Exhibit 10.2
Warner Chilcott
Limited
Management Incentive
Plan
1.
Purpose . The purpose of this Management Incentive Plan (the
“ Plan ”) is to aid Warner Chilcott Limited, an
exempted Bermuda limited company or any successor or parent thereto
(the “ Company ”), in attracting, retaining,
motivating and rewarding key senior employees and executives of the
Company and the Group Companies, to provide for equitable and
competitive compensation opportunities, to recognize individual
contributions and reward achievement of Company goals.
2.
Administration. The Committee will have full power and
authority to construe, interpret and administer the Plan. All
decisions, actions or interpretations of the Committee will be
final, conclusive and binding upon all parties.
3.
Eligibility. Participants in the Plan will be selected by
the Committee from among the executive officers and senior managers
of the Company and the Group Companies who have the capability of
making a substantial contribution to the success of the Company. In
making this selection and in determining the form and amount of
awards, the Committee may consider any factors it deems relevant,
including, without limitation, the individuals’ functions,
responsibilities, value of services to the Company and past and
potential contributions to the Company’s profitability and
growth.
4. Term,
Amendment and Termination.
(a)
Term. The Plan will commence as of the Effective Date and,
subject to the terms of the Plan, will continue in full force and
effect until terminated by the Board.
(b)
Amendment and Termination. The Board reserves the right at
any time to amend, suspend or terminate the Plan in whole or in
part and for any reason and without the consent of any Participant
or Beneficiary; provided , that no such amendment will
adversely affect rights to receive any amount to which Participants
or Beneficiaries have become entitled prior to such
amendment.
5.
Awards
(a) Award
Denomination and Amount. An Award may be denominated and
computed based on a stated dollar amount or a percentage of the
annual base salary of the Participant receiving such Award. The
maximum aggregate amount that a Participant may earn in respect of
an Award or Awards granted in respect of any single fiscal year of
the Company is $5,000,000.
(b) Grant
of Awards and Establishment of Performance Goals. Awards will
be granted in respect of a designated Performance Period and will
be earned based on the achievement of Performance Goals over the
term of such Performance Period. The Performance Goals applicable
to an Award, which may vary among Participants, shall be based on
(i) one or more Business Criteria, (ii) personal
performance goals or (iii) a combination of one or more
Business Criteria and personal performance goals. With respect to
Awards to Named Executives intended to be Section 162(m)
Exempt Awards, the Performance Goals applicable to such awards
shall be established by the Committee in writing not later than 90
days after the beginning of the Performance Period applicable to
such Awards (or in the case of an Award granted with respect to
less than a full Performance Period, in accordance with the rules
applicable under Code Section 162(m)). With respect to other
Awards, the Performance Goals may be established in any manner
permitted by the Committee.
(c)
Determination and Payment of Final Award Amounts . With
respect to an Award to a Named Executive intended to be a
Section 162(m) Exempt Award, the Committee will, promptly
after the date on which the necessary financial or other
information for the relevant Performance Period becomes
available,
B-1
certify whether the Performance
Goals applicable to such Award have been achieved in the manner
required by Code Section 162(m). With respect to other Awards,
the determination of the achievement of the applicable Performance
Goals pertaining to such Awards may be established in any manner
permitted by the Committee. If the Performance Goals with respect
to an Award have been achieved, the Award will have been earned,
except that the Committee may, in its sole discretion, reduce the
amount of the Award to reflect the Committee’s assessment of
the Participant’s individual performance or for any other
reason, unless such reduction is explicitly prohibited under the
terms of the Award or the terms of a written agreement between the
Company (or a Group Company) and the relevant Participant.
Payments, if any, with respect to an Award shall generally be made
to the Participant within a reasonable period, not to exceed ninety
days, following the date of the final certification or
determination above, subject to Section 6.
(d)
Business Criteria . One or more of the following criteria
relating to the Company, a Group Company or a designated business
segment, business unit, division, business line or other
sub-category of the Company, a Group Company or their respective
businesses may be used by the Committee in establishing Performance
Goals for Awards: (i) revenues, (ii) expenses,
(iii) gross profit, (iv) operating income, (v) net
income, (vi) earnings per share, (vii) cash flow,
(viii) capital expenditures, (ix) working capital,
(x) economic value added, (xi) stock price per share,
(xii) market value, (xiii) enterprise value,
(xiv) book value, (xv) return on equity,
(xvi) return on book value, (xvii) return on invested
capital, (xviii) return on asset, (xix) capital
structure, (xx) return on investment, (xxi) utilization,
(xxii) cash net income, (xxiii) adjusted cash net income,
(xxiv) EBITDA and (xxv) adjusted EBITDA. The Performance
Goals relating to such criteria may be expressed as absolute
measures or measures relative to stated references, including,
without limitation, the achievements of one or more other
businesses or indices.
(e)
Adjustments. The Committee will have the authority to adjust
Performance Goals for any Performance Period as equitably
necessary, without enlarging or diminishing the Participants’
rights, in recognition of (i) extraordinary or nonrecurring
events experienced by the Company during the Performance Period,
(ii) changes in applicable accounting rules or principles or
changes in the Company’s methods of accounting during the
Performance Period or (iii) other corporate transactions or
events affecting Awards, including, without limitation, the
occurrence of a dividend or other distribution (other than an
ordinary dividend), whether in the form of cash, securities or
other property, recapitalization, stock split, reverse stock split,
reorganization, reclassification, merger, consolidation, split-up,
spin-off, combination, repurchase, exchange of shares or other
securities of the Company, issuance of warrants or other rights to
purchase shares or other securities of the Company; provided that
such adjustment is appropriate to prevent diminution or enlargement
of the benefits or potential benefits intended to be provided under
the Plan.
6.
Termination of Employment .
(a)
Without Cause, For Good Reason, Due to Death or Disability.
If, prior to the payment of amounts with respect to an Award
granted to a Participant, the Participant’s employment with
the Company is terminated by the Company without Cause, by the
Participant for Good Reason or due to the Participant’s death
or Disability, to the extent that the Performance Goals for the
Performance Period during which such termination occurred are
achieved and certified, the Participant (or, if applicable, the
Participant’s Beneficiary) will be paid a pro rata amount of
the Award that would have been earned and payable but for such
termination; provided, that, unless such reduction is e
