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Exhibit 10.13
MEAD JOHNSON NUTRITION COMPANY
2009 SENIOR EXECUTIVE PERFORMANCE INCENTIVE
PLAN
(Effective [
], 2009)
1. Purpose . The purpose of this 2009 Senior Executive
Performance Incentive Plan (the "Plan") is to aid Mead Johnson
Nutrition Company, a Delaware corporation (together with its
successors and assigns, the "Company"), in attracting, retaining,
motivating and rewarding executive employees of the Company or its
Subsidiaries or Affiliates by providing for Awards that will serve
as an incentive to annual performance by executive employees who
contribute materially to the success of the Company and its
Subsidiaries and Affiliates. The Plan authorizes annual incentive
awards that are intended to qualify as "performance-based
compensation" that is tax deductible without limitation under
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code").
2. Definitions . In addition to the terms defined in
Section 1 above and elsewhere in the Plan, the following
capitalized terms used in the Plan have the respective meanings set
forth in this Section:
(a) "Affiliate" means a corporation or other entity that
directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with the
Company. For purposes of the Plan, an ownership interest of more
than fifty percent (50%) shall be deemed to be a controlling
interest.
(b) "Award" means the amount of a Participant’s Award
Opportunity in respect of a given Performance Year determined by
the Committee to have been earned and to be payable or potentially
payable to the Participant, subject to any conditions as may be
imposed by the Committee.
(c) "Award Opportunity" means a specified percentage of the
Award Pool that a Participant potentially may earn in respect of a
specified Performance Year, subject to such additional requirements
as the Committee may impose. An Award Opportunity constitutes a
conditional right to receive an Award.
(d) "Award Pool" means a hypothetical cash amount equal to two
percent (2%) of the Pretax Earnings for a specified
Performance Year. Pretax Earnings for this purpose may not include
Pretax Earnings from any period not included in the designated
Performance Year and, if Performance Years overlap, the Committee
must specify counting rules so that the aggregate of Award Pools
for such Performance Years does not exceed the limit of two percent
(2%) of the Pretax Earnings during the relevant periods.
(e) "Beneficiary" means the person, persons, trust or trusts
designated as being entitled to receive the benefits under a
Participant’s Award Opportunity or Award upon and following
such Participant’s death. Unless otherwise determined by the
Committee, a Participant may designate one or more individuals
and/or one or more trusts as his or her Beneficiary, and in the
absence of a designated Beneficiary the Participant’s
Beneficiary shall be as specified in Section 8(a). Unless
otherwise determined by the Committee, any designation of a
Beneficiary other than a Participant’s spouse, or a trust in
which the Participant’s spouse is the sole beneficiary, shall
be subject to the written consent of such spouse.
(f) "Board" means the Company’s Board of
Directors.
(g) "BMS" means Bristol-Myers Squibb Company, a Delaware
corporation.
(h) "Change in Control" means the occurrence of any one of the
following events after the Effective Date while BMS is an Affiliate
of the Company:
(i) Any Person (as defined in Section 13(d)(3) of the
Securities and Exchange Act) shall have become the direct or
indirect beneficial owner of thirty percent (30%) or more of
the then outstanding common shares of BMS;
(ii) The consummation of a merger or consolidation of BMS with
any other corporation other than (A) a merger or consolidation
which would result in the voting securities of BMS outstanding
immediately prior thereto continuing to represent at least
fifty-one percent (51%) of the combined voting power of the
voting securities of BMS or the surviving entity outstanding
immediately after such merger or consolidation, or (B) a
merger or consolidation effected to implement a recapitalization of
BMS in which no Person acquires more than fifty percent
(50%) of the combined voting power of BMS’s then
outstanding securities;
(iii) The date the stockholders of BMS approve a plan of
complete liquidation of BMS or an agreement for the sale or
disposition by BMS of all or substantially all BMS’s
assets;
(iv) The date there shall have been a change in the composition
of the Board of Directors of BMS within a two-year period such that
a majority of BMS’s Board of Directors does not consist of
directors who were serving at the beginning of such period together
with directors whose initial nomination for election by BMS’s
stockholders or, if earlier, initial appointment to BMS’s
Board of Directors, was approved by the vote of two-thirds of the
directors then still in office who were in office at the beginning
of the two-year period together with the directors who were
previously so approved.
Notwithstanding the forgoing, for purposes of Section 7(f),
a Change in Control means a change in the ownership or effective
control of BMS, or a change in the ownership of a substantial
portion of the assets of BMS, each within the meaning of Treasury
Regulation Section 1.409A-3(i)(5), while BMS is an Affiliate
of the Company.
(i) "Code" has the meaning specified in Section 1.
References to any provision of the Code or regulation thereunder
include any successor provisions and regulations, and reference to
regulations includes any applicable guidance or pronouncement of
the Department of the Treasury and Internal Revenue Service.
(j) "Committee" means the Compensation Committee of the Board,
the composition and governance of which is established in the
Committee’s Charter as approved from time to time by the
Board and subject to other corporate governance documents of the
Company. No action of the Committee shall be void or deemed to be
without authority due to
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the failure of any member, at the time the action
was taken, to meet any qualification standard set forth in the
Committee Charter or this Plan. The Committee may specify that any
of its actions shall be subject to the approval of the
Board.
(k) "Covered Employee" means a person designated by the
Committee as likely, with respect to a given fiscal year of the
Company, to be a "covered employee," as defined in Code
Section 162(m)(3) and Internal Revenue Service Notice 2007-49,
or in any subsequent guidance or pronouncement of the Department of
the Treasury or Internal Revenue Service that defines or interprets
the term "covered employee" for purposes of Code
Section 162(m)(3), for that year (or a later year in which an
Award may be settled). This designation generally is required at
the time an Award Opportunity is granted.
(l) "Current Portion" has the meaning specified in
Section 6(a).
(m) "Deferral Account" means a hypothetical bookkeeping account
established and maintained by the Company on behalf of a
Participant pursuant to Section 7(a) to track the Deferred
Portions of the Participant’s Awards.
(n) "Deferred Portion" has the meaning specified in
Section 6(a).
(o) "Disability" means an event which results in the Participant
being (i) unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than twelve
(12) months, or (ii) by reason of any medically
determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period
of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three
(3) months under an accident and health plan covering
employees of the Company or its Subsidiaries.
(p) "Effective Date" means [
], 2009, subject to the approval of the Plan by the Company’s
stockholders, as specified in Section 10(j).
(q) "Pretax Earnings" means the Company’s earnings from
continuing operations on a consolidated basis before deduction of
income taxes as reported (or to be reported) in the Company’s
financial statements, less pretax minority interest expenses, and
excluding discontinued operations, extraordinary items and other
non-recurring items, in each case as determined in accordance with
generally accepted accounting principles or identified in the
Company’s financial statements, notes to the financial
statements, management’s discussion and analysis or other
filings with the U.S. Securities and Exchange Commission.
(r) "Participant" means a person who has been granted an Award
Opportunity or Award under the Plan which remains outstanding.
(s) "Performance Year" means the fiscal year or portion thereof
specified by the Committee as the period over which Pretax Earnings
are to be measured as a basis for determining the level of funding
of the Award Pool.
(t) "Plan Regulations" has the meaning specified in
Section 3(a)(iii).
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(u) "Retirement" means a Participant’s
Separation from Service with the Company or a Subsidiary or
Affiliate in the following circumstances:
(i) At or after the Participant’s 65th birthday; or
(ii) At or after the Participant’s 55th birthday having
completed 10 years of service with the Company and/or any
Subsidiaries and/or Affiliate; or
(iii) Such termination is by the Company or a Subsidiary or
Affiliate not for cause and is not voluntary on the part of the
Participant, at or after the Participant has attained age plus
years of service (rounded up to the next higher whole number) which
equals at least 70 and the Participant has completed 10 years of
service with the Company and/or any Subsidiary and/or Affiliate,
and the Participant has executed a general release and has agreed
to be subject to covenants relating to noncompetition,
nonsolicitation and other commitments for the protection of the
Company’s business as then may be required by the Committee
(subject to Section 7(f)(ix)).
(v) "Section 409A Specified Employee" means a "specified
employee," within the meaning of Code Section 409A(a)(2)(B)(i)
and Treasury Regulation Section 1.409A-1(i), as determined by
the Committee or its designee. For purposes of a distribution to
which the requirements of Section 7(f)(iii)(B) apply, the
status of a Participant as a Section 409A Specified Employee
will be determined annually under the Company’s
administrative procedure for such determination for purposes of all
plans subject to Code Section 409A.
(w) "Separation from Service" means the date of cessation of a
Participant’s employment relationship with the Company and
any Affiliate and Subsidiary for any reason, with or without cause,
as determined by the Company. A transfer of a Participant between
and among the Company or a Subsidiary or Affiliate shall not be
deemed a Separation from Service for purposes of the Plan.
Notwithstanding the forgoing, with respect to any distribution of a
Deferred Portion, the date on which a participant incurs a
Separation from Service shall be determined in accordance with Code
Section 409A(a)(2)(A)(i) and Treasury Regulation
Section 1.409A-1(h).
(x) "Subsidiary" means any corporation which at the time
qualifies as a subsidiary of the Company under the definition of
"subsidiary corporation" in Code Section 424(f).
(y) "Unforeseeable Emergency" means a severe financial hardship
to the Participant resulting from an illness or accident of the
Participant, the Participant’s spouse, or a dependent (as
defined in Code Section 152, without regard to Code Sections
152(b)(1), (b)(2), and (d)(1)(B)) of the Participant, loss of the
Participant’s property due to casualty, or similar
extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant, and otherwise
meeting the definition set forth in Treasury Regulation
Section 1.409A-3(i)(3).
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3. Administration .
(a) Authority of the Committee . The Plan shall be
administered by the Committee, which shall have full and final
authority and discretion, in each case subject to and consistent
with the provisions of the Plan and any applicable laws or
regulations, to:
(i) select eligible employees of the Company and any Subsidiary
to become Participants;
(ii) grant Award Opportunities and Awards under the Plan;
(iii) prescribe documents setting the terms of Award
Opportunities and Awards (such Award documents need not be
identical for each Participant or each Award), amendments thereto,
and rules and regulations for the administration of the Plan and
amendments thereto ("Plan Regulations");
(iv) construe and interpret the Plan and Award documents and
correct defects, supply omissions or reconcile inconsistencies
therein; and
(v) to make all other decisions and determinations as the
Committee may deem necessary or advisable for the administration of
the Plan.
(b) Committee Determinations . Decisions of the Committee
with respect to the administration and interpretation of the Plan
shall be final, conclusive, and binding upon all persons interested
in the Plan, including Participants, Beneficiaries, and other
persons claiming rights from or through a Participant, and
stockholders (except as may be otherwise determined by the
Board).
(c) Manner of Exercise of Committee Authority . The
express grant of any specific power to the Committee, and the
taking of any action by the Committee, shall not be construed as
limiting any power or authority of the Committee. The Committee may
act through subcommittees, including for purposes of qualifying
Award Opportunities and Awards under Code Section 162(m) as
performance-based compensation, in which case the subcommittee
shall be subject to any limitations under the Committee Charter,
and the acts of the subcommittee shall be deemed to be acts of the
Committee hereunder.
(d) Delegation of Authority . The Committee may delegate
to one or more officers or managers of the Company or any
Subsidiary or Affiliate, or committees thereof, the authority,
subject to such terms as the Committee shall determine, to perform
such functions, including administrative functions, as the
Committee may determine, to the extent that such delegation
(i) will not cause Award Opportunities and Awards intended to
qualify as performance-based compensation under Code
Section 162(m) to fail to so qualify, and (ii) will not
result in a related-party transaction with an executive officer
required to be disclosed under Item 404(a) of Regulation S-K
(in accordance with Instruction 5.a.ii thereunder) under the
Securities and Exchange Act, and (iii) is permitted under the
applicable provisions of the Delaware General Corporation Law.
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(e) Limitation of Liability . The
Committee and each member thereof, and any person acting pursuant
to authority delegated by the Committee, shall be entitled, in good
faith, to rely or act upon any report or other information
furnished by any executive officer, other officer or employee of
the Company or a Subsidiary or Affiliate, the Company’s
independent auditors, consultants or any other agents assisting in
the administration of the Plan. Members of the Committee, any
person acting pursuant to authority delegated by the Committee, and
any officer or employee of the Company or a Subsidiary or Affiliate
acting at the direction or on behalf of the Committee or a delegee
shall not be personally liable for any action or determination
taken or made in good faith with respect to the Plan, and shall, to
the fullest extent permitted by law and the Company’s
By-Laws, be fully indemnified and protected by the Company with
respect to any such action or determination.
4. Eligibility and Per-Person Limits . Employees of the
Company or any Subsidiary or Affiliate who are or may become
executive officers of the Company may be selected by the Committee
to participate in this Plan in a specified Performance Year;
except, however, that for purposes of this Section 4,
"Affiliate" shall not include BMS. The maximum Award Opportunity of
any individual Participant who is the Chief Executive Officer of
the Company during any part of a Performance Year shall be twenty
percent (20%) of the Award Pool for that Performance Year, and
for any other individual Participant shall be fifteen percent
(15%) of the Award Pool for that Performance Year, provided
that the aggregate of all Award Opportunities under this Plan for
any Performance Year may not exceed one-hundred percent
(100%) of the Award Pool.
5. Designation and Earning of Award Opportunities .
(a) Designation of Award Opportunities . The Committee
shall select employees to participate in the Plan and designate the
Performance Year of such participation. The Committee shall
designate, for each such Participant, the Award Opportunity such
Participant may earn for such Performance Year and any conditions
to the earning of such Award Opportunity or portions thereof (in
addition to the requirement that Pretax Earnings be achieved in
order to fund the Award Pool). Award Opportunities will be
denominated in cash and Awards will be payable in cash, except that
the Committee may denominate an Award Opportunity in shares of
common stock or equity awards based on common stock or provide for
payment of a cash-denominated Award Opportunity in the form of such
shares or equity awards if and to the extent that the shares or
equity awards are available under the Mead Johnson Nutrition
Company 2009 Stock Award and Incentive Plan (or a successor
thereto) and authorized for use hereunder in accordance with
applicable requirements of such other plan. Except for shares drawn
from such other plan, no shares of common stock are specifically
reserved for issuance under this Plan.
(b) Award Opportunities of Covered Employees . If the
Committee determines that an Award Opportunity to be granted to an
eligible person who is designated as a Covered Employee by the
Committee should qualify as performance based compensation for
purposes of Code Section 162(m), the Committee will specify
the Performance Year and the Participant’s Award Opportunity
no later than the date which is the earlier of (i) ninety
(90) days after the beginning of the applicable Performance
Year or (ii) the time twenty-five percent (25%) of such
Performance Year has elapsed. Any settlement or other event which
would change the form of
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payment from that originally specified shall be
implemented in a manner such that the Award does not, solely for
that reason, fail to qualify as performance-based compensation for
purposes of Code Section 162(m).
(c) Additional Participants and Award Opportunity
Designations During a Performance Year . At any time during a
Performance Year, the Committee may select a new employee or a
newly promoted employee to participate in the Plan for that
Performance Year and/or designate, for any such Participant, an
Award Opportunity (or additional Award Opportunity) for such
Performance Year or a different Performance Year. In determining
the amount of the Award Opportunity for such Participant under this
Section 5(c), the Committee, in its sole and absolute
discretion, may take into account the portion of the Performance
Year already elapsed, the performance achieved during such elapsed
portion of the Performance Year, and such other considerations as
the Committee may deem relevant.
(d) Determination of Award . During the year following
the Performance Year, within a reasonable time after the end of
each Performance Year and financial results for the Performance
Year have become available (but not later than March 15
th for any portion
of an Award for which the substantial risk of forfeiture lapsed
during the Performance Year), the Committee will determine the
extent to which the Award Pool is funded and Award Opportunities
for the Performance Year have been earned, and the Award for each
Participant for such Performance Year. The Committee may, in its
sole and absolute discretion, increase or reduce the amount of an
Award or cancel an Award, but may not exercise discretion to
increase any such amount payable to a Covered Employee in respect
of an Award that is intended to qualify as performance-based
compensation for purposes of Code Section 162(m) if such
increase would cause the amount payable under the related Award
Opportunity to exceed the amount actually earned based on Pretax
Earnings performance. Unless otherwise determined by the Committee
(or otherwise provided under a separate agreement, plan or policy
conferring rights on the Participant), the Award shall be deemed
earned and vested only at the time the Committee makes the
determination pursuant to this Section 5(d) with respect to a
Participant who remains employed by the Company or a Subsidiary or
Affiliate at th
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