Attached files
| file | filename |
|---|---|
| EX-32 - EXHIBIT 32 - BECTON DICKINSON & CO | ex3203312017.htm |
| EX-31 - EXHIBIT 31 - BECTON DICKINSON & CO | ex3103312017.htm |
| 10-Q - 10-Q - BECTON DICKINSON & CO | bdx0331201710-q.htm |
Exhibit 10.1
BECTON, DICKINSON AND COMPANY
PERFORMANCE INCENTIVE PLAN
AMENDED AND RESTATED AS OF JANUARY 24, 2017
PURPOSE
The purpose of the Performance Incentive Plan (the “Plan”) is to provide annual incentive payments to associates for their contribution to the Company’s successful financial performance and the accomplishment of strategic objectives.
NOTWITHSTANDING ANYTHING IN THIS PLAN TO THE CONTRARY, THE PAYMENT OF ANNUAL INCENTIVES, IF ANY, IS SOLELY WITHIN THE DISCRETION OF THE PERFORMANCE INCENTIVE COMMITTEE AND THE BOARD OF DIRECTORS, EXCEPT THAT PAYMENT IN EXCESS OF THE PLAN GUIDELINES WILL NOT BE MADE. NO EMPLOYEE HAS ANY VESTED RIGHT TO ANY SUCH PAYMENT.
PERFORMANCE INCENTIVE COMMITTEE
The Performance Incentive Committee will be responsible for administering this Plan. The Performance Incentive Committee will consist of no less than three persons, including the Chairman, Chief Executive Officer & President and such other senior executives as are designated from time to time by the Chairman, Chief Executive Officer & President.
ELIGIBILITY
Participation in any particular fiscal year is restricted to employees of the Company and its worldwide subsidiaries in Job Group 4 and above positions (other than those covered under other incentive plans or sales incentive plans) and other key management positions as may be approved by the Performance Incentive Committee. Current employees promoted to, and persons newly hired to, eligible positions during a particular fiscal year may be considered for a pro-rata bonus. Persons employed by companies acquired by the Company which have pre- existing incentive, profit sharing or similar programs will not participate in this Plan until and unless those plans are superseded by this Plan.
PARTICIPATION LEVELS
Plan targets for eligible employees are determined based upon the scope and responsibilities of the position.
INCENTIVE CALCULATION
Incentive payments shall be made under the Plan based upon total company, unit, region and individual performance, as measured against certain financial and strategic criteria and targets established from time to time by the Compensation and Management Development Committee of the Board of Directors (the “Compensation Committee”), or by the Chairman, Chief Executive Officer & President, as applicable.
Incentive payments made to a member of the Executive Group shall, if the Compensation Committee intends that such payment should constitute “qualified performance-based compensation” for purposes of Section 162(m) of the Internal Revenue Code of 1986 (the “Code”), be made in accordance with a pre-established formula, such that such payment is subject to the achievement during a performance period or periods, as determined by the Compensation Committee, of a level or levels, as determined by the Compensation Committee, of one or more of the following performance measures: (i) Return on Net Assets, (ii) Revenue Growth, (iii) Return on Common Equity, (iv) Total Shareholder Return, (v) Earnings Per Share, (vi) Net Revenue Per Employee, (vii) Market Share, (viii) Return on Invested Capital, or (ix) Net Income. Any such award of performance-based compensation granted to a member of the Executive Group pursuant to any such pre-established formula with respect to a fiscal year (a “Performance Award”) shall not exceed $3,000,000.
For purposes of this Plan:
“Earnings Per Share” shall mean earnings per share calculated in accordance with U.S. Generally Accepted Accounting Principles.
“Executive Group” shall mean every person who is expected by the Compensation Committee to be both (i) a “covered employee” as defined in Section 162(m) of the Code as of the end of the taxable year in which payment of the Award may be deducted by the Company, and (ii) the recipient of compensation of more than $1,000,000 for that taxable year.
“Market Share” shall mean the percent of sales of the total available market in an industry, product line or product attained by the Company or one of its business units during a time period.
“Net Income” shall mean net income calculated in accordance with U.S. Generally Accepted Accounting Principles.
“Net Revenue Per Employee” in a period shall mean net revenue divided by the average number of employees of the Company, with average defined as the sum of the number of employees at the beginning and ending of the period divided by two.
“Return On Common Equity” for a period shall mean net income less preferred stock dividends divided by total shareholders’ equity, less amounts, if any, attributable to preferred stock.
“Return on Invested Capital” for a period shall mean earnings before interest, taxes, depreciation and amortization divided by the difference of total assets less non-interest bearing current liabilities.
“Return On Net Assets” for a period shall mean net income less preferred stock dividends divided by the difference of average total assets less average non-debt liabilities, with average defined as the sum of assets or liabilities at the beginning and ending of the period divided by two.
“Revenue Growth” shall mean the percentage change in revenue (as defined in Statement of Financial Accounting Concepts No. 6, published by the Financial Accounting Standards Board) from one period to another.
“Total Shareholder Return” shall mean the sum of the appreciation in the Company’s stock price and dividends paid on the common stock of the Company over a given period of time.
The Compensation Committee or Board may not increase the amount of any Performance Award, or adjust the formula during the year, except to make adjustments for business dispositions or acquisitions, using adjustment factors that are specified in the terms of the Performance Award. The Compensation Committee reserves the right, however, in its discretion to make incentive awards to members of the Executive Group other than Performance Awards.
POOL FACTOR SCALES AND MULTIPLIERS
Funding levels for incentive payments shall be determined based on Company performance as measured against the corporate performance targets in accordance with the formula established on an annual basis by the Compensation Committee. Funding levels are adjusted both upwards (for performance above target) and downwards (for performance below target).
DETERMINATION OF INCENTIVE POOLS
(a) | Theoretical Incentive |
Following the close of each fiscal year, unit, region and function heads will be provided with a list of approved participants for whom that unit, region or function has, during the course of the prior fiscal year, accrued a hypothetical incentive pool at 100% of target.
(b) | Incentive Factors |
Following the close of each fiscal year, the Chairman, Chief Executive Officer & President in consultation with other members of the Performance Incentive Committee, and the Compensation Committee, as applicable, will determine the final incentive factors used to determine business modifiers for the fiscal year. The incentive pool for a unit, region or function is determined by applying the respective business modifier to the hypothetical accrued incentive pool.
Business modifiers will be established based on one or more of total company, unit and region incentive factors.
(c) | Communication |
The operating unit and performance results will be communicated throughout the organization.
(d) | Incentive Payment Recommendations |
Management will apply the final business modifiers to the individual incentive targets to develop the recommended incentive amounts. They will have discretion to recommend incentives that differ from these amounts; provided that no individual may receive an incentive payment in excess of 200% of the amount derived after the application of the business modifiers without the further approval of the Compensation Committee or designee; and provided further that no member of the Executive Group may receive an incentive payment in excess of the amount calculated pursuant to the pre-established formula established by the Compensation Committee, to the extent such payment is intended to constitute “qualified performance-based compensation” for purposes of Section 162(m) of the Code.
FINAL REVIEW AND APPROVAL
The recommendations for all incentive payments will be reviewed and approved by the unit, region and function heads for their respective areas of responsibility and Chairman, Chief Executive Officer & President for the Company. In the case of executive officers, recommendations will be subject to final review and approval by the Compensation Committee (and, in the case of the Chairman, Chief Executive Officer & President, the independent members of the Board of Directors).
(a) | Payment |
Incentives will generally be paid by January of the calendar year following the year in which they are awarded. Except in cases of death, disability or retirement, no incentive payments will be made to individuals who are not active employees on the final day of the fiscal year. Employees who are terminated for cause prior to the distribution date will forfeit their incentives.
Incentives awarded to any employee who dies prior to the distribution date may be made, at the discretion of management, to the survivors of the employee.
(b) | Exceptions |
Any recommendations for exceptions to the provisions of the Plan must be submitted to the Performance Incentive Committee for review and are subject to final approval by the Chairman, Chief Executive Officer & President. Any exceptions applicable to executive officers are further subject to approval by the Compensation Committee of the Board of Directors and the terms of this Plan.
RECOVERY OF INCENTIVE PAYMENTS
Any incentive payment approved under this Plan shall be subject to the terms of the Company’s Policy Regarding the Recovery of Compensation, effective May 20, 2008, as the same may be subsequently amended (the “Policy”); provided, that no amendment to the Policy shall adversely affect the rights of an employee with respect to any incentive payment that is approved in accordance with this Plan prior to such amendment.
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