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Johnson & Johnson
Executive Bonus Plan
1. Purposes.
The purposes of
the Johnson & Johnson Executive Bonus
Plan (the "Plan") are to attract and retain
highly qualified
individuals as executives; to obtain from
each the best
possible performance; and to underscore to
them the
importance of achieving business
objectives. The Plan,
as
set forth herein, supersedes prior versions
of the Johnson &
Johnson Executive Bonus Plan, but it does
not replace or
amend the Johnson & Johnson Executive
Incentive Plan.
2. Definitions.
For purposes of
the Plan:
"Award" means
(i) a dollar-denominated bonus awarded to
an Eligible Employee pursuant to the Plan
with respect to a
Year and (ii) solely for the purpose set
forth in
Section 8(a) hereof, any payment identified
in Appendix A
hereto.
"Board" means
the Board of Directors of the
Corporation.
"Code" means the
Internal Revenue Code of 1986, as
amended.
"Committee"
means the Management Compensation Committee
of the Corporation.
"Common Stock"
means the common stock, par value $1.00
per share, of the Corporation.
"Corporation"
means Johnson & Johnson, a New Jersey
corporation.
"Eligible
Employee" means an individual who is not an
Executive Officer but who, at any time
during the Year for
which an Award is made, is on the active
payroll of (i) the
Corporation, (ii) any of the Corporation's
domestic or
international subsidiaries and affiliated
entities, (iii) a
joint venture operation of the Corporation
and its
subsidiaries and affiliated entities, or
(iv) a partner in
such a joint venture who is assigned to
such joint venture.
"Executive
Officer" means the Chairman and any Vice
Chairman of the Board and any other officer
of the
Corporation who has been designated as part
of the Office of
the Chairman or elected a Member of the
Executive Committee
of the Corporation.
"Fair Market
Value" on any date means the average of
the high and low sales prices, on such
date, of shares of
Common Stock on the principal securities
exchange on which
such shares are traded or, if there are no
such sales on
such date, then the average of the high and
low sales prices
of such shares on the date or dates that
the Committee
determines, in its sole discretion, to be
appropriate.
"LTIP" means the
Johnson & Johnson Long-Term Incentive
Plan as in effect from time to time.
"Plan" means the
Johnson & Johnson Executive Bonus Plan
as set forth herein and as amended from
time to time.
"Share Election"
means an election by an Eligible
Employee in accordance with the provisions
of Section 5
hereof to reduce the percentage of the
Award for a Year that
is payable in cash and to receive, in lieu
of any such cash,
shares of Common Stock with a Fair Market
Value (determined
as of a date designated by the Committee)
equal to the
dollar amount of the Award that the
Eligible Employee elects
not to receive in cash.
"Year" means the
calendar year.
3. Administration.
(a) Authority of Committee.
The Plan shall be
administered
by the Committee, which shall have all of
the powers vested
in it by the terms of the Plan, including
the authority
(subject to the restrictions imposed by the
Plan):
to
select the Eligible Employees to be granted Awards;
to
determine the nature, size, and terms of each Award;
to
determine the time when Awards are to be granted and
any
conditions that must be satisfied before an Award is
granted;
to
determine whether any conditions applicable to an
Award have been met; and
to
determine the guidelines and/or procedures for the
payment of Awards.
(b) Interpretation of Plan.
The Committee shall
have full
power and authority to administer and
interpret the Plan and
to adopt or establish such rules,
regulations, agreements,
guidelines, procedures, and instruments
that are not
inconsistent with the Plan and that, in the
Committee's
opinion, may be necessary or advisable for
the
administration and operation of the Plan.
The Committee's
interpretations of the Plan, and all
actions taken and
determinations made by the Committee
pursuant to the powers
vested in it hereunder, shall be conclusive
and binding on
all persons, including the Corporation, its
subsidiaries,
its shareholders, and all Eligible
Employees.
(c) Delegation of Authority.
To the extent not
prohibited
by law, the Committee may delegate its
authority hereunder
to one or more of its members or other
persons.
(d) Execution of Documents and
Provision of Assistance.
The Committee may designate employees of
the Corporation to
execute documents on behalf of the
Committee or otherwise to
assist the Committee in the administration
and operation of
the Plan.
(e) Uniformity Not Required.
The terms and
conditions that
apply to Awards, including, but not limited
to, Share
Elections, need not be uniform among all
Awards, among all
Awards of the same type, among all Awards
granted to the
same Eligible Employee, or among all Awards
granted at the
same time.
4. Eligibility.
Subject to the
terms and conditions of the Plan, the
Committee may, from time to time, select
from all Eligible
Employees those to whom Awards shall be
granted for each
Year and shall determine the nature, size,
and terms of each
Award.
5. Awards.
(a) General. Subject to the provisions of this
Section 5,
an Award to an Eligible Employee for a Year
shall be paid in
cash, in shares of Common Stock, or in a
combination of cash
and shares of Common Stock, as determined
by the Committee.
Each Award to an Eligible Employee shall be
paid entirely in
cash unless the Committee requires such
Eligible Employee to
receive all or part of such Award in shares
of Common Stock
pursuant to the provisions of this Section
5(a) or such
Eligible Employee makes a Share Election
with respect to
such Award. If the Committee determines that
an Eligible
Employee shall receive all or part of an
Award for a Year in
shares of Common Stock, the Eligible
Employee may not make a
Share Election with respect to any portion
of such Award
that is payable in cash.
(b) Share Election. Subject to the provisions of
this
Section 5, the Committee may allow an
Eligible Employee to
elect to reduce the percentage of the Award
for a Year that
is payable in cash and to receive, in lieu
of any such cash,
shares of Common Stock with a Fair Market
Value (determined
as of a date designated by the Committee)
equal to the
dollar amount of the Award that the
Eligible Employee elects
not to receive in cash.
(c) Permissible Elections.
A Share Election with
respect
to an Award for a Year must designate the
percentage of such
Award that the Eligible Employee elects to
forgo receiving
in cash. The Committee may provide that a
Share Election
shall not be effective unless such Share
Election (i)
designates a percentage that the Committee
permits and (ii)
causes the Eligible Employee to receive at
least a specified
minimum number of shares of Common
Stock.
(d) Election Procedure. The Committee may require any
Share Election to be made in such manner
and form and by
such date as the Committee shall specify.
A Share Election
shall become irrevocable on the date
specified by the
Committee. A Share Election that fails to
conform to the
requirements specified by the Committee
shall have no
effect, and any Award for which such Share
Election was made
shall be paid entirely in cash.
(e) No Right to Award. An Eligible Employee shall not
be
entitled to an Award merely because he or
she is
