Exhibit 10.5


 





 


 


NEENAH PAPER


SUPPLEMENTAL PENSION PLAN


 





















 


NEENAH
PAPER SUPPLEMENTAL PENSION PLAN


 


ARTICLE I



INTRODUCTION


 


1.1                                 Establishment
of the Plan.  Neenah Paper, Inc. (the
“Company”) hereby establishes a supplemental benefits plan for its Employees,
to be known as the Neenah Paper Supplemental Pension Plan (the “Plan”), as set
forth in this document.


 


1.2                                 Background.  Effective as of November 30, 2004 (the “Distribution
Date”), a spinoff of the Company, then a subsidiary of Kimberly-Clark Corporation,
was effectuated by the distribution of Company shares to Kimberly-Clark
Corporation’s shareholders.  In
connection with the spinoff transaction, the Company agreed to establish a
supplemental pension plan similar to the Supplemental Benefit Plan to the
Kimberly-Clark Corporation Pension Plan and the Second Supplemental Benefit
Plan to the Kimberly-Clark Corporation Pension Plan for the benefit of certain
employees who were hired by the Company.


 


1.3                                 Type
of Plan.  This Plan is intended to be
both (i) an unfunded “excess benefit plan” within the meaning of Section 3(36)
and 4(b)(5) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) and (ii) an unfunded plan of deferred compensation for a select group
of management or highly compensated employees, within the meaning of Title I of
ERISA.


 


1.4                                 Purpose.  As an unfunded excess benefit plan and an
unfunded plan of deferred compensation, the purpose of this Plan is solely to
provide benefits to participants in the Neenah Paper Pension Plan, as amended
and restated from time to time (the “Pension Plan”), which exceed the
limitation on benefits imposed by Section 415 of the Internal Revenue Code of
1986, or any comparable provision of any future legislation which amends,
supplements or supersedes that Section (“Section 415 of the Code”).  Additionally, this Plan will provide such
benefits in addition to the Pension Plan, which are necessary to fulfill the
Pension Plan’s intent without regard to Code Section 401(a)(17) or any dollar
limit imposed by the Code on the amount of compensation considered under the
Pension Plan.


 


1.5                                 Effective
Date.  The effective date of the Plan
is December 1, 2004.


 





















 


ARTICLE
II



DEFINITIONS & CONSTRUCTION


 


Each term that
is used in this Plan and also used in the Pension Plan shall have the same
meaning herein as under the Pension Plan.


 


Notwithstanding
the above, for purposes of this Plan, where the following words and phrases
appear in this Plan they shall have the respective meanings set forth below
unless the context clearly indicates otherwise:


 


2.1                                 Affiliate.  The Company and any company, person or
organization which, on the date of determination, (A) is a member of a
controlled group of corporations (as defined in Code section 414(b)) which
includes the Company; (B) is a trade or business (whether or not incorporated)
which controls, is controlled by or is under common control with (within the
meaning of Code section 414(c)) the Company; (C) is a member of an affiliated
service group (as defined in Code section 414(m)) which includes the Company;
or (D) is otherwise required to be aggregated with the Company pursuant to Code
section 414(o) and regulations promulgated thereunder.


 


2.2                                 Benefit.  Any benefit payable pursuant to, and
determined in accordance with the provisions of this Plan.


 


2.3                                 Board.  The Board of Directors of Neenah Paper, Inc.


 


2.4                                 Change
of Control.  A Change of Control
shall be deemed to have taken place upon:


 


(A)                              Acquisition
of Substantial Percentage.  The
acquisition by any Person of Beneficial Ownership of thirty percent (30%) or
more of the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of Directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this
Section, the following acquisitions shall not constitute a Change in Control:  (i) any acquisition by a Person who on the Effective
Date is the Beneficial Owner of thirty percent (30%) or more of the Outstanding
Company Voting Securities, (ii) any acquisition directly from the Company,
including without limitation, a public offering of securities, (iii) any acquisition
by the Company, (iv) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any of its Affiliates, or (v)
any acquisition by any corporation pursuant to a transaction which complies
with subparagraphs (i), (ii), and (iii) of Section 2.4(C) hereof;


 


(B)                                Change
in Majority of Board Members.  During
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board, provided that any individual
becoming a Director whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the Directors
then comprising the Incumbent Board shall


 


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be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election or removal of the Directors of the Company or other actual or
threatened solicitation of proxies of consents by or on behalf of a Person
other than the Board;


 


(C)                                Reorganization,
Merger or Consolidation. 
Consummation of a reorganization, merger, or consolidation to which the
Company is a party or a sale or other disposition of all or substantially all
of the assets of the Company (a “Business Combination”), in each case unless,
following such Business Combination: (i) all or substantially all of the individuals
and entities who were the Beneficial Owners of Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than sixty percent (60%) of the combined voting
power of the outstanding voting securities entitled to vote generally in the
election of Directors of the Company resulting from the Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more Affiliates) (the “Successor
Entity”) in substantially the same proportions as their ownership immediately
prior to such Business Combination of the Outstanding Company Voting Securities;
and (ii) no Person (excluding any Successor Entity or any employee benefit
plan, or related trust, of the Company or such Successor Entity) beneficially
owns, directly or indirectly, thirty percent (30%) or more of the combined
voting power of the then outstanding voting securities of the Successor Entity,
except to the extent that such ownership existed prior to the Business
Combination; and (iii) at least a majority of the members of the board of
directors of the Successor Entity were members of the Incumbent Board
(including persons deemed to be members of the Incumbent Board by reason of the
proviso to paragraph (b) of this Section) at the time of the execution of the
initial Participation Agreement or of the action of the Board providing for
such Business Combination; or


 


(D)                               Liquidation
or Dissolution.  Approval by the
shareholders of the Company of a complete liquidation or dissolution of the Company.


 


2.5                                 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.


 


2.6                                 Company.  Neenah Paper, Inc., a Delaware corporation.


 


2.7                                 Supplemental
Benefit.  The Supplemental Benefit
shall be the difference between:


 


(A)                              the
monthly amount payable under the Pension Plan, which monthly amount shall be
calculated (i) without regard to Article XII of the Pension Plan and (ii) using
the term Earnings defined as set forth in Section 2.9; less


 


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(B)                                the
sum of (i) the monthly amount payable under the Pension Plan and (ii) the monthly
amount payable as an Excess Benefit under this Plan.


 


2.8                                 Distribution
Date.  November 30, 2004, the date
upon which a spinoff of the Company, then a subsidiary of Kimberly-Clark
Corporation, was effected through the distribution of Company shares to
Kimberly-Clark Corporation’s shareholders.


 


2.9                                 Earnings.  Earnings shall have the same meaning herein
as under the Pension Plan.  For the
purposes of this Plan, however, the Earnings paid to an Employee for a Plan
Year in excess of $200,000 (or such limit as adjusted at the same time and in
the same manner as under Section 401(a)(17)(B) of the Code for that Plan Year)
shall be included in determining the Supplemental Benefit under this Plan.


 


2.10                           Effective
Date.  December 1, 2004, or with
respect to a particular Affiliate, such later date as of which the Plan
Administrative Committee deems such Affiliate to be a Participating Employer in
the Plan.


 


2.11                           Employee.  An Employee as defined in the Schedules to
the Pension Plan; provided, notwithstanding any other provision in the Plan, a
person whose only relationship to the Plan is that of a leased employee shall
not be an Employee and shall not be entitled to benefit under the Plan. For
purposes of the preceding sentence, the term “leased employee” means any person
(other than an employee of recipient) who pursuant to an agreement between the
recipient and any other person (a “leasing organization”) has performed
services for the recipient (or for the recipient and related persons determined
in accordance with section 414(n) of the Code) on a substantially full-time
basis for a period of at least one year, and such services are performed under
the primary direction and control of the recipient.


 


2.12                           Employer.  The Company and each Affiliate that the Plan
Administrative Committee shall from time to time designate as a Participating
Employer for purposes of the Plan as shown in Appendix A of the Pension Plan.


 


2.13                           ERISA.  The Employee Retirement Income Security Act
of 1974, as amended from time to time, and as construed and interpreted by
valid regulations or rulings issued thereunder.


 


2.14                           Excess
Benefit.  The amounts paid to a
Pensioner (or such spouse or designated beneficiary, as the case may be) of
Disability Benefit, Basic Benefit, Optional Joint and Survivor Benefit,
Pensioners Benefit, Survivors Benefit, Optional Years Certain and Life Benefit,
Deferred Benefit, Automatic Survivor’s Benefit, (all as defined in the Pension
Plan) and any other benefits including benefits distributed upon termination of
the Plan (as the case may be) as would have been paid to such person under the
Pension Plan without regard to the limitation on benefits imposed by Section
415 of the Code, but only to the extent that the amount of such benefits
exceeds such limitation.


 


2.15                           Lump
Sum Payment.  A form of benefit
payable as a lump sum cash payment, actuarially determined based on the rate of
interest equivalent to the yield on a 20-year Treasury Bond as published in the
Federal Reserve Statistical Release for the week that contains


 


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the
first business day of the month prior to the date such Lump Sum payment is
payable under this Plan, or such other rate as determined pursuant to uniform
Plan Administrative Committee rules, and the mortality table set forth for
determining actuarial equivalent benefits under Section 10.1(a) of the Pension
Plan, and (i) in the case of a lump sum payment pursuant to Section 4.1(A) of
this Plan, based on the Participant’s Benefit payable from this plan and his
age at the date of such lump sum payment, and (ii) in the case of a lump sum
payment pursuant to Section 4.1(B) of this Plan, based on the Participant’s
Benefit payable under this Plan, the earliest age at which his Benefit from the
Pension Plan could commence if he terminated employment, and the early
retirement reduction factor applicable at such age of commencement.  Notwithstanding the foregoing, the 20-year
Treasury Bond yield shall be used in determining a lump sum cash payment so
long as such rate is published by the Federal Reserve.  In the event that the Federal Reserve ceases
to publish the 20-year Treasury Bond rate, a lump sum cash payment will be
actuarially determined based on the rate of interest equivalent to the yield on
the longest term Treasury Bond published in the Federal Reserve Statistical
Release which is no more than 20-years but not less than for a 10-year term.


 


2.16                           Participant.  A participant in this Plan is a Participant
in the Pension Plan and


 


(A)                              is
eligible to receive an Excess Benefit, pursuant to Section 3.1(A), upon his
termination of employment; and/or


 


(B)                                is
eligible to receive a Supplemental Benefit, pursuant to Section 3.1(B); except,
no individual shall be a Participant herein to the extent that such participation
is precluded by an agreement between the Company and such individual or such
individual is subject to a separate agreement regarding deferred compensation
which provides for similar benefits.


 


2.17                           Participating
Employer.  An Employer that has been
approved by the Plan Administrative Committee as an Employer participating in
the Plan.  Appendix A to the Pension
Plan sets forth a list of Participating Employers and may be amended from time
to time by the Plan Administrative Committee without Board action or approval.


 


2.18                           Pension
Plan.  The Neenah Paper Pension Plan.


 


2.19                           Pensioner.  A person whose employment with an Employer
has terminated and who is receiving a Benefit from the Pension Plan based upon
such employment.


 


2.20                           Plan.  This Neenah Paper Supplemental Pension Plan,
as amended from time to time.


 


2.21                           Plan
Administrative Committee.  The
committee appointed by the Board to administer and regulate the Plan as
provided in Section 5.3 of this Plan.


 


2.22                           Plan
Year.  The short period beginning on December
1, 2004, and ending on December 31, 2004; and thereafter, each twelve calendar
month period beginning on January 1 and ending on the following December 31.


 


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2.23                           Timely
Elected.  Shall mean as follows:


 


(A)                              The
Participant has elected to receive a Lump Sum Payment no later than the
calendar year prior to the year in which the payments are eligible to commence
under the Pension Plan.


 


(B)                                In
the event of the death of the Participant who has not commenced payments under
this Plan, the Participant’s surviving spouse or designated beneficiary, as the
case may be, may, with the consent of the Plan Administrative Committee, elect
a Lump Sum Payment in writing no later than thirty (30) days after the Participant’s
date of death.


 


(C)                                In
the event that a Participant terminates service due to a Disability as
described in the relevant Schedule to the Pension Plan, the Participant may,
with the consent of the Plan Administrative Committee, elect a Lump Sum Payment
in writing no later than thirty (30) days after the date the Participant is
determined to be disabled under the Pension Plan.


 


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



BENEFITS


 


3.1                                 Eligibility.


 


(A)                              Excess
Benefit.  A Participant in the
Pension Plan is eligible to receive an Excess Benefit under this Plan if such
Participant


 


(1)                                  is
entitled to receive benefits under the Pension Plan; and


 


(2)                                  would
have received additional benefits under the Pension Plan were it not for the
limitation on benefits imposed by Section 415 of the Code.


 


(B)                                Supplemental
Benefit.  A Participant in the
Pension Plan is eligible to receive a Supplemental Benefit under this Plan if
such Participant


 


(1)                                  is
a managerial or highly compensated employee of an Employer within the meaning
of Title I of ERISA; and


 


(2)                                  has
earnings in excess of the limit provided under Section 401(a)(17) of the Code
for any calendar year in which the Participant participates in the Pension
Plan; and


 


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(3)                                  would
have received additional benefits under the Pension Plan were it not for the
limitation on benefits imposed by Section 401(a)(17) of the Code.


 


3.2                                 Payment
of Benefits.  All amounts payable to
a Participant as an Excess Benefit and Supplemental Benefit shall be paid to
such Participant at the same times, on the same terms and conditions, and
pursuant to the same elections made by the Employee, as they would have been if
paid under the Pension Plan, were it not for the limitations imposed on
benefits by Sections 415 and 401(a)(17) of the Code.


 


ARTICLE IV



LUMP SUM PAYMENTS


 


4.1                                 Election.  Notwithstanding any other provision of the
Pension Plan, a Participant (or surviving spouse or designated beneficiary, as
the case may be) shall receive his Benefit payable under Article III as a Lump
Sum Payment (subject to any applicable payroll or other taxes required to be
withheld) under the following circumstances:


 


(A)                              The
Participant (or surviving spouse or designated beneficiary, as the case may be)
has Timely Elected to receive such Lump Sum Payment;


 


(B)                                if
the Company experiences a Change of Control, the Participant shall, within the
time period specified below, receive his or her Benefit as a Lump Sum Payment;
or


 


(C)                                in
any event, the amount of the Lump Sum Payment is equal to or less than $100,000.


 


4.2                                 Timing
of Payment.  A Lump Sum Payment shall
be payable:


 


(A)                              if
a Participant has Timely Elected to receive a Lump Sum Payment, then such Lump
Sum Payment shall be payable at the same time as payments are eligible to
commence under the Pension Plan; and


 


(B)                                if
a Participant is to receive a Lump Sum Payment pursuant to a Change of Control,
then such Lump Sum Payment shall be paid within thirty (30) days of the date of
the Change of Control.


 


4.3                                 Limitations
on Timing of Payment. 
Notwithstanding anything in the Plan or the Pension Plan to the
contrary, any amounts payable to a Participant under the Plan shall be subject
to the limitations on timing of payment specified by the American Jobs Creation
Act of 2004, and regulations issued thereunder, so that payment shall not be
distributed earlier than:


 


(A)                              With
respect to a “key employee” as defined in Code Section 416(i) (without regard
to paragraph (5) thereof), the date six (6) months after the Participant’s


 


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date
of separation from service with all Affiliates, or with respect to all other
Participants, the date of the Participant’s separation from service with all
Affiliates;


 


(B)                                The
date that Participant becomes disabled, as defined below;


 


(C)                                The
date of the Participant’s death;


 


(D)                               If
applicable under the Plan, a fixed date or schedule, if specified under the Pension
Plan as of the date that Supplemental Benefits or Excess Benefits accrue under
this Plan with respect to the Participant;


 


(E)                                 The
date on which a Change of Control occurs; or


 


(F)                                 If
applicable under the Plan, the date of the Participant’s unforeseeable emergency.


 


4.4                                 Discretion
of Plan Administrative Committee.  If
a Participant (or surviving spouse or designated beneficiary, as the case may
be) elects a Lump Sum Payment pursuant to subsection 4.1 (A) above, such
election is subject to approval by the Plan Administrative Committee in its
sole discretion.


 


4.5                                 Penalties.  If a Participant (or surviving spouse or
designated beneficiary, as the case may be) receives a Lump Sum Payment
pursuant to subsection 4.1 (B) above, the Lump Sum Payment shall be reduced for
active Employees by a penalty equal to ten percent (10%) of the Benefit
otherwise payable and for former Employees (or spouses or designated
beneficiaries) by a penalty equal to five percent (5%) of the Benefit otherwise
payable.  Such penalty shall be permanently
forfeited and shall not be paid to, or in respect of, the Employee, former
Employee, or spouse or designated beneficiary.


 


4.6                                 Form
of Benefit.  Notwithstanding any
other provisions of this Plan to the contrary, except where waived by the
Participant’s spouse as required under the provisions of the Pension Plan, all Benefits
payable to a Participant shall be paid in the same form as the benefits would
be payable under the Pension Plan; provided, however, if the amount of the Lump
Sum Payment, calculated as if such Participant (or surviving spouse or
designated beneficiary, as the case may be) had made an election to receive a
Lump Sum Payment at the earliest time that such person could have made an
election under subsection 4.1 (A), does not exceed $100,000, then such Lump Sum
Payment shall be paid at the earliest time such person could have made an
election under subsection 4.1 (A).


 


4.7                                 Postponement
of Payment.  Notwithstanding any
other provisions of this Plan to the contrary, in the event that a portion of
the Lump Sum Payment due a Participant pursuant to this Article IV would not be
deductible by the Company pursuant to Section 162(m) of the Code, the Company,
at its discretion, may postpone payment of such amounts to the Participant
until such time that the payments would be deductible by the Company; provided,
however, that no payment postponed pursuant to this paragraph shall be
postponed beyond the first anniversary of the date such Participant terminated


 


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employment.  Any Lump Sum Payment postponed pursuant to
this paragraph shall include interest for the period such Lump Sum Payment is
postponed at a rate yielding interest equivalent to the per annum secondary
market discount rate for six-month U.S. Treasury Bills as published by the
Federal Reserve Board for the calendar week ending prior to January 1 (for
interest to be credited for either of the two subsequent fiscal quarters ending
March 31 or June 30) or prior to July 1 (for interest to be credited for either
of the subsequent fiscal quarters ending on September 30 or December 31), or
such other rate as determined pursuant to uniform Plan Administrative Committee
rules.


 


4.8                                 Additional
Accrual.  If a Participant has
received a Lump Sum Payment pursuant to this Article IV, such Participant may
accrue an additional Benefit under this Plan after the date of such Lump Sum
Payment, provided, however, that such future participation shall not result in
duplication of benefits.  Accordingly, if
he has received a distribution of a Benefit under the Plan by reason of prior
participation, his Benefit shall be reduced by the actuarial equivalent (at the
date of the later distribution) of the present value of the Benefit previously
paid hereunder.


 


ARTICLE V


 


MISCELLANEOUS


 


5.1                                 Funding.  This Plan shall not be a funded plan, and the
Company shall be under no obligation to set aside any funds for the purpose of
making payments under this Plan.  Any
payments hereunder shall be made out of the general assets of the Employer.


 


5.2                                 Amendment
and Termination.  The Company, by
action of the Board, shall have the right at any time to amend this Plan in any
respect or to terminate this Plan.


 


5.3                                 Plan
Administrative Committee.  The Plan
Administrative Committee under the Pension Plan, as constituted from time to
time, shall administer this Plan and shall have the same powers and duties, and
shall be subject to the same limitations as are set forth in the Pension Plan.


 


5.4                                 Termination
of Pension Plan.  Subject to the
provisions of Section 5.2, this Plan shall terminate when the Pension Plan
terminates.


 


5.5                                 Plan
Sponsor.  The Company is the Plan
Sponsor and Named Fiduciary of the Plan, within the meaning of ERISA.


 


5.6                                 Coordination
with Pension Plan.  An application or
claim for a benefit under the Pension Plan, or an election to receive his
benefit in a Lump Sum Payment, shall constitute a claim for a Benefit under
this Plan.


 


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IN WITNESS
WHEREOF, the Company has caused this Plan to be executed by its duly authorized
officer.


 


	
   

  	
  NEENAH PAPER, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
						



 


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