Exhibit 10.2

HALYARD HEALTH, INC.

SEVERANCE PAY PLAN

Effective November 1, 2014

Amended and Restated October 26, 2016

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TABLE OF CONTENTS

 

ARTICLE

  

TITLE

I    NAME, PURPOSE AND EFFECTIVE DATE OF PLAN II    DEFINITIONS III   
ELIGIBILITY AND PARTICIPATION IV    SEVERANCE BENEFITS V    PLAN ADMINISTRATION
VI    LIMITATIONS AND LIABILITIES    APPENDIX A - COVERED EMPLOYERS

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ARTICLE I

NAME, PURPOSE AND EFFECTIVE DATE OF PLAN

 

1.1 Name of the Plan. Halyard Health, Inc. (the “Corporation”) hereby
establishes a severance pay plan for its Employees, to be known as the Halyard
Health, Inc. Severance Pay Plan (the “Plan”) as set forth in this document. The
Plan is intended to qualify as an employee welfare benefit plan within the
meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”).

 

1.2 Purpose of the Plan. The purpose of the Plan is to provide Eligible
Employees a severance benefit in the event of involuntary termination of
employment in certain circumstances. The Plan is not intended as a replacement
or substitution for any agreement between a Participant and his or her Employer
executed prior or subsequent to the effective date of the Plan.

 

1.3 Effective Date. The Plan was effective as of November 1, 2014, and was
amended and restated as of October 26, 2016.

ARTICLE II

DEFINITIONS AND CONSTRUCTION

 

2.1 Definitions. When the following words and phrases appear in this Plan, they
shall have the respective meanings set forth below unless the context clearly
indicates otherwise.

 

  (a) Average Bonus Amount: The average of the annual cash incentive awards paid
to the Participant under MAAP, EOAAP, or other annual cash incentive plan
maintained by the Corporation or the Participant’s Employer, for the three years
prior to the year in which the Separation from Service occurs (or such fewer
number of years for which the Participant has been employed by the Employer, if
less than three). If a Participant has not received any prior payment of annual
cash incentive awards, the Average Bonus Amount will be determined as follows:

 

  (i) For a Participant classified at the Corporation’s Tier II level (Grades
3-5) , as defined by the Corporation, the Average Bonus Amount shall be
calculated based on the average MAAP payment paid to other employees at the same
grade level for the three years prior to the year in which the Separation from
Service occurs.

 

  (ii) For a Participant at the Tier I level (except for the Chief Executive
Officer of the Corporation), the Average Bonus Amount shall be calculated based
on the average MAAP or EOAAP payment paid to other employees at the Tier I level
(other than the Chief Executive Officer of the Corporation) for the three years
prior to the year in which the Separation from Service occurs.

 

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  (iii) For the Chief Executive Officer of the Corporation, the Average Bonus
Amount shall be calculated based on the average MAAP or EOAAP payment paid to
the Chief Executive Officer(s) of the Corporation for the three years prior to
the year in which the Separation from Service occurs.

For the purpose of determining the Average Bonus Amount during the period
beginning on the Effective Date and ending on the third anniversary of the
Effective Date (the “Initial Period”), the Average Bonus Amount will take into
account awards paid to the Participant for services in an equivalent position
for the most recent years under the Kimberly-Clark Corporation Executive Officer
Achievement Award Program and/or Management Achievement Award Program, as if
they had been earned under the Corporation’s MAAP and/or EOAAP for such years.

 

  (b) Base Pay: A Participant’s base pay on his or her Termination Date,
calculated based upon the Participant’s then-current base salary or stated pay
rate. If a Participant is a full-time Employee, Base Pay will be calculated
assuming a 40-hour work week. If a Participant is an Employee who works less
than 40 hours per week, Base Pay will be calculated assuming the Participant
works his or her regularly scheduled hours per week. Base Pay does not include
overtime pay, disability pay, nonrecurring payments (such as reimbursements or
relocation expenses), annual incentive awards under the EOAAP, MAAP or other
programs, sales incentive awards, long-term incentive awards, or other
remuneration. The calculation of Base Pay shall be subject to any applicable
Committee rule.

 

  (c) Board: The Board of Directors of the Corporation.

 

  (d) Cause: Any termination of employment which is classified by the Employer
as being for “cause,” including but not limited to a termination due to any of
the following: (i) Participant’s unsatisfactory performance of duties or
inability to meet the requirements of the position, unless classified by the
Employer as a Performance Termination; (ii) any habitual neglect of duty or
misconduct of the Participant in discharging any of his or her duties and
responsibilities; (iii) excessive unexcused, or statutorily unprotected
absenteeism or inattention to duties; (iv) failure or refusal to comply with the
provisions of the Employer’s personnel manual or any other rule or policy of the
Employer; (v) misconduct, including but not limited to, engaging in conduct
which the Committee reasonably determines to be detrimental to the Employer;
(vi) disloyal, dishonest or illegal conduct by the Participant; (vii) theft,
fraud, embezzlement or other criminal activity involving the Participant’s
relationship with the Employer; (viii) the Participant’s violation of any
applicable statute, regulation, or rule, or provision of any applicable code of
professional ethics; (ix) suspension, revocation, or other restriction of the
Participant’s professional license, if applicable; or (x) the Employer’s
inability to confirm, to its sole satisfaction, the references and/or
credentials which the Participant provided with respect to any professional
license, educational background and employment history.

 

  (e) COBRA: Medical continuation coverage elected under the provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985.

 

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  (f) Code: The Internal Revenue Code of 1986, as amended from time to time, and
as construed and interpreted by valid regulations or rulings issued thereunder.

 

  (g) Committee: The Benefits Administration Committee is appointed to
administer and regulate the Plan as provided in Article V.

 

  (h) Comparable Position: Any position of employment offered to a Participant
will be considered a Comparable Position under this Plan unless, as determined
by the Committee in its sole discretion, such position would result in any of
the following changes for the Participant:

(i) With respect to all Participants, a change, by more than 50 miles, in the
geographic location at which the Participant must perform the services.

(ii) In addition, with respect to Tier I and Tier II Participants only, a
material diminution in the Participant’s Base Pay on the date of such offer, or
a material diminution of the Participant’s authority, duties or
responsibilities, including but not limited to situations where an Employee in
either a Tier I or Tier II position ceases to be in either a Tier I or Tier II
position.

The Participant must provide notice to the Corporation of the existence of any
of the above conditions within a period not to exceed 90 days of the initial
offer of the non-Comparable Position to the Participant, and the Corporation
must be provided a period of at least 30 days following receipt of the notice
during which it may remedy the offer so that it constitutes a Comparable
Position. Any determination by the Committee as to whether a Participant has
been offered a Comparable Position shall be final and conclusive as to all
parties.

 

  (i) Corporation: Halyard Health, Inc.

 

  (j) Effective Date: November 1, 2014, or with respect to a particular company
that became a Subsidiary after that date, such later date on which such company
became a Subsidiary.

 

  (k) Eligible Employee: An hourly Employee not covered by a collective
bargaining unit, or salaried Employee, on the regular payroll of an Employer.
For purposes of this subsection, “on the regular payroll of an Employer” shall
mean paid through the payroll department of such Employer, and shall exclude
(A) employees classified by an Employer as intermittent or temporary, and
(B) persons classified by an Employer as independent contractors, regardless of
how such persons may be classified by any federal, state, or local, domestic or
foreign, governmental agency or instrumentality thereof, or court.

 

  (l) Employee: A person classified as a common law employee by an Employer.

 

  (m) Employer: The Corporation and each Subsidiary, other than any Subsidiary
which the Committee shall from time to time designate as a non-participating
Subsidiary for purposes of the Plan. A list of Subsidiaries excluded from the
definition of Employers is set forth in Appendix A.

 

  (n) EOAAP: The Corporation’s Executive Officer Achievement Award Program or
any successor plan.

 

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  (o) MAAP: The Corporation’s Management Achievement Award Program or any
successor plan.

 

  (p) MAAP Eligible: Participants who as of their date of Separation from
Service meet the eligibility requirements to participate under MAAP.

 

  (q) Participant: An Eligible Employee who has met the eligibility requirements
to participate in the Plan pursuant to Article III.

 

  (r) Performance Termination: Any termination of employment with the Employer
which is classified by the Employer as for a Participant’s unsatisfactory
performance of duties, or inability to meet the requirements of the
Participant’s position. The termination of employment will be classified as a
Performance Termination if it is approved by the Participant’s team leader, the
supervisor of the team leader for the Participant and the applicable Human
Resources Leadership Team member, and also meets one of the following criteria:

 

  (i) the Employee experiences an involuntary Separation from Service on the
release date determined by the Employer after the Employee’s team leader has
offered the Employee a choice of either entering into a Performance Improvement
Plan or a Performance Termination, and the Employee has elected a Performance
Termination rather than entering into a Performance Improvement Plan; or

 

  (ii) the Employee experiences an involuntary Separation from Service after the
Employee’s team leader had offered the Employee a choice of either entering into
a Performance Improvement Plan or a Performance Termination, the Employee
elected to enter into a Performance Improvement Plan, and had in the judgment of
the Employee’s team leader, subsequently failed to successfully improve his or
her performance to an acceptable level following completion of the Performance
Improvement Plan.

 

  (s) Plan: The Halyard Health, Inc. Severance Pay Plan.

 

  (t) Plan Year: A calendar year period beginning January 1 and ending
December 31.

 

  (u) Prorated Final Year Bonus: Payment made to a Participant pursuant to
Article IV hereof equal to (i) the annual cash incentive award that would have
been payable to the Participant, for the year in which the Termination Date
occurs, under the EOAAP, MAAP or other annual cash incentive plan maintained by
the Corporation or the Participant’s Employer and in which the Participant was a
participant on the Termination Date, if the Participant had remained employed
for the entire calendar year, and assuming that performance was achieved at
either (A) the target level of performance or (B) the actual level of
performance achieved by the Corporation (or the Employer, any business unit,
and/or the Participant, as applicable) for such year, as provided for the
Participant in Section 4.1(a), multiplied by (ii) a fraction, the numerator of
which is the number of days worked by the Participant during such final year and
the denominator of which is 365.

 

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  (v) Qualifying Termination: A Participant’s Separation from Service under the
conditions described in Section 3.2.

 

  (w) Separation from Service: Termination of employment with the Employer
within the meaning of Code Section 409A. A Separation from Service will be
deemed to have occurred if the Employee’s services are reduced to an annual rate
that is 20 percent or less of the services rendered, on average, during the
immediately preceding three years of employment (or if employed less than three
years, such lesser period). The Committee shall have the power to promulgate
Committee Rules and other guidelines in connection with the determination of a
Separation from Service, and any such determination by the Committee shall be
final and conclusive as to all parties.

 

  (x) Severance Pay: Cash severance payment made to a Participant pursuant to
Article IV hereof and based on a Participant’s Base Pay.

 

  (y) Subsidiary: Any corporation, 50% or more of the voting shares of which are
owned directly or indirectly by the Corporation, which is incorporated under the
laws of one of the States of the United States.

 

  (z) Termination Date: The date of an Employee’s Separation from Service.

 

  (aa) Years of Service: A Participant shall be credited with a Year of Service
for each year commencing with the Participant’s amended service date, as
maintained by the Corporation’s Human Resources Information System, and ending
on the Employee’s Termination Date, rounded up to the nearest whole year for a
partial year of service in excess of six months, and rounded down to the nearest
whole year for a partial year less than or equal to six months (including, for
avoidance of doubt, service with Kimberly-Clark Corporation prior to the
spin-off of the Corporation from Kimberly-Clark Corporation). Years of Service
will not be credited in fractional amounts. Notwithstanding any provision in the
Plan to the contrary, an Employee’s credited Years of Service shall be reduced
to the extent such Years of Service have previously been used to calculate a
prior severance payment to the Participant.

 

2.2 Construction: Where appearing in the Plan the masculine shall include the
feminine and the plural shall include the singular, unless the context clearly
indicates otherwise. The words “hereof,” “herein,” “hereunder” and other similar
compounds of the word “here” shall mean and refer to the entire Plan and not to
any particular section or subsection.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

 

3.1 Participation. An Eligible Employee shall become a Participant on the later
of the Effective Date or the first day actively employed by an Employer.

 

3.2 Eligibility. Each Participant who experiences an involuntary Separation from
Service for a reason (i) other than Cause; or (ii) after receiving an offer of a
Comparable Position pursuant to Section 3.3 (each, a “Qualifying Termination”),
shall be eligible to receive Severance Benefits. For the avoidance of doubt, a
Qualifying Termination shall not include, and Severance Benefits shall not be
paid to any Participant who:

 

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  (a) does not experience a Separation from Service because the Employee accepts
another position (either a Comparable Position or any other position);

 

  (b) is terminated during a period in which such Participant is not actively at
work (i.e. has been on leave) for more than 25 weeks, except to the extent
otherwise required by law;

 

  (c) is terminated for Cause;

 

  (d) voluntarily resigns or retires; or

 

  (e) dies or becomes subject to a disability.

 

3.3 Comparable Position. A Qualifying Termination shall not include, and
Severance Benefits shall not be paid to any Participant whose employment is
involuntarily terminated related to:

 

  (a) any separation or reorganization of the Corporation including, but not
limited to, a sale, spin-off or shutdown of a portion of the Corporation,
including but not limited to a portion of a plant or other location, if such
Participant is offered a Comparable Position with the successor entity,

 

  (b) the outsourcing of a Participant to a company other than an Employer, in
which such Participant is offered or continues in a Comparable Position,

 

  (c) any elimination of a job function, or transfer of a Participant’s position
to another location, in which such Participant is offered a Comparable Position
with the Corporation, or

 

  (d) any other circumstances involving an offer of a Comparable Position.

 

3.4 Duration. A Participant remains a Participant under the Plan until the
earliest of:

 

  (a) the date the Participant is no longer an Eligible Employee;

 

  (b) the Participant’s Termination Date;

 

  (c) the date the Subsidiary employing the Participant ceases to be an
Employer; or

 

  (d) the date the Plan terminates.

 

3.5 Separation Agreement and Release. No Participant shall be entitled to
receive Severance Benefits hereunder unless such Participant executes a
Separation Agreement and Full and Final Release of Claims (the “Separation
Agreement”), in the form required by the Corporation, within the period
specified for such individual therein and such Participant does not revoke such
Separation Agreement in writing within the 7-day period following the date on
which it is executed. The Employer shall provide the Separation Agreement to the
Participant promptly following the Termination Date.

 

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3.6 Continuing Obligations. A Participant shall retain in confidence any
confidential information known to the Participant concerning the Corporation and
its business so long as such information is not publicly disclosed by a
non-related party.

ARTICLE IV

SEVERANCE BENEFITS

 

4.1 Severance Benefits. The decision to pay any Severance Benefits under this
Plan, or to increase or decrease the amount of Severance Benefits set forth
below, shall be in the sole discretion of the Committee and other authorized
individuals as authorized pursuant to Section 5.7 below. Any such increase or
decrease in the amount of Severance Benefits shall be final and conclusive as to
all parties. Subject to the exercise of such discretion, a Participant’s
Severance Benefits shall be determined as follows:

 

  (a) Each Participant who is eligible to receive Severance Benefits due to a
Qualifying Termination as provided in Article III above, but whose termination
of employment is not classified by the Employer as a Performance Termination,
shall receive the Severance Pay, Prorated Final Year Bonus, COBRA, Outplacement
Assistance services and Employee Assistance Program services (collectively, the
“Severance Benefits”) set forth below.

 

Provision

 

  

Tier I

(CEO)

 

  

Tier I

(Non-CEO
Executive
Officers)

 

  

Tier II

(Grades 3-5)

 

  

Other

MAAP-Eligible

(Grade 6)

 

  

Salaried

Exempt

 

  

Salaried

Non-

Exempt

 

  

Production

Non-

Union

 

Severance Pay -Termination on or after 12 months employment    2 x the sum of
annual Base Pay plus 3 year Average Bonus Amount    1.5 x the
sum of
annual
Base Pay
plus 3 year
Average
Bonus
Amount    The sum of
annual
Base Pay
plus 3 year
Average
Bonus
Amount    2 weeks of
Base Pay
per Year
of Service
(26 weeks
Base Pay
minimum)    2 weeks of
Base Pay
per Year of
Service (12
weeks Base
Pay
minimum)    1 week of
Base Pay
per Year of
Service (6
weeks Base
Pay
minimum)    1 week of
Base Pay
per Year of
Service (6
weeks Base
Pay
minimum)           Severance Pay – Termination within first 12 months employment
  

3 months

Base Pay

   3 months
Base Pay    3 months
Base Pay    3 months
Base Pay    3 months
Base Pay    6 weeks
Base Pay    6 weeks
Base Pay          

Final Year Annual

Bonus

   Prorated Final Year Bonus (based on actual performance) if Separation from
Service is after March 31 of the performance year    Prorated
Final Year
Bonus
(based on
actual
performance)
if
Separation
from
Service is
after
March 31
of the
performance
year    Prorated Final
Year Bonus
(based on
actual
performance
for an officer
of the
Corporation
elected by the
Board, or
based on
target
performance
for all other
Tier II
employees)
if
Separation
from Service
is after
March 31
of the
performance
year    Prorated
Final Year
Bonus
(based on
target) if
Separation
from
Service is
after
March 31
of the
performance
year    Prorated
Final Year
Bonus
(based on
target) if
Separation
from
Service is
after
March 31
of the
performance
year    N/A    N/A

 

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Provision

 

  

Tier I

(CEO)

 

  

Tier I

(Non-CEO
Executive
Officers)

 

  

Tier II

(Grades 3-5)

 

  

Other

MAAP-Eligible

(Grade 6)

 

  

Salaried

Exempt

 

  

Salaried

Non-

Exempt

 

  

Production

Non-

Union

 

COBRA    6 months    6 months    6 months    6 months    6 months    6 months   
6 months          

Outplace-

ment Assistance

   6 months    6 months    6 months    6 months    3 months    1 month    1
month           EAP    3 months    3 months    3 months    3 months    3 months
   3 months    3 months

 

  (b) Each Participant who is eligible to receive Severance Benefits due to a
Qualifying Termination as provided in Article III above, and whose termination
of employment is classified by the Employer as a Performance Termination, shall
receive, the Severance Benefits set forth below. Notwithstanding the foregoing,
any Participant who is elected by the Board shall not be eligible to receive a
benefit under this subsection 4.1(b).

 

Provision

 

  

Tier I

(Executive
Officers)

 

  

Tier II

(Grades 3-5)

 

    

Other

MAAP-Eligible

(Grade 6)

 

    

Salaried

Exempt

 

    

Salaried

Non-Exempt

 

    

Production

Non-Union

 

           

Severance Pay – Performance

Termination

   N/A     
  6 months
Base Pay   
       
  3 months
Base Pay   
       
  3 months
Base Pay   
       
  6 weeks
Base Pay   
        N/A             

COBRA

   N/A      6 months         6 months         6 months         6 months        
N/A              Outplacement Assistance    N/A      6 months         6 months
        3 months         1 month         N/A             

EAP

   N/A      3 months         3 months         3 months         3 months        
N/A   

 

  (c) Severance Pay and payment of any Prorated Final Year Bonus shall be paid
as a lump sum cash payment no later than 60 days following the Participant’s
Termination Date, subject to Section 6.6, provided that should any payments
under this Plan be delayed no interest will be owed to the Participant with
respect to such late payment. Notwithstanding the foregoing, any Prorated Final
Year Bonus that is based on actual performance shall be paid at the same time as
it was payable under the provisions of EOAAP or MAAP but no later than March 15
of the calendar year following the year in which the Termination Date occurs.

 

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  (d) Participants receiving COBRA benefits shall be eligible to receive medical
continuation coverage under COBRA for the number of months provided above if the
Participant is otherwise eligible for, and timely elects, COBRA medical
continuation coverage, and the Employer will pay the applicable monthly premium
during such period. The Participant shall be responsible for any additional
months of COBRA coverage elected beyond the months of COBRA provided by the
Corporation under this Plan. If the Participant is otherwise eligible to enroll
in other applicable COBRA coverage (e.g. dental and/or the health care spending
accounts) and elects to do so, the Participant shall be responsible for and must
pay the COBRA premium for such coverage.

 

  (e) Participants receiving Outplacement Assistance services and EAP services
as part of their Severance Benefits will receive such services, for the number
of months provided above, under the terms and conditions of the Corporation’s or
Employer’s Outplacement Assistance Program and Employee Assistance Program in
place during such time.

 

  (f) The Severance Pay determined pursuant to subsection 4.1(a) and (b) above
will be offset by any amount paid to a Participant (but not less than zero)
pursuant to the Worker Adjustment and Retraining Notification Act (“WARN”), or
any similar state law, in lieu of notice thereunder. The benefits provided under
this Plan are intended to satisfy any and all statutory obligations that may
arise out of an Eligible Employee’s involuntary termination, and the Committee
shall so construe and implement the terms of the Plan.

 

  (g) If, at the time Severance Pay is to be made hereunder, a Participant is
indebted or obligated to an Employer or any affiliate, including, but not
limited to, any repayment under the Employer’s relocation program, then such
Severance Benefits shall be reduced by the amount of such indebtedness or
obligation to the extent allowable under applicable federal or state law;
provided that the Employer may in its sole discretion elect not to reduce the
Severance Benefits by the amount of such indebtedness or obligation and provided
that any such election by the Employer shall not constitute a waiver of its
claim of such indebtedness or obligation, in accordance with applicable law.

 

  (h) Notwithstanding any provision in the Plan to the contrary, Severance
Benefits for a Participant shall be reduced by the amount of any other severance
payments or benefits paid to the Participant, whether under any severance plan
or offer letter or other individual agreement, made by an Employer.

 

  (i) Severance Benefits hereunder shall not be considered “compensation” for
purposes of determining any benefits provided under any pension, savings, or
other benefit plan maintained by an Employer.

 

4.2 Withholding. A Participant shall be responsible for payment of any federal,
Social Security, state, local or other taxes on Severance Benefits under the
Plan. The Employer shall deduct from Severance Benefits any federal, Social
Security, state, local or other taxes which are subject to withholding, as
determined by the Employer, which may be at supplemental withholding rates.

 

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4.3 Recovery of Overpayments. If it is determined that any amount paid to an
individual under this Plan should not have been paid or should have been paid in
a lesser amount, written notice thereof shall be given and such individual shall
promptly repay the amount of the overpayment to the Plan. Notwithstanding the
foregoing, the Plan in all cases reserves the right to pursue collection of any
remaining overpayments if the above recovery efforts under this paragraph have
failed.

ARTICLE V

PLAN ADMINISTRATION

BENEFITS ADMINISTRATION COMMITTEE

 

5.1 Membership. The Committee shall consist of at least three persons who shall
be officers or directors of the Corporation or Eligible Employees. Members of
the Committee shall be appointed from time to time by, and shall serve at the
pleasure of, the Chief Human Resources Officer of the Corporation (the “CHRO”).
The CHRO shall appoint one of the members of the Committee to serve as chairman.
If the CHRO does not appoint a chairman, the Committee, in its discretion, may
elect one of its members as chairman. The Committee shall appoint a secretary
who may be but need not be, a member of the Committee. The Committee shall not
receive compensation for its services. Committee expenses shall be paid by the
Corporation.

 

5.2 Powers. The Committee shall have all such powers as may be necessary to
discharge its duties hereunder, including, but not by way of limitation, the
power to construe or interpret the Plan, to determine all questions of
eligibility hereunder, to adopt rules relating to coverage, and to perform such
other duties as may from time to time be delegated to it by the Board. Any
interpretations of this Plan by persons other than the Committee or individuals
or organizations to whom the Committee has delegated administrative duties shall
have no effect hereunder. The Committee may prescribe such forms and systems and
adopt such rules and methods and tables as it deems advisable. It may employ
such agents, attorneys, accountants, actuaries, medical advisors, or clerical
assistants (none of whom need be members of the Committee) as it deems necessary
for the effective exercise of its duties, and may delegate to such agents any
power and duties, both ministerial and discretionary, as it may deem necessary
and appropriate. Notwithstanding the foregoing, any claim which arises under any
other plan shall not be subject to review under this Plan, and the Committee’s
authority under this Article V shall not extend to any matter as to which an
Administrator under such other plan is empowered to make determinations under
such plan. In administering the Plan, the Committee will be entitled, to the
extent permitted by law, to rely conclusively on all tables, valuations,
certificates, opinions and reports which are furnished to, or in accordance with
the instructions of, the Committee, or by accountants, counsel or other experts
employed or engaged by the Committee.

 

5.3

Procedures. The Committee may take any action upon a majority vote at any
meeting at which all members are present, and may take any action without a
meeting upon the unanimous written consent of all members. All action by the
Committee shall be evidenced by a certificate signed by the chairperson or by
the secretary to the Committee. The Committee shall appoint a secretary to the
Committee who need not be

 

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  a member of the Committee, and all acts and determinations of the Committee
shall be recorded by the secretary, or under his or her supervision. All such
records, together with such other documents as may be necessary for the
administration of the Plan, shall be preserved in the custody of the secretary.

 

5.4 Rules and Decisions. All rules and decisions of the Committee shall be
uniformly and consistently applied to all Eligible Employees and Participants
under this Plan in similar circumstances and shall be conclusive and binding
upon all persons affected by them.

 

5.5 Books and Records. The records of the Employers shall be conclusive evidence
as to all information contained therein with respect to the basis for
participation in the Plan and for the calculation of Severance Benefits.

 

5.6 Claim Procedure. The Committee procedure for handling all claims hereunder
and review of denied claims shall be consistent with the provisions of ERISA. If
a claim for Plan benefits is denied, the Committee shall provide a written
notice within 90 days to the person claiming the benefits that contains the
specific reasons for the denial, specific references to Plan provisions on which
the Committee based its denial and a statement that the claimant may (a) request
a review upon written application to the Committee within 60 days, (b) may
review pertinent Plan documents and (c) may submit issues and comments in
writing. If a claim is denied because of incomplete information, the notice
shall also indicate what additional information is required. If additional time
is required to make a decision on the claim, the Committee shall notify the
claimant of the delay within the original 90-day period. This notice will also
indicate the special circumstances requiring the extension and the date by which
a decision is expected. This extension period may not exceed 90 days beyond the
end of the first 90-day period.

The claimant may request a review of a denied claim by writing the Committee.
The appeal must, however, be made within 60 days after the claimant’s receipt of
notice of the denial of the claim. Pertinent documents may be reviewed by the
Participant in preparing an appeal, and issues and comments may be submitted in
writing. An appeal shall be reviewed by the Committee, and a written decision,
including reasons, shall be provided within 60 days. If additional time is
required to review the appeal, the Committee shall notify the claimant in a
written notice within the original 60 day period of its receipt of the appeal
and indicating that the decision will be delayed. A final decision on the appeal
shall be made within 120 days of the Committee’s receipt of the appeal.

The Committee shall have all of the authority with respect to all aspects of
claims for benefits under the Plan, and it shall administer this authority in
its sole discretion.

 

5.7 Committee Discretion.

 

  (a) Any action on matters within the discretion of the Committee, including
but not limited to, the amount of Severance Benefits conferred upon a
Participant, shall be final and conclusive as to all parties. The Committee
shall exercise all of the powers, duties and responsibilities set forth
hereunder in its sole discretion. Notwithstanding anything in this Plan to the
contrary, the Committee shall have the sole discretion to interpret the
operation and terms of the Plan, including but not limited to, whether a
Participant has experienced a Qualifying Termination, whether a Participant’s
termination is for Cause, whether a Participant is offered a Comparable
Position, and whether Severance Benefits shall be payable to any Participant
under this Plan.

 

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  (b) An increase or decrease in the amount of Severance Benefits for Eligible
Employees who are not elected by the Board, different than the amount set forth
in 4.1(a) and (b) above may be authorized in their sole discretion by (i) the
Committee, (ii) a Group President or Senior Vice President of the Corporation
with the endorsement of either the Senior Vice President Global Human Resources
or the Vice President Compensation and Benefits or (iii) the Chief Executive
Officer. Any such increase or decrease in the amount of Severance Benefits shall
be final and conclusive as to all parties.

 

  (c) An increase or decrease in the amount of Severance Benefits for Eligible
Employees who are elected by the Board, different than the amount set forth in
4.1(a) and (b) above, may be authorized in their sole discretion by the
Compensation Committee of the Board. Any such increase or decrease in the amount
of Severance Benefits shall be final and conclusive as to all parties.

 

5.8 Plan Amendments. The Board may from time to time modify, alter, amend or
terminate the Plan. Any action permitted to be taken by the Board under the
foregoing provision may be taken by the CHRO if such action:

 

  (a) is required by law, or

 

  (b) is estimated not to increase the annual cost of the Plan by more than
$5,000,000, or

 

  (c) is estimated not to increase the annual cost of the Plan by more than
$25,000,000 provided such action is approved and duly executed by the Chief
Executive Officer.

Any action taken by the Board or CHRO shall be made by or pursuant to a
resolution or action duly adopted by the Board or CHRO and shall be evidenced by
such resolution or by a written instrument executed by such persons as the Board
or CHRO shall authorize for that purpose.

The Board or CHRO also shall have the right to make any amendment retroactively
which is necessary to bring the Plan into conformity with the Code or which is
otherwise permitted by applicable law. Any such amendment will be binding and
effective for the Employer.

Any action which is required or permitted to be taken by the Board under the
provisions of this Plan may be taken by the Compensation Committee of the Board
or any other duly authorized committee of the Board designated under the By-Laws
of the Corporation.

The Board, the Compensation Committee or any duly authorized committee of the
Board, the Chief Executive Officer or the CHRO may authorize persons to carry
out its policies and directives subject to the limitations and guidelines set by
it, and delegate its authority under the Plan.

 

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5.9 Delegation of Duties. This Plan is sponsored by the Corporation. The
Committee reserves the right to delegate any and all administrative duties to
one or more individuals or organizations. Any reference herein to any other
entity or person, other than the Committee or any of its members, which is
performing administrative services shall also include any other third party
administrators. The responsibilities of any third party administrator may be
governed, in part, by a separate administrative services contract.

 

5.10 Funding. Severance Benefits shall be paid from the general assets of the
Employer.

ARTICLE VI

LIMITATIONS AND LIABILITIES

 

6.1 Non-Guarantee of Employment. Nothing contained in this Plan shall be
construed as a contract of employment between an Employer and a Participant, or
as a right of any Participant to continue in the employment of an Employer, or
as a limitation of the right of an Employer to discharge any Participant with or
without Cause. Nothing contained in this Plan shall affect the eligibility
requirements under any other plans maintained by the Employer, nor give any
person a right to coverage under any other Plan.

 

6.2 Non-Alienation. Except as otherwise provided herein, no right or interest of
any Participant or Beneficiary in the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, attachment, garnishment, execution, levy, bankruptcy, or any other
disposition of any kind, either voluntary or involuntary, prior to actual
receipt of payment by the person entitled to such right or interest under the
provisions hereof, and any such disposition or attempted disposition shall be
void.

 

6.3 Applicable Law. This Plan is construed under, to the extent not preempted by
federal law, enforced in accordance with and governed by, the laws of the State
of Delaware. If any provision of this Plan is found to be invalid, such
provision shall be deemed modified to comply with applicable law and the
remaining terms and provisions of this Plan will remain in full force and
effect.

 

6.4 Notice. Any notice given hereunder is sufficient if given to a Participant
by the Employer, or if mailed to the Participant to the last known address of
the Participant as such address appears on the records of the Employer.

 

6.5 Service of Process. The Chair of the Committee shall be the designated
recipient of the services of process with respect to legal actions regarding the
Plan.

 

6.6 No Guarantee of Tax Consequences. It is intended that the payments and
benefits provided under the Plan shall either be exempt from the application of,
or comply with, the requirements of Section 409A of the Code. The Plan shall be
construed in a manner that effects such intent. Nevertheless, the tax treatment
of the benefits provided under the Plan is not warranted or guaranteed. Neither
the Corporation or any other Employer nor its respective directors, officers,
employees or advisers (other than in his or her capacity as a Participant) shall
be held liable for any taxes, interest, penalties or other monetary amounts owed
by any Participant or other taxpayer as a result of the Plan.

 

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Notwithstanding anything in the Plan to the contrary, to the extent that any
amount or benefit that would constitute non-exempt “deferred compensation” for
purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would
otherwise be payable or distributable under the Plan by reason of the occurrence
of the Participant’s termination of employment, such Non-Exempt Deferred
Compensation will not be payable or distributable to the Participant by reason
of such circumstance unless the circumstances giving rise to such termination of
employment meet any description or definition of “separation from service” in
Section 409A of the Code and applicable regulations (without giving effect to
any elective provisions that may be available under such definition). If this
provision prevents the payment or distribution of any Non-Exempt Deferred
Compensation, such payment or distribution shall be made on the date, if any, on
which an event occurs that constitutes a Section 409A-compliant “separation from
service.” Each payment of Severance Benefits pursuant to this Plan shall be
considered a separate payment, as described in Treas. Reg.
Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.

Whenever in this Plan a payment or benefit is conditioned on the Participant’s
execution of a Separation Agreement, the Separation Agreement must be executed
and all revocation periods shall have expired in accordance with terms set forth
therein, but in no case later than sixty (60) days after the Termination Date;
failing which such payment or benefit shall be forfeited. If such payment or
benefit constitutes Non-Exempt Deferred Compensation, then such payment or
benefit (including any installment payments) that would have otherwise been
payable during such 60-day period shall be accumulated and paid on the 60th day
after the Termination Date provided such release shall have been executed and
such revocation periods shall have expired. If such payment or benefit is exempt
from Section 409A of the Code, the Corporation may elect to make or commence
payment at any time during such 60-day period.

 

6.7 Limitation of Liability. Neither the Corporation or any other Employer nor
the Committee shall be liable for any act or failure to act which is made in
good faith pursuant to the provisions of the Plan, except to the extent required
by applicable law. It is expressly understood and agreed by each Eligible
Employee who becomes a Participant that, except for its or their willful
misconduct or gross neglect, neither the Corporation or any other Employer nor
the Committee shall be subject to any legal liability to any Participant, for
any cause or reason whatsoever, in connection with this Plan, and each such
Participant hereby releases the Corporation, its Subsidiaries, their officers
and agents, and the Committee, from any and all liability or obligation except
as provided in this paragraph.

 

6.8 Indemnification of the Committee. The Corporation shall indemnify the
Committee and each of its members and hold them harmless from the consequences
of their acts or conduct in their official capacity, including payment for all
reasonable legal expenses and court costs, except to the extent that such
consequences are the result of their own willful misconduct or breach of good
faith.

 

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APPENDIX A

SUBSIDIARIES NOT PARTICIPATING IN THE HALYARD HEALTH, INC.

SEVERANCE PAY PLAN

 

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