Document:

EX-10.2

 Exhibit 10.2 

Execution Version 

TAX MATTERS AGREEMENT 

DATED AS OF OCTOBER 31, 2014 

BETWEEN 
 KIMBERLY-CLARK
CORPORATION 
 AND 

HALYARD HEALTH, INC.

 TABLE OF CONTENTS 

 

							
	 SECTION 1.
	  	 Definition of Terms
	  	 	2	  
			
	 SECTION 2.
	  	 Allocation of Tax Liabilities and Tax Benefits
	  	 	8	  
	 2.1
	  	 Liability for and the Payment of Taxes
	  	 	8	  
	 2.2
	  	 Allocation Rules
	  	 	11	  
			
	 SECTION 3.
	  	 Preparation and Filing of Tax Returns
	  	 	13	  
	 3.1
	  	 Joint Returns
	  	 	13	  
	 3.2
	  	 Separate Returns
	  	 	15	  
	 3.3
	  	 Special Rules Relating to the Preparation of Tax Returns
	  	 	15	  
	 3.4
	  	 Reliance on Exchanged Information
	  	 	17	  
	 3.5
	  	 Allocation of Tax Items
	  	 	17	  
			
	 SECTION 4.
	  	 Tax Payments
	  	 	17	  
	 4.1
	  	 Payment of Taxes to Tax Authority
	  	 	17	  
	 4.2
	  	 Indemnification Payments
	  	 	17	  
	 4.3
	  	 Initial Determinations and Subsequent Adjustments
	  	 	19	  
	 4.4
	  	 Interest on Late Payments
	  	 	20	  
	 4.5
	  	 Payments by or to Other Group Members
	  	 	20	  
	 4.6
	  	 Procedural Matters
	  	 	20	  
	 4.7
	  	 Tax Consequences of Payments
	  	 	20	  
			
	 SECTION 5.
	  	 Assistance and Cooperation
	  	 	20	  
	 5.1
	  	 Cooperation
	  	 	20	  
	 5.2
	  	 Supplemental Tax Opinions
	  	 	21	  
			
	 SECTION 6.
	  	 Tax Records
	  	 	21	  
	 6.1
	  	 Retention of Tax Records
	  	 	21	  
	 6.2
	  	 Access to Tax Records
	  	 	21	  
	 6.3
	  	 Confidentiality
	  	 	21	  
			
	 SECTION 7.
	  	 Tax Contests
	  	 	22	  
	 7.1
	  	 Notices
	  	 	22	  
	 7.2
	  	 Control of Tax Contests
	  	 	22	  
	 7.3
	  	 Cooperation
	  	 	23	  
			
	 SECTION 8.
	  	 Restriction on Certain Actions of External Distributing and External SpinCo
	  	 	23	  
	 8.1
	  	 General Restrictions
	  	 	23	  
	 8.2
	  	 Restricted Actions Relating to Tax Materials
	  	 	24	  
	 8.3
	  	 Certain External SpinCo Actions Following the Effective Time
	  	 	24	  
			
	 SECTION 9.
	  	 General Provisions
	  	 	25	  
	 9.1
	  	 Limitation of Liability
	  	 	25	  
	 9.2
	  	 Entire Agreement
	  	 	25	  

  
 i 

							
	 9.3
	  	 Governing Law
	  	 	25	  
	 9.4
	  	 Termination
	  	 	25	  
	 9.5
	  	 Notices
	  	 	25	  
	 9.6
	  	 Counterparts
	  	 	26	  
	 9.7
	  	 Binding Effect; Assignment
	  	 	26	  
	 9.8
	  	 No Third Party Beneficiaries
	  	 	26	  
	 9.9
	  	 Severability
	  	 	26	  
	 9.10
	  	 Failure or Indulgence Not Waiver; Remedies Cumulative
	  	 	26	  
	 9.11
	  	 Amendments; Waivers
	  	 	26	  
	 9.12
	  	 Authority
	  	 	27	  
	 9.13
	  	 Construction
	  	 	27	  
	 9.14
	  	 Interpretation
	  	 	27	  
	 9.15
	  	 Predecessors or Successors
	  	 	27	  
	 9.16
	  	 Effective Time
	  	 	27	  
	 9.17
	  	 Change in Law
	  	 	27	  
	 9.18
	  	 Disputes
	  	 	27	  

  
 ii 

 TAX MATTERS AGREEMENT 

THIS TAX MATTERS AGREEMENT (this “Agreement”) is entered into as of October 31, 2014, between Kimberly-Clark
Corporation, a Delaware corporation (“External Distributing”), and Halyard Health, Inc., a Delaware corporation (“External SpinCo”). Unless otherwise indicated, all “Section” references in this Agreement
are to sections of this Agreement. 
 RECITALS 

WHEREAS, External SpinCo is a wholly owned Subsidiary of External Distributing; and 

WHEREAS, the Board of Directors of External Distributing has determined that it would be appropriate and desirable for External Distributing
to separate the External SpinCo Group from the External Distributing Group, as contemplated by the Distribution Agreement (the “Separation”); and 

WHEREAS, in furtherance thereof, the Board of Directors of External Distributing has determined that, in connection with the Separation, it
would be appropriate and desirable for (i) Kimberly-Clark Worldwide, Inc., a Delaware corporation and wholly-owned subsidiary of External Distributing (“Internal Distributing”), to contribute (such contribution, the
“Internal Contribution”) certain assets and liabilities to Avent, Inc., a Delaware corporation (“Internal SpinCo”), and to distribute its entire interest in the stock of Internal SpinCo to External Distributing (the
“Internal Distribution”) in what is intended to qualify, together with the Internal Contribution, as a “reorganization” described under Sections 368(a)(1)(D) and 355 of the Code, and (ii) following the
transactions described in clause (i), for External Distributing (A) to transfer (or cause its Subsidiaries to transfer) certain assets and liabilities associated with the External SpinCo Business to External SpinCo (or to certain other Persons
that will become members of the External SpinCo Group pursuant to the Separation), (B) to contribute to External SpinCo (1) all of the outstanding shares of stock of Halyard Healthcare, Inc., (such contribution, “External
Contribution 1”), (2) all of the membership interests of Halyard Sales LLC (such contribution, “External Contribution 2”), and (3) all of the stock of Internal SpinCo (such contribution, “External
Contribution 3” and together with External Contribution 1 and External Contribution 2, the “External Contributions”), and (C) to distribute its entire interest in the stock of External SpinCo on a pro rata basis
to holders of External Distributing common stock (the “External Distribution”) in what is intended to qualify, together with the External Contributions, as a “reorganization” described under Sections 368(a)(1)(D) and 355
of the Code; and 
 WHEREAS, the Board of Directors of External SpinCo has also approved such transactions; and 

WHEREAS, the parties set forth in the Distribution Agreement the principal arrangements between them regarding the separation of the External
SpinCo Group from the External Distributing Group; and 
 WHEREAS, the parties desire to provide for and agree upon the allocation between
the parties of Taxes and Tax Items arising prior to, as a result of, and subsequent to the External Distribution, and provide for and agree upon other matters relating to Taxes. 

  
 1 

 NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements set forth
below, the parties hereto agree as follows: 
 SECTION 1. Definition of Terms. For purposes of this Agreement (including the recitals
hereof), the following terms have the following meanings: 
 “2014 Joint Federal Return” means External Distributing’s
U.S. federal consolidated income Tax Return for the Tax Year that begins on January 1, 2014, and ends on December 31, 2014. 

“Affiliate” means with respect to any Person, any other Person that directly or indirectly, through one or more
intermediaries, Controls, is Controlled by, or is under common Control with, such first Person. It is expressly agreed that, from and after the Effective Time, (i) no member of the External Distributing Group shall be deemed an Affiliate of any
member of the External SpinCo Group and (ii) no member of the External SpinCo Group shall be deemed an Affiliate of any member of the External Distributing Group. 

“Agreement” has the meaning set forth in the preamble hereof. 

“Cash Distribution” has the meaning set forth in the definition of Repatriation Taxes in this Section 1. 

“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, or any successor law. 

“Control” means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through ownership of securities or partnership, membership, limited liability company, or other ownership interests, by contract or otherwise and the terms “Controlling” and
“Controlled” have meanings correlative to the foregoing. 
 “Credit Transfer Agreement” means that certain
agreement between External Distributing and External SpinCo, dated as of the date hereof, pursuant to which External Distributing transferred a portion of its South Carolina jobs tax credits to External SpinCo. 

“Disclosing Party” has the meaning set forth in Section 6.3. 

“Distribution Agreement” means the Distribution Agreement entered into as of the date hereof, between External Distributing
and External SpinCo. 
 “Distribution Date” means the date on which the External Distribution occurs. 

“Due Date” has the meaning set forth in Section 4.4. 

“Effective Time” means the time at which the External Distribution is effected on the Distribution Date. 

“External Contribution 1” has the meaning set forth in the recitals hereto. 

  
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 “External Contribution 2” has the meaning set forth in the recitals hereto. 

“External Contribution 3” has the meaning set forth in the recitals hereto. 

“External Contributions” has the meaning set forth in the recitals hereto. 

“External Distributing” has the meaning set forth in the preamble hereof. 

“External Distributing Business” has the meaning set forth for the term Retained Business in the Distribution Agreement. 

“External Distributing Group” means External Distributing and each Subsidiary of External Distributing (but only while such
Subsidiary is a Subsidiary of External Distributing) other than any Person that is a member of the External SpinCo Group. 

“External SpinCo” has the meaning set forth in the preamble hereof. 

“External SpinCo Business” has the meaning set forth for the term Halyard Business in the Distribution Agreement. 

“External SpinCo Group” means (i) with respect to any Tax Year (or portion thereof) ending on or before the Distribution
Date, External SpinCo and each other Subsidiary of External Distributing that is (or will be) a Subsidiary of External SpinCo at the Effective Time; and (ii) with respect to any Tax Year (or portion thereof) that begins after the Distribution
Date, External SpinCo and each Subsidiary of External SpinCo (but only while such Subsidiary is a Subsidiary of External SpinCo). 

“External Distribution” has the meaning set forth in the recitals hereof. 

“Group” means the External Distributing Group or the External SpinCo Group, as the context requires. 

“Income Tax” or “Income Taxes” means any federal, state, local or foreign Tax measured by or imposed on net
income, together with any interest, penalties, additions to tax, or additional amounts in respect of the foregoing. 

“Information” has the meaning set forth for such term in the Distribution Agreement. 

“Internal Distributing” has the meaning set forth in the recitals hereof. 

“Internal Distributing Business” means the portion of the External Distributing Business consisting of contract manufacturing
family, infant and childcare products through two plants, located in Ogden Utah, and Fullerton, California. 
 “Internal
Distribution” has the meaning set forth in the recitals hereof. 
 “Internal SpinCo” has the meaning set forth in
the recitals hereof. 

  
 3 

 “Internal SpinCo Business” means the portion of the External SpinCo Business
consisting of manufacturing health care related products on behalf of Kimberly-Clark Global Sales LLC in its surgical and infection prevention and medical devices business segments. 

“IRS” means the United States Internal Revenue Service. 

“Joint Return” means any Tax Return, for any Tax Year, that includes Tax Items of both the External Distributing Business and
the External SpinCo Business, determined without regard to Tax Items carried forward to such Tax Year; provided, however, that Joint Returns shall not include any Tax Returns (other than Tax Returns that are filed on a consolidated, combined, or
unitary basis with any member of the External Distributing Group) that are required to be filed with respect to (i) Internal SpinCo (or any of its Subsidiaries prior to the External Distribution) or (ii) either of the Thai Subsidiaries.

 “Losses” means any and all damages, losses, deficiencies, liabilities, obligations, Taxes, penalties, judgments,
settlements, claims, payments, fines, interest, costs and expenses (including, without limitation, the fees and expenses of any and all actions and demands, assessments, judgments, settlements and compromises relating thereto and the costs and
expenses of attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder), including direct and consequential damages.

 “Mexican Maquilas” means (i) Avent S. de R.L. de C.V. and (ii) La Ada de Acuna, S. de R.L. de C.V. 

“Non-Income Tax” or “Non-Income Taxes” means all Taxes other than Income Taxes. 

“Non-Preparer” means, in the case of any Joint Return or Separate Return, the party that is not responsible for the
preparation and filing of such Joint Return or Separate Return, as applicable, pursuant to Sections 3.1(a) or 3.2. 

“Non-Preparer Party Item” has the meaning set forth in Section 7.2(b). 

“Payment Date” means (i) with respect to any U.S. federal income tax return, the due date for any required installment
of estimated taxes determined under Code Section 6655, the due date (determined without regard to extensions) for filing the return determined under Code Section 6072, and the date the return is filed, and (ii) with respect to any
other Tax Return, the corresponding dates determined under the applicable Tax Law. 
 “Person” means any individual,
corporation, limited liability company, joint stock company, partnership, trust, incorporated or unincorporated association, union, unincorporated organization, joint venture, governmental entity (or any department, agency or political subdivision
thereof) or other entity of any kind. 
 “Pre-Acquisition Taxes” means any Taxes that (i) are the liability of any
Person listed in Appendix B and (ii) relate to any Tax Year (or portion thereof) prior to the acquisition of such Person by the External Distributing Group. 

  
 4 

 “Pre-Spin Billed Amount” has the meaning set forth in Section 4.2(c)(i).

 “Preparer” means, in the case of any Joint Return or Separate Return, the party that is responsible for the preparation
and filing of the Joint Return or Separate Return, as applicable, pursuant to Sections 3.1(a) or 3.2. 
 “Receiving
Party” has the meaning set forth in Section 6.3. 
 “Redetermination Event” has the meaning set forth in
Section 4.3. 
 “Requesting Party” has the meaning set forth in Section 5.2. 

“Repatriation Taxes” means any Income Taxes (other than Separation Taxes) and withholding Taxes imposed by the United States,
Thailand, or Singapore on the direct or indirect distribution of cash by the Thai Subsidiaries or Kimberly-Clark Far East Pte. Limited to a member of the External Distributing Group (all such distributions collectively, the “Cash
Distribution”). 
 “Restructuring Taxes” means any Income Taxes (other than Separation Taxes) including, without
limitation, Income Taxes imposed by the United States or Mexico, which are related to or arise in connection with the transfer, at or prior to the Effective Time, of assets and liabilities (i) related to the External SpinCo Business from
members of External Distributing Group on one hand to members of External SpinCo Group on the other hand; and (ii) related to the External Distributing Business from members of the External SpinCo Group on one hand to members of External
Distributing Group on the other hand. For the avoidance of doubt, Restructuring Taxes shall include without limitation any Mexican Income Taxes arising from the transfers of FemCare assets by Internal SpinCo and Internal SpinCo’s Subsidiaries,
and any United States Income Taxes arising out of deferred intercompany gains recognized pursuant to Treasury Regulation Section 1.1502-13, any recapture of excess loss account recognized pursuant to Treasury Regulation Section 1.1502-19,
any triggering of dual consolidated losses pursuant to Treasury Regulation Section 1.1503(d)-6, recapture of overall foreign loss pursuant to Section 904(f) of the Code and gain recognition pursuant to a gain recognition agreement pursuant
to Treasury Regulation Section 1.367(a)-8. 
 “Separate Return” means any Tax Return that (i) is required to be
filed by or with respect to any member of either Group and (ii) is not a Joint Return (including, for the avoidance of doubt, Tax Returns of foreign Subsidiaries of External Distributing or External SpinCo which are not Joint Returns). 

“Separation” has the meaning set forth in the recitals hereof. 

“Separation Taxes” means any Taxes resulting from (i) the failure of the Internal Contribution together with the
Internal Distribution to qualify as a transaction described in Sections 355 and 368(a)(1)(D) of the Code, (ii) the failure of the External Contributions together with the External Distribution to qualify as a transaction described in Sections
355 and 368(a)(1)(D) of the Code, or (iii) the application of Section 355(d), Section 355(e) or Section 355(f) of the Code to the Internal Distribution or the External Distribution. 

  
 5 

 “Separation Transactions” means the transactions described in Schedule 2.1 of
the Distribution Agreement. 
 “Stub Period” means the two-month period beginning on November 1, 2014 and ending on
December 31, 2014. 
 “Subsidiary” when used with respect to any Person, means (i)(A) a corporation a majority in
voting power of whose share capital or capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by one or more Subsidiaries of such Person, or by such Person and
one or more Subsidiaries of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, (B) a partnership or limited liability company in which such Person or a Subsidiary of such Person is, at the date of
determination, (1) in the case of a partnership, a general partner of such partnership with the power affirmatively to direct the policies and management of such partnership or (2) in the case of a limited liability company, the managing
member or, in the absence of a managing member, a member with the power affirmatively to direct the policies and management of such limited liability company, or (C) any other Person (other than a corporation) in which such Person, one or more
Subsidiaries of such Person or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has or have (1) the power to elect or direct the election of a majority of the members of the
governing body of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, or (2) in the absence of such a governing body, at least a majority ownership interest or (ii) any other Person of which an
aggregate of 50% or more of the equity interests are, at the time, directly or indirectly, owned by such Person and/or one or more Subsidiaries of such Person. References herein to Subsidiaries includes (without limitation) any Subsidiary formed
after the date hereof in anticipation of the External Distribution. 
 “Supplemental Tax Opinion” means, with respect to a
specified action, an opinion (other than the Tax Opinion) from Tax Counsel to the effect that (i) such action should not preclude the Internal Contribution and the Internal Distribution together from qualifying as a reorganization
described under Sections 368(a)(1)(D) and 355 of the Code, (ii) such action will not preclude the External Contributions and the External Distribution together from qualifying as a reorganization described under Sections 368(a)(1)(D)
and 355 of the Code and (iii) such action will not otherwise increase the amount of Tax imposed on the Separation Transactions. No opinion relied upon by External SpinCo to satisfy the requirements of Section 8.3 shall be considered a
“Supplemental Tax Opinion” unless such opinion is, in addition to the requirements above, an unqualified “will” opinion (in the case of the External Distribution) or an unqualified “should” opinion (in the case of the
Internal Distribution) reasonably satisfactory to External Distributing, which opinion may rely upon, and may assume the accuracy of, any customary representations, reasonably satisfactory to External Distributing, contained in an officer’s
certificate delivered by an officer of External Distributing or External SpinCo to Tax Counsel. 
 “Tax” or
“Taxes” means all forms of taxation imposed by any governmental entity or political subdivision, agency, commission or authority thereof, whenever created or imposed, and whether of the United States or foreign jurisdiction, and
whether imposed by a local, municipal, state, national, federal, or other body, and without limiting the foregoing, shall include any income, gross income, gross receipts, profits, capital stock, franchise, withholding,

  
 6 

 
payroll, social security, workers compensation, unemployment, disability, property, ad valorem, stamp, medical device excise, other excise, severance, occupation, service, sales, use, license,
lease, transfer, recording, import, export, value added, alternative minimum, estimated or other similar tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax), together with any interest, penalties, additions to
tax, or additional amounts in respect of the foregoing. 
 “Tax Authority” means, with respect to any Tax, the governmental
entity or political subdivision, agency, commission or authority thereof that imposes such Tax, or that is charged with the assessment, determination or collection of such Tax for such entity or subdivision. 

“Tax Benefit” means, for any Tax Year with respect to a Group, (i) losses of such Group carried forward or back to such
Tax Year from another Tax Year; (ii) Tax credits generated by such Group; and (iii) after separately taking into account solely the items of income, gain, loss, and deduction of such Group for such Tax Year (but excluding any deductions
attributable to losses carried forward or back to such Tax Year from another Tax year), any net operating loss of such Group for such Tax Year. 

“Tax Contest” means an audit, review, examination, or any other administrative or judicial proceeding with the purpose or
effect of examining, determining or redetermining Taxes of any member of either Group (including any administrative or judicial review of any claim for refund). 

“Tax Counsel” means (i) with respect to the Tax Opinion delivered to External Distributing with respect to the External
Distribution, Baker Botts L.L.P., (ii) with respect to the Tax Opinion delivered to External Distributing with respect to the Internal Distribution, Price Waterhouse Coopers, or (iii) with respect to a Supplemental Tax Opinion delivered to
External Distributing or to External SpinCo, a nationally recognized law firm or accounting firm reasonably acceptable to External Distributing to provide such Supplemental Tax Opinion. 

“Tax Item” means, with respect to any Tax, any item of income, gain, loss, deduction, credit or other attribute that may have
the effect of increasing or decreasing any Tax. 
 “Tax Law” means the law of any governmental entity or political
subdivision thereof, and any controlling judicial or administrative interpretations of such law, relating to any Tax. 
 “Tax
Materials” means (i) the representation letters delivered to Tax Counsel in connection with the delivery of the Tax Opinion or the Supplemental Tax Opinion and (ii) any other materials delivered or deliverable by External
Distributing, External SpinCo and others in connection with the rendering by Tax Counsel of the Tax Opinions or the Supplemental Tax Opinion. 

“Tax Opinion” means the opinion to be delivered by Tax Counsel to External Distributing in connection with the Internal
Distribution and the External Distribution to the effect that (i) the Internal Contribution and the Internal Distribution together should qualify as a reorganization described under Sections 368(a)(1)(D) and 355 of the Code and
(ii) the External Contributions and the External Distribution together will qualify as a reorganization described under Sections 368(a)(1)(D) and 355 of the Code. 

  
 7 

 “Tax Records” means Tax Return, Tax Return work papers, documentation relating
to any Tax Contests, and any other books of account or records required to be maintained under applicable Tax Laws (including but not limited to Section 6001 of the Code) or under any record retention agreement with any Tax Authority. 

“Tax Return” means any report of Taxes due (including estimated Taxes), any claims for refund of Taxes paid, any information
return with respect to Taxes, or any other similar report, statement, declaration, election, notice or other document required to be filed (by paper, electronically or otherwise) under any applicable Tax Law (whether or not a payment is required to
be made in connection with such filing), including any attachments, exhibits, schedules, appendices or other materials submitted with any of the foregoing, and including any amendments or supplements to any of the foregoing. 

“Tax Year” means with respect to any Tax, the year, or shorter period, if applicable, for which the Tax is reported as
provided under applicable Tax Law. 
 “Thai Subsidiaries” means (i) Safeskin Corporation Thailand Ltd. and
(ii) Safeskin Medical and Scientific Thailand Ltd. 
 “Treasury Regulations” means the regulations promulgated from
time to time under the Code as in effect for the relevant Tax Year. 
 SECTION 2. Allocation of Tax Liabilities and Tax Benefits.

 2.1 Liability for and the Payment of Taxes. Except as provided in Section 3.1(b) (Provision of Information and
Assistance), Section 3.2(c) (Provision of Information), and Section 7 (Tax Contests), and in accordance with Section 4, the parties’ liabilities for Taxes and payment obligations with respect to utilized Tax Benefits shall be as
set forth in Sections 2.1(a) and 2.1(b) below. 
 (a) External SpinCo Liabilities and Payments. For any Tax Year (or portion
thereof): 
 (i) External SpinCo shall be liable for the Taxes (determined without regard to Tax Benefits) allocated to External SpinCo
pursuant to Section 2.2(a)(i) or Section 2.2(b), reduced by any Tax Benefits that External SpinCo is permitted to utilize under the rules set forth in Section 2.1(c) that are allowable under applicable Tax Law. 

(ii) External SpinCo shall pay External Distributing for: 

(A) any Tax Benefits arising in a Tax Year that begins on or before the Distribution Date which are allocated to External Distributing
pursuant to Section 2.2(a)(ii), but which are utilized by External SpinCo to reduce Taxes for which it is liable pursuant to Section 2.1(a)(i) in any Tax Year that begins after the Distribution Date, 

(B) any Tax Benefits arising in a Tax Year that begins after the Distribution Date which are allocated to External Distributing pursuant to
Section 2.2(a)(ii), but which are utilized by External SpinCo to reduce Taxes for which it is liable pursuant to Section 2.1(a)(i) in any Tax Year that begins on or before the Distribution Date, 

  
 8 

 (C) any Tax Benefits arising in any Tax Year which are allocated to External Distributing
pursuant to Section 2.2(a)(ii), but which are utilized by External SpinCo to reduce Taxes for which it is liable in such Tax Year or in another Tax Year beginning on or before the Distribution Date pursuant to Section 2.1(a)(i), and 

(D) any Tax Benefits arising in a Tax Year that begins on or before the Distribution Date which are allocated to External Distributing
pursuant to Section 2.2(a)(ii), but which both arise as a result of a Tax Contest or other dispute which is resolved after the Distribution Date and are utilized by External SpinCo to reduce Taxes for which it is liable pursuant to
Section 2.1(a)(i) in any Tax Year that begins on or before the Distribution Date. 
 (b) External Distributing Liabilities and
Payments. For any Tax Year (or portion thereof): 
 (i) External Distributing shall be liable for the Taxes (determined without regard
to Tax Benefits) allocated to External Distributing pursuant to Section 2.2(a)(i) or Section 2.2(b), reduced by any Tax Benefits that External Distributing is permitted to utilize under the rules set forth in Section 2.1(c) that are
allowable under applicable Tax Law. 
 (ii) External Distributing shall pay External SpinCo for: 

(A) any Tax Benefits arising in a Tax Year that begins on or before the Distribution Date which are allocated to External SpinCo pursuant to
Section 2.2(a)(ii), but which are utilized by External Distributing to reduce Taxes for which it is liable pursuant to Section 2.1(b)(i) in any Tax Year that begins after the Distribution Date, 

(B) any Tax Benefits arising in a Tax Year that begins after the Distribution Date which are allocated to External SpinCo pursuant to
Section 2.2(a)(ii), but which are utilized by External Distributing to reduce Taxes for which it is liable pursuant to Section 2.1(b)(i) in any Tax Year that begins on or before the Distribution Date, 

(C) any Tax Benefits arising in any Tax Year which are allocated to External SpinCo pursuant to Section 2.2(a)(ii), but which are
utilized by External Distributing to reduce Taxes for which it is liable in such Tax Year or in another Tax Year beginning on or before the Distribution Date pursuant to Section 2.1(b)(i), and 

(D) any Tax Benefits arising in a Tax Year that begins on or before the Distribution Date which are allocated to External SpinCo pursuant to
Section 2.2(a)(ii), but which both arise as a result of a Tax Contest or other dispute which is resolved after the Distribution Date and are utilized by External Distributing to reduce Taxes for which it is liable pursuant to
Section 2.1(b)(i) in any Tax Year that begins on or before the Distribution Date. 

  
 9 

 (c) Rules for Utilization of Tax Benefits. For purpose of this Section 2, the
parties’ rights to utilize Tax Benefits under Sections 2.1(a) and 2.1(b) shall be determined in accordance with the following rules: 

(i) In general, the party to whom Tax Benefits are allocated pursuant to Section 2.2(a)(ii) shall be entitled to utilize such Tax
Benefits to reduce Taxes for which such party is liable pursuant to Section 2.1(a)(i) or Section 2.1(b)(i). 
 (ii)
Notwithstanding the preceding paragraph, for any Tax Year that begins on or before the Distribution Date, (A) External SpinCo may take into account a Tax Benefit under Section 2.1(a)(i) only if (and to the extent that) the utilization by
External SpinCo of such Tax Benefit would be allowable under applicable Tax Law after taking into account only those Tax Items allocated to External SpinCo during such Tax Year (or portion thereof), and (B) External Distributing may take into
account a Tax Benefit under Section 2.1(b)(i) only if (and to the extent that) the utilization by External Distributing of such Tax Benefit would be allowable under applicable Tax Law after taking into account only those Tax Items allocated to
External Distributing during such Tax Year (or portion thereof); provided, however, that for purposes of determining whether External Distributing may take into account any foreign tax credit under this Section 2.1(c)(ii) for any Tax Year,
External Distributing shall be entitled to treat any foreign source income reported on its U.S. consolidated federal income Tax Return for such Tax Year (other than foreign source income that is both a Tax Item of a member of the External SpinCo
Group and is taken into account by External SpinCo during such Tax Year for purposes of utilizing a foreign tax credit (excluding any foreign tax credit carried back from another Tax Year) that is allocated to External SpinCo in such Tax Year under
this Agreement) as a Tax Item allocated to External Distributing during such Tax Year. 
 (iii) For any Tax Year that begins on or before
the Distribution Date, if, because of the application of the rules described in the preceding paragraph or otherwise, External Distributing is not able to fully utilize the Tax Benefits allocated to it pursuant to Section 2.2(a)(ii), then
External SpinCo may utilize such Tax Benefits allocated to External Distributing, but only to the extent such Tax Benefits are not taken into account by External Distributing pursuant to Section 2.1(b)(i) in the same Tax Year on an original or
amended return or otherwise. Similarly, if, because of the application of the rules described in the preceding paragraph or otherwise, External SpinCo is not able to fully utilize the Tax Benefits allocated to it pursuant to Section 2.2(a)(ii),
then External Distributing may utilize such Tax Benefits allocated to External SpinCo, but only to the extent such Tax Benefits are not taken into account by External SpinCo pursuant to Section 2.1(a)(i) in the same Tax Year on an original or
amended return or otherwise. 
 (iv) For any Tax Year that begins after the Distribution Date in which a party has available for
utilization both Tax Benefits allocated to such party pursuant to Section 2.2(a)(ii) and Tax Benefits allocated to the other party pursuant to Section 2.2(a)(ii) (because, for example, such other party was unable to utilize the Tax
Benefits allocated to it), if the applicable Tax Law does not provide for the priority and order in which such Tax Benefits are deemed to be utilized then the first party shall be deemed to first utilize the Tax Benefits allocated to it pursuant to
Section 2.2(a)(ii) to the extent that such Tax Benefits may be utilized by the first party in such Tax Year under the rules set forth in this Section 2.1(c). 

  
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 (v) Payment for Tax Benefits described in Section 2.1(a)(ii) shall be made only when and to
the extent that the utilization of such Tax Benefit does not increase the Taxes of External SpinCo or reduce the Tax Benefits otherwise utilizable by External SpinCo during the applicable Tax Year, and payment for Tax Benefits described in
Section 2.1(b)(ii) shall be made only when and to the extent that the utilization of such Tax Benefit does not increase the Taxes of External Distributing or reduce the Tax Benefits otherwise utilizable by External Distributing during the
applicable Tax Year. 
 (d) Deemed Utilization of Tax Benefits. Notwithstanding anything else to the contrary in this Agreement, to
the extent that any action taken after the Effective Time by any member of the External SpinCo Group (other than the ordinary conduct of the External SpinCo Business consistent with past practice prior to the External Distribution) directly causes
any foreign tax credits that are allocated to External Distributing pursuant to Section 2.2(a)(ii)(A) to be reduced, External SpinCo shall be deemed to have utilized foreign tax credits allocated to External Distributing to reduce Taxes for
which External SpinCo is liable for the Stub Period and shall be required to make a payment to External Distributing, pursuant to Section 2.1(a)(ii)(A), with respect to such foreign tax credits. For the avoidance of doubt, any such payment
shall not be subject to the limitation in the last sentence of Section 4.3.  
 2.2 Allocation Rules. For purposes of
Section 2.1: 
 (a) General Rule. Except as otherwise provided in this Section 2.2, 

(i) Taxes for any Tax Year (or portion thereof) shall be allocated between External SpinCo and External Distributing as follows: 

(A) Pre-Acquisition Taxes and medical device excise taxes shall be allocated solely to External SpinCo. 

(B) Restructuring Taxes and Repatriation Taxes shall be allocated solely to External Distributing. 

(C) Income Taxes (other than Separation Taxes, which are allocated pursuant to Section 2.2(b), and other than Income Taxes described in
subclauses (i)(A) and (i)(B) of this Section 2.2(a)) shall be allocated among External SpinCo and External Distributing in proportion to the separate taxable income (calculated in accordance with Treasury Regulation Section 1.1552-1(a)(1)
and in accordance with past practices) attributable to or arising from the members of the External Distributing Group (including, for the avoidance of doubt, the members of the External Distributing Group that are treated as disregarded entities for
U.S. federal income tax purposes), on the one hand, and the members of the External SpinCo Group (including, for the avoidance of doubt, the members of the External SpinCo Group that are treated as disregarded entities for U.S. federal income tax
purposes), on the other hand. 
 (D) Non-Income Taxes (other than those described in subclauses (i)(A) and (i)(B) of this
Section 2.2(a)) shall be allocated among External SpinCo and External Distributing based on the applicable items attributable to or arising from the respective External SpinCo Business and External Distributing Business (as so defined for such
Tax Year or portion thereof) that contribute to such Taxes (e.g., sales taxes and value added taxes shall be 

  
 11 

 
allocated to External SpinCo to the extent arising from taxable sales made by the External SpinCo Business). In the event that any Non-Income Tax is not attributable to (and does not arise from)
any items of the External SpinCo Business or the External Distributing Business (e.g., capital taxes imposed based on the authorized stock), such Non-Income Taxes shall be allocated among External Distributing and External SpinCo in proportion to
the net taxable income of the External Distributing Business, on the one hand, and the External SpinCo Business, on the other hand. 
 (ii)
Tax Benefits for any Tax Year (or portion thereof) shall be allocated between External SpinCo and External Distributing as follows: 
 (A)
All foreign tax credits (including foreign tax credits arising in a Tax Year, but that cannot be claimed on the Tax Return for such Tax Year due to a limitation on such foreign tax credits under applicable Tax Law) arising (1) in 2014 with
respect to the 2014 Joint Federal Return or (2) in a Tax Year beginning before 2014, shall be allocated solely to External Distributing; provided, however, that foreign tax credits attributable to (1) Mexican Income Taxes (other than
Restructuring Taxes) that are imposed by the applicable Tax Authority on Internal SpinCo or the Mexican Maquilas, (2) Japanese Income Taxes (other than Restructuring Taxes) imposed by the applicable Tax Authority on Halyard Healthcare Inc. (or
its Subsidiary), or (3) Honduran Income Taxes (other than Restructuring Taxes) that are imposed by the applicable Tax Authority on Avent de Honduras, S.A. de C.V., shall be allocated to External SpinCo. For the avoidance of doubt (and without
limiting the foreign tax credits allocated to External Distributing under this Section 2.2(a)(ii)(A)), any foreign tax credits related to or arising in connection with the Cash Distribution or any Restructuring Taxes (whether or not such
foreign tax credits arise prior to the Effective Time) shall be allocated to External Distributing. 
 (B) Tax Benefits arising from
(1) the Georgia research and development tax credits and the North Carolina investment tax credits shall be allocated solely to External Distributing and (2) the portion of the South Carolina jobs tax credits transferred from External
Distributing to External SpinCo pursuant to the Credit Transfer Agreement shall be allocated solely to External SpinCo. 
 (C) Except as
provided in subclause (ii)(B) of this Section 2.2(a), all research and development tax credits shall be allocated solely to External Distributing. 

(D) Except as provided in subclauses (ii)(A) through (ii)(C) of this Section 2.2(a), Tax Benefits with respect to Income Taxes
(including, for the avoidance of doubt, Tax Benefits derived from the payment or accrual of Taxes, whether Income Taxes or Non-Income Taxes) shall be allocated in proportion to the losses, credits, or other applicable items attributable to or
arising from the members of the External Distributing Group (including, for the avoidance of doubt, the members of the External Distributing Group that are treated as disregarded entities for U.S. federal income tax purposes), on the one hand, and
from the members of the External SpinCo Group (including, for the avoidance of doubt, the members of the External SpinCo Group that are treated as disregarded entities for U.S. federal income tax purposes), on the other hand, that gave rise to such
Tax Benefits. 

  
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 (E) Tax Benefits other than Tax Benefits allocated pursuant to subclauses (ii)(A) through
(ii)(D) of this Section 2.2(a) shall be allocated among External SpinCo and External Distributing in proportion to the losses, credits, or other applicable items attributable to or arising from the respective External SpinCo Business and
External Distributing Business (as so defined for such Tax Year or portion thereof) that contribute to such Tax Benefits. 
 For purposes of applying this
Section 2.2, any Taxes imposed on payments from a member of one Group to a member of the other Group shall be treated as attributable entirely to the payee, except that Taxes in the nature of sales, value added or other transaction-based Taxes
shall be treated as attributable entirely to the payer. 
 (b) Taxes Resulting from the Internal Contribution, the Internal Distribution,
the External Contributions, or the External Distribution. Separation Taxes will be allocated as follows: 
 (i) Separation Taxes
Allocable to External Distributing. Separation Taxes shall be allocated to External Distributing to the extent that such Separation Taxes result primarily from one or more of the following: 

(A) from the External Distributing Group ceasing to be engaged in the Internal Distributing Business or the External Distributing Business;
or 
 (B) from an action or failure to act by the External Distributing Group that causes Section 355(e) of the Code to apply to
either the Internal Distribution or the External Distribution, or that causes Section 355(f) of the Code to apply to the Internal Distribution; or 

(C) taking any of the actions prohibited in (or failing to take any of the actions required by) Sections 8.1 or 8.2. 

(ii) Separation Taxes Allocable to External SpinCo. Separation Taxes shall be allocated to External SpinCo to the extent that such
Separation Taxes result primarily from External SpinCo’s taking any of the actions prohibited in (or failing to take any of the actions required by) Sections 8.1, 8.2 or 8.3. 

(iii) Joint Responsibility for Separation Taxes. Any Separation Taxes not allocated under Section 2.2(b)(i) or
Section 2.2(b)(ii) shall be allocated fifty percent (50%) to External Distributing and fifty percent (50%) to External SpinCo. 

SECTION 3. Preparation and Filing of Tax Returns. 

3.1 Joint Returns. 
 (a)
Preparation of Joint Returns. In general, External Distributing shall be responsible for preparing and timely filing all Joint Returns. Notwithstanding the previous sentence, with respect to tax years ending on or before December 31,
2014, (i) External Distributing shall be responsible for (A) preparing all IRS Forms 5471 required to be filed with 

  
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respect to any foreign Subsidiaries of External Distributing and (B) timely filing all IRS Forms 5471 required to be filed with respect to any foreign Subsidiaries of External Distributing
(other than foreign Subsidiaries of External SpinCo) and (ii) External SpinCo shall be responsible for timely filing all IRS Forms 5471 required to be filed with respect to any foreign Subsidiaries of External SpinCo. 

(b) Provision of Information and Assistance. 

(i) Information with Respect to Joint Returns. The Non-Preparer shall provide the Preparer with all information in its possession
necessary for the Preparer to properly and timely file all Joint Returns for which such Preparer is responsible pursuant to Section 3.1(a). The Non-Preparer shall provide such information no later than thirty days prior to the extended due date
of such Joint Return. If the Non-Preparer fails to provide such information within the time period provided in this Section 3.1(b)(i) and in the form reasonably requested by the Preparer to permit the timely filing of any Joint Return for which
the Preparer is responsible pursuant to Section 3.1(a), then notwithstanding any other provision of this Agreement, the Non-Preparer shall be liable for, and shall indemnify and hold harmless each member of the Preparer’s Group from and
against, any penalties, interest, or other payment obligation assessed against any member of either Group by reason of a failure to file such return by its due date (including applicable extensions). If the Non-Preparer provides information within
the time period provided in this Section 3.1(b)(i) in the form reasonably requested by the Preparer to permit the timely filing of a Joint Return for which such Preparer is responsible pursuant to Section 3.1(a), or if the Preparer does
not request any such information, then notwithstanding any other provision of this Agreement, the Preparer shall be liable for, and shall indemnify and hold harmless each member of the Non-Preparer’s Group from and against, any penalties,
interest, or other payments assessed against any member of either Group by reason of a failure to file such return by its due date (including applicable extensions). 

(ii) Information with Respect to Estimated Payments and Extension Payments. The Non-Preparer shall provide the Preparer with all
information relating to members of the Non-Preparer’s Group that the Preparer needs to determine the amount of Taxes due on any Payment Date with respect to a Joint Return for which such Preparer is responsible pursuant to Section 3.1(a).
The Non-Preparer shall provide such information no later than thirty days before such Payment Date. In the event that the Non-Preparer fails to provide information within the time period provided in this Section 3.1(b)(ii) in the form
reasonably requested by the Preparer to permit the timely payment of such Taxes, the indemnification principles of Section 3.1(b)(i) shall apply with respect to any penalties, interest, or other payments assessed against any member of either
Group by reason of a failure to pay such Taxes by the Payment Date. 
 (iii) Assistance. At the request of the Preparer, the
Non-Preparer shall take (at its own cost and expense), and shall cause the members of the Non-Preparer’s Group to take (at their own cost and expense), any reasonable action (e.g., filing a ruling request with the relevant Tax Authority
or executing a power of attorney) that is reasonably necessary in order for the Preparer or any other member of the Preparer’s Group to prepare, file, amend or take any other action with respect to a Joint Return for which the Preparer is
responsible pursuant to Section 3.1(a). In the event that the Non-Preparer fails to take, or cause to be taken, any such 

  
 14 

 
requested action, the indemnification principles of Section 3.1(b)(i) shall apply with respect to any penalties, interest, or other payments assessed against any member of either Group by
reason of a failure to take any such requested action. 
 (iv) Information with Respect to Liability for Taxes. At the reasonable
request of either Party, the Parties shall provide whatever documentation, schedules, workpapers, Tax Returns, etc. as may be reasonably required to substantiate a claim made by one Party against the other Party for Taxes or Tax Benefits pursuant to
Section 2.1. 
 3.2 Separate Returns. 

(a) Tax Returns to be Prepared by External Distributing. External Distributing shall be responsible for preparing and timely filing all
Separate Returns that include Tax Items of the External Distributing Business (other than Separate Returns described in Section 3.2(b)), determined without regard to Tax Items carried forward to such Tax Year. 

(b) Tax Returns to be Prepared by External SpinCo. External SpinCo shall be responsible for preparing and timely filing (i) any
Separate Returns that are required to be filed with respect to (A) Internal SpinCo (or any of its Subsidiaries prior to the External Distribution) or (B) either of the Thai Subsidiaries and (ii) all Separate Returns that include Tax
Items of the External SpinCo Business, determined without regard to Tax Items carried forward to such Tax Year. 
 (c) Provision of
Information. External Distributing shall provide to External SpinCo, and External SpinCo shall provide to External Distributing, any information about members of the External Distributing Group or the External SpinCo Group, respectively, which
the party receiving such information reasonably needs to properly and timely file all Separate Returns pursuant to Sections 3.2(a) or (b). Such information shall be provided within the time prescribed by Section 3.1(b) for the provision of
information for Joint Returns. In the event that External Distributing or External SpinCo fails to provide information within the time period provided in Section 3.1(b) and in the form reasonably requested by the other party to permit the
timely filing of a Separate Return, the indemnification principles of Section 3.1(b)(i) shall apply with respect to any penalties, interest, or other payments assessed against any member of the External Distributing Group or the External SpinCo
Group by reason of a failure to file any such return by its due date (including applicable extensions). 
 3.3 Special
Rules Relating to the Preparation of Tax Returns. 
 (a) General Rule. Except as otherwise provided in this Agreement, the
Preparer shall have the exclusive right, in its reasonable discretion, with respect to such Tax Return to determine (i) the manner in which such Tax Return shall be prepared and filed, including the elections, methods of accounting, positions,
conventions and principles of taxation to be used and the manner in which any Tax Item shall be reported, (ii) whether any extensions may be requested, (iii) whether an amended Tax Return shall be filed, (iv) whether any claims for
refund shall be made, (v) whether any refunds shall be paid by way of refund or credited against any liability for the related Tax and (vi) whether to retain outside firms to prepare or review such Tax Return. Notwithstanding the preceding
sentence, if the External SpinCo Group 

  
 15 

 
pays any Tax to a Tax Authority other than the IRS that may be claimed as a foreign Tax credit for U.S. federal income tax purposes in a Tax Return for which External Distributing is the party
responsible for filing (or causing to be filed), External Distributing shall amend such Tax Returns and file such claims for credit or refund that External SpinCo may reasonably request. In addition, the Preparer shall provide to the Non-Preparer
for Non-Preparer’s review and comment pro forma Tax Returns reflecting the Non-Preparer’s share of Tax Items to be reflected on a Joint Return twenty (20) days prior to the due date of such Joint Return. 

(b) External SpinCo Tax Returns. With respect to any Separate Return for which External SpinCo is responsible pursuant to
Section 3.2(b): 
 (i) External SpinCo may not take, and shall cause the members of the External SpinCo Group not to take (including,
without limitation, any such members formed after the date hereof in anticipation of the External Distribution), any positions that it knows, or reasonably should know, would be inconsistent with past practices or positions taken by any member of
the External Distributing Group; and 
 (ii) External SpinCo and other members of the External SpinCo Group must (A) allocate Tax
Items between such Separate Return for which External SpinCo is responsible pursuant to Section 3.2(b) and any related Joint Return for which External Distributing is responsible pursuant to Section 3.1(a) that is filed with respect to the
same Tax Year (or with respect to a Tax Year that includes the Tax Year for such Separate Return) in a manner that is consistent with the reporting of such Tax Items on the related Joint Return for which External Distributing is responsible pursuant
to Section 3.1(a) and (B) make any applicable elections required under applicable Tax Law (including, without limitation, under Treasury Regulations Section 1.1502-76(b)(2)) necessary to effect such allocation. 

(c) Election to File Consolidated, Combined or Unitary Tax Returns. External Distributing shall have the reasonable discretion of
filing any Tax Return on a consolidated, combined or unitary basis, if such Tax Return would include at least one member of each Group and the filing of such Tax Return is elective under the relevant Tax Law. 

(d) Carrybacks of Tax Benefits. External SpinCo shall not carry back and utilize as a Tax Benefit in a Tax Year that begins on or
before the Distribution Date any Tax Item arising in a Tax Year that begins after the Distribution Date, provided, that, if the carryback of such Tax Item is material and is required by applicable Tax Law (for example, pursuant to
Section 904(c) of the Code), and if External Distributing would be the Preparer of any Tax Return (or Tax Returns) amended to include the carried-back Tax Item, External Distributing shall amend such Tax Return (or Tax Returns) and file such
claims for credit or refund that External SpinCo may reasonably request. External SpinCo shall reimburse External Distributing for reasonable outside advisor fees incurred in connection with amending such Tax Return (or Tax Returns). With respect to
any foreign Taxes claimed on any such amended Tax Return, External Distributing shall only elect the benefits of the foreign Tax credit under Section 901 of the Code and shall not elect to deduct such foreign Taxes. 

(e) Withholding and Reporting. With respect to stock of External Distributing delivered to any Person, External Distributing and
External SpinCo shall cooperate (and shall 

  
 16 

 
cause their Affiliates to cooperate) so as to permit External Distributing to discharge any applicable Tax withholding and Tax reporting obligations, including the appointment of External SpinCo
or one or more of its Affiliates as the withholding and reporting agent if External Distributing or one or more of its Affiliates is not otherwise required or permitted to withhold and report under applicable Tax Law. 

(f) Standard of Performance. Each party shall act reasonably and in good faith in preparing the Tax Returns for which it is responsible
pursuant to this Section 3. 
 (g) IRS Forms 8858. In each case, the party responsible under applicable law for filing (or
causing to be filed) IRS Form 8858 shall prepare and timely file such forms. 
 3.4 Reliance on Exchanged Information. If a member of
the External SpinCo Group supplies information to a member of the External Distributing Group, or a member of the External Distributing Group supplies information to a member of the External SpinCo Group, and an officer of the requesting member
intends to sign a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then a duly authorized officer of the member supplying such information shall certify, to the best of such officer’s
knowledge, the accuracy and completeness of the information so supplied. 
 3.5 Allocation of Tax Items. External Distributing shall
determine in accordance with applicable Tax Laws the allocation of any applicable Tax Items (e.g., net operating loss, net capital loss, investment Tax credit, foreign Tax credit, research and experimentation credit, charitable deduction, or
credit related to alternative minimum Tax) as of the Effective Time among External Distributing, each other External Distributing Group member, External SpinCo, and each other External SpinCo Group member. External Distributing and External SpinCo
hereby agree that in the absence of controlling legal authority each such Tax Item shall be allocated as provided in Section 2.2. External Distributing shall provide reasonably timely updates of the allocation of Tax Items, as it finalizes its
Tax Returns and as adjustments, if any, are subsequently made to such Tax Returns. 
 SECTION 4. Tax Payments. 

4.1 Payment of Taxes to Tax Authority. External Distributing shall be responsible for remitting to the proper Tax Authority all Tax
shown (including Taxes for which External SpinCo is wholly or partially liable pursuant to Section 2) on any Tax Return for which it is responsible for the preparation and filing pursuant to Section 3.1(a) or Section 3.2(a), and
External SpinCo shall be responsible for remitting to the proper Tax Authority all Tax shown (including Taxes for which External Distributing is wholly or partially liable pursuant to Section 2) on any Tax Return for which it is responsible for
the preparation and filing pursuant to Section 3.2(b). 
 4.2 Indemnification Payments. 

(a) Tax Payments Made by the External Distributing Group. If any member of the External Distributing Group remits a payment to a Tax
Authority for Taxes for which External SpinCo is wholly or partially liable under this Agreement, External SpinCo shall remit the amount for which it is liable pursuant to Section 2 to External Distributing within thirty days after receiving
notification requesting such amount. 

  
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 (b) Tax Payments Made by the External SpinCo Group. If any member of the External SpinCo
Group remits a payment to a Tax Authority for Taxes for which External Distributing is wholly or partially liable under this Agreement, External Distributing shall remit the amount for which it is liable pursuant to Section 2 to External SpinCo
within thirty days after receiving notification requesting such amount. 
 (c) Credit for Prior Deemed Payments. 

(i) For purposes of Section 4.2(a), the portion of any Taxes paid by External Distributing to a Tax Authority for which External SpinCo
is liable will be determined by assuming that External SpinCo has previously paid in the aggregate any amounts that the members of the External SpinCo Group paid to External Distributing prior to the Effective Time (adjusted, as appropriate and
without duplication, for any additional payments made prior to the Effective Time with respect to any such Taxes as a result of any audit or Tax Contest that was finally concluded prior to the Effective Time with respect to any such Taxes) based on
External Distributing’s calculation prior to the External Distribution of the portion of such Taxes that was allocable to members of the External SpinCo Group (as so adjusted with respect to any such Taxes, such payments the “Pre-Spin
Billed Amount”). For the avoidance of doubt, in the event that, after the application of the preceding sentence, External SpinCo is required to make a payment to External Distributing under Section 4.2(a) with respect to Taxes relating
to Tax Years or portions thereof ending on or prior to the Distribution Date (including, without limitation, as a result of the conclusion after the Distribution Date of a Tax Contest with respect to a Tax for which there was a Pre-Spin Billed
Amount or as a result of a difference between External SpinCo’s allocable share of the amount actually shown on the 2014 Joint Federal Return and the Pre-Spin Billed Amount with respect to the Taxes reported on the 2014 Joint Federal Return),
no payment shall be made to account for any errors that were previously made in the calculation of the Pre-Spin Billed Amount. External Distributing’s obligation under this Agreement to provide information relating to the calculation of any
Pre-Spin Billed Amount will be governed by Section 3.1(b)(iv). 
 (ii) For purposes of Section 4.2(d)(i), the payments that
External Distributing is required to make to External SpinCo pursuant to Section 2.1(b)(ii) will be determined by assuming that External Distributing has previously paid External SpinCo for any Tax Benefit to the extent that such Tax Benefit
was previously taken into account by External Distributing for purposes of calculating a Pre-Spin Billed Amount. 
 (d) Payments for Tax
Benefits. 
 (i) If a member of the External Distributing Group utilizes a Tax Benefit for which External SpinCo is entitled to payment
pursuant to clause (ii) of Section 2.1(b), External Distributing shall pay to External SpinCo, within fifteen business days following the utilization of such Tax Benefit, an amount equal to such Tax Benefit. 

(ii) If a member of the External SpinCo Group utilizes a Tax Benefit for which External Distributing is entitled to payment pursuant to
clause (ii) of Section 2.1(a), External SpinCo shall pay to External Distributing, within fifteen business days following the utilization of such Tax Benefit, an amount equal to such Tax Benefit. 

  
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 (iii) For purposes of this Agreement, a Tax Benefit will be considered utilized (i) in the
case of a Tax Benefit that generates a Tax refund, at the time such Tax refund is received and (ii) in all other cases, at the time the Tax Return is filed with respect to such Tax Benefit or, if no Tax Return is filed, at the time the Tax
would have been due in the absence of such Tax Benefit. The amount of such Tax Benefit will be the amount by which Taxes are actually reduced by such Tax Benefit (determined in accordance with the provisions of Section 2.1(c)). 

(e) Withholding Taxes. If any member of the External SpinCo Group determines that it is required under applicable Tax Law to withhold
Taxes that are allocated to External Distributing under Section 2.2 in respect of any payment directly or indirectly made by such member of the External SpinCo Group to a member of the External Distributing Group, External Distributing shall be
deemed to have made payment of such Taxes to External SpinCo for purposes of Section 4.2(b) to the extent of such withholdings. If any member of the External Distributing Group determines that it is required under applicable Tax Law to withhold
Taxes that are allocated to External SpinCo under Section 2.2 in respect of any payment directly or indirectly made by such member of the External Distributing Group to a member of the External SpinCo Group, External SpinCo shall be deemed to
have made payment of such Taxes to External Distributing for purposes of Section 4.2(a) to the extent of such withholdings. For the avoidance of doubt, this Section 4.2(e) shall apply to any withholding taxes imposed on the Cash
Distribution. 
 4.3 Initial Determinations and Subsequent Adjustments. The initial determination of the amount of any payment that
one party is required to make to another under this Agreement shall be made on the basis of the Tax Return as filed, or, if the Tax to which the payment relates is not reported in a Tax Return, on the basis of the amount of Tax initially paid to the
Tax Authority. The amounts paid under this Agreement will be redetermined, and additional payments relating to such redetermination will be made (subject to the last sentence of this Section 4.3), as appropriate, if as a result of an audit by a
Tax Authority, an amended Tax Return, or for any other reason (i) additional Taxes to which such redetermination relates are subsequently paid, (ii) a refund of such Taxes is received, (iii) the party utilizing a Tax Benefit changes,
or (iv) the amount or character of any Tax Item is adjusted or redetermined. Each payment required by the immediately preceding sentence (i) as a result of a payment of additional Taxes will be due thirty days after the date on which the
additional Taxes were paid or, if later, fifteen days after the date of a request from the other party for the payment, (ii) as a result of the receipt of a refund will be due thirty days after the refund was received, (iii) as a result of
a change in utilization of a Tax Benefit will be due thirty days after the date on which the final action resulting in such change is taken by a Tax Authority or either party or any of their Subsidiaries, or (iv) as a result of an adjustment or
redetermination of the amount or character of a Tax Item will be due thirty days after the date on which the final action resulting in such adjustment or redetermination is taken by a Tax Authority or either party or any of their Subsidiaries. If a
payment is made as a result of an audit by a Tax Authority which does not conclude the matter, further adjusting payments will be made, as appropriate, to reflect the outcome of subsequent administrative or judicial proceedings. Notwithstanding
anything else to the contrary in this Agreement, in any case in which amounts are redetermined pursuant to a particular event described in the second sentence of this Section 4.3 (a “Redetermination Event”), the parties will be
obligated to make additional payments otherwise owed under this Section 4.3 only if the amount of additional payment resulting from such Redetermination Event exceeds $50,000. 

  
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 4.4 Interest on Late Payments. Payments pursuant to this Agreement that are not made by
the date prescribed in this Agreement or, if no such date is prescribed, within fifteen days after demand for payment is made (the “Due Date”) shall bear interest for the period from and including the date immediately following the
Due Date through and including the date of payment at a per annum rate equal to the rate specified in Section 6.8 of the Distribution Agreement. Such interest will be payable at the same time as the payment to which it relates and shall be
calculated on the basis of a year of 365 days and the actual number of days for which due. 
 4.5 Payments by or to Other Group
Members. When appropriate under the circumstances to reflect the underlying liability for a Tax or entitlement to a Tax refund or Tax Benefit, a payment which is required to be made by or to External Distributing or External SpinCo may be made
by or to another member of the External Distributing Group or the External SpinCo Group, as appropriate, but nothing in this Section 4.5 shall relieve External Distributing or External SpinCo of its obligations under this Agreement. 

4.6 Procedural Matters. Any written notice delivered to the indemnifying party in accordance with Section 9.5 shall show the
amount due and owing together with a schedule calculating in reasonable detail such amount (and shall include any relevant Tax Return, statement, bill or invoice related to such Taxes, costs, expenses or other amounts due and owing). All payments
required to be made by one party to the other party pursuant to this Section 4 shall be made by electronic, same day wire transfer. Payments shall be deemed made when received. If the indemnifying party fails to make a payment to the
indemnified party within the time period set forth in this Section 4, the indemnifying party shall pay to the indemnified party, in addition to interest that accrues pursuant to Section 4.4, any costs or expenses, including any breakage
costs, incurred by the indemnified party to secure such payment or to satisfy the indemnifying party’s portion of the obligation giving rise to the indemnification payment. 

4.7 Tax Consequences of Payments. For all Tax purposes and to the extent permitted by applicable Tax Law, the parties hereto shall
treat any payment made pursuant to this Agreement as a capital contribution or a distribution, as the case may be, immediately prior to the External Distribution. Under no circumstances shall any payment (or portion thereof) made pursuant to this
Agreement be grossed up to take into account any additional Taxes that may be owed by the recipient (or any of the members of its Group) as a result of such payment. In the event that a Tax Authority asserts that External Distributing’s or
External SpinCo’s treatment of a payment pursuant to this Agreement should be other than as required pursuant to this Section 4.7, External Distributing or External SpinCo, as appropriate, shall use its reasonable best efforts to contest
such assertion if the parties reasonably believe that the treatment described in this Section 4.7 is permitted by applicable Tax Law. 

SECTION 5. Assistance and Cooperation. 

5.1 Cooperation. In addition to the obligations enumerated in Sections 3.1(b) and 3.2(c), External Distributing and External
SpinCo will cooperate (and cause their respective 

  
 20 

 
Subsidiaries to cooperate) with each other and with each other’s agents, including accounting firms and legal counsel, in connection with Tax matters, including provision of relevant
documents and information in their possession and making available to each other, as reasonably requested and available, personnel (including officers, directors, employees and agents of the parties or their Affiliates) responsible for preparing,
maintaining, and interpreting information and documents relevant to Taxes, and personnel reasonably required as witnesses or for purposes of providing information or documents in connection with any administrative or judicial proceedings relating to
Taxes. 
 5.2 Supplemental Tax Opinions. Each of the parties agrees that at the reasonable request of the other party (the
“Requesting Party”), such party shall cooperate and use reasonable efforts to (and shall cause its Subsidiaries to cooperate and use reasonable efforts to) assist the Requesting Party in obtaining, as expeditiously as reasonably
practicable, a Supplemental Tax Opinion from Tax Counsel. Within thirty days after receiving an invoice from the other party therefor, the Requesting Party shall reimburse such party for all reasonable costs and expenses incurred by such party and
the members of its Group in connection with assisting the Requesting Party in obtaining any Supplemental Tax Opinion. 
 SECTION 6. Tax
Records. 
 6.1 Retention of Tax Records. Each of External Distributing and External SpinCo shall preserve, and shall cause their
respective Subsidiaries to preserve, all Tax Records that are in their possession, and that could affect the liability of any member of the other Group for Taxes, for as long as the contents thereof may become material in the administration of any
matter under applicable Tax Law, but in any event until the later of (i) the expiration of any applicable statutes of limitation, as extended, and (ii) seven years after the Distribution Date. 

6.2 Access to Tax Records. External SpinCo shall make available, and cause its Subsidiaries to make available, to members of the
External Distributing Group for inspection and copying (i) all Tax Records in their possession that relate to Tax Years that begin on or before the Distribution Date, and (ii) the portion of any Tax Record in their possession that relates
to Tax Years that begin after the Distribution Date and which is reasonably necessary for the preparation of a Joint Return or Separate Return by a member of the External Distributing Group or with respect to an audit or litigation by a Tax
Authority of such return. External Distributing shall make available, and cause its Subsidiaries to make available, to members of the External SpinCo Group for inspection and copying (i) that portion of any Tax Record in their possession
(redacted to reflect only the information relating to the members of the External SpinCo Group) that relates to Tax Years that begin on or before the Distribution Date and which is reasonably necessary for the preparation of a Separate Return by a
member of the External SpinCo Group or with respect to an audit or litigation by a Tax Authority of such return and (ii) workpapers or other documentation relating to the calculation of the Taxes and Tax Benefits that have been allocated to
External SpinCo pursuant to this Agreement. 
 6.3 Confidentiality. Each party hereby agrees that it will hold, and shall use its
reasonable best efforts to cause its officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence all records and information prepared and shared by and among the parties in carrying out the intent of
this Agreement, except as may 

  
 21 

 
otherwise be necessary in connection with the filing of Tax Returns or any administrative or judicial proceedings relating to Taxes or unless disclosure is compelled by a governmental authority.
Information and documents of one party (the “Disclosing Party”) shall not be deemed to be confidential for purposes of this Section 6.3 to the extent such information or document (i) becomes publicly available by means
other than unauthorized disclosure under this Agreement by the other party (the “Receiving Party”) or (ii) is received from a third party without, to the knowledge of the Receiving Party after reasonable diligence, a duty of
confidentiality owed to the Disclosing Party. 
 SECTION 7. Tax Contests. 

7.1 Notices. Each party shall provide prompt notice to the other party of any pending or threatened Tax audit, assessment or proceeding
or other Tax Contest of which it becomes aware relating to (i) Taxes for which it is or may be indemnified by the other party hereunder, (ii) the qualification of the Internal Contribution and the Internal Distribution together as a
reorganization described under Sections 368(a)(1)(D) and/or 355 of the Code or (iii) the qualification of the External Contributions and the External Distribution together as a reorganization described under Sections 368(a)(1)(D) and/or
355 of the Code. Such notice shall contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority in
respect of any such matters. If (i) an indemnified party has knowledge of an asserted Tax liability with respect to a matter for which it is to be indemnified hereunder, (ii) such party fails to give the indemnifying party prompt notice of
such asserted Tax liability and (iii) the indemnifying party has the right, pursuant to Section 7.2(a), to control the Tax Contest relating to such Tax liability, then (x) if the indemnifying party is precluded from contesting the
asserted Tax liability as a result of the failure to give prompt notice, the indemnifying party shall have no obligation to indemnify the indemnified party for any Taxes arising out of such asserted Tax liability and (y) if the indemnifying
party is not precluded from contesting the asserted Tax liability, but such failure to give prompt notice results in a monetary detriment to the indemnifying party, then any amount which the indemnifying party is otherwise required to pay the
indemnified party pursuant to this Agreement shall be reduced by the amount of such detriment. 
 7.2 Control of Tax Contests. 

(a) General Rule. Except as provided in the following sentence or in Section 7.2(b), each party (or the appropriate member of
their Group) shall have full responsibility, control and discretion in handling, settling or contesting any Tax Contest involving a Tax reported on a Tax Return for which it is responsible for preparing (or causing to be prepared) pursuant to
Section 3 of this Agreement. Notwithstanding the previous sentence, External SpinCo may not take, and shall cause the members of the External SpinCo Group not to take (including, without limitation, any such members formed after the date hereof
in anticipation of the External Distribution), any position in a Tax Contest that it knows, or reasonably should know, would have a material adverse effect on any member of the External Distributing Group. 

  
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 (b) Non-Preparer Participation Rights. With respect to a Tax Contest of any Tax Return
which involves a Tax Item for which the Non-Preparer may be liable (in the case of Tax Items that increase Tax liability), or which is allocated to the Non-Preparer (in the case of Tax Benefits), under this Agreement (a “Non-Preparer Party Item”), (i) the Non-Preparer shall, at its own cost and expense, be entitled to participate in such Tax Contest, to the extent it relates to a
Non-Preparer Party Item; (ii) the Preparer shall keep the Non-Preparer reasonably informed and consult in good faith with the Non-Preparer and its Tax advisors with respect to any issue relating to a Non-Preparer Party Item; (iii) the Preparer shall provide the Non-Preparer with copies of all correspondence, notices, and other written materials received from any Tax Authority and shall otherwise keep the
Non-Preparer and its Tax advisors advised of significant developments in the Tax Contest and of significant communications involving representatives of the Tax Authority, to the extent related to a
Non-Preparer Party Item; (iv) the Non-Preparer may request that the Preparer take a position in respect of a Non-Preparer Party Item, and the Preparer shall do so
provided that (A) there exists substantial authority for such position (within the meaning of the accuracy-related penalty provisions of Section 6662 of the Code), (B) the adoption of such position could not reasonably be expected to
increase the Taxes or reduce the Tax Benefits allocated to the Preparer pursuant to Section 2 of this Agreement (unless the Non-Preparer agrees to indemnify and hold harmless the Preparer from such increase in Taxes or reduction in Tax
Benefits) and (C) the Non-Preparer agrees to reimburse the Preparer for any reasonable third-party costs that are attributable to the
Non-Preparer’s request; (v) the Preparer shall provide the Non-Preparer with a copy of any written submission to be sent to a Taxing Authority to the extent related to a Non-Preparer Party Item prior to the submission thereof and shall give good faith consideration to any comments or suggested revisions that the Non-Preparer or its Tax advisors may have with respect thereto; and
(vi) there will be no settlement, resolution, or closing or other agreement with respect to the Non-Preparer Party Item without the consent of the Non-Preparer, which consent shall not be unreasonably
withheld. 
 7.3 Cooperation. The Non-Preparer shall provide a party controlling any Tax Contest pursuant to Section 7.2(a) with
all information relating to the Non-Preparer’s Group which the party controlling the Tax Contest needs to handle, settle or contest the Tax Contest. At the request of a party controlling any Tax Contest pursuant to Section 7.2(a), the
other party shall take any action (e.g., executing a power of attorney) that is reasonably necessary in order for the party controlling the Tax Contest to handle, settle or contest the Tax Contest. External SpinCo shall assist External
Distributing, and External Distributing shall assist External SpinCo, in taking any remedial actions that are necessary or desirable to minimize the effects of any adjustment made by a Tax Authority. The indemnifying party shall reimburse the
indemnified party for any reasonable out-of-pocket costs and expenses incurred in complying with this Section 7.3. The party controlling the Tax Contest shall have no obligation to indemnify the indemnified party for any additional Taxes
resulting from the Tax Contest, if the indemnified party fails to cooperate in accordance with this Section 7.3. 
 SECTION 8.
Restriction on Certain Actions of External Distributing and External SpinCo. 
 8.1 General Restrictions. Following the Effective
Time, External Distributing and External SpinCo shall not, and shall cause the members of their respective Groups not to, take any action that, or fail to take any action the failure of which, (i) would be inconsistent with the Internal
Contribution and the 

  
 23 

 
Internal Distribution together qualifying, or preclude the Internal Contribution and the Internal Distribution together from qualifying, as a reorganization described under Sections 368(a)(1)(D)
and/or 355 of the Code, (ii) would be inconsistent with the External Contributions and the External Distribution together qualifying, or preclude the External Contributions and the External Distribution together from qualifying, as a
reorganization described under Sections 368(a)(1)(D) and/or 355 of the Code, (iii) would result in the recognition of gain under either Section 355(d), Section 355(e) or Section 355(f) of the Code, or (iv) reasonably
could be expected to increase the amount of Tax imposed on any other part of the Separation Transactions. 
 8.2 Restricted Actions
Relating to Tax Materials. Without limiting the other provisions of this Section 8, following the Effective Time, External Distributing and External SpinCo shall not, and shall cause the members of their Groups not to, take any action that,
or fail to take any action the failure of which, would be reasonably likely to be inconsistent with, or cause any Person to be in breach of, any representation or covenant, or any material statement, made in the Tax Materials. 

8.3 Certain External SpinCo Actions Following the Effective Time. Without limiting the other provisions of this Section 8, during
the two-year period following the Distribution Date, External SpinCo shall not take (and shall cause the members of the External SpinCo Group to not take), nor negotiate or enter into a binding agreement to take (and shall cause the members of the
External SpinCo Group to not negotiate or enter into a binding agreement to take), any of the following actions: (i) liquidate, or sell or transfer (1) 50% or more of the assets that constitute the External SpinCo Business as of the
Effective Time to any Person other than External SpinCo or an entity which is and will be wholly-owned, directly or indirectly, by External SpinCo or (2) 50% or more of the assets that constitute the Internal SpinCo Business as of the Effective
Time to any Person other than Internal SpinCo or an entity which is and will be wholly-owned, directly or indirectly, by Internal SpinCo; (ii) transfer, in a transaction described in subparagraphs (A), (C), (D), or (G) of
Section 368(a)(1), (1) any assets of External SpinCo or any External SpinCo Affiliate to another entity (other than to External SpinCo or an entity which is and will be wholly-owned, directly or indirectly, by External SpinCo) or
(2) any assets of Internal SpinCo or any Internal SpinCo Affiliate to another entity (other than to Internal SpinCo or an entity which is and will be wholly-owned, directly or indirectly, by Internal SpinCo); (iii) issue stock of External
SpinCo or any External SpinCo Affiliate (or any instrument that is convertible or exchangeable into any such stock), other than an issuance to which Treasury Regulations Section 1.355-7(d)(8) or (9) applies, equal to or exceeding twenty
percent (20%) (by vote or value) of the stock of External SpinCo or of such External SpinCo Affiliate that was issued and outstanding immediately following the Effective Time; (iv) facilitate or otherwise participate in any acquisition (or
deemed acquisition) of stock of External SpinCo or Internal SpinCo that would result in (1) any shareholder owning (or being deemed to own after applying the rules of Sections 355(e)(4)(C) and 355(e)(3)(B) of the Code) forty percent
(40%) or more (by vote or value) of the outstanding stock of External SpinCo or (2) any shareholder other than External SpinCo owning (or being deemed to own after applying the rules of Sections 355(e)(4)(C) and 355(e)(3)(B) of the Code)
forty percent (40%) or more (by vote or value) of the outstanding stock of Internal SpinCo; (v) redeem or otherwise repurchase any stock of External SpinCo other than pursuant to open market stock repurchase programs meeting the
requirements of Section 4.05(1)(b) of Rev. Proc. 96-30, 1996-1 C.B. 696; or (vi) terminate the active conduct 

  
 24 

 
by the External SpinCo Group of the External SpinCo Business or the Internal SpinCo Business; in each case, without first obtaining and delivering to External Distributing at External
SpinCo’s own expense a Supplemental Tax Opinion with respect to such action, in such form and on such terms as External Distributing may reasonably direct. 

SECTION 9. General Provisions. 

9.1 Limitation of Liability. IN NO EVENT SHALL ANY MEMBER OF THE EXTERNAL DISTRIBUTING GROUP OR THE EXTERNAL SPINCO GROUP OR THEIR
RESPECTIVE DIRECTORS, OFFICERS AND EMPLOYEES BE LIABLE TO ANY OTHER MEMBER OF THE EXTERNAL DISTRIBUTING GROUP OR THE EXTERNAL SPINCO GROUP FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND
ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 

9.2 Entire Agreement. This Agreement and the Distribution Agreement constitute the entire agreement between External Distributing and
External SpinCo with respect to the subject matter hereof and shall supersede all prior written and oral and all contemporaneous oral agreements and understandings with respect to the subject matter hereof. 

9.3 Governing Law. This Agreement shall be governed and construed and enforced in accordance with the laws of the State of Texas as to
all matters regardless of the laws that might otherwise govern under the principles of conflicts of laws applicable thereto. 
 9.4
Termination. 
 (a) This Agreement may be terminated at any time prior to the Distribution Date by and in the sole discretion of
External Distributing without the approval of External SpinCo. In the event of termination pursuant to this Section 9.4, neither party shall have any liability of any kind to the other party. 

(b) This Agreement shall otherwise terminate at such time as all obligations and liabilities of the parties hereto have been satisfied. The
obligations and liabilities of the parties arising under this Agreement shall continue in full force and effect until all such obligations have been satisfied and such liabilities have been paid in full, whether by expiration of time, operation of
law, or otherwise. 
 9.5 Notices. Unless expressly provided herein, all notices, claims, certificates, requests, demands and other
communications hereunder shall be in writing and shall be deemed to be duly given (i) when personally delivered or (ii) if mailed registered or certified mail, postage prepaid, return receipt requested, on the date the return receipt is
executed or the letter is refused by the addressee or its agent or (iii) if sent by overnight courier which delivers only upon the signed receipt of the addressee, on the date the receipt acknowledgment is executed or refused by the addressee
or its agent or (iv) if sent by facsimile or other generally accepted means of electronic transmission, on the date confirmation of transmission is received (provided that a copy of any notice delivered pursuant to this clause (iv) shall
also be sent pursuant to 

  
 25 

 
clause (ii) or (iii)), addressed to the attention of the addressee’s General Counsel at the address of its principal executive office or to such other address or facsimile number for a
party as it shall have specified by like notice. 
 9.6 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original but all of which shall constitute one and the same agreement. 
 9.7 Binding Effect; Assignment.
This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective legal representatives and successors, and nothing in this Agreement, express or implied, is intended to confer upon any other Person any rights
or remedies of any nature whatsoever under or by reason of this Agreement. This Agreement may not be assigned by any party hereto. 
 9.8
No Third Party Beneficiaries. This Agreement is solely for the benefit of External Distributing, External SpinCo and their Subsidiaries and is not intended to confer upon any other Person any rights or remedies hereunder. 

9.9 Severability. If any term or other provision of this Agreement is determined by a nonappealable decision by a court, administrative
agency or arbitrator to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner materially adverse to either party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the court,
administrative agency or arbitrator shall interpret this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest extent
possible. If any sentence in this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. 

9.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the part of either party hereto in the exercise of
any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor shall any single or partial exercise of any such right preclude other or further
exercise thereof or of any other right. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available. 

9.11 Amendments; Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as otherwise provided herein, the rights and
remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by applicable law. Any consent provided under this Agreement must be in writing, signed by the party against whom enforcement of such consent is
sought. 

  
 26 

 9.12 Authority. Each of the parties hereto represents to the other that (a) it has
the corporate or other requisite power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it has been duly authorized by all necessary corporate or other actions,
(c) it has duly and validly executed and delivered this Agreement to be executed and delivered on or prior to the Distribution Date, and (d) this Agreement creates legal, valid and binding obligations, enforceable against it in accordance
with its respective terms subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equity principles. 

9.13 Construction. This Agreement shall be construed as if jointly drafted by External SpinCo and External Distributing and no rule of
construction or strict interpretation shall be applied against either party. The parties represent that this Agreement is entered into with full consideration of any and all rights which the parties may have. The parties have relied upon their own
knowledge and judgment and upon the advice of the attorneys of their choosing. The parties have received independent legal advice, have conducted such investigations they and their counsel thought appropriate, and have consulted with such other
independent advisors as they and their counsel deemed appropriate regarding this Agreement and their rights and asserted rights in connection therewith. The parties are not relying upon any representations or statements made by any other party, or
such other party’s employees, agents, representatives or attorneys, regarding this Agreement, except to the extent such representations are expressly incorporated in this Agreement. The parties are not relying upon a legal duty, if one exists,
on the part of any other party (or such other party’s employees, agents, representatives or attorneys) to disclose any information in connection with the execution of this Agreement or its preparation, it being expressly understood that no
party shall ever assert any failure to disclose information on the part of the other party as a ground for challenging this Agreement. 

9.14 Interpretation. The headings contained in this Agreement and in the table of contents to this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement. The word “including” and words of similar import when used in this Agreement will mean “including, without limitation,” unless otherwise
specified. The operation of various provisions of this Agreement is illustrated by examples in Appendix A hereto, and this Agreement shall be interpreted in accordance with such examples. 

9.15 Predecessors or Successors. Any reference to External Distributing, External SpinCo, a Person, or a Subsidiary in this Agreement
shall include any predecessors or successors (e.g., by merger or other reorganization, liquidation, conversion, or election under Treasury Regulations Section 301.7701-3) of External Distributing, External SpinCo, such Person, or such
Subsidiary, respectively. 
 9.16 Effective Time. This Agreement shall become effective on the date recited above on which the
parties entered into this Agreement. 
 9.17 Change in Law. Any reference to a provision of the Code or any other Tax Law shall
include a reference to any applicable successor provision or law. 
 9.18 Disputes. The procedures for discussion, negotiation and
arbitration set forth in Article XI of the Distribution Agreement shall apply to all disputes, controversies or claims (whether sounding in contract, tort or otherwise) that may rise out of or relate to, or arise under or in connection with
this Agreement. 

  
 27 

 9.19 Conflict. Notwithstanding anything else to the contrary in the Distribution
Agreement, except to the extent expressly provided in this Agreement the parties shall have no obligation to each other (or to any of each other’s Affiliates) with respect to the transfer, delivery, sharing, disclosure, provision, preparation,
or maintenance of (i) any books and records primarily relating to Taxes, (ii) any Information primarily relating to Taxes, or (iii) any Tax Records. 

[Signature Page Follows] 

  
 28 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
authorized representatives as of the date set forth above. 
  

			
	KIMBERLY-CLARK CORPORATION
		
	By:	 	 /s/ Mark A. Buthman

	Name:	 	Mark A. Buthman
	Title:	 	Chief Financial Officer
	
	HALYARD HEALTH, INC.
		
	By:	 	 /s/ Steven E. Voskuil

	Name:	 	Steven E. Voskuil
	Title:	 	Senior Vice President and Chief Financial Officer

  
 29 

 APPENDIX A 

The following examples illustrate the operation of various provisions of this Agreement. However, each example is not necessarily intended to
illustrate every provision of this Agreement that may be relevant thereto. 
 Except as stated otherwise, each of the examples assumes
(i) a U.S. federal income Tax rate of 35%, (ii) that the Distribution Date was October 31, 2014, and that both the Internal Distribution and the External Distribution occurred thereon, (iii) that External SpinCo files a Separate
Return with respect to all Taxes for the Stub Period (“External SpinCo Stub Period Return”), for 2015 and for later years, (iv) that the Internal Contribution and the Internal Distribution together qualify as a reorganization
under Sections 368(a)(1)(D) and 355 of the Code, (v) that the External Contributions and the External Distribution together qualify as a reorganization under Sections 368(a)(1)(D) and 355 of the Code, and (vi) that, for
convenience, there are no Separation Taxes, Restructuring Taxes or Repatriation Taxes. In addition, for convenience, it is assumed that the amount of the credit for prior deemed tax payments which would otherwise be allowed by Section 4.2(c) is
zero. 
  

	 	Example 1.	General Tax Allocation on Joint Return. 

 On the 2014 Joint Federal Return, the
External Distributing consolidated group reports $200x of consolidated taxable income, no credits, no losses carried forward to 2014 from any prior Tax Year, and a Tax liability of $70x (viz., (35%)($200x)). Of the $200x of consolidated
taxable income reported on such Tax Return, $150x is attributable to the separate taxable income (calculated in accordance with Treasury Regulation Section 1.1552-1(a)(1) and in accordance with past practices) of the members of the External
Distributing Group. The remaining $50x of consolidated taxable income is attributable to the separate taxable income (calculated in accordance with Treasury Regulation Section 1.1552-1(a)(1) and in accordance with past practices) of the members
of the External SpinCo Group during the period in which External SpinCo joins in the filing of such Tax Return (viz., the period beginning January 1, 2014, and ending on the Distribution Date (the “External SpinCo Pre-Spin 2014
Period”)). 
 The $150x of consolidated taxable income attributable to the External Distributing Group and the $50x of consolidated
taxable income attributable to the External SpinCo Group in each case includes deductions. However, in neither case are these deductions a Tax Benefit because after separately taking into account solely the items of income, gain, loss, and deduction
of each Group for such Tax Year, the aggregate of such deductions for each Group in the Tax Year does not exceed the income attributable to or arising from the relevant Group in such Tax Year. 

Because the 2014 Joint Federal Return includes Tax Items attributable to the External Distributing Business and Tax Items attributable to the
External SpinCo Business (determined without regard to Tax Items carried forward to such Tax Year), it will be a Joint Return. Pursuant to Section 2.1, each of External Distributing and External SpinCo will be liable for its allocable portion
of the $70x of Tax shown on such Joint Return. Because $150x of the consolidated taxable income that gave rise to the Tax was attributable to members of the External Distributing Group and $50x of the consolidated taxable income that gave rise to
the 

  
 30 

 
Tax was attributable to members of the External SpinCo Group, pursuant to Section 2.2(a), $52.5x of Tax will be allocable to External Distributing (viz., ($150x/$200x)($70x)) and
$17.5x of Tax will be allocable to External SpinCo (viz., ($50x/$200x)($70x)). 
 Pursuant to Section 3.1(a), External
Distributing is responsible for preparing and filing the 2014 Joint Federal Return. As a result, External Distributing will have the exclusive right, in its reasonable discretion, to make those determinations described in Section 3.3(a) with
respect to the 2014 Joint Federal Return. Pursuant to Section 4.1, External Distributing must pay the $70x of Tax to the proper Tax Authority. Pursuant to Section 4.2(a), External SpinCo must remit the amount for which it is liable
(viz., $17.5x) to External Distributing within thirty days after receiving notification requesting such amount. If payment is not made within thirty days, External SpinCo must pay interest thereafter on the amount past due at the rate and as
determined under Section 4.4. 
 Pursuant to Section 4.7, the parties would ordinarily characterize External SpinCo’s payment
of $17.5x in the same manner as if it were a distribution to External Distributing immediately prior to the External Distribution. However, under applicable Tax Law (viz., Treasury Regulations Sections 1.1552-1(b)(2) and
1.1502-32(b)(3)(iv)(D)), the parties are required to treat the obligation to make such payment as a distribution to External Distributing and to treat the payment itself as a payment in satisfaction of indebtedness owed by External SpinCo to
External Distributing. Finally, such payment does not further reduce External Distributing’s basis in the External SpinCo stock. 
  

	 	Example 2.	Treatment of Tax Benefits - Net Operating Losses. 

 On the 2014 Joint Federal
Return, the External Distributing consolidated group reports $130x of consolidated taxable income, no credits, no losses carried forward to 2014 from any prior Tax Year, and a Tax liability of $45.5x (viz., (.35)($130x)). The $130x of
consolidated taxable income reported on such Tax Return represents (i) $150x of separate taxable income (calculated in accordance with Treasury Regulation Section 1.1552-1(a)(1) and in accordance with past practices) attributable to the
members of the External Distributing Group and (ii) after separately taking into account solely the items of income, gain, loss, and deduction of the External SpinCo Group for the External SpinCo Pre-Spin 2014 Period (but excluding any
deductions attributable to losses carried forward or back to the 2014 Joint Federal Return from another Tax Year), a net operating loss of $20x (calculated in accordance with Treasury Regulation Section 1.1552-1(a)(1) and in accordance with
past practices) attributable to the External SpinCo Group for the External SpinCo Pre-Spin 2014 Period. 
 The $20x net operating loss is a
Tax Benefit that is allocated solely to External SpinCo under Section 2.2(a)(ii)(D), but, taking into account only those Tax Items allocated to External SpinCo during such Tax Year, none of this Tax Benefit would be allowable under applicable
Tax Law. Therefore, under Section 2.1(c)(ii), none of this Tax Benefit can be utilized by External SpinCo. Instead, the $20x net operating loss is utilized by External Distributing under Section 2.1(c)(iii), reducing the Tax for which
External Distributing is liable pursuant to Section 2.1(b)(i). Consequently, pursuant to Section 2.1(b)(ii)(C) External Distributing must pay External SpinCo for utilizing such Tax Benefit to reduce the Taxes for which External
Distributing is liable under Section 2.1(b)(i). Under Section 4.2(d)(iii), the amount of the payment from External Distributing for the utilization of this Tax Benefit would be $7x (viz., the amount by which External
Distributing’s Taxes were actually reduced by the Tax Benefit). 

  
 31 

	 	Example 3.	Treatment of Tax Benefits - Foreign Tax Credits. 

 For the 2014 Joint Federal
Return, External Distributing has $150x of foreign tax credits available (ignoring any limitation on such foreign tax credits), $30x of which are carried forward from prior Tax Years (and are allocable to External Distributing under this Agreement)
and $120x of which arise in 2014. Of the $120x of foreign tax credits arising in 2014, $15x are attributable to Mexican Income Taxes imposed on the Mexican Maquilas with respect to their Tax Year that begins in 2014, $5x are attributable to Japanese
Income Taxes imposed on Halyard Healthcare Inc.’s Subsidiary with respect to its Tax Year that begins in 2014, and none are attributable to Honduran Income Taxes. Assume that (i) the foreign source income of the members of the External
SpinCo Group reported for the External SpinCo Pre-Spin 2014 Period exceeds the amount needed for External SpinCo to take into account all foreign tax credits that arise in 2014 and are allocated to External SpinCo (such excess foreign source income,
the “Excess FSI”) under this Agreement and (ii) the foreign source income of the members of the External Distributing Group that is reported for External Distributing’s 2014 Tax Year is less than the amount needed for
External Distributing to take into account all foreign tax credits that arise in (or are carried forward to) 2014 and are allocated to External Distributing for 2014 under this Agreement. 

The $30x of foreign tax credits carried forward to 2014 are assumed to be allocated to External Distributing. The $20x of foreign tax credits
arising in 2014 that are attributable to the Mexican Income Taxes and Japanese Income Taxes imposed in 2014 on the Mexican Maquilas and Halyard Healthcare Inc.’s Subsidiary, respectively, are allocated to External SpinCo under
Section 2.2(a)(ii)(A). The remaining $100x of foreign tax credits arising in 2014 are allocated to External Distributing under Section 2.2(a)(ii)(A). 

Because the foreign source income of the members of the External SpinCo Group reported for the External SpinCo Pre-Spin 2014 Period exceeds
the amount needed for External SpinCo to take into account all foreign tax credits that arise in 2014 and are allocated to External SpinCo, External SpinCo is entitled to use all $20x of these foreign tax credits to reduce the Taxes for which it is
liable under Section 2.1(a)(i). The foreign source income of the members of the External Distributing Group for 2014 is less than the amount needed for External SpinCo to take into account the $130x of foreign tax credits that are allocated to
External Distributing. However, under Section 2.1(c)(ii) External Distributing is entitled to treat the Excess FSI as a Tax Item allocated to External Distributing during 2014. 

The foreign tax credits allocated to External Distributing for 2014 that cannot be taken into account by External Distributing on the 2014
Joint Federal Return after treating the Excess FSI as a Tax Item allocated to External Distributing during 2014, if any, are carried forward to 2015 (and will be allocated to External Distributing in 2015). External Distributing is not required to
make any payment to External SpinCo under Section 2.1(b)(ii) (or otherwise) for utilizing any portion of the $130x of foreign tax credits (including any portion that External Distributing is entitled to utilize solely as a result of being
entitled to treat the Excess FSI as a Tax Item allocated to External Distributing during 2014) to reduce its liability for Taxes on the 

  
 32 

 
2014 Joint Federal Return, because all such foreign tax credits are allocated to External Distributing. Furthermore, External Distributing is not required to make any payment to External SpinCo
under this Agreement for treating the Excess FSI as a Tax Item allocated to External Distributing. 
  

	 	Example 4.	Treatment of Foreign Tax Credit Carrybacks. 

 Assume the same facts as Example 3,
except that in the Stub Period, the External SpinCo Group has foreign tax credits of $10x which it cannot use on the Stub Period Tax Return due to the foreign tax credit limitation. The External SpinCo Group has sufficient Excess FSI during the
External SpinCo Pre-Spin 2014 Period to both permit External SpinCo Group to utilize the foreign tax credit carryback and to allow the External Distributing Group’s utilization of its foreign tax credits to remain unchanged. 

Assuming that the $10x foreign tax credit carryback is material, it can be carried back to the 2014 Joint Federal Return pursuant to
Section 3.3(d). Taking into account only those Tax Items allocated to the External SpinCo Group on the 2014 Joint Federal Return, the External SpinCo Group has sufficient foreign source income to utilize the $10x foreign tax credit carryback
from the Stub Period. Consequently, pursuant to Section 2.1(a)(i), the External SpinCo Group may reduce Taxes allocated to it under Section 2.2(a)(i) or Section 2.2(b). External Distributing shall amend the 2014 Joint Federal Return
and file a claim for refund for such Tax Benefit, which is a Redetermination Event pursuant to Section 4.3. External Distributing shall pay External SpinCo the amount of such refund within thirty day of receipt, provided the refund exceeds
$50,000. 
 For the avoidance of doubt, if, alternatively, the Excess FSI (reduced by the amount of the Excess FSI that External
Distributing was previously entitled to treat as a Tax Item allocated to External Distributing during 2014 pursuant to Section 2.1(c)(ii)) (such reduced Excess FSI, the “Adjusted Excess FSI”) would not be sufficient to permit
External SpinCo to fully utilize the foreign tax credit carryback from the Stub Period, External SpinCo is not permitted to carry back its foreign tax credits from the Stub Period to the 2014 Joint Federal Return to the extent such a carryback
exceeds the foreign tax credit that could be utilized after taking into account solely the Adjusted Excess FSI. The External SpinCo Group’s remaining excess foreign tax credit from the Stub Period must be carried forward. 

 

	 	Example 5.	Treatment of Income and Value Added Taxes Arising from a Transfer of Assets. 

External Distributing directly or indirectly owns 100% of the stock of a foreign corporation (“ForeignCo”) which is a member
of the External Distributing Group. Prior to the Distribution Date, ForeignCo held assets related to the External SpinCo Business and other assets related to the External Distributing Business. On or before the Distribution Date, ForeignCo sold or
otherwise transferred the assets related to the External SpinCo Business to a member of the External SpinCo Group. The transfer of those assets gave rise to $20x of Income Tax in the foreign jurisdiction in which ForeignCo is organized. In addition,
the transfer gave rise to value added tax paid by the purchasing member of the External SpinCo Group. 

  
 33 

 The foreign income Tax Return of ForeignCo is a Joint Return because it includes Tax Items of
both the External Distributing Business and the External SpinCo Business (and is not required to be filed with respect to Internal SpinCo (or any of its foreign Subsidiaries prior to the External Distribution) or the Thai Subsidiaries, each of which
are members of the External SpinCo Group). External Distributing is responsible for preparing and filing ForeignCo’s Joint Return pursuant to Section 3.1(a) and for remitting the $20x of foreign Income Tax shown thereon pursuant to
Section 4.1. The $20x of Income Tax arising from the transfer is a Restructuring Tax and is allocated entirely to External Distributing pursuant to Section 2.2(a)(i)(B). Because the transaction involves a payment from a member of one Group
to a member of the other Group, value added tax arising from the transaction is allocated entirely to External SpinCo pursuant to the flush language in Section 2.2(a). 

After the Distribution Date, the Tax Authority in the country where ForeignCo is resident conducts an Income Tax audit of ForeignCo and
challenges the value at which the assets related to the External SpinCo Business were sold to the External SpinCo Group member for Income Tax purposes. The External Distributing Group shall handle the audit of ForeignCo pursuant to
Section 7.2(a) and any Tax Contest that may result therefrom at its own expense. External SpinCo shall have no responsibility to indemnify External Distributing for any additional Income Tax arising from that Tax Contest under
Section 4.2(a) because External SpinCo is not partially or wholly responsible for the underlying Income Tax pursuant to Section 2.2(a)(i)(B). However, in the event that the Tax Contest has the effect of increasing the value added tax
imposed on the transfer, External SpinCo would be liable for the increased value added tax and the associated interest and penalties, consistent with Section 4.3. 
  

	 	Example 6.	Allocation of Separation Taxes. 

 Assume the same facts as in Example 1 and that
all payments discussed in Example 1 were timely made. In 2016, the relevant Tax Authority initiates a Tax Contest with respect to the 2014 Joint Federal Return. In the Tax Contest, the Tax Authority successfully asserts that, due to certain actions
taken by members of the External SpinCo Group during 2015 (and that were prohibited under Section 8.3), the Internal Contribution together with the Internal Distribution fail to qualify as a transaction described under Sections 355 and
368(a)(1)(D) of the Code. As a result, a portion of the Internal Contribution (which had previously been were treated as a tax-free transfer of property to Internal SpinCo for U.S. federal income tax purposes) is recharacterized as an intercompany
sale of assets from Internal Distributing to Internal SpinCo, resulting in a deferred intercompany gain to Internal Distributing of $10x. Under applicable Tax Law (viz., Treasury Regulations Section 1.1502-13(d)), Internal
Distributing’s $10x of deferred intercompany gain is required to be taken into account immediately prior to the External Distribution, with the result that an additional $10x of taxable income must be reported for the 2014 Joint Federal Return.

 As a result of the Tax Contest relating to the 2014 Joint Federal Return, Section 4.3 requires that the amounts paid under this
Agreement be redetermined. Since External Distributing is responsible for preparing the 2014 Joint Federal Return pursuant to Section 3.1, Section 4.1 requires External Distributing to pay the $3.5x of Tax resulting from the Tax Contest
(viz, (.35)(the additional $10x of taxable income arising from taking the deferred intercompany gain into account)). This $3.5x of Tax is a Separation Tax because it results from the failure of

  
 34 

 
the Internal Contribution together with the Internal Distribution to qualify as a transaction described under Sections 355 and 368(a)(1)(D) of the Code. This Separation Tax results primarily from
External SpinCo taking actions prohibited by Section 8.3 and therefore is allocated to External SpinCo under Section 2.2(b)(ii). As a result, pursuant to Section 4.3, External SpinCo is required to make a payment of $3.5x to External
Distributing within thirty days after the date on which External Distributing paid the $3.5x in additional Tax to the Tax Authority (or, if later, fifteen days after the date of a request for such payment from External Distributing), provided that
the $3.5x in additional Tax exceeds $50,000. 
 This Example 6 shall apply to External Distributing in a similar manner under the assumption
that a member of the External Distributing Group took actions that were prohibited under Sections 8.1 or 8.2. 
  

	 	Example 7.	Repatriation Taxes and Foreign Tax Credits. 

 Part I. Assume the
same facts as Example 1 and further assume that the Thai Subsidiaries have (i) $50x of net taxable profits in 2014 (which is equal to the Thai Subsidiaries’ current earnings and profits for 2014 under United States Income Tax law), on
which Thailand imposes an Income Tax equal to $10x (which is not considered to have accrued until after the Effective Time, but before January 1, 2015, and is not payable until 2015), and (ii) additional local distributable reserves of
$40x as of December 31, 2013 (which is equal to the Thai Subsidiaries’ accumulated earnings and profits under United States Income Tax law as of such date), with respect to which the Thai Subsidiaries have previously paid $10x of Thailand
Income Tax. 
 During 2014, and prior to the Effective Time, the Thai Subsidiaries, which are disregarded as entities separate from their
parent, Safeskin B.V.I. (“Safeskin”) for United States federal income tax purposes, make a cash distribution of $80x to Safeskin (representing all of the Thai Subsidiaries’ current and accumulated earnings and profits).
This cash distribution to Safeskin is subject to a $8x Thailand withholding tax. Safeskin, in turn (and prior to the Effective Time), distributes the remaining $72x to External Distributing, and such distribution is not subject to a withholding tax.
Collectively, the Thai Subsidiaries’ distribution to Safeskin, followed by Safeskin’s distribution to External Distributing are referred to as the “Thai Cash Distribution.” The Thai Cash Distribution is reported on the
2014 Joint Federal Return as resulting in $100x of U.S. federal taxable income (which includes any dividend deemed to have been paid under section 78 of the Code) and a $28x foreign tax credit (viz., equal to the sum of the Thailand Income
Taxes on current earnings, plus the withholding taxes with respect to the Thai Cash Distribution, plus the Thailand Income Taxes previously paid with respect to the Thai Subsidiaries’ accumulated earnings and profits). 

Assume that Kimberly-Clark Far East Pte. Limited (“KC Singapore”) has (i) $50x of chargeable income in 2014 (which is
equal to KC Singapore’s current earnings and profits for 2014 under United States Income Tax law), on which Singapore imposes an Income Tax equal to $10x (which is considered to accrue ratably during 2014 and is payable after the Effective
Time), and (ii) additional local distributable reserves of $40x as of December 31, 2013 (which is equal to KC Singapore’s accumulated earnings and profits under United States Income Tax law as of such date), with respect to which KC
Singapore has previously paid $10x of Singapore Income Tax. 

  
 35 

 During 2014, and prior to the Effective Time, KC Singapore makes a cash distribution of $40x (the
“Singapore Cash Distribution”) to its parent, Kimberly-Clark International, S.A., a Panamanian corporation that is a member of the External Distributing Group (“KC International”). Assume further that KC
International sells KC Singapore to Halyard Health prior to the Effective Time (the “Singapore Sale”), which, under United States Income Tax law (viz., section 964(e) of the Code), results in a deemed dividend from KC
Singapore to KC International of $40x. Assume further that Panama imposes $5x of Income Tax on the Singapore Sale (and that this Tax is considered to be accrued after the Effective Time and is paid in 2015). Finally, assume the Singapore Cash
Distribution and the deemed dividend resulting from the Singapore Sale (net of the Panama Income Taxes imposed on the Singapore Sale) (collectively, the “Singapore Income”) constitute $75x of “subpart F income” of KC
International (viz., $40x from the Singapore Cash Distribution, plus $40x of deemed dividend income from the Singapore Sale, minus $5x of Panama Income Tax imposed on the Singapore Sale). As a result, the Singapore Income gives rise to $25x
of foreign tax credits for the 2014 Joint Federal Return (viz., $20x attributable to the Singapore Income Tax imposed on KC Singapore’s chargeable income, plus $5x attributable to the Panama Income Tax imposed on the gain in the
Singapore Sale) and $100x of taxable income (viz., $75x attributable to the subpart F income, plus a $25x deemed dividend under section 78 of the Code). 

On the 2014 Joint Federal Return, the External Distributing consolidated group reports $400x of consolidated taxable income, no losses carried
forward to 2014 from any prior Tax Year, foreign tax credits of $53x, and a Tax liability of $87x (viz., (.35)($400x) - $53x of foreign tax credits). 

Of the $200x of consolidated taxable income reported on such Tax Return that is not attributable to the Thai Cash Distribution or the
Singapore Income, $150x is attributable to the separate taxable income (calculated in accordance with Treasury Regulation Section 1.1552-1(a)(1) and in accordance with past practices) of the members of the External Distributing Group, and the
remaining $50x of consolidated taxable income is attributable to the separate taxable income (calculated in accordance with Treasury Regulation Section 1.1552-1(a)(1) and in accordance with past practices) of the members of the External SpinCo
Group during the External SpinCo Pre-Spin 2014 Period. The $200x of consolidated taxable income reported on such Tax Return that is not attributable to the Thai Cash Distribution or the Singapore Income results in $70x of Tax. For the reasons
discussed in Example 1, $52.5x of such Tax is allocated to External Distributing, while the other $17.5x of such Tax is allocated to External SpinCo. 

The $52.5x of U.S. federal income taxes imposed on the $150x of U.S. federal taxable income attributable to the Thai Cash Distribution and the
Singapore Cash Distribution (viz., $72x distributed in the Thai Cash Distribution, plus $40x of subpart F income deemed distributed and attributable to the Singapore Cash Distribution, plus $38x of deemed dividends under section 78 of the
Code (viz., $28x attributable to the Thai Cash Distribution, plus $10x attributable to the Singapore Cash Distribution)) are Repatriation Taxes and are allocated solely to External Distributing under Section 2.2(a)(i)(B). The $17.5x of
U.S. federal income taxes imposed on the $50x of U.S federal taxable income attributable to the Singapore Sale (viz., $35x of subpart F 

  
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income attributable to the Singapore Sale, plus a deemed dividend of $15x under section 78 of the Code) are Restructuring Taxes and are allocated solely to External Distributing under
Section 2.2(a)(i)(B). Finally, notwithstanding the fact that a portion of the foreign tax credits attributable to the Thai Cash Distribution and the Singapore Income relate to taxes that accrue after the Effective Time and are payable after the
Effective Time, the entire $53x of these foreign tax credits are allocated to External Distributing under Section 2.2(a)(ii)(A) (even if some portion of the $53x of these foreign tax credits cannot be claimed on the 2014 Joint Federal Return
due to a limitation on such foreign tax credits under applicable Tax Law), because they arise in 2014 with respect to the 2014 Joint Federal Return (and are not attributable to Mexican or Japanese Income Taxes). Therefore, pursuant to
Section 2.1 External Distributing is liable for $69.5x of the Tax reported on the 2014 Joint Federal Return (viz., ($52.5x plus $70x of Tax) - $53x of foreign tax credits), and External SpinCo is liable for the remaining $17.5x of the
Tax reported on the 2014 Joint Federal Return. 
 Pursuant to Section 3.1(a), External Distributing is responsible for preparing and
filing the 2014 Joint Federal Return. Pursuant to Section 4.1, External Distributing must pay the $87x of Tax to the Tax Authority. Pursuant to Section 4.2(a), External SpinCo must remit the amount for which it is liable (viz.,
$17.5x) to External Distributing within thirty days after receiving notification requesting such amount. If payment is not made within thirty days, External SpinCo must pay interest thereafter on the amount past due at the rate and as determined
under Section 4.4. 
 For the avoidance of doubt, for purposes of calculating the parties’ liability for non-U.S. Taxes and the
utilization of Tax Benefits for 2014: 
 (i) The $8x of withholding taxes that were imposed by Thailand on the Thai Subsidiaries’ cash
distribution to Safeskin are Repatriation Taxes and are allocated solely to External Distributing under Section 2.2(a)(i)(B). Section 4.2(e) applies to such withholding taxes because they are imposed on the Cash Distribution. Therefore,
External Distributing is deemed to have made payment of such withholding taxes to External SpinCo for purposes of Section 4.2(b) to the extent of such withholdings. 

(ii) The $10x of Income Tax imposed by Thailand on the Thai Subsidiaries’ net taxable profits for 2014 is allocated solely to External
SpinCo under Section 2.2(a)(i)(C). As a result, External SpinCo is liable for such Income Tax under Section 2.1(a)(i). External SpinCo is responsible for preparing and filing the Tax Return with respect to such Income Tax pursuant to
Section 3.2(b) and remitting the Income Tax shown thereon to the proper Tax Authority pursuant to Section 4.1. No payment will be required from External Distributing under Section 4.2(b) with respect to such Income Taxes. 

(iii) The $10x of Singapore Income Tax imposed on KC Singapore’s $50x of chargeable income in 2014 is allocated solely to External SpinCo
under Section 2.2(a)(i)(C). As a result, External SpinCo is liable for such Income Tax under Section 2.1(a)(i). External SpinCo is responsible for preparing and filing the Tax Return with respect to such Income Tax pursuant to
Section 3.2(b) and remitting the Income Tax shown thereon to the proper Tax Authority pursuant to Section 4.1. No payment will be required from External Distributing under Section 4.2(b) with respect to such Income Tax. 

  
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 (iv) The $5x of Panama Income Tax with respect to the Singapore Sale is a Restructuring Tax
allocated to External Distributing under Section 2.2(a)(i)(B). As a result, External Distributing is liable for such Income Tax under Section 2.1(b)(i). External Distributing is responsible for preparing and filing the Tax Return with
respect to such Income Tax pursuant to Section 3.2(a) and remitting the Income Tax shown thereon to the proper Tax Authority pursuant to Section 4.1. No payment will be required from External SpinCo under Section 4.2(a) with respect
to such Income Tax. 
 Part II. Assume the same facts as in Part I of this Example 7, except that following the Effective Time
the Thai Subsidiaries make an additional cash distribution during 2014 to Safeskin, which in turn immediately distributes such cash to Internal SpinCo (which is a member of the External SpinCo Group) (collectively, such distributions the
“Post-Spin Distribution”). Moreover, assume that, for U.S. federal income tax purposes, the effect of the Post-Spin Distribution is to reduce the portion of the Thai Cash Distribution that is treated as a dividend to External
Distributing (viz., by causing some of the Thai Subsidiaries’ current earnings and profits for 2014 to be deemed distributed to Internal SpinCo), with the result that (i) the foreign tax credits claimed with respect to the Thai Cash
Distribution on the 2014 Joint Federal Return are only $20x (rather than $28x) and (ii) the remaining $8x of foreign tax credits that were claimed with respect to the Thai Cash Distribution under Part I of this Example 7 (the “Shifted
Foreign Tax Credits”) are instead claimed by External SpinCo against its U.S. federal income taxes on its External SpinCo Stub Period Return. 

The $20x of foreign tax credits claimed with respect to the Thai Cash Distribution on the 2014 Joint Federal Return are allocated to External
Distributing under Section 2.2(a)(ii)(A) because they arise in 2014 with respect to the 2014 Joint Federal Return. Because of the Post-Spin Distribution, the Shifted Foreign Tax Credits arise in 2014 with respect to the External SpinCo Stub
Period Return rather than the 2014 Joint Federal Return, with the result that they are allocated to External SpinCo under Section 2.2(a)(ii)(D) (rather than to External Distributing under Section 2.2(a)(ii)(A)). However, because the
Post-Spin Distribution directly causes foreign tax credits that are allocated to External Distributing pursuant to Section 2.2(a)(ii)(A) to be reduced, External SpinCo is deemed under Section 2.1(d) to have utilized foreign tax credits
allocated to External Distributing to reduce Taxes for which External SpinCo is liable for the Stub Period and is required under Section 2.1(d) to make a payment to External Distributing, pursuant to Section 2.1(a)(ii)(A), for the Shifted
Foreign Tax Credits. Such payment is not subject to the limitation in the last sentence of Section 4.3.
 Part III.
Assume the same facts as in Part II of this Example 7, except that in 2015 Thailand initiates an audit of the Thai Subsidiaries that successfully asserts that the Thai Subsidiaries owed additional Income Taxes for 2014. For U.S. federal income tax
purposes, the effect of these additional Thailand Income Taxes is that each of External Distributing and External SpinCo are able to amend the 2014 Joint Federal Return and the External SpinCo Stub Period Return, respectively, (i) to claim
additional foreign tax credits and (ii) to report additional deemed dividend income under section 78 of the Code. For the same reasons set forth in Parts I and II of this Example 7, the additional foreign tax credit reported on the amended 2014
Joint Federal Return and the additional Shifted Foreign Tax Credits are each allocated in the same manner as set forth in Part II of this Example 7. The additional United States Income Taxes imposed on the additional deemed dividend income reported
on the amended 2014 Joint Federal 

  
 38 

 
Return are Repatriation Taxes, and the additional United States Income Taxes imposed on the additional deemed dividend income reported on the amended External SpinCo Stub Period Return are Income
Taxes allocated to External SpinCo under Section 2.2(a)(i)(C). For the same reasons set forth in Part II of this Example 7, External SpinCo must make a payment to External Distributing for the additional Shifted Foreign Tax Credits. 

 

	 	Example 8.	Restructuring Taxes and Foreign Tax Credits. 

 For the External SpinCo Pre-Spin
2014 Period, the Mexican Maquilas, which are disregarded as entities separate from Internal SpinCo for U.S. federal income tax purposes and which are members of the External SpinCo Group, have $100x of taxable income under both United States and
Mexican Income Tax law. This taxable income includes gain from a sale by the Mexican Maquilas of certain assets relating to the External Distributing Business to members of the External Distributing Group (such sale, the “Mexican
Sale”) in preparation for the External Distribution. The Mexican Sale results in $20x of taxable gain under Mexican Income Tax law and a deferred intercompany gain of $20x under United States Income Tax law (which is taken into account by
Internal SpinCo immediately prior to the External Distribution as required under Treasury Regulations Section 1.1502-13(d)). Assume the Mexican Maquilas pay Mexican Income Tax equal to $30x ($6x of which is attributable to the Mexican Sale) to
the Tax Authority pursuant to Section 4.1. With respect to the 2014 Joint Federal Return, the Mexican Maquilas give rise to $100x of taxable income and $30x of foreign tax credits. 

Mexican Income Taxes. The $6x of Mexican Income Tax attributable to the Mexican Sale is a Restructuring Tax that is allocated
solely to External Distributing pursuant to Section 2.2(a)(i)(B). The remaining $24x of Mexican Income Tax is allocated solely to External SpinCo pursuant to Section 2.2(a)(i)(C). Assuming that these Mexican Income Taxes are filed and paid
by External SpinCo pursuant to Section 4.1, External Distributing must remit the amount for which it is liable (viz., $6x) to External SpinCo under Section 4.2(b) within thirty days after receiving notification requesting such
amount. If payment is not made within thirty days, External Distributing must pay interest thereafter on the amount past due at the rate and as determined under Section 4.4. 

United States Income Taxes. Because the 2014 Joint Federal Return is a Joint Return, External Distributing is responsible for
filing the 2014 Joint Federal Return (pursuant to Section 3.1(a)) and remitting the Taxes shown thereon to the Tax Authority. The $7x of United States Income Tax attributable to the Mexican Sale (viz., (.35)($20x of deferred intercompany
gain taken into account by Internal SpinCo immediately prior to the External Distribution)) is a Restructuring Tax that is allocated solely to External Distributing pursuant to Section 2.2(a)(i)(B). The remaining $28x (viz.,
(.35)($100x-$20x)) of United States Income Tax attributable to the Mexican Maquilas for the External SpinCo Pre-Spin 2014 Period is allocated to External SpinCo under Section 2.2(a)(i)(C). Under Section 2.2(a)(ii)(A), the $6x of foreign
tax credit attributable to the Mexican Restructuring Tax is allocated to External Distributing, and the remaining $24x of foreign tax credit attributable to the Mexican Income Taxes are allocated to External SpinCo. 

Under Section 2.1(b)(i) External Distributing is liable for $1x (viz., $7x of Restructuring Tax - $6x of foreign tax credit) of
United States Income Tax reported on the 2014 Joint Federal 

  
 39 

 
Return related to the Mexican Maquilas. Under Section 2.1(a)(i) External SpinCo is liable for $4x (viz., $28x of United States Income Tax - $24x of foreign tax credit) of United
States Income Tax reported on the 2014 Joint Federal Return related to the Mexican Maquilas. Therefore, assuming the same facts as in Example 1 (other than the income relating to the Mexican Maquilas), under Section 4.2(a) External SpinCo will
be required to make a payment of $4x to External Distributing relating to the United States Income Tax imposed with respect to the Mexican Maquilas. 
  

	 	Example 9.	Tax Contests - U.S. Income Taxes. 

 Assume the same facts as in Example 1 and that
all payments discussed in Example 1 were timely made. In 2016, the relevant Tax Authority initiates a Tax Contest with respect to the 2014 Joint Federal Return. As a result of the Tax Contest, it is concluded that External Distributing
(i) failed to report $50x of consolidated taxable income ($25x of which is allocated to External Distributing under Section 2.2(a)(i)(C), and the remaining $25x of which is allocated to External SpinCo under Section 2.2(a)(i)(C)) and
(ii) was entitled to claim an additional foreign tax credit of $10x that is allocated to External Distributing pursuant to Section 2.2(a)(ii)(A). Consequently, External Distributing is required to pay an additional $7.5x to the Tax
Authority (viz., (.35)($50x of additional taxable income) minus $10x of foreign tax credits). 
 Section 4.3 requires that the
amounts paid under this Agreement be redetermined as follows: Taking into account the adjustments from the Tax Contest, the 2014 Joint Federal Return should have reported $250x of consolidated taxable income ($175x of which is allocated to External
Distributing, and $75x of which is allocated to External SpinCo), $10x of foreign tax credits (all of which are allocated to External Distributing), and Tax liability of $77.5x (viz., (.35)($250x) minus $10x of foreign tax credits). Under
Section 2.1, External Distributing is liable for $51.25x of Tax (viz., (.35)($175x of taxable income allocated to External Distributing) minus $10x of foreign tax credits), and External SpinCo is liable for $26.25x of Tax (viz.,
(.35)($75x of taxable income allocated to External SpinCo)). When the 2014 Joint Federal Return was originally filed, External Distributing paid $70x to the Tax Authority and received a payment of $17.5x from External SpinCo. External Distributing
is required to pay an additional $7.5x to the Tax Authority as a result of the Tax Contest, and External SpinCo is required to make a payment to External Distributing of $8.75x (viz., $26.25x redetermined liability after the Tax Contest,
minus $17.5x initially paid to External Distributing with respect to the 2014 Joint Federal Return) within thirty days after the date on which External Distributing paid the $7.5x in additional tax to the Tax Authority (or, if later, fifteen days
after the date of a request for such payment from External Distributing), provided that the $8.75x in additional tax exceeds $50,000. 
  

	 	Example 10.	Tax Contests - State Taxes. 

 External Distributing files its income Tax Return
for State 1 with respect to the Tax Year that begins on January 1, 2014, and ends on December 31, 2014 (the “2014 Combined State 1 Return”), on a combined basis with the other corporate members of both Groups. Assume that
States 1 imposes its income tax at a 10% rate and that the 2014 Combined State 1 Return reported $1,000,000 of combined taxable income, no losses carried forward to 2014 from any prior year, a $50,000 research and development tax credit, and a Tax
liability of $50,000 (viz., (.1)($1,000,000) minus the $50,000 research and development tax credit). Of the $1,000,000 of 

  
 40 

 
combined taxable income reported on the 2014 Combined State 1 Return, assume that $900,000 is allocated to External Distributing under Section 2.2, and the remaining $100,000 of combined
taxable income is allocated to External SpinCo under Section 2.2. Assume the research and development tax credits are allocated entirely to External Distributing under Section 2.2(a)(ii)(C). Consistent with Sections 3.1, 4.1, and 4.2(a),
External Distributing prepared and filed the 2014 Combined State 1 Return, paid the $50,000 Tax liability, and timely received a $10,000 payment from External SpinCo for the portion of the Tax for which External SpinCo is liable under
Section 2.1. 
 For the Tax Year that begins on January 1, 2015, and ends on December 31, 2015, External SpinCo reports a
loss of $500,000 on its combined income Tax Return for State 1. Under State 1’s Income Tax law, External SpinCo is required to carry back this loss to the 2014 Combined State 1 Return, and for purposes of this Example 10, the carryback of this
Tax Item is assumed to be material. Therefore, at External SpinCo’s reasonable request, External Distributing is required under Section 3.3(d) to amend the 2014 Combined State 1 Return and file a claim for refund. The 2014 Combined State 1
Return is amended (the “State 1 Redetermination Event”), to report combined taxable income of $500,000, a $50,000 research and development tax credit, and a Tax liability of $0 (viz., (.1)($500,000), minus the $50,000
research and development tax credit), resulting in a refund of $50,000 that is paid to External Distributing. Under Section 3.3(d), External SpinCo is required to reimburse External Distributing for reasonable outside advisor fees incurred in
connection with amending the 2014 Combined State 1 Return. 
 Under Section 4.3 the amounts paid under this Agreement are redetermined
to take into account the State 1 Redetermination Event. In this regard, the parties take the following into consideration: 
 (i) Without
regard to Tax Benefits, the amended 2014 Combined State 1 Return reflects $900,000 of combined taxable income that is allocated to External Distributing under Section 2.2, and $100,000 of combined taxable income that is allocated to External
SpinCo. Therefore, under Section 2.1 (and ignoring Tax Benefits) External Distributing is liable for $90,000 of Tax and External SpinCo is liable for $10,000 of Tax. 

(ii) The amended 2014 Combined State 1 Return reflects two Tax Benefits. The $50,000 of research and development tax credits are allocated
entirely to External Distributing and therefore are utilized by External Distributing under Section 2.1(c)(i) to reduce its Tax liability. The $500,000 loss carryback is allocated solely to External SpinCo under Section 2.2(a)(ii)(D), but,
taking into account only those Tax Items allocated to External SpinCo during such Tax Year (viz., $100,000 of combined taxable income), only $100,000 of such Tax Benefit would be allowable under applicable Tax Law. Therefore, under
Section 2.1(c)(ii), only $100,000 of the loss carryback is utilized by External SpinCo, and the remaining $400,000 of the loss carryback is utilized by External Distributing under Section 2.1(c)(iii). Taking into account the utilization of
Tax Benefits, External Distributing and External SpinCo each have no liability for any Tax with respect to the amended 2014 Combined State 1 Return. 

(iii) External Distributing paid the $50,000 Tax liability reflected on the 2014 Combined State 1 Return as originally filed and received a
refund of $50,000 from the Tax 

  
 41 

 
Authority, resulting in a net payment of $0 from External Distributing to the Tax Authority. Because External Distributing received a $10,000 payment from External SpinCo for the portion of the
Tax for which External SpinCo is liable under Section 2.1 and, as a result of the State 1 Redetermination Event, External SpinCo is not liable for any Tax with respect to the amended 2014 Combined State 1 Return, External Distributing is
required under Section 4.3 to make a payment of $10,000 to External SpinCo (subject to the limitation in the last sentence of Section 4.3). Furthermore, subject to the limitation set forth in the last sentence of Section 4.3, under
Section 2.1(b)(ii)(D) External Distributing is required to pay External SpinCo for the loss carrybacks that were utilized by External Distributing. Under Section 4.2(d)(iii), the amount of the payment from External Distributing for the
utilization of the loss carryback would be $40,000 (viz., the amount by which External Distributing’s Taxes were actually reduced by the Tax Benefit). 

Based on the foregoing, the redetermined payment attributable to the State 1 Redetermination Event is determined to be a payment from External
Distributing to External SpinCo of $50,000 (viz., $10,000 as repayment of the payment previously received from External SpinCo for its allocable share of Taxes, and $40,000 for External Distributing’s utilization Tax Benefits allocated
to External SpinCo). However, this redetermined payment attributable to the State 1 Redetermination Event is not required to be made under Section 4.3 because it does not exceed $50,000. 

In addition to the State 1 Redetermination Event, assume that the relevant Tax Authority initiates a Tax Contest in 2015 with respect to a
Joint Return filed by External Distributing with respect to Non-Income Taxes in State 2 for the period that begins on October 1, 2014, and ends on the Distribution Date (the “State 2 Non-Income Tax Return”). Consistent with
Sections 3.1, 4.1, and 4.2(a), External Distributing originally prepared and filed the State 2 Non-Income Tax Return, paid the $150,000 Tax liability reported thereon, and timely received a $50,000 payment from External SpinCo for the portion of the
Tax for which External SpinCo was liable under Section 2.1. As a result of this Tax Contest (the “State 2 Redetermination Event”), however, it is concluded that an exemption was available to the External SpinCo Business, making
the correct Tax liability on the State 2 Non-Income Tax Return equal to $110,000, $100,000 of which is allocated to External Distributing. Therefore, following the redetermination of payments made with respect to the State 2 Non-Income Tax Return
under Section 4.3, it is determined that External SpinCo overpaid External Distributing by $40,000. Additional payments calculated with respect to the State 1 Redetermination Event and the State 2 Redetermination Event are not aggregated for
purposes of applying the threshold in Section 4.3 because they arise from separate Redetermination Events. Therefore, no payment is required to be made under Section 4.3 from External Distributing to External SpinCo with respect to the
State 2 Redetermination Event. 

  
 42 

 APPENDIX B 

AcryMed Incorporated 
 Aria Aesthetics, Inc. 

Avent Slovakia, Inc. 
 Avent, Inc. 

Ballard Medical Products 
 Ballard Purchase Corporation 

Ballard Real Estate Holdings, Inc 
 BMCO One, Inc. 

BMCO Two, Inc. 
 Cardiotronics Systems, Inc. 

Eastern Safeskin Corp. 
 Halyard Healthcare Inc. 

I-Flow Corporation 
 Kimberly-Clark PHC International, Inc. 

Medical Innovations Corporation 
 Mistassist, Inc. 

Plastic Engineered Products Company 
 R2 Medical Systems, Inc.

 Safeskin Corporation 
 Safeskin Insurance Management, Inc.

 Safeskin Real Estate 
 Safeskin Scientific Corporation 

Safeskin Sensicon Corporation 
 Spenco Medical Corporation 

TAC II 
 Tactyl Technologies, Inc. 

TCNL Technologies 
 Tecnadyne Scientific Incorporated 

Tecnol Consumer Products, Inc. 
 Tecnol Medical Products, Inc.

 Tecnol New Jersey Wound Care, Inc. 
 Tecnol, Inc. 

Tri-Med Specialties, Inc. 
 Value Select Corporation 

  
 43EX-10.3

 Exhibit 10.3 

Execution Version 

EMPLOYEE MATTERS AGREEMENT 

This Employee Matters Agreement (“Agreement”), dated as of October 31, 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 31, 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. 

 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. 

  
 2 

 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, 

  
 3 

 
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. 
 (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. 

  
 4 

 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). 

  
 5 

 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. 

  
 6 

 
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. 

(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). 

  
 7 

 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. 

  
 8 

 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. 

  
 9 

 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. 

  
 10 

 (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 

  
 11 

 
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. 
 (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 Inc. 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 of Halyard common stock immediately following the Effective Time and the denominator of which is the fair market value of Kimberly-Clark common stock immediately prior to the Effective
Time, 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 prior to the Effective Time
shall equal the closing price of Kimberly-Clark’s common stock on The New York Stock Exchange for the day prior to the first day in which Halyard common stock is traded on a regular way basis, and (ii) the fair market value of Halyard
common stock immediately following the Effective Time shall equal 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. 
 (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 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. 

  
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 (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. 

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

  
 15 

 
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.

 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. 

  
 16 

 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 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. 

  
 17 

 (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). 

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 

  
 18 

 
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:	 	 /s/ Mark A. Buthman

	Name:	 	Mark A. Buthman
	Title:	 	Chief Financial Officer
	
	HALYARD HEALTH, INC.
		
	By:	 	 /s/ Steven E. Voskuil

	Name:	 	Steven E. Voskuil
	Title:	 	Senior Vice President and Chief Financial Officer

  
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