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TABLE OF CONTENTS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant x
Filed by a Party other than the Registrant ¨
Check the appropriate box:
| Filed by the Registrant | ||||||
Filed by a Party other than the Registranto | ||||||
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o | Preliminary Proxy Statement | |||||
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Definitive Proxy Statement | ||||||
Definitive Additional Materials | ||||||
Soliciting Material | ||||||
Bristol-Myers Squibb Company
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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| Bristol-Myers Squibb Company | ||||
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||
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ý | No fee | |||
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and | ||||
| (1) | Title of each class of securities to which transaction applies: | |||
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| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
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Fee paid previously with preliminary materials. | ||||
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | ||||
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March 20, 201219, 2014
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| NOTICE OF 2014 ANNUAL MEETING AND PROXY STATEMENT TUESDAY, MAY 6, 2014 AT 10:00 A.M. BRISTOL-MYERS SQUIBB COMPANY 777 SCUDDERS MILL RD. PLAINSBORO NEW JERSEY | DEARFELLOWS You are cordially invited to attend the Annual Meeting of Stockholders of Bristol-Myers Squibb Company at our offices located in Plainsboro, New Jersey, on Tuesday, May These materials include the Notice of Annual Meeting and the Proxy Statement. The Proxy Statement describes the business to be transacted at the meeting and provides other information about the company that you should know when you vote your shares. The principal business of the Annual Meeting will be: • the election of directors; • the ratification of the appointment of an independent registered public accounting firm; • an advisory vote to approve the compensation of our named executive officers; and •
proposal. We will also review the status of the Last year, over Please follow the instructions in the Proxy Statement on how to attend the Annual Meeting. Admission to the Annual Meeting will be by ticket only.Please bring photo identification. We have provided space on the proxy card for comments from our registered stockholders. We urge you to use it to let us know your feelings about BMS or to bring a particular matter to our attention. If you hold your shares through an intermediary or received the proxy materials electronically, please feel free to write directly to us. |
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JAMES M. CORNELIUS | LAMBERTO ANDREOTTI | |||||
| Chairman of the Board |
Chief Executive Officer |
345 Park Avenue
New York, New York 10154-0037
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
Notice is hereby given that the 20122014 Annual Meeting of Stockholders will be held at Bristol-Myers Squibb Company, 777 Scudders Mill Road, Plainsboro, New Jersey, on Tuesday, May 1, 2012,6, 2014, at 10:00 a.m. for the following purposes as set forth in the accompanying Proxy Statement:
2014;
to approve the company’s 2012 Stock Award and Incentive Plan;
Holders of record of our common and preferred stock at the close of business on March 9, 2012,14, 2014 will be entitled to vote at the meeting.
By Order of the Board of Directors
SANDRA LEUNG
General Counsel and Secretary
| By Order of the Board of Directors | ||
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| SANDRALEUNG General Counsel and Corporate Secretary |
Dated: March 20, 2012
19, 2014
YOUR VOTE IS IMPORTANT
Regardless of the number of shares you own, your vote is important. If you do not attend the Annual Meeting to vote in person, your vote will not be counted unless a proxy representing your shares is presented at the meeting. To ensure that your shares will be voted at the meeting, please vote in one of these ways:
| YOUR VOTE IS IMPORTANT | ||||||||
Regardless of the number of shares you own, your vote is important. If you do not attend the Annual Meeting to vote in person, your vote will not be counted unless a proxy representing your shares is presented at the meeting. To ensure that your shares will be voted at the meeting, please vote in one of these ways: | ||||||||
(1) | GO TO WWW.PROXYVOTE.COM and vote via the Internet; | |||||||
(2) | CALL THE TOLL-FREE TELEPHONE NUMBER (800) 690-6903 (this call is toll-free in the United States); or |
(3) | MARK, SIGN, DATE AND PROMPTLY RETURN the enclosed proxy card in the postage-paid envelope. | |||||||
If you do attend the Annual Meeting, you may revoke your proxy and vote by ballot. | ||||||||
If you do attend the Annual Meeting, you may revoke your proxy and vote by ballot.
PROXY STATEMENT
| Inside Back Cover | ||
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Why am I receiving these materials?
This Proxy Statement is being delivered to all stockholders of record as of the close of business on March 9, 201214, 2014 in connection with the solicitation of proxies on behalf of the Board of Directors for use at the Annual Meeting of Stockholders on May 1, 2012.6, 2014. We expect our proxy materials, including this Proxy Statement and the Annual Report, to be first made available to stockholders on or about March 20, 2012.19, 2014. Although the Annual Report and Proxy Statement are being delivered together, the Annual Report should not be deemed to be part of the Proxy Statement.
What is “Notice"Notice and Access”Access" and how does it affect me?
The U.S. Securities and Exchange Commission (SEC) has adopted a “Notice"Notice and Access”Access" model which permits us to provide proxy materials to our stockholders electronically by posting the proxy materials on a publicly accessible website. Delivering proxy materials electronically will conserve natural resources and save us money by reducing printing and mailing costs. Accordingly, we have sent to all stockholders who hold fewer than 5,000 sharesmost of our common and preferred stock and have not requested paper copies of our proxy materialsstockholders a “Notice"Notice of Internet Availability of Proxy Materials.”" This Notice provides instructions on how to access our proxy materials online and, if you prefer receiving a paper copy of the proxy materials, how you can request one. Employees and pension plan participants who have given consent to receive materials electronically received a link to access our proxy materials by email. If you hold 5,000 or more shares and have not previously elected to receive materials electronically or if you are a pension plan participant who did not provide consent to receive materials electronically, you were mailed a paper copy of the proxy materials. We encourage all of our stockholders who currently receive paper copies of the proxy materials to elect to view future proxy materials electronically if they have Internet access. You can do so by following the instructions when you vote your shares online or, if you are a beneficial holder, by asking your bank, broker or other holder of record how to receive proxy materials electronically.
What is “householding”"householding" and how does it work?
“Householding” "Householding" is a procedure we adopted whereby stockholders of record who have the same last name and address and who receive the proxy materials by mail will receive only one copy of the proxy materials unless we have received contrary instructions from one or more of the stockholders. This procedure reduces printing and mailing costs. If you wish to receive a separate copy of the proxy materials, now or in the future, at the same address, or if you are currently receiving multiple copies of the proxy materials at the same address and wish to receive a single copy, you may contact us by writing to Stockholder Services, Bristol-Myers Squibb Company, 345 Park Avenue, New York, New York 10154, or by calling us at (212) 546-3309.
If you are a beneficial owner (your shares are held in the name of a bank, broker or other holder of record), the bank, broker or other holder of record may deliver only one copy of the Proxy Statement and Annual Report, or Notice of Internet Availability of Proxy Materials, to stockholders who have the same address unless the bank, broker or other holder of record has received contrary instructions from one or more of the stockholders. If you wish to receive a separate copy of the Proxy Statement and Annual Report, or Notice of Internet Availability of Proxy Materials, now or in the future, you may contact us at the address or phone number above and we will promptly deliver a separate copy. Beneficial owners sharing an address who are currently receiving multiple copies of the Proxy Statement and Annual Report, or Notice of Internet Availability of Proxy Materials, and wish to receive a single copy in the future, should contact their bank, broker or other holder of record to request that only a single copy be delivered to all stockholders at the shared address in the future.
Who can attend the Annual Meeting?
Only stockholders of Bristol-Myers Squibb as of the record date, March 9, 2012,14, 2014, their authorized representatives and guests of Bristol-Myers Squibb may attend the Annual Meeting. Admission will be
by ticket only. A form of government-issued photograph identification will be required to enter the meeting. Large bags, backpacks, briefcases, cameras, recording equipment and other electronic devices will not be permitted in the meeting, and attendees will be subject to security inspections. Our
offices are wheelchair accessible. We will provide, upon request, wireless headsets for hearing amplification.
How do I receive an admission ticket?
If you are a registered stockholder (your shares are held in your name) and plan to attend the meeting, you should bring either the Notice of Internet Availability of Proxy Materials or the top portion of the proxy card, both of which will serve as your admission ticket.
If you are a beneficial owner (your shares are held in the name of a bank, broker or other holder of record) and plan to attend the meeting, you can obtain an admission ticket in advance by writing to Stockholder Services, Bristol-Myers Squibb Company, 345 Park Avenue, New York, New York 10154. Please be sure to enclose proof of ownership, such as a bank or brokerage account statement. Stockholders who do not obtain tickets in advance may obtain them upon verification of ownership at the Registration Desk on the day of the Annual Meeting.
We may also issue tickets to other individuals at our discretion.
All holders of record of our $0.10 par value common stock and $2.00 convertible preferred stock at the close of business on March 9, 201214, 2014 will be entitled to vote at the 20122014 Annual Meeting. Each share is entitled to one vote on each matter properly brought before the meeting.
How do I vote if I am a registered stockholder?
Proxies are solicited to give all stockholders who are entitled to vote on the matters that come before the meeting the opportunity to do so whether or not they attend the meeting in person. If you are a registered holder, you can vote your shares by proxy in one of the following manners:
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Choosing to vote via Internet or calling the toll-free number listed above will save us expense. In order to vote online or via telephone, have the voting form in hand and either call the number or go to the website and follow the instructions. If you vote via the Internet or by telephone, please do not return a signed proxy card.
If you received a paper copy of the proxy materials and choose to vote by mail, markspecify how you want your shares voted on each proposal by marking the appropriate boxes on the proxy card enclosed with the Proxy Statement, date and sign it, and mail it in the postage-paid envelope.
If you wish to vote in person, you can vote your shares in person at the Annual Meeting.
How do I specify how I want my shares voted?
If you are a registered stockholder, you can specify how you want your shares voted on each proposal by marking the appropriate boxes on the proxy card. The individuals named as proxies on the proxy card will vote your shares in accordance with your instructions. Please review the voting instructions and read the entire text of the proposals and the positions of the Board of Directors in the Proxy Statement prior to marking your vote.
If your proxy card is signed and returned without specifying a vote or an abstention on a proposal, it will be voted according to the recommendation of the Board of Directors on that proposal. That recommendation is shown for each proposal on the proxy card.
How do I vote if I am a beneficial stockholder?
If you are a beneficial stockholder, you have the right to direct your broker or nominee on how to vote the shares. You should complete a voting instruction card which your broker or nominee is obligated to provide you. If you wish to vote in person at the meeting, you must first obtain from the record holder a legal proxy issued in your name.
Under the rules of the New York Stock Exchange (NYSE), brokers that have not received voting instructions from their customers ten days prior to the meeting date may vote their customers’customers' shares in the brokers’brokers' discretion on the proposals regarding routine matters, which in most cases includes the ratification of the appointment of the independent registered public accounting firm.
Under NYSE rules, the election of directors, the advisory vote to approve the compensation of our named executive officers the approval of the 2012 Stock Award and Incentive Plan and the approval of any stockholder proposals are considered “non-discretionary”"non-discretionary" items, which means that your broker cannot vote your shares on these proposals.
What items will be voted upon at the Annual Meeting?
At the Annual Meeting, we will consider and act on the following items of business:
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We do not know of any other matter that may be brought before the meeting. However, if other matters are properly presented for action, it is the intention of the named proxies to vote on them according to their best judgment.
What are the Board of Directors’Directors' voting recommendations?
For the reasons set forth in more detail later in the Proxy Statement, our Board of Directors recommends a vote FOR the election of each director, FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2012,2014 and FOR the advisory vote to approve the compensation of our named executive officers,officers. The Board of Directors has decided not to take a position FOR or AGAINST the approvalstockholder proposal on simple majority vote.
How will my shares be voted at the Annual Meeting?
The individuals named as proxies on the proxy card will vote your shares in accordance with your instructions. Please review the voting instructions and read the entire text of the company’s 2012 Stock Awardproposals and Incentive Plan and AGAINST eachthe positions of the three stockholder proposals.Board of Directors in the Proxy Statement prior to marking your vote.
If your proxy card is signed and returned without specifying a vote or an abstention on a proposal, it will be voted according to the recommendation of the Board of Directors on that proposal. That recommendation is shown for each proposal on the proxy card. With respect to the shareholder proposal on simple majority vote, in the absence of voting instructions to the contrary, shares represented by validly executed proxies will be voted ABSTAIN.
How many votes are needed to elect the directors and to approve each of the proposals?
Director Elections: A majority of votes cast with respect to each director’sdirector's election at the meeting is required to elect each director. A majority of the votes cast means that the number of votes cast “for”"for" a director must exceed the number of votes cast “against”"against" that director in order for the director to be elected. Abstentions will not be counted as votes cast for or against the director and broker non-votes will have no effect on this proposal.
Ratification of our Auditors: The affirmative vote of a majority of our outstanding shares present in person or by proxy and entitled to vote on the matter is required for the ratification of the appointment of our independent registered public accounting firm. Abstentions will be counted as votes against this proposal. As described above, a broker or other nominee may generally vote on routine matters such as this one, and therefore no broker non-votes are expected to exist in connection with this proposal.
Advisory Vote: The affirmative vote of a majority of our outstanding shares present in person or by proxy and entitled to vote on the matter is required for the approval of the advisory vote to approve the compensation of our named executive officers. Because your vote is advisory, it will not be binding upon our Board of Directors. Abstentions will be counted as votes against this proposal and broker non-votes will have no effect on this proposal.
ApprovalTable of 2012 Stock Award and Incentive PlanContents
Stockholder Proposal: The affirmative vote of a majority of our outstanding shares present in person or by proxy and entitled to vote on the matter is required for the approval of the 2012 Stock Award and Incentive Plan.stockholder proposal, if presented at the meeting. Abstentions will be counted as votes against this proposal and broker non-votes will have no effect on this proposal.
Stockholder Proposals: The affirmative vote of a majority of our outstanding shares present in person or by proxy and entitled to vote on the matter is required for the approval of each of the three stockholder proposals, if presented at the meeting. Abstentions will be counted as votes against these items and broker non-votes will have no effect on these proposals.
How are the votes counted?
In accordance with the laws of Delaware, our Amended and Restated Certificate of Incorporation and our Bylaws, for all matters being submitted to a vote of stockholders, only proxies and ballots that indicate votes “FOR,” “AGAINST”"FOR," "AGAINST" or “ABSTAIN”"ABSTAIN" on the proposals, or that provide the designated proxies with the right to vote in their judgment and discretion on the proposals are counted to determine the number of shares present and entitled to vote. Broker non-votes are not counted as shares present and entitled to vote but will be counted for purposes of determining quorum (whether enough votes are present to hold the Annual Meeting).
Can I change my vote after I return the proxy card, or after voting by telephone or electronically?
If you are a stockholder of record, you can revoke your proxy at any time before it is voted at the meeting by taking one of the following three actions:
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If you are a beneficial owner of shares, you may submit new voting instructions by contacting your bank, broker or other holder of record. You may also vote in person at the Annual Meeting if you obtain a legal proxy.
All shares that have been properly voted and not revoked will be voted at the Annual Meeting.
If you wish to give your proxy to someone other than the persons named as proxies in the enclosed form of proxy, you may do so by crossing out the names of all three persons named as proxies on the proxy card and inserting the name of another person. The signed card must be presented at the meeting by the person you have designated on the proxy card.
An independent agent tabulates the proxies and the votes cast at the meeting. In addition, independent inspectors of election certify the results of the vote tabulation.
Yes, any information that identifies a stockholder or the particular vote of a stockholder is kept confidential.
Who will pay for the costs involved in the solicitation of proxies?
We will pay all costs of preparing, assembling, printing and distributing the proxy materials as well as the solicitation of all proxies. We have retained Georgeson Shareholder Communications Inc. to assist in soliciting proxies for a fee of $18,000, plus reasonable out-of-pocket expenses. We may solicit proxies on behalf of the Board of Directors through the mail, in person, electronically, and by telecommunications. We will, upon request, reimburse brokerage firms and others for their reasonable expenses incurred for forwarding solicitation material to beneficial owners of stock.
CORPORATE GOVERNANCE AND BOARD MATTERS
Our business is managed under the direction of our Board of Directors pursuant to the Delaware General Corporation Law and our Bylaws. The Board has responsibility for establishing broad corporate policies and for the overall performance of our company. The Board is kept advised of company business through regular written reports and analyses and discussions with the CEO and other officers of Bristol-Myers Squibb, by reviewing materials provided to them and by participating in Board and Board Committee meetings.
The Committee on Directors and Corporate Governance continually reviews corporate governance issues and is responsible for identifying and recommending the adoption of corporate governance initiatives. In addition, our Compensation and Management Development Committee regularly reviews compensation issues and recommends adoption of policies and procedures that strengthen our compensation practices. The Compensation Discussion and Analysis beginning on page 2827 discusses many of these policies and procedures.
Listed below are some of the significant corporate governance initiatives we have adopted:
Special Stockholder Meetings | • | Stockholders that hold 25% or more of our outstanding stock may call special meetings of stockholders. | ||||||||
| • | We amended our Amended and Restated Certificate of Incorporation to eliminate the sole supermajority provision applicable to common stockholders. | ||||||||
| • | Our directors are annually elected by our stockholders. | ||||||||
• | Our directors must receive a majority of the votes cast in uncontested elections to be elected. | |||||||||
• | We have a director resignation policy that requires a current director to tender his or her resignation to the Board if such director does not receive a majority of the votes cast. The Committee on Directors and Corporate Governance will recommend to the full Board whether to accept the resignation or whether to take other action. | |||||||||
| • | We do not currently have a stockholder rights plan (poison pill). | ||||||||
• | All stockholder rights plans must be approved by a minimum of two-thirds of the Board. | |||||||||
• | All stockholder rights plans must expire one year after Board adoption unless approved by our stockholders. | |||||||||
| • | We have adopted related party transaction policies and procedures that require the Committee on Directors and Corporate Governance to review and approve related party transactions. These policies and procedures are described in greater detail beginning on page |
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| Political Activities | • | We semi-annually disclose on our website all political contributions to political committees, parties or candidates on both state and federal levels that are made by our company or our employee political action committee. We also disclose the amount of our dues or other payments made to trade associations to which we give lobbying expenditures. | ||||||||
• | Our Committee on Directors and Corporate Governance provides oversight of our political | |||||||||
Director Retirement Policy | • | Non-employee directors, a director who is the Chief Executive Officer of the Company or a director who is a retired Chief Executive Officer of the Company must retire from the position of director at the Annual Meeting following attainment of age 75. | ||||||||
• | An employee who is a director of the Company (other than the Chief Executive Officer or a retired Chief Executive Officer) must retire from the position of director on the effective date of the director's retirement as an employee of the Company. |
The Board of Directors has adopted Corporate Governance Guidelines that govern its operation and that of its Committees. From time to time, our Board revises the Corporate Governance Guidelines in response to changing regulatory requirements, evolving best practices and the concerns of our stockholders and other constituents. Our Corporate Governance Guidelines may be viewed on our website at www.bms.com/ourcompany/governance.
Board’s
Board's Role in Strategic Planning and Risk Oversight
Our Board meets regularly to discuss the strategic direction and the issues and opportunities facing our company in light of trends and developments in the biopharmaceutical industry and general business environment. Our Board has been instrumental in determining our strategy to combine the best of biotechnology with pharmaceuticalsfurther evolve our business model to become a best-in-class next generationleading specialty biopharmaceutical company. Throughout the year, our Board provides guidance to management regarding our strategy and helps to refine our operating plans to implement our strategy. Each year, typically during the second quarter, the Board holds an extensive meeting with senior management dedicated to discussing and reviewing our long-term operating plans and overall corporate strategy. A discussion of key risks to the plans and strategy as well as risk mitigation plans and activities is led by our Chief Executive Officer as part of the meeting. The involvement of the Board in setting our business strategy is critical to the determination of the types and appropriate levels of risk undertaken by the company. As stated in our Corporate Governance Guidelines, our Board is responsible for risk oversight as part of its fiduciary duty of care to effectively monitor business operations. Our Board administers its risk oversight function as a whole and through its Board Committees. For example, the Audit Committee regularly discusses with management our policies and guidelines regarding risk assessment and risk management, as well as our major risk exposures, their potential financial impact on our company and our risk mitigation strategies. In addition, the Audit Committee participates in regular reviews of our process to assess and manage enterprise risk management, including those related to market/environmental, strategic, financial, operational, legal, compliance and reputational risks. In addition, each of the other standing Board committees (the Compensation and Management Development Committee, the Committee on Directors and Corporate Governance, and the Science and Technology Committee), regularly meet to discuss thetheir short-term and long-term objectives and to provide oversight for risks relating to the applicable committee’scommittee's areas of responsibility.
It is the policy of our Board that a substantial majority of its members be independent from management, and the Board has adopted independence standards that meet and in some areas exceed, the listing standards of the New York Stock Exchange. In accordance with our Corporate Governance Guidelines, our Board undertook its annual review of director independence. Our Board considered any and all commercial and charitable relationships of directors, including transactions and relationships between each director or any member of his or her immediate family and Bristol-Myers Squibb and its subsidiaries, which are described more fully below. Following the review, our Board determined, by applying the independence standards contained in the Corporate Governance Guidelines, that each of our directors and each director nominee for election at this Annual Meeting is independent of Bristol-Myers Squibb and its management in that none has a direct or indirect material relationship with our company, except for Lamberto Andreotti, James M. Cornelius and Elliott Sigal, M.D., Ph.D.Andreotti. Mr. Andreotti and Dr. Sigal areis not considered an independent directorsdirector because they arehe is currently employed by our company. In addition, Mr. Cornelius is not considered independent because of his previous employment, within the past three years, as Chief Executive Officer of our company.
In determining that each of Lewis B. Campbell, Louis J. Freeh,James M. Cornelius, Laurie H. Glimcher, M.D., Michael Grobstein, Alan J. Lacy, Thomas J. Lynch, Jr., M.D., Dinesh C. Paliwal, Vicki L. Sato, Ph.D., Gerald L. Storch and Togo D. West, Jr. and R. Sanders Williams, M.D. is independent, the Board considered the following relationships which were deemed immaterial under our categorical standards (see Exhibit A):
Additionally, in determining Dr. Williams’whether Mr. Cornelius and Mr. Grobstein meet the applicable independence standards, the Board considered certain payments made to, and certain payments received from, our former subsidiary Mead Johnson Nutrition Company. Mr. Cornelius serves as the Company’s relationship withnon-executive chairman of the board of directors of Mead Johnson and Mr. Grobstein began serving as a member of the board in February 2014. The J. David Gladstone Institutes (Gladstone), an independentBoard also considered payments we made to a private company where Mr. Cornelius serves in a non-paid board-advisory role and nonprofit biomedical-research organizationindirectly owns less than 2% of which Dr. Williams is President and Robert W. and Linda L. Mahley Distinguished Professor, which entered into a research collaboration agreement with the companycompany's common stock. In each case, we made payments to these companies that exceeded 2% of such company's consolidated gross revenue in December 2011. We made an upfront paymentat least one of $2 million to Gladstone in January 2012, and we agreed to fund specific research projects to identify and validate novel targets in Alzheimer’s disease.the last three years. The Board determined that Dr. Williams does not have a directnone of these relationships impairs Mr. Cornelius' or indirect material interest in these arrangements and thatMr. Grobstein's independence under the arrangements do not interfere with the exercise of his independent judgment. The Board will continue to monitor the company’s relationship with Gladstone when determining Dr. Williams’ independence in the future in accordance with ourNew York Stock Exchange's independence standards and applicable rules and regulations. A more detailed description of the transaction with Gladstone may be found under the heading “Related Party Transactions” on page 20 of this Proxy Statement.or otherwise.
On May 4, 2010, Mr. Cornelius retired as our CEO and became our Non-Executive Chairman and Mr. Andreotti became our new CEO. The company's governance documents provide the Board determined at that time that it waswith flexibility to select the appropriate to separateleadership structure for the roles ofcompany. They establish well-defined responsibilities with respect to the Chairman and Lead Independent Director roles, including the CEO in view ofrequirement that the completion of our transformation into a next generation biopharmaceutical company and Mr. Cornelius’ retirement as CEO. The Board has determined to maintainhave a Lead Independent Director if the Chairman is not an independent director. This information is set forth in more detail on our website at this time becausewww.bms.com/ourcompany/governance.
James M. Cornelius has served as our Non-Executive Chairman since his retirement as our CEO on May 4, 2010. For a three-year period after his retirement, Mr. Cornelius doeswas not considered to be an independent director under the independence standards set forth in our Corporate Governance Guidelines (which meet the listing standards of the New York Stock Exchange standards of independenceExchange) due to his prior service as Chief Executive Officer of the company. The independent directors have electedDuring that time, the Board determined that it was appropriate to maintain a Lead Independent Director and Lewis B. Campbell, the current Chair of the CompensationCommittee on Directors and Management Development Committee,Corporate Governance, was annually selected by the Board to serve as the Lead Independent Director. TheAs noted above, Mr. Cornelius is now independent. As such, the Board determined that a Lead Independent Director is selected annually byrole was no longer necessary or required under our Guidelines, and Mr. Campbell stepped down from that role and continues to serve as an independent director. We continue to separate the independent directors. The Lead Independent Director’s responsibilities include, among others, presiding atpositions of Chairman and CEO.
In making these Board leadership structure determinations, the meetingsBoard considered many factors, including the specific needs of independent directors, approving meeting agendas and meeting schedules, approving and advising the Chairman as to the quality, quantity and timeliness of information sent to the Board and serving as the principal liaison and facilitator between the independent directorsbusiness, our Corporate Governance Guidelines and the Chairman. A more detailed descriptionbest interests of our stockholders. The Board believes this structure will continue to provide an effective, high-functioning Board as well as appropriate safeguards and oversight. Our Board will continue to evaluate its leadership structure in light of changing circumstances and will evaluate the rolesBoard's leadership structure on at least an annual basis and responsibilities of the Lead Independent Director is available on our websitemake changes at www.bms.com/ourcompany/governance.such times as it deems appropriate.
Our Board meets on a regularly scheduled basis during the year to review significant developments affecting Bristol-Myers Squibb and to act on matters requiring Board approval. It also holds special meetings when important matters require Board action between scheduled meetings. Members of senior management regularly attend Board meetings to report on and discuss their areas of responsibility. In 2011,2013, the Board of Directors met 7 times. The average aggregate attendance of directors at Board and committee meetings was over 98%94%. No director attended fewer than 75% of the aggregate number of Board and committee meetings during the period he or she served.served, except that Mr. Paliwal attended three of the five (60%) Board and Committee on Directors and Corporate Governance meetings held since he joined the Board on July 1, 2013. Both of the meetings Mr. Paliwal missed were held on the same day and Mr. Paliwal had informed the company prior to joining the Board that he would be unable to attend these meetings due to a previously scheduled commitment. In addition, our independent directors met six times during 20112013 to discuss such topics as our independent directors determined, including the evaluation of the performance of our Chief Executive Officer. The Lead Independent Director's responsibilities include, among others, presiding at the meetings of independent directors and Mr. Campbell presided over these sessions while he served as our Lead Independent Director, presided over these sessions.
Annual Meeting of Stockholders
Directors are strongly encouraged, but not required, to attend the Annual Meeting of Stockholders. All of the 20122013 nominees for director who were on the Board at the time attended our 20112013 Annual Meeting of Stockholders.Stockholders except for Mr. Andreotti (who was attending to a family emergency) and Dr. Glimcher (who had a long-standing previous commitment).
Our Bylaws specifically provide for an Audit Committee, Compensation and Management Development Committee, and Committee on Directors and Corporate Governance, which are composed entirely of independent directors. Our Board of Directors has determined, in its judgment, that all members of the Audit Committee are financially literate and that all members of the Audit Committee meet additional, heightened independence criteria applicable to directors serving on audit committees under the New York Stock Exchange listing standards. In addition, our Board has determined that Messrs. Grobstein, Lacy and Storch each qualify as an “audit"audit committee financial expert”expert" under the applicable SEC rules.
Our Bylaws also authorize the establishment of additional committees of the Board and, under this authorization, our Board of Directors established the Science and Technology Committee. Our Board has appointed individuals from among its members to serve on these four committees and each committee operates under a written charter adopted by the Board, as amended from time to time. These charters are published on our website at www.bms.com/ourcompany/governance. Each of these Board committees has the necessary resources and authority to discharge its responsibilities, including the authority to retain consultants or experts to advise the committee.
On March 7, 2013, the Board established a Securities Issuance Committee to determine and approve the terms and provisions of securities issued by the company during the fourth quarter of 2013. The members of the Securities Issuance Committee were James M. Cornelius, Lamberto Andreotti and Lewis B. Campbell. The Securities Issuance Committee met once during 2013.
The table below indicates the current members of the Audit Committee, Compensation and Management Development Committee, Committee on Directors and Corporate Governance and Science and Technology Committee, the primary responsibilities of each committee and the number of meetings held in 2011:2013:
| Committee | Current Members | Primary Responsibilities | No. of Meetings | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Audit |
| Alan J. Lacy (Chair)
| • overseeing and monitoring the quality of our accounting and auditing practices; • appointing, compensating and providing oversight of the performance of our independent registered public accounting firm for the purpose of preparing or issuing audit reports and related work regarding our financial statements and the effectiveness of our internal control over financial reporting; • assisting the Board in fulfilling its responsibilities for general oversight of (i) compliance with legal and regulatory requirements, (ii) the performance of our internal audit function and (iii) risk assessment and risk management policies and guidelines; • reviewing our disclosure controls and procedures, including internal controls, periodic filings with the SEC, earnings releases and earnings guidance; • producing the required Audit Committee Report for inclusion in our Proxy Statement; and • overseeing investigations into complaints concerning financial or accounting matters. | ||||||||||||||||||||
| |||||||||||||||||
| Compensation and Management Development | Togo D. West, Jr. (Chair) Lewis B. Campbell
| • reviewing, approving and reporting to our Board on our major compensation and benefits plans, policies and programs; • annually reviewing and approving corporate goals and objectives relevant to CEO compensation, evaluating the • reviewing and evaluating the performance of senior management; approving the compensation of executive officers and certain senior management; • overseeing our management development programs, performance assessment of senior executives and succession planning; | 7 | ||||||||||||||
| Committee | Current Members | Primary Responsibilities | No. of Meetings | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
•
• establish and oversee our compensation recovery policy; and • reviewing incentive compensation programs to confirm incentive pay does not encourage unnecessary risk-taking. | |||||||||||||||||
| Directors and Corporate |
| Lewis B. Campbell
(Chair)
| • provide oversight of our corporate governance affairs and •
• considering questions of potential conflicts of interest of directors and senior management, including approving related party transactions; • evaluate and make recommendations to the Board concerning director independence; • defining specific categorical standards for director independence; • considering matters of corporate social and public responsibility and matters of significance in areas related to corporate public affairs and our employees and stockholders; • provide oversight of the company's political activities; • identifying individuals qualified to become Board members and recommending that our Board select the director nominees for the next annual meeting of stockholders; and • overseeing our | ||||||||||||||
| Science and Technology(2) | Vicki L. Sato, Ph.D. (Chair) Laurie H. Glimcher, M.D.
Francis Cuss, MB BChir, FRCP(3) | • reviewing and advising our Board on the strategic direction of our research and development (R&D) programs and our progress in achieving long-term R&D objectives; • reviewing and advising our Board on our internal and external investments in science and technology; and • identifying and discussing significant emerging trends and issues in science and technology and considering their potential impact on our company. | 4 | ||||||||||||||
|
Beginning on May 1, 2012,6, 2014, the members and chairs of the Board’sBoard's four committees will be as follows:
| Audit | Compensation and
| Directors and Corporate Governance | Science and Technology | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Alan J. Lacy (Chair)
| Togo D. West, Jr. (Chair)
| Lewis B. Campbell (Chair)
| Vicki L. Sato, Ph.D. (Chair)
Francis Cuss, MB BChir, FRCP | |||||||||||||||||||
Compensation Committee Interlocks and Insider Participation
There were no Compensation and Management Development Committee interlocks or insider (employee) participation in 2011.2013.
Risk Assessment of Compensation Policies and Practices
We annually conduct a worldwide review of our material compensation policies and practices. Based on this review, we have concluded that our material compensation policies and practices are not reasonably likely to have a material adverse effect on the company. As part of this process in 2011, in the interest of best practices, the Compensation and Management Development Committee requested that our internal auditors review our 2010 assessment, which confirmed our conclusion last year that our material compensation policies and practices were not reasonably likely to have had a material adverse effect on the company.
On a global basis, our compensation programs contain many design features that mitigate the likelihood of inducing excessive risk-taking behavior. These features include:
objectives and, newly added for 2014, pipeline performance;
Our Corporate Governance Guidelines contain Board membership criteria that apply to nominees for a position on our Board of Directors.Directors, including candidates recommended by stockholders in accordance with the procedures described below. Under these criteria, members of our Board should be persons of diverse backgrounds with broad experience in areas important to the operation of our company such as business, science, medicine, finance/accounting, law, business strategy, crisis management, corporate governance, education or government and should possess qualities reflecting integrity, independence, leadership, good business judgment, wisdom, an inquiring mind, vision, a proven record of accomplishment and an ability to work well with others. In addition, each director must represent the interestsThe Board believes that its membership should continue to reflect a diversity of all stockholders. We do not have a formal policy on Board diversity as it relates togender, race gender or national origin.and ethnicity.
Identification and Selection of Nominees for our Board
The Committee on Directors and Corporate Governance periodically assesses the appropriate size of our Board, and whether any vacancies on our Board are expected due to retirement or otherwise. In the event that vacancies are anticipated or otherwise arise, the Committee on Directors and Corporate Governance considers candidates for Board membership. Candidates may come to the attention of the Committee on Directors and Corporate Governance through current Board members, third-party search firms, management, stockholders or others. The Chair of the Committee on Directors and Corporate Governance, in consultation with the Chairman, conducts an initial evaluation of the prospective nominees against the established Board membership criteria discussed above. The Committee reviews the skills of the current directors and compares them to the particular skills of potential candidates, keeping in mind its commitment to maintain a Board with members of diverse experience.experience and background. Additional information relevant to the qualifications of prospective nominees may be requested from third-party search firms, other directors, management or other sources. After this initial evaluation, prospective nominees may be interviewed by telephone or in person by the Chair of the Committee on Directors and Corporate Governance, the Chairman, the Lead Independent Director and other directors.directors, as applicable. After completing this evaluation and interview, the Committee on Directors and Corporate Governance makes a recommendation to the full Board as to the persons who should be nominated by our Board, and the full Board determines the nominees after considering the recommendation and any additional information it may deem appropriate. Mr. Storch,Paliwal and Dr. Lynch, who joined the Board on July 1, 2013 and January 23, 2012, was1, 2014 respectively, were initially identified as a potential candidatecandidates for election to our Board by a third-party search firm retained by the Committee on Directors and Corporate Governance.
Stockholder Nominations for Director
The Committee on Directors and Corporate Governance considers and evaluates stockholder recommendations of nominees for election to our Board of Directors in the same manner as other director nominees. Stockholder recommendations must be accompanied by disclosure including written information about the recommended nominee’snominee's business experience and background with consent in writing signed by the recommended nominee that he or she is willing to be considered as a nominee and, if nominated and elected, he or she will serve as a director. Stockholders should send their written recommendations of nominees accompanied by the required documents to the principal executive offices of the company addressed to: Bristol-Myers Squibb Company, 345 Park Avenue, New York, New York 10154, attention: Corporate Secretary.
Our Board of Directors has nominated twelveeleven current directors, Lamberto Andreotti, Lewis B. Campbell, James M. Cornelius, Louis J. Freeh, Laurie H. Glimcher, M.D., Michael Grobstein, Alan J. Lacy, Thomas J. Lynch, Jr., M.D., Dinesh C. Paliwal, Vicki L. Sato, Ph.D., Elliott Sigal, M.D., Ph.D., Gerald L. Storch and Togo D. West, Jr. and R. Sanders Williams, M.D., to serve as directors of Bristol-Myers Squibb. The directors will hold office from election until the 20132015 Annual Meeting.
A majority of the votes cast is required to elect directors. Any current director who does not receive a majority of votes cast must tender his or her resignation as a director within 10 business days after the certification of the stockholder vote. The Committee on Directors and Corporate Governance, without participation by any director tendering his or her resignation, will consider the resignation offer and recommend to the Board whether to accept it. The Board, without participation by any director tendering his or her resignation, will act on the Committee’sCommittee's recommendation at its next regularly scheduled meeting to be held within 60 days after the certification of the stockholder vote. We will promptly disclose the Board’sBoard's decision and the reasons for that decision in a broadly disseminated press release that will also be furnished to the SEC on Form 8-K. If any nominee is unable to serve, proxies will be voted in favor of the remainder of those nominated and may be voted for substitute nominees, unless our Board of Directors provides for a lesser number of directors.
Listed below is certain biographical information of each of the nominees for election including his or her principal occupation, current directorships and directorships held during the past 5 years of public companies and registered investment advisors and other business affiliations. Also included is a description of the specific experience, qualifications, attributes and skills of each nominee that led the Board to conclude that each nominee is well-qualified to serve as a member of our Board of Directors.
| LAMBERTO ANDREOTTI Mr. Andreotti, age He is a member of Pharmaceutical Research and Manufacturers of America and The Business Council. With his Mr. Andreotti is a Director of E. I. du Pont de Nemours and Company. During the last 5 years, Mr. Andreotti was Vice Chairman of the Board of Directors of Mead Johnson Nutrition Company. | |
| LEWIS B. CAMPBELL Mr. Campbell, age Mr. Campbell served as our Lead Independent Director from February 2008 through March 2014. Mr. Campbell is a demonstrated leader with keen business understanding. With his Mr. Campbell is on the Board of Directors of Sensata Technologies Holding N.V. and the Board of Trustees of Noblis, Inc. During the last 5 years, Mr. Campbell was the Chairman of the Board of Directors of Textron Inc. and the Board of Navistar International Corporation. | |||
| JAMES M. CORNELIUS Mr. Cornelius, age Mr. Cornelius has been the principal strategist in the Mr. Cornelius is the Non-Executive Chairman of the Board of Directors of Mead Johnson Nutrition Group and Given Imaging Ltd. | |||
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Director since 1997 | LAURIE H. GLIMCHER, M.D. Dr. Glimcher, age
Dr. Glimcher is an internationally known immunologist and physician who brings a unique perspective to our Board on a variety of healthcare related issues. Her expertise in the immunology area and her extensive experience in the medical field position her well to serve as Additionally, her experience as the Dean of a major medical school positions her well to serve as a member of our Audit Committee. Dr. Glimcher is a Director of Waters Corporation. | |||
| MICHAEL GROBSTEIN Mr. Grobstein, age With over 30 years experience at a major auditing firm, Mr. Grobstein has extensive knowledge and background relating to accounting and financial reporting rules and regulations as well as the evaluation of financial results, internal controls and business processes. Mr. and Compensation and Management Development Committees. Mr. Grobstein is a Director of Mead Johnson Nutrition Company. During the last five years, Mr. Grobstein was a Director of Given Imaging Ltd. | ||
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| ALAN J. LACY Mr. Lacy, age Mr. Lacy is a highly respected business leader with a proven record of accomplishment. He brings to the Board extensive business understanding and demonstrated management expertise having served in key leadership positions at Sears Holdings Corporation, including Chief Executive Officer. In addition, his experience as a senior financial officer of three large public companies provides him with a comprehensive understanding of the complex financial, legal and our Committee on Directors and Corporate Governance. Mr. Lacy is a Director of The Hillman Companies, Inc. | |
| THOMAS J. LYNCH, JR., M.D. Dr. Lynch, age 53, has served as the Director of Yale Cancer Center and has been the Richard and Jonathan Sackler Professor of Internal Medicine, Yale Cancer Center, Yale School of Medicine since 2009. He has also served as the Physician-in-Chief of Smilow Cancer Hospital, Yale-New Haven since 2009. Prior to 2009, he served as Professor of Medicine at Harvard Medical School and Chief of Hematology/Oncology at Massachusetts General Hospital. Dr. Lynch is a member of the American Association for Cancer Research, the American Society of Clinical Oncology, and the International Association for the Study of Lung Cancer. He also serves as a Director on the boards of the Kenneth B. Schwartz Center for Compassionate Healthcare and the Pearlpoint Foundation and is a member of the Scientific Advisory Board of Arvinas, Inc. Dr. Lynch is an internationally recognized oncologist known for his leadership in the treatment of lung cancer with a special interest in personalized medicine. His experience as a practicing physician, administrator and clinical researcher position him well to serve as a member of our Science and Technology Committee. During the last 5 years, Dr. Lynch was a Director of Infinity Pharmaceuticals, Inc. | |
| DINESH C. PALIWAL Mr. Paliwal, age 56, has served as Executive Chairman, President and Chief Executive Officer of Harman International Industries, Inc., a company that designs, manufactures and markets a wide range of audio and information solutions for the automotive, consumer and professional market, since July 2008. Mr. Paliwal has served as President and Chief Executive Officer of Harman since July 2007. Prior to joining Harman, Mr. Paliwal served as a member of the Group Executive Committee of ABB Ltd., a provider of industrial automation, power transmission systems and services, from January 2001 until June 2007. Mr. Paliwal also served as President of Global Markets and Technology of ABB Ltd. from January 2006 until June 2007, as Chairman and Chief Executive Officer of ABB North America from January 2004 until June 2007, and as President and Chief Executive Officer of ABB Automation Technologies Division from October 2002 to December 2005. Mr. Paliwal is a member of the CEO Business Roundtable. Mr. Paliwal brings to the Board extensive leadership, business and governance experience having served as a public company chief executive officer and a senior executive officer of various divisions of a multinational corporation. His engineering and financial background, together with his worldwide experience, particularly in emerging markets, provide him with a heightened understanding of the complex issues which arise in the global marketplace. In addition, Mr. Paliwal's service on the nominating and governance committee of another public company positions him well to serve as a member of our Committee on Directors and Corporate Governance. During the last 5 years, he was a Director of ADT Corporation and Tyco International, Ltd. | |||
| VICKI L. SATO, PH.D. Dr. Sato, age Dr. Dr. Sato is a Director of PerkinElmer Corporation, Galapagos NV and | |||
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| GERALD L. STORCH Mr. Storch, age Fanatics, Inc. A retail veteran with more than 20 years of experience, Mr. Storch provides the Board with valuable business, leadership and management insight, including expertise leading an organization with global operations, giving him a keen understanding of the issues facing a multinational business. These qualities make him a valued member of our Audit Committee. Additionally, his prior service on the compensation committee of another public company positions him well to serve as a Mr. Storch is the Non-Executive Chairman of the Board of Directors of Supervalu, Inc. | |||
| TOGO D. WEST, JR. Secretary West, age Secretary Secretary West is a Director of FuelCell Energy, Inc. and Krispy Kreme Doughnuts, Inc. During the last 5 years, he was a Director of AbitibiBowater Inc. | |||
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Communications with our Board of Directors
The Committee on Directors and Corporate Governance has created a process by which an interested party may communicate directly with our non-management directors. Any interested party wishing to contact aour non-management directordirectors may do so in writing by sending a letter to:
[Name of Director]
c/o Corporate Secretary,
Bristol-Myers Squibb Company,
345 Park Avenue,
New York, NY 1015410154.
Any matter relating to our financial statements, accounting practices or internal controls should be addressed to the Chair of the Audit Committee. All other matters should be addressed to the Chair of the Committee on Directors and Corporate Governance. Our Corporate Secretary reviews all correspondence and regularlyperiodically forwards to our Board a summary of all such correspondence and copies of all correspondence that, in the opinion of our Corporate Secretary, deals with the functions of our Board or its committees, or that our Corporate Secretary otherwise determines requires Board attention. Directors may at any time review a log of the correspondence we receive that is addressed to members of the Board and request copies of any such correspondence.
Our Board of Directors has adopted the Standards of Business Conduct and Ethics that sets forth important company policies and procedures in conducting our business in a legal, ethical and responsible manner. These standards are applicable to all of our employees, including the Chief Executive Officer, the Chief Financial Officer and the Controller. In addition, the Audit Committee has adopted the Code of Ethics for Senior Financial Officers that supplements the Standards of Business Conduct and Ethics by providing more specific requirements and guidance on certain topics. The Code of Ethics for Senior Financial Officers applies to the Chief Executive Officer, the Chief Financial Officer,
the Controller, the Treasurer and the heads of major operating units. Our Board has also adopted the Code of Business Conduct and Ethics for Directors that applies to all directors and sets forth guidance with respect to recognizing and handling areas of ethical issues. The Standards of Business Conduct and Ethics, the Code of Ethics for Senior Financial Officers and the Code of Business Conduct and Ethics for Directors are available on our website at www.bms.com/ourcompany/governance. We will post any substantive amendments to, or waivers from, applicable provisions of our Standards of Business Conduct and Ethics, our Code of Ethics for Senior Financial Officers, and our Code of Business Conduct and Ethics for Directors on our website at www.bms.com/ourcompany/governance within two days following the date of such amendment or waiver.
Employees are required to report any conduct they believe in good faith to be an actual or apparent violation of our Codes of Conduct. In addition, as required under the Sarbanes-Oxley Act of 2002, the Audit Committee has established procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by company employees of concerns regarding questionable accounting or auditing matters.
The Board has adopted written policies and procedures for the review and approval of transactions involving the company and related parties, such as directors, executive officers and their immediate family members. The policy covers any transaction or series of transactions (an “interested transaction”"interested transaction") in which the amount involved exceeds $120,000, the company is a participant, and a related party has a direct or indirect material interest (other than solely as a result of being a director or less than 10 percent beneficial owner of another entity). All interested transactions are subject to approval or ratification in accordance with the following procedures:
The As disclosed in our proxy statements for our 2012 and 2013 Annual Meetings, the Chair of theour Committee on Directors and Corporate Governance, in consultation with the General Counsel, has approved the following related party transaction in accordance2011 with our policy and Bylaws,former director R. Sanders Williams, M.D., which approval will be submitted towas subsequently ratified by the Committee for ratification at its next meetingin 2012 (with Dr. Williams recusing himself from that portion of the meeting):, in accordance with our policy and Bylaws:
Additionally, as disclosed in our proxy statement for our 2013 Annual Meeting, the following related party transaction with our former director Louis J. Freeh was deemed to be pre-approved in accordance with our policy and Bylaws:
Pepper Hamilton in 2012 and approximately $5.5 million in 2013. Mr. Freeh did not initiate or negotiate the services provided by Pepper Hamilton and the relationship with Pepper Hamilton was entered into in the ordinary course of business prior to Mr. Freeh becoming a partner of the firm. In February 2013, Mr. Freeh was named Chair of Pepper Hamilton.
Availability of Corporate Governance Documents
Our Corporate Governance Guidelines (including the standards of director independence), Standards of Business Conduct and Ethics, Code of Ethics for Senior Financial Officers, Code of Business Conduct and Ethics for Directors, additional policies and guidelines, committee charters and links to Reports of Insider Transactions are available on our corporate governance webpage at www.bms.com/ourcompany/governance and are available to any interested party who requests them by writing to: Corporate Secretary, Bristol-Myers Squibb Company, 345 Park Avenue, New York, New York 10154.
20112013 Director Compensation Program
We aim to provide a competitive compensation program to attract and retain high quality directors. The Committee on Directors and Corporate Governance annually reviews our directors’directors' compensation practices and compares them against the practices of the companies in our peer group. The Committee submits its recommendations for director compensation to the full Board for approval. Mr. Andreotti and Dr. SigalOur employee directors do not receive any additional compensation for serving as directors.
Management has In 2012, management engaged an outside consultant, Frederic W. Cook & Co., Inc. (FWC), to review market data and competitive information on director compensation. Consistent with our desire to attract and retain highly skilled and experienced directors, the Committee on Directors and Corporate Governance, in consultation with FWC, determined that it was appropriate to target director compensation at the median of the companies in our peer group for 2011. In December 2010, when the directors approved the 2011 compensation for directors, the2013. The following companies were in our peer group: Abbott Laboratories (prior to AbbVie Inc. separation), Amgen Inc., Biogen Idec Inc., Eli Lilly & Co., Genzyme Corporation, Gilead Sciences Inc., Johnson & Johnson, Merck & Co. and Pfizer, Inc. As further described below, our director compensation program in 20112013 was positioned belowat the 25th percentile.median. The Committee believes the total compensation package for directors we offered in 20112013 was reasonable, and appropriately aligned the interests of directors to stockholders by ensuring directors have a proprietary stake in our company.
The components of our standard non-management directors’directors' compensation for 20112013 were as follows:
Cash Compensation
In 2011,2013, our non-management directors were entitled to receive the following cash compensation:
$90,000;
In addition, the Lead Independent Director received an annual cash retainer of $30,000.
Deferral Program
A non-management director may elect to defer payment of all or part of the cash compensation received as a director under our company’scompany's 1987 Deferred Compensation Plan for Non-Employee Directors. The election to defer is made in the year preceding the calendar year in which the compensation is earned. Deferred funds may be credited to one or more of the following funds: a 6-month United States Treasury bill equivalent fund, a fund based on the return on the company’scompany's invested cash or a fund based on the return on our common stock. Deferred portions are payable in a lump sum or in a maximum of ten annual installments. Payments under the Plan begin when a participant ceases to be a director or at a future date previously specified by the director.
Equity Compensation
Under the 1987 Deferred Compensation Plan for Non-Employee Directors, on On February 1, 2011,2013, all non-management directors serving on the Board at that time received an annual award of deferred common share units valued at $125,000.$160,000 under the 1987 Deferred Compensation Plan for Non-Employee Directors. These deferred common share units are non-forfeitable at grant and are settleable solely in shares of company common stock. A new member of the Board who is eligible to participate in the Plan receives, on the date the Director joins the Board, a pro-rata number of deferred common share units based on the number of share units payable to participants as of the prior February 1.
Share Retention Requirements
All non-management directors are required to acquire at least $300,000 worth of BMS shares and/or share units within three years of joining the Board and to maintain this ownership level throughout their service as a director. We requiredrequire that at least 25% of the annual retainer be deferred and credited to a deferred compensation account, the value of which is determined by the value of our common stock, until a non-management director has attained our share retention requirements. All of our current directors, except for Mr. Storch who joined the Board on January 23, 2012, have met our share retention requirements.
Charitable Contribution Programs
Each director who joined the Board prior to December 2009 participates in our Directors’Directors' Charitable Contribution Program. Upon the death of a director, we will donate up to an aggregate of $500,000 to up to five qualifying charitable organizations designated by the director. Individual directors derive no financial or tax benefit from this program since the tax benefit of all charitable deductions relating to the contributions accrues solely to us. In December 2009, the Board eliminated the Charitable Contributions Program for all new directors.
Each Also, each director was also able to participate in our company-wide matching gift program in 2011, other than Mr. Storch who joined the Board on January 23, 2012.2013. We matched dollar for dollar a director’sdirector's contribution to qualified charitable and educational organizations up to $20,000.$30,000. This benefit was also available to all company employees. In 2011,2013, each of the following directors participated in our matching gift programs as indicated in the Director Compensation Table below: Messrs. Campbell, Cornelius, Freeh, Grobstein, and Lacy and Drs. Glimcher, SatoWest and Dr. Williams.
Compensation of the Non-Executive Chairman
On May 4, 2010, Mr. Cornelius retired as our CEO and became our Non-Executive Chairman of the Board. As Non-Executive Chairman, Mr. Cornelius has significantly greater responsibilities than other directors, including chairing the Office of the Chairman to meet on a regular basis with the CEO on the most critical strategic issues and transactions, serving as a liaison between the CEO and the independent directors, frequently discussing the strategy and direction of the company with senior management, and serving as a non-voting member, ex-officio, of the Audit Committee, Committee on Directors and Corporate Governance and the Compensation and Management Development Committee. In addition to the standard Board compensation that all non-employee directors receive, Mr. Cornelius receives an annual Non-Executive Chairman retainer of $200,000, paid quarterly, of which 50% is paid in cash and 50% in shares of company common stock.
20122014 Director Compensation
In December 2011,2013, the Committee on Directors and Corporate Governance reviewedengaged FWC to review market data and otherprepare analyses prepared by FWC that compared our director compensation program against the sameour peer group used in 2010 other than Genzyme Corporation, which was acquired by Sanofi-Aventis SA in 2011.group. The companies in this peer group are the same as the companies in the primary peer group that will be used for evaluating 2014 executive compensation purposes and are listed on page 32. Our director compensation program in 20112013 was positioned belowat the 25th percentile. FWC recommendedmedian for the executive compensation peer group. Based on this analysis and FWC's recommendation in January 2014 that the directorsno changes need to be positioned at median amongst our peers. Therefore,made to bring our directorthe compensation program to median, FWC recommended, and the Board approved, effective January 1, 2012, increasing the annual grant of deferred share units tofor our non-employee directors to $140,000 in value.2014, the Committee determined that no changes were necessary at that time.
Director Compensation Table
The following table sets forth information regarding the compensation earned by our non-employee directors in 2011. Mr. Storch,2013. Dr. Lynch, who joined theour board inon January 2012,1, 2014, did not receive any compensation for 2011.2013.
Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Option Awards(3) | All Other Compensation(4) | Total | ||||||||||||||||||||
L. B. Campbell | $ | 162,500 | $ | 125,000 | $ | 0 | $ | 20,000 | $ | 307,500 | |||||||||||||||
J. M. Cornelius(5) | $ | 185,000 | $ | 225,000 | $ | 0 | $ | 20,000 | $ | 430,000 | |||||||||||||||
L. J. Freeh | $ | 125,000 | $ | 125,000 | $ | 0 | $ | 20,000 | $ | 270,000 | |||||||||||||||
L. H. Glimcher, M.D. | $ | 132,500 | $ | 125,000 | $ | 0 | $ | 2,000 | $ | 259,500 | |||||||||||||||
M. Grobstein | $ | 125,000 | $ | 125,000 | $ | 0 | $ | 16,000 | $ | 266,000 | |||||||||||||||
L. Johansson(6) | $ | 86,250 | $ | 125,000 | $ | 0 | $ | 0 | $ | 211,250 | |||||||||||||||
A. J. Lacy | $ | 107,500 | $ | 125,000 | $ | 0 | $ | 20,000 | $ | 252,500 | |||||||||||||||
V. L. Sato, Ph.D. | $ | 115,000 | $ | 125,000 | $ | 0 | $ | 20,000 | $ | 260,000 | |||||||||||||||
T. D. West, Jr. | $ | 107,500 | $ | 125,000 | $ | 0 | $ | 0 | $ | 232,500 | |||||||||||||||
R. S. Williams, M.D. | $ | 107,500 | $ | 125,000 | $ | 0 | $ | 16,400 | $ | 248,900 | |||||||||||||||
Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Option Awards(3) | All Other Compensation(4) | Total | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
L. B. Campbell | $ | 160,000 | $ | 160,000 | $ | 0 | $ | 30,000 | $ | 350,000 | ||||||
J. M. Cornelius(5) | $ | 190,000 | $ | 260,000 | $ | 0 | $ | 30,000 | $ | 480,000 | ||||||
L. J. Freeh(6) | $ | 17,823 | $ | 160,000 | $ | 0 | $ | 30,000 | $ | 207,823 | ||||||
L. H. Glimcher, M.D. | $ | 120,000 | $ | 160,000 | $ | 0 | $ | 0 | $ | 280,000 | ||||||
M. Grobstein | $ | 120,000 | $ | 160,000 | $ | 0 | $ | 30,000 | $ | 310,000 | ||||||
A. J. Lacy | $ | 122,500 | $ | 160,000 | $ | 0 | $ | 30,000 | $ | 312,500 | ||||||
D. C. Paliwal(7) | $ | 48,750 | $ | 93,336 | $ | 0 | $ | 0 | $ | 142,086 | ||||||
V. L. Sato, Ph.D. | $ | 130,000 | $ | 160,000 | $ | 0 | $ | 0 | $ | 290,000 | ||||||
G. L. Storch | $ | 120,000 | $ | 160,000 | $ | 0 | $ | 0 | $ | 280,000 | ||||||
T. D. West, Jr. | $ | 122,500 | $ | 160,000 | $ | 0 | $ | 15,000 | $ | 297,500 | ||||||
R. S. Williams, M.D.(8) | $ | 36,753 | $ | 160,000 | $ | 0 | $ | 30,000 | $ | 226,753 | ||||||
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Name | Dollar Amount Deferred | Percentage of Deferred Amount Allocated to U.S. Treasury Bill Fund | Percentage of Deferred Amount Allocated to Deferred Share Units | Number of Deferred Share Units Acquired | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
L. H. Glimcher, M.D. | $ | 120,000 | 100 | % | 0 | % | 0 | ||||||
M. Grobstein | $ | 60,000 | 0 | % | 100 | % | 1,303 | ||||||
D. C. Paliwal | $ | 48,750 | 0 | % | 50 | % | 989 | ||||||
G. L. Storch | $ | 120,000 | 0 | % | 100 | % | 2,606 | ||||||
Name | Dollar Amount Deferred | Percentage of Deferred Amount Allocated to Deferred Share Units | Number of Deferred Share Units Acquired | ||||||||||||
M. Grobstein | $ | 31,250.00 | 100 | % | 1,037 | ||||||||||
T. D. West, Jr. | $ | 26,875.00 | 100 | % | 892 | ||||||||||
deferred share units held by each of these directors as of December 31, 2013 is set forth below. In some cases, these figures include deferred share units acquired through elective deferrals of cash compensation.
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J. M. Cornelius | 24,148 | |||
L. H. Glimcher, M.D. | 74,917 | |||
M. Grobstein | 46,804 | |||
A. J. Lacy | 37,338 | |||
D. C. Paliwal | 3,076 | |||
V. L. Sato, Ph.D. | 39,411 | |||
G. L. Storch | 15,042 | |||
T. D. West, Jr. | 34,936 | |||
R. S. Williams, M.D. | 47,283 | |||
Name | # of Stock Options | ||||
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L. B. Campbell | |||||
| 5,000 | ||||
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Award Date | Value | Fair Market Value | Shares of Common Stock Acquired | |||||||
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3/31/2013 | $ | 25,000 | $ | 41.19 | 606 | |||||
6/30/2013 | $ | 25,000 | $ | 44.69 | 559 | |||||
9/30/2013 | $ | 25,000 | $ | 46.28 | 540 | |||||
12/31/2013 | $ | 25,000 | $ | 53.15 | 470 | |||||
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Award Date | Value | Fair Market Value | Shares of Common Stock Acquired | ||||||||||||
3/31/2011 | $ | 25,000 | $26.43 | 945 | |||||||||||
6/30/2011 | $ | 25,000 | $28.96 | 863 | |||||||||||
9/30/2011 | $ | 25,000 | $31.38 | 796 | |||||||||||
12/31/2011 | $ | 25,000 | $35.24 | 709 | |||||||||||
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VOTING SECURITIES AND PRINCIPAL HOLDERS
At the close of business on March 9, 2012,14, 2014, there were 1,687,521,2621,656,972,493 shares of $0.10 par value common stock and 5,2424,342 shares of $2.00 convertible preferred stock outstanding and entitled to vote.
Common Stock Ownership by Directors and Executive Officers
The following table sets forth, as of February 28, 2012,March 12, 2014, beneficial ownership of shares of our common stock by each director, each of the named executive officers and all directors and executive officers as a group. Shares are beneficially owned when an individual has voting and/or investment power over the shares or could obtain voting and/or investment power over the shares within 60 days. Voting power includes the power to direct the voting of the shares and investment power includes the power to direct the disposition of the shares. Unless otherwise noted, shares listed below are owned directly or indirectly with sole voting and investment power. None of our directors and executive officers, individually or as a group, beneficially owns greater than 1% of our outstanding shares of common or preferred stock.
Name | Bristol-Myers Squibb Company | |||||||||||
| Total Common Shares Owned(1) | Common Shares Underlying Options or Stock Units(2) | Common Shares Underlying Deferred Share Units(3) | ||||||||||
L. Andreotti | 2,158,884 | 1,886,772 | 0 | |||||||||
C. A. Bancroft | 275,780 | 231,211 | 0 | |||||||||
L. B. Campbell | 42,652 | 14,500 | 26,042 | |||||||||
B. Cazala | 743,776 | 591,682 | 0 | |||||||||
J. M. Cornelius | 3,214,713 | 2,202,092 | 18,488 | |||||||||
L. J. Freeh | 37,405 | 2,500 | 34,905 | |||||||||
L. H. Glimcher, M.D. | 80,684 | 14,500 | 66,184 | |||||||||
M. Grobstein | 40,712 | 0 | 37,329 | |||||||||
A. C. Hooper | 318,262 | 96,194 | 0 | |||||||||
A. J. Lacy | 33,185 | 0 | 30,880 | |||||||||
S. Leung | 747,129 | 649,808 | 0 | |||||||||
V. L. Sato, Ph.D. | 32,828 | 0 | 32,828 | |||||||||
E. Sigal, M.D., Ph.D. | 1,467,980 | 1,236,730 | 23,777 | |||||||||
G. L. Storch | 4,313 | 0 | 4,313 | |||||||||
T. D. West, Jr. | 28,623 | 0 | 28,623 | |||||||||
R. S. Williams, M.D. | 42,786 | 0 | 42,286 | |||||||||
All Directors and Executive Officers as a Group(4) | 10,829,841 | 8,351,222 | 345,656 | |||||||||
| | Bristol-Myers Squibb Company | |||||||||
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Name | Total Common Shares Owned(1) | Common Shares Underlying Options or Stock Units(2) | Common Shares Underlying Deferred Share Units(3) | |||||||
L. Andreotti | 2,099,304 | 1,450,825 | 0 | |||||||
C. Bancroft | 277,127 | 112,942 | 0 | |||||||
G. Caforio, M.D. | 138,026 | 70,580 | 0 | |||||||
L. B. Campbell | 42,725 | 5,000 | 35,615 | |||||||
B. Cazala(4) | 254,965 | 0 | 0 | |||||||
J. M. Cornelius | 1,335,908 | 1,035,000 | 27,515 | |||||||
F. Cuss, MB BChir, FRCP | 416,123 | 177,677 | 0 | |||||||
L. H. Glimcher, M.D. | 78,655 | 0 | 78,655 | |||||||
M. Grobstein | 53,720 | 0 | 50,337 | |||||||
A. J. Lacy | 43,107 | 0 | 40,802 | |||||||
S. Leung | 838,262 | 572,135 | 0 | |||||||
T. J. Lynch, Jr, M.D. | 3,447 | 0 | 3,447 | |||||||
D. C. Paliwal | 6,290 | 0 | 6,290 | |||||||
V. L. Sato, Ph.D. | 42,890 | 0 | 42,890 | |||||||
E. Sigal, M.D., Ph.D.(5) | 231,263 | 101,478 | 0 | |||||||
G. L. Storch | 18,344 | 0 | 18,344 | |||||||
T. D. West, Jr. | 38,382 | 0 | 38,382 | |||||||
All Directors and Executive Officers as a Group(6) | 6,638,300 | 3,867,738 | 342,278 | |||||||
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Principal Holders of Voting Securities
The following table sets forth information regarding beneficial owners of more than 5 percent of the outstanding shares of our common stock. There are no beneficial owners of more than 5 percent of the outstanding shares of our preferred stock.
Name | Number of Shares Beneficially Owned | Percent of Class | ||||||||
Capital World Investors 333 South Hope Street Los Angeles, CA 90071 | 153,908,560 | (1) | 9.1 | %(1) | ||||||
BlackRock, Inc. 40 East 52nd Street New York, NY 10022 | 113,142,060 | (2) | 6.7 | %(2) | ||||||
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Name | Number of Shares Beneficially Owned | Percent of Class | | |||||
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| Capital World Investors 333 South Hope Street Los Angeles, CA 90071 | 108,984,410 | (1) | 6.6% | (1) | ||||
| BlackRock, Inc. 40 East 52nd Street New York, NY 10022 | 105,137,363 | (2) | 6.4% | (2) | ||||
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Securities Exchange Act of 1934, our directors, executive officers and the beneficial holders of more than 10% of our common stock are required to file reports of ownership and changes in ownership with the SEC. To the best of our knowledge, during 20112013 all applicable Section 16(a) filing requirements were met,met.
Our insider trading policy prohibits all employees, including directors and executive officers, from holding our securities in a margin account or pledging our securities as collateral for a loan except that, duein certain limited circumstances pre-approved by our Corporate Secretary when a person wishes to administrative errors,pledge our securities as collateral for a Form 4 was filed lateloan and clearly demonstrates the ability to repay the loan without selling such securities. None of our directors or executive officers (including our NEOs) has pledged shares of our stock as collateral for James M. Cornelius relating to the purchasea loan or holds shares of 900 sharesour stock in February 2011; and due to technical transmission difficulties, a Form 4 was filed one-day late for Brian Daniels relating to a grantmargin account.
COMPENSATION DISCUSSION AND ANALYSISCompensation Discussion and Analysis
INTRODUCTION
This Compensation Discussion and Analysis (CD&A) is intended to explain to our stockholders how our compensation program is designed and how it operates with respect to our Named Executive Officers (our current CEO, CFO, the three other most highly paid executives of our company and onetwo of our former executives). Anthony C. Hooper,Elliott Sigal, M.D., Ph.D., our former SVP Commercial Operations &Executive Vice President U.S., Japan and Intercontinental,Chief Scientific Officer, retired from the company effective October 25, 2011. This CD&A includes Mr. Hooper’s compensation information duringJune 30, 2013. On November 13, 2013, Beatrice Cazala ceased serving as Executive Vice President, Commercial Operations in charge of Global Commercialization, Europe and China. As previously announced, Ms. Cazala will be departing from the time he served in that role.company on June 9, 2014.
Our CD&A first describes our executive compensation philosophy and how we design our compensation program, with a discussion focusing on the main components of our compensation program. We then detail the process for, and analyze the determination by the Compensation and Management Development Committee (Committee) of, the resultant compensation of our Named Executive Officers. Finally, we discuss 2014 changes to our 2012 compensation and benefit program, changes, outline other benefits we provide to our Named Executive Officers and describe several of our key executive compensation policies.
EXECUTIVE SUMMARY
Highlights of our Executive Compensation Program
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As described in more detail below, our Named Executive Officers were compensated based on the successful implementation of our strategy, strong financial performance of BMS and their individual performance.performance including their continued focus on evolving the company into a specialty care biopharmaceutical business with a focus on innovative products for significant unmet medical needs in
oncology, virology, immunology and specialty cardiovascular disease. As part of this strategy, our executives are building a foundation for the future by shifting our research and development focus, evolving our commercial model, growing our marketed products, and investing significantly in our pipeline. In addition, we aligned our compensation program was aligned with our goals of strengthening our pay-for-performance philosophy, reducing costs and delivering stockholder value.
20112013 Financial Performance
Our executive compensation program and the compensation of our Named Executive Officers are directly tied to the financial performance of our company. The continued evolutionOur solid 2013 financial performance was attributable to a number of factors, including:
strong financial performance of BMS in 2011. The financial measures used in our compensation arrangements in 20112013 were applicable to the determination of incentive awards for all eligible employees, including our Named Executive Officers. These financial measures are detailed below:
Financial Measure | Target | Actual | Actual after Adjustment | Percent of Target | ||||||||||||
Non-GAAP Diluted Earnings Per Share(1) | $ | 2.14 | $ | 2.28 | 106.5 | % | ||||||||||
Net Sales, Net of Foreign Exchange ($=MM)(2) | $ | 20,004 | $ | 20,789 | $ | 20,583 | (3) | 102.9 | %(3) | |||||||
Working Capital plus Capital Expenditures as a % of Net Sales, Net of Foreign Exchange(4) | 11.0 | % | 8.5 | % | 122.7 | %(5) | ||||||||||
Financial Measure | Target | Actual | Actual after Adjustment | Percent of Target | | |||||||||
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Non-GAAP Diluted Earnings Per Share(1) | $ | 1.80 | $ | 1.82 | 101.1 | % | ||||||||
Total Revenues, Net of Foreign Exchange ($=MM)(2)(3) | $ | 16,355 | $ | 16,286 | 99.6 | % | ||||||||
Adjusted Net Cash Flow from Operating Activities ($=MM)(4) | $ | 3,417 | $ | 3,137 | $ | 3,266 | (5) | 95.6 | %(4) | |||||
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Total Shareholder Return
Our executive compensation program is designed to have a significant portionalign the long-term economic interests of compensation paid in the form of equity to tie executives’ interests toour executives with the interests of our stockholders. This alignment is achieved through our pay-for-performance philosophy that balances strategic, financial, operational, and behavioral objectives. The equity awards granted to all of our executives include performance and service requirements, and our senior executives are required to retain substantial stock ownership in the company.
As shown below, our total shareholder return (stock price appreciation plus dividends (TSR))dividends), or TSR, for the three and five-year periods ended in 20112013 exceeded that of our peers (includes companies in our primary and extended peer groups) and the S&P 500 Index. In 2011,2013, for the thirdfifth year in a row, we increased our dividends.dividend.
Role of Advisory Vote to Approve Compensation of our Named Executive Officers
We provide our stockholders with the opportunity to cast an annual advisory vote to approve compensation of our Named Executive Officers. At our annual meeting of stockholders held in May 2011, a substantial majority (93.8%)2013, approximately 96.1% of the votes cast on the proposal at that meeting voted in favor of the proposal. The Committee believes this affirms stockholders’stockholders' support of the company’scompany's approach to executive compensation, and the Committee did not implement changes as a direct result of the vote. However, as disclosed in more detail on page 43, the Committee implemented some enhancements to our annual and long-term incentive programs to mitigate the overlap of performance metrics between those two programs and to further align the interests of our executives with the interests of our stockholders. The Committee will continue to consider the outcome of the annual advisory vote to approve compensation when making future compensation decisions for the Named Executive Officers.
2011 Changes to our Compensation ProgramTable of Contents
We implemented certain changes to our compensation and performance management programs for 2011 to continue driving the evolution of our biopharmaceutical business strategy and culture. These changes are described below:
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2011 BMS BioPharma Behaviors
Decide and Act
Connect and Collaborate
Innovate and Improve
Grow and Engage
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EXECUTIVE COMPENSATION PHILOSOPHY
Our executive compensation philosophy is based on two core elements: to pay for performance and to provide a competitive compensation package.package and design. Each of these elements is described below:
Pay for Performance: We structure our compensation program to align the interests of our senior executives with the interests of our stockholders. We believe that an executive’sexecutive's compensation should be directly tied directly to helping us achieve our mission and deliver value to our stockholders. Therefore, a substantial portion of an executive's compensation is variable and at risk in the form of annual bonus and equity awards that vary in value based on company financial results and our TSR over one or more years. In addition, a significant partportion of each executive’sexecutive's pay depends on his or her individual performance against pre-determined strategic, financial and operational objectives as well as key behavioral standards. We also believe that a significant amount of compensation should be at risk. A substantial portion of an executive’s compensation, therefore, is in the form of variable bonus and equity awards that tie the executive’s compensation directly to creating stockholder value and achieving financial and operational results.behaviors.
Competitive Pay Program: We believe that a competitive compensation program is important to help attract and retain talented employees capable of leading our business in the highly complex and competitive business environment in which we operate. We intend to pay our executives at approximately the median level of pay of our peer group when targeted levels of performance are achieved. In certain circumstances, we may target pay above or below the competitive median to help attract or retain executives, as necessary, or to recognize differences in their competencies, qualifications, experiences, responsibilities, contribution, individual performance, role criticality and/or potential. By providing compensation that is competitive with our peer companies, we reduce the risk that our competitors can successfully recruit our executives.
In addition, our compensation program is designed with the following principles in mind:
Additionally, the Committee annually reviews the compensation programs from a risk perspective. Based on ourthat review of our executive compensation arrangements as detailed beginning on page 11, our Committee believes that our compensation program does not encourage executives to take unreasonable risks that may harm stockholder value. Our compensation program achieves this by striking an appropriate balance between short-term and long-term incentives, using a diversity of metrics to assess performance under our incentive programs, using different forms of long-term incentives, placing caps on our incentive award payout opportunities, following equity grant practices that limit potential for timing awards and having stock ownership and stock retention requirements.
OUR COMPENSATION PROGRAM DESIGN
This section will explain how we determine the design of our executive compensation program.
Compensation and Management Development Committee
The Committee is responsible for providing oversight of our executive compensation program for the Named Executive Officers as well as other members of senior management. The Committee is responsible for setting the compensation of the Chief Executive Officer and approving the compensation of all of the other Named Executive Officers.
The Committee annually reviews and evaluates the executive compensation program to ensure that the program is aligned with our compensation philosophy and with our performance. The “Committees"Committees of Our Board”Board" section on page 98 discusses the duties and responsibilities of the Committee in more detail.
Independent Compensation Consultant
In September 2009, the The Committee has retained Compensation Advisory Partners, LLC (CAP) on an annual basis as its independent compensation consultant to provide executive compensation services to the Committee. CAP reports directly to the Committee, and the Committee directly oversees the fees paid for services provided by CAP. The Committee instructs CAP to give advice to the Committee independent of management and to provide such advice for the benefit of our company and stockholders. CAP does not provide any consulting services to BMS beyond its role as consultant to the Committee.
In 2011,2013, CAP provided the following services:
Participated
Provided
Provideddata;
Reviewed
Attended
Role of Company Management
The CEO makes recommendations to the Committee concerning the compensation of the other Named Executive Officers and other members of senior management. In addition, the CEO and CFO are involved in recommending for the Committee’sCommittee's approval the financial and business goals that are used as the performance goals for the annual and long-term incentive plans. The Senior Vice Presidenthead of Human Resources Public Affairs and Philanthropy works closely with the Committee, the Committee’sCommittee's independent compensation consultant and management to (i) ensure that the Committee is provided with the appropriate information to make its decisions, (ii) propose recommendations for Committee consideration, and (iii) communicate those decisions to management for implementation.
Peer Group and Benchmarking Analysis
Our executive compensation program seeks to provide total direct compensation, when targeted levels of performance are achieved, at the median of the pay levels of our primary peer group, a designated peer group of U.S. companies further described below. In any given year, however, we may target total direct compensation for an executive above or below the median of our primary peer group due to multiple factors, including individual performance results, length of time in an officer’s current role, scope of responsibility and retention. We define total direct compensation as base salary plus target annual incentive bonus plus the fair value of annual long-term incentives granted to an executive in a given year.executive. The Committee’sCommittee's independent compensation consultant annually conducts a review of the compensation for our Named Executive Officers using compensation information compiled from the proxy statement disclosures made by our primary and extended peer groupgroups to assess our overall program. We use pay levels of our peers as a reference point when determining individual pay decisions (i.e., base salary levels, the size of salary adjustments, target bonus amounts and the size of long-term incentive awards). Paying at levels competitive with our peers when targeted levels of performance are achieved allows us to attract and retain the talent we need to run our business while also enabling us to maintain a competitive cost base with respect to compensation expense. For 2011, the value of our 2011-2013 performance share unit awards included a one-time 50% enhancement to provide focus on performance and retention. All of the enhanced value has been built into the 2013 portion of the award. Resulting target compensation for each of our current Named Executive Officers was approximately at the 50between median and 75th percentile of our primary peer group for Messrs.Mr. Andreotti and Bancroft and Ms. Leung, between the 50th and 75th percentiles of our primary peer group for Ms. Cazala and Mr. Hooper, and approximately at the 7525th percentile of our primary peer group for Mr. Bancroft and Dr. Sigal.Caforio and below the 25th percentile for Dr. Cuss and Ms. Leung.
Peer Group
Our primary peer group in 20112013 consisted of the following companies:
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| AbbVie Inc. | Gilead Sciences Inc. | |
Amgen Inc. | Johnson & Johnson | |
Biogen Idec Inc. | Merck & Co. | |
Eli Lilly and Company | Pfizer, Inc. |
In 2011,2013, we removed Genzyme CorporationAbbott Laboratories from our primary peer group in lightand added AbbVie Inc. Abbott spun-off its pharmaceutical business as AbbVie as of it being acquired by Sanofi-Aventis SA.January 1, 2013. Additionally, the Committee approved adding Celgene Corporation to the peer group for evaluating 2014 compensation. Celgene is a biopharmaceutical company with a similar business and product focus as BMS and will provide a balance against some of our larger peer companies. We believe this peer group was appropriate given the unique nature of the pharmaceutical/biotechnology industry. The companies in our primary peer group varied in size. BMS approximated between the 25th percentile and the median in both revenue and at the median in market capitalization amongst our primary peer group. We believe that company size, however, should not be the only factor in determining a peer group. Instead, we believe emphasis should be placed on whether a company competes directly with us for unique pharmaceutical/biotechnology talent. The companies in our 20112013 primary peer group represented our primary competitors for executive talent and operated in a similarly complex regulatory and research-driven environment. We also reviewed an extended peer group, which is comprised of the eightnine companies in our primary peer group plus five companies based outside the U.S. The five foreignnon-U.S. companies included in our extended peer group are: AstraZeneca PLC, GlaxoSmithKline PLC, Roche Holding Ltd., Novartis AG and Sanofi-Aventis SA. This extended peer group serves as an additional reference point for the Committee given the global nature of our business and the fact that we compete for talent on a global basis. BMS approximates the 25th percentile of the extended peer group in both revenue and market capitalization. We monitor the composition of our peer groups regularly and make changes when appropriate.
DETERMINING THE INDIVIDUAL COMPENSATION OF OUR EXECUTIVES
This section will explain how the 20112013 compensation was determined for each of our Named Executive Officers, including our former SVP Commercial Operations & President U.S., Japan and Intercontinental, who retired from the company effective October 25, 2011.Officers.
Our executive compensation program is designed to provide value to the executive based on the extent to whichthrough (i) individual performance,TSR over one or more years, (ii) company performance versus annual financial targets and (iii) total return to stockholders (stock price appreciation plus dividends) meet, exceed or fall short of expectations.individual performance against key strategic, financial, and operational objectives, as well as our specified BMS BioPharma Behaviors described below. We believe this approach, with a significant emphasis on long-term and performance-based compensation, serves to focus the efforts of our executives on the attainment of sustained long-term growth and profitability for the benefit of our company and our long-term stockholders while demonstrating high ethical standards.
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Performance Management System
Our performance management system involves an annual review of all executives, including the Named Executive Officers, which measures individual performance over the course of the previous year. This review includes an evaluation of the individual goals set by each executive on an annual basis. These individual goals are set within the framework of the company’scompany's strategic goals. The system assists in ensuring that each executive’sexecutive's compensation is tied to the key strategic, financial and operational performanceobjectives of our company, to stockholder return, and to the executive’sexecutive's demonstration of the BMS BioPharma Behaviors and the values embodied in the BMS Commitment. The Committee conducts the assessment process for our CEO. The CEO conducts the assessment for all of our other Named Executive Officers. The assessment for each Named Executive Officer is then reviewed and approved by the Committee.
Each executive is assessed on both “Results”"Results" and “Behaviors”"Behaviors". The Committee uses these assessments as the basis for making individual compensation decisions. The assessments described below pertain to 20112013 performance and were used to help the Committee determine the size of each Named Executive Officer’s 2011Officer's 2013 annual bonus payment. Prior-year assessments, as disclosed in our 20112013 proxy statement, were used by the Committee to determine the size of the 20112013 long-term incentive awards granted in March of 20112013 to each Named Executive Officer.
Individual Performance
When determining the individual 20112013 annual incentive payments and the 2012 long term2014 long-term incentive awards, the Committee considered each executive's contributions to our company's strategic achievements and financial and operational performance, including their continued focus on evolving the strong financial performance ofcompany into a specialty care biopharmaceutical business, growing our company against preset financial measures identified on page 29marketed products, and general operational goals which had a direct impact on the financial measures. In addition, the Committee placed an emphasis on the requirement that the executives achieve their goals while demonstrating the highest standards of business integrity and ethics.investing significantly in our pipeline.
For Mr. Andreotti, the Committee considered his strong leadership in: (i) delivering exceptional TSR that exceeded that of our peers (includes companies in our primary and extended peer groups) and the strong 2011S&P 500 Index for both the three and five-year periods ended in 2013, which was supported by solid financial results and total shareholder return shown on page 29;results; (ii) driving future development of pipeline and executing strategic “string of pearls” transactions; (iii) executing the Yervoy launch and preparing launches for several new products; (iv) continuing to prepare for long term growth while driving expenseemphasize organizational management in connection with the company's evolution to a specialty care BioPharma business, as well as developing and profitability;recruiting top
leadership talent through, among other things, the addition of two new members to the Senior Management Team in 2013 through promotion or external hire; (iii) enhancing the value of our pipeline; (iv) evolving the company's strategy through the divestiture of the diabetes business; and (v) further strengthening the leadership team through developmentcontinuing to drive a culture of internal talentsintegrity and hiring of qualified executives.compliance, continuous improvement and cost management.
For Mr. Bancroft, the Committee considered: (i) his key role in the achievement of our strongsolid financial results, including our TSR that exceeded that of our peers (includes companies in 2011;our primary and extended peer groups) and the S&P 500 Index for both the three and five-year periods ended in 2013; (ii) his leadership over our capital allocation;in the divestiture of the diabetes business to strengthen the company's overall strategy; (iii) his financial oversight of the “string of pearls” transactions;continued role in driving and exceeding continuous improvement goals; and (iv) his performance in hissuccessful management of the Intercontinental and Japan businesses. The Committee also considered that Mr. Bancroft took on new responsibilities leading two geographicalfor business units.development and strategy during 2013 through the previously announced management changes. Accordingly, Mr. Bancroft now leads an expanded global organization that integrates financial planning, enterprise-wide strategy and business development.
For Dr. Sigal,Cuss, the Committee considered (i) his successful transition to the successrole of Executive Vice President and Chief Scientific Officer; (ii) progressing several new product indications, key formulations and geographic submissions including securing EU approval forYervoy in first-line metastatic melanoma, early submission in the EU for daclatasvir, an investigational compound being studied for the treatment of hepatitis C, and accelerated initiation of the Phase III program for an all-oral combination of three BMS investigational products also for the treatment of hepatitis C; (iii) achieving four first-in-human starts and ten Early Candidate Nominations; and (iv) leading and executing the shift of our R&D understrategy by, among other things, simplifying and streamlining research governance and evolving the R&D strategy and organization to strengthen our position for future growth.
For Dr. Caforio, the Committee considered (i) his successful transition to the role of Executive Vice President and Chief Commercial Officer; (ii) his role in the achievement of solid financial results; (iii) the continued growth of our key brands, particularlyYervoy, Sprycel, Orencia, Onglyza/Kombiglyze andBaraclude; (iv) his leadership which consolidatedand role in the positionlaunch of BMS asEliquis globally, including in the benchmark innovation company. For 2011,U.S., Japan, Germany, the accomplishments of the R&D organization included: (i) receiving 14 regulatory approvals including three new product approvals (Yervoy, EliquisU.K. and Nulojix)Canada; and (v) successfully driving significant improvement in our employees' engagement and the extensiondevelopment of existing approvals to new indications and/or geographies; (ii) advancing two products to full development; (iii) achieving proof of confidence for four compounds; and (iv) achieving 11 first-in-human starts and producing 14 Early Candidate Nominations.his Global Commercial team.
For Ms. Cazala, the Committee considered: (i) the positive performance of the two geographical business units reporting to her; (ii) her supervision of the preparation of the global launch and commercialization plans for Yervoy and other key products; (iii) the evolution of our customer model; and (iv) the execution of our Emerging Markets strategy.
For Ms. Leung, the Committee consideredconsidered: (i) her performance in providing consistently sound legal advice to senior management and the Board of Directors. The Committee also considered her leadership in drivingDirectors, including critical support related to the performancedivestiture of the Law Departmentdiabetes business and significant contributions toward the addition of two new Directors to support the Company’s results, including: (i)our Board; (ii) securing, protecting and defending the Company’sCompany's legal rights and interests;interests globally, including overseeing favorable resolutions and (ii) providingoutcomes in a number of key investigations and litigations; and (iii) her continued role in driving continuous improvement goals and managing legal supervision of our “string of pearls” transactions and our Emerging Markets and customer model initiatives.expenditures.
THE COMPONENTS OF OUR 20112013 COMPENSATION PROGRAM
The main components of our executive compensation program in 20112013 were:
The following chart shows the 20112013 compensation mix for these elements based on the average of targeted compensation for our Named Executive Officers:Officers (other than Dr. Sigal and Ms. Cazala):
This target mix supports the core elements of our executive compensation philosophy by emphasizing long-term incentives while providing competitive short-term components. Additionally, compensation realized by our Named Executive Officers has a significant relationship to the company's stock price because a considerable portion of each Named Executive Officer's compensation is delivered in stock. Below, we explain how each of these components is set and describe certain changes we made to these components in 2011, including the enhancement of the value of our 2011-2013 performance share unit award by 50%. The changes noted were implemented to provide for the continued alignment ofhow our compensation program continues to be aligned with the core elements of our compensation philosophy. The specific pay decisions with respect to our Named Executive Officers are also detailed.
Base Salary
Base salaries are used to help keep us competitive and to help us retain talent. The base salaries of our executives are set based primarily upon the pay levels of comparable positions within our primary peer group and the unique qualifications and experience of the individual executives. Merit increases for our executives are determined based upon both the performance of an individual and the size of our merit increase budget in a given year. We review results of surveys that forecast what other companies’companies' salary increase budgets will be. We typically set our annual salary increase budgets based upon the median of such forecasts. Salary adjustments aremay also typicallybe granted from time to time during the year, such as when executives assumean executive assumes significant increases in responsibility.
In 2011, after a one-year suspension, we reinstated a2013, under our company-wide salary increase program. Under the program, employees, including the Named Executive Officers, were eligible for a modest merit increase provided their performance fully met or exceeded expectations on both Results and Behaviors. Employees rated below the fully-performing level typically receivedreceive a reduced merit increase or receive no salary increase.increase depending on the extent to which they were rated below the fully-performing level. Consistent with this policy, Dr.Mr. Andreotti, Drs. Sigal Ms.and Cuss, and Mmes. Cazala and Mr. HooperLeung each received a 2%3% salary increase effective April 1, 2011, the standard increase for U.S. employees.2013. Mr. AndreottiBancroft received an 11%a 4% salary increase effective April 1, 20112013 to bring him closer to competitive market levels. Mr. Bancroft and Ms. LeungDr. Caforio received a 10%7% salary increase effective AprilJanuary 1, 20112013 to bring their base salarieshim closer to thecompetitive market median of executives in similar positions at peer companies. Additionally, Mr. Bancroftlevels and Ms. Cazala each received a 3% salary increase on October 19, 2011 in connection with their appointments ashis promotion effective February 15, 2013 in lieu of a merit increase. Dr. Caforio also received a 19% salary increase effective November 13, 2013 in connection with his promotion to Executive Vice Presidents of the companyPresident and to recognize anChief Commercial Officer. Dr. Cuss received a 42% salary increase effective July 1, 2013 in their responsibilities. In addition to his CFO responsibilities, Mr. Bancroft assumed operational responsibility for the pharmaceutical business in Latin America, Middle East, Africa, Canada, Japan and several other countries in the Pacific Rim. Ms. Cazala added responsibility for global policy to her role leading Global Commercialization, Europe and Emerging Markets. In connection with her transitionhis promotion to a long-term assignment in the United States which is further described under “Other Compensation” on page 43, Ms. Cazala was transferred from the French payroll to the U.S. payroll on February 21, 2011, which resulted in a salary increase of 1% due to the exchange rate conversion.Executive Vice President and Chief Scientific Officer.
Annual Incentives
Annual incentive awards are designed to reward the Named Executive Officers for achieving short-term financial and operational goals and to reward their individual performance, consistent with our pay-for-performance philosophy. A Named Executive Officer’sOfficer's annual incentive award opportunity is expressed as a percentage of base salary as determined by the individual’sindividual's grade level.
Under our 20112013 bonus plan design, three corporate-wide measures—non-GAAP diluted earnings per share (weighted 50%), non-GAAP net sales,total revenues, net of foreign exchange (weighted 25%) and working capital plus capital expenditures as a percent ofadjusted net salescash flow from operating activities (weighted 25%)—serve to funddetermine our bonus pool. Individual target bonuses, in turn, may be increased or decreased based upon our company’scompany's performance against these corporate-wide measures. Overall individual results can modify an award from 0% to 150%, and if a pre-specified amount above target plan is achieved, individual results can range from 0% to 165%. The maximum bonus opportunity based on company and individual results is 251% of target.
Current Structure of Annual Incentive Award for Named Executive Officers
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The table below shows the performance and resulting payout percentage of the financial measures used for our 20112013 bonus plan:
Financial Measure | Percent of Target | Resulting Payout Percentage | ||||||||
Non-GAAP Diluted Earnings Per Share | 106.5 | % | 117.65 | % | ||||||
Net Sales, Net of Foreign Exchange | 102.9 | %(1) | 125.70 | % | ||||||
Working Capital plus Capital Expenditures as a % of Net Sales, Net of Foreign Exchange | 122.7 | %(2) | 152.17 | % | ||||||
Total | 128.29 | % | ||||||||
Financial Measure | Target | Actual | Percent of Target | Resulting Payout Percentage | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Non-GAAP Diluted Earnings Per Share | $ | 1.80 | $ | 1.82 | 101.1 | % | 101.93% | ||||||
Total Revenues, Net of Foreign Exchange ($=MM) | $ | 16,355 | $ | 16,286 | 99.6 | % | 98.53% | ||||||
Adjusted Net Cash Flow from Operating Activities ($=MM) | $ | 3,417 | $ | 3,266 | (1) | 95.6 | % | 97.94% | |||||
Total | 100.08% | ||||||||||||
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Assuming the achievement of the financial measures, the actual bonus an executive receives is based entirely onthen further modified by the executive's individual performance. As described above, individual performance is assessed on the two dimensions of our performance management process—system—Results and Behaviors. Additionally, the bonuses of our Named Executive Officers and other Senior Management Team members may be modified up or down based on the extent to which each executive demonstrates actions that promote diversity (e.g., ensuring that diversity candidates are considered for developmental opportunities; including diversity candidates in succession plans; mentoring employees with diverse backgrounds; and holding staff members accountable for advancing our diversity objectives). We place an emphasis on diversity in our annual incentive program because we believe a diverse workforce, which engenders diversity of thought and perspective, is a source for creating a competitive advantage. In 2011, the Committee determined not to modify any of the Named Executive Officer’s bonuses because the Named Executive Officers demonstrated their commitment to diversity on a relatively equal basis by hosting various diversity awareness and advancement forums and ensuring that our talent acquisition slates included viable diversity candidates.
We believe this approach for determining incentive award payments balances the need to consider overall company performance, results specific to an executive’sexecutive's functional area of responsibility, and the executive’sexecutive's ability to achieve results vs. objectives on an individual level while also demonstrating the BMS BioPharma Behaviors. The recommended payments are reviewed and approved by the Committee in the first quarter of the year following the performance year, and the awards are paid by March 15th.
The actual annual incentives paid to our Named Executive Officers are shown in the table below and also reported in the Summary Compensation Table in the Non-Equity Incentive Plan Compensation column:
Executive | Target Bonus | Adjusted Target Bonus(1) | Actual Payout(2) | % of Target | |||||||||
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Mr. Andreotti | $ | 2,531,250 | $ | 2,533,275 | $ | 3,799,913 | 150.12% | ||||||
Mr. Bancroft | $ | 901,765 | $ | 902,486 | $ | 1,128,108 | 125.10% | ||||||
Dr. Cuss | $ | 650,238 | $ | 650,758 | $ | 748,372 | 115.09% | ||||||
Dr. Caforio | $ | 630,348 | $ | 630,852 | $ | 788,565 | 125.10% | ||||||
Ms. Leung | $ | 674,850 | $ | 675,390 | $ | 844,238 | 125.10% | ||||||
Dr. Sigal(3) | $ | 652,612 | $ | 653,134 | $ | 653,134 | 100.08% | ||||||
Ms. Cazala | $ | 895,199 | $ | 895,915 | $ | 895,915 | 100.08% | ||||||
Executive | Target Bonus | Adjusted Target Bonus(1) | Actual Payout(2) | % of | ||||||||||||
Mr. Andreotti | $ | 2,268,750 | $ | 2,910,579 | $ | 4,220,340 | 186.0% | |||||||||
Mr. Bancroft | $ | 812,500 | $ | 1,042,356 | $ | 1,407,181 | 173.2% | |||||||||
Dr. Sigal | $ | 1,242,360 | $ | 1,593,824 | $ | 2,151,663 | 173.2% | |||||||||
Ms. Cazala(3) | $ | 811,524 | $ | 1,041,104 | $ | 1,353,436 | 166.8% | |||||||||
Ms. Leung | $ | 580,500 | $ | 744,723 | $ | 968,140 | 166.8% | |||||||||
Mr. Hooper(4) | $ | 675,973 | $ | 867,206 | $ | 867,206 | 128.3% | |||||||||
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As set forth in the table above, each Named Executive Officer’sOfficer's target bonus was earned at 128.29%100.08% based on strong financial results.their continued focus on our transformation into a leading specialty BioPharma company. Then, an individual performance payout factor was applied to each of the adjusted target bonuses. In determining the individual annual incentives paid to our Named Executive Officers, the Committee considered the 20112013 performance of each executive as described under “Individual Performance”"Individual Performance" on page 34.33. The Committee approved individual performance factors ranging between 130%115% and 145%150% for each Named Executive Officer, other than Mr. Hooper,Dr. Sigal and Ms. Cazala, based on the strong individual performance results described above.
Long-Term Incentive Program
Long-term incentives are designed to tie executive interests to the interests of our stockholders. The ultimate value of long-term awards is driven by stock price and dividends, which provide a direct link to the creation of stockholder value. In addition, our long-term incentive program is designed to reward individual performance. In 2011,2013, we offered two long-term award vehicles, each of which served a different purpose:
We believe our long-term incentive program serves the best interests of our stockholders by focusing the efforts of our executives on key financial drivers of long-term success and on total shareholder returnTSR while enabling us to reduce expenses. In 2010, we redesigned ourOur long-term incentive program is designed to achieve the following objectives that support our biopharmaceutical business strategy:
The program offers the opportunity to earn dividend
Annual Equity Award Grants
Annual equity award grantsawards are typically madeapproved on the date the Committee and full Board meet during the first week of March to coincide with meetingsa grant effective date of the Committee and the full Board of Directors.March 10. We believe that consistent timing of equity award grants is a good corporate governance practice that reduces the risk of selecting a grant date with a preferential stock price.
Under our long-term incentive program, the Committee establishes target awards,established guidelines, expressed in dollars, at each grade level.level under our long-term incentive program. The value of these target awards,guidelines, taken in conjunction with the other components of our pay program, enables us to achieve our overall target level of competitive compensation.
Based upon individual performance, an executive may receive a long-term incentive award ranging from 0% to 150% of the target award. Typically, once the grant value is established for each executive, 60% of the value is converted into performance share units and 40% into market share units.
In determining the size of the individual long-term incentive awards granted to our Named Executive Officers in March 2011,2013, the Committee considered the prior-year performance of each executive as well as ways to incentivizemotivate our Named Executive Officers to focus on the company’scompany's long-term performance over the next three years and beyond. Each Named Executive Officer other than the CEO had a target value for their long-term incentive award granted in March 2013. The Committee approved individual
awards ranging frombetween 120% and 130% to 135% of the target value for all of thethese Named Executive Officers other than the CEO based on strong individual performance during 2010.2012. The 2013-2015 performance share unit award and the market share unit award granted to Dr. Sigal in March 2013 were forfeited in their entirety in connection with his retirement from the company on June 30, 2013. The CEO's long-term incentive award is not based on a target value of the CEO’s individual awardand is determined annually by the Committee based on competitive benchmarks and individual performance and contributions. His award took into account his strong performance during 2010. The Committee also enhanced the value of our 2011-2013 performance share unit award by 50%. All of the enhanced value was built into the 2013 portion of the award. This enhancement represented a one-time increase in total long-term incentive value of 30% (when taking both the value of performance share units and market share units into consideration). The purpose of the special nature of this award was to: (a) provide extra incentive for our executives to realize key strategic opportunities over the three year performance cycle, particularly in light of patent expirations on our largest products; and (b) help retain and reward the talent we need to become a premier growth company in the biopharmaceutical industry in 2014 and beyond. As a result of this one-time increase in the value of our 2011 total long-term incentive award, the long-term incentive mix in 2011 was 69% performance share units and 31% market share units.2012.
Performance Results Under Our Outstanding Performance Share Unit Awards
The payout of performance share unit awards is based on three-year performance cycles. The Committee approves annual performance targets at the beginning of each year of the three-year performance cycle, and awards are payable in the year following the end of the three-year cycle. This design provides for a better link between performance and payout because it eliminates the need to project performance beyond one year. This closer line of sight will helphelps to avoid situations where unforeseen events lead to performance targets that are either overstated or understated and do not appropriately support our pay-for-performance philosophy.philosophy and retention objectives. Given that thesethe shares underlying our performance share unit awards are denominatednot paid out until after the three-year performance cycle has been completed, the awards create an effective balance between short-term motivation to maximize annual financial performance and paid in shares, there is a strong linklong-term motivation to stockholder return.create shareholder value, as well as promote greater retention of our executives.
The Committee established a 20112013 non-GAAP pretax earnings goal of $3,774$2,649.75 million for the purpose of preserving tax deductibility of 20112013 payouts under this award pursuant to Section 162(m) of the Internal Revenue Code. The company’scompany's actual non-GAAP pretax earnings for 20112013 of $5,082$3,552 million exceeded the established goal, thus enabling the 20112013 portion of the 2009-2011, 2010-20122011-2013, 2012-2014 and 2011-20132013-2015 performance share unit awards to be earned.
2009-20112011-2013 Award: The 20112013 portion of the 2009-20112011-2013 award is based 50% onhas the same performance metrics and weights as the 2012 portion of the award: non-GAAP diluted earnings per share 25% on non-GAAP net sales,(weighted 50%), total revenues, net of foreign exchange (weighted 25%) and adjusted net cash flow from operating activities (weighted 25% on). In 2011, working capital and capital expenditures as a percent of net sales. In 2009sales was used as our cash flow metric. Upon grant in 2011, the value of our 2011-2013 performance share unit award was enhanced by 50%. All of the enhanced value was built into the 2013 portion of the award. This enhancement represented a one-time increase in total long-term incentive value of 30% (when taking both the value of performance share units and 2011, net sales were measuredmarket share units into consideration). The purpose of this enhanced award was to: (a) provide extra incentive for our executives to realize key strategic opportunities over the three-year performance cycle, particularly in dollar terms;light of patent expirations on our largest products; and (b) help retain and reward the talent we need to become a premier growth company in 2010, a percent growth metric was used.the biopharmaceutical industry in 2014 and beyond. Under the 20112013 earnings per share metric, achievement of target yields a payout of 100% of target for that portion of the award; achievement below 79.4%85% of target will yield no payout; and achievement levels of 115.9%115% or higher of target yields a maximum payout of 167.5% for that portion of the award. Under the 2011 net sales2013 total revenues metric, achievement of target yields a payout of 100% of target for that portion of the award; achievement below 92.3%95% of target will yield no payout; and achievement levels of 105.3%105% or higher of target will yield a maximum payout of 167.5% for that portion of the award. Under the 2011 working capital and capital expenditures as a percent of2013 adjusted net sales metric,cash flow from operating activities, achievement of target yields a payout of 100% of target for that portion of the award; achievement below 77.2%70% of target will yield no payout; and achievement levels of 117.7%130% or higher of target yields a maximum payout of 167.5% for that portion of the awardaward.
The 2009-20112011-2013 award is payable at 130.92%114.26% of target award. The following table summarizes the performance and payout results relating to this award:
Year | Measure | Target | Actual | % of Target | % Payout | |||||||||||||
| 2009 | EPS | $ | 1.70 | $ | 1.89 | 111.2 | % | 146.00 | % | |||||||||
| Sales ($=MM) | $ | 19,199 | $ | 19,537 | 101.8 | % | 101.80 | % | ||||||||||
| Work Cap + CapEx (%) | 18.1 | % | 15.9 | % | 112.2 | % | 151.00 | % | ||||||||||
| Annual Total | 136.20 | % | ||||||||||||||||
| Adjusted Annual Total | 133.18 | %(1) | ||||||||||||||||
| 2010 | EPS | $ | 2.17 | $ | 2.22 | (2) | 102.3 | % | 109.92 | % | ||||||||
| Sales Growth (%) | 6.1 | % | 4.1 | %(2) | 67.2 | % | 90.80 | % | ||||||||||
| Work Cap + CapEx (%) | 12.5 | % | 9.6 | %(2) | 123.2 | % | 167.50 | % | ||||||||||
| Annual Total | 119.54 | % | ||||||||||||||||
| 2011 | EPS | $ | 2.14 | $ | 2.28 | 106.5 | % | 127.79 | % | |||||||||
| Sales ($=MM) | $ | 20,004 | $ | 20,583 | (3) | 102.9 | % | 137.06 | % | |||||||||
| Work Cap + CapEx (%) | 11.0 | % | 8.5 | % | 122.7 | %(4) | 167.50 | % | ||||||||||
| Annual Total | 140.04 | % | ||||||||||||||||
| Three-Year Total | 130.92 | % | ||||||||||||||||
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Year | Measure | Target | Actual | % of Target | % Payout | ||||||||||
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| 2011 | EPS | $ | 2.14 | $ | 2.28 | 106.5 | % | 127.79% | |||||||
| Sales ($=MM) | $ | 20,004 | $ | 20,583 | (1) | 102.9 | % | 137.06% | |||||||
| Work Cap + CapEx (%) | 11.0 | % | 8.5 | % | 122.7 | %(2) | 167.50% | ||||||||
| Annual Total | 140.04% | ||||||||||||||
| 2012 | EPS | $ | 1.95 | $ | 2.01 | (3) | 103.1 | % | 111.91% | ||||||
| Sales ($=MM) | $ | 18,018 | $ | 17,922 | (3) | 99.5 | % | 97.66% | |||||||
| Adj. NCF from Oper. Act. ($=MM) | $ | 3,361 | $ | 3,875 | (3) | 115.3 | % | 159.47% | |||||||
| Annual Total | 120.24% | ||||||||||||||
| 2013 | EPS | $ | 1.80 | $ | 1.82 | 101.1 | % | 105.00% | |||||||
| Total Revenues ($=MM) | $ | 16,355 | $ | 16,286 | 99.6 | % | 98.42% | ||||||||
| Adj. NCF from Oper. Act. ($=MM) | $ | 3,417 | $ | 3,266 | (4) | 95.6 | % | 97.79% | |||||||
| Annual Total | 101.55% | ||||||||||||||
| Three-Year Total | 114.26% | ||||||||||||||
2010-20122012-2014 Award: The 20112013 portion of the 2010-20122012-2014 award has the same performance metrics and weights, and the same performance goals and payout schedules as the 2009-20112013 portion of the 2011-2013 award: non-GAAP diluted earnings per share (weighted 50%), non-GAAP net sales,total revenues, net of foreign exchange (weighted 25%) and working capital plus capital expenditures as a percent ofadjusted net salescash flow from operating activities (weighted
25%). In 2011, net sales were measured in dollar terms; in 2010, a percent growth metric was used. Below are the performance and banked payout results for the first two years of the 2010-20122012-2014 award:
Year | Measure | Target | Actual | % of Target | % Payout | |||||||||||||
| 2010 | EPS | $ | 2.17 | $ | 2.22 | (1) | 102.3 | % | 109.92 | % | ||||||||
| Sales Growth (%) | 6.1 | % | 4.1 | %(1) | 67.2 | % | 90.80 | % | ||||||||||
| Work Cap + CapEx (%) | 12.5 | % | 9.6 | %(1) | 123.2 | % | 167.50 | % | ||||||||||
| Annual Total | | 119.54 | % | |||||||||||||||
| 2011 | EPS | $ | 2.14 | $ | 2.28 | 106.5 | % | 127.79 | % | |||||||||
| Sales ($=MM) | $ | 20,004 | $ | 20,583 | (2) | 102.9 | % | 137.06 | % | |||||||||
| Work Cap + CapEx (%) | 11.0 | % | 8.5 | % | 122.7 | %(3) | 167.50 | % | ||||||||||
| Annual Total | 140.04 | % | ||||||||||||||||
Year | Measure | Target | Actual | % of Target | % Payout | ||||||||||
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| 2012 | EPS | $ | 1.95 | $ | 2.01 | (1) | 103.1 | % | 111.91% | ||||||
| Sales ($=MM) | $ | 18,018 | $ | 17,922 | (1) | 99.5 | % | 97.66% | |||||||
| Adj. NCF from Oper. Act. ($=MM) | $ | 3,361 | $ | 3,875 | (1) | 115.3 | % | 159.47% | |||||||
| Annual Total | 120.24% | ||||||||||||||
| 2013 | EPS | $ | 1.80 | $ | 1.82 | 101.1 | % | 105.00% | |||||||
| Total Revenues ($=MM) | $ | 16,355 | $ | 16,286 | 99.6 | % | 98.42% | ||||||||
| Adj. NCF from Oper. Act. ($=MM) | $ | 3,417 | $ | 3,266 | (2) | 95.6 | % | 97.79% | |||||||
| Annual Total | 101.55% | ||||||||||||||
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2011-20132013-2015 Award: The 20112013 portion of the 2011-20132013-2015 award has the same performance metrics and weights, and the same performance goals and payout schedules as the 2009-20112013 portion of the 2011-2013 award: non-GAAP diluted earnings per share (weighted 50%), non-GAAP net sales,total revenues, net of foreign exchange (weighted 25%) and working capital plus capital expenditures as a percent ofadjusted net salescash flow from operating activities (weighted 25%). As described above, upon grant, the value of our 2011-2013 award was enhanced by 50%. All of the enhanced value has been built into the 2013 portion of the award. Below are the performance and banked payout results for the first year of the 2011-20132013-2015 award:
Year | Measure | Target | Actual | % of Target | % Payout | |||||||||||||
2011 | EPS | $ | 2.14 | $ | 2.28 | 106.5 | % | 127.79 | % | |||||||||
| Sales ($=MM) | $ | 20,004 | $ | 20,583 | (1) | 102.9 | % | 137.06 | % | |||||||||
| Work Cap + CapEx (%) | 11.0 | % | 8.5 | % | 122.7 | %(2) | 167.50 | % | ||||||||||
| Annual Total | 140.04 | % | ||||||||||||||||
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Year | Measure | Target | Actual | % of Target | % Payout | ||||||||||
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| 2013 | EPS | $ | 1.80 | $ | 1.82 | 101.1 | % | 105.00% | |||||||
| Total Revenues ($=MM) | $ | 16,355 | $ | 16,286 | 99.6 | % | 98.42% | ||||||||
| Adj. NCF from Oper. Act. ($=MM) | $ | 3,417 | $ | 3,266 | (1) | 95.6 | % | 97.79% | |||||||
| Annual Total | 101.55% | ||||||||||||||
Performance Results Under Our Outstanding Market Share UnitsUnit Awards
Market share units will vest 25% per year over a four-year period.period, where the number of shares received by an executive upon payout is increased or decreased depending on the performance of our stock price during the one-, two-, three- and four-year performance cycles. On each vesting date, a payout factor is derived as a ratio of the average closing price (i.e., an average of the closing price on the vesting date plus the nine prior trading days) divided by the average stock price on the grant date (also a 10-day average). The payout factor is applied to the target number of units vesting on a given date, inclusive of accrued dividend equivalents, to determine the total number of units and dividend equivalents payable. No payout may exceed 200% of the target units and accrued dividend equivalents payable. If the vesting date stock price (a 10-day average closing price) falls below 60% of the grant price (also a 10-day average), the target units, inclusive of the accrued dividend equivalents, are forfeited.
We first granted market share units to our Named Executive Officers on March 2, 2010. Mr. Andreotti was granted an additional market share unit award on May 4, 2010 in connection with his promotion to the position of Chief Executive Officer. The following table summarizes the payout factorfactors relating to the tranches that vested in 2013 and earlier for theour outstanding market share unit awards that vested on March 2, 2011 and May 4, 2011 (the first anniversariesawards:
Grant Date | Vesting Date | # of Months in Performance Cycle | Payout Factor | ||||||
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March 2, 2010 | March 2, 2011 | 12 | 103.66% | ||||||
| March 2, 2012 | 24 | 132.05% | ||||||
| March 2, 2013 | 36 | 149.39% | ||||||
May 4, 2010 | May 4, 2011 | 12 | 113.53% | ||||||
| May 4, 2012 | 24 | 135.47% | |||||||
| May 4, 2013 | 36 | 163.33% | |||||||
March 1, 2011 | March 1, 2012 | 12 | 127.09% | ||||||
| March 1, 2013 | 24 | 144.01% | ||||||
March 6, 2012 | March 6, 2013 | 12 | 113.82% | ||||||
Table of the respective grant dates) was 103.66% and 113.53%, respectively.Contents
Stock Options and Restricted Stock Units and Stock Options
In 2011,2013, we did not grant any stock options, nor did we grant any service-based restricted stock units to executives as part of our annual long-term incentive program. Restricted stock units were only granted selectively to executives for purposes of attracting, retaining and providing special recognition. Among our Named Executive Officers, the Committee granted two special restricted stock unit awards in 2011. Ms. Cazala2013. Dr. Cuss received an award on MarchJuly 1, 20112013 valued at $500,000 in connection with her long-term assignment in the United Stateshis promotion to Executive Vice President and to recognize her value and criticality to the company.Chief Scientific Officer. Mr. Bancroft received an award on November 1, 2011December 2, 2013 valued at $300,000$1,000,000 to recognize a significant increase in responsibility. Mr. Bancroft was appointed Executive Vice President ofhis taking on an expanded role that includes the companyBusiness Development and assumed operational responsibility for the pharmaceutical business in Latin America, Middle East, Africa, Canada, Japan and several other countries in the Pacific Rim.Strategy groups. Each of Ms. Cazala’sDr. Cuss's and Mr. Bancroft’sBancroft's awards will vest one-third per year on the third, fourth and fifth anniversaries of the grant date. We have not granted any stock options to our executives since 2009.
OTHER ELEMENTS OF 20112013 COMPENSATION
In addition to the components set forth above, our senior executives, including all of our Named Executive Officers, were entitled to receive benefitsparticipate in 2011 under the following plans or arrangements:arrangements in 2013:
Post-Employment Benefits
We offer certain plans which provide compensation and benefits to employees who have terminated their employment. These plans are periodically reviewed by the Committee to ensure that they are consistent with competitive practice. The plans offered are common within our primary peer group and enhance our ability to attract and retain key talent.
Defined Benefit Pension Plans
Our defined benefit plans provide income for employees following retirement. The Retirement Income Plan is a tax-qualified plan, as defined under IRS regulations, and the Benefit Equalization Plan–Plan relating to the Retirement Income Plan is a non-qualified plan that provides pension benefits above those allowed under the contribution limits for tax-qualified plans. The Summary Compensation Table reflects the annual increase in the actuarial value of these benefits. Current accrued benefits for each of the Named Executive Officers are provided in the Pension Benefit Table. As of December 31, 2009, we discontinued service accruals under our qualified and non-qualified pension plans in the U.S. and Puerto Rico for active plan participants, including all of our Named Executive Officers, and we stopped
adding new participants to our plans. For active plan participants at year-end 2009, we are allowing five additional years of pay growth in our pension plans. These actions were taken to align our retirement program with our new biopharmaceutical business strategy and culture, to respond to the competitiveness of a changing industry, and to meet the mobility and career expectations of an evolving workforce.
Savings Plans
Our savings plans allow employees to defer a portion of their total cash compensation and to receive matching contributions from BMS to supplement their income in retirement.savings and retirement income. The Savings and Investment Program is a tax-qualified 401(k) plan, as defined under IRS regulations, and the Benefit Equalization Plan–Plan for the Savings Planand Investment Program is a non-qualified deferred compensation
plan that allows employees to defer a portion of their total cash compensation and to receive matching contributions from BMS in excess of the contributions allowed under the Savings and Investment Program. The savings plans are designed to allow employees to accumulate savings for retirement on a tax-advantaged basis. The company matching contribution under our savings plans equals 100% of the employee’semployee's contribution on the first 6% of eligible compensation that an employee elects to contribute. Employees are eligible for an additional automatic company contribution that is based on a point system of one’san employee's age plus service as follows: below 40 points, the automatic contribution is an additional 3% of total cash; between 40 and 6059 points, the contribution is 4.5%; and at 60 points and above, the contribution is 6%. For those employees with 60 or more points who had 10 or more years of service at year-end 2009, an additional automatic contribution of 2% is provided for a five-year period. EachAs of December 31, 2009, each Named Executive Officer hasother than Drs. Cuss and Caforio had earned over 60 points and hashad more than 10 years of service. All U.S. employees are eligible to participate in both savings plans. The Summary Compensation Table reflects company contributions to these plans during 20112013 in the All Other Compensation column. The Non-Qualified Deferred Compensation Table provides more detail on the Benefit Equalization Plan–Plan for the Savings Plan.and Investment Program.
Annual Incentive Deferral Plan
We maintain a non-qualified deferred compensation plan for our executives, including theour Named Executive Officers. Until we discontinued new deferrals under the plan, effective January 1, 2010, the plan permitted executives to defer up to 100% of their annual cash incentive awards into a choice of two funds: a Bristol-Myers Squibb common stock unit fund and a U.S. Treasury Bill fund. Although we no longer permit new deferrals under the plan, we maintain the plan for executives who made deferrals prior to 2010. We do not pay above-market interest rates on these investments. Upon retirement or termination, plan participants are eligible to receive their deferred amounts based on a previously-selected payout schedule. The Committee may approve accelerated distributions in the event of an unforeseeable emergency. The Non-Qualified Deferred Compensation Table provides more detail on this plan for those Named Executive Officers who participated in previous years. The rationale for discontinuing new deferrals under the plan is that (i) very few employees elected to defer their bonuses in prior years; and (ii) partial bonus deferrals are now possible under our enhanced qualified and non-qualified savings plans.
Severance Plan
The Bristol-Myers Squibb Senior Executive Severance Plan provides a competitive level of severance protection for certain senior executives (including the Named Executive Officers) to help us attract and retain key talent necessary to run our company. The value of this benefit for our Named Executive Officers is shown in the “Post-Termination Benefits”"Post-Termination Benefits" section on page 57.59.
Change-in-Control Arrangements
We have entered into change-in-control agreements with certain executives including the CEO and other Named Executive Officers. These agreements enable management to evaluate and support potential transactions that might be beneficial to stockholders even though the result would be a change in control of BMS. Additionally, the agreements provide for continuity of management in the event of a change in control. Our agreements require a “double-trigger”"double-trigger" before any payments are made to an executive. This means that payments are only made in the event of a change in control and subsequent involuntary termination or termination for good reason of the employee within 36 months
after a change in control for executives who became eligible for change-in-control benefits prior to September 1, 2010, or within 24 months after a change in control for executives who became eligible for change-in-control benefits after September 1, 2010. With respect to our Named Executive Officers, if payments made to a covered officer are subject to excise tax as excess parachute payments by the Internal Revenue Code, then the covered officer is eligible to have the compensation grossed up to fully offset the excise taxes. However, if the payment does not exceed the excise tax threshold by more than 10%, we will reduce the payment so that no portion of the payment is subject to excise tax and no gross-up would be made. As of September 1, 2010, we no longer gross up compensation on excess parachute payments for newly eligible executives. If a change in control occurs during the term of the agreement, the agreement will continue in effect for either 36 months or 24 months beyond the month in which such change in control
occurred depending on whether the executive became eligible for change-in-control benefits before or after September 1, 2010. The value of this benefit for our Named Executive Officers is provided in the “Post-Termination Benefits”"Post-Termination Benefits" section.
Other Compensation
Except as set forth below, we did not provide perquisites and other personal benefits to our Named Executive Officers that were not otherwise available to all salaried employees.
On February 21, 2011, Ms. Cazala, our Executive Vice President, Commercial Operations, began a long-term assignment in the United States. Prior to that time, she had been working in the United States on a short-term assignment as a French expatriate. During 2011,Under the company providedemployment letter agreement we entered into with Ms. Cazala with a reimbursement for a portion of the legal fees she incurred in connection with her transition tolong-term assignment, the long-term assignment. The reimbursement was grossed up for taxes. The company also made payments to continue certain of Ms. Cazala’sCazala's social insurance and company-sponsored health and welfare benefits in France. Between January 1 and February 21, 2011,Additionally, Ms. Cazala received reimbursement of tax preparation fees related to her past expatriate arrangement and a number of other benefits that aretax gross up on such amount during 2013, which is a benefit generally available to any of our salaried employees who had been working under an expatriate arrangement, including a car allowance, a cost of living allowance, the reimbursement of relocation costs, a tax gross up on the payment of relocation costs, and the reimbursement of tax preparation fees. As a French expatriate, Ms. Cazala was also entitled to company contributions to the French profit sharing and gain sharing plans.arrangement. The amounts relating to these benefits are disclosed in the All Other Compensation column in the Summary Compensation Table. We ceased providing these expatriate benefits toAs further discussed on page 61, we have entered into a Settlement Agreement and General Release with Ms. Cazala on February 21, 2011 when she beganand her long-term U.S. assignment.employment letter agreement has been terminated.
TAX IMPLICATIONS OF EXECUTIVE COMPENSATION PROGRAM
Section 162(m) of the Internal Revenue Code includes potential limitations on the deductibility of compensation in excess of $1 million paid to certain Named Executive Officers. A significant portion of the compensation we pay to our Named Executive Officers qualifies as “performance-based compensation”"performance-based compensation" for purposes of Section 162(m) and is, therefore, eligible to be fully deducted by BMS for federal income tax purposes. We view preserving tax deductibility as an important objective, but not the sole objective, in establishing executive compensation. In specific instances, we may authorize compensation arrangements that are not fully tax deductible, but which promote other important objectives. To the extent that compensation paid in 20112013 to certain Named Executive Officers, such as salary and distributions pursuant to the vesting of restricted stock units awarded without performance-based vesting conditions, does not qualify for an exception under Section 162(m) and exceeds $1 million in the aggregate, we will not be able to deduct such excess for federal income tax purposes.
Under the 2008 portion of the 2008-2010 special performance share unit award, the cash flow metric did not qualify for deductibility. Under the 2009 portion of the 2008-2010 performance share unit award and the 2008-2010 special performance share unit award, certain expenses related to the acquisition of Medarex, Inc. and the extension of our agreement with Otsuka Pharmaceutical Co., Ltd. to market ABILIFY* in the U.S. were excluded from the calculation of payouts after targets had been set by the Committee. Additionally, the market share units that vested on March 2, 2011 and May 4, 2011 did not qualify for deductibility under Section 162(m). As a result of these items, we lost deductibility on payments totaling $4.1 million in 2011.
COMPENSATION PROGRAM CHANGES FOR 20122014
Our 2011 annual We implemented certain changes to our compensation program for 2014 to support the continued evolution of our biopharmaceutical business strategy and long-term incentive programs usedculture. These changes are described below:
Through these changes, we were able to achieve several objectives that support our biopharmaceutical business strategy:
CORPORATE POLICIES COVERING EXECUTIVE COMPENSATION
Share Ownership and Retention Policy
In order to preserve the link between the interests of the Named Executive Officers and those of stockholders, executives are expected to use the shares acquired upon the exercise of their previously granted stock options, after satisfying the cost of exercise and taxes, to establish and maintain a significant level of direct ownership. This same expectation applies to shares acquired upon the vesting of (i) restricted stock units, (ii) market share units and (iii) performance share unit awards granted in 2011 and beyond. We continue to maintain longstanding share-ownership expectations for our senior
executives. Our current Named Executive Officers must comply with the following ownership and retention requirements:
| Share Retention Policy—applied to all shares acquired, net of taxes | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Executive | Stock Ownership Guideline as a Multiple of Salary | Achieving Guideline | 2013 Compliance with Share Ownership and Retention Policy | ||||||||||||||
| |||||||||||||||||
| 6 x | 100% | 75% for 1 year | Yes | |||||||||||||
C. Bancroft | 3 x | 100% | 75% for 1 year | Yes | |||||||||||||
| 3 x | 100% | 75% for 1 year | Yes | |||||||||||||
| 3 x | 100% | 75% for 1 year | Yes | |||||||||||||
S. Leung | 2 x | 100% | 75% for 1 year | Yes | |||||||||||||
Recoupment of Compensation
We maintain clawback provisions relating to stock options, restricted stock units, performance share units and market share units. Under these clawback provisions, executives that violate non-competition or non-solicitation agreements, or otherwise act in a manner detrimental to our interests, forfeit any outstanding awards, and any accrued and unpaid dividend equivalents underlying these awards, as of the date such violation is discovered and have to return any gains realized in the twelve months prior to the violation. These provisions serve to protect our intellectual property and human capital, and help ensure that executives act in the best interest of BMS and our stockholders.
In 2005, the Board adopted a policy wherein the Board will seek reimbursement of annual incentives paid to an executive if such executive engaged in misconduct that caused or partially caused a restatement of financial results. In such an event, we will seek to claw back the executive’sexecutive's entire annual incentive for the relevant period, plus a reasonable rate of interest. This policy may be viewed on our website at www.bms.com.www.bms.com.
We are awaiting final rules from In December 2012, the Board adopted a policy that BMS will seek recoupment of any bonus and/or other compensation paid to executives and certain other employees after December 4, 2012 where:
In any instance where the employee misconduct occurred in a prior year, the Committee may elect to reduce a current or future bonus and/or other compensation award in lieu of requiring reimbursement of past compensation previously paid to such executive or other employee. This policy may be viewed on our website atwww.bms.com.
Once the SEC to implementhas implemented Dodd-Frank legislation on clawback provisions, we will review and will revise our policy,policies, as appropriate, based on such rules.
Equity Grant Policy
In 2006, the Committee approved a The Committee's policy covering equity grants to all employees. Forfor the Named Executive Officers the policy is as follows.
Approval of Awards
Grant Effective Date
Annual Awards
For
All Other Awards
In no case whatsoever will the grant effective date precede the approval date of a given award.
Grant Price
Policy Against the Repricing of Stock Options
We have always maintained a consistent policy against the repricing of stock options. We believe this is a critical element in maintaining the integrity of the equity compensation program and ensuring alignment of senior executives’executives' interests with the interests of stockholders. The Board of Directors has adopted a formal policy prohibiting the repricing of stock options without stockholder approval. This policy may be viewed on our website at www.bms.com.www.bms.com.
Policy Regarding Stockholder Approval of Severance
The Board has approved a policy that requires stockholder approval of any future agreements that provide for cash severance payments in excess of 2.99 times the sum of an executive’sexecutive's base salary plus annual incentive. “Cash"Cash severance payments”payments" exclude accrued incentive payments, the value of equity acceleration, benefits continuation or the increase in retirement benefits triggered by severance provisions or tax gross-up payments. This policy may be viewed on our website at www.bms.com.www.bms.com.
Compensation and Management Development Committee Report
The Compensation and Management Development Committee (Committee) of Bristol-Myers Squibb Company has reviewed and discussed with management the Compensation Discussion and Analysis on pages 2827 to 4546 of this Proxy Statement as required under Item 402(b) of Regulation S-K. Based on its review and discussions with management, the Committee recommended to the full Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
Compensation and Management Development Committee
Lewis B. Campbell, Chair
Michael Grobstein
Vicki L. Sato, Ph.D.
Gerald L. Storch
Togo D. West, Jr., Chair
Lewis B. Campbell
Michael Grobstein
Vicki L. Sato, Ph.D.
Gerald L. Storch
The following tables and notes present the compensation provided to Lamberto Andreotti, Chief Executive Officer, Charles A. Bancroft, Executive Vice President and Chief Financial Officer, and the three other most highly compensated Executive OfficersOfficers. The tables and Anthony C. Hooper,notes also include two additional highly compensated executives: Elliott Sigal, M.D., Ph.D., our former SeniorExecutive Vice President Commercial Operations & President U.S., Japan and IntercontinentalChief Scientific Officer, who retired from the company effective October 25, 2011.June 30, 2013, and Beatrice Cazala, our former Executive Vice President, Commercial Operations in charge of Global Commercialization, Europe and China, who ceased serving in that Executive Officer role effective November 13, 2013.
For
for Fiscal Years Ended December 31, 2013, 2012 and 2011
Name and Principal Position | Year (1) | Salary (2) | Stock Awards (3) | Non-Equity Incentive Plan Compensation (4) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings (5) | All Other Compensation (6) | Total | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Lamberto Andreotti | 2013 | $ | 1,686,539 | $ | 14,586,898 | $ | 3,799,913 | $ | 0 | $ | 774,396 | $ | 20,847,746 | |||||||||
Chief Executive Officer | 2012 | $ | 1,623,077 | $ | 9,722,004 | $ | 3,844,864 | $ | 1,193,957 | $ | 818,078 | $ | 17,201,980 | |||||||||
| 2011 | $ | 1,510,192 | $ | 7,351,673 | $ | 4,220,340 | $ | 1,179,899 | $ | 649,843 | $ | 14,911,947 | |||||||||
Charles Bancroft | 2013 | $ | 901,092 | $ | 4,778,079 | $ | 1,128,108 | $ | 759,507 | $ | 311,230 | $ | 7,878,016 | |||||||||
EVP and Chief Financial | 2012 | $ | 868,635 | $ | 2,395,753 | $ | 1,321,979 | $ | 3,662,332 | $ | 318,614 | $ | 8,567,313 | |||||||||
Officer | 2011 | $ | 809,712 | $ | 2,151,058 | $ | 1,407,181 | $ | 2,754,087 | $ | 250,363 | $ | 7,372,400 | |||||||||
Francis Cuss, MB, | 2013 | $ | 736,102 | $ | 2,016,197 | $ | 748,372 | $ | 65,331 | $ | 153,035 | $ | 3,719,037 | |||||||||
BChir, FRCP | ||||||||||||||||||||||
Giovanni Caforio, M.D. | 2013 | $ | 748,320 | $ | 1,587,106 | $ | 788,565 | $ | 0 | $ | 177,861 | $ | 3,301,852 | |||||||||
EVP and Chief Commercial Officer | ||||||||||||||||||||||
Sandra Leung | 2013 | $ | 843,087 | $ | 2,883,914 | $ | 844,238 | $ | 0 | $ | 245,048 | $ | 4,816,287 | |||||||||
General Counsel | 2012 | $ | 768,738 | $ | 2,020,399 | $ | 907,256 | $ | 1,953,216 | $ | 243,163 | $ | 5,892,772 | |||||||||
& Corporate Secretary | 2011 | $ | 724,587 | $ | 1,827,335 | $ | 968,140 | $ | 1,758,498 | $ | 213,113 | $ | 5,491,673 | |||||||||
Elliott Sigal, M.D., Ph.D.(7) | 2013 | $ | 564,451 | $ | 5,890,044 | $ | 653,134 | $ | 0 | $ | 340,796 | $ | 7,448,425 | |||||||||
Former EVP and Chief | 2012 | $ | 1,063,209 | $ | 3,219,625 | $ | 1,869,807 | $ | 1,740,960 | $ | 450,082 | $ | 8,343,683 | |||||||||
Scientific Officer | 2011 | $ | 1,034,986 | $ | 2,908,753 | $ | 2,151,663 | $ | 2,518,327 | $ | 418,268 | $ | 9,031,998 | |||||||||
Beatrice Cazala(8) | 2013 | $ | 894,694 | $ | 3,611,980 | $ | 895,915 | $ | 0 | $ | 75,609 | $ | 5,478,198 | |||||||||
Former EVP, Commercial | 2012 | $ | 868,635 | $ | 2,445,800 | $ | 1,126,130 | $ | 3,522,012 | $ | 68,448 | $ | 8,031,025 | |||||||||
Operations | 2011 | $ | 895,100 | $ | 2,602,126 | $ | 1,353,436 | $ | 957,938 | $ | 132,567 | $ | 5,941,167 | |||||||||
these awards is disclosed in the Grants of Plan-Based Awards Table in the Proxy Statements for the specified years. For performance share unit awards, the following represents the aggregate value based on the maximum number of shares that can be earned for the awards granted in the specified years.
Name and Principal Position | Year (1) | Salary (2) | Stock Awards (3) | Option Awards (4) | Non-Equity Incentive Plan Compen- sation (5) | Change in Pension Value and Non- Qualified Deferred Compen- sation Earnings (6) | All Other Compen- sation (7) | Total | ||||||||||||||||||||||||
Lamberto Andreotti | 2011 | $ | 1,510,192 | $ | 7,351,673 | $ | 0 | $ | 4,220,340 | $ | 1,179,899 | $ | 649,843 | $ | 14,911,947 | |||||||||||||||||
Chief Executive Officer | 2010 | $ | 1,347,868 | $ | 5,808,704 | $ | 0 | $ | 3,131,544 | $ | 863,366 | $ | 619,398 | $ | 11,770,880 | |||||||||||||||||
| 2009 | $ | 1,244,730 | $ | 1,636,206 | $ | 1,684,655 | $ | 3,076,402 | $ | 1,307,315 | $ | 56,013 | $ | 9,005,321 | ||||||||||||||||||
Charles A. Bancroft | 2011 | $ | 809,712 | $ | 2,151,058 | $ | 0 | $ | 1,407,181 | $ | 2,754,087 | $ | 250,363 | $ | 7,372,400 | |||||||||||||||||
EVP and Chief Financial Officer | 2010 | $ | 678,830 | $ | 1,000,385 | $ | 0 | $ | 978,595 | $ | 1,418,419 | $ | 142,409 | $ | 4,218,638 | |||||||||||||||||
Elliott Sigal, M.D., Ph.D. | 2011 | $ | 1,034,986 | $ | 2,908,753 | $ | 0 | $ | 2,151,663 | $ | 2,518,327 | $ | 418,268 | $ | 9,031,998 | |||||||||||||||||
EVP and Chief | 2010 | $ | 1,020,000 | $ | 2,918,790 | $ | 0 | $ | 1,952,642 | $ | 1,941,559 | $ | 449,383 | $ | 8,282,374 | |||||||||||||||||
Scientific Officer | 2009 | $ | 1,014,846 | $ | 3,436,891 | $ | 1,350,155 | $ | 2,189,879 | $ | 1,966,999 | $ | 45,668 | $ | 10,004,439 | |||||||||||||||||
Beatrice Cazala | 2011 | $ | 895,100 | $ | 2,602,126 | $ | 0 | $ | 1,353,436 | $ | 957,938 | $ | 132,567 | $ | 5,941,167 | |||||||||||||||||
EVP Commercial Operations | ||||||||||||||||||||||||||||||||
Sandra Leung | 2011 | $ | 724,587 | $ | 1,827,335 | $ | 0 | $ | 968,140 | $ | 1,758,498 | $ | 213,113 | $ | 5,491,673 | |||||||||||||||||
General Counsel | 2010 | $ | 675,000 | $ | 1,824,035 | $ | 0 | $ | 797,648 | $ | 1,110,255 | $ | 222,965 | $ | 4,629,903 | |||||||||||||||||
& Secretary | ||||||||||||||||||||||||||||||||
Anthony C. Hooper | 2011 | $ | 711,323 | $ | 2,307,474 | $ | 0 | $ | 867,206 | $ | 1,729,920 | $ | 273,425 | $ | 5,889,348 | |||||||||||||||||
Former SVP Commercial Operations & President US, Japan and Intercontinental |
| 2010 2009 |
| $ $ | 800,000 782,308 |
| $ $ | 2,649,962 1,005,715 |
| $ $ | 0 1,022,217 |
| $ $ | 1,276,236 1,113,373 |
| $ $ | 1,154,442 1,068,498 |
| $ $ | 267,872 35,204 |
| $ $ | 6,148,512 5,027,315 |
| ||||||||
|
| | Performance Share Units | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Name | 2011 | 2012 | 2013 | |||||||
Lamberto Andreotti | $ | 6,511,186 | $ | 10,044,739 | $ | 17,513,725 | ||||
Charles Bancroft | $ | 1,428,360 | $ | 2,450,141 | $ | 4,741,036 | ||||
Francis Cuss, MB BChir, FRCP(1) | n.a. | n.a. | $ | 1,867,635 | ||||||
Giovanni Caforio, M.D.(1) | n.a. | n.a. | $ | 1,436,011 | ||||||
Sandra Leung | $ | 1,777,063 | $ | 2,194,865 | $ | 3,608,164 | ||||
Elliott Sigal, M.D., Ph.D. | $ | 2,844,839 | $ | 3,514,622 | $ | 5,660,978 | ||||
Beatrice Cazala | $ | 1,895,405 | $ | 2,533,970 | $ | 4,567,447 | ||||
|
|
| Performance Share Units | Market Share Units | |||||||||||||||||||
Name | 2009 | 2010 | 2011 | 2010 | 2011 | |||||||||||||||
Lamberto Andreotti | $ | 1,936,847 | $ | 4,659,199 | $ | 6,511,186 | $ | 6,049,061 | $ | 6,928,794 | ||||||||||
Charles A. Bancroft (1) | n.a. | $ | 739,907 | $ | 1,428,360 | $ | 1,116,564 | $ | 2,014,120 | |||||||||||
Elliott Sigal, M.D., Ph.D. | $ | 1,785,818 | $ | 2,890,966 | $ | 2,844,839 | $ | 2,380,556 | $ | 2,420,684 | ||||||||||
Beatrice Cazala (1) | n.a. | n.a. | $ | 1,895,405 | n.a. | $ | 1,939,523 | |||||||||||||
Sandra Leung (1) | n.a. | $ | 1,836,770 | $ | 1,777,063 | $ | 1,451,533 | $ | 1,532,804 | |||||||||||
Anthony C. Hooper | $ | 1,185,985 | $ | 2,114,703 | $ | 2,240,668 | $ | 1,760,649 | $ | 1,939,523 | ||||||||||
|
|
|
|
|
Name | Change in Pension Value | |||
|---|---|---|---|---|
| ($267,561) | |||
| | |||
| | |||
Beatrice Cazala | ($169,869) | |||
For 2013, for Mr. Bancroft and Dr. Cuss, the rise in interest rates was offset by increases in their Final Average Compensation, which is defined as the average of the five consecutive years out of the last ten years, ending December 31, 2014, in which the employee's compensation was the highest. Ms. Cazala was a participant in the U.S. pension plan during her U.S. assignment from June 1, 1987 through April 30, 1991. Additionally, Ms. Cazala is a participant in our Supplementary Pension Plan payable in Euros. The change in value relating to the Supplementary Pension Plan also reflects the difference in exchange rates used to convert the 2011, 2012 and 2013 amounts from Euros into US dollars. These exchange rates were 1.3928, 1.2861 and 1.3279 for 2011, 2012 and 2013, respectively. Dr. Caforio is not a participant in any company pension plans.
Name | Company Contributions to Savings Plans | |||
|---|---|---|---|---|
Lamberto Andreotti | $ | 774,396 | ||
Charles Bancroft | $ | 311,230 | ||
Francis Cuss, MB BChir, FRCP | $ | 153,035 | ||
Giovanni Caforio, M.D. | $ | 177,861 | ||
Sandra Leung | $ | 245,048 | ||
Elliott Sigal, M.D., Ph.D. | $ | |||
Beatrice Cazala | $ | 0 | ||
| ||||
| ||||
On occasion, a family member accompanied Mr. Bancroft when traveling on the company's HeliFlite account for business travel. Mr. Bancroft paid the taxes on the imputed income as calculated using the Standard Industry Fare Level (SIFL) rate. We did not reimburse Mr. Bancroft for taxes he paid.
|
Employment Letter Agreement
On February 11, 2011, we entered into an employment letter agreement with Ms. Cazala in connection with the commencement of her long-term assignment in the United States, which took effect on February 21, 2011. At the same time, Ms. Cazala’sCazala's employment contract with our French subsidiary, Bristol-Myers Squibb SARL, was suspended. Prior to February 21, 2011, Ms. Cazala had been workingCazala's employment letter agreement was terminated by the company in January 2014, resulting in the United Statesautomatic reinstatement of her French employment contract. As previously announced, Ms. Cazala's French contract is being terminated effective June 9, 2014. In connection with Ms. Cazala's departure from the company, we entered into a Settlement Agreement and General Release with her, which is further described on a short-term assignment as a French expatriate. Underpage 61.
During the term of the U.S. employment letter agreement, Ms. Cazala is entitled to an initial base salary of $800,000, as well as a target bonus equal to 100% of her base salary. As described above in the CD&A, Ms. Cazala’s base salary was increased in October 2011 in connection with her appointment as Executive Vice President of the company and to recognize an increase in her responsibilities. On March 1, 2011, Ms. Cazala received a special RSU award valued at $500,000 under the terms of her employment letter agreement, with one-third of the award vesting on each of the third, fourth and fifth anniversaries of the grant date.
Ms. Cazala is eligible to participate in the company’scompany's U.S. benefit plans. The company hashad also agreed to continue certain of Ms. Cazala’sCazala's social insurance and company-sponsored health and welfare benefits in France under the same cost-sharing arrangements that applied before Ms. Cazala’sCazala's long-term assignment in the United States. During the term of her U.S. assignment, Ms. Cazala’sCazala's participation in our Supplementary Pension Plan has beenwas suspended, although she will be eligible to
receive credit under the plan for her service in the United States in the event her U.S. assignment is terminated and her former employment contract is reinstated. As a result,States. Ms. Cazala iswas not eligible to participate in the Savings and Investment Program.
The employment letter agreement does not provide Ms. Cazala with any right to continued employment with the company or any subsidiary; however, her former contract will be automatically reinstated if she is terminated from her assignment in the United States. In the event Ms. Cazala’s assignment in the United States is involuntarily terminated not for cause, then we will be responsible for the cost of a one-way economy class airline ticket and the reasonable costs associated with the shipment of household goods if Ms. Cazala elects to return to France.
We do not have employment agreements with any of our other Named Executive Officers.
Grants of Plan-Based Awards
2013 Fiscal Year
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(3) | Estimated Future Payouts Under Equity Incentive Plan Awards (shares) | | | | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | All Other Stock Awards: # of Shares of Stock or Units | Grant Date Fair Value of Stock and Option Awards(4) | | |||||||||||||||||||||||||||
Name | Grant Date(1) | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | |||||||||||||||||||||||
Lamberto Andreotti | $ | 294,384 | $ | 2,531,250 | $ | 6,355,475 | ||||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 17,631 | 165,865 | 277,824 | (5)(8) | $ | 6,203,351 | ||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 6,216 | 58,480 | 97,954 | (6)(8) | $ | 2,187,152 | ||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 5,871 | 55,226 | 92,504 | (7)(8) | $ | 2,065,452 | ||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 66,272 | 110,453 | 220,906 | (9) | $ | 4,130,942 | ||||||||||||||||||||||||
Charles Bancroft | $ | 104,875 | $ | 901,765 | $ | 2,264,156 | ||||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 5,125 | 48,215 | 80,760 | (5)(8) | $ | 1,803,241 | |||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 1,557 | 14,647 | 24,534 | (6)(8) | $ | 547,798 | |||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 1,363 | 12,819 | 21,472 | (7)(8) | $ | 479,431 | |||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 15,384 | 25,640 | 51,280 | (9) | $ | 958,936 | |||||||||||||||||||||||||
| 12/02/13 | 11/13/13 | 19,205 | (10) | $ | 988,673 | |||||||||||||||||||||||||||
Francis Cuss, | $ | 75,623 | $ | 650,238 | $ | 1,632,621 | ||||||||||||||||||||||||||
MB BChir, FRCP | 03/10/13 | 03/07/13 | 1,947 | 18,316 | 30,679 | (5)(8) | $ | 685,018 | ||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 640 | 6,019 | 10,082 | (6)(8) | $ | 225,111 | ||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 582 | 5,478 | 9,176 | (7)(8) | $ | 204,877 | ||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 6,575 | 10,958 | 21,916 | (9) | $ | 409,829 | ||||||||||||||||||||||||
| 07/01/13 | 03/29/13 | (2) | 10,963 | (10) | $ | 491,362 | |||||||||||||||||||||||||
Giovanni Caforio, | $ | 73,309 | $ | 630,348 | $ | 1,582,681 | ||||||||||||||||||||||||||
M.D. | 03/10/13 | 03/07/13 | 785 | 7,389 | 12,377 | (5)(8) | $ | 276,349 | ||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 614 | 5,778 | 9,678 | (6)(8) | $ | 216,097 | |||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 1,037 | 9,756 | 16,341 | (7)(8) | $ | 364,874 | |||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 11,708 | 19,513 | 39,026 | (9) | $ | 729,786 | |||||||||||||||||||||||||
Sandra Leung | $ | 78,485 | $ | 674,850 | $ | 1,694,417 | ||||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 3,901 | 36,694 | 61,462 | (5)(8) | $ | 1,372,356 | ||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 1,185 | 11,147 | 18,671 | (6)(8) | $ | 416,898 | ||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 1,037 | 9,756 | 16,341 | (7)(8) | $ | 364,874 | ||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 11,708 | 19,513 | 39,026 | (9) | $ | 729,786 | ||||||||||||||||||||||||
Elliott Sigal, M.D., | $ | 152,919 | $ | 1,314,868 | $ | 3,301,376 | ||||||||||||||||||||||||||
Ph.D.(11) | 03/10/13 | 03/07/13 | 6,160 | 57,948 | 97,063 | (5)(8) | $ | 2,167,255 | ||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 1,871 | 17,603 | 29,485 | (6)(8) | $ | 658,352 | |||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 1,575 | 14,815 | 24,815 | (7)(8) | $ | 554,081 | |||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 17,778 | 29,630 | 59,260 | (9) | $ | 1,108,162 | |||||||||||||||||||||||||
| 06/30/13 | 05/07/13 | 31,376 | $ | 1,402,193 | (12) | |||||||||||||||||||||||||||
Beatrice Cazala | $ | 104,112 | $ | 895,199 | $ | 2,247,670 | ||||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 4,936 | 46,430 | 77,770 | (5)(8) | $ | 1,736,482 | ||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 1,557 | 14,647 | 24,534 | (6)(8) | $ | 547,798 | ||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 1,258 | 11,833 | 19,820 | (7)(8) | $ | 442,554 | ||||||||||||||||||||||||
| 03/10/13 | 03/07/13 | 14,200 | 23,667 | 47,334 | (9) | $ | 885,146 | ||||||||||||||||||||||||
based on the grant date closing price of $44.69 on June 28, 2013 (the last trading date preceding the grant date of June 30) for Dr. Sigal's award, $44.82 on July 1, 2013 for Dr. Cuss' award, and $51.48 on December 2, 2013 for Mr. Bancroft's award. These values are consistent with the grant date estimate of compensation costs to be recognized over the service period, excluding the effect of forfeitures.
Name | Grant Date(1) | Approval Date (1) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(3) | Estimated Future Payouts Under Equity Incentive Plan Awards (shares) | All Other Stock Awards: # of Shares of Stock or Units | Grant Date Fair Value of Stock and Option Awards (4) | ||||||||||||||||||||||||||||||||||
| Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||
Lamberto Andreotti | $ | 210,994 | $ | 2,268,750 | $ | 5,696,389 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 2,136 | 26,271 | 44,004 | (5)(8) | $ | 638,385 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 4,933 | 60,676 | 101,632 | (6)(8) | $ | 1,552,092 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 5,393 | 66,333 | 111,108 | (7)(8) | $ | 1,696,798 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 80,474 | 134,123 | 268,246 | (9) | $ | 3,464,397 | ||||||||||||||||||||||||||||||||||
Charles A. Bancroft | $ | 75,563 | $ | 812,500 | $ | 2,040,029 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 234 | 2,884 | 4,831 | (5)(8) | $ | 70,081 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 920 | 11,315 | 18,953 | (6)(8) | $ | 289,438 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | �� | 1,568 | 19,282 | 32,297 | (7)(8) | $ | 493,234 | |||||||||||||||||||||||||||||||||
| 03/01/11 | 23,393 | 38,988 | 77,976 | (9) | $ | 1,007,060 | ||||||||||||||||||||||||||||||||||
| 11/01/11 | 10/14/11 | 9,302 | (10) | $ | 291,246 | |||||||||||||||||||||||||||||||||||
Elliott Sigal, M.D., Ph.D. | $ | 115,539 | $ | 1,242,360 | $ | 3,119,324 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 1,634 | 20,103 | 33,673 | (5)(8) | $ | 488,503 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 1,961 | 24,124 | 40,408 | (6)(8) | $ | 617,092 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 1,884 | 23,175 | 38,818 | (7)(8) | $ | 592,817 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 28,115 | 46,858 | 93,716 | (9) | $ | 1,210,342 | ||||||||||||||||||||||||||||||||||
Beatrice Cazala | $ | 75,472 | $ | 811,524 | $ | 2,037,579 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 1,035 | 12,728 | 21,319 | (5)(8) | $ | 309,290 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 1,104 | 13,578 | 22,743 | (6)(8) | $ | 347,325 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 1,510 | 18,568 | 31,101 | (7)(8) | $ | 474,969 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 22,526 | 37,544 | 75,088 | (9) | $ | 969,762 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 01/24/11 | (2) | 19,577 | (10) | $ | 500,780 | ||||||||||||||||||||||||||||||||||
Sandra Leung | $ | 53,987 | $ | 580,500 | $ | 1,457,522 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 1,035 | 12,728 | 21,319 | (5)(8) | $ | 309,290 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 1,196 | 14,710 | 24,639 | (6)(8) | $ | 376,282 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 1,193 | 14,674 | 24,579 | (7)(8) | $ | 375,361 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 17,803 | 29,671 | 59,342 | (9) | $ | 766,402 | ||||||||||||||||||||||||||||||||||
Anthony C. Hooper (11) | $ | 75,516 | $ | 812,000 | $ | 2,038,774 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 1,359 | 16,722 | 28,009 | (5)(8) | $ | 406,345 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 1,451 | 17,842 | 29,885 | (6)(8) | $ | 456,398 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 1,510 | 18,568 | 31,101 | (7)(8) | $ | 474,969 | ||||||||||||||||||||||||||||||||||
| 03/01/11 | 22,526 | 37,544 | 75,088 | (9) | $ | 969,762 | ||||||||||||||||||||||||||||||||||
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Outstanding Equity Awards at Fiscal Year-End
2013 Fiscal Year
| | | Option Awards | Stock Awards | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Rights That Have Not Vested ($)(5) | |||||||||||||||||||
| | | Number of Securities Underlying Unexercised Options (#) | | | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3)(5) | ||||||||||||||||||||||
Name | Grant Date/ Performance Award Period | Exer- cisable(2) | Unexer- cisable(1)(2) | Option Exercise Price | Option Expiration Date | |||||||||||||||||||||||
Lamberto Andreotti | 3/2/2004 | 108,000 | 0 | $ | 28.11 | 3/1/2014 | ||||||||||||||||||||||
| 3/1/2005 | 112,500 | 0 | (8) | $ | 25.45 | 2/28/2015 | |||||||||||||||||||||
| 3/7/2006 | 115,000 | 0 | (8) | $ | 22.73 | 3/6/2016 | |||||||||||||||||||||
| 12/1/2006 | 300,000 | 0 | (8) | $ | 24.74 | 11/30/2016 | |||||||||||||||||||||
| 3/6/2007 | 234,720 | 0 | (8) | $ | 27.01 | 3/5/2017 | |||||||||||||||||||||
| 3/4/2008 | 305,909 | 0 | (8) | $ | 22.14 | 3/3/2018 | |||||||||||||||||||||
| 3/3/2009 | 368,706 | 0 | (8) | $ | 17.51 | 3/2/2019 | 10,344 | (4) | $ | 549,784 | |||||||||||||||||
| 1/1/2011-12/31/2013 | 360,641 | (9) | $ | 19,168,088 | |||||||||||||||||||||||
| 1/1/2012-12/31/2014 | 135,637 | (10) | $ | 7,209,129 | |||||||||||||||||||||||
| 1/1/2013-12/31/2015 | 57,407 | (11) | $ | 3,051,163 | |||||||||||||||||||||||
| 3/2/2010 | 32,698 | (6) | $ | 1,737,899 | |||||||||||||||||||||||
| 5/4/2010 | 27,980 | (6) | $ | 1,487,137 | |||||||||||||||||||||||
| 3/1/2011 | 134,124 | (6) | $ | 7,128,691 | |||||||||||||||||||||||
| 3/6/2012 | 175,440 | (6) | $ | 9,324,636 | |||||||||||||||||||||||
| 3/10/2013 | 66,272 | (7) | $ | 3,522,346 | |||||||||||||||||||||||
Charles Bancroft | 3/1/2005 | 16,931 | 0 | $ | 25.45 | 2/28/2015 | ||||||||||||||||||||||
| 3/7/2006 | 19,320 | 0 | $ | 22.73 | 3/6/2016 | |||||||||||||||||||||||
| 3/6/2007 | 22,598 | 0 | $ | 27.01 | 3/5/2017 | |||||||||||||||||||||||
| 3/4/2008 | 37,460 | 0 | $ | 22.14 | 3/3/2018 | |||||||||||||||||||||||
| 3/3/2009 | 52,884 | 0 | $ | 17.51 | 3/2/2019 | |||||||||||||||||||||||
| 11/1/2011 | 9,302 | (4) | $ | 494,401 | ||||||||||||||||||||||||
| 12/2/2013 | 19,205 | (4) | $ | 1,020,746 | ||||||||||||||||||||||||
| 1/1/2011-12/31/2013 | 104,835 | (9) | $ | 5,571,964 | ||||||||||||||||||||||||
| 1/1/2012-12/31/2014 | 33,971 | (10) | $ | 1,805,547 | ||||||||||||||||||||||||
| 1/1/2013-12/31/2015 | 13,325 | (11) | $ | 708,249 | ||||||||||||||||||||||||
| 3/2/2010 | 11,316 | (6) | $ | 601,445 | ||||||||||||||||||||||||
| 3/1/2011 | 38,988 | (6) | $ | 2,072,212 | ||||||||||||||||||||||||
| 3/6/2012 | 43,940 | (6) | $ | 2,335,411 | ||||||||||||||||||||||||
| 3/10/2013 | 15,384 | (7) | $ | 817,660 | ||||||||||||||||||||||||
Francis Cuss, MB | 3/2/2004 | 38,667 | 0 | $ | 28.11 | 3/1/2014 | ||||||||||||||||||||||
BChir, FRCP | 3/1/2005 | 38,667 | 0 | $ | 25.45 | 2/28/2015 | ||||||||||||||||||||||
| 12/1/2006 | 100,000 | 0 | $ | 24.74 | 11/30/2016 | ||||||||||||||||||||||
| 3/6/2007 | 39,010 | 0 | $ | 27.01 | 3/5/2017 | ||||||||||||||||||||||
| 11/2/2009 | 6,666 | (4) | $ | 354,298 | |||||||||||||||||||||||
| 7/1/2013 | 10,963 | (4) | $ | 582,683 | |||||||||||||||||||||||
| 1/1/2011-12/31/2013 | 39,825 | (9) | $ | 2,116,706 | |||||||||||||||||||||||
| 1/1/2012-12/31/2014 | 13,959 | (10) | $ | 741,917 | |||||||||||||||||||||||
| 1/1/2013-12/31/2015 | 5,694 | (11) | $ | 302,657 | |||||||||||||||||||||||
| 3/2/2010 | 8,262 | (6) | $ | 439,125 | |||||||||||||||||||||||
| 3/1/2011 | 14,812 | (6) | $ | 787,258 | |||||||||||||||||||||||
| 3/6/2012 | 18,058 | (6) | $ | 959,783 | |||||||||||||||||||||||
| 3/10/2013 | 6,575 | (7) | $ | 349,451 | |||||||||||||||||||||||
Giovanni Caforio, | 3/7/2006 | 20,125 | 0 | $ | 22.89 | 3/6/2016 | ||||||||||||||||||||||
M.D. | 3/6/2007 | 21,615 | 0 | $ | 27.01 | 3/5/2017 | ||||||||||||||||||||||
| 3/4/2008 | 28,840 | 0 | $ | 23.12 | 3/3/2018 | |||||||||||||||||||||||
| 3/3/2009 | 39,363 | 0 | $ | 17.51 | 3/2/2019 | |||||||||||||||||||||||
| 1/3/2011 | 15,000 | (4) | $ | 797,250 | ||||||||||||||||||||||||
| 1/1/2011-12/31/2013 | 16,066 | (9) | $ | 853,908 | ||||||||||||||||||||||||
| 1/1/2012-12/31/2014 | 13,402 | (10) | $ | 712,291 | ||||||||||||||||||||||||
| 1/1/2013-12/31/2015 | 10,141 | (11) | $ | 538,994 | ||||||||||||||||||||||||
| 3/2/2010 | 2,394 | (6) | $ | 127,241 | ||||||||||||||||||||||||
| 3/1/2011 | 5,976 | (6) | $ | 317,624 | ||||||||||||||||||||||||
| 3/6/2012 | 17,334 | (6) | $ | 921,302 | ||||||||||||||||||||||||
| 3/10/2013 | 11,708 | (7) | $ | 622,270 | ||||||||||||||||||||||||
2011 Fiscal YearTable of Contents
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
| Number of Securities Underlying Unexercised Options (#) | Number of Shares or Units of Stock That Have Not Vested (#) (3)(4) | Market Value of Shares or Units of Stock That Have Not Vested ($) (3) (5) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Rights That Have Not Vested ($) (5) | ||||||||||||||||||||||||||||||||
Name | Grant Date/ Performance Award Period | Exer- cisable(2) | Unexer- cisable(1)(2) | Option Exercise Price | Option Expiration Date | |||||||||||||||||||||||||||||||
Lamberto Andreotti | 3/5/2002 | 40,000 | 0 | $ | 48.08 | 3/4/2012 | ||||||||||||||||||||||||||||||
| 3/4/2003 | 135,000 | 0 | $ | 23.14 | 3/4/2013 | |||||||||||||||||||||||||||||||
| 3/2/2004 | 108,000 | 0 | $ | 28.11 | 3/1/2014 | |||||||||||||||||||||||||||||||
| 3/1/2005 | 112,500 | 0 | (8) | $ | 25.45 | 2/28/2015 | ||||||||||||||||||||||||||||||
| 3/7/2006 | 115,000 | 0 | (8) | $ | 22.73 | 3/6/2016 | ||||||||||||||||||||||||||||||
| 12/1/2006 | 300,000 | 0 | (8) | $ | 24.74 | 11/30/2016 | ||||||||||||||||||||||||||||||
| 3/6/2007 | 234,720 | 0 | (8) | $ | 27.01 | 3/5/2017 | 6,600 | $ | 232,584 | |||||||||||||||||||||||||||
| 3/4/2008 | 305,909 | 0 | (8) | $ | 22.14 | 3/3/2018 | 14,906 | $ | 525,287 | |||||||||||||||||||||||||||
| 3/3/2009 | 368,706 | 0 | (8) | $ | 17.51 | 3/2/2019 | 31,032 | $ | 1,093,568 | |||||||||||||||||||||||||||
| 1/1/2009-12/31/2011 | 103,180 | (9) | $ | 3,636,063 | ||||||||||||||||||||||||||||||||
| 1/1/2010-12/31/2012 | 157,503 | (10) | $ | 5,550,406 | ||||||||||||||||||||||||||||||||
| 1/1/2011-12/31/2013 | 92,893 | (11) | $ | 3,273,549 | ||||||||||||||||||||||||||||||||
| 3/2/2010 | 98,092 | (6) | $ | 3,456,762 | ||||||||||||||||||||||||||||||||
| 5/4/2010 | 83,938 | (6) | $ | 2,957,975 | ||||||||||||||||||||||||||||||||
| 3/1/2011 | 80,474 | (7) | $ | 2,835,897 | ||||||||||||||||||||||||||||||||
Charles A. Bancroft | 3/5/2002 | 18,000 | 0 | $ | 48.08 | 3/4/2012 | ||||||||||||||||||||||||||||||
| 3/4/2003 | 26,875 | 0 | $ | 23.14 | 3/4/2013 | |||||||||||||||||||||||||||||||
| 3/2/2004 | 20,250 | 0 | $ | 28.11 | 3/1/2014 | |||||||||||||||||||||||||||||||
| 3/1/2005 | 16,931 | 0 | $ | 25.45 | 2/28/2015 | |||||||||||||||||||||||||||||||
| 3/7/2006 | 19,320 | 0 | $ | 22.73 | 3/6/2016 | |||||||||||||||||||||||||||||||
| 3/6/2007 | 22,598 | 0 | $ | 27.01 | 3/5/2017 | |||||||||||||||||||||||||||||||
| 3/4/2008 | 28,095 | 9,365 | $ | 22.14 | 3/3/2018 | 2,052 | $ | 72,312 | ||||||||||||||||||||||||||||
| 3/3/2009 | 26,442 | 26,442 | $ | 17.51 | 3/2/2019 | 4,974 | $ | 175,284 | ||||||||||||||||||||||||||||
| 11/1/2011 | 9,302 | $ | 327,802 | |||||||||||||||||||||||||||||||||
| 1/1/2009-12/31/2011 | 11,325 | (9) | $ | 399,093 | ||||||||||||||||||||||||||||||||
| 1/1/2010-12/31/2012 | 29,372 | (10) | $ | 1,035,069 | ||||||||||||||||||||||||||||||||
| 1/1/2011-12/31/2013 | 27,003 | (11) | $ | 951,586 | ||||||||||||||||||||||||||||||||
| 3/2/2010 | 33,946 | (6) | $ | 1,196,257 | ||||||||||||||||||||||||||||||||
| 3/1/2011 | 23,393 | (7) | $ | 824,362 | ||||||||||||||||||||||||||||||||
Elliott Sigal, M.D., Ph.D. | 3/5/2002 | 65,000 | 0 | $ | 48.08 | 3/4/2012 | ||||||||||||||||||||||||||||||
| 3/2/2004 | 48,333 | 0 | $ | 28.11 | 3/1/2014 | |||||||||||||||||||||||||||||||
| 3/1/2005 | 103,500 | 0 | (8) | $ | 25.45 | 2/28/2015 | ||||||||||||||||||||||||||||||
| 3/7/2006 | 95,795 | 0 | (8) | $ | 22.73 | 3/6/2016 | ||||||||||||||||||||||||||||||
| 12/1/2006 | 300,000 | 0 | (8) | $ | 24.74 | 11/30/2016 | ||||||||||||||||||||||||||||||
| 3/6/2007 | 244,500 | 0 | (8) | $ | 27.01 | 3/5/2017 | 6,875 | $ | 242,275 | |||||||||||||||||||||||||||
| 3/4/2008 | 0 | 76,478 | (8) | $ | 22.14 | 3/3/2018 | 14,906 | $ | 525,287 | |||||||||||||||||||||||||||
| 3/3/2009 | 0 | 147,749 | (8) | $ | 17.51 | 3/2/2019 | 24,877 | $ | 876,665 | |||||||||||||||||||||||||||
| 3/3/2009 | 114,220 | $ | 4,025,113 | |||||||||||||||||||||||||||||||||
| 1/1/2009-12/31/2011 | 78,955 | (9) | $ | 2,782,374 | ||||||||||||||||||||||||||||||||
| 1/1/2010-12/31/2012 | 62,620 | (10) | $ | 2,206,729 | ||||||||||||||||||||||||||||||||
| 1/1/2011-12/31/2013 | 32,454 | (11) | $ | 1,143,679 | ||||||||||||||||||||||||||||||||
| 3/2/2010 | 72,372 | (6) | $ | 2,550,389 | ||||||||||||||||||||||||||||||||
| 3/1/2011 | 28,115 | (7) | $ | 990,766 | ||||||||||||||||||||||||||||||||
Beatrice Cazala | 3/5/2002 | 22,500 | 0 | $ | 48.08 | 3/4/2012 | ||||||||||||||||||||||||||||||
| 3/12/2003 | 32,250 | 0 | $ | 21.27 | 3/11/2013 | |||||||||||||||||||||||||||||||
| 3/2/2004 | 40,600 | 0 | $ | 28.11 | 3/1/2014 | |||||||||||||||||||||||||||||||
| 3/1/2005 | 46,667 | 0 | $ | 25.45 | 2/28/2015 | |||||||||||||||||||||||||||||||
| 4/5/2006 | 37,145 | 0 | $ | 24.55 | 10/4/2015 | |||||||||||||||||||||||||||||||
| 12/1/2006 | 100,000 | 0 | (8) | $ | 24.74 | 11/30/2016 | ||||||||||||||||||||||||||||||
| 3/12/2007 | 42,911 | 0 | $ | 27.36 | 9/11/2016 | |||||||||||||||||||||||||||||||
| 3/7/2008 | 55,125 | 18,376 | $ | 21.88 | 9/6/2017 | 4,027 | $ | 141,911 | ||||||||||||||||||||||||||||
| 3/6/2009 | 84,946 | 84,947 | $ | 18.35 | 9/2/2018 | 7,189 | $ | 253,340 | ||||||||||||||||||||||||||||
| 3/1/2011 | 19,577 | $ | 689,893 | |||||||||||||||||||||||||||||||||
| 1/1/2009-12/31/2011 | 49,989 | (9) | $ | 1,761,612 | ||||||||||||||||||||||||||||||||
| 1/1/2010-12/31/2012 | 35,246 | (10) | $ | 1,242,069 | ||||||||||||||||||||||||||||||||
| 1/1/2011-12/31/2013 | 26,003 | (11) | $ | 916,346 | ||||||||||||||||||||||||||||||||
| 3/2/2010 | 40,734 | (6) | $ | 1,435,466 | ||||||||||||||||||||||||||||||||
| 3/1/2011 | 22,526 | (7) | $ | 793,830 | ||||||||||||||||||||||||||||||||
Sandra Leung | 3/5/2002 | 14,000 | 0 | $ | 48.08 | 3/4/2012 | ||||||||||||||||||||||||||||||
| 3/4/2003 | 19,310 | 0 | $ | 23.14 | 3/4/2013 | |||||||||||||||||||||||||||||||
| 3/2/2004 | 15,000 | 0 | $ | 28.11 | 3/1/2014 | |||||||||||||||||||||||||||||||
| 3/1/2005 | 15,000 | 0 | $ | 25.45 | 2/28/2015 | |||||||||||||||||||||||||||||||
| 3/7/2006 | 14,560 | 0 | $ | 22.73 | 3/6/2016 | |||||||||||||||||||||||||||||||
| 12/1/2006 | 100,000 | 0 | (8) | $ | 24.74 | 11/30/2016 | ||||||||||||||||||||||||||||||
| 3/6/2007 | 116,100 | 0 | (8) | $ | 27.01 | 3/5/2017 | 3,400 | $ | 119,816 | |||||||||||||||||||||||||||
| 3/4/2008 | 117,436 | 39,146 | (8) | $ | 22.14 | 3/3/2018 | 7,960 | $ | 280,510 | |||||||||||||||||||||||||||
| 3/3/2009 | 84,946 | 84,947 | (8) | $ | 17.51 | 3/2/2019 | 14,378 | $ | 506,681 | |||||||||||||||||||||||||||
| 1/1/2009-12/31/2011 | 49,989 | (9) | $ | 1,761,612 | ||||||||||||||||||||||||||||||||
| 1/1/2010-12/31/2012 | 38,183 | (10) | $ | 1,345,569 | ||||||||||||||||||||||||||||||||
| 1/1/2011-12/31/2013 | 20,549 | (11) | $ | 724,147 | ||||||||||||||||||||||||||||||||
| 3/2/2010 | 44,130 | (6) | $ | 1,555,141 | ||||||||||||||||||||||||||||||||
| 3/1/2011 | 17,803 | (7) | $ | 627,364 | ||||||||||||||||||||||||||||||||
Anthony C. Hooper | 3/5/2002 | 40,000 | 0 | $ | 48.08 | 3/4/2012 | ||||||||||||||||||||||||||||||
| 3/2/2004 | 63,333 | 0 | $ | 28.11 | 3/1/2014 | |||||||||||||||||||||||||||||||
| 3/1/2005 | 55,833 | 0 | (8) | $ | 25.45 | 2/28/2015 | ||||||||||||||||||||||||||||||
| 12/1/2006 | 200,000 | 0 | (8) | $ | 24.74 | 11/30/2016 | ||||||||||||||||||||||||||||||
| 3/6/2007 | 104,616 | 0 | (8) | $ | 27.01 | 3/5/2017 | ||||||||||||||||||||||||||||||
| 3/4/2008 | 46,495 | 0 | (8) | $ | 22.14 | 3/3/2018 | ||||||||||||||||||||||||||||||
| 3/3/2009 | 113,724 | 0 | (8) | $ | 17.51 | 3/2/2019 | ||||||||||||||||||||||||||||||
| 1/1/2009-12/31/2011 | 61,774 | (9) | $ | 2,176,916 | ||||||||||||||||||||||||||||||||
| 1/1/2010-12/31/2012 | 42,149 | (10) | $ | 1,485,331 | ||||||||||||||||||||||||||||||||
| | | Option Awards | Stock Awards | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Rights That Have Not Vested ($)(5) | |||||||||||||||||||
| | | Number of Securities Underlying Unexercised Options (#) | | | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3)(5) | ||||||||||||||||||||||
Name | Grant Date/ Performance Award Period | Exer- cisable(2) | Unexer- cisable(1)(2) | Option Exercise Price | Option Expiration Date | |||||||||||||||||||||||
Sandra Leung | 3/2/2004 | 15,000 | 0 | $ | 28.11 | 3/1/2014 | ||||||||||||||||||||||
| 3/1/2005 | 15,000 | 0 | $ | 25.45 | 2/28/2015 | ||||||||||||||||||||||
| 3/7/2006 | 14,560 | 0 | $ | 22.73 | 3/6/2016 | ||||||||||||||||||||||
| 12/1/2006 | 100,000 | 0 | (8) | $ | 24.74 | 11/30/2016 | |||||||||||||||||||||
| 3/6/2007 | 116,100 | 0 | (8) | $ | 27.01 | 3/5/2017 | |||||||||||||||||||||
| 3/4/2008 | 156,582 | 0 | (8) | $ | 22.14 | 3/3/2018 | |||||||||||||||||||||
| 3/3/2009 | 169,893 | 0 | (8) | $ | 17.51 | 3/2/2019 | 4,793 | (4) | $ | 254,748 | |||||||||||||||||
| 1/1/2011-12/31/2013 | 79,782 | (9) | $ | 4,240,432 | |||||||||||||||||||||||
| 1/1/2012-12/31/2014 | 25,854 | (10) | $ | 1,374,114 | |||||||||||||||||||||||
| 1/1/2013-12/31/2015 | 10,141 | (11) | $ | 538,994 | |||||||||||||||||||||||
| 3/2/2010 | 14,710 | (6) | $ | 781,837 | |||||||||||||||||||||||
| 3/1/2011 | 29,672 | (6) | $ | 1,577,067 | |||||||||||||||||||||||
| 3/6/2012 | 33,440 | (6) | $ | 1,777,336 | |||||||||||||||||||||||
| 3/10/2013 | 11,708 | (7) | $ | 622,270 | |||||||||||||||||||||||
Elliott Sigal, M.D., | 3/6/2007 | 25,000 | 0 | (8) | $ | 27.01 | 3/5/2017 | |||||||||||||||||||||
Ph.D. | 3/4/2008 | 76,478 | 0 | (8) | $ | 22.14 | 3/3/2018 | |||||||||||||||||||||
| 1/1/2011-12/31/2013 | 95,631 | (9) | $ | 5,082,805 | ||||||||||||||||||||||||
| 1/1/2012-12/31/2014 | 31,604 | (10) | $ | 1,679,758 | ||||||||||||||||||||||||
Beatrice Cazala | 3/6/2009 | 169,893 | 0 | (8) | $ | 18.35 | 9/2/2018 | |||||||||||||||||||||
| 3/1/2011 | 19,577 | (4) | $ | 1,040,518 | |||||||||||||||||||||||
| 1/1/2011-12/31/2013 | 100,952 | (9) | $ | 5,365,606 | |||||||||||||||||||||||
| 1/1/2012-12/31/2014 | 33,971 | (10) | $ | 1,805,547 | |||||||||||||||||||||||
| 1/1/2013-12/31/2015 | 12,300 | (11) | $ | 653,735 | |||||||||||||||||||||||
| 3/2/2010 | 13,578 | (6) | $ | 721,671 | |||||||||||||||||||||||
| 3/1/2011 | 37,544 | (6) | $ | 1,995,464 | |||||||||||||||||||||||
| 3/6/2012 | 43,940 | (6) | $ | 2,335,411 | |||||||||||||||||||||||
| 3/10/2013 | 14,200 | (7) | $ | 754,741 | |||||||||||||||||||||||
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Grant Date | Vesting | |||
|---|---|---|---|---|
| ||||
| 3/ | Three equal installments on each of the third, fourth, and fifth anniversaries of the grant date | |||
| 11/2/2009 | Three equal installments on each of the third, fourth, and fifth anniversaries of the grant date | |||
| 1/3/ | Four equal installments of 25% on each of the first four anniversaries of the grant date | |||
| 3/1/2011 | Three equal installments on each of the third, fourth, and fifth anniversaries of the grant date | |||
| 11/1/2011 | Three equal installments on each of the third, fourth, and fifth anniversaries of the grant date | |||
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| Three equal installments |
| Three equal installments |
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Option Exercises and Stock Vesting
2013 Fiscal Year
| | Option Awards | Stock Awards | | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of Shares Acquired on Exercise (#) | Value Realized On Exercise (1)($) | Number of Shares Acquired on Vesting (#) | Value Realized On Vesting (1)($) | | |||||||||
Lamberto Andreotti | 0 | $ | 0 | 17,797 | $ | 659,593 | (2) | |||||||
| 128,838 | $ | 4,896,294 | (3) | ||||||||||
| 251,044 | $ | 9,421,691 | (4) | ||||||||||
Charles Bancroft | 0 | $ | 0 | 2,487 | $ | 92,392 | (2) | |||||||
| 30,823 | $ | 1,156,787 | (3) | |||||||||||
| 46,817 | $ | 1,757,044 | (4) | |||||||||||
Francis Cuss, MB BChir, FRCP | 84,952 | $ | 1,246,668 | 10,419 | $ | 489,256 | (2) | |||||||
| 14,928 | $ | 560,248 | (3) | ||||||||||
| 34,177 | $ | 1,282,666 | (4) | ||||||||||
Giovanni Caforio, M.D. | 43,833 | $ | 613,896 | 9,351 | $ | 318,065 | (2) | |||||||
| 7,228 | $ | 271,267 | (3) | |||||||||||
| 9,904 | $ | 371,685 | (4) | |||||||||||
Sandra Leung | 19,310 | $ | 265,128 | 8,773 | $ | 325,081 | (2) | |||||||
| 28,014 | $ | 1,051,365 | (3) | ||||||||||
| 60,859 | $ | 2,284,021 | (4) | ||||||||||
Elliott Sigal, M.D., Ph.D. | 914,877 | $ | 15,552,623 | 100,185 | $ | 4,069,915 | (2)(5) | |||||||
| 63,338 | $ | 2,509,041 | (3)(6) | |||||||||||
| 99,812 | $ | 3,745,957 | (4) | |||||||||||
Beatrice Cazala | 216,412 | $ | 3,974,876 | 3,595 | $ | 135,747 | (2) | |||||||
| 31,994 | $ | 1,200,735 | (3) | ||||||||||
| 56,181 | $ | 2,108,474 | (4) | ||||||||||
2011 Fiscal YearTable of Contents
| Option Awards | Stock Awards | |||||||||||||||||||
| Number of Shares Acquired on Exercise | Value Realized On Exercise | Number of Shares Acquired on Vesting | Value Realized On Vesting | |||||||||||||||||
Name | (#) | (1) ($) | (#) | (1) ($) | ||||||||||||||||
Lamberto Andreotti | 0 | $ | 0 | 23,252 | $ | 613,446 | (2) | |||||||||||||
| 32,828 | $ | 886,231 | (3) | |||||||||||||||||
| 116,000 | $ | 2,967,280 | (4) | |||||||||||||||||
Charles A. Bancroft | 0 | $ | 0 | 5,951 | $ | 156,564 | (2) | |||||||||||||
| 5,864 | $ | 148,887 | (3) | |||||||||||||||||
| 16,636 | $ | 425,549 | (4) | |||||||||||||||||
Elliott Sigal, M.D., Ph.D. | 445,179 | $ | 3,588,935 | 21,993 | $ | 580,355 | (2) | |||||||||||||
| 12,503 | $ | 317,451 | (3) | |||||||||||||||||
| 116,000 | $ | 2,967,280 | (4) | |||||||||||||||||
Beatrice Cazala | 0 | $ | 0 | 10,304 | $ | 271,798 | (2) | |||||||||||||
| 7,037 | $ | 178,669 | (3) | |||||||||||||||||
| 33,665 | $ | 861,151 | (4) | |||||||||||||||||
Sandra Leung | 0 | $ | 0 | 7,380 | $ | 195,053 | (2) | |||||||||||||
| 7,623 | $ | 193,548 | (3) | |||||||||||||||||
| 76,455 | $ | 1,955,719 | (4) | |||||||||||||||||
Anthony C. Hooper | 381,750 | 2,937,025 | 36,880 | $ | 1,059,402 | (2) | ||||||||||||||
| 17,068 | $ | 479,651 | (3) | |||||||||||||||||
| 76,455 | 1,955,719 | (4) | ||||||||||||||||||
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Retirement Plan
As of December 31, 2009, we discontinued service accruals under the Retirement Income Plan and Benefit Equalization Plan—Retirement Plan in the U.S. and Puerto Rico for active plan participants and we stopped adding new participants to those plans. For active plan participants at year-end 2009, we are allowing five additional years of pay growth in the pension plans.
The Retirement Income Plan is a defined benefit pension plan that provides income for employees after retirement. The Retirement Income Plan is a tax-qualified plan, as defined under Section 401(a) of the Internal Revenue Code. The benefit is calculated based on the employee’semployee's final average compensation and years of service. All U.S. employees hired before January 1, 2010 who are not participants in a pension plan through a collective bargaining agreement are eligible for the Retirement Income Plan if they work at least 1,000 hours per year. Employees whose pay or benefits exceed the IRS qualified plan limits are eligible for the Benefit Equalization Plan—Retirement Plan.
The key plan provisions of the Retirement Income Plan are as follows:
Final Average Compensation equals the average of the five consecutive years out of the last ten years, ending December 31, 2014, in which the employee’semployee's compensation was the highest. Compensation equals the base salary rate, plus bonuses paid during the year. Compensation is subject to the limits defined under Section 401(a)(17) of the Internal Revenue Code.
The Benefit Equalization Plan—Retirement Plan is a non-qualified deferred compensation plan that provides income for employees after retirement in excess of the benefits payable under the qualified Retirement Income Plan. The benefit is calculated using the same formula as the Retirement Income Plan, but without the limits on compensation and benefits imposed under Section 401(a)(17) and Section 415(b) of the Internal Revenue Code. Employees whose pay or benefits exceed the IRS qualified plan limits are eligible for the Benefit Equalization Plan—Retirement Plan.
The provisions are the same as those above for the Retirement Income Plan, except for the following:
Supplementary Pension Plan
We maintain a defined benefit pension plan which was closed to new participants in January 2010. Participation in the plan was limited to certain eligible employees.employees in Europe. Ms. Cazala is the only Named Executive Officer who was eligible to participate in the plan. The key plan provisions of the Supplementary Pension Plan are as follows:
Present Value of Accumulated Pension Benefits
2013 Fiscal Year
2011 Fiscal Year
Name | Plan Name | # of Years of Credited Service (6) | Present Value of Accumulated Benefits(1) | |||||||
Lamberto Andreotti (2) (3) | Retirement Income Plan | 4.3 | $ | 260,234 | ||||||
| Benefit Equalization Plan | 4.3 | $ | 4,883,547 | |||||||
Charles A. Bancroft | Retirement Income Plan | 25.6 | $ | 1,138,644 | ||||||
| Benefit Equalization Plan | 25.6 | $ | 5,193,271 | |||||||
Elliott Sigal, M.D., Ph.D. (3) | Retirement Income Plan | 12.4 | $ | 780,886 | ||||||
| Benefit Equalization Plan | 12.4 | $ | 9,975,677 | |||||||
Beatrice Cazala (2) (3) (4) | Retirement Income Plan | 4.4 | $ | 200,673 | ||||||
| Benefit Equalization Plan | 4.4 | $ | 1,388,157 | |||||||
| Supplementary Pension Plan | 29.9 | $ | 5,502,953 | |||||||
Sandra Leung | Retirement Income Plan | 17.8 | $ | 811,307 | ||||||
| Benefit Equalization Plan | 17.8 | $ | 4,518,552 | |||||||
Anthony C. Hooper (3) (5) | Retirement Income Plan | 14.0 | $ | 781,664 | ||||||
| Benefit Equalization Plan | 14.0 | $ | 5,813,081 | |||||||
|
Name | Plan Name | # of Years of Credited Service(5) | Present Value of Accumulated Benefits(1) | Payments During Last Fiscal Year | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Lamberto Andreotti(2)(3) | Retirement Income Plan | 4.3 | $ | 248,924 | $ | 0 | ||||||
| Benefit Equalization Plan | 4.3 | $ | 5,821,254 | $ | 0 | |||||||
| Charles Bancroft | Retirement Income Plan | 25.6 | $ | 1,213,060 | $ | 0 | ||||||
| Benefit Equalization Plan | 25.6 | $ | 9,540,694 | $ | 0 | |||||||
| Francis Cuss, MB BChir, FRCP(3) | Retirement Income Plan | 6.5 | $ | 404,988 | $ | 0 | ||||||
| Benefit Equalization Plan | 6.5 | $ | 1,942,580 | $ | 0 | |||||||
| Giovanni Caforio, M.D.(2) | Retirement Income Plan | 0.0 | $ | 0 | $ | 0 | ||||||
| Benefit Equalization Plan | 0.0 | $ | 0 | $ | 0 | |||||||
| Sandra Leung | Retirement Income Plan | 17.8 | $ | 859,669 | $ | 0 | ||||||
| Benefit Equalization Plan | 17.8 | $ | 6,000,701 | $ | 0 | |||||||
| Elliott Sigal, M.D., Ph.D.(3)(6) | Retirement Income Plan | 12.4 | $ | 0 | $ | (823,663) | ||||||
| Benefit Equalization Plan | 12.4 | $ | 10,822,866 | $ | 0 | |||||||
| Beatrice Cazala(2)(3)(4) | Retirement Income Plan | 4.4 | $ | 216,216 | $ | 0 | ||||||
| Benefit Equalization Plan | 4.4 | $ | 1,818,118 | $ | 0 | |||||||
| Supplementary Pension Plan | 31.9 | $ | 8,409,591 | $ | 0 | |||||||
4.25%
for the Retirement Income Plan
These assumptions are the same as those disclosed in conformity with generally accepted accounting principles. For active executives, payments are assumed to begin at age 60, the earliest age that employees are eligible for an unreduced pension, or current age if over age 60. The actual benefit received will vary based on a number of factors including final pay, years of service and interest rates at the time of retirement.
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Non-Qualified Deferred Compensation Plan
The Benefit Equalization Plan—Savings Plan is a non-qualified deferred compensation plan that allows employees to defer a portion of their total eligible cash compensation and to receive company matching contributions in excess of contributions allowed under the Savings and Investment Program. The Savings and Investment Program is a tax-qualified plan, as defined under Section 401(a) and Section 401(k) of the Internal Revenue Code. Employees who are eligible to participate in the Bristol-Myers Squibb Savings and Investment Program, and whose pay or benefits exceed the IRS qualified plan limits, are eligible for the Benefit Equalization Plan—Savings Plan. The key provisions of the BEP-Savings Plan are as follows:
Non-Qualified Deferred Compensation
2013 Fiscal Year
Name | Executive Contributions in 2013(1) | Registrant Contributions in 2013(2) | Aggregate Earnings in 2013(3) | Aggregate Withdrawals/ Distributions in 2013 | Aggregate Balance at December 31, 2013(2)(4) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Lamberto Andreotti(5) | $ | 316,584 | $ | 738,696 | $ | 1,265,722 | $ | 0 | $ | 5,814,391 | ||||||
Charles Bancroft(5) | $ | 118,084 | $ | 280,630 | $ | 308,128 | $ | 0 | $ | 1,777,255 | ||||||
Francis Cuss, MB BChir, FRCP(5) | $ | 61,218 | $ | 122,435 | $ | 167,840 | $ | 0 | $ | 1,101,995 | ||||||
Francis Cuss, MB BChir, FRCP(6) | $ | 0 | $ | 0 | $ | 1,609 | $ | 0 | $ | 2,195,283 | ||||||
Giovanni Caforio, M.D.(5) | $ | 85,903 | $ | 147,261 | $ | 73,597 | $ | 0 | $ | 588,801 | ||||||
Sandra Leung(5) | $ | 237,874 | $ | 235,177 | $ | 388,109 | $ | 0 | $ | 2,539,345 | ||||||
Elliott Sigal M.D., Ph.D.(5)(9) | $ | 130,755 | $ | 307,646 | $ | 84,995 | $ | 0 | $ | 3,498,571 | ||||||
Elliott Sigal M.D., Ph.D.(6) | $ | 0 | $ | 0 | $ | 345,691 | $ | (244,820 | ) | $ | 1,783,774 | |||||
Elliott Sigal M.D., Ph.D.(7) | $ | 2,895,823 | $ | 0 | $ | 561,093 | $ | 0 | $ | 3,456,915 | ||||||
Beatrice Cazala(5)(8) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||
2011 Fiscal Year
Name | Executive Contributions in 2011 | Registrant Contributions in 2011 (1) | Aggregate Earnings in 2011 (2) | Aggregate Withdrawals/ Distributions in 2011 | Aggregate Balance at December 31, 2011 (1) (3) | |||||||||||||||
Lamberto Andreotti (4) | $ | 263,804 | $ | 615,543 | -$ | 37,972 | $ | 0 | $ | 2,113,542 | ||||||||||
Charles A. Bancroft (4) | $ | 92,598 | $ | 220,963 | -$ | 800 | $ | 0 | $ | 575,917 | ||||||||||
Elliott Sigal M.D., Ph.D. (4) | $ | 164,558 | $ | 386,418 | $ | 62,461 | $ | 0 | $ | 2,296,187 | ||||||||||
Elliott Sigal M.D., Ph.D. (5) | $ | 0 | $ | 0 | $ | 236,426 | $ | 0 | $ | 1,718,364 | ||||||||||
Beatrice Cazala (4) (6) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
Sandra Leung (4) | $ | 203,244 | $ | 203,076 | -$ | 56,935 | $ | 0 | $ | 1,057,131 | ||||||||||
Anthony C. Hooper (4) (7) | $ | 257,955 | $ | 259,425 | $ | 54,006 | $ | 0 | $ | 2,006,268 | ||||||||||
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| 2011 | ||||||||||||
Name | Salary | All Other Compensation | Total | |||||||||
Lamberto Andreotti | $ | 263,804 | $ | 615,543 | $ | 879,347 | ||||||
Charles A. Bancroft | $ | 92,598 | $ | 220,963 | $ | 313,561 | ||||||
Elliott Sigal M.D., Ph.D. | $ | 164,558 | $ | 386,418 | $ | 550,976 | ||||||
Beatrice Cazala | $ | 0 | $ | 0 | $ | 0 | ||||||
Sandra Leung | $ | 203,244 | $ | 203,076 | $ | 406,320 | ||||||
Anthony C. Hooper | $ | 257,955 | $ | 259,425 | $ | 517,380 | ||||||
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The following illustrates the potential payments and benefits under the company’scompany's plans and programs to the Named Executive Officers upon a termination of employment assuming an effective date of December 31, 2011.2013. To the extent payments and benefits are generally available to salaried employees on a non-discriminatory basis, they are excluded from the table.
Termination of Employment Obligations (Excluding Vested Benefits)
2013 Fiscal Year
Name | Cash Severance (1) | Restricted Stock Units (2) | Market Share Units (3)(5) | Performance Share Units (4)(5) | Retirement (6) | Health (7) | Retiree Medical (8) | Total | Gross-Up on Excise Taxes (9) | |||||||||||||||||||
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Voluntary Termination for Good Reason | ||||||||||||||||||||||||||||
Lamberto Andreotti(10) | $ | 3,400,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 20,227 | $ | 0 | $ | 3,420,227 | $ | 0 | ||||||||||
Charles Bancroft | $ | 1,821,040 | $ | 0 | $ | 0 | $ | 0 | $ | 4,248,877 | $ | 15,686 | $ | 129,677 | $ | 6,215,280 | $ | 0 | ||||||||||
Francis Cuss, MB BChir, FRCP(10) | $ | 1,750,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 32,188 | $ | 0 | $ | 1,782,188 | $ | 0 | ||||||||||
Giovanni Caforio, M.D.(11) | $ | 1,750,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 22,094 | $ | 88,687 | $ | 1,860,781 | $ | 0 | ||||||||||
Sandra Leung | $ | 1,699,500 | $ | 0 | $ | 0 | $ | 0 | $ | 2,705,594 | $ | 22,470 | $ | 109,069 | $ | 4,536,633 | $ | 0 | ||||||||||
Involuntary Termination Not for Cause | ||||||||||||||||||||||||||||
Lamberto Andreotti(10) | $ | 3,400,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 20,227 | $ | 0 | $ | 3,420,227 | $ | 0 | ||||||||||
Charles Bancroft | $ | 1,821,040 | $ | 118,897 | $ | 1,878,427 | $ | 8,085,759 | $ | 4,248,877 | $ | 15,686 | $ | 129,677 | $ | 16,298,363 | $ | 0 | ||||||||||
Francis Cuss, MB BChir, FRCP(10) | $ | 1,750,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 32,188 | $ | 0 | $ | 1,782,188 | $ | 0 | ||||||||||
Giovanni Caforio, M.D.(11) | $ | 1,750,000 | $ | 395,436 | $ | 442,474 | $ | 2,105,193 | $ | 0 | $ | 22,094 | $ | 88,687 | $ | 4,803,884 | $ | 0 | ||||||||||
Sandra Leung | $ | 1,699,500 | $ | 210,208 | $ | 1,698,036 | $ | 6,153,540 | $ | 2,705,594 | $ | 22,470 | $ | 109,069 | $ | 12,598,418 | $ | 0 | ||||||||||
Qualifying Termination Within 3 Years Following a Change in Control | ||||||||||||||||||||||||||||
Lamberto Andreotti(12) | $ | 12,707,500 | $ | 96,042 | $ | 18,915,288 | $ | 0 | $ | 2,261,598 | $ | 30,868 | $ | 0 | $ | 34,011,296 | $ | 16,868,569 | ||||||||||
Charles Bancroft | $ | 5,444,910 | $ | 1,515,147 | $ | 6,530,062 | $ | 8,085,759 | $ | 9,614,370 | $ | 48,175 | $ | 106,612 | $ | 31,345,035 | $ | 13,129,810 | ||||||||||
Francis Cuss, MB BChir, FRCP(12) | $ | 5,232,500 | $ | 879,845 | $ | 1,938,912 | $ | 0 | $ | 2,180,670 | $ | 98,860 | $ | 0 | $ | 10,330,787 | $ | 4,876,116 | ||||||||||
Giovanni Caforio, M.D.(11) | $ | 5,232,500 | $ | 797,250 | $ | 2,680,514 | $ | 2,105,193 | $ | 0 | $ | 68,016 | $ | 90,326 | $ | 10,973,799 | $ | 4,451,440 | ||||||||||
Sandra Leung | $ | 4,573,355 | $ | 254,748 | $ | 5,293,793 | $ | 6,153,540 | $ | 5,454,669 | $ | 69,139 | $ | 107,341 | $ | 21,906,585 | $ | 8,270,710 | ||||||||||
2011 Fiscal YearTable of Contents
Name | Cash Severance (1) | In the Money Value of Options (2) | Restricted Stock Units (3) | Market Share Units (4) | Perfor- mance Share Units (5) | Retirement (6) | Health (7) | Retiree Medical (8) | Other (9) | Total | Gross-Up on Excise Taxes (10) | |||||||||||||||||||||||||||||||||
Voluntary Termination for Good Reason |
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Lamberto Andreotti(11) | $ | 3,100,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 16,252 | $ | 0 | $ | 0 | $ | 3,116,252 | $ | 0 | ||||||||||||||||||||||
Charles A. Bancroft | $ | 1,700,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 2,568,617 | $ | 21,844 | $ | 126,234 | $ | 0 | $ | 4,416,695 | $ | 0 | ||||||||||||||||||||||
Elliott Sigal, M.D., Ph.D.(11) | $ | 2,080,800 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 25,332 | $ | 0 | $ | 0 | $ | 2,106,132 | $ | 0 | ||||||||||||||||||||||
Beatrice Cazala(11) | $ | 1,700,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 12,299 | $ | 0 | $ | 0 | $ | 1,712,299 | $ | 0 | ||||||||||||||||||||||
Sandra Leung | $ | 1,485,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 2,154,157 | $ | 22,189 | $ | 101,904 | $ | 0 | $ | 3,763,250 | $ | 0 | ||||||||||||||||||||||
Involuntary Termination Not for Cause |
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Lamberto Andreotti(11) | $ | 3,100,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 16,252 | $ | 0 | $ | 0 | $ | 3,116,252 | $ | 0 | ||||||||||||||||||||||
Charles A. Bancroft | $ | 1,700,000 | $ | 591,498 | $ | 131,833 | $ | 234,557 | $ | 2,385,748 | $ | 2,568,617 | $ | 21,844 | $ | 126,234 | $ | 0 | $ | 7,760,332 | $ | 0 | ||||||||||||||||||||||
Elliott Sigal, M.D., Ph.D.(11) | $ | 2,080,800 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 25,332 | $ | 0 | $ | 0 | $ | 2,106,132 | $ | 0 | ||||||||||||||||||||||
Beatrice Cazala(11) | $ | 3,424,897 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 12,299 | $ | 0 | $ | 16,023 | $ | 3,453,219 | $ | 0 | ||||||||||||||||||||||
Sandra Leung | $ | 1,485,000 | $ | 2,018,923 | $ | 372,381 | $ | 304,967 | $ | 3,831,328 | $ | 2,154,157 | $ | 22,189 | $ | 101,904 | $ | 0 | $ | 10,290,849 | $ | 0 | ||||||||||||||||||||||
Qualifying Termination Within 3 Years Following a Change in Control |
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Lamberto Andreotti(12) | $ | 11,586,250 | $ | 0 | $ | 1,101,955 | $ | 9,878,653 | $ | 0 | $ | 4,001,001 | $ | 49,432 | $ | 0 | $ | 0 | $ | 26,617,291 | $ | 9,577,447 | ||||||||||||||||||||||
Charles A. Bancroft | $ | 5,083,000 | $ | 591,498 | $ | 575,399 | $ | 2,731,558 | $ | 2,385,748 | $ | 9,377,298 | $ | 68,082 | $ | 116,564 | $ | 0 | $ | 20,929,147 | $ | 8,169,091 | ||||||||||||||||||||||
Elliott Sigal, M.D., Ph.D.(12) | $ | 6,843,751 | $ | 0 | $ | 3,716,446 | $ | 3,573,336 | $ | 0 | $ | 2,656,793 | $ | 78,479 | $ | 0 | $ | 0 | $ | 16,868,805 | $ | 4,422,395 | ||||||||||||||||||||||
Beatrice Cazala(12) | $ | 5,083,000 | $ | 0 | $ | 865,988 | $ | 2,550,354 | $ | 0 | $ | 2,012,710 | $ | 38,118 | $ | 0 | $ | 0 | $ | 10,550,170 | $ | 3,531,448 | ||||||||||||||||||||||
Sandra Leung | $ | 3,996,135 | $ | 2,018,923 | $ | 907,007 | $ | 2,536,822 | $ | 3,831,328 | $ | 4,916,613 | $ | 69,201 | $ | 103,740 | $ | 0 | $ | 18,379,769 | $ | 4,919,728 | ||||||||||||||||||||||
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date;
accelerated vesting of options held for one year from the grant date
provisions; and
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The following information presents the post-termination benefits for Dr. Sigal and Ms. Cazala in connection with their terminations. To the extent payments and benefits are generally available to salaried employees on a non-discriminatory basis or are vested benefits, we have not quantified the value of these payments or benefits.
Elliott Sigal, M.D., Ph.D.
Dr. Sigal retired from the company on June 30, 2013. In accordance with our various benefit plans and compensation programs, Dr. Sigal was entitled to and received the following benefits on account of his retirement:
Additionally, on May 7, 2013 the Board approved the acceleration of the final tranches of Dr. Sigal's unvested restricted stock unit awards scheduled to vest in March 2014 as of his retirement date. As a result of the acceleration, Dr. Sigal received 31,376 shares of our common stock with an incremental fair value of $1.4 million.
Beatrice Cazala
As previously announced, Ms. Cazala ceased to serve as an executive officer of the company on November 13, 2013 and was going to transition to a new role. As part of that transition, in January 2014, we terminated Ms. Cazala's employment letter agreement, dated as of February 11, 2011, covering her long-term U.S. assignment, resulting in the automatic reinstatement of her suspended French employment contract with our French subsidiary Bristol-Myers Squibb SARL. Ms. Cazala was offered a position in France which she has declined and, as a result, her French contract is being terminated effective as of June 9, 2014, her separation date.
In connection with Ms. Cazala's departure, the company and our French subsidiary have entered into a Settlement Agreement and General Release with Ms. Cazala, effective as of February 14, 2014. Pursuant to the agreement, Ms. Cazala remains an active employee in the United States in the position of Executive Vice President through her separation date at her current salary and she will continue to be eligible to participate in all applicable benefit plans. She received her 2013 annual incentive award and remains eligible for the continued vesting of all previously awarded but unvested stock unit awards in accordance with the applicable plan documents. Ms. Cazala is not eligible for 2014 annual or long-term incentive awards.
Ms. Cazala will receive the following benefits to which she is entitled consistent with her French employment contract and all applicable benefit plans as an employee who is retirement eligible and involuntarily terminated without cause and who executes a general release:
Under the Agreement, Ms. Cazala also received in February 2014 an aggregate of $1.15 million in settlement of any claims Ms. Cazala may have had against the company or our French Subsidiary. Ms. Cazala will be entitled to the following payments in connection with her signing another general release prior to her termination:
Additionally, under the agreement, Ms. Cazala has agreed to release any claims she may have against the company and our French subsidiary and any of their affiliates, subsidiaries, officers, directors, employees and agents, among others, except for those that may relate to the administration of any applicable benefit plan or those that cannot be lawfully waived. The agreement also contains covenants imposing on Ms. Cazala certain obligations with respect to confidentiality, proprietary information and non-disparagement, and restricting her ability to engage in certain activities in competition with the company for a period of six months after her separation date. Ms. Cazala has agreed to cooperate and to generally make herself available in connection with any investigation or legal proceedings involving, or any matter that relates to her employment with, the company or our French subsidiary.
Following is a description of payments and benefits available under different termination scenarios:
Voluntary Termination
The company does not offer any payments or benefits to salaried employees, including the Named Executive Officers, upon a voluntary termination other than those that are vested at the time of termination.termination unless the applicable plan or award agreement provides otherwise.
Voluntary Termination for Good Reason
Under the Bristol-Myers Squibb Senior Executive Severance Plan, certain senior executives (including the Named Executive Officers) are eligible to receive severance payments and benefits if they voluntarily terminate their employment for “good"good reason,”" where “good reason”"good reason" is defined as:
A terminated executive who signs a general release will be eligible for the following:
Retirement and Death
The following benefits are generally available to all salaried employees including the Named Executive Officers:
Annual Incentive—Employees are eligible for a pro-rata award based on the number of months worked in the performance period.
Stock Options—Employees are eligible for accelerated vesting of stock options held at least one year from the grant date and have the full term to exercise vested stock options. Upon retirement, exercise thresholds, as described in the Outstanding Equity Awards Table, remain in effect, where applicable. Upon death, exercise thresholds lapse. All outstanding options held by our employees are vested as of December 31, 2013.
Restricted Stock Units—Employees are eligible to vest in a pro-rata portion of restricted stock unit awards held at least one year from the grant date.date; provided that if an employee turns 65 on or prior
to their retirement or death, then any unvested Restricted Stock Units held for at least one year will have vested in full prior to their retirement or death.
Market Share Units—Employees are eligible to vest in a pro-rata portion of market share unit awards held at least one year from the grant date, subject to performance provisions; provided that if an employee turns 65 on or prior to their retirement or death, then any unvested Market Share Units held for at least one year will vest in full upon their retirement or death; subject to performance provisions.
Performance Share Units—If at least one year from the beginning of the three-year performance cycle of a performance share unit award has passed, employees are eligible to vest (1) in any performance share units for which the performance year has been completed before the employee’semployee's retirement or death and (2) in a proportionate amount of the performance share units for the performance year during which the employee retires or dies, subject to performance provisions.
Defined Benefit Pension Plans—Employees are eligible for benefits accrued under the Retirement Income Plan and the Benefit Equalization Plan—Retirement Plan.
Savings Plans—Employees are eligible for benefits accumulated under the Savings and Investment Program and the Benefit Equalization Plan—Savings Plan.Plan, as well as a pro-rata annual and transition (if applicable) contribution on eligible compensation paid in the year of separation from service or death.
Post-Retirement Medical and Life Insurance—Employees age 55 or older with ten years of service are eligible for post-retirement medical and life insurance benefits.
Involuntary Termination Not for Cause
The following benefits are generally available to all salaried employees including the Named Executive Officers:
Annual Incentive—Employees are eligible for a pro-rata award based on the number of months worked in the performance period if the termination occurs on or after September 30th of the plan year. If an employee is eligible to retire, or the employee’semployee's age plus years of service equal or exceed 70, and the employee has at least 10 years of service, the employee is eligible for a pro-rata award based on the number of months worked in the performance period.
Stock Options—Upon signing a general release, an employee is eligible for accelerated vesting of stock options held at least one year from the grant date and has three months to exercise. If an employee is eligible to retire, or the employee’semployee's age plus years of service equal or exceed 70 and the employee has at least 10 years of service, the employee will have the full term to exercise. Exercise thresholds, as described in the Outstanding Equity Awards Table, remain in effect, where applicable. All outstanding options held by our employees are vested as of December 31, 2013.
Restricted Stock Units—Upon signing a general release, employees are eligible to vest in a pro-rata portion of restricted stock unit awards held at least one year from the grant date.date; provided that if an employee turns 65 on or prior to their involuntary termination not for cause, then any unvested Restricted Stock Units held for at least one year will have vested in full prior to their involuntary termination not for cause.
Market Share Units—Upon signing a general release, employees are eligible to vest in a pro-rata portion of unvested market share unit awards held at least one year from the grant date, subject to performance provisions; provided that if an employee turns 65 on or prior to their involuntary termination not for cause, then any unvested Market Share Units held for at least one year will vest in full upon their involuntary termination not for cause; subject to performance provisions.
Performance Share Units—If at least one year from the beginning of the three-year performance cycle of a performance share unit award has passed and upon signing a general release,
employees are eligible to vest (1) in any performance share units for which the performance year has been completed before the employee’semployee's involuntary termination not for cause and (2) in a proportionate amount of the performance share units for the performance year during which the employee is involuntarily terminated not for cause, subject to performance provisions.
Defined Benefit Pension Plans—Employees are eligible for benefits accrued under the Retirement Income Plan and the Benefit Equalization Plan—Retirement Plan. If the employee’semployee's age plus years of service equal or exceed 70 and the employee has at least 10 years of service, the employee is not eligible for early retirement, and the employee signs a general release, the retirement benefits are payable following termination of employment based upon enhanced adjustment factors similar to those applied to employees eligible for early retirement.
Savings Plans—Employees are eligible for benefits accumulated under the Savings and Investment Program and the Benefit Equalization Plan—Savings Plan. If the employee is involuntarily terminated not for cause on or after September 30th and the employee signs a general release, or the employee's age plus years of service equal or exceed 70 and the employee has at least 10 years of service, the employee is not eligible for early retirement, and the employee signs a general release, the employee is eligible for a pro-rata annual and transition (if applicable) contribution based on eligible compensation paid in the year of separation from service.
Post-Retirement Medical Insurance—If the employee’semployee's age plus years of service equal or exceed 70 and the employee has at least 10 years of service, the employee is not eligible for early retirement, and the employee signs a general release, the employee is eligible for continued medical coverage beyond the severance and COBRA period, as long as no other group medical coverage is available, without company subsidy until age 55,55. At age 55, they become eligible for company-subsidized, post-retirement medical benefits starting at age 55.
Under the Bristol-Myers Squibb Senior Executive Severance Plan, certain senior executives (including the Named Executive Officers) are eligible to receive severance payments and benefits if they are involuntarily terminated not for “cause,”"cause," where “cause”"cause" is defined as:
A terminated executive who signs a general release will be eligible for the following:
Change in Control
As disclosed in the CD&A, the company has entered into change-in-control agreements with certain senior executives, including all of the Named Executive Officers. The current agreements will expire on December 31, 2012,2014, and may be extended with revisions, as appropriate, beginning on January 1, 2013,2015, in one-year increments unless either the company or the executive gives prior notice of termination of the agreement or a change in control shall have occurred prior to January 1 of such year.
To trigger benefits, there must be both a change in control of the company and either (i) a subsequent involuntary termination without cause by the company or (ii) a good reason termination by the employee. Good reason includes a reduction in job responsibilities or changes in pay and benefits as well as relocation beyond 50 miles. The executive has 120 days to assert a claim for payments under this provision. This protection extends for 36 months following a change in control for executives who became eligible for change-in-control benefits prior to September 1, 2010 (including all of the Named Executive Officers), or 24 months following a change in control for executives who became eligible for change-in-control benefits after September 1, 20102010.
“Change "Change in Control”Control" means the earliest to occur of any one of the following dates:
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Each of our Named Executive OfficerOfficers is eligible to receive the following benefits if he or she is terminated in connection with a change in control:
longer provide any pension subsidy or enhancement for newly eligible executives. In lieu of such subsidy or enhancement, we provide under the non-qualified savings plan a continuation of company matching contributions and automatic year-end contributions equal to the length of the severance period.
ITEM 2—RATIFICATION OF THE APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Our Board of Directors, upon the recommendation of its Audit Committee, has ratified the Audit Committee’sCommittee's appointment of Deloitte & Touche LLP (D&T) as our independent registered public accounting firm for the year 2012.2014. The Audit Committee and the Board believe that the continued retention of D&T to serve as our independent registered public accounting firm is in the best interests of the company and its stockholders. As a matter of good corporate governance, we are asking stockholders to ratify such appointment. In the event our stockholders fail to ratify the appointment, the Board of Directors and the Audit Committee will reconsider such appointment. It is understood that even if the appointment is ratified, the Audit Committee at its discretion, may direct the appointment of a new independent registered public accounting firm at any time during the year if the Audit Committee feels that such a change would be in the best interests of our company and our stockholders.
The Audit Committee is directly responsible for appointing, compensating and providing oversight of the performance of our independent registered public accounting firm for the purpose of issuing audit reports and related work regarding our financial statements and the effectiveness of our internal control over financial reporting. The Audit Committee is also responsible for approving the audit fee of our independent registered public accounting firm. In order to assure continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of the independent registered public accounting firm. Further, in conjunction with the mandated rotation of the audit firm's lead engagement partner every five years, the Audit Committee and its chairperson participate in the process for the selection of D&T's new lead engagement partner.
Representatives from Deloitte & Touche LLPD&T will be present at the Annual Meeting to respond to appropriate questions and to make any statements as they may desire.
The Board of Directors unanimously recommends a vote “FOR”"FOR" the ratification of the appointment of Deloitte & Touche LLP as Bristol-Myers Squibb’sSquibb's independent registered public accounting firm for 2012.2014.
The following table presents aggregate fees for professional audit services rendered by Deloitte & Touche LLP (D&T)D&T for the years ended December 31, 20112013 and 20102012 for the audits of our annual financial statements and internal control over financial reporting, and fees billed for other services rendered by D&T during those periods. The 2010 tax fees include approximately $1 million related to certain tax services provided by BMS under a Transition Services Agreement (TSA) with Mead Johnson Nutrition Company (MJN), a public subsidiary of the company that was divested through a split-off transaction in December 2009, for which D&T was engaged to perform in 2010.
| | 2012 | 2013 | |||||
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| | (in millions) | ||||||
Audit | $ | 11.43 | $ | 10.98 | |||
Audit Related | 1.61 | 1.21 | |||||
Tax | 7.33 | 7.40 | |||||
All Other | 0.05 | 0.66 | |||||
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Total | $ | 20.42 | $ | 20.25 | |||
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| 2010 | 2011 | |||||||
| (in millions) | ||||||||
Audit | $ | 13.03 | $ | 11.53 | ||||
Audit Related | 1.72 | 0.99 | ||||||
Tax | 7.68 | 6.06 | ||||||
All Other | 0.01 | 0.02 | ||||||
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Total | $ | 22.44 | $ | 18.60 | ||||
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Audit fees for 20102012 and 20112013 were for professional services rendered for the audits of our consolidated financial statements, including accounting consultation, and of our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, (Section 404), statutory and subsidiary audits, timely reviews of quarterly financial statements, consents, and assistance with review of documents filed with the SEC.
Audit Relatedfees for 20102012 and 20112013 were primarily for assurance services, employee benefit planagreed-upon procedures, special purpose financial statement audits, (for 2010 only), due diligence related to acquisitions, and other audit-related services that are not required by statute or regulation.
Taxfees for 20102012 and 20112013 were for services related to tax compliance, including the preparation of tax returns and claims for refund, tax planning (excluding planning related to transactions or proposals for which the sole purpose may be tax avoidance or for which tax treatment may not be supported by the Internal Revenue Code) and tax advice, including assistance with tax audits and appeals, advice related to acquisitions, preparation of individual income tax returns (excluding those of executive officers) and consultations relating to our international compensation matters, and requests for rulings or technical advice from tax authorities. For 2010, tax fees also included preparation of tax returns and certain planning activities for which D&T was engaged to perform under the TSA for tax services.
All Other fees for 20102012 and 20112013 related to subscription fees to an accounting and reporting research library and a pharmaceutical alliance database, as well as surveys, benchmarking, commercial strategy and training programs.
Pre-Approval Policy for Services Provided by our Independent Registered Public Accounting Firm
The Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm consistent with applicable SEC rules. Our independent registered public accounting firm is generally prohibited from performing any management consulting projects. Our independent registered public accounting firm is also prohibited from providing tax consulting services relating to transactions or proposals in which the sole purpose may be tax avoidance or for which the tax treatment may not be supported by the Internal Revenue Code. Prior to the engagement of our independent registered public accounting firm for the next year’syear's audit, management submits ana schedule of the aggregate of services expected to be rendered during that year for each of the four categories of services described above is submitted to the Audit Committee for approval. Prior to engagement, the Audit Committee pre-approves these services by category of service. The fees are budgeted by category of service and the Audit Committee receives periodic reports from management and our independent registered public accounting firm on actual fees versus the budget by category of service. During the year, circumstances may arise when it may become necessary to engage our independent registered public accounting firm for additional services not contemplated in the pre-approval. In those instances, the Audit Committee requires specific pre-approval before engaging our independent registered public accounting firm.
The Audit Committee may delegate pre-approval authority to one or more of its members. The member or members to whom such authority is delegated is required to report, for informational purposes, any pre-approval decisions to the Audit Committee at its next regularly scheduled meeting.
Prior to the split-off in December 2009, engagements of D&T by MJN were reviewed and approved by the audit committee of MJN pursuant to pre-approval policies adopted by MJN’s audit committee. For 2010, the MJN audit committee also approved the engagement of D&T to perform certain tax services required by the TSA.
As the Audit Committee of the Board of Directors, we are composed of independent directors as required by and in compliance with the listing standards of the New York Stock Exchange. We operate pursuant to a written charter adopted by the Board of Directors that is published on the company’scompany's website.
Management has primary responsibility for the company’scompany's financial reporting process, principles and internal controls as well as preparation of its consolidated financial statements. The independent registered public accounting firm is responsible for performing an audit in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB) to obtain reasonable assurance that Bristol-Myers Squibb’sSquibb's consolidated financial statements are free from material misstatement and expressing an opinion on the conformity of such financial statements with accounting principles generally accepted in the United States. We are responsible for overseeing and monitoring D&T’s&T's auditing process on behalf of the Board of Directors.
As part of the oversight of the company’scompany's financial statements, we review and discuss with both management and D&T all annual and quarterly financial statements prior to their issuance. Management advised us that each set of financial statements reviewed was prepared in accordance with accounting principles generally accepted in the United States. We have reviewed with management significant accounting and disclosure issues and reviewed with D&T matters required to be discussed pursuant to auditing standards adopted by the PCAOB.
In addition, we have received the written disclosures and the letter from D&T required by PCAOB Ethics and Independence Rule 3526, “Communication"Communication with Audit Committees Concerning Independence”Independence", and have discussed with D&T their independence from Bristol-Myers Squibb and its management. We have determined that D&T’s&T's provision of non-audit services in 20112013 was compatible with, and did not impair, its independence. We have also received written materials addressing D&T’s&T's internal quality control procedures and other matters, as required by the New York Stock Exchange listing standards.
We have discussed with our internal auditors and D&T the overall scope and plans for their respective audits. We have met with the internal auditors and D&T, with and without management present, to discuss their evaluations of the company’scompany's internal control over financial reporting, and the overall quality of the company’scompany's financial reporting.
Based on the reviews and discussions described above, we recommended to the Board of Directors, and the Board has approved that, the audited consolidated financial statements for the year ended December 31, 20112013 be included in Bristol-Myers Squibb’sSquibb's Annual Report on Form 10-K for the year ended December 31, 20112013 for filing with the Securities and Exchange Commission.
In addition, we have confirmed there have been no new circumstances or developments since our respective appointments to the Committee that would impair any of our member’smember's ability to act independently.
The Audit Committee
Michael Grobstein, Chair
Lewis B. Campbell
LouisAlan J. Freeh
Lacy, Chair
Laurie H. Glimcher, M.D.
Alan J. Lacy
Michael Grobstein
Gerald L. Storch
ITEM 3—ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
As required by Section 14A of the Securities Exchange Act of 1934, as amended, we are providing stockholders the opportunity to advise the Compensation and Management Development Committee and the Board of Directors regarding the compensation of our named executive officers,Named Executive Officers, as such compensation is described in the Compensation Discussion and Analysis (CD&A) section, the tabular disclosure regarding such compensation and the accompanying narrative disclosure, beginning on page 28.27. Accordingly, we are requesting your nonbinding vote on the following resolution:
“"RESOLVED, that the stockholders of Bristol-Myers Squibb Company approve, on an advisory basis, the compensation of the Company’sCompany's Named Executive Officers, as described in the Compensation Discussion and Analysis section, the tabular disclosure regarding such compensation and the accompanying narrative disclosure set forth in the Company’s 2012Company's 2014 Proxy Statement.”"
Our executive compensation programs are designed to enable us to attract and retain talented employees capable of leading our business in the highly complex and competitive business environment in which we operate. We seek to accomplish this goal in a way that rewards performance and is aligned with our stockholders’stockholders' long-term interests. A significant partportion of each executive’sexecutive's pay depends on his or her individual performance against financial and operational objectives as well as key behavioral standards.behaviors. In addition, a substantial portion of an executive’sexecutive's compensation is in the form of equity awards that tie the executive’sexecutive's compensation directly to creating stockholder value and achieving financial and operational results.
At our annual meeting of stockholders held in May 2011, a substantial majority (93.8%)2013, approximately 96.1% of the votes cast on the proposal at that meeting voted in favor of the proposal. The Committee believes this affirms stockholders’stockholders' support of the company’scompany's approach to executive compensation. Nevertheless, as disclosed in more detail on page 43, the Committee implemented some enhancements to our annual and long-term incentive programs to mitigate the overlap of performance metrics between those two programs and to further align the interests of our executives with the interests of our stockholders.
We strongly urge you to read the CD&A, which describes our compensation program in greater detail. Highlights include:
our strong performance on profits, revenues and working capital efficiency;
We value input from our stockholders as expressed through their votes and have a strong record of engagement with our stockholders on compensation matters.other communications. As an advisory vote, this proposal is not binding on the company. TheHowever, consistent with our record of shareholder responsiveness, the Compensation and Management Development Committee however, will consider the outcome of the vote when making future executive compensation decisions.
Accordingly, the Board of Directors unanimously recommends a vote “FOR”"FOR" the approval, on an advisory basis, of the compensation of our Named Executive Officers.
ITEM 4—PROPOSAL ON THE APPROVAL OF THE
2012 STOCK AWARD AND INCENTIVE PLAN
At our Annual Meeting, we will ask stockholders to approve the 2012 Stock Award and Incentive Plan (the “2012 Plan”). The 2012 Plan will replace the 2007 Stock Award and Incentive Plan (the “2007 Plan”) which was approved by stockholders at our 2007 Annual Meeting. Similar to the 2007 Plan, the 2012 Plan provides for the granting of stock options and a variety of other types of equity and cash-based incentive awards.
The Board approved the 2012 Plan to help us:
Attract, retain and motivate officers, employees, directors, and other service providers to Bristol-Myers Squibb and its subsidiaries and affiliates.
Provide equitable and competitive benefit opportunities.
Reward achievement of our goals.
Promote creation of long-term value for stockholders by closely aligning the interests of participants with the interests of stockholders.
The Board and the Compensation and Management Development Committee (the “Committee”) believe that awards linked to common stock and awards with terms tied to our performance can provide incentives for the achievement of important performance objectives and promote the long-term success of Bristol-Myers Squibb. Therefore, they view the 2012 Plan as an integral part of our overall compensation program.
The 2012 Plan is similar to the 2007 Plan in most respects. No increase is proposed for the aggregate number of shares reserved for grant under the 2012 Plan. The changes relate to updating the 2012 Plan to assure compliance with current changes in accounting rules, tax laws and other regulations, as well as other changes to conform the 2012 Plan to emerging governance standards.
Shares Committed for Equity Compensation
Information on the total number of shares available under our existing equity compensation plans and unissued shares deliverable under outstanding options, warrants and rights as of the end of the last fiscal year is presented on page 75 under the caption “Equity Compensation Plan Information.”
Based on our equity award plans in effect and outstanding awards at February 29, 2012, if stockholders approve the 2012 Plan the total number of shares subject to outstanding awards and available for future awards under the 2012 Plan and other continuing equity compensation plans would be as follows:
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As stated above, the 2012 Plan would replace the current 2007 Plan, and therefore approximately 109 million shares that remain available under the 2007 Plan (as of February 29, 2012) would be made available under the 2012 Plan. No new awards would be granted under the 2007 Plan, although the
Committee retains full authority regarding outstanding awards under that plan. Shares subject to outstanding awards under the 2007 Plan may become available under the 2012 Plan if such shares are not delivered to the participant, in accordance with the share counting rules explained below under the caption “Shares Available Under the 2012 Plan.”
Overview of 2012 Plan Awards
The 2012 Plan authorizes a broad range of awards, including:
stock options
stock appreciation rights (“SARs”)
restricted stock, a grant of actual shares subject to a risk of forfeiture and restrictions on transfer
restricted stock units or stock units, a contractual commitment to deliver shares at a future date, which may or may not be subject to a risk of forfeiture
other awards based on common stock
dividend equivalents
performance shares or other stock-based performance awards
cash-based performance awards tied to achievement of specific performance objectives
shares issuable in lieu of rights to cash compensation
The Board seeks approval of the 2012 Plan by stockholders in order to meet requirements of the New York Stock Exchange and to satisfy requirements of tax law to help preserve our ability to claim tax deductions for compensation to executive officers. In addition, the Board regards stockholder approval of the 2012 Plan as desirable and consistent with corporate governance best practices.
Section 162(m) of the Internal Revenue Code (the “Code”) limits the deductions a publicly held company can claim for compensation in excess of $1 million in a given year paid to the Chief Executive Officer and the three other most highly compensated executive officers serving on the last day of the fiscal year, excluding the chief financial officer. “Performance-based” compensation that meets certain requirements is not counted against the $1 million deductibility cap, and therefore remains fully deductible. For purposes of Section 162(m), approval of the 2012 Plan will be deemed to include approval of the general business criteria upon which performance objectives for awards are based, described below under the caption “Performance Awards.” Stockholder approval of general business criteria, without specific targeted levels of performance, will permit qualification of incentive awards for full tax deductibility for a period of five years under Section 162(m). Stockholder approval of the performance goal inherent in stock options and SARs (increases in the market price of stock) is not subject to a time limit under Section 162(m).
In addition, stockholder approval will permit designated stock options to qualify as incentive stock options under the Internal Revenue Code for a period of ten years. Such qualification can give the holder of the options more favorable tax treatment, as explained below.
Restriction on Repricing and Loans
Consistent with the company’s long-standing policy, the 2012 Plan includes a restriction providing that, without stockholder approval, we will not amend or replace options or SARs previously granted under the 2012 Plan in a transaction that constitutes a “repricing.” For this purpose, a “repricing” is defined as amending the terms of an option or SAR after it is granted to lower its exercise price, any other action that is treated as a repricing under generally accepted accounting principles, or canceling an option or SAR at a time when its strike price is equal to or greater than the fair market value of the underlying stock in exchange for another option, SAR, restricted stock, other equity, cash or other
property, unless the cancellation and exchange occurs in connection with a merger, acquisition, spin-off or other similar corporate transaction. Adjustments to the exercise price or number of shares subject to an option or SAR to reflect the effects of a stock split or other extraordinary corporate transaction will not constitute a “repricing.”
The 2012 Plan does not authorize loans to participants.
Description of the 2012 Plan
The following is a brief description of the material features of the 2012 Plan. This description, including information summarized above, is qualified in its entirety by reference to the full text of the proposed 2012 Plan, a copy of which is attached to this Proxy Statement as Exhibit B.
Shares Available under the 2012 Plan. If the 2012 Plan is approved by our stockholders, 109 million shares remaining available for new grants under the 2007 Plan and shares recaptured from outstanding awards under the 2007 Plan will be available for delivery to participants. No increase is proposed for the aggregate number of shares reserved for grant under the 2012 Plan. Shares that remained available under the 2002 Stock Incentive Plan in 2007 and shares that are recaptured from outstanding awards under that plan currently are part of the shares available under the 2007 Plan, and likewise will be available under the 2012 Plan. The 2012 Plan specifies that not more than 42 million shares would be available for tax-favored incentive stock options. Shares used for awards assumed in an acquisition do not count against the shares reserved under the 2012 Plan. The shares reserved may be used for any type of award under the 2012 Plan. The number of shares reserved under the 2012 Plan is subject to adjustment in the event of stock splits, stock dividends and other extraordinary items.
Only the number of shares actually delivered to participants in connection with an award after all restrictions have lapsed will be counted against the number of shares reserved under the 2012 Plan. Thus, shares will remain available for new awards if an award expires or is forfeited, canceled or settled in cash, if shares are withheld or separately surrendered to pay the exercise price of an option or to satisfy tax withholding obligations relating to an award, if fewer shares are delivered upon exercise of an SAR than the number of shares covered by the SAR, or if shares that had been issued as restricted stock are forfeited. These same rules will apply to awards under the 2007 Plan, so that shares may become available under the 2012 Plan to the extent that shares are not in fact both delivered and vested in connection with those awards. Under the 2012 Plan, awards may be outstanding relating to a greater number of shares than the aggregate remaining available under the 2012 Plan so long as the Committee ensures that awards will not result in delivery and vesting of shares in excess of the number then available under the 2012 Plan. Shares delivered under the 2012 Plan may be either newly issued or treasury shares.
On February 29, 2012, the last reported sale price of Bristol-Myers Squibb’s common stock in composite transactions for New York Stock Exchange-listed securities was $32.17 per share.
Per-Person Award Limitations. The 2012 Plan includes a limitation on the amount of awards that may be granted to any one participant in a given year in order to qualify awards as “performance-based” compensation not subject to the limitation on deductibility under Section 162(m) of the Code. Under this annual per-person limitation, no participant may in any year be granted share-denominated awards under the 2012 Plan relating to more than his or her “Annual Limit”. The Annual Limit equals three million shares plus the amount of the participant’s unused Annual Limit relating to share-based awards as of the close of the previous year, subject to adjustment for splits and other extraordinary corporate events. In the case of cash-denominated awards, the 2012 Plan limits performance awards that may be earned by a participant to the participant’s defined Annual Limit, which for this purpose equals $6 million plus the amount of the participant’s unused cash Annual Limit as of the close of the previous year. The per-person limit for cash-denominated performance awards does not operate to limit the amount of share-based awards, and vice versa. These limits apply only to awards under the 2012 Plan, and do not limit our ability to enter into compensation arrangements outside of the 2012 Plan.
Adjustments. Adjustments to the number and kind of shares subject to the share limitations and specified in the share-based Annual Limit are authorized in the event of a large and non-recurring dividend or distribution, recapitalization, stock split, stock dividend, reorganization, business combination, or other similar corporate transaction, equity restructuring as defined under applicable accounting rules, or other similar event affecting the common stock. We are also obligated to adjust outstanding awards upon the occurrence of these types of events to preserve, without enlarging, the rights of participants with respect to their awards. The Committee may adjust performance conditions and other terms of awards in response to these kinds of events or to changes in applicable laws, regulations, or accounting principles, except that adjustments to awards intended to qualify as “performance-based” generally must conform to requirements imposed by Section 162(m).
Eligibility. Executive officers and other employees of Bristol-Myers Squibb and its subsidiaries, and non-employee directors and others who provide substantial services to us, are eligible to be granted awards under the 2012 Plan. In addition, any person who has been offered employment by us may be granted awards, but such prospective grantee may not receive any payment or exercise any right relating to the award until he or she has commenced employment or the providing of services. Currently, we have approximately 27,000 employees and other service providers who would be potentially eligible for awards under the 2012 Plan. Under the current program, approximately 5,600 employees are eligible on an annual basis to receive awards and in 2011, we granted equity awards of the type to be authorized in the 2012 Plan to approximately 5,400 persons.
Administration.The Committee will administer the 2012 Plan, except that the Board may itself act to administer the 2012 Plan. References to the “Committee” here mean the Committee or the full Board exercising authority with respect to a given award. The 2012 Plan provides that the composition and governance of the Committee shall be established in the Committee’s charter adopted by the Board. Subject to the terms and conditions of the 2012 Plan, the Committee is authorized to select participants, determine the type and number of awards to be granted and the number of shares to which awards will relate or the amount of a performance award, specify times at which awards will be exercisable or settled, including performance conditions that may be required as a condition thereof, set other terms and conditions of such awards, prescribe forms of award agreements, interpret and specify rules and regulations relating to the 2012 Plan, and make all other determinations which may be necessary or advisable for the administration of the 2012 Plan. Nothing in the 2012 Plan precludes the Committee from authorizing payment of other compensation, including bonuses based upon performance, to officers and employees, including the executive officers, outside of the 2012 Plan.
The Board or another committee of the Board may perform the functions of the Committee for purposes of granting awards under the 2012 Plan to non-employee directors, as the Board may at any time direct. The 2012 Plan authorizes the Committee to delegate authority to executive officers to the extent permitted by applicable law, but such delegation will not authorize grants of awards to executive officers without direct participation by the Committee. The 2012 Plan provides that members of the Committee and the Board shall not be personally liable, and shall be fully indemnified, in connection with any action, determination, or interpretation taken or made in good faith under the 2012 Plan.
Stock Options and SARs. The Committee is authorized to grant stock options, including both incentive stock options (“ISOs”), which can result in potentially favorable tax treatment to the participant, and non-qualified stock options. SARs may also be granted, entitling the participant to receive the excess of the fair market value of a share on the date of exercise over the SAR’s designated “base price.” The exercise price of an option and the base price of an SAR are determined by the Committee, but generally may not be less than the fair market value (i.e. closing price) of the shares on the date of grant. The maximum term of each option or SAR will be ten years. Subject to this limit, the times at which each option or SAR will be exercisable and provisions requiring forfeiture of unexercised options (and in some cases gains realized upon an earlier exercise) at or following termination of employment or upon the occurrence of other events generally are fixed by the Committee. Options may be exercised by payment of the exercise price in cash, shares having a fair
market value equal to the exercise price or surrender of outstanding awards or other property having a fair market value equal to the exercise price. These exercise methods may include withholding of option shares to pay the exercise price if that would not result in additional accounting expense. We may impose limits on any of these methods of exercise and settlement and implement other methods, for both options and SARs. SARs may be exercisable for shares or for cash, as determined by the Committee. Options and SARs may be granted on terms that cause such awards not to be subject to Section 409A of the Code (“Section 409A”), or with terms that cause those awards to be deferral arrangements subject to Section 409A.
Restricted Stock and Stock Units. The Committee is authorized to grant restricted stock and stock units. Prior to the end of the restricted period, shares granted as restricted stock may not be sold, and will be forfeited in the event of termination of employment in specified circumstances. The Committee will establish the length of the restricted period for awards of restricted stock. Aside from the risk of forfeiture and non-transferability, an award of restricted stock entitles the participant to the rights of a stockholder of Bristol-Myers Squibb, including the right to vote the shares and to receive dividends, which dividends could be either forfeitable or non-forfeitable. Any of these rights may be limited by the Committee.
Stock units give a participant the right to receive shares at the end of a specified deferral period. Stock units subject to a risk of forfeiture upon termination of employment may be denominated as an award of “restricted stock units.” The Committee will establish any vesting requirements for restricted stock units. Restricted stock units offer an advantage, as compared to restricted stock, in that the period during which the award is deferred as to settlement can be extended past the date the award becomes non-forfeitable, so the Committee can require or permit a participant to continue to hold an interest tied to common stock on a tax-deferred basis. Prior to settlement, stock units carry no voting or dividend rights or other rights associated with stock ownership, but the Committee may choose to authorize payment of dividend equivalents, which may be forfeitable or non-forfeitable, in connection with these awards.
Other Stock-Based Awards, Bonus Stock Awards, and Awards in Lieu of Other Obligations. The 2012 Plan authorizes the Committee to grant awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to common stock. The Committee will determine the terms and conditions of such awards, including the consideration to be paid to exercise awards in the nature of purchase rights, the periods during which awards will be outstanding, and any forfeiture conditions and restrictions on awards. In addition, the Committee is authorized to grant shares as a bonus free of restrictions, or to grant shares or other awards in lieu of obligations under other plans or compensatory arrangements, subject to such terms as the Committee may specify.
Performance-Based Awards.The Committee may grant performance awards, which may be awards of a specified cash amount or may be share-based awards (for example, performance shares). Generally, performance awards require satisfaction of pre-established performance goals, consisting of one or more business criteria and a targeted performance level with respect to such criteria as a condition of awards being granted or becoming exercisable or settleable, or as a condition to accelerating the timing of such events. Performance may be measured over a period of any length specified by the Committee. Therefore, for example, annual incentive awards may be granted under the 2012 Plan, payable in cash or in shares. If so determined by the Committee, in order to avoid the limitations on tax deductibility under Section 162(m) of the Code, the business criteria used by the Committee in establishing performance goals applicable to performance awards to the named executive officers will be selected from among the following: net sales; revenue; revenue growth or product revenue growth; operating income (before or after taxes); pre- or after-tax income (before or after allocation of corporate overhead and bonus); earnings per share; net income (before or after taxes); return on equity; total stockholder return; return on assets or net assets; appreciation in and/or maintenance at or above a specified level of the price of the shares or any other publicly-traded securities of the company; market share; gross profits; earnings (including earnings before taxes, earnings before interest and taxes or earnings before interest, taxes, depreciation and amortization);
economic value-created models or equivalent metrics; comparisons with various stock market indices; reductions in costs; cash flow or cash flow per share (before or after dividends); return on capital (including return on total capital or return on invested capital); cash flow return on investment; improvement in or attainment of expense levels or working capital levels; operating margins, gross margins or cash margins; year-end cash; debt reductions and control of interest expense; stockholder equity; regulatory achievements; and implementation, completion or attainment of measurable objectives with respect to research, development, products or projects, production volume levels, acquisitions and divestitures, market penetration, total market capitalization, business retention, new product generation, geographic business expansion goals, cost controls and targets (including cost of capital), customer satisfaction, employee satisfaction, agency ratings, management of employment practices and employee benefits, supervision of litigation and information technology, implementation of business process controls, and recruiting and retaining personnel.
The Committee retains discretion to set the level of performance for a given business criteria that will result in the earning of a specified amount under a performance award. Performance goals may be based on our overall performance or the performance of a subsidiary, division, business segment, product line or business unit or function, or based on such performance as compared to the performance of other companies or an index or industry measure of performance. The Committee may also exclude charges or items from the measurement of performance, including those relating to (a) restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring charges, (b) an event either not directly related to our operations or not within the reasonable control of our management, or (c) the effects of tax or accounting changes in accordance with U.S. generally accepted accounting principles. The Committee may specify that a performance goal will incorporate additional business criteria (including business criteria not specified above) as a condition to the earning of all or a portion of a performance award, so long as the performance goal incorporates at least one of the business criteria specified above and the failure to achieve a specified level of performance with respect to that business criteria will result in forfeiture of the performance award.
Other Terms of Awards. Awards may be settled in cash, shares, other awards or other property, in the discretion of the Committee. The Committee may require or permit participants to defer the settlement of all or part of an award, including shares issued upon exercise of an option or SAR subject to compliance with Section 409A, in accordance with such terms and conditions as the Committee may establish, including payment or crediting of interest or dividend equivalents on any deferred amounts. The 2012 Plan allows vested but deferred awards to be paid out to the participant in the event of an unforeseeable emergency, as defined in Section 409A. The Committee is authorized to place cash, shares or other property in trusts or make other arrangements to provide for payment of our obligations under the 2012 Plan. The Committee may condition awards on the payment of taxes, and may provide for mandatory withholding of a portion of the shares or other property to be distributed in order to satisfy tax withholding obligations, or may permit a participant to elect to satisfy these tax obligations by having us withhold shares. Awards granted under the 2012 Plan generally may not be pledged or otherwise encumbered and are not transferable except by will or by the laws of descent and distribution, or to a designated beneficiary upon the participant’s death, except that the Committee may permit transfers of awards other than incentive stock options on a case-by-case basis, but such transfers will be allowed only for estate-planning purposes and may not involve transfers to other third parties for value.
The 2012 Plan authorizes the Committee to provide for a forfeiture of awards and award gains realized by exercise or settlement of an award in the event a participant fails to comply with conditions relating to non-competition, non-solicitation, confidentiality, non-disparagement and other requirements for the protection of our business. The 2012 Plan also provides that awards may be subject to a “clawback” to the extent necessary to comply with applicable law or as otherwise determined by the Committee. Awards under the 2012 Plan may be granted without a requirement that the participant pay consideration in the form of cash or property for the grant (as distinguished from the exercise), except
to the extent required by law. Subject to the requirement that any repricing transaction be approved by stockholders, the Committee may grant awards in substitution for, exchange for or as a buyout of other awards or rights to payment from us, and may exchange or buy out outstanding awards for cash or other property. The Committee also may grant awards in addition to and in tandem with other awards or rights. In granting a new award, the Committee may determine that the in-the-money value or fair value of any surrendered award may be applied to reduce the purchase price of any new award, subject to the requirement that repricing transactions must be approved by stockholders.
Dividend Equivalents.The Committee may grant dividend equivalents. These are rights to receive payments equal in value to the amount of dividends paid on a specified number of shares of common stock while an award is outstanding. These amounts may be in the form of cash or rights to receive additional awards or additional shares of common stock having a value equal to the cash amount. The awards may be granted on a stand-alone basis or in conjunction with another award, and the Committee may specify whether the dividend equivalents will be forfeitable or non-forfeitable, provided that all dividend equivalents relating to a performance award are forfeitable to the same extent as the underlying award is forfeitable due to failure to achieve the specified performance condition.
Vesting, Forfeitures, and Related Award Terms.The Committee will determine, in its discretion, the vesting schedule of awards, the circumstances resulting in forfeiture of awards, the post-termination exercise periods of options and SARs, and the events resulting in acceleration of the right to exercise and the lapse of restrictions, or the expiration of any deferral period, on any award.
The 2012 Plan provides that, in the event of a “change in control” (as defined in the 2012 Plan) of Bristol-Myers Squibb followed within two years (or such other period specified by the Committee) by a termination of the participant’s employment by us not for cause or by the participant for “good reason” (as defined in the 2012 Plan) then, upon such termination, outstanding awards will immediately vest and be fully exercisable, any restrictions and forfeiture conditions of such awards will lapse, and goals relating to awards that remain subject to performance conditions will be deemed met at the specified target level. The Committee can provide for different treatment of an award upon a change in control, by so specifying at the date of grant. The Committee may also terminate outstanding awards in the event of a merger or other acquisition of Bristol-Myers Squibb, which would entitle the participant to the per-share consideration to be received by stockholders. The distribution of cash or shares in settlement of awards upon termination following a change in control may be limited by applicable restrictions under Section 409A.
Amendment and Termination of the 2012 Plan.The Board may amend, suspend, discontinue, or terminate the 2012 Plan or the Committee’s authority to grant awards thereunder without stockholder approval, except as required by law or regulation or under the Listed Company Manual of the New York Stock Exchange. New York Stock Exchange rules require stockholder approval of any material amendment to plans such as the 2012 Plan. Under these rules, however, stockholder approval will not necessarily be required for all amendments which might increase the cost of the 2012 Plan or broaden eligibility. Unless earlier terminated, the authority of the Committee to make grants under the 2012 Plan will terminate ten years after the latest stockholder approval of the 2012 Plan, and the 2012 Plan will terminate when we have no further rights or obligations with respect to any outstanding award or otherwise under the 2012 Plan.
Federal Income Tax Implications of the 2012 Plan
We believe that under current law the following Federal income tax consequences generally would arise with respect to awards under the 2012 Plan.
Options and SARs that are not deemed to be deferral arrangements under Section 409A would have the following tax consequences: the grant of an option or an SAR will create no federal income tax consequences for the participant or Bristol-Myers Squibb. A participant will not have taxable income upon exercising an option that is an ISO, except that the alternative minimum tax may apply.
Upon exercising an option that is not an ISO, the participant generally must recognize ordinary income equal to the difference between the exercise price and the fair market value of the freely transferable or non-forfeitable shares acquired on the date of exercise. Upon exercising an SAR, the participant must generally recognize ordinary income equal to the cash or the fair market value of the shares received.
Upon a disposition of shares acquired upon exercise of an ISO before the end of the applicable ISO holding periods, the participant must generally recognize ordinary income equal to the lesser of (i) the fair market value of the ISO shares at the date of exercise minus the exercise price or (ii) the amount realized upon the disposition of the ISO shares minus the exercise price. Otherwise, a participant’s sale of shares acquired by exercise of any option generally will result in short-term or long-term capital gain or loss measured by the difference between the sale price and the participant’s tax “basis” in such shares. The tax “basis” normally is the exercise price plus any amount he or she recognized as ordinary income in connection with the option’s exercise. A participant’s sale of shares acquired by exercise of an SAR generally will result in short-term or long-term capital gain or loss measured by the difference between the sale price and the tax “basis” in the shares, which normally is the amount he or she recognized as ordinary income in connection with the SAR’s exercise.
We normally can claim a tax deduction equal to the amount recognized as ordinary income by a participant in connection with the exercise of an option or SAR, but no tax deduction relating to a participant’s capital gains. Accordingly, we will not be entitled to any tax deduction with respect to an ISO if the participant holds the shares for the applicable ISO holding periods prior to selling the shares.
Awards other than options and SARs that result in a transfer to the participant of cash or shares or other property generally will be structured under the 2012 Plan to meet applicable requirements under Section 409A. If no restriction on transferability or substantial risk of forfeiture applies to amounts distributed to a participant, the participant generally must recognize ordinary income equal to the cash or the fair market value of shares actually received. Thus, for example, if we grant an award of restricted stock units that has vested or requires or permits deferral of receipt of cash or shares under a vested award, the participant should not become subject to income tax until the time at which shares or cash are actually distributed, and we will become entitled to claim a tax deduction at that time.
On the other hand, if a restriction on transferability and substantial risk of forfeiture applies to shares or other property actually distributed to a participant under an award (such as, for example, a grant of restricted stock), the participant generally must recognize ordinary income equal to the fair market value of the transferred amounts at the earliest time either the transferability restriction or risk of forfeiture lapses. In the usual case, we can claim a tax deduction in an amount equal to the ordinary income recognized by the participant, except as discussed below. A participant may elect to be taxed at the time of grant of restricted stock or other property rather than upon lapse of restrictions on transferability or the risk of forfeiture, but if the participant subsequently forfeits such shares or property he or she would not be entitled to any tax deduction, including as a capital loss, for the value of the shares or property on which he or she previously paid tax.
Any award that is deemed to be a deferral arrangement (excluding certain exempted short-term deferrals) will be subject to Section 409A. Participant elections to defer compensation under such awards and as to the timing of distributions relating to such awards must meet requirements under Section 409A in order for income taxation to be deferred upon vesting of the award and tax penalties avoided by the participant.
Some options and SARs may be subject to Section 409A, which regulates deferral arrangements. In such case, the distribution to the participant of shares or cash relating to the award would have to be restricted in order for the participant not to be subject to tax and a tax penalty at the time of vesting. In particular, the participant’s discretionary exercise of the option or SAR could not be permitted over a period extending more than a year in most cases. If the distribution and other award terms meet applicable requirements under Section 409A, the participant would realize ordinary income at the time of distribution of shares or cash rather than exercise, with the amount of ordinary income equal to the
distribution date value of the shares or cash less any exercise price actually paid. We would not be entitled to a tax deduction at the time of exercise, but would become entitled to a tax deduction at the time shares are delivered at the end of the deferral period.
As discussed above, compensation that qualifies as “performance-based” compensation is excluded from the $1 million deductibility cap of Section 162(m) of the Code, and therefore remains fully deductible by the company paying it. Under the 2012 Plan, options and SARs granted with an exercise price or base price at least equal to 100% of fair market value of the underlying stock at the date of grant, performance awards to employees the Committee expects to be named executive officers at the time compensation is received, and certain other awards which are conditioned upon achievement of performance goals are intended to qualify as such “performance-based” compensation. A number of requirements must be met in order for particular compensation to so qualify, however, so there can be no assurance that such compensation under the 2012 Plan will be fully deductible under all circumstances. In addition, other awards under the 2012 Plan, such as non-performance-based restricted stock and restricted stock units, generally will not so qualify, so that compensation paid to certain executives in connection with such awards may, to the extent it and other compensation subject to Section 162(m)’s deductibility cap exceed $1 million in a given year, not be deductible by us as a result of Section 162(m). Compensation to certain employees resulting from the earning or vesting of awards in connection with a change in control or termination following a change in control also may be non-deductible under Code Sections 4999 and 280G.
The foregoing provides only a general description of the application of federal income tax laws to certain awards under the 2012 Plan. This discussion is intended for the information of stockholders considering how to vote at the Annual Meeting and not as tax guidance to participants in the 2012 Plan, as the consequences may vary with the types of awards made, the identity of the recipients and the method of payment or settlement. Different tax rules may apply, including in the case of variations in transactions that are permitted under the 2012 Plan (such as payment of the exercise price of an option by surrender of previously acquired shares). The summary does not address in any detail the effects of other federal taxes (including possible “golden parachute” excise taxes) or taxes imposed under state, local or foreign tax laws.
New Plan Benefits Under the 2012 Plan
Because future awards under the 2012 Plan will be granted in the discretion of the Committee, the type, number, recipients, and other terms of such awards cannot be determined at this time. Information regarding our recent practices with respect to incentive awards and stock-based compensation under existing plans is presented in the “Summary Compensation Table” and these related tables: “Grants of Plan-Based Awards,” “Outstanding Equity Awards at Fiscal Year-End,” and “Options Exercises and Stock Vesting,” elsewhere in this Proxy Statement, and in our financial statements for the fiscal year ended December 31, 2011, in the Annual Report which accompanies this Proxy Statement.
If stockholders decline to approve the 2012 Plan, no awards will be granted under the 2012 Plan, but awards may continue to be granted under the 2007 Plan until its expiration.
The Board of Directors unanimously recommends a vote “FOR” the approval of the 2012 Stock Award and Incentive Plan.
Equity Compensation Plan Information
The following table summarizes information concerning the company’scompany's equity compensation plans and outstanding and exercisable options as of December 31, 2011:2013:
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (in millions) | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (in millions) | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| | (a) | (b) | (c) | |||||||
Equity compensation plans approved by security holders | 35.2 | (1) | $ | 22.87 | (1) | 114.4 | ||||
Equity compensation plans not approved by security holders(2) | 0.1 | $ | 25.39 | 28.4 | ||||||
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| 35.3 | $ | 22.88 | 142.8 | |||||||
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Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (in millions) | Weighted- average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (in millions) | ||||||||||||
| (a) | (b) | (c) | |||||||||||||
Equity compensation plans approved by security holders(1) | 79 | (3) | $ | 26.87 | (3) | 108 | |||||||||
Equity compensation plans not approved by security holders(2) | 4 | $ | 29.95 | 27 | |||||||||||
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| 83 | $ | 27.04 | 135 | ||||||||||||
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STOCKHOLDER PROPOSALS
We expect the following stockholder proposals (Items 5 through 7)proposal (Item 4) to be presented at the 20122014 Annual Meeting. The Board of Directors has recommendedis not recommending a vote against these proposals"FOR" or "AGAINST" Item 4 for the policy reasons as set forth following the proposal. The stock holdings of athe proponent will be provided upon request to the Corporate Secretary of Bristol-Myers Squibb.
ITEM 5—4—STOCKHOLDER PROPOSAL ON CUMULATIVE VOTINGSIMPLE MAJORITY VOTE
The proponent of this resolution is Evelyn Y. Davis of 2600 Virginia Avenue N.W., Suite 215, Washington, DC 20037.
RESOLVED: “That the stockholders of Bristol-Myers Squibb, assembled in Annual Meeting in person and by proxy, hereby request the Board of Directors to take the necessary steps to provide for cumulative voting in the election of directors, which means each stockholder shall be entitled to as many votes as shall equal the number of shares he or she owns multiplied by the number of directors to be elected, and he or she may cast all of such votes for a single candidate, or any two or more of them as he or she may see fit.”
REASONS: “Many states have mandatory cumulative voting, so do National Banks.”
“In addition, many corporations have adopted cumulative voting.”
“If you AGREE, please mark your proxy FOR this resolution.”
Board of Directors’ Position
The Board of Directors recommends a vote “AGAINST” this proposal for the following reasons:
The Board of Directors believes that our present method for electing directors of one vote for each nominee for director is working well and should not be changed. Cumulative voting creates the possibility of allowing narrow constituencies of stockholders to elect “special interest” directors and otherwise have a voice in the elections of directors that is disproportionate to their economic investment in the corporation. In addition, directors elected by such a “special interest” constituency may have difficulty fulfilling their fiduciary duty of loyalty to the corporation and its stockholders due to inherent conflicts between the corporation and its stockholders on the one hand and the director’s constituency on the other. The Board believes that these potential conflicts create factionalism and discord within the Board, which may undermine its ability to work effectively as a governing body on behalf of the common interests of all stockholders. The present system of voting used by us and by most leading corporations prevents the stacking of votes behind special interest or potentially partisan directors. The present system thus promotes the election of a more effective Board in which each director represents and is accountable to stockholders as a whole.
The Board, in fact, has taken a number of steps in recent years to achieve greater accountability to stockholders, and it does not believe that cumulative voting enhances that accountability. The company’s directors are elected annually by a majority of the votes cast in uncontested elections. A director is required to tender his or her resignation to the Board if such director does not receive a majority of the votes cast. The Board’s Committee on Directors and Corporate Governance, which consists solely of non-management directors who qualify as independent under the New York Stock Exchange rules, will recommend to the full Board whether to accept the resignation or take other action. The Committee on Directors and Corporate Governance also recommends to the Board nominees for election as directors. This process helps ensure that the Board will continue to act independently and in the best interests of stockholders. The Committee on Directors and Corporate Governance will consider director candidates suggested by stockholders. The process by which stockholders may recommend director candidates is described on page 12 of this Proxy Statement.
For the foregoing reasons, the Board believes that directors should be elected by and accountable to all stockholders, not special interests holding a small percentage of the company’s stock who elect directors by cumulating their votes, and that the company’s current election process protects the best interests of all stockholders.
Accordingly, the Board of Directors unanimously recommends a vote “AGAINST” this proposal.
ITEM 6—STOCKHOLDER PROPOSAL ON TRANSPARENCY IN ANIMAL RESEARCH
The proponent of this resolution is People for the Ethical Treatment of Animals of 1536 16th St. NW, Washington, DC 20036.
RESOLVED, to promote transparency and minimize the use of animals, the Board should issue an annual report to shareholders disclosing procedures to ensure proper animal care, as well as specific plans to promote alternatives to animal use.
Supporting Statement
Our Company posts a number of public policies on its website. Specific data regarding air emissions,1 water use,2 waste,3 energy,4 and transportation5 are reported, as are fines for safety violations, spills, and remediation investigations.6
In contrast, our Company’s animal testing policy is included in a random “product stewardship” list7 and provides no specific information, despite touting the virtues of reducing animal use. Other international companies provide detailed information such as animal use numbers and specific efforts to incorporate replacement methods.8
In the last three years, our Company used more than 20,000 animals in-house. This number includes more than 2,600 dogs and 3,400 primates. Nearly 12,500 of these animals were used in painful experiments—a staggering 62%.9
These figures do not include animals used in Bristol-Myers Squibb experiments in contract laboratories nor the vast numbers of animals who are most commonly used in experiments and, though not legally required to be counted, suffer as well.
Animals used in laboratory experiments experience pain, fear, and stress. They spend their lives in unnatural settings—caged and deprived of companionship—and are subjected to painful experiments. Undercover investigations have exposed atrocities at accredited institutions and footage shows animals being beaten, tormented, abused, and left to suffer from illness and injury without veterinary care.
Our Company’s animal testing policy states that “we evaluate each contractor animal care and use program….for conformance to published regulations and standards for the humane care, treatment and use of all animals.”
Yet in one contract laboratory used by our Company, Covance, Inc., an undercover investigator videotaped workers striking primates and throwing them against cages. Primates circled frantically in their cages, pulled out their hair, and chewed at their own flesh.10
In other instances, a primate became trapped in his cage bars, unable to reach food or water for days, while others suffered frostbite from inadequate weather protection. The government has cited and fined Covance for improper care and failure to provide pain relief to suffering animals.
Given that 92% of drugs deemed safe and effective when tested on animals fail in human clinical trials,11 our Company has an ethical and fiscal obligation to ensure that a minimum number of animals and the best science possible are used.
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Our Company must incorporate recommendations from the National Academy of Sciences to use recent scientific advances to “transform toxicity testing from a system based on whole-animal testing to one founded primarily onin vitro [non-animal] methods.”12 These approaches will improve efficiency and reduce costs, and increase speed and predictivity to humans.
We urge shareholdersFORthis socially and ethically important proposal.
Board of Directors’ Position
The Board of Directors recommends a vote “AGAINST” this proposal for the following reasons:
The Board of Directors believes that the preparation of an additional report to stockholders as requested by the proponent would not be a good use of company resources. We are highly supportive of the principles of protecting the care and welfare of animals and fully recognize the fundamental ethical obligation to treat animals used in research responsibly. Furthermore, we are committed to reducing and replacing animals, where feasible.
At Bristol-Myers Squibb our mission is to discover, develop and deliver innovative medicines to patients with serious diseases such as cancer, diabetes, hepatitis and cardiovascular disease. We have both a legal and an ethical obligation to ensure the safety and efficacy of investigational new medicines prior to their use in humans. Regulatory agencies around the world, including the U.S. Food and Drug Administration, require investigational medicines be thoroughly evaluated before approving them for use in human clinical trials. At times, to ensure fulfillment of these obligations, research or testing methods that include the use of animals is required. As a result, testing with animals will continue to be a component of our research and development efforts.
Our sustainability report, available on our website at www.bms.com/sustainability, details our long-standing, highly regarded animal testing program that is committed to reducing reliance on animal testing methods, promoting the development, validation and use of non-animal tests, and providing the highest level of care when use of animals is required.
As stated in our sustainability report, it is our policy that our scientists always consider replacing the use of animals by other methods where possible, reducing the number of animals used and refining procedures to minimize impact to animals (also known as the 3Rs—replace, reduce and refine). To further promote that policy, the company confers an annual Animal Welfare Award to scientists who have implemented new scientific procedures that reduce, refine or replace animals used in our studies. We are committed to developing non-animal tests, and using them whenever possible. Over the past two decades we have moved from primarily animal based testing to a system that combinesin silico,in vitroandin vivo approaches. We have supported development of alternatives to animal research both internally, as part of the discovery and development process, and externally with over one million dollars of funding to other institutions.
Employees involved in any aspect of our animal research program attend regular training to ensure that they are competent in the care of the animals and in the procedures required to complete the proposed work, that they are aware of the ethical issues involved in the use of animals, and that they demonstrate humane care, use and respect for all research animals. Disciplinary actions, up to and including termination, can be taken against employees that do not comply with our standards and procedures.
In addition, all of our procedures that involve the use and care of animals must comply with applicable governmental regulations and our internal corporate animal care and use directives. The company’s Animal Care and Use Committees are charged with reviewing and monitoring our procedures and each internal, external or contracted animal study protocol generated by any of our employees to ensure that animals are cared for in a way that meets our high standards. The
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committees also perform semi-annual facility inspections and program reviews to ensure that the animals are healthy and cared for appropriately. All of our facilities and programs involved with the care and use of animals are periodically subjected to rigorous inspection by company auditors and, to the extent applicable, government inspectors to ensure compliance with appropriate standards.
Our animal testing program integrates our firm commitment to reduce use of animals, to develop, where feasible, alternatives to animal use and to pursue humane care of the animals we use. The Board believes that the disclosures already contained in our sustainability report provide our stockholders with sufficient information to assess our animal testing program. Therefore, the Board believes that publishing an additional report to stockholders beyond what is already published in our sustainability report is unnecessary and would not be in the best interests of our stockholders.
Accordingly, the Board of Directors unanimously recommends a vote “AGAINST” the proposal.
ITEM 7—STOCKHOLDER PROPOSAL ON SHAREHOLDER ACTION BY WRITTEN CONSENT
The proponent of this resolution is Kenneth Steiner of 14 Stoner Ave., 2M, Great Neck, New York 11021.
RESOLVED, Shareholders request that our board take the steps necessary so that each voting requirement in our charter and bylaws that calls for a greater than simple majority vote be eliminated, and replaced by a requirement for a majority of directors undertakethe votes cast for and against applicable proposals, or a simple majority in compliance with applicable laws. If necessary this means the closest standard to a majority of the votes cast for and against such steps as may be necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting (to the fullest extent permitted by law).proposals consistent with applicable laws. This includes written consent regarding issuesthe 75% provision in our Charter.
Shareowners are willing to pay a premium for shares of corporations that our board is nothave excellent corporate governance. Supermajority voting requirements have been found to be one of six entrenching mechanisms that are negatively related to company performance according to "What Matters in favor of.Corporate Governance" by Lucien Bebchuk, Alma Cohen and Allen Ferrell of the Harvard Law School. Supermajority requirements are arguably most often used to block initiatives supported by most shareowners but opposed by a status quo management.
This proposal topic won majority shareholder74% to 88% support at 13 major companiesWeyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw-Hill and Macy's. The proponents of these proposals included Ray T. Chevedden and William Steiner. Currently a 1%-minority can frustrate the will of our 74%-shareholder majority.
This proposal should also be more favorably evaluated due to our Company's clearly improvable environmental, social and corporate governance performance as reported in 2010. This2013:
In regard to executive pay there was $17 million for Lamberto Andreotti. GMI Ratings, an independent investment research firm, said Bristol-Myers could give long-term incentive pay to our CEO for below-median performance. Unvested equity pay would not lapse upon CEO termination.
Lead Director Lewis Campbell had 15-years independence-detracting tenure and received our highest negative votes—into double digits. Togo West chaired our executive pay committee. Mr. West's resume included 67%-supportdirector experience at both AllstateKrispy Kreme and Sprint. Hundreds of major companies enable shareholder action by written consent.
Taking action by written consent in place ofAbitibiBowater leading up to their bankruptcies. We also had a meetinglong-tenured former CEO on our executive pay committee, Lewis Campbell. A former CEO on an executive pay committee is a means shareholders can usepractice not associated with moderation.
Bristol-Myers admitted the SEC had launched an investigation under the Foreign Corrupt Practices Act into its sales and marketing practices in various countries. Louisiana Attorney General James Caldwell's office said Bristol Myers [sic] would pay $7 million to raise important matters outsideresolve allegations they misreported drug price information to the normal annual meeting cycle. A study by Harvard professor Paul Gompers supports the concept that shareholder dis-empowering governance features, including restrictions on shareholder ability to act by written consent, are significantlystate's Medicaid program.
GMI said there were forensic accounting ratios related to reduced shareholder value.
For some reason our company pushed the notion in 2011asset-liability valuation that contacting all shareholders regarding written consent is somehow important for “shareholder democracy.” But it’s insanely expensive. Requiring all shareholderhad extreme values either relative to be contacted basically deters all but the most aggressive and well-heeled – and the default Delaware process already contains a procedure for giving notice of an action to shareholders who did not give written consentindustry peers or to the action. In other words, Delaware’scompany's own corporate law contemplates that nothistory. GMI said BMY was rated as having Very Aggressive Accounting & Governance Risk. This indicated higher accounting and governance risk than 96% of companies. Bristol-Myers had a higher shareholder class action litigation risk than 99% of all shareholders will be contacted in a written consent solicitation.rated companies.
Please encourage our board Returning to respond positively tothe core topic of this proposal from the context of our clearly improvable corporate climate, please vote to support improved corporate governance and financial performance:protect shareholder value:
Shareholder Action by Written Consent – Yes on 7.Simple Majority Vote—Proposal 4
Board of Directors’Directors' Position
The Board of Directors recommendsis not recommending a vote “AGAINST”"FOR" or "AGAINST" this proposal for the following reasons:
The Our Board believes that this proposal isgenerally, our governing documents should not contain supermajority voting provisions. At our 2010 Annual Meeting, the Board, in the best interests of the stockholders because, unlike meetings of stockholders, action by written consent would disenfranchise certain stockholders by denying them the ability to vote or otherwise have a say on proposed stockholder actions. Action by written consent would enable the holders of just a majority of our outstanding shares to take action on a proposal without the benefit of hearing the views, questions and arguments of other stockholders or the company. In addition, action by written consent eliminates the need for advance notice to be given to stockholders about a proposed action, and therefore, certain stockholders may not be informed about the proposed action until after the action has already been taken. This would deny these stockholders the ability to determine whether to exercise their rights. The Board, therefore, believes that this proposal could adversely affect the conduct of stockholder business by resulting in our taking of an action that we otherwise would not have taken if all of our stockholders were afforded the opportunity to discuss, debate and vote on the matter.
The Board also believes that adoption of this proposal is unnecessary because the company is committed to high standardsits continuing review of corporate governance and has already taken a number of steps to achieve greater transparency and accountability to stockholders. These corporate governancebest practices and policies cover a wide range of matters and are described beginning on page 5 of this Proxy Statement under the heading “Corporate Governance and Board Matters.” Our Board continually reassesses our corporate governance practices to identify additional steps to further benefit our stockholders. In recent years, our Board recommended, andafter careful consideration, asked our stockholders approved,to approve amendments to our Amended and Restated Certificate of Incorporation to remove all of the supermajority voting requirements remaining in our Certificate. These requirements consisted of a provision applicable to our common stockholders that required a vote of at least 75% of the holders of our outstanding stock to eliminate allthe annual election of directors and approve a classified Board structure, as well as two provisions applicable to our preferred stockholders that require a two-thirds vote of preferred stock on any proposed amendments to the Certificate or by-laws that would materially alter the existing provisions or powers, preferences or rights of the preferred stock.
The proposal to remove the 75% supermajority provisionsvoting provision applicable to common stockholders and to permit stockholders holding a minimum of 25% of our outstanding shares of common stock to call a special meeting of stockholders. Furthermore,referenced in the
Board’s Committee on Directors and Corporate Governance has created a process for stockholders to communicate directly with our non-management directors outside the annual meeting cycle, which is described on page 19 of this Proxy Statement under the heading “Communications with our Board of Directors.”
Permitting stockholder action by written consent has the potential to create substantial confusion and disruption, above proposal and the Board doesprior paragraph was approved, and we made the applicable state filings to remove this provision from our Certificate. However, the proposal to remove the supermajority voting provisions applicable to preferred stockholders was not believe it is part of an appropriate corporate governance model for a widely-held public company. Multiple groups of stockholders would be able to solicit written consents at any time and as frequently as they choose on a range of special or self-interested issues. There also is the possibility that consent solicitations may conflict with one another, be duplicative, or not be in the best interestsapproved because less than two-thirds of the company oroutstanding preferred shares voted in favor of the stockholdersproposal as a whole. The written consent process that this proposal seeks to authorize can be cumbersome, time consuming,required by our Amended and may lead to a chaotic stateRestated Certificate of corporate affairs. TheIncorporation. In view of the stockholder vote in 2010, the Board believes that holding meetings whereby all stockholders may discuss the proposed actions and vote their shares is the best way for stockholdershas decided not to take action and helps to ensurea position for or against the accuracy and completeness of information presented to stockholders to obtain their approval. The Board, therefore, believes that action by written consent isstockholder resolution this year so it can better assess stockholder interest in this issue. Our Bylaws do not in the best interests of the stockholders.have any supermajority voting provisions.
Accordingly, the Board of Directors unanimously recommendsis not recommending a vote “AGAINST” the"FOR" or "AGAINST" this proposal.
Advance Notice Procedures
As set forth in our Bylaws, if you wish to propose any action, including the nomination of directors, at next year’syear's annual meeting, you must deliver notice to BMS containing certain information set forth in our Bylaws, not less than 90 but not more than 120 days before the anniversary of the prior year’syear's annual meeting. For our 20132015 Annual Meeting, we must receive this notice between January 1, 20136, 2015 and January 31, 2013.February 5, 2015. These requirements are separate and distinct from the SEC requirements that a stockholder must meet to have a stockholder proposal included in our proxy statement. For further information on how a stockholder may nominate a candidate to serve as a director, please see page 12.
Our Bylaws are available on our website at www.bms.com/ourcompany/governance. In addition, a copy of the Bylaw provisions discussed above may be obtained by writing to us at our principal executive offices, Bristol-Myers Squibb Company, 345 Park Avenue, New York, New York 10154, attention: Corporate Secretary.
20132015 Stockholder Proposals
Stockholder proposals relating to our 20132015 Annual Meeting of Stockholders must be received by us at our principal executive offices, Bristol-Myers Squibb Company, 345 Park Avenue, New York, New York 10154, attention: Corporate Secretary, no later than November 21, 2012.19, 2014. Such proposals must comply with SEC regulations under Rule 14a-8 regarding the inclusion of stockholder proposals in company sponsored proxy materials. Stockholders are encouraged to contact the Office of the Corporate Secretary prior to submitting a stockholder proposal or any time they have a concern. At the direction of the Board of Directors, the Office of the Corporate Secretary acts as corporate governance liaison to stockholders.
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Categorical Standards of Independence
The In determining director independence, the Board has adopted the following categorical standards forto assist it in determining which relationships will be considered immaterial:
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BRISTOL-MYERS SQUIBB COMPANY
2012 STOCK AWARD AND INCENTIVE PLAN
1.Purpose. The purpose of this 2012 Stock Award and Incentive Plan (the “Plan”) is to aid Bristol-Myers Squibb Company, a Delaware corporation (together with its successors and assigns, the “Company”), in attracting, retaining and motivating employees, non-employee directors, and other service providers of the Company or its subsidiaries or affiliates, to provide for equitable and competitive benefit opportunities, to reward achievement of Company goals, and to promote the creation of long-term value for stockholders by closely aligning the interests of Participants with those of stockholders. The Plan authorizes stock-based and cash-based incentives for Participants.
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) “Acquisition Events” shall have the meaning specified in Section 9(d).
(b) “Annual Limit” shall have the meaning specified in Section 5(b).
(c) “Award” means any Option, SAR, Restricted Stock, Stock Unit, Stock granted as a bonus or in lieu of another award, Dividend Equivalent, Other Stock-Based Award, or Performance Award, together with any related right or interest, granted to a Participant under the Plan.
(d) “Beneficiary” means the person, persons, trust or trusts designated as being entitled to receive the benefits under a Participant’s Award upon and following a Participant’s death. Unless otherwise determined by the Committee, a Participant may designate a person, persons, trust or trusts as his or her Beneficiary, and in the absence of a designated Beneficiary the Participant’s Beneficiary shall be as specified in Section 11(b)(ii). Unless otherwise determined by the Committee, any designation of a Beneficiary other than a Participant’s spouse shall be subject to the written consent of such spouse.
(e) “Board” means the Company’s Board of Directors.
(f) “Change in Control” and related terms have the meanings specified in Section 9.
(g) “Code” means the Internal Revenue Code of 1986, as amended. References to any provision of the Code or regulation thereunder shall 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.
(h) “Committee” means the Compensation and Management Development 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 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 full Board may perform any function of the Committee hereunder (subject to applicable requirements of New York Stock Exchange rules and Code Section 162(m)), in which case the term “Committee” shall refer to the Board.
(i) “Covered Employee” means an Eligible Person who is a Covered Employee as specified in Section 11(j).
(j) “Dividend Equivalent” means a right, granted under this Plan, to receive cash, Stock, other Awards or other property equal in value to all or a specified portion of the dividends paid with respect to a specified number of shares of Stock.
(k) “Effective Date” means the effective date specified in Section 11(q).
(l) “Eligible Person” shall have the meaning specified in Section 5.
(m) “Exchange Act” means the Securities Exchange Act of 1934, as amended. References to any provision of the Exchange Act or rule (including a proposed rule) thereunder shall include any successor provisions and rules.
(n) “Fair Market Value” means the fair market value of Stock, Awards or other property as determined in good faith by the Committee or under procedures established by the Committee. Unless otherwise determined by the Committee, the Fair Market Value of Stock on a given day shall mean the last sale price of a share of stock before the 4 p.m. Eastern Time closing time (or equivalent earlier time for partial trading days) on that day or, if there was not trading on that day, on the last preceding day on which the Stock was traded, as reported on the composite tape for securities listed on the New York Stock Exchange. Fair Market Value relating to the exercise price or base price of any Non-409A Option or SAR and relating to the market value of Stock measured at the time of exercise shall conform to applicable requirements under Code Section 409A.
(o) “409A Awards” means Awards that constitute a deferral of compensation under Code Section 409A granted to or held by a person who is subject to United States federal income tax . “Non-409A Awards” means Awards other than 409A Awards. Although the Committee retains authority under the Plan to grant Options and SARs on terms that will qualify those Awards as 409A Awards, Options, and SARs are intended to be Non-409A Awards unless otherwise expressly specified by the Committee.
(p) “Full-Value Award” means an Award relating to Stock other than (i) Options and SARs and (ii) Awards for which the Participant pays (at any time) a stated price specified in the Award for each share of Stock issued upon exercise of the Award at least equal to 100% of the Fair Market Value of the underlying Stock valued at the grant date, either directly or by forgoing a right to receive a cash payment from the Company.
(q) “Incentive Stock Option” or “ISO” means any Option designated as an incentive stock option within the meaning of Code Section 422 and qualifying thereunder.
(r) “Option” means a right to purchase Stock granted under Section 6(b).
(s) “Other Stock-Based Awards” means Awards granted to a Participant under Section 6(h).
(t) “Participant” means a person who has been granted an Award under the Plan which remains outstanding, including a person who is no longer an Eligible Person.
(u) “Performance Award” means a conditional right, granted to a Participant under Sections 6(i) or 7, to receive cash, Stock or other Awards or payments.
(v) “Protected Period” shall have the meaning specified in Section 9(a).
(w) “Restricted Stock” means Stock granted under this Plan which is subject to certain restrictions and to a risk of forfeiture.
(x) “Retirement” means a Participant’s termination of employment with the Company or a subsidiary or affiliate in the following circumstances:
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(y) “Section 409A” shall have the meaning specified in Section 11(k)(i).
(z) “Stock” means the Company’s Common Stock, par value $0.10 per share, and any other equity securities of the Company that may be substituted or resubstituted for Stock pursuant to Section 11(c).
(aa) “Stock Units” means a right, granted under this Plan, to receive Stock or other Awards or a combination thereof at the end of a specified period. Stock Units subject to a risk of forfeiture may be designated as “Restricted Stock Units” as provided in Section 6(e)(ii).
(bb) “Stock Appreciation Rights” or “SAR” means a right granted to a Participant under Section 6(c).
(cc) “2007 Plan” shall have the meaning specified in Section 4(a).
3.Administration.
(a)Authority of the Committee. The Plan shall be administered by the Committee, which shall have full and final authority, in each case subject to and consistent with the provisions of the Plan, to select Eligible Persons to become Participants; to grant Awards; to determine the type and number of Awards, the dates on which Awards may be exercised and on which the risk of forfeiture or deferral period relating to Awards shall lapse or terminate, the acceleration of any such dates, the expiration date of any Award, whether, to what extent, and under what circumstances an Award may be settled, or the exercise price of an Award may be paid, in cash, Stock, other Awards, or other property, and other terms and conditions of, and all other matters relating to, Awards; to prescribe documents evidencing or setting terms of 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; to construe and interpret the Plan and Award documents and correct defects, supply omissions or reconcile inconsistencies therein; and to make all other decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan. 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, transferees under Section 11(b) and other persons claiming rights from or through a Participant, and stockholders. The foregoing notwithstanding, the Board or another committee of the Board may perform the functions of the Committee for purposes of granting Awards under the Plan to non-employee directors, as the Board may at any time direct.
(b)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 perfecting exemptions under Rule 16b-3 or qualifying Awards under Code Section 162(m) as performance-based compensation, in which case the subcommittee shall be subject to and have authority under the charter applicable to the Committee, and the acts of the subcommittee shall be deemed to be acts of the Committee hereunder. 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 result in the loss of an exemption under Rule 16b-3(d) for Awards granted to Participants subject to Section 16 of the Exchange Act in respect of the Company, (ii) will not cause Awards intended to qualify as “performance-based compensation” under Code Section 162(m) to fail to so qualify, (iii) will not result in a related-
person 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 Exchange Act, and (iv) is permitted under Section 157 and other applicable provisions of the Delaware General Corporation Law.
(c)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, Company's independent auditor;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 extent permitted by law, by the Company’s certificate of incorporation or by the Company’s bylaws, be fully indemnified and protected by the Company with respect to any such action or determination.
4.Stock Subject To Plan.
(a)Overall Number of Shares Available for Delivery. Subject to adjustment as provided under Section 11(c), the total number of shares of Stock reserved and available for delivery in connection with Awards under the Plan shall be (i) the number of shares that, immediately prior to the Effective Date, remain available for new awards under the 2007 Stock Award and Incentive Plan (the “2007 Plan”), plus (ii) the number of shares subject to awards under the 2007 Plan that become available in accordance with Section 4(b) after the Effective Date; provided, however, that the total number of shares with respect to which ISOs may be granted shall not exceed 42 million shares; and provided further, that shares issuable in connection with awards of acquired businesses that are assumed or substituted for by Awards shall not count against the shares of Stock reserved under the Plan. Any shares of Stock delivered under the Plan shall consist of authorized and unissued shares or treasury shares.
(b)Share Counting Rules. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute Awards) and make adjustments in accordance with this Section 4(b). Shares shall be counted against those reserved to the extent such shares have been delivered and are no longer subject to a risk of forfeiture. Accordingly, (i) to the extent thatdirector has an Award under the Plan or an award under the 2007 Planimmediate family member who i) is canceled, expired, forfeited, settled in cash, settled by delivery of fewer shares than the number underlying the Award or award, or otherwise terminated without delivery of shares to the Participant, the shares retained by or returned to the Company will not be deemed to have been delivered under the Plan or the 2007 Plan and will be available for Awards under the Plan; and (ii) shares that are withheld from such Award or award or separately surrendered by the Participant in payment of the exercise price or taxes relating to such Award or award shall be deemed to constitute shares not delivered and will be available for Awards under the Plan. The Committee may determine that Awards may be outstanding that relate to more shares than the aggregate remaining available under the Plan so long as Awards will not in fact result in delivery and vesting of shares in excess of the number then available under the Plan. In addition, in the case of any Award granted in assumption of or in substitution for an award of a company or business acquired by the Company or a subsidiary or affiliate or with which the Company or a subsidiary or affiliate combines, shares delivered or deliverable in connection with such assumed or substitute Award shall not be counted against the number of shares reserved under the Plan.
5.Eligibility; Per-Person Award Limitations.
(a)Eligibility. Awards may be granted under the Plan only to Eligible Persons. For purposes of the Plan, an “Eligible Person” means (i) an employee of, but not a partner of, the Company or any subsidiary or affiliate, including any executive officer or employeeindependent auditor and ii) does not personally work on the Company's audit;subsidiarydirector, is a director, an executive officer or affiliate, (ii) any person who has been offered employment byan employee of another company that makes payment to, or receives payment from, the Company for property or a subsidiaryservices in an amount which, in any single fiscal year within the preceding three years, does not exceed the greater of $1 million or affiliate, provided that
2% of such prospective employee may not receive any payment or exercise any right relating to an Award until such person has commenced employment with other company's consolidated gross revenues;
(b)Per-Person Award Limitations. In each calendar year during any part of which the Plan is in effect, an Eligible Person may be granted Awards under the Plan intended to qualify as “performance-based compensation” under Code Section 162(m) up to his or her Annual Limit. A Participant’s Annual Limit, in any year during any part of which the Participant is then eligible under the Plan, shall equal three million shares plus the amount of the Participant’s unused Annual Limit as of the close of the previous year, subject to adjustment as provided in Section 11(c). In the case of an Award which is not valued in a way in which the limitation set forth in the preceding sentence would operate as an effective limitation satisfying applicable law (including Treasury Regulation § 1.162-27(e)(4)), an Eligible Person may not be granted Awards under the Plan authorizing the earning during any calendar year of an amount that exceeds the Eligible Person’s Annual Limit. For this purpose, a Participant’s Annual Limit, in any year during any part of which the Participant is then eligible under the Plan, shall equal $6 million plus the amount of the Eligible Person’s unused cash Annual Limit as of the close of the previous year (this limitation is separate and not affected by the number of Awards granted during such calendar year which are subject to the annual share limitation described in this Section 5(b), and the Annual Limits are subject to Section 11(h)). For this purpose, (i) “earning” means satisfying performance conditions so that an amount becomes payable, without regard to whether it is to be paid currently or on a deferred basis or continues to be subject to any service requirement or other non-performance condition, (ii) a Participant’s Annual Limit is used to the extent an amount or number of shares may be potentially earned or paid under an Award, regardless of whether such amount or shares are in fact earned or paid, and (iii) the Annual Limit applies to Dividend Equivalents under Section 6(g) only if such Dividend Equivalents are granted separately from and not as a feature of a Full-Value Award.
6.Specific Terms of Awards.
(a)General. Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Sections 11(e) and 11(k)), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of employment or service by the Participant and terms permitting a Participant to make elections relating to his or her Award. The Committee shall retain full power and discretion with respect to any term or condition of an Award that is not mandatory under the Plan, subject to Section 11(k) and the terms of the Award agreement. The Committee shall require themakes payment of lawful consideration for an Award to the extent necessary to satisfy the requirements of the Delaware General Corporation Law, and may otherwise require payment of consideration for an Award except as limited by the Plan.
(b)Options. The Committee is authorized to grant Options to Participants on the following terms and conditions:
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(c)Stock Appreciation Rights. The Committee is authorized to grant SARs to Participants on the following terms and conditions:
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(d)Restricted Stock. The Committee is authorized to grant Restricted Stock to Participants on the following terms and conditions:
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(e)Stock Units. The Committee is authorized to grant Stock Units to Participants, subject to the following terms and conditions:
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(f)Bonus Stock and Awards in Lieu of Obligations. The Committee is authorized to grant to Participants Stock as a bonus, or to grant Stock or other Awards in lieu of obligations of the Company or a subsidiary or affiliate to pay cash or deliver other property under the Plan or under other plans or compensatory arrangements, subject to such terms as shall be determined by the Committee,provided that no Stock or other Award shall be granted in lieu of any obligation of the Company, subsidiary or affiliate where such obligation is or relates to a 409A Award or otherwise constitutes deferred compensation subject to Code Section 409A.
(g)Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents to a Participant, which may be awarded on a free-standing basis or in connection with another Award. The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional Stock, Awards, or other investment vehicles, and subject to restrictions on transferability, risks of forfeiture and such other terms as the Committee may specify. All dividend equivalents relating to a Performance Award or other Award subject to performance conditions shall remain forfeitable to the same extent as the underlying Award is forfeitable due to failure to achieve the specified performance condition.
(h)Other Stock-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock or factors that may influence the value of Stock, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment contingent upon performance of the Company or business units thereof or any other factors designated by the Committee, and Awards valued by reference to the book value of Stock or the value of securities of or the performance of specified subsidiaries or affiliates or other business units. The Committee shall determine the terms and conditions of such Awards. Stock delivered pursuant to an Award in the nature of a purchase right granted under this Section 6(h) shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, cash, Stock, other Awards, or other property, as the Committee shall determine. Cash awards, as an element of or supplement to any other Award under the Plan, may also be granted pursuant to this Section 6(h).
(i)Performance Awards. Performance Awards, denominated in cash or in Stock or other Awards, may be granted by the Committee in accordance with Section 7.
7.Performance Awards.
(a)Performance Awards Generally. Performance Awards may be denominated as a cash amount, number of shares of Stock, or specified number of other Awards (or a combination) which may be earned upon achievement or satisfaction of performance conditions specified by the Committee. In addition, the Committee may specify that any other Award shall constitute a Performance Award by conditioning the right of a Participant to exercise the Award or have it settled, and the timing thereof, upon achievement or satisfaction of such performance conditions as may be specified by the Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to reduce or increase the amounts payable under any Award subject to performance conditions, except as limited under Section 7(b) in the case of a Performance Award intended to qualify as “performance-based compensation” under Code Section 162(m).
(b)Performance Awards Granted to Covered Employees. If the Committee determines that a Performance Award to be granted to an Eligible Person who is designated by the Committee as likely to be a Covered Employee should qualify as “performance-based compensation” for purposes of Code Section 162(m), the grant, exercise and/or settlement of such Performance Award shall be contingent upon achievement of a preestablished performance goal and other terms set forth in this Section 7(b).
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(c)Written Determinations. Determinations by the Committee as to the establishment of performance goals, the amount potentially payable in respect of Performance Awards, the level of actual achievement of the specified performance goals relating to Performance Awards, and the amount of any final Performance Award shall be recorded in writing in the case of Performance Awards intended to qualify under Code Section 162(m). Specifically, the Committee shall certify in writing, in a manner conforming to applicable regulations under Code Section 162(m), prior to settlement of each such Award granted to a Covered Employee, that the performance objective relating to the Performance Award and other material terms of the Award upon which settlement of the Award was conditioned have been satisfied.
8.Certain Provisions Applicable to Awards.
(a)Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted under another plan of the Company, any subsidiary or affiliate, or any business entity to be acquired by the Company or a subsidiary or affiliate, or any other right of a Participant to receivereceives payment from, the Company for property or any subsidiary or affiliate; provided, however, that a 409A Award may not be granted in tandem with a Non-409A Award,services; and a substitution or exchange relating to any Award must comply with requirements under Code Section 409A; and provided further, that a substitution or exchange will be subject to
(b)Term of Awards. The term of each Award shall be for such period as may be determined by the Committee, subject to the express limitations set forth in Sections 6(b)(ii), 6(c)(ii) and 8 or elsewhere in the Plan.
(c)Form and Timing of Payment under Awards; Deferrals. Subject to the terms of the Plan (including Section 11(k)) and any applicable Award document, payments to be made by the Company or a subsidiary or affiliate upon the exercise of an Option or other Award or settlement of an Award may be made in such forms as the Committee shall determine, including, without limitation, cash,
Stock, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis. The settlement of any Award may be accelerated, and cash paid in lieu of Stock in connection with such settlement, in the discretion of the Committee or upon occurrence of one or more specified events, subject to Section 11(k). Subject to Section 11(k), installment or deferred payments may be required by the Committee (subject to Section 11(e)) or permitted at the election of the Participant on terms and conditions established by the Committee. Payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in Stock. In the case of any 409A Award that is vested and no longer subject to a risk of forfeiture (within the meaning of Code Section 83), such Award will be distributed to the Participant, upon application of the Participant, if the Participant has had an unforeseeable emergency within the meaning of Code Sections 409A(a)(2)(A)(vi) and 409A(a)(2)(B)(ii), in accordance with Code Section 409A(a)(2)(B)(ii).
9.Change in Control.
(a)Effect of “Change in Control.”In the event that there occurs a Change in Controldirector of the Company ifis a director, executive officer, trustee or equivalent of a charitable organization or non-profit organization, and the Participant’s employment withCompany's, or the Company and its subsidiaries and affiliates terminates in an event constituting a “Qualifying Termination” (as defined in Section 9(c)) during the Protected Period the following provisions shall applyBristol-Myers Squibb Foundation's discretionary charitable contributions to the Participant’s Awards upon such Qualifying Termination, unless otherwise provided by the Committeeorganization, in the Award document (in language specifically negatingaggregate, in any single fiscal year within the effectpreceding three years, do not exceed the greater of this Section 9(a) if the effect$1 million or 2% of such language is to restrict the Participant’s rights hereunder):
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The Company and any successor that has assumed an Award in connection with a Change in Control must acknowledge and agree to be bound by the provisions hereof during the Protected Period following the Change in Control in a legally binding agreement with the Participant. For purposes of this Section 9(a), the “Protected Period” means the two-year period following the Change in Control, or such other period specified by the Committee in a Participant’s Change-in-Control Agreement or Change-in-Control Plan, as applicable, or such other specific period (not less than one year) specified by the Committee at the time of grant of a Participant’s Award in the resolutions authorizing the grant of such Award.organization's consolidated gross revenues.
(b)DefinitionTable of “Change in Control.” “Change in Control” means the occurrence of any one of the following events after the Effective Date:
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(c)Qualifying Termination. For purposes of this Section 9, a “Qualifying Termination” shall be deemed to have occurred under the following circumstances:
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A Participant’s death or voluntary resignation without good reason will not constitute a Qualifying Termination.
(d)Termination of Awards Upon Acquisition Events. In the event of a merger or consolidation in which the Company is not the surviving entity or in the event of any transaction that results in the acquisition of substantially all of the Company’s outstanding common shares by a single person or entity or by a group of persons and/or entities acting in concert, or in the event of the sale or transfer of all or substantially all of the Company’s assets to such a person, entity or group of persons and/or entities (together, “Acquisition Events”), then the Company may, by action of the Committee, terminate any outstanding Award, effective as of the date of the Acquisition Event. In such case, the Company shall deliver notice of termination of each Award to each affected Participant at least 30 days before the date of the Acquisition Event, and at the consummation of the Acquisition Event each then outstanding Award shall be automatically exercised and/or settled by payment of the per-share consideration to be received by stockholders less any applicable exercise price or similar payment obligation or deduction under the terms of the Award for each share subject to the Award, provided that (i) if the net amount payable is zero or less the Award will be terminated without payment; and (ii) the affected Awards shall be deemed to be fully vested, except that Awards subject to performance conditions will be deemed earned on a pro rata basis as provided under Section 9(a)(ii), treating the Participant as though he or she had a Qualifying Termination at the date of the Acquisition Event.Contents
10.Additional Award Forfeiture Provisions; Clawbacks.
(a) The Committee may condition a Participant’s right to receive a grant of an Award, to exercise the Award, to receive a settlement or distribution with respect to the Award or to retain cash, Stock, other Awards, or other property acquired in connection with an Award, upon compliance by the Participant with specified conditions that protect the business interests of the Company and its subsidiaries and affiliates from harmful actions of the Participant, including but not limited to conditions relating to non-competition, confidentiality of information relating to or possessed by the Company, non-solicitation of customers, suppliers, and employees of the Company, cooperation in litigation,
non-disparagement of the Company and its subsidiaries and affiliates and the officers, directors and affiliates of the Company and its subsidiaries and affiliates, and other restrictions upon or covenants of the Participant, including during specified periods following termination of employment or service to the Company. Accordingly, an Award may include terms providing for a “clawback” or forfeiture from the Participant of the profit or gain realized by a Participant in connection with an Award, including cash or other proceeds received upon sale of Stock acquired in connection with an Award.
(b) Notwithstanding any provisions in this Plan or any Award agreement to the contrary, any compensation, payments, or benefits provided hereunder (or profits realized from the sale of Stock relating to Awards), whether in the form of cash or otherwise, shall be subject to a “clawback” to the extent necessary to comply with the requirements of any applicable law, including but not limited to, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Section 304 of the Sarbanes-Oxley Act of 2002, or any regulations promulgated thereunder.
11.General Provisions.
(a)Compliance with Legal and Other Requirements. The Company may, to the extent deemed necessary or advisable by the Committee and subject to Section 11(k), postpone the issuance or delivery of Stock or payment of other benefits under any Award until completion of such registration or qualification of such Stock or other required action under any federal, state or foreign law, rule or regulation, listing or other required action with respect to any stock exchange or automated quotation system upon which the Stock or other securities of the Company are listed or quoted, or compliance with any other obligation of the Company, as the Committee may consider appropriate, and may require any Participant to make such representations, furnish such information and comply with or be subject to such other conditions as it may consider appropriate in connection with the issuance or delivery of Stock or payment of other benefits in compliance with applicable laws, rules, and regulations, listing requirements, or other obligations. The inability or impracticability of the Company to obtain or maintain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Stock hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Stock as to which such requisite authority shall not have been obtained, and shall constitute circumstances in which the Committee may determine to amend or cancel Awards pertaining to such Stock, with or without consideration to the affected Participants. The foregoing notwithstanding, in connection with a Change in Control, the Company shall take or cause to be taken no action, and shall undertake or permit to arise no legal or contractual obligation, that results or would result in any postponement of the issuance or delivery of Stock or payment of benefits under any Award or the imposition of any other conditions on such issuance, delivery or payment, to the extent that such postponement or other condition would represent a greater burden on a Participant than existed on the 90th day preceding the Change in Control.
(b)Limits on Transferability; Beneficiaries.
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(A) Surviving spouse, if any,
(B) Surviving children, equally
(C) Surviving parents, equally
(D) Surviving brothers and sisters, equally
(E) Executors or administrators;
and the term “Beneficiary” as used in the Plan shall include such person or persons. This provision applies to payments and benefits distributable upon vesting or after expiration of any mandatory or elective deferral period, and also to the right to exercise any option or SAR during any period in which the Award is outstanding and exercisable. Notwithstanding the foregoing, in the absence of a Beneficiary validly designated under the Plan and applicable law who is living (or in existence) at the time of death of a Participant, any required distribution under the Plan shall be made to the executor or administrator of the estate of the Participant, or to such other individual as may be prescribed by applicable law.
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(c)Adjustments. In the event that any large and non-recurring dividend or other distribution (whether in the form of cash or property other than Stock), recapitalization, forward or reverse split, Stock dividend, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the Stock such that an adjustment is determined by the Committee to be appropriate or, in the case of any outstanding Award, which is necessary in order to prevent dilution or enlargement of the rights of the Participant, then the Committee shall, in an equitable manner as determined by the Committee, adjust any or all of (i) the number and kind of shares of Stock which may be delivered in connection with Awards granted thereafter, including the number of shares available under Section 4, (ii) the number and kind of shares of Stock by which annual per-person Award limitations are measured under Section 5, (iii) the number and kind of shares of Stock subject to or deliverable in respect of outstanding Awards (iv) the exercise price, grant price or purchase price relating to any Award or, if deemed appropriate, the Committee may make provision for a payment of cash or property to the holder of an outstanding Option, and (v) performance goals based on per-share measures of performance (in all cases subject to Sections
11(k) and 11(l)). In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards (including Performance Awards and performance goals and any hypothetical funding pool relating thereto) in recognition of unusual or nonrecurring events (including, without limitation, events described in the preceding sentence, as well as acquisitions and dispositions of businesses and assets) affecting the Company, any subsidiary or affiliate or other business unit, or the financial statements of the Company or any subsidiary or affiliate, or in response to changes in applicable laws, regulations, accounting principles, tax rates and regulations or business conditions or in view of the Committee’s assessment of the business strategy of the Company, any subsidiary or affiliate or business unit thereof, performance of comparable organizations, economic and business conditions, personal performance of a Participant, and any other circumstances deemed relevant; provided that no such adjustment shall be authorized or made if and to the extent that the existence of such authorization (i) would cause Options, SARs, or Performance Awards granted under the Plan to Participants designated by the Committee as Covered Employees and intended to qualify as “performance-based compensation” under Code Section 162(m) and regulations thereunder to otherwise fail to qualify as “performance-based compensation” under Code Section 162(m) and regulations thereunder, (ii) would cause the Committee to be deemed to have authority to change the targets, within the meaning of Treasury Regulation 1.162-27(e)(4)(vi), under the performance goals relating to Options or SARs granted to Covered Employees and intended to qualify as “performance-based compensation” under Code Section 162(m) and regulations thereunder, or (iii) would cause a Non-409Award to become subject to Code Section 409A or, as to a 409A Award, would cause it to violate Code Section 409A. In furtherance of the foregoing, in the event of an “equity restructuring” as defined in FASB ASC Topic 718 which affects the Stock, a Participant shall have a legal right to an adjustment to the Participant’s Award which shall preserve without enlarging the value of the Award, with the manner of such adjustment to be determined by the Committee in its discretion, and subject to any limitation on this right set forth in the applicable Award agreement.
(d)Tax Provisions.
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(e)Changes to the Plan. The Board may amend, suspend or terminate the Plan or the Committee’s authority to grant Awards under the Plan without the consent of stockholders or Participants; provided, however, that any amendment to the Plan shall be submitted to the Company’s stockholders for approval not later than the earliest annual meeting for which the record date is at or after the date of such Board action if such stockholder approval is required by any federal or state law or regulation or the rules of the New York Stock Exchange, or if such amendment would materially increase the number of shares reserved for issuance and delivery under the Plan, and the Board may otherwise, in its discretion, determine to submit other amendments to the Plan to stockholders for approval. The Committee is authorized to amend the Plan if and to the extent that its actions are within the scope of the Committee’s authority, and subject to all other requirements that would apply if the amendment were adopted by the Board. The Committee is authorized to amend outstanding awards, except as limited by the Plan. Except as provided in Section 11(a) above, the Board and Committee may not amend outstanding Awards (including by means of an amendment to the Plan) without the consent of an affected Participant if such an amendment would materially and adversely affect the rights of such Participant with respect to the outstanding Award (for this purpose, actions that alter the timing of federal income taxation of a Participant will not be deemed material unless such action results in an income tax penalty on the Participant, and any discretion that is reserved by the Board or Committee with respect to an Award is unaffected by this provision). Without the approval of stockholders, the Committee will not amend or replace previously granted Options or SARs in a transaction that constitutes a “repricing,” which for this purpose means any of the following or any other action that has the same effect:
Lowering the exercise price of an option or SAR after it is granted;
Any other action that is treated as a repricing under generally accepted accounting principles;
Canceling an option or SAR at a time when its exercise price exceeds the fair market value of the underlying Stock, in exchange for another option or SAR, restricted stock, other equity, cash or other property;
provided, however, that the foregoing transactions shall not be deemed a repricing if pursuant to an adjustment authorized under Section 11(c). With regard to other terms of Awards, the authority of the Committee to waive or modify an Award term after the Award has been granted does not permit waiver or modification of a term that would be mandatory under the Plan for any Award newly granted at the date of the waiver or modification.
(f)Right of Setoff. The Company or any subsidiary or affiliate may, to the extent permitted by applicable law, deduct from and set off against any amounts the Company or a subsidiary or affiliate may owe to the Participant from time to time, including amounts payable in connection with any Award, owed as wages, fringe benefits, or other compensation owed to the Participant, such amounts as may be owed by the Participant to the Company, including but not limited to amounts owed under Section 10, although the Participant shall remain liable for any part of the Participant’s payment obligation not satisfied through such deduction and setoff. By accepting any Award granted hereunder, the Participant agrees to any deduction or setoff under this Section 11(f). The foregoing notwithstanding, no setoff is permitted against a 409A Award except at the time of distribution pursuant to such 409A Award and, if so required by Code Section 409A, may not apply to any obligation of the Participant that arose more than 30 days before the date of distribution.
(g)Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute an “unfunded” plan for Federal income tax purposes (except in the case of Restricted Stock). With respect to any payments not yet made to a Participant or obligation to deliver Stock pursuant to an Award, nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of the Company; provided that the Committee may authorize the creation of trusts and deposit therein cash, Stock, other Awards or other property, or make other arrangements to meet the Company’s obligations under the Plan. Such trusts or other arrangements shall not adversely affect the status of the Plan and any Award as unfunded for Federal income tax purposes unless the Committee otherwise determines with the consent of each affected Participant.
(h)Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its submission to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements, apart from the Plan, as it may deem desirable, including incentive arrangements and awards which do not qualify under Code Section 162(m), and such other arrangements may be either applicable generally or only in specific cases.
(i)Payments in the Event of Forfeitures; Fractional Shares. Unless otherwise determined by the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid cash consideration, the Participant shall be repaid the amount of such cash consideration. No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
(j)Compliance with Code Section 162(m).It is the intent of the Company that Options and SARs granted to Covered Employees and other Awards designated as Awards to Covered Employees subject to Section 7 shall constitute qualified “performance-based compensation” within the meaning of Code Section 162(m) and regulations thereunder, unless otherwise determined and expressly provided by the Committee. Accordingly, the terms of Sections 7(b) and (c), including the definitions of Covered Employee and other terms used therein, shall be interpreted in a manner consistent with Code Section 162(m) and regulations thereunder. The foregoing notwithstanding, because the Committee cannot determine with certainty whether a given Participant will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean only a person designated by the Committee as likely to be a Covered Employee with respect to a specified fiscal year. If any provision of the Plan or any Award document relating to a Performance Award that is designated as intended to comply with Code Section 162(m) does not comply or is inconsistent with the requirements of Code Section 162(m) or regulations thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements, and no provision shall be deemed to confer upon the Committee or any other person discretion to increase the amount of compensation otherwise payable in connection with any such Award upon attainment of the applicable performance objectives.
(k)Certain Limitations on Awards to Ensure Compliance with Code Section 409ANotwithstanding any provision of the Plan or an Award to the contrary:
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(l)Certain Limitations Relating to Accounting Treatment of Awards. At any time that the Company is accounting for Awards that constitute “share-based payment arrangements” under FASB ASC Topic 718, the Company intends that, with respect to such Awards, the compensation measurement date for accounting purposes shall occur at the inception of the arrangement, unless the Committee specifically determines otherwise. Therefore, other provisions of the Plan notwithstanding, in order to preserve this fundamental objective of the Plan, if any authority granted to the Committee hereunder or any provision of the Plan or an Award agreement would result, under FASB ASC Topic 718, in an Award inadvertently being classified as a “liability” or a measurement date other than the date of inception of the arrangement, if the Committee was not specifically aware of such accounting consequence at the time such Award was approved, such authority shall be limited and such provision shall be automatically modified and reformed to the extent necessary to preserve the accounting treatment of the award intended by the Committee, subject to Section 11(e) of the Plan. This provision shall cease to be effective if and at such time as the Company is no longer accounting for equity compensation under FASB ASC Topic 718.
(m)Governing Law. The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan and any Award document shall be determined in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of laws, and applicable provisions of federal law.
(n)Awards to Participants Outside the United States. Other provisions of the Plan to the contrary notwithstanding, in order to foster and promote achievement of the purposes of the Plan or to comply with provisions of laws and customary business practices in other countries in which the Company and its subsidiaries and affiliates operate or have employees, the Committee shall have the power and authority to (i) determine which Participants employed outside the United States or subject to non-United States tax, securities or other laws are eligible to participate in the Plan, (ii) modify the terms and conditions of Awards granted to or held by such Participants, (iii) establish subplans, modify exercise procedures and other terms and procedures relating to Awards granted or held by such Participants to the extent such actions may be necessary or advisable, and (iv) take such other actions as the Committee may deem necessary or appropriate to accommodate the specific requirements of local laws, procedures, and practices and ensure that the value and other benefits of an Award to such a Participant, as affected by foreign tax laws and other applicable restrictions, shall be comparable to the value of such an Award to a Participant who is resident or employed in the United States. An Award may be modified under this Section 11(n) in a manner that is inconsistent with the express terms of the Plan, so long as such modifications will not contravene any applicable law or regulation or result in actual liability under Section 16(b) for the Participant whose Award is modified.
(o)Limitation on Rights Conferred under Plan. Neither the Plan nor any action taken hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or a subsidiary or affiliate, (ii) interfering in any way with the right of the Company or a subsidiary or affiliate to terminate any Eligible Person’s or Participant’s employment or service at any time (subject to the terms and provisions of any separate written agreements), (iii) giving an Eligible Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and employees, or (iv) conferring on a Participant any of the rights of a stockholder of the Company unless and until the Participant is duly issued or transferred shares of Stock in accordance with the terms of an Award or an Option or SAR is duly exercised. Except as expressly provided in the Plan and an Award document, neither the Plan nor any Award document shall confer on any person other than the Company and the Participant any rights or remedies thereunder. Any Award shall not be deemed compensation for purposes of computing benefits under any retirement plan of the Company or any subsidiary or affiliate and shall not affect any benefits under any other benefit plan under which the availability or amount of benefits is related to the level of compensation (unless required by any such other plan or arrangement with specific reference to Awards under this Plan).
(p)Severability; Entire Agreement. If any of the provisions of this Plan or any Award document is finally held to be invalid, illegal or unenforceable (whether in whole or in part), such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability, and the remaining provisions shall not be affected thereby; provided, that, if any of such provisions is finally held to be invalid, illegal, or unenforceable because it exceeds the maximum scope determined to be acceptable to permit such provision to be enforceable, such provision shall be deemed to be modified to the minimum extent necessary to modify such scope in order to make such provision enforceable hereunder. The Plan and any Award documents contain the entire agreement of the parties with respect to the subject matter thereof and supersede all prior agreements, promises, covenants, arrangements, communications, representations and warranties between them, whether written or oral with respect to the subject matter thereof. No rule of strict construction shall be applied against the Company, the Committee, or any other person in the interpretation of any terms of the Plan, Award, or agreement or other document relating thereto.
(q)Plan Effective Date and Termination. The Plan will become effective if, and at such time as, the stockholders of the Company have approved it by the affirmative votes of the holders of a majority of the voting securities of the Company present, or represented, and entitled to vote on the subject matter at a duly held meeting of stockholders, provided that the total vote cast on the proposal represents over fifty percent (50%) in interest of all securities entitled to vote on the proposal. The date
of such stockholder approval will be the Effective Date. Upon such approval of the Plan by the stockholders of the Company, no further awards will be granted under the 2007 Plan, but any outstanding awards under that plan will continue in accordance with their terms. Unless earlier terminated by action of the Board of Directors, the authority of the Committee to make grants under the Plan will terminate on the date that is ten years after the latest date upon which stockholders of the Company have approved the Plan (except that, for Awards under Section 7(b), such authority will terminate earlier at the date five years after the latest stockholder approval of the business criteria for such Awards under Section 7(b)(ii)), and the Plan will remain in effect until such time as the Company has no further rights or obligations with respect to outstanding Awards or otherwise under the Plan.
Exhibit A
Deferral Election Rules
If a participant in a plan, program or other compensatory arrangement (a “plan”) of Bristol-Myers Squibb Company (the “Company”) is permitted to make an election resulting in the deferral of compensation as defined by Section 409A of the Internal Revenue Code (the “Code”), which with regulations and administrative guidance, is referred to as “Section 409A,” any such election must be received by the Company prior to the date specified by or at the direction of the administrator of such plan (the “Administrator”). For purposes of compliance with Code Section 409A, and notwithstanding any provision of such plan to the contrary, any such election to defer shall be subject to the rules set forth below, subject to any additional restrictions as may be specified by the Administrator. Under no circumstances may a participant elect to defer compensation to which he or she has attained, at the time of deferral, a legally enforceable right to current receipt of such compensation.
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Initial deferral elections with respect to compensation that, absent the election, constitutes a short-term deferral may be made in accordance with Treasury Regulation § 1.409A-2(a)(4) and (b);
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Initial deferral elections by a participant in his or her first year of eligibility may be made within 30 days after the date the participant becomes eligible to participate in the applicable plan, with respect to compensation paid for services to be performed after the election and in compliance with Treasury Regulation § 1.409A-2(a)((7);
Initial deferral elections by a participant with respect to performance-based compensation (as defined under Treasury Regulation § 1.409A-1(e)) may be made on or before the date that is six months before the end of the performance period, provided that (i) the participant was employed continuously from either the beginning of the performance period or the later date on which the performance goal was established, (ii) the election to defer is made before such compensation has become readily ascertainable (i.e., substantially certain to be paid), (iii) the performance period is at least 12 months in length and the performance goal was established no later than 90 days after the commencement of the service period to which the performance goal relates, (iv) the performance-based compensation is not payable in the absence of performance except due to death, disability, a 409A Ownership/Control Change (as defined in Section 11(k) of the 2012 Stock Award and Incentive Plan) or as otherwise permitted under Treasury Regulation § 1.409A-1(e), and (v) this initial deferral election must in any event comply with Treasury Regulation § 1.409A-2(a)(8);
Initial deferral elections resulting in Company matching contributions may be made in compliance with Treasury Regulation § 1.409A-2(a)(9);
Initial deferral elections may be made to the fullest permitted under other applicable provisions of Treasury Regulation § 1.409A-2(a); and
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The further deferral election will not take effect until at least 12 months after the date on which the election is made;
If the election relates to a distribution event other than a Disability (as defined in Treasury Regulation § 1.409A-3(i)(4)), death, or Unforeseeable Emergency (as defined in Treasury Regulation § 1.409A- 3(i)(3)), the payment with respect to which such election is made must be deferred for a period of not less than five years from the date such payment would otherwise have been paid (or in the case of a life annuity or installment payments treated as a single payment, five years from the date the first amount was scheduled to be paid), to the extent required under Treasury Regulation § 1.409A-2(b);
The requirement that the further deferral election be made at least 12 months before the original deferral amount would be first payable may not be waived by the Administrator, and shall apply to a payment at a specified time or pursuant to a fixed schedule (and in the case of a life annuity or installment payments treated as a single payment, 12 months before the date that the first amount was scheduled to be paid);
The further deferral election shall be irrevocable when filed with the Company; and
The further deferral election otherwise shall comply with the applicable requirements of Treasury Regulation § 1.409A-2(b).
DIRECTIONS TO OUR PLAINSBORO OFFICE AT
777 SCUDDERS MILL ROAD
PLAINSBORO, NJ 08536
By Car:
From New York:
Take the Lincoln Tunnel.
Take the New Jersey Turnpike South/Newark Exit.
Exit Left onto I-95 South.
Merge onto NJ-18 North Via Exit 9 toward US-1/New Brunswick/Princeton.
Merge onto US-1 South toward Trenton.
Take ramp onto Scudders Mill Rd.
Our offices are approximately 11/2 mile on the left side of the road.
From Philadelphia:
Take I-95 North.
Merge onto US-1 North via Exit 67A toward New Brunswick.
Turn Slight Right onto Scudders Mill Road.
Our offices are approximately 11/2 mile on the left side of the road.
By Train:
New Jersey Transit and Amtrak train service is available to Princeton Junction, New Jersey. Our Plainsboro office is approximately a 10 minute car drive from the station.
Parking:
Free parking for stockholders attending the 20122014 Annual Meeting is available. Please go directly to the parking area reserved for stockholders.
Y O U R V O T E I S I M P O R T A N T
P L E A S E V O T E Y O U R P R O XYX Y
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date VOTE BY INTERNET -www.proxyvote.com Use the internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time, either on (i) Thursday, | |
ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS | ||
| If you would like to reduce the costs incurred by Bristol-Myers Squibb Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. | ||
| VOTE BY PHONE - 1-800-690-6903 | ||
| Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time, either on (i) Thursday, | ||
| VOTE BY MAIL | ||
| Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Bristol-Myers Squibb Company, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. We recommend you mail your proxy by April | ||
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| P.O. BOX 4000 PRINCETON, NJ 08540 M67649-P49593-Z62610 BRISTOL-MYERS SQUIBB COMPANY | ||||||||||||
| THE BOARD OF DIRECTORS RECOMMENDS A VOTE | ||||||||||||
| "FOR" EACH DIRECTOR UNDER ITEM 1. | ||||||||||||
| 1. | Election of Directors | |||||||||||
| For Against Abstain Nominees: | ||||||||||||
| ! ! ! 1A) | L. Andreotti | |||||||||||
| ! ! ! Against For Abstain THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 2 AND 3. 1B) | L. B. Campbell | |||||||||||
| ! ! ! ! ! ! 1C) | J. M. Cornelius | |||||||||||
| 2. Ratification of the Appointment of Independent Registered Public Accounting Firm. ! ! ! 1D) | ||||||||||||
| L. H. Glimcher, M.D. | ||||||||||||
| ! ! ! ! ! ! 1E) M. Grobstein | ||||||||||||
| 3. Advisory Vote to Approve the Compensation of our Named Executive Officers. ! ! ! 1F) A. J. Lacy | ||||||||||||
| THE BOARD OF DIRECTORS IS NOT RECOMMENDING A VOTE “FOR” OR “AGAINST” ITEM 4. ! ! ! For Against Abstain 1G) T. J. Lynch, Jr., M.D. ! ! ! ! ! ! 1H) | D. C. Paliwal 4. Simple Majority Vote. ! ! ! 1I) V. L. Sato, Ph.D. | |||||||||||
| ! ! ! 1J) | G. L. Storch | |||||||||||
| ! ! ! 1K) | T. D. West, Jr. | |||||||||||
| ! For address changes and/or comments, please check this box and write them on the back where indicated. | ||||||||||||
| ! ! Please indicate if you plan to attend this meeting. | ||||||||||||
| Yes | No | |||||||||||
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Note: Please sign as name appears on this card. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. |
ADMISSION TICKET 2014 Annual Meeting of Stockholders Tuesday, May 6, 2014 10:00 A.M. Bristol-Myers Squibb Company 777 Scudders Mill Road Plainsboro, New Jersey PHOTO IDENTIFICATION WILL BE REQUIRED This is your admission ticket to the meeting. This ticket admits only the stockholder(s) listed on the reverse side of this card and is not transferable. Bristol-Myers Squibb Company is located at 777 Scudders Mill Road, Plainsboro, New Jersey. Directions to the facility can be found on the inside back cover of the Proxy Statement or you can call the company at 609-897-2000. Free parking for stockholders attending the 2014 Annual Meeting is available at Bristol-Myers Squibb. Important Notice Regarding the Availability of Proxy Materials for the 2014 Annual Meeting: The Notice of 2014 Annual Meeting, Proxy Statement and Annual Report are available at www.proxyvote.com. M67650-P49593-Z62610 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS, MAY 6, 2014 The undersigned hereby appoints Lamberto Andreotti, Charles This proxy also provides voting instructions for shares held by the Trustee of the Bristol-Myers Squibb Company Savings and Investment Program, the Bristol-Myers Squibb Company Employee Incentive Thrift Plan, and the Bristol-Myers Squibb Puerto Rico, Inc. Savings and Investment Program, and directs such Trustee to vote at the Annual Meeting all of the shares of common stock of Bristol-Myers Squibb Company which are allocated to the undersigned’s employee plan account in the manner directed on the reverse side of this card. If no direction is given or if direction is received after When properly executed, your proxy will be voted as you indicate, or where no contrary indication is made, will be voted FOR Items 1, 2 and 3 and Address Changes/Comments: ADMISSION TICKET
2012 Annual Meeting of StockholdersTuesday, May 1, 201210:00 A.M.Bristol-Myers Squibb Company777 Scudders Mill RoadPlainsboro, New JerseyPHOTO IDENTIFICATION WILL BE REQUIREDThis is your admission ticket to the meeting.This ticket admits only the stockholder(s) listed on the reverse side of this card and is not transferable.Bristol-Myers Squibb Company is located at 777 Scudders Mill Road, Plainsboro, New Jersey.Directions to the facility can be found on the inside back cover of the Proxy Statement or you can call the company at 609-897-2000.Free parking for stockholders attending the 2012 Annual Meeting is available at Bristol-Myers Squibb.Important Notice Regarding the Availability of Proxy Materials for the 2012 Annual Meeting:The Notice of 2012 Annual Meeting, Proxy Statement and Annual Report are available at www.proxyvote.com.
1, 2012. A. Bancroft, and Sandra Leung, and each of them proxies, with full power of substitution in each of them, for and on behalf of the undersigned to vote as proxies, as directed and permitted herein, at the Annual Meeting of Stockholders of the company to be held at Bristol-Myers Squibb Company, 777 Scudders Mill Road, Plainsboro, New Jersey, on May 1, 20126, 2014 at 10:00 A.M., and at any adjournments or postponements thereof upon matters set forth in the Proxy Statement and, in their judgment and discretion, upon such other business as may properly come before the meeting.April 26, 2012,May 1, 2014, the Trustee will vote the shares in the same proportion as to which it has received instructions.4, and AGAINST Items 5, 6 and 7.to ABSTAIN on Item 4. The full text of the items and the position of the Board of Directors on each appear in the Proxy Statement and should be reviewed prior to voting.(If_______________________________________________________________________________ ________________________________________________________________________________________________________ (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Director since 2009
Director since 1998
Director since 2005
Director since 2007
Director since 2008
Director since 2014
Director since 2013
Director since 2006
Director since 2012
Director since 2008
