EX-10.21 2 agnex102120141231.htm EXHIBIT 10.21 AGN EX 10.21 2014 12 31
EXHIBIT 10.21

2015 PERFORMANCE OBJECTIVES – CEO AND PRESIDENT
TARGET BONUS AS A PERCENTAGE OF BASE SALARY
The target bonus amount for the fiscal year ending December 31, 2015 (the “Plan Year”) for the Chief Executive Officer (“CEO”) of Allergan, Inc. (the “Company”) and the President of the Company that the CEO and the President may earn as a bonus for the Plan Year will be equal to an amount established separately by the Company’s Organization and Compensation Committee. The 2015 target bonus amounts for the CEO and the President are referred to herein individually as a “Target Bonus Amount” and collectively as the “Target Bonus Amounts.”
PERFORMANCE OBJECTIVES AND BONUS AMOUNT DETERMINATION
If the Company’s Adjusted EPS is greater than the Threshold EPS, the CEO and President will be eligible to receive a bonus based on the following three criteria: (i) Adjusted EPS, (ii) Net Sales Growth and (iii) R&D Reinvestment Rate. The bonus (if any) payable will be an amount determined by multiplying (i) the Target Bonus Amount by (ii) the Target Bonus Multiplier. In no event, however, will the CEO or President be eligible to receive all or any portion of such bonus if the Company’s Adjusted EPS does not exceed the Threshold EPS. For sake of clarity, if the Company’s performance exceeds any of the targets for Net Sales Growth and/or R&D Reinvestment Rate, but actual Adjusted EPS does not exceed the Threshold EPS, no bonus will be payable. Payment of the CEO’s and President’s performance bonus (if any) will be made in accordance with, and subject to, the terms of the Allergan, Inc. 2011 Executive Bonus Plan, as in effect on the date hereof (the “Plan”), including, without limitation, the provisions of Sections 2.4, 3.3 and 6.3 of the Plan.
For purposes of determining the CEO’s and President’s performance bonus, the following terms will have the following meanings:
“Adjusted EPS” means the Company’s Adjusted Net Earnings divided by the weighted average number of common shares outstanding on a diluted basis during the Plan Year, rounded to the third decimal place.
“Adjusted Net Earnings” means Non-GAAP net earnings attributable to Allergan, Inc. as furnished in the Company’s periodic reports of operating results. Non-GAAP net earnings represent net earnings attributable to Allergan, Inc. as calculated under generally accepted accounting principles in the United States (U.S. GAAP), adjusted to remove the effects of (i) extraordinary, unusual or non-recurring items; (ii) accounting changes required by U.S. GAAP; (iii) expenses for restructuring or productivity initiatives; (iv) integration and transaction costs associated with business combinations; (v) changes in the fair value of contingent consideration; (vi) amortization of acquired intangible assets; (vii) impairment of goodwill and intangible


2015 PERFORMANCE OBJECTIVES    ALLERGAN, INC.

assets; (viii) significant unusual legal settlement expenses or recoveries; (ix) any unrealized gains or losses on derivative instruments; (x) significant discrete income tax adjustments related to transactions in previously filed tax returns; (xi) items that are outside the scope of the Company’s core, ongoing business, and (xii) any income tax effects of any adjustments with respect to subclauses (i) through (xi).
“Net Sales Growth” means the percentage increase (if any) in net product sales for the Plan Year relative to net product sales for the fiscal year preceding the Plan Year, adjusted for the translation effect of changes in foreign exchange rates between each fiscal year, rounded to the nearest one-tenth of one percent.
“R&D Reinvestment Rate” means total research and development expenses for the Plan Year as a percentage of the Company’s total net sales for the Plan Year, adjusted for the translation effect of changes in foreign exchange rates between the Plan Year and the Company’s budgeted foreign exchange rates for the Plan Year, rounded to the nearest one-tenth of one percent.
“EPS Target” means an amount per share specified by the Organization and Compensation Committee at the time of adoption of these performance objectives.
“Target Bonus Multiplier” means the sum of the “Bonus % of Target” corresponding to: (a) the Company’s Adjusted EPS, (b) the Company’s Net Sales Growth, and (c) the Company’s R&D Reinvestment Rate, in each case as determined in accordance with Exhibit A.
“Threshold EPS” means the EPS Target, less $0.425.
METHOD OF BONUS PAYMENT
Payment of the CEO’s and President’s performance bonus (if any) will be made in cash up to the Target Bonus Amount. If the CEO’s and President’s performance bonus exceeds the Target Bonus Amount, such excess will be paid in the form of a restricted stock or restricted stock unit award granted under, and subject to the terms and conditions of, the Allergan, Inc. 2011 Incentive Award Plan, as amended from time to time, or its successor (the “2011 Incentive Award Plan”). The number of restricted shares or restricted stock units subject to such award will be determined by dividing (x) the portion of the CEO’s performance bonus that exceeds his or her Target Bonus Amount by (y) the closing trading price of the Company’s common stock on the date of grant, and rounding down to the next whole share. No cash payment will be made in lieu of any fractional share rounded down.
Any bonus amount payable to the CEO and President in the form of a restricted stock or restricted stock unit award will vest in a single installment upon the CEO’s and President’s completion of continuous employment with the Company through the earlier of (i) the second anniversary of the grant date of such award, or (ii) his or her Normal Retirement Eligibility Date


2015 PERFORMANCE OBJECTIVES    ALLERGAN, INC.

(as defined in 2011 Incentive Award Plan), except as otherwise provided in the award agreement (and accompanying documents) under which the restricted stock or restricted stock unit award is granted.


2015 PERFORMANCE OBJECTIVES    ALLERGAN, INC.


EXHIBIT A
TO
2015 PERFORMANCE OBJECTIVES – CEO AND PRESIDENT


Earnings Per Share
 
Net Sales Growth
 
R&D Reinvestment Rate
 
 
EPS
Range %
EPS
Range
Bonus %
of Target
 
Net Sales
Growth Variance to Target
Bonus %
of Target
 
R&D Rate Variance to Target
Bonus %
of Target
 
Bonus %
of Target
-4.8%
-$0.425
0.0%
 
 
 
 
 
 
 
0.0%
-2.6%
-$0.230
46.0%
 
-5.9%
0.0%
 
-0.9%
0.0%
 
46.0%
-2.2%
-$0.195
57.0%
 
-4.7%
2.0%
 
-0.7%
2.0%
 
61.0%
-1.4%
-$0.124
68.0%
 
-3.5%
4.0%
 
-0.5%
4.0%
 
76.0%
-1.1%
-$0.097
72.0%
 
-2.3%
6.0%
 
-0.3%
6.0%
 
84.0%
-0.6%
-$0.053
76.0%
 
-1.2%
8.0%
 
-0.2%
8.0%
 
92.0%
 
Target
80.0%
 
Target
10.0%
 
Target
10.0%
 
100.0%
1.0%
$0.089
84.0%
 
1.2%
13.8%
 
0.2%
13.8%
 
111.5%
1.9%
$0.168
88.0%
 
2.3%
17.5%
 
0.3%
17.5%
 
123.0%
2.6%
$0.230
92.0%
 
3.5%
21.3%
 
0.5%
21.3%
 
134.5%
3.2%
$0.283
96.0%
 
4.7%
25.0%
 
0.8%
25.0%
 
146.0%


If actual results for any one or more of the performance measures falls between the performance levels shown above, the “Bonus % of Target” for such performance measure(s) will be prorated accordingly. If the Company’s performance exceeds the highest performance level shown above for one or more of the specified performance measures (i.e., Adjusted EPS, Net Sales Growth, and R&D Reinvestment Rate), the “Bonus % of Target” achieved with respect to that performance measure will be the maximum “Bonus % of Target” specified for that performance measure.
Notwithstanding anything to the contrary above, if Adjusted EPS exceeds the threshold level but does not exceed the target level, the “Bonus % of Target” for each of the Net Sales Growth and R&D Reinvestment Rate components will not exceed the “Bonus % of Target” specified for those performance measures at the target level.
In no event will a bonus be payable in the event the Company’s Adjusted EPS does not exceed the Threshold EPS.