KIMBERLY-CLARK  CORPORATION

 

                          EXECUTIVE  SEVERANCE  PLAN

                                      As

                             Amended and Restated

                              As of June 8, 2000

 

 

     1.     Preamble and Statement of Purpose.  The purpose of this Plan is to

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assure  the Corporation that it will have the continued dedication of, and the

availability  of  objective  advice  and  counsel  from, key executives of the

Corporation  notwithstanding the possibility, threat or occurrence of a bid to

take  over  control  of  the  Corporation.

 

     In  the  event  the Corporation receives any proposal from a third person

concerning  a  possible  business  combination  with  the  Corporation,  or

acquisition  of  the  Corporation's  equity securities, the Board of Directors

(the  "Board")  believes  it  imperative that the Corporation and the Board be

able  to  rely  upon  key  executives  to  continue  in their positions and be

available  for  advice,  if  requested, without concern that those individuals

might  be distracted by the personal uncertainties and risks created by such a

proposal.

 

     Should  the  Corporation receive any such proposals, in addition to their

regular  duties,  such  key  executives  may  be  called upon to assist in the

assessment  of  proposals,  advise management and the Board as to whether such

proposals  would  be  in  the  best  interest  of  the  Corporation  and  its

stockholders,  and  to take such other actions as the Board might determine to

be  appropriate.

 

     2.     Definitions.  As used in this Plan, the following terms shall have

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the  following  respective  meanings:

 

            (a)    Agreement:    An  Executive  Severance  Agreement  in

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substantially the form approved by the Board and attached hereto as Exhibit A.

 

            (b)    Cause:    The  term  "Cause"  shall  mean  any  of the

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following:

                       (i)       the commission by  he Participant of a felony;

                       (ii)      the Participant's dishonesty, habitual neglect

or incompetence  in  the  management  of  the  affairs  of the  Corporation; or

                       (iii)     the refusal or failure by the Participant to

act in accordance with any lawful directive or order of the Corporation, or an

act or failure to act by the Participant which is  in  bad  faith and which is

detrimental to  the  Corporation.

 

            (c)    Change of Control:  A "Change of Control" shall be

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deemed to have  taken  place  if:  (i) a third person, including a "group" as

defined in Section 13(d)(3) of the Securities Exchange Act of 1934, acquires

shares of the  Corporation  having  20% or more of the total number of votes

that may be cast for the election of Directors of the Corporation; or (ii)

as the result of any cash  tender or exchange offer, merger or other business

combination, sale  of  assets  or  contested  election, or any combination of

the foregoing transactions  (a  "Transaction"), the persons who were directors

of the Corporation before the Transaction shall cease to constitute a majority

of the Board of Directors of the Corporation or any successor to the

Corporation.

 

            (d)    Corporation:      Kimberly-Clark  Corporation.

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            (e)    Eligible Executive:  Those key executives of the

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Corporation and its Subsidiaries who are from time to time designated by the

Board as, or who  pursuant  to  criteria  established  by  the  Board  or  its

Compensation Committee are, eligible to receive an  Agreement.

 

            (f)    Good Reason:   Termination by the Participant for "Good

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Reason"  shall  mean the occurrence (without the Participant's express written

consent)  of  any one of the following acts by the Corporation, or failures by

the  Corporation  to  act,  unless,  in  the case of any act or failure to act

described  below,  such  act  or  failure  to  act  is  corrected prior to the

Participant's  termination  date:

 

                       (i)       the  assignment  to  the Participant of any

duties inconsistent  with  the Participant's status as a key executive officer

of the corporation or a substantial adverse alteration in the nature or status

of the Participant's  responsibilities  from those in effect immediately prior

to the Change  of  Control  other  than such alteration primarily attributable

to the fact  that  the  Corporation  may  no  longer  be  a  public  company;

 

                       (ii)      a reduction by the Corporation of the

Participant's annual  base  salary by five percent or more as in effect

immediately prior to the Change of Control, except for across-the-board salary

reductions similarly affecting  all  key  executives  of  the  Corporation;

 

                       (iii)     the Corporation requiring the Participant to

be based at a location more than 50 miles from the location of the Participant's

office as of the date of the Change of Control except for required travel on the

Corporation's  business  to  an  extent  substantially  consistent  with  the

Participant's  business  travel  obligations  as  of the date of the Change of

Control;

 

                       (iv)      the  failure of the Corporation to pay as soon

as administratively feasible, after notice from the Participant, any portion of

the  Participant's  current  compensation;

 

                       (v)       the failure of the Corporation to continue in

effect any  compensation plan in which the Participant participates immediately

prior to  the  Change  of  Control  which  is  material  to  the Participant's

total compensation, but including but not limited to the Corporation's stock

option, incentive compensation, and bonus plans, or any substitute plans adopted

prior to  the  Change of Control, unless an equitable arrangement (which is

embodied in  an  ongoing  substitute or alternative plan but which need not

provide the Participant  with  equity-based incentives) has been made with

respect to such plan,  or  the  failure  by  the  Corporation  to  continue the

Participant's participation therein (or in such substitute or alternative plan)

on a basis not materially less favorable than the benefits  provided  to  other

participants; or

                       (vi)      the failure by the Corporation to continue to

provide the Participant with benefits substantially similar to those enjoyed by

the Participant under any of the Corporation's pension, life insurance, medical,

health  and  accident,  or  disability  plans  in  which  the  Participant was

participating  at  the time of the Change of Control, the taking of any action

by the Corporation which would directly or indirectly materially reduce any of

such  benefits  or  deprive  the  Participant  of  any material fringe benefit

enjoyed  by  the  Participant  at  the  time  of the Change of Control, or the

failure  by the Corporation to provide the Participant with the number of paid

vacation  days  to  which the Participant is entitled on the basis of years of

service  with  the  Corporation  in  accordance  with the Corporation's normal

vacation  policy  in  effect  at  the  time  of  the  Change  of  Control.

 

          The  Participant's  right  to terminate the Participant's employment

for  Good  Reason shall not be affected by the Participant's incapacity due to

physical  or mental illness.  The Participant's continued employment shall not

constitute  consent  to,  or  a  waiver  of rights with respect to, any act or

failure  to  act  constituting  Good  Reason  hereunder.

 

            (g)    Participant:  An Eligible Executive who is a party to an

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Agreement  which  has not been terminated in accordance with the terms of this

Plan  prior  to  the  time  when  the Corporation has knowledge that any third

person  has taken steps reasonably calculated to effect a Change of Control of

the  Corporation.

 

            (h)    Qualified Termination of Employment:  The termination of

 

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a Participant's employment with the Corporation and/or its Subsidiaries within

the  two  (2) year period following a Change of Control of the Corporation for

any  reason  (whether  voluntary or involuntary) unless such termination is by

reason  of  death or disability or, to the extent specifically provided in the

Participant's Agreement, unless such termination is (i) by the Corporation for

Cause or (ii) by the Participant without Good Reason.  Subject to subparagraph

2(f),  transfers  of  employment  for  administrative  purposes  among  the

Corporation  and  its Subsidiaries shall not be deemed a Qualified Termination

of  Employment.

 

            (i)    Subsidiary:   Any domestic or foreign corporation at

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least twenty percent (20%) of whose shares normally entitled to vote in

electing directors  is  owned  directly  or  indirectly  by the Corporation or

by other Subsidiaries.

 

     3.     Participation.    Eligible Executives shall be proffered an

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Agreement and upon execution and delivery thereof by the Eligible Executive

evidencing  such  Eligible  Executive's agreement not to voluntarily leave the

employ  of  the  Corporation  and  its  Subsidiaries and to continue to render

services  during  the  pendency  of  any  threatened  Change of Control of the

Corporation,  such  Eligible  Executive  shall  become  a  Participant.    A

Participant  shall  cease to be a Participant in the Plan when notified by the

Board  that  it  has  determined  that such Participant has ceased to be a key

executive for purposes of this Plan or upon termination of employment with the

Corporation or its Subsidiaries prior to a Change of Control in which case the

Agreement  shall terminate and be of no further force and effect, except that,

no  such  determination  that  a  Participant has ceased to be a key executive

shall  be  made,  and  if made shall have no effect, during any period of time

when  the  Corporation  has  knowledge  that  any third person has taken steps

reasonably  calculated to effect a Change of Control of the Corporation until,

in  the opinion of the Board, the third person has abandoned or terminated his

efforts  to  effect  a  Change of Control.  Any decision by the Board that the

third  person  has  abandoned  or terminated his efforts to effect a Change of

Control  shall  be  conclusive  and  binding  on  the  Participants.

 

     4.     Termination of Employment of Participants.  Nothing in this Plan

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shall be deemed to entitle a Participant to continued employment with the

Corporation and its Subsidiaries and the rights of  the  Corporation to

terminate  the  employment  of a Participant shall continue as fully as though

this  Plan  were  not  in  effect,  provided that any Qualified Termination of

Employment  within  two  years following a Change of Control shall entitle the

Participant  to  the  benefits  herein provided.  In addition, nothing in this

Plan  shall  be deemed to entitle a Participant under this Plan to any rights,

or  to  payments  under  this  Plan,  with  respect  to  any plan in which the

Participant  was  not  a  participant  prior  to  a  Qualified  Termination of

Employment.

 

     5.     Payments Upon Qualified Termination of Employment.  In the event of

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a Qualified  Termination  of Employment of a Participant, a lump sum cash

payment or payments shall be  made to such Participant as compensation for

services  rendered, in an amount or amounts (subject to any applicable

payroll or  other  taxes  required  to  be  withheld)  equal to the sum of the

amounts specified  in  subparagraphs  (i) through (vi) below, such payments to

be made within 10 days following the last day of employment of the Participant

with the  Corporation  except  to the extent not yet calculable, in which case

such portions shall be paid as soon as  practicable  following the ability to

calculate the  amount.

 

                       (i)       Salary Plus Incentive Compensation.  An amount

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equal to three times the sum of (a) the Participant's annual base salary at the

rate in effect  immediately  prior  to the Change of Control and (b) the maximum

award payable to the Participant for  the  year  in  which the Change of Control

occurred  (or,  if  not  then  established,  for the preceding year) under the

Kimberly-Clark  Corporation  Management  Achievement  Award  Program  or  any

successor  or  additional  plan;

 

                       (ii)      Equity  Participation Plan - Participation

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Shares.

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An amount  equal to the payment to which the Participant would have been

entitled had all Participation Shares awarded to  the  Participant  under  the

Kimberly-Clark Corporation 1992 Equity Participation Plan (or any successor or

additional  plan)  and  which had not matured as of the date of termination of

employment  and  which  will  not  mature  as  a  result of the termination of

employment,  matured,  such  payment  to  be  the  higher  of  (a) the payment

determined  as  though  such  award had matured and its book value at maturity

been  determined  on the last day of the year preceding the Change of Control,

or  (b)  the  payment determined as though such award had matured and its book

value  at  maturity  been  determined  on the last day of the calendar quarter

preceding  the  date  of  termination  of  the  Participant's  employment;

 

                       (iii)     Equity Participation Plan - Option Shares.

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With respect to stock options granted to the Participant under the

Kimberly-Clark Corporation  1992  Equity  Participation  Plan (or any successor

or additional plan) which are not exercisable on or after the date of the

termination of the Participant's  employment  or,  if  exercisable, on the date

of termination of employment,  not  thereafter  exercised,  an amount equal to

the higher of the excess  of  (a)  the  value on the date preceding the Change

of Control of all shares of common stock of the Corporation optioned to the

Participant pursuant to  such  options, or (b) such value on the date of

termination of employment, over  the  option  price;

 

                       (iv)  Restricted Stock.  With respect to restricted

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stock granted to the Participant under the Kimberly-Clark Corporation 1999

Restricted Stock Plan (or any successor or additional plan) which are not

vested on the date of the termination of the Participant's employment, an

amount equal to the higher of  (a) the value on the date preceding the

Change of Control of an equivalent number  of shares of common stock of the

Corporation, or (b) such value on the date of termination of employment;

 

                       (v)    Incentive Investment Plan.  An amount equal to

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the excess of (a)  the  benefits under the Kimberly-Clark  orporation Salaried

Employees Incentive  Investment  Plan (or any successor or additional plan) to

which the Participant  would  be entitled if he were fully vested in all of his

benefits under the Plan at the date of termination of employment, over (b) the

value of the  benefits  to  which  the  Participant is actually entitled at the

date of termination  of  employment;  and

 

                       (vi)  Retirement Contribution Plan. An amount equal to

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(a) the Participant's annual Retirement Contributions under the Kimberly-Clark

Corporation  Retirement  Contribution  Plan  (or  any  successor or additional

plans)  and  the  Kimberly-Clark  Corporation  Retirement  Contribution Excess

Benefit  Program  (or  any  successor  or  additional plans) (collectively the

"Retirement  Contribution  Plan")  to  which  the  Participant would have been

entitled  if  he  had  remained  employed by the Corporation for an additional

period  of  three  years  at  the  rate  of  annual  compensation specified in

subparagraph  (i)  of Paragraph 5 above except that the Management Achievement

Award  Program  element  shall  be  treated  as  earned  for the year in which

termination occurred and the two subsequent years and no award actually earned

in,  and paid for, the year in which termination occurred shall be considered,

plus (b) the excess of (I) the benefits under the Retirement Contribution Plan

to  which  the Participant would be entitled if he were fully vested in all of

his benefits under the Retirement Contribution Plan at the date of termination

of employment, over (II) the value of the benefits to which the Participant is

actually  entitled  at  the  date  of  termination  of  employment.

                       (vii) Successor or Additional Stock Option, Stock

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Appreciation Right, Incentive  Compensation,  and  Bonus  Plan. An amount equal

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to the payment to which  the  Executive  would  have  been  entitled  had all

amounts awarded or granted  to  the  Executive,  vested or matured, under any

stock option, stock appreciation right, incentive compensation, and bonus plans

which are adopted after  the  effective  date  of  the  Executive's  Agreement

and in which the Executive  participates  immediately  prior to the Change of

Control, which is material to the Executive's total compensation, but including

any substitute plans adopted prior to the Change of Control,  (or any successor

or additional plan),  which  had  not  vested  or  matured  as of the date of

termination of employment  and  will not vest or mature as a result of the

termination of the Executive's  employment,  such  payment  to  be  the higher

of (a) the payment determined  as  though such award or grant had vested or

matured on the day of the  Change  of Control, or (b) the payment determined as

though such award or grant  had  vested  or  matured  on the date of termination

of the Executive's employment;

 

     6.     Salaried Retirement Plan.  In the event of a Qualified Termination

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of  Employment,  a  Participant shall be paid a monthly retirement benefit, in

addition  to  any benefits received under the Supplemental Benefit Plan to the

Kimberly-Clark  Corporation  Salaried  Employees'  Retirement  Plan  (or  any

successor or additional plans) and the Second Supplemental Benefit Plan to the

Kimberly-Clark  Corporation  Salaried  Employees'  Retirement  Plan  (or  any

successor  or additional plans) (collectively the "Supplemental Plan") and the

Kimberly-Clark  Corporation  Salaried  Employees'  Retirement  Plan  (or  any

successor  or additional plans) (the "Salaried Retirement Plan"), such benefit

to  commence  on  the  commencement  of payment of benefits under the Salaried

Retirement  Plan, but not prior to three years following the date of Qualified

Termination  of  Employment, such benefit to be in the form of a straight life

annuity  without  level  income option and in an amount equal to the excess of

(a)  the benefits under the Salaried Retirement Plan and the Supplemental Plan

to  which  the  Participant would have been entitled in the form of a straight

life  annuity  without  level  income  option if such Participant had remained

employed  by  the  Corporation for an additional period of three years, at the

rate of annual compensation specified in subparagraph (i) of Paragraph 5 above

except  that the Management Achievement Award Program element shall be treated

as  earned  for  the year in which termination occurred and the two subsequent

years  and  no  award  actually  earned  in,  and  paid for, the year in which

termination  occurred  shall be considered, over (b) the benefits to which the

Participant  would  actually  have been entitled under the Salaried Retirement

Plan  and  the  Supplemental Plan, had such benefit been paid in the form of a

straight  life  annuity  without  level  income  option.

 

<PAGE>

 

     7.     Other Terms and Conditions.  The Agreement to be entered into

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pursuant  to  this  Plan  shall  contain  such  other  terms,  provisions  and

conditions  not  inconsistent  with  this  Plan  as shall be determined by the

Board.    Where  appearing  in this Plan or the Agreement, the masculine shall

include  the  feminine  and  the plural shall include the singular, unless the

context  clearly  indicates  otherwise.

 

     8.     Non-Assignability.  Each Participant's rights under this Plan

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shall  be  non-transferable  except  by  will  or  by  the laws of descent and

distribution.

 

     9.     Unfunded  Plan.    The  Plan  shall be unfunded.  Neither the

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Corporation  nor  the Board shall be required to segregate any assets that may

at  any  time  be  represented  by  benefits  under  the  Plan.    Neither the

Corporation  or the Board shall be deemed to be a trustee of any amounts to be

paid under the Plan.  Any liability of the Corporation to any Participant with

respect  to any benefit shall be based solely upon any contractual obligations

created  by  the Plan and the Agreement; no such obligation shall be deemed to

be  secured  by  any  pledge  or  any  encumbrance  on  any  property  of  the

Corporation.

 

     10.    Certain  Reduction  of  Payments  by  the  Corporation.

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            (a)    For purposes of this paragraph 10, (i) a Payment shall mean

any  payment  or  distribution  in  the  nature  of compensation to or for the

 

benefit  of  a  Participant,  whether paid or payable pursuant to this Plan or

otherwise;  (ii)  Separation  Payment  shall  mean  a  Payment paid or payable

pursuant  to  this  Plan  (disregarding  this  paragraph); (iii) Net After Tax

Receipt  shall mean the Present Value of a Payment net of all taxes imposed on

an  Participant with respect thereto under Sections 1 and 4999 of the Internal

Revenue  Code  of  1986,  as  amended (the "Code"), determined by applying the

highest  marginal  rate  under  Section  1  of  the  Code which applied to the

Participant's  taxable income for the immediately preceding taxable year; (iv)

"Present  Value"  shall  mean such value determined in accordance with Section

280G(d)(4)  of  the  Code;  and  (v)  "Reduced Amount" shall mean the greatest

aggregate  amount of Separation Payments which (a) is less than the sum of all

Separation  Payments and (b) results in aggregate Net After Tax Receipts which

are  equal to or greater than the Net After Tax Receipts which would result if

the  Participant  were  paid  the  sum  of  all  Separation  Payments.

 

            (b)    Anything in this Agreement to the contrary notwithstanding,

in  the  event Deloitte & Touche LLP or such other certified public accounting

firm  designated  by  the  Participant (the "Accounting Firm") shall determine

that  receipt  of  all  Payments  would  subject  the Participant to tax under

Section 4999 of the Code, it shall determine whether some amount of Separation

Payments  would  meet  the  definition  of  a  "Reduced Amount."  If said firm

determines  that  there is a Reduced Amount, the aggregate Separation Payments

shall  be  reduced to such Reduced Amount.  All fees payable to the Accounting

Firm  with  respect  to  this  paragraph  10  shall  be  paid  solely  by  the

Corporation.

 

            (c)    If Accounting Firm determines that aggregate Separation

Payments  should  be  reduced  to  the  Reduced  Amount, the Corporation shall

promptly give the Participant notice to that effect and a copy of the detailed

 

calculation  thereof,  and  the  Participant  may  then  elect,  in  his  sole

discretion,  which and how much of the Separation Payments shall be eliminated

or  reduced (as long as after such election the present value of the aggregate

Separation  Payments  equals  the  Reduced  Amount),  and  shall  advise  the

Corporation  in  writing  of  his  election  within ten days of his receipt of

notice.    If  no such election is made by the Participant within such ten-day

period,  the  Corporation may elect which of such Separation Payments shall be

eliminated or reduced (as long as after such election the present value of the

aggregate  Separation Payments equals the Reduced Amount) and shall notify the

Participant  promptly of such election.  All determinations made by Accounting

Firm  under  this  paragraph  shall  be  binding  upon the Corporation and the

Participant and shall be made within 60 days of a termination of employment of

the Participant.  As promptly as practicable following such determination, the

Corporation shall pay to or distribute for the benefit of the Participant such

Separation  Payments  as  are  then due to the Participant under this Plan and

shall  promptly pay to or distribute for the benefit of the Participant in the

future  such  Separation  Payments as become due to the Participant under this

Plan.

 

             (d)   While it is the intention of the Corporation to reduce the

amounts  payable  or  distributable  to the Participants hereunder only if the

aggregate  Net After Tax Receipts to a Participant would thereby be increased,

as  a result of the uncertainty in the application of Section 4999 of the Code

at  the  time of the initial determination by Accounting Firm hereunder, it is

possible that amounts will have been paid or distributed by the Corporation to

or  for  the  benefit of an Participant pursuant to this Plan which should not

have  been  so  paid or distributed ("Overpayment") or that additional amounts

which  will have not been paid or distributed by the Corporation to or for the

benefit  of  a  Participant  pursuant  to this Plan could have been so paid or

distributed ("Underpayment"), in each case, consistent with the calculation of

 

the Reduced Amount hereunder.  In the event that Accounting Firm, based either

upon the assertion of a deficiency by the Internal Revenue Service against the

Corporation  or  the  Participant  which  Accounting  Firm believes has a high

probability  of success determines that an Overpayment has been made, any such

benefit  of  an Participant shall be treated for all purposes as a loan to the

Participant which the Participant shall repay to the Corporation together with

interest  at the applicable federal rate provided for in Section 7872(f)(2) of

the  Code;  provided,  however, that no such loan shall be deemed to have been

made and no amount shall be payable by a Participant to the Corporation if and

to  the extent such deemed loan and payment would not either reduce the amount

on which the Participant is subject to tax under Section 1 and Section 4999 of

the  Code  or  generate  a refund of such taxes.  In the event that Accounting

Firm,  based  upon  controlling precedent or substantial authority, determines

that  an  Underpayment  has  occurred, any such Underpayment shall be promptly

paid by the Corporation to or for the benefit of the Participant together with

interest  at the applicable federal rate provided for in Section 7872(f)(2) of

the  Code.

 

     11.    Termination and Amendment of this Plan.  The Board shall have

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power  at  any  time,  in  its discretion, to amend, abandon or terminate this

Plan,  in  whole  or  in  part;  except  that  no  amendment,  abandonment  or

termination  shall  impair or abridge the obligations of the Corporation under

any  Agreements  previously  entered  into  pursuant  to  this  Plan.

 

     12.    Effective Date.  This amended and restated Plan shall become

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effective  on  June  8,  2000.