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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 allowed
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