EX-10.3



 Exhibit 10.3 

EMPLOYEE MATTERS AGREEMENT 

This Employee Matters Agreement (“Agreement”), dated as of
                    , 2014, is between Kimberly-Clark Corporation (“Kimberly-Clark”), a Delaware corporation, and Halyard Health,
Inc. (“Halyard”), a Delaware corporation. 
 RECITALS 

1. Kimberly-Clark and Halyard have entered into a Distribution Agreement dated as of October     , 2014 (the
“Distribution Agreement”) pursuant to which all of the outstanding shares of Halyard’s common stock will be distributed on a pro rata basis to the holders of Kimberly-Clark’s common stock (the “Distribution”). 

2. Pursuant to the Distribution Agreement, Kimberly-Clark will transfer, or cause its subsidiaries to transfer, to Halyard certain assets and
liabilities prior to the Distribution. 
 3. In connection with the Distribution, Kimberly-Clark and Halyard desire to enter into this
Employee Matters Agreement. 
 In consideration of the mutual agreements contained herein and in the Distribution Agreement, the parties
hereto agree as follows: 
 ARTICLE I 

DEFINITIONS 
 As used in
this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meanings set forth in the Distribution Agreement. 

1.01 “Automatic Transfer Employee” means a Business Employee (other than an Isolated Employee) whose employment transfers or
will transfer from Kimberly-Clark to Halyard as a result of the implementation of the Distribution Agreement and/or by operation of any Automatic Transfer Law. 

1.02 “Automatic Transfer Law” means any law which provides for the transfer of an employee from Kimberly-Clark to Halyard
automatically by operation of law (including, without limitation, the EU’s Acquired Rights Directive (Council Directive 2001/23/EC) and any implementing legislation in respect thereof). 

1.03 “Business Employee” means any and all of the following: (i) an individual employed at any time on or prior to the
Distribution Date by Kimberly-Clark who has, as of the Distribution Date, or who, immediately prior to his or her termination of employment with Kimberly-Clark, had employment duties primarily related to the Halyard Business; (ii) the Isolated
Employees; and (iii) the administrative and functional support personnel to be agreed upon between Kimberly-Clark and Halyard.  

1.04 “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as codified at Part 6 of Subtitle B of Title I
of ERISA and at section 4980B of the Code. 

  
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 1.05 “Domestic Business Employee” means a Business Employee who is employed by
Kimberly-Clark in the United States. 
 1.06 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
29 U.S.C. §1001, et. seq. 
 1.07 “Foreign Business Employee” means a Business Employee employed by
Kimberly-Clark outside the United States. 
 1.08 “Isolated Employee” means a Business Employee employed by Kimberly-Clark
or a third party leasing agency or other entity on behalf of Kimberly-Clark on or prior to the Distribution Date in a jurisdiction where Halyard does not intend to have a legal entity presence following the Distribution Date, and to be agreed upon
between Kimberly-Clark and Halyard. 
 1.09 “Isolated Employer” means the employee leasing agency or other third party
entity by whom an Isolated Employee is employed on or before the Distribution Date, or where the context requires, after the Distribution Date, as agreed upon between Kimberly-Clark and Halyard. 

1.10 “Non-Automatic Transfer Employee” means a Business Employee who is not an Automatic Transfer Employee and not an
Isolated Employee. 
 1.11 “Non-ERISA Benefit Arrangement” means each contract, agreement, policy, practice, program, plan,
trust or arrangement, other than a Pension Plan or Welfare Plan, providing for benefits, perquisites or compensation of any nature to any Business Employee, or to any family member, dependent or beneficiary of any such Business Employee, including,
without limitation, disability, severance, health, dental, life, accidental death and dismemberment, travel and accident, tuition reimbursement, supplemental unemployment, vacation, sick, personal or bereavement days, holidays, retirement, deferred
compensation, profit sharing, bonus, stock-based compensation or other forms of incentive compensation. 
 1.12 “Pension
Plan” means any pension plan as defined in section 3(2) of ERISA, without regard to sections 4(b)(4) or 4(b)(5) of ERISA. 

1.13 “Transferred Employee” means any Automatic Transfer Employee described in Section 2.01(a) or any Non-Automatic
Transfer Employee described in Section 2.01(b) who is employed by Halyard immediately following the Effective Time (or as soon thereafter as is legally permissible or practicable or such other time as is specified in Section 2.01). Where
applicable, the term also includes the Isolated Employees agreed upon between Kimberly-Clark and Halyard.  
 1.14 “Welfare
Plan” means any employee welfare plan as defined in section 3(1) of ERISA, without regard to sections 4(b)(4) or 4(b)(5) of ERISA 

1.15 Any reference in this Agreement to an individual’s employment or engagement by Kimberly-Clark or by Halyard (and any
reference to any related benefit provided by such entity), shall, where the context requires, be deemed to be a reference to the employment or engagement of that individual (or the provision of such a benefit) by any relevant Kimberly-Clark or
Halyard subsidiary or Affiliate. 

  
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 1.16 Any reference in this Agreement to “substantially similar terms and
conditions” or any equivalent phrase shall mean substantially similar terms and conditions of employment for the employee or other service provider in question (relating, where relevant, to salary, wages, incentive pay opportunity, equity
compensation, employee welfare benefits, retirement benefits, or other terms and conditions of employment, or where the context indicates, any combination thereof), as in effect at Kimberly-Clark (or, where relevant, an Isolated Employer) on the
Distribution Date, but subject to the exceptions set forth herein or agreed upon between Kimberly-Clark and Halyard. 
 ARTICLE II

 TRANSFERRED EMPLOYEE MATTERS 

2.01 Employment. 
 (a)
Automatic Transfer Employees. The Automatic Transfer Employees shall transfer from Kimberly-Clark to Halyard by operation of law, effective as of the Distribution Date. Except to the extent set out in this Agreement or otherwise agreed
between the parties, such employees shall be employed by Halyard on terms and conditions as required by the relevant Automatic Transfer Law. 

(b) Non-Automatic Transfer Employees. On or before the Distribution Date (or (i) as soon thereafter as is legally permissible,
taking into account the timing of the formation of the local Halyard subsidiaries, immigration laws and other applicable requirements, or (ii) such later time as provided in the Transition Services Agreement or other agreement between the
parties), Halyard shall (unless otherwise expressly agreed between the parties in respect of any one or more individual, including without limitation, any individual on worker’s compensation in a jurisdiction where an employment transfer would
cause loss of such benefits) employ or (if already employed) continue to employ each Non-Automatic Transfer Employee who, as of the day immediately prior thereto is employed by Kimberly-Clark, including any such employee who is then an inactive
employee on approved medical, non-medical or short-term disability, long-term disability or weekly indemnity leave of absence or absent from active employment due to occupational illness or injury covered by workers’ compensation (with the
employees on disability or leave, to Kimberly-Clark’s best knowledge as of September 30, 2014, agreed upon between Kimberly-Clark and Halyard). Except to the extent set out or scheduled in this Agreement or otherwise agreed between the
parties, such employee shall initially be employed by Halyard on terms and conditions substantially similar in the aggregate to the terms and conditions of such employee’s last day of employment with Kimberly-Clark. 

(c) Isolated Employees. Except to the extent they agree otherwise, the parties shall use their respective reasonable endeavors to
ensure that any Isolated Employees being employed by Kimberly-Clark or an Isolated Employer on or before the Distribution Date are employed or offered employment by Halyard or a 3rd party staffing agency providing staffing services to Halyard (or
other 3rd party employer) as agreed upon between Kimberly-Clark and Halyard opposite the name of each Isolated Employee associated with such employer, on such initial terms and conditions substantially similar in the aggregate to the terms and
conditions of such employee’s last day of employment with Kimberly-Clark or the relevant Isolated Employer. 

  
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 (d) Terms and Conditions of Transferred Employees. In respect of each Transferred
Employee, the terms and conditions of that employee’s employment with Halyard (i) shall be communicated to each such Transferred Employee prior to the Distribution Date in a form mutually satisfactory to Halyard and Kimberly-Clark,
(ii) except as otherwise provided herein, shall include credit, for all purposes, for all years of service credited by Kimberly-Clark (other than under retiree medical or retiree life plans), (iii) shall include credit for all hours worked
for or paid by Kimberly-Clark for overtime, leave of absence and unemployment compensation purposes, and (iv) may include a requirement to execute one or more agreements dealing with confidentiality, non-competition, non-solicitation, or other
similar obligations, between such Transferred Employee and Halyard. To the extent legally possible, Business Employees temporarily seconded to Halyard shall remain Kimberly-Clark employees until actually transferred to Halyard and the provisions
herein relating to Transferred Employees shall not apply until such transfer of employment occurs. Such employees to be seconded will be agreed upon between Kimberly-Clark and Halyard. Similarly, Business Employees who are not transferred or moved
to Halyard until after the Distribution Date (either pursuant to the terms of the Transition Services Agreement or otherwise) shall remain Kimberly-Clark employees and shall not become Transferred Employees until actually transferred or moved to
Halyard, and the provisions herein relating to Transferred Employees shall not apply until such transfer or movement of employment occurs. 

2.02 Severance. It is not intended that any Transferred Employee or other Business Employee will be eligible for termination or
severance payments or benefits from Kimberly-Clark as a result of the transfer or change of employment from Kimberly-Clark to Halyard (or, in the case of an Isolated Employee, the change of employment from Kimberly-Clark to an Isolated Employer).
Notwithstanding the preceding sentence, in the event that any such termination or severance payments or benefits become payable on account of such transfer, change or the refusal of a Business Employee to accept employment with Halyard (or, with
respect to an Isolated Employee, to accept employment with an Isolated Employer), Halyard shall indemnify Kimberly-Clark for the amount of such termination or severance payments or benefits. Halyard shall be liable, and indemnify Kimberly-Clark for
any termination or severance obligations owed to Business Employees on or after the Distribution Date.  
 2.03 Employment
Solicitation. For a period of 12 months following the Distribution Date, neither Kimberly-Clark nor Halyard may, and will not permit any of their respective subsidiaries, Affiliates or agents to, solicit or recruit for employment any then
current employees of the other company or its subsidiaries or Affiliate, without the prior written consent of the other company. Nothing in this Section 2.03 shall be construed so as to (i) prohibit the hiring by either company or its
subsidiaries or Affiliates of any employee of the other company who initiated contact for the purpose of seeking employment without prior contact initiated by any employee or agent of the company where employment is sought, or (ii) prohibit the
hiring of any person who applied for employment with either company in response to any public advertising medium.  

  
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 2.04 Personnel Records. Subject to applicable law, all information and records regarding
employment, global mobility and personnel matters (including immigration records but not including medical files) of Transferred Employees will be transferred to and/or retained after the Distribution Date (or after the effective date of such
Transferred Employee’s move to Halyard, as the case may be) by Halyard in accordance with all laws relating to the collection, storage, retention, privacy, and disclosure of such records. Access to such records after the transfer will be
provided to Kimberly-Clark in accordance with this Article 2, the Transition Services Agreement and the Distribution Agreement. Notwithstanding anything to the contrary in the foregoing, Kimberly-Clark shall retain reasonable access (either through
retaining copies or Halyard sharing such information with Kimberly-Clark upon request) to those records necessary to (i) Kimberly-Clark’s continued administration of any plans or programs on behalf of Transferred Employees after the date
of transfer of such records for so long as said administration continues pursuant to this Agreement or the Transition Services Agreement (and Kimberly-Clark and Halyard agree to enter into any ancillary or additional agreements necessary for such
purpose, including a HIPAA Business Associate Agreement in a form agreed upon between Kimberly-Clark and Halyard), and (ii) as needed for any litigation, investigation, charge or other employment matter relating to a Transferred Employee or any
employee benefit plan or other employment matter. Kimberly-Clark shall also retain copies of all confidentiality, non-competition, non-solicitation, or other similar agreements with any Business Employee in which Kimberly-Clark has an interest.
Personnel files for Business Employees who are not Transferred Employees shall be retained by Kimberly-Clark with provision for access by Halyard in accordance with this Article 2, the Transition Service Agreement and the Distribution Agreement. 

 2.05 Consultation Issues. To the extent required by law, the parties have and shall continue to cooperate with each other in
respect of any obligations they may have to consult with Transferred Employees and/or their representatives, and to the parties knowledge, all such consultations as of the date hereof have been satisfactorily completed in accordance with applicable
law. Each party shall indemnify the other in respect of any claims, liabilities and demands that may arise from their respective failures to so cooperate and consult. 

2.06 Relocation Agreements. Halyard shall have the right to enforce and receive any payments pursuant to any relocation agreement
previously entered into by Kimberly-Clark and any Transferred Employee that provides for reimbursement or penalties if the Transferred Employee voluntarily terminates employment with Kimberly-Clark or Halyard before the end of the applicable
repayment period. The relocation agreements with Business Employees currently in force will be agreed upon between Kimberly-Clark and Halyard. To the extent that Halyard is unable directly to enforce such relocation agreement provisions,
Kimberly-Clark shall take all reasonable steps to provide assistance to Halyard to do so or to receive the benefit of having done so, including (without limitation) novating or assigning such relocation agreement to Halyard or taking reasonable
steps to recover any such payment (to be paid, net of all recovery costs including attorney’s fees, to Halyard). 

  
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 ARTICLE III 

WELFARE PLANS 
 The
provisions of Section 3.01 — 3.07 shall apply only to Transferred Employees (or where relevant, Business Employees) who are Domestic Business Employees. Provisions with regard to Transferred Employees (or where relevant, Business
Employees) who are not Domestic Business Employees are set forth in Section 3.08. 
 3.01 Cessation of Participation in
Kimberly-Clark Welfare Plans.  
 (a) 2014 Transition. Effective as of the Effective Time, Halyard shall (i) adopt
the Kimberly-Clark Flexible Plan and underlying Welfare Plans to be agreed upon between Kimberly-Clark and Halyard as an additional adopting employer for the remainder of the 2014 Plan Year, and (ii) establish its own Section 125 Cafeteria
Plan for the purpose of effectuating the Transferred Employees’ continued salary deferrals to pay the employee portion of the premiums under the Kimberly-Clark Welfare Plans. Except as otherwise provided in this Agreement or as required by the
terms of any Kimberly-Clark Welfare Plan or by COBRA or any comparable state or federal law, participation in the Kimberly-Clark Welfare Plans by all Transferred Employees and all Business Employees who are no longer employed by Kimberly-Clark as of
the Distribution Date, will cease as of 11:59 P.M. on December 31, 2014. Halyard shall pay and/or reimburse Kimberly-Clark for the cost of such Transferred Employees’ and Business Employees’ continued coverage in the Kimberly Clark
Welfare Plans on and after the Distribution Date through 11:59 P.M. on December 31, 2014 (both for the actual benefit costs and the reasonably necessary administration costs, including, without limitation, for the services and costs detailed in
the Transition Services Agreement). 
 (b) Continued Participation in Kimberly-Clark Welfare Plans. Notwithstanding the above
(i) Domestic Business Employees receiving Kimberly-Clark long-term disability insurance benefits as of the Distribution Date shall remain on such insurance and Halyard shall reimburse Kimberly-Clark for any post-Distribution Date costs incurred
by Kimberly-Clark associated therewith (including, without limitation, the Employer’s share of any federal and state employment taxes associated therewith); and (ii) Business Employees participating in or eligible for Kimberly-Clark
Retiree Medical Plan and/or Retiree Life Insurance benefits as of the Distribution Date shall retain such participation and/or eligibility pursuant to the terms of such plans, and Halyard shall not be responsible for such costs. 

3.02 Halyard’s Welfare Plans. Except with respect to the long-term disability, retiree medical and retiree life insurance benefits
referenced in Section 3.01 above, effective as of January 1, 2015, Halyard shall adopt and establish for the benefit of Transferred Employees (and any otherwise eligible Business Employees who are no longer employed by Kimberly-Clark as of
the Distribution Date) and their respective eligible dependents, health (including medical, vision and dental), disability, life insurance, and other Welfare Plans substantially similar in the aggregate (except as otherwise agreed upon between
Kimberly-Clark and Halyard) to the Welfare Plans maintained by Kimberly-Clark in which such individuals were eligible to participate immediately prior thereto. Except with respect to the long-term disability, retiree medical and retiree life
insurance benefits referenced in Section 3.01 above, Transferred Employees (and, as applicable, otherwise eligible Business Employees who are no longer employed by Kimberly-Clark thereof as of the Distribution Date) shall be eligible to
participate in the Halyard Welfare Plans as of January 1, 2015 on the same basis on which they were eligible to participate in the Kimberly-Clark Welfare Plans immediately prior thereto. 


  
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Notwithstanding the above, Halyard shall not be required to establish or maintain any post-employment health or life insurance benefits, other than as may be required under COBRA or other
applicable law. Effective as of January 1, 2015, all Business Employees on COBRA coverage under a Kimberly-Clark Welfare Plan shall either (a) be transferred to an applicable Halyard Welfare Plan, and Halyard shall be solely responsible
for such COBRA liability, or (b) at Kimberly-Clark’s election, certain Business Employees who elected COBRA prior to the Distribution Date shall remain on Kimberly-Clark’s Health Plan and Halyard shall reimburse Kimberly-Clark to the
extent that Kimberly-Clark pays any health benefits or other cost or liability (including plan administration costs) for any such COBRA participant in excess of his or her COBRA premiums. For avoidance of doubt, the parties understand that
(i) the transfer of employment from Kimberly-Clark to Halyard in connection with the Spin-Off is not intended to be a qualifying event under COBRA, and (ii) all COBRA liability for current and former Business Employees and their qualified
beneficiaries on and after the Distribution Date will be the liability of Halyard, either through reimbursing Kimberly-Clark for coverage provided under a K-C Healthcare Plan (including both benefit costs in excess of the COBRA premiums and
administration costs) or directly by Halyard under a Halyard Healthcare Plan, and Halyard hereby holds harmless and indemnifies Kimberly-Clark with respect thereto. 

3.03 Welfare Plan Liabilities. 

(a) Halyard Liabilities. Except as provided in this Agreement, as of the Effective Time, Halyard shall assume, and either be
responsible for paying or, to the extent incurred by Kimberly-Clark under a Kimberly-Clark Plan, for reimbursing Kimberly-Clark for (i) all Welfare Plan liabilities incurred by Halyard or Kimberly-Clark, as the case may be, with respect to any
Business Employee after the Effective Time; and (ii) all COBRA and long-term disability benefit costs or liabilities incurred by Kimberly-Clark with respect to any Business Employee who is participating in a Kimberly-Clark-sponsored
continuation plan as of the Effective Time (provided that any post Distribution Date benefits for claims incurred prior to the Effective Time pursuant to the terms of a fully insured plan maintained by Kimberly-Clark shall be paid pursuant to such
plan and reimbursed by Halyard). 
 (b) Kimberly-Clark Liabilities. Kimberly-Clark shall continue to be responsible after the
Effective Time for employer liabilities under its Welfare Plans with respect to the following: 
 (1) Retirees. Any
Domestic Business Employee whose employment terminated on or prior to the Effective Time due to retirement and who elected or is eligible to elect retiree medical and/or retiree life insurance benefits under the Kimberly-Clark Retiree Medical and/or
Retiree Life Insurance Plan. 
 (2) Pre-Distribution Claims. All claims for welfare benefits incurred by Business
Employees prior to the Effective Time that remain unpaid as of such date, shall be paid from the appropriate Kimberly-Clark Welfare Plan and an appropriate reimbursement or accrual charged to Halyard. Claims for health benefits shall be considered
to be incurred prior to the Effective Time if the services related to such claims were provided prior to the Effective Time. Claims for all other welfare benefits shall be considered to be incurred prior to the Effective Time if the date of loss
occurred prior to the Effective Time. Notwithstanding the above, Halyard shall be responsible for the Welfare Plan costs as set forth in Sections 2.02, 3.04 and 3.07. 

  
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 (3) Long-Term Disability. Any Domestic Business Employee receiving fully
insured benefits on a Kimberly-Clark long-term disability insurance plan as of the Distribution Date shall continue to be covered under such policy (pursuant to the terms thereof) but subject to reimbursement by Halyard as provided in Sections
3.01(b) and 3.03(a). 
 3.04 Flexible Spending Accounts. Effective as of the Effective Time, Halyard shall adopt the Kimberly-Clark
Flexible Spending Account Plan, as an additional adopting employer, for the remainder of the 2014 calendar year (and with respect to any permitted grace period for claims incurred by March 15, 2015). Halyard shall effect the Transferred
Employees’ continued flexible spending account salary deferrals into the Kimberly-Clark Flexible Spending Account Plan for the remainder of the 2014 calendar year under its own Section 125 Cafeteria Plan. For the 2014 calendar year,
Transferred Employees shall maintain their existing eligibility, participation status and account balances under the flexible spending account plan maintained by Kimberly-Clark. Salary reduction elections made by Transferred Employees shall continue
to apply through the end of the 2014 calendar year and Halyard shall promptly transfer all such 2014 post-Effective Date Flexible Spending Account deferrals to Kimberly-Clark. After the end of the 2014 Plan Submission / Reconciliation Report Period
(typically, July 15, 2015), Kimberly-Clark shall calculate the positive or negative remaining flexible spending account balances of all Transferred Employee’s in the aggregate. Kimberly-Clark shall pay, or cause to have paid, to Halyard
any net positive balance, and Halyard shall pay, or cause to have paid, to Kimberly-Clark any net negative balance. Halyard shall establish its own Flexible Spending Account Plan as of January 1, 2015. 

3.05 Kimberly-Clark Assets. Kimberly-Clark shall retain all claim reserves, bank accounts, trust funds or other balances maintained by
or on behalf of Kimberly-Clark’s Welfare Plans. 
 3.06 Flex Days. Halyard shall assume and be responsible for paying the
remaining 2014 Flex Days (as provided under the Kimberly-Clark Flexible Plan and/or Kimberly-Clark Time-Off Policy) for all Transferred Employees that have not yet been taken as of the Effective Time in accordance with this Section 3.06. That
is, with respect to Transferred Employees, Halyard shall administer and pay any Flex Days taken on or after the Effective Time, and shall honor any previously banked but not yet used Flex Days with respect to the 2014 calendar year (which shall be
rolled over to Halyard). Kimberly-Clark shall either transfer cash to Halyard or provide Halyard with an accrual, in an amount equal to the Transferred Employees’ prior 2014 Flex Day deferrals not yet taken as paid vacation (or other Paid Time
Off) as of the Effective Time. Thus, Halyard shall credit Transferred Employees for any previously accrued (but unused) Flex Days, and Kimberly-Clark shall either reimburse Halyard or provide Halyard an appropriate accrual for the 2014 Flex Day
benefits accrued and paid for by the Transferred Employees under the Kimberly-Clark Flex Days Plan but paid out post-Effective Date under the Halyard Plan. Unless otherwise provided by local law, any Flex Days owed to any Transferred Employees not
used on or before December 31, 2014 shall be forfeited effective as of January 1, 2015, and such forfeited amounts shall be equitably divided such that Halyard shall transfer 10/12 of such amounts to Kimberly-Clark and shall retain 2/12 of
such forfeited amounts. 

  
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 3.07 Disability.  

(a) Weekly Indemnity/Short-Term Disability Benefits. Halyard shall be responsible for all claims for weekly indemnity and short-term
disability benefits payable to Business Employees on or after the Distribution Date. Kimberly-Clark shall continue to be responsible after the Distribution Date for all claims for weekly indemnity benefits incurred by a Business Employee prior to
the Distribution Date which are payable under an insured weekly indemnity plan, and Halyard shall reimburse Kimberly-Clark for any ongoing costs associated therewith. Periods of active work or disability absence for any Business Employee credited
under any Kimberly-Clark disability plan shall count as work days or disability absence under the Halyard disability plans. 
 (b)
Long-Term Disability Benefits. Kimberly-Clark shall continue to be responsible after the Effective Time for all claims for long-term disability incurred prior to the Effective Time by any Business Employee who is absent from active employment
due to a disability, as defined in the Kimberly-Clark disability plan, on or prior to the Effective Time to the extent that such long-term disability benefits are provided under an insured Welfare Plan. Kimberly-Clark shall also remain responsible
for long-term disability benefits for any Transferred Employee who is receiving weekly indemnity or short-term disability benefits as of the Effective Time and who becomes eligible for long-term disability benefits thereafter, provided that the
disability relates to the same condition for which weekly indemnity or short-term disability benefits were paid and, provided further, that such long-term disability benefits are payable under an insured Welfare Plan. Notwithstanding the above,
Halyard shall reimburse Kimberly-Clark for any post-Effective Time costs that Kimberly-Clark incurs by virtue of the continued long-term disability coverage provided under this Section 3.07(b). Halyard shall assume and be solely responsible for
all other claims for long-term disability payable after the Effective Time with respect to any Business Employee. Periods of active work or disability absence for any Business Employee credited under any Kimberly-Clark disability plan shall count as
work days or disability absence under the Halyard disability plans. 
 3.08 Special Provision for Foreign Welfare Plans and Benefits.
Except as may otherwise be agreed upon between Kimberly-Clark and Halyard or as required under any state or provincial law, effective as of the Distribution Date, (i) participation in all Kimberly-Clark foreign (i.e., non U.S.) Welfare
Plans by all Transferred Employees and other Business Employees who are no longer employed by Kimberly-Clark as of the Distribution Date, will cease as of the Effective Time; (ii) Halyard shall adopt and establish Welfare Plans for Foreign
Business Employees with substantially similar terms and conditions to the Kimberly-Clark Welfare Plans in which Foreign Business Employees were eligible to participate immediately prior to the Distribution Date, with immediate participation in such
plans by all Foreign Business Employees who are Transferred Employees, with no waiting period, evidence of insurability or preexisting condition limitations, and with the participants being credited for all 2014 out-of-pocket expenses incurred to
date; and (iii) Kimberly-Clark shall retain all claim reserves, bank accounts, trust funds or other balances maintained by or on behalf of the Kimberly-Clark foreign Welfare Plans. 

  
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 ARTICLE IV 

COMPENSATION MATTERS 
 AND
NON-ERISA BENEFIT ARRANGEMENTS 
 4.01 Cessation of Participation in Kimberly-Clark Non-ERISA Benefit Arrangements. Except as
otherwise provided in this Agreement or as required by the terms of any Kimberly-Clark Non-ERISA Benefit Arrangement, or by state, federal, foreign, provincial or other applicable law, participation in Kimberly-Clark Non-ERISA Benefit Arrangements
will cease for all Transferred Employees and all Business Employees who are not Transferred Employees as of the Effective Time. 

4.02 Assumption of Certain Employee Related Obligations. To the extent not otherwise provided for by law and subject to the specific
provisions set out below, effective as of the Effective Time, Kimberly-Clark shall assign, and/or Halyard shall assume the rights and obligations in respect of (with Kimberly-Clark not retaining any further liability for), the following agreements,
obligations and liabilities; provided, however, that (i) this section shall only apply to agreements, obligations and liabilities to the extent Kimberly-Clark would otherwise have been responsible for them, and (ii) if any such agreement,
obligation or liability cannot be assumed by Halyard for a reason beyond the reasonable control of the parties hereto (including where Halyard may assume the same but Kimberly-Clark retains any residual liability), including the refusal of a third
party to agree to such an assumption, then Halyard shall indemnify Kimberly-Clark and hold it harmless with respect to such agreement, obligation or liability, as though it had been assumed by Halyard. 

(a) Agreements entered into between Kimberly-Clark and Transferred Employees, including without limitation any employment agreements and
severance or executive severance agreements, including, without limitation, those agreements to be identified and agreed upon between Kimberly-Clark and Halyard, but not including any Kimberly-Clark equity plan agreements; provided, however,
notwithstanding the above, that with respect to any retention agreements provided by Kimberly-Clark in contemplation of or in connection with the Distribution, Kimberly-Clark shall transfer the accrual to Halyard and Halyard shall pay the same from
the Halyard payroll. Effective as of the Effective Time, Halyard shall enter into new Executive Severance Agreements, in a form substantially comparable to the existing Kimberly-Clark Executive Severance Agreements (except as otherwise agreed upon
between Kimberly-Clark and Halyard), with the Halyard officers and key personnel to be agreed between Kimberly-Clark and Halyard. 
 (b)
Agreements entered into between Kimberly-Clark and its independent contractors providing services to the Halyard Business, in a manner to be agreed upon between Kimberly-Clark and Halyard (except to the extent the parties agree that such agreements
should instead be terminated by Kimberly-Clark and/or replaced by new agreements with Halyard, as shall be agreed upon between Kimberly-Clark and Halyard). 

(c) All confidentiality, non-competition, non-solicitation and other similar agreements between Kimberly-Clark and Transferred Employees,
including without limitation those referenced by jurisdiction and to be agreed upon between Kimberly-Clark and Halyard; provided, however, that Kimberly-Clark shall retain (and may enforce) all confidentiality and similar agreements relating to any
Domestic Business Employee. Halyard may enter into new restricted covenant and confidentiality agreements with the Transferred Employees. 

  
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 (d) To the extent required by applicable law, all collective bargaining agreements and collective
agreements entered into between Kimberly-Clark, its subsidiaries or Affiliates and any union, works council or similar representative body representing a Transferred Employee, including without limitation, the collective bargaining and collective
agreements to be identified and agreed upon between Kimberly-Clark and Halyard. 
 (e) All wages, salary, incentive compensation,
commissions, bonuses, (including 13th month compensation and legally mandated compensation), overtime payments and other remuneration and allowances payable to Business Employees after the Effective Time (whether referable to the period before or
after the Distribution Date), subject to the following, 
 (1) The accrual for Business Employees under the Kimberly-Clark
Executive Officer Achievement Award Program, the Kimberly-Clark Management Achievement Award Program and the Kimberly-Clark Achievement Incentive Plan for the portion of the 2014 calendar year occurring prior to the Effective Time shall be
transferred to Halyard on the Distribution Date, and Halyard shall pay the same in February 2015 based on actual results and performance ratings. The Europe (EBP), Asia (PIP) and Latin America (LIP) incentive plans will be administrated and paid the
same way as the U.S. incentive plans described in the immediately preceding sentence. 
 (2) September and October 2014 U.S.
Healthcare-related sales incentives / commissions earned by Transferred Employees will be paid by Halyard in Nov and Dec 2014, and Kimberly-Clark shall either transfer the accrual or reimburse Halyard therefor; 

(3) The Lexington Mill Quarterly Incentive Bonus for the 4th quarter 2014 will be payable by Halyard in Jan 2015. The accrual
for the portion thereof relating to the pre-Effective Time (i.e., the accrual for October 2014) will be transferred to Halyard as of the Distribution Date. A reasonable estimate of the Oct bonus accrual will be determined by looking at the prior
four quarters actual results 
 (4) Kimberly-Clark shall either transfer the accrual or reimburse Halyard for the
pre-Distribution Date overtime payments paid by Halyard, to the extent agreed upon between Kimberly-Clark and Halyard. 

Except as required by law or other agreement between the parties, Halyard shall make relevant payments (agreed in advance with
Kimberly-Clark) to any Transferred Employee under (1) through (4) and, to the extent specified above, Kimberly-Clark shall provide Halyard with an appropriate accrual or reimbursement therefor. Effective as of the Effective Time, Halyard
shall adopt and establish annual incentive, commission or other variable remuneration plans for the remainder of 2014 substantially comparable in the aggregate to the Kimberly-Clark annual incentive plans. 

(f) Effective as of the Effective Time, (i) Halyard shall establish for Transferred Employees, Severance and Executive Severance Plans
substantially comparable to the Kimberly-Clark Severance and Executive Severance Plans, and (ii) Kimberly-Clark shall have no further liability for any Business Employee under the Kimberly-Clark Severance Plan or Executive Severance Plan. 

  
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 (g) All commitments under the Kimberly-Clark Global Assignment Program with respect to Business
Employees. 
 (h) All moving expenses incurred by Transferred Employees and Isolated Employees in connection with the Distribution, in
accordance with the terms of the Kimberly-Clark employee relocation program. 
 (i) All immigration-related rights, obligations and
liabilities related to Transferred Employees (including liabilities relating both to employees transferred to the U.S. and employees transferred to foreign jurisdictions, but excluding any fines or assessments for pre-Distribution noncompliance),
including but not limited to, all obligations, liabilities and undertakings of any immigration related applications filed with any governmental agency. For avoidance of doubt, Halyard shall reimburse Kimberly-Clark for any costs associated with
filing applications to transfer L-1 Visas to Halyard, whether prior to, on or after the Distribution Date. 
 (j) All liabilities and
obligations whatsoever of the Halyard Business with respect to claims made by or with respect to Business Employees or any other persons who at any time prior to the Distribution Date had employment duties primarily related to the Halyard Business
relating to Non-ERISA Benefit Arrangements with respect to the Halyard Business and not otherwise retained or assumed by Kimberly-Clark pursuant to this Agreement, including such liabilities relating to actions or omissions of or by Halyard or any
officer, director, employee or agent thereof on or prior to the Distribution Date, as further detailed in the Distribution Agreement; provided, however, that if the Distribution Agreement assigns a liability to Kimberly-Clark (such as Director and
Officer Insurance Policy claims), the Distribution Agreement shall control. 
 (k) All liabilities and obligations whatsoever in recognition
of the Transferred Employees years of service and seniority. 
 (l) With regard to the Kimberly-Clark Employee Referral Bonus Program,
Kimberly-Clark shall be solely responsible for payment of any amounts due to a Kimberly-Clark employee based on a referral made on or before the Distribution Date, and Halyard shall be solely responsible for payment of any amounts due to a Business
Employee based on a referral made on or before the Distribution Date, regardless of whether the referred person is or becomes a Kimberly-Clark employee or a Transferred Employee. 

4.03 Equity Compensation Plans. The following shall apply in respect of the Transferred Employees and Isolated Employees, to the extent
allowed by any provincial or other applicable law. 
 (a) Halyard 2014 Plan. Effective as of the Effective Time, Halyard shall
adopt and establish the Halyard Health 2014 Equity Participation Plan (“Halyard 2014 Plan”), which Plan shall have terms and conditions substantially similar to the Kimberly-Clark 2011 Equity Participation Plan (“Kimberly-Clark 2011
Plan”). The Halyard 2014 Plan shall be 

  
 12 








 
approved by the Halyard Board of Directors and by Kimberly-Clark Corporation, as the sole stockholder of Halyard, prior to the Distribution Date. Halyard shall file a Form S-8 Registration
Statement with the SEC with respect to the Halyard 2014 Plan and shall be responsible for compliance with applicable securities laws in respect of the operation of the plan. 

(b) Unexercisable Options. As of the Effective Time, each outstanding option to purchase Kimberly-Clark common stock, other than an
option granted under the Kimberly-Clark Corporation SharePlus Plan, that is held by a Transferred Employee (a “K-C Option”) shall, to the extent such K-C Option is not exercisable as of the Effective Time and the Transferred Employee is
under age 55, be cancelled and replaced with a substitute option to purchase shares of Halyard common stock (“Halyard Option”), granted by Halyard under the Halyard 2014 Plan. The substitute Halyard Option shall have the same intrinsic
value as the forfeited K-C Option, such that (i) the exercise price of such Halyard Option will be decreased by multiplying the exercise price of the K-C Option immediately prior to the Effective Time by a fraction (the “Halyard
Ratio”), the numerator of which is the fair market value immediately following the Effective Time of the fractional amount of Halyard common stock received in dividend in the Distribution for one share of Kimberly-Clark common stock and the
denominator of which is the sum of (A) the fair market value of Kimberly-Clark common stock immediately following the Effective Time and (B) the fair market value immediately following the Effective Time of the fractional amount of Halyard
common stock received in dividend in the Distribution for one share of Kimberly-Clark common stock, and (ii) the number of Halyard shares purchasable under each Halyard Option will be increased by dividing the number of K-C Option Shares that
were forfeited at the Effective Time by the Halyard Ratio. Employment or service credited by Kimberly-Clark shall be taken into account in determining when such substitute Halyard Options become exercisable, and when they terminate. Except as
otherwise provided herein, each substitute Halyard Option shall be exercisable upon the same terms and conditions as were applicable under the related K-C Option immediately prior to the Effective Time. For purposes of this Section 4.03(b),
(i) the fair market value of Kimberly-Clark common stock immediately following the Effective Time shall equal the opening price of Kimberly-Clark’s common stock on The New York Stock Exchange for the first day in which Halyard common stock
is traded on a regular way basis, and (ii) the fair market value of the above-referenced fractional amount of Halyard common stock immediately following the Effective Time shall equal the quotient of (a) the volume-weighted average price
of Halyard’s common stock on The New York Stock Exchange for the first five (5) days in which the Halyard common stock is traded on a regular way basis, divided by (b) the number of shares of Kimberly-Clark’s common stock
required to receive one share of Halyard’s common stock in the spin-off Distribution. 
 (c) Exercisable Options. As of the
Effective Time, pursuant to the terms of the Kimberly-Clark 2011 Plan, (i) any vested K-C Option held by any Transferred Employee under age 55 will be exercisable for the lesser of three (3) months or the remaining term of the K-C Option,
and (ii) any unvested K-C Option held by a Transferred Employee who is age 55 or older will vest and, together with all otherwise vested K-C Options held by Transferred Employees age 55 or older, shall remain exercisable for the lesser of five
(5) years or the remaining term of the K-C Option. All such vested K-C Options held by Transferred Employees shall remain options to purchase Kimberly-Clark common stock and will be adjusted to maintain their intrinsic value, such that
(i) the exercise price of each such K-C Option will be decreased by dividing the pre-Distribution Date exercise price of the K-C Option by a fraction (the “K-C


  
 13 








 
Ratio”), the numerator of which is the closing price of Kimberly-Clark common stock on The New York Stock Exchange on the Distribution Date, and the denominator of which is the opening price
of Kimberly-Clark common stock on The New York Stock Exchange on the first trading day immediately following the Distribution, and (ii) the number of Kimberly-Clark shares purchasable under each such K-C Option will be increased by multiplying
the number of such K-C Options by the K-C Ratio. 
 (d) Restricted Stock Units Held by Participants under age 55. As of the Effective
Time, with respect to Transferred Employees under age 55 on the Distribution Date; 
 (1) any unvested performance-based
restricted share units granted under the Kimberly-Clark 2011 Plan (“K-C PRSUs”) that have been outstanding more than 6 months from date of grant will vest pro-rata, based on the number of full years of employment from the grant date to the
Effective Time, but to be paid out (in the form of K-C common stock) only at the end of the relevant performance period and (A) only to the extent the performance criteria are satisfied at that time, after adjusting the ROIC and Net Sales as
reported metrics to take into account the Distribution, as determined in the sole discretion of the Kimberly-Clark Management Development and Compensation Committee, and (B) the number of such vested K-C PRSUs shall be increased by the Dividend
Equivalent on the pro-rata vested PRSUs, with such Dividend Equivalent being equal, for each pro-rata vested PRSU, to the fair market value of the fractional amount of Halyard common stock received in the Distribution for each share of K-C common
stock, with such fair market value being equal to the opening price of Halyard common stock on the New York Stock Exchange on the first trading day immediately following the Distribution, multiplied by the fractional amount of Halyard common stock
received in the Distribution for each share of Kimberly-Clark common stock (“Dividend Equivalent”). The Dividend Equivalent will be reinvested in additional K-C PRSUs at the opening price of Kimberly-Clark’s common stock on The New
York Stock Exchange on the first trading day immediately following the Distribution. The additional K-C PRSUs credited by virtue of such Dividend Equivalent will be accumulated and paid only if, when and to the extent that the underlying K-C PRSUs
outstanding immediately prior to the Distribution vest, achieve their performance goals and are paid. 
 (2) the K-C PRSUs
not pro rata vested pursuant to (1) above (either because not held for 6 months or because they consist of the remaining portion not vested in the pro-rata vesting) shall be forfeited and Halyard shall issue replacement Halyard Time-Based
Restricted Stock Units (“ Halyard TRSU’s”) as of the Effective Time, on the same terms and conditions as the forfeited K-C PRSUs, except that the Halyard TRSUs shall vest at the end of the original performance period, subject to the
participant’s continued employment through that date, and taking into account service with Kimberly-Clark, and except that the number of replacement Halyard TRSUs shall be determined by dividing the number of K-C PRSUs that were forfeited at
the Effective Time (calculated as if the performance requirement is met at the “target” level) by the Halyard Ratio. 

(3) any unvested TRSUs granted under the Kimberly-Clark 2011 Plan (the “K-C TRSUs”) will vest pro-rata, based on the
number of full years of employment from the grant date to the Effective Time, but only paid out (in the form of K-C common stock) on the normal vesting date, and the number of such pro-rata vested K-C TRSUs shall be increased by the Dividend
Equivalent on such pro-rated vested K-C TRSUs; and 

  
 14 








 (4) the K-C TRSUs not pro rata vested pursuant to (3) above shall be
forfeited and Halyard shall issue replacement Halyard TRSUs as of the Effective Time, on the same terms and conditions as the forfeited K-C TRSUs and taking into account service with Kimberly-Clark, except that the number of replacement Halyard
TRSUs shall be determined by dividing the number if K-C TRSUs that were forfeited at the Effective Time by the Halyard Ratio. 

Moreover, to the extent that any K-C PRSUs or K-C TRSUs become vested after the Record Date, and therefore did not receive the
dividend distribution in the spin-off, K-C shall increase the number of such K-C PRSUs or K-C TRSUs by the Dividend Equivalent on such vested K-C PRSUs and K-C TRSUs, to make them whole. 

(e) Restricted Stock Units Held by Participants at or over age 55. As of the Effective Time, with respect to Transferred Employees at
or over age 55 on the Distribution Date, (i) any unvested K-C PRSUs outstanding more than six months after the date of grant will vest and be payable (in the form of K-C common stock) at the end of the performance period, based on the
attainment of the performance goals, with the number of such K-C PRSUs being increased by the Dividend Equivalent on such K-C PRSUs (based on the same principles as detailed in Section 4.03(d)(1) above), and the ROIC and Net Sales as reported
performance metrics criteria being adjusted for the Distribution as determined in the sole discretion of the Kimberly-Clark Management Development and Compensation Committee; (ii) any K-C PRSUs not outstanding for more than six months from the
date of grant shall be forfeited and Halyard shall issue replacement Halyard TRSUs in the same manner as detailed in (d)(2) above; (iii) any unvested K-C TRSUs will vest pro-rata, based on the number of full years of employment from the grant
date to the Effective Time, but only paid out on the normal vesting date, and the number of such pro-rata vested K-C TRSUs shall be increased by the Dividend Equivalent on such pro-rata vested K-C TRSUs; and (iv) the K-C TRSUs not vested
pursuant to (iii) above shall be forfeited and Halyard shall issue replacement Halyard TRSUs as of the Effective Time in the same manner as detailed in (d)(4) above. 

(f) Kimberly-Clark SharePlus Plans. Business Employees participating in the SharePlus Plans shall be treated the same as terminated
employees. Halyard shall not be required to establish any new SharePlus Plans for its employees. 
 (g) Other Equity Awards. To the
extent not addressed above in this Section 4.03 or in any agreement between Kimberly-Clark and Halyard, all other outstanding equity compensation awards held by Business Employees under any Kimberly-Clark equity compensation plan shall be
subject to the terms of such plan and applicable award agreements. For avoidance of doubt, any equity awards related to Kimberly-Clark stock and vested hereunder shall remain the liability of Kimberly-Clark. 

  
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 4.04 Workers’ Compensation.  

(a) U.S. Employees. Except as provided herein, Halyard shall be solely responsible for all claims for workers’ compensation
reported by a Transferred Employee employed in the U.S. on or after the Distribution Date. Kimberly-Clark shall continue to be responsible after the Distribution Date for administering all claims for workers’ compensation reported by a Domestic
Business Employee prior to the Distribution Date under the terms of any Kimberly-Clark workers’ compensation policy or plan; however, Halyard shall reimburse, and shall indemnify Kimberly-Clark, or its subsidiaries or Affiliates, for any
amounts payable under such claims. In accordance with Section 6.05, Kimberly-Clark shall transfer, or cause to have transferred, to Halyard the amount of any reserves related to such claims which have been set aside by Kimberly-Clark or its
subsidiaries or Affiliates prior to the Distribution Date. 
 (b) Foreign Employees. Halyard shall be solely responsible, and shall
indemnify Kimberly-Clark for all outstanding claims for workers’ compensation reported by a Foreign Business Employee before the Distribution Date, and for any such new claims reported by a Foreign Business Employee on or after the Distribution
Date. Notwithstanding the foregoing, in the event any such claims are covered by an insurance policy held or maintained by Kimberly-Clark which cannot be assigned to the benefit of Halyard, then (i) Halyard shall reimburse and indemnify
Kimberly-Clark for any amounts payable under such claims; (ii) any amounts received by or for the benefit of Kimberly-Clark pursuant to such insurance policy shall be offset against Halyard’s indemnification obligation; and (iii) any
experience refunds which relate to such claims shall be paid to Halyard, or if received by Kimberly-Clark, paid by Kimberly-Clark to Halyard. Halyard shall be solely responsible for, and shall indemnify Kimberly-Clark for any experience surcharges
which relate to such claims. 
 4.05 Accrued Vacation Days Off. Halyard shall recognize and assume all liability for all vacation,
holiday, Flex Days (subject to Section 3.06 above), personal days and other Paid Time-Off, including long-service leave entitlements and banked vacation, accrued but untaken or not otherwise paid or satisfied for any Transferred Employees as of
the Effective Time, and Halyard shall credit each Transferred Employee with such days off accrual as of the date of the movement of such Transferred Employee to Halyard.  

4.06 Leaves of Absence. Halyard shall establish leave of absence policies which are substantially similar to the leave of absence
policies maintained by Kimberly-Clark immediately prior to the Distribution Date and will continue to apply such policies to inactive Transferred Employees who are on an approved leave of absence as of the Distribution Date. Transferred Employees
shall be eligible for leaves of absence after the Distribution Date to the same extent they would have been had they remained employed by Kimberly-Clark, its subsidiaries or Affiliates. Leaves of absence taken by Transferred Employees prior to the
Distribution Date shall be deemed to have been taken as employees of Halyard under such policies. For avoidance of doubt, Halyard shall recognize and honor all approved leaves of absence granted to any Transferred Employee prior to the Distribution
Date or Effective Time. For avoidance of doubt, for purposes of this Section 4.06, the term “leave of absence” shall not include absences covered by any long-term disability insurance policy maintained by Kimberly-Clark.  

  
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 4.07 Past Service Credit. Halyard shall credit Transferred Employees with all years of
service credited to such Transferred Employees by Kimberly-Clark and its subsidiaries and Affiliates for all purposes relating to Halyard’s Non-ERISA Benefit Arrangements. Kimberly-Clark shall provide Halyard with copies of any records
available to Kimberly-Clark to document such service. For avoidance of doubt, this Section 4.07 does not obligate Halyard to be responsible for any costs related to retiree medical or retiree life insurance benefits referenced in
Section 3.01 above.  
 4.08 Kimberly-Clark Assets. Kimberly-Clark shall retain all reserves, bank accounts, trust funds
or other balances maintained with respect to Kimberly-Clark’s Non-ERISA Benefit Arrangements. 
 ARTICLE V 

PENSION PLANS 
 5.01
Foreign Retirement Benefit Plans. Effective as of the Distribution Date, Halyard shall establish supplemental employee retirement plans or other registered and/or non-registered pension plans that are substantially similar to the Kimberly-Clark
supplemental employee retirement plans and pension plans in which Foreign Business Employees participate immediately prior to the Distribution Date. Halyard shall assume and be solely responsible for any liabilities arising from or in connection
with all such Foreign Business Employees under such plans. To the extent not addressed in this Section 5 or in any other agreement between Kimberly-Clark and Halyard, or as required by the terms of any state or provincial law, participation in
the Kimberly-Clark supplemental employee retirement plans and pension plans in which Foreign Business Employees participate by all Transferred Employees and all Business Employees who are no longer employed by Kimberly-Clark as of the Distribution
Date, will cease as of the Effective Time, and Kimberly-Clark shall retain all claim reserves, bank accounts, trust funds or other balances maintained by or on behalf of such plans.  

5.02 U.S. Defined Contribution Plans. 

(a) Employees’ 401(k) Plan. 

(1) Establishment of Halyard 401(k) Plan. Effective as of the Distribution Date, (i) participation in the
Kimberly-Clark Corporation 401(k) and Profit Sharing Plan will cease for all Transferred Employees and other Business Employees, and (ii) Halyard shall adopt and establish a Pension Plan and trust qualified under sections 401(a), 401(k) and
501(a) of the Code (the “Halyard 401(k) Plan”) that is substantially similar (except as may be agreed upon between Kimberly-Clark and Halyard) to the Kimberly-Clark Corporation 401(k) and Profit-Sharing Plan and trust immediately prior to
the Distribution Date (the “K-C 401(k) Plan”). Halyard shall assume and thereafter be solely responsible for all then existing or future employer liabilities related to Transferred Employees and other Business Employees under the Halyard
401(k) Plan and the administration thereof. As soon as practicable after the adoption of the Halyard 401(k) Plan, Halyard shall submit an application to the IRS for a determination regarding the qualification of the Halyard 401(k) Plan and shall
take any actions not inconsistent with Halyard’s other general commitments contained in this 

  
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Agreement and make any amendments necessary to receive a favorable determination letter. All existing participant elections for Transferred Employees and other Business Employees (and their
beneficiaries and alternate payees) under the K-C 401(k) Plan, including without limitation, beneficiary designations, deferral elections, investment elections and form of payment elections shall continue in full force and effect under the Halyard
401(k) Plan, until otherwise changed pursuant to the terms of the Halyard 401(k) Plan, except that any investment election for the Employer Stock Fund shall be deemed instead to be an election for the Target Date Fund, until otherwise changed by the
participant. 
 (2) Transfer of Account Balances. As soon as administratively practicable after the Distribution Date,
there shall be transferred to the Halyard 401(k) Plan assets having a value as of the applicable valuation date that are equal to the value of the account balances of, and liabilities with respect to, all Transferred Employees and other Business
Employees (other than seconded employees described in Section 2.01(d)) with an account balance under the K-C 401(k) Plan as of such valuation date. Such transferred assets shall be in cash and in-kind transfers of investment fund units (except
for any promissory notes evidencing outstanding loan balances of Transferred Employees), and shall be in accordance with section 414(l) of the Code. Liabilities under any qualified domestic relations orders (as defined in section 414(p) of the Code)
received with respect to any assets transferred to the Halyard 401(k) Plan shall be transferred to Halyard (along with such qualified domestic relations orders and administrative instructions) at the time such assets are transferred. Kimberly-Clark
shall transfer to Halyard, and Halyard shall accept any promissory notes including outstanding loan balances of Business Employees, and Halyard shall continue to process any plan loans transferred from the K-C 401(k) Plan to the Halyard 401(k) Plan.

 (3) Employer Stock. By virtue of the Distribution, participants in the K-C 401(k) Plan who have investments in the
K-C Employer Stock Fund will receive shares of Halyard stock for each share of Kimberly-Clark stock held in their account, based on the Distribution Ratio. With respect to K-C 401(k) Plan participants who are not Business Employees, the Halyard
Stock allocated to their accounts shall be automatically sold and reinvested in K-C stock within the K-C Employer Stock Fund. With respect to Business Employees, both the K-C stock and Halyard Stock allocated to their accounts shall be
automatically sold as of a date determined by the K-C 401(k) Plan Administrator and the cash proceeds transferred to the Halyard 401(k) Plan and reinvested in the Target Date Fund thereunder, until otherwise changed pursuant to the terms of the
Halyard 401(k) Plan. Kimberly-Clark and Halyard shall co-operate in providing appropriate notice to Business Employees with respect to the above. 

(4) 2014 Employer Contributions. Kimberly-Clark shall make the 2014 Profit-Sharing Contribution to the K-C 401(k) Plan,
with respect to the participants’ pre-Distribution Date Eligible Earnings (as defined in the K-C 401(k) Plan) for those K-C 401(k) Plan participants who are at or over age 55 on the Distribution Date, as per the terms of the K-C 401(k) Plan.
The Halyard 401(k) Plan shall provide for a one-time 2014 Profit-Sharing Contribution for all Transferred Employees who are participants in the Halyard 401(k) Plan and who did not receive a 2014 Profit Sharing Contribution to the K-C 401(k) Plan,
equal to 3% of their 2014 pre-Distribution Date Eligible Earnings (including, for avoidance of doubt, both their base compensation and their 2013 bonus or other incentive compensation paid in 2014). 

  
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 In addition, the Halyard 401(k) Plan shall provide for a “true-up”
Company Match Contribution for the 2014 Plan Year for any Transferred Employee participating in the Halyard 401(k) Plan who would have received a true-up Company Match Safe Harbor Contribution under the K-C 401(k) Plan had he or she been a
participant in the K-C 401(k) Plan for the entire 2014 Plan Year, due to his or her total 2014 Company Match Safe Harbor Contributions under the K-C 401(k) Plan and Halyard 401(k) Plan being limited to less than it otherwise would have been by
virtue of the Code Section 401(a)(17) or 402(g) limits being reached before Plan Year end. The amount of the true-up contribution shall be equal to the difference between 4.33% of the Participant’s 2014 combined Eligible Earnings for both
Kimberly-Clark and Halyard (or if less, his actual combined Contributions to both the K-C 401(k) Plan and the Halyard 401(k) Plan for the 2014 Plan Year) and the amount of Company Match Safe Harbor Contributions allocated to his account under the
K-C 401(k) Plan and the Halyard 401(k) Plan for such 2014 Plan Year. 
 Kimberly-Clark shall transfer the appropriate
accruals to Halyard with respect to (i) the above-described Profit-Sharing Contributions, (ii) the above-described Company Match True-Up Contributions, and (iii) 4% of the Company Safe Harbor Match Contribution for that portion of the
2014 bonus or other incentive compensation that is transferred to and payable by Halyard in 2015 that is attributed to pre-Distribution Date service. 

(b) Supplemental 401(k) Plan. Effective as of the Distribution Date, (i) participation in the Kimberly-Clark Corporation
Supplemental Retirement 401(k) and Profit Sharing Plan (“K-C Supplemental 401(k) Plan”) will cease for all Transferred Employees and other Business Employees, and (ii) Halyard shall adopt and establish a Supplemental 401(k) Plan
(“Halyard Supplemental 401(k) Plan”) that is substantially similar (except as may be agreed upon between Kimberly-Clark and Halyard) to the K-C Supplemental 401(k) Plan immediately prior to the Distribution Date. All existing elections by
Transferred Employees and other Business Employees under the K-C Supplemental 401(k) Plan, including salary deferral, investments, beneficiaries, and forms and timing of payment, shall continue under the Halyard Supplemental 401(k) Plan, until
otherwise changed pursuant to the terms of the Halyard Supplemental 401(k) Plan. Effective as of the Distribution Date, Kimberly-Clark shall transfer to Halyard, and Halyard shall assume and thereafter be solely responsible for all then existing or
future liabilities related to Transferred Employees and other Business Employees under either the K-C Supplemental 401(k) Plan or the Halyard Supplemental 401(k) Plan and the administration thereof. However, given that the K-C Supplemental 401(k)
Plan is an unfunded plan, there shall be no assets transferred from Kimberly-Clark or the K-C Supplemental 401(k) Plan to Halyard or the Halyard Supplemental 401(k) Plan (including, without limitation, any assets held in a grantor or so-called rabbi
trust). 
 (c) Deferred Compensation Plan. Following the Effective Time, Business Employees shall be considered to have incurred a
Termination of Service as defined under the Kimberly-Clark Corporation Deferred Compensation Plan (which is a grandfathered plan exempt from Code Section 409A), and shall be entitled to a distribution therefrom pursuant to the terms of such
Plan. Halyard shall not be required to establish a similar plan. 

  
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 5.03 U.S. Pension Plan. 

(a) K-C Pension Plan. Halyard shall not be required to adopt a U.S. defined benefit pension plan and shall not assume any liabilities
under the Kimberly-Clark Corporation Pension Plan. Effective as of the Effective Time, Business Employees shall be deemed to have incurred a Termination of Employment as defined under the Kimberly-Clark Corporation Pension Plan (“K-C Pension
Plan”), and shall be entitled to a distribution therefrom pursuant to its terms and conditions. 
 (b) K-C Supplemental Pension
Plans. Halyard shall not be required to adopt any U.S. supplemental pension plans and shall not assume any liabilities under the Supplemental Benefit Plan to the Kimberly-Clark Corporation Pension Plan (“K-C Supplemental Pension Plan”)
or the Second Supplemental Benefit Plan to the Kimberly-Clark Corporation Pension Plan (“K-C Second Supplemental Pension Plan”). Effective as of the Effective Time, Business Employees shall be deemed to have incurred a Termination of
Employment (as defined under the K-C Supplemental Pension Plan and the K-C Second Supplemental Pension Plan) under the Grandfathered Portions (i.e., those portions of the Plan exempt from Code Section 409A) of the K-C Supplemental
Pension Plan and the K-C Second Supplemental Pension Plan, and shall be entitled to distributions therefrom pursuant to their terms and conditions. Business Employee Participants in the non-Grandfathered Portions of the K-C Supplemental Pension Plan
and K-C Second Supplemental Pension Plan shall not be considered to have incurred a Separation from Service (as defined in Code Section 409A) from Kimberly-Clark by virtue of the Distribution, and thus shall not be entitled to any distribution
from such non Grandfathered Portions of such Plans by virtue of the Distribution. Rather, Business Employee Participants shall be considered to have incurred a Separation from Service under the non-Grandfathered Portions of such Plans when they
incur a Separation from Service with Halyard, and Halyard shall notify Kimberly-Clark of the same, so that Kimberly-Clark can comply with the automatic payment provisions thereunder. 

5.04 Past Service Credit. With respect to all Business Employees, Halyard shall recognize all service, plan participation and
membership recognized under the (i) K-C 401(k) Plan, (ii) K-C Supplemental 401(k) Plan, and (iii) any foreign retirement or pension plan assumed or transferred to Halyard or any of whose assets or liabilities are assumed by or
transferred to Halyard or to a Halyard retirement or pension plan, in each case for purposes of determining benefit eligibility, participation, vesting, and calculation of benefits under Halyard retirement plans and programs including the Halyard
401(k) Plan, the Halyard Supplemental 401(k) Plan, any foreign retirement or pension plan sponsored or maintained by Halyard, and non-pension fringe benefit plans (but not including any retiree medical or retiree life insurance plan). Kimberly-Clark
will provide to Halyard copies of any records available to Kimberly-Clark to document such service, plan participation and membership and cooperate with Halyard to resolve any discrepancies or obtain any missing data for purposes of determining
benefit eligibility, participation, vesting and calculation of benefits with respect to such Business Employees.  

  
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 ARTICLE VI 

GENERAL PROVISIONS 

6.01 Miscellaneous. All Miscellaneous Matters contained in Article XIII of the Distribution Agreement are fully applicable hereto and
are incorporated herein by reference. 
 6.02 Preservation of Rights to Amend. The rights of Kimberly-Clark or Halyard to
amend or terminate any plan referred to herein shall not be limited in any way by this Employee Matters Agreement. 
 6.03
Applicability to Subsidiaries and Affiliate. The obligations of Halyard in this Agreement shall also be applicable to any subsidiary or Affiliate of Halyard, and Halyard shall cause its subsidiaries or Affiliates to comply with such obligations.
The obligation of Kimberly-Clark in this Agreement shall also be applicable to any subsidiary or Affiliate of Kimberly-Clark, and Kimberly-Clark shall cause its subsidiaries and Affiliates to comply with such obligations. Further, any reference in
this Agreement to a person being employed or engaged by a party, shall be construed as including a reference to that person being employed or engaged by a subsidiary or an Affiliate of the party, as the case may require.  

6.04 Administrative Complaints/Litigation. As of and after the Distribution Date, Halyard shall assume, and be solely liable for, the
handling, administration, investigation, and defense of actions (whether arising before, on or after the Distribution Date), including, without limitation, ERISA, occupational safety and health, employment standards, union grievances, wrongful
dismissal, discrimination or human rights and unemployment compensation claims, that are outstanding on the Distribution Date or asserted on or after the Distribution Date against Kimberly-Clark or Halyard by any Business Employee or any other
person arising out of or relating to employment with the Halyard Business or Halyard. Any Losses arising from such actions shall be deemed Assumed Liabilities under the Distribution Agreement. Kimberly-Clark reserves the right to participate in the
investigation, defense or settlement of any matter to the extent it deems reasonably necessary. Notwithstanding the above, this Section 6.04 shall not apply to any claims covered by the Kimberly-Clark Director and Officer Liability Insurance
Policy that Kimberly-Clark retains pursuant to the terms of the Distribution Agreement.  
 6.05 Reimbursement and
Indemnification. The parties hereto agree to reimburse each other, within 30 days of receipt from the other party of appropriate verification, for all costs and expenses which each may incur on behalf of the other as a result of any of the
Welfare Plans, Pension Plans and Non-ERISA Benefit Arrangements and, as contemplated by Section 2.02, any termination or severance payments or benefits. All liabilities retained, assumed or indemnified against by Halyard pursuant to this
Agreement shall be deemed Assumed Liabilities, and all liabilities retained, assumed or indemnified against by Kimberly-Clark pursuant to this Agreement shall be deemed Retained Liabilities, and in each case shall be subject to the indemnification
provisions of the Distribution Agreement. 
 6.06 No Third Party Beneficiaries. No Transferred Employee, Business Employee, or
other current or former employee of Kimberly-Clark or Halyard or any subsidiary or Affiliate of either (or his/her spouse, dependent or beneficiary), or any other Person not a party to this Agreement, shall be entitled to assert any claim hereunder.
This Agreement shall be binding  

  
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upon and inure to the benefit only of the parties hereto and their respective successors. Notwithstanding any other provisions to the contrary except with respect to such successors, this
Agreement is not intended and shall not be construed for the benefit of any third party or any Person not a signatory hereto. In no event shall this Agreement constitute a third party beneficiary contract. Notwithstanding the above, any reference to
a “party” or “parties” in this Section 6.06 shall also include the subsidiaries and Affiliates, excluding for these purposes individuals who are Affiliates, of such party or parties. 

  
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 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in their names
by a duly authorized officer as of the date first written above. 
  

			
	KIMBERLY-CLARK CORPORATION
		
	By:	 	 
	Name:	 	Thomas J. Falk
	Title:	 	Chief Executive Officer
	
	HALYARD HEALTH, INC.
		
	By:	 	 
	Name:	 	Robert E. Abernathy
	Title:	 	Chief Executive Officer



  
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