EXHIBIT 10.22
ALLERGAN
2009
MANAGEMENT BONUS
PLAN
PURPOSE OF THE PLAN
The Allergan, Inc. 2009 Management
Bonus Plan (the “Plan”) is designed to reward eligible
management-level employees for their contributions to providing
Allergan’s stockholders increased value for their investment
through the successful accomplishment of specific financial
objectives and individual performance objectives.
PLAN YEAR
The Plan year runs from
January 1, 2009 through December 31, 2009.
ELIGIBILITY
All regular full-time and part-time
employees of Allergan, Inc. and its subsidiaries (the
“Company”) scheduled to work 20 or more hours per week
in salary grades 7E and above who are not covered by any other
bonus or sales incentive plan, unless otherwise provided in a
written agreement between the Company and a Plan participant, are
eligible to participate in the Plan. Notwithstanding anything in
this Plan to the contrary, any individual who (a) performs
services for the Company and is classified or paid as an
independent contractor (regardless of his or her classification for
federal tax or other legal purposes) by the Company or
(b) performs services for the Company pursuant to an agreement
between the Company and any other person (e.g. a leasing
organization) shall not be eligible to participate in the Plan. In
addition, in order to be eligible to receive a bonus, participants
must be employed by the Company on or before June 30, 2009 and
must be actively employed by the Company on the date bonuses are
paid. Participants who resign or are terminated for reasons other
than those noted below will receive no bonus.
Bonuses, if any, for participants
who become eligible after the beginning of the plan year, retire
(“normal retirement” is defined as termination of
employment after the Plan participant has attained age 55, provided
that such participant has been employed by the Company for a
minimum of 5 years), become disabled, die or transfer into a
position covered by another incentive plan will be prorated, except
in cases of normal retirement and termination (a) by mutual
agreement, (b) during counseling review, (c) after
counseling review or (d) for serious misconduct. In such
cases, participants will receive no bonus. Bonuses, if any, for
participants who are laid-off will be prorated provided the
participant was eligible for at least six months of the Plan year.
All proration will be based on the number of months of
participation in the Plan during the Plan year.
PERFORMANCE OBJECTIVES
Bonuses for Plan participants are
based on both corporate performance and individual performance in
relation to pre-established objectives, as follows:
CORPORATE
OBJECTIVES
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Earnings Per Share
(“EPS”) —EPS is defined as adjusted net earnings
from continuing operations as measured by Wall Street divided by
the weighted average number of common and common equivalent shares
on a diluted basis.
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Revenue Growth in Local
Currency —Net sales
stated in constant local currency compared to the prior year.
Specifically defined as the percentage change in annual net sales
in constant local currency from the previous fiscal year end to the
current fiscal year end (“Revenue Growth”). The purpose
of net sales stated in constant local currency is to remove any
impact on net sales growth from changes in currency exchange rates
from year to year.
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09 MBP Page -1-
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Research and Development
(“R&D”) Reinvestment Rate —R&D expense as a percentage of
revenue. Specifically defined as the total annual R&D expense
as a percentage of annual net sales as of the current fiscal year
end.
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Operating Income
—Operating Income compared to
budget may be considered for allocation of bonus pools by Business
Unit/Function. Operating Income is defined as Net Sales minus Cost
of Goods minus Selling and General Administrative expenses minus
Research & Development minus allocated corporate interest
where applicable.
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INDIVIDUAL
OBJECTIVES
Management Bonus Objectives
(“MBOs”) are prepared by each participant and his or
her supervisor at the beginning of the Plan year and may be
modified throughout the year as necessary. Objectives should
reflect major results and accomplishments to be achieved in order
to meet short and long-term business goals that contribute to
increased stockholder value. MBOs are expressed as specific,
quantifiable measures of performance in relation to key operating
decisions for the participant’s business unit, such as
managing inventory levels, receivables, expenses, payables,
increasing sales, eliminating unnecessary capital expenditures,
etc.
At the end of the Plan year, the
supervisor evaluates the participant’s performance in
relation to his or her objectives in order to determine the size of
the bonus award, if any. A more detailed description of how the
award is calculated is provided under “Individual Bonus Award
Calculation.”
BONUS POOL CALCULATION
The components of this calculation
for bonus pool funding are: (1) EPS, (2) Revenue Growth
and (3) R&D Reinvestment Rate.
Bonus pool funding
–Bonuses are funded when the
Company achieves a threshold level of target EPS performance. The
level of bonus funding is determined by EPS performance, Revenue
Growth and R&D Reinvestment Rate as outlined in the table
below.
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Earnings Per Share, Revenue
Growth and R&D Reinvestment Rate
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2009 EPS
RANGE %
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2009 EPS
RANGE
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BONUS %
OF TARGET
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REVENUE
GROWTH
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BONUS %
OF TARGET
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R&D
REINVEST.
RATE
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BONUS %
OF TARGET
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TOTAL
BONUS % OF
TARGET
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-5.5%
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-$0.150
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0.0%
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0.0%
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-2.9%
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-$0.080
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50.0%
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-0.2%
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0.0%
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15.55%
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0.0%
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50.0%
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-2.5%
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-$0.070
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62.5%
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0.8%
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2.0%
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15.80%
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2.0%
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66.5%
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-1.6%
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-$0.045
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75.0%
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1.8%
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4.0%
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16.05%
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4.0%
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83.0%
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-1.3%
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-$0.035
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80.0%
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2.8%
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6.0%
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16.30%
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6.0%
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92.0%
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-0.7%
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-$0.020
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85.0%
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3.8%
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8.0%
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16.55%
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8.0%
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101.0%
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Target
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90.0%
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4.8%
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10.0%
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16.80%
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10.0%
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110.0%
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1.1%
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$0.030
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95.0%
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5.8%
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13.8%
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17.05%
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13.8%
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122.5%
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2.2%
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$0.060
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100.0%
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6.8%
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17.5%
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17.30%
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17.5%
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135.0%
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2.9%
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$0.080
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105.0%
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7.8%
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21.3%
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17.55%
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21.3%
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147.5%
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3.6%
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$0.100
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110.0%
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8.8%
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25.0%
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17.80%
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25.0%
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160.0%
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09 MBP Page -2-
Revenue Growth and R&D
Reinvestment Rate bonus funding may not exceed target unless EPS
performance is equal to or greater than target. If actual results
fall between the performance levels shown above, bonuses will be
prorated accordingly. For sake of clarity, if the Company’s
performance exceeds any of the targets for Revenue Growth and/or
R&D Reinvestment Rate, but EPS does not exceed the threshold
level of target EPS performance, no bonus will be
payable.
BONUS POOL DIFFERENTIATION BY
BUSINESS UNIT/FUNCTION
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Operating Income
—The target bonus pool
d
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