Document:

EX-10.2

 Exhibit 10.2 

TAX MATTERS AGREEMENT 

DATED AS OF [                    ]

 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	  	 	10	  
			
	 SECTION 3.
	 	Preparation and Filing of Tax Returns	  	 	13	  
	 3.1
	 	Joint Returns	  	 	13	  
	 3.2
	 	Separate Returns	  	 	14	  
	 3.3
	 	Special Rules Relating to the Preparation of Tax Returns	  	 	14	  
	 3.4
	 	Reliance on Exchanged Information	  	 	16	  
	 3.5
	 	Allocation of Tax Items	  	 	16	  
			
	 SECTION 4.
	 	Tax Payments	  	 	16	  
	 4.1
	 	Payment of Taxes to Tax Authority	  	 	16	  
	 4.2
	 	Indemnification Payments	  	 	17	  
	 4.3
	 	Initial Determinations and Subsequent Adjustments	  	 	17	  
	 4.4
	 	Interest on Late Payments	  	 	18	  
	 4.5
	 	Payments by or to Other Group Members	  	 	18	  
	 4.6
	 	Procedural Matters	  	 	18	  
	 4.7
	 	Tax Consequences of Payments	  	 	19	  
			
	 SECTION 5.
	 	Assistance and Cooperation	  	 	19	  
	 5.1
	 	Cooperation	  	 	19	  
	 5.2
	 	Supplemental Tax Opinions	  	 	19	  
			
	 SECTION 6.
	 	Tax Records	  	 	19	  
	 6.1
	 	Retention of Tax Records	  	 	19	  
	 6.2
	 	Access to Tax Records	  	 	20	  
	 6.3
	 	Confidentiality	  	 	20	  
			
	 SECTION 7.
	 	Tax Contests	  	 	20	  
	 7.1
	 	Notices	  	 	20	  
	 7.2
	 	Control of Tax Contests	  	 	21	  
	 7.3
	 	Cooperation	  	 	22	  
			
	 SECTION 8.
	 	Restriction on Certain Actions of External Distributing and External SpinCo	  	 	22	  
	 8.1
	 	General Restrictions	  	 	22	  
	 8.2
	 	Restricted Actions Relating to Tax Materials	  	 	22	  
	 8.3
	 	Certain External SpinCo Actions Following the Effective Time	  	 	22	  
			
	 SECTION 9.
	 	General Provisions	  	 	23	  
	 9.1
	 	Limitation of Liability	  	 	23	  
	 9.2
	 	Entire Agreement	  	 	23	  

  
 i 

									
		 	 9.3
	 	Governing Law	  	 	23	  
		 	 9.4
	 	Termination	  	 	24	  
		 	 9.5
	 	Notices	  	 	24	  
		 	 9.6
	 	Counterparts	  	 	24	  
		 	 9.7
	 	Binding Effect; Assignment	  	 	24	  
		 	 9.8
	 	No Third Party Beneficiaries	  	 	24	  
		 	 9.9
	 	Severability	  	 	24	  
		 	 9.10
	 	Failure or Indulgence Not Waiver; Remedies Cumulative	  	 	25	  
		 	 9.11
	 	Amendments; Waivers	  	 	25	  
		 	 9.12
	 	Authority	  	 	25	  
		 	 9.13
	 	Construction	  	 	25	  
		 	 9.14
	 	Interpretation	  	 	26	  
		 	 9.15
	 	Predecessors or Successors	  	 	26	  
		 	 9.16
	 	Effective Time	  	 	26	  
		 	 9.17
	 	Change in Law	  	 	26	  
		 	 9.18
	 	Disputes	  	 	26	  

  
 ii 

 TAX MATTERS AGREEMENT 

THIS TAX MATTERS AGREEMENT (this “Agreement”) is entered into as of
            , 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, 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 Health Care, Inc., (such contribution, “External Contribution 1”), (2) all of the
membership interests of Halyard US 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. 

  
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 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: 
 “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             , pursuant to which External Distributing transferred a portion of its South Carolina investment 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. 

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

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

  
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 “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. 
 “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. 

  
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 “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),
(ii) Safeskin Corporation Thailand Ltd., or (iii) Safeskin Medical and Scientific Thailand Ltd. 
 “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. 
 “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 (i) any Taxes that (A) are the liability
of any Person listed in Appendix B and (B) relate to any Tax Year (or portion thereof) prior to the acquisition of such Person by the External Distributing Group and
(ii) [                    ]. 

“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. 

  
 4 

 “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 Safeskin Corporation Thailand Ltd., Safeskin Medical and Scientific Thailand Ltd., 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. 

“Separation Transactions” means the transactions described in Schedule 2.1 of the Distribution Agreement. 

“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 

  
 5 

 
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, 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, 

  
 6 

 
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. 

“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. 

  
 7 

 “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. 
 “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, 

(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. 

  
 8 

 (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. 
 (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). 

  
 9 

 (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). 
 (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 either 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. 
 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 net taxable income (calculated in accordance with Treasury Regulation Section 1.1552-1(a)(1) and in accordance with past practices) attributable to 

  
 10 

 
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 shall be 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 arising in 2014 shall be allocated solely to External Distributing, other than foreign tax credits attributable
to (i) foreign Taxes accrued or paid prior to the External Distribution by (1) Internal SpinCo (or any of its Subsidiaries prior to the External Distribution) or (2) Kimberly-Clark Health Care Inc. or
(ii) [                    ]. Notwithstanding the preceding sentence, any foreign tax credits related to or arising in connection with the Cash
Distribution (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 investment 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. 

  
 11 

 (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. 

  
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 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 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. 

  
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 (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 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 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), (B) Safeskin Corporation Thailand Ltd., and (C) Safeskin Medical and Scientific
Thailand Ltd. 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 

  
 14 

 
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
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 

  
 15 

 
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 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). 

  
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 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. 
 (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 Tax Payments. For purposes of
Section 4.2(a), the portion of 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 (i) an amount equal to
[                    ] with respect to Tax Years for which Tax Returns have not been filed before the Distribution Date and (ii) the full amount
of its allocable share of all Taxes shown on any other Tax Return filed before the Distribution Date with respect to any other Tax Year ending before the Distribution Date. 

(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. 

(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)). 

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 

  
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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. 
 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. 

  
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 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 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. 

  
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 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 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 

  
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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. 

(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. 

  
 21 

 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 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,

  
 22 

 
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 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. 

  
 23 

 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 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 

  
 24 

 
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. 
 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. 

  
 25 

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

  
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 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             , 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 in 2015 and 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 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 its U.S. federal consolidated income Tax Return for the Tax Year that begins on January 1, 2014, and ends on December 31, 2014,
the External Distributing consolidated group reports $200x of consolidated net 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 net
taxable income reported on such Tax Return, $150x is attributable to the separate net 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 net taxable income is attributable to the separate net 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 $150x of taxable income attributable to the External Distributing Group and the $50x of taxable income attributable to the External SpinCo
Group in each case includes deductions. However, in neither case are these deductions a Tax Benefit because the aggregate of such deductions in the Tax Year does not exceed the income attributable to or arising from the relevant Group in such Tax
Year. 
 Because External Distributing’s 2014 U.S. federal consolidated income Tax 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 net taxable income that gave rise to the Tax was attributable to members of the External
Distributing Group and $50x of the consolidated net taxable income that gave rise to the 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)). 

  
 27 

 Pursuant to Section 3.1(a), External Distributing is responsible for preparing and filing
the Joint 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 such Tax 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. 

  
 28 

 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. 
 I-Flow Corporation 

Kimberly-Clark Health Care Inc. 
 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 

  
 29EX-10.3

 Exhibit 10.3 

EMPLOYEE MATTERS AGREEMENT 

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

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

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

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

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

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

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

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

  
 1 

 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, on such initial terms and conditions substantially similar in the aggregate to the terms and
conditions of such employee’s last day of employment with Kimberly-Clark or the relevant Isolated Employer. 

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

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

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

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

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

  
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 ARTICLE III 

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

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

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

3.03 Welfare Plan Liabilities. 

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

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

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

  
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 3.07 Disability.  

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

  
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 ARTICLE IV 

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

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

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

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

  
 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 the Kimberly-Clark Severance and Executive Severance Plans, and (ii) Kimberly-Clark shall have no further liability for any Business Employee under the Kimberly-Clark Severance Plan or Executive Severance Plan. 

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

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

  
 12 

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

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

  
 13 

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

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

  
 14 

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

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

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

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

  
 15 

 4.04 Workers’ Compensation.  

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

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

  
 16 

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

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

5.02 U.S. Defined Contribution Plans. 

(a) Employees’ 401(k) Plan. 

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

  
 17 

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

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

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

  
 18 

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

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

  
 19 

 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.  

  
 20 

 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  

  
 21 

 
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. 

  
 22 

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

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

  
 23

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