Exhibit 10.35
2007 PERFORMANCE OBJECTIVES — CEO AND PRESIDENT
TARGET BONUS AS A PERCENTAGE OF BASE SALARY
The 2007 target bonus for the Chief Executive Officer (“CEO”) of Allergan, Inc. (the “Company”) will be an amount equal to 120% of the CEO’s annual base salary as of the last day of the 2007 fiscal year. The 2007 target bonus for the President of the Company (“President”) will be an amount equal to 70% of the President’s annual base salary as of the last day of the 2007 fiscal year. The 2007 target bonus amounts for the CEO and the President are referred to herein individually as a “Target Bonus Amount” and collectively as the “Target Bonus Amounts.”
If the Company’s 2007 Adjusted EPS is greater than the Threshold EPS, the CEO and President will be eligible to receive a bonus based on the following three criteria: (i) 2007 Adjusted EPS, (ii) 2007 Revenue Growth and (iii) 2007 R&D Reinvestment Rate. The bonus (if any) payable will be an amount determined by multiplying (i) the Target Bonus Amount by (ii) the Target Bonus Multiplier. In no event, however, will the CEO or President be eligible to receive all or any portion of such bonus if the Company’s 2007 Adjusted EPS does not exceed the Threshold EPS. For sake of clarity, if the Company’s performance exceeds any of the targets for 2007 Revenue Growth and/or 2007 R&D Reinvestment Rate, but actual 2007 Adjusted EPS does not exceed the Threshold EPS, no bonus will be payable. Payment of the CEO’s and President’s 2007 performance bonus (if any) will be made in accordance with, and subject to, the terms of the Allergan, Inc. 2006 Executive Bonus Plan, as in effect on the date hereof (the “Plan”), including, without limitation, the provisions of Sections 2.4, 3.3 and 6.3 of the Plan.
For purposes of determining the CEO’s and President’s 2007 performance bonus, the following terms will have the following meanings:
“2007 Adjusted EPS” means the Company’s 2007 Adjusted Net Earnings divided by the weighted average number of common shares outstanding on a diluted basis during 2007, rounded to the fourth decimal place.
“2007 Adjusted Net Earnings” means the Company’s net earnings from continuing operations for the 2007 fiscal year, adjusted to:
| • | remove the effects of extraordinary, unusual or non-recurring items; | ||
| • | remove the effects of items that are outside the scope of the Company’s core, on-going business activities; | ||
| • | remove the effects of accounting changes required by United States generally accepted accounting principles; | ||
| • | remove the effects of financing activities; | ||
| • | remove the effects of expenses for restructuring or productivity initiatives; | ||
| • | remove the effects of non-operating items; | ||
| • | remove the effects of spending for acquisitions; | ||
| • | remove the effects of divestitures; and | ||
| • | remove the effects of amortization of acquired intangible assets. |
| 2007 PERFORMANCE OBJECTIVES | ALLERGAN, INC. |
“2007 Revenue Growth” means the percentage increase (if any) in net product sales for the 2007 fiscal year relative to net product sales for the 2006 fiscal year, adjusted for the translation effect of changes in foreign exchange rates between each fiscal year and excluding Cornéal ophthalmic surgical product net sales for the 2007 fiscal year, rounded to the nearest one-hundredth of one percent.
“2007 R&D Reinvestment Rate” means total research and development expenses for the 2007 fiscal year excluding research and development expenses for the Cornéal ophthalmic surgical business as a percentage of the Company’s total net sales, excluding Cornéal ophthalmic surgical product net sales, for the 2007 fiscal year, rounded to the nearest one-hundredth of one percent.
“EPS Target” means an amount per share specified by the Organization and Compensation Committee at the time of adoption of these performance objectives.
“Target Bonus Multiplier” means the sum of the “% of Target Bonus Amount” corresponding to: (a) the Company’s 2007 Adjusted EPS, (b) the Company’s 2007 Revenue Growth, and (c) the Company’s 2007 R&D Reinvestment Rate, in each case as determined in accordance with the tables set forth onExhibit A.
“Threshold EPS” means the EPS Target, less $0.15.
Bonuses will be paid in cash up to a maximum bonus pool equal to 100% of Plan participants’ bonus targets. Bonuses will be paid in restricted stock or restricted stock units to the extent the bonus pool exceeds 100% of Plan participants’ bonus targets. Such restricted stock or restricted stock units will provide for cliff vesting two years from the award effective date. Any payment in the form of restricted stock or restricted stock units will be issued under the Company’s Incentive Compensation Plan. Upon a recipient’s death or Total Disability (as defined below), or upon a recipient’s Normal Retirement Eligibility Date (as defined below), all of the restrictions imposed on the recipient’s restricted stock or restricted stock units shall lapse. Total Disability shall be defined as the inability of a recipient, by reason of mental or physical illness or accident, to perform any and every duty of the occupation at which such recipient was employed when such disability commenced, which disability is expected to continue for a period of at least 12 months. A recipient’s Normal Retirement Eligibility Date shall be defined as the date on which the recipient has (i) attained age 55 and (ii) been employed by the Company for a minimum of 5 years.
| 2007 PERFORMANCE OBJECTIVES | ALLERGAN, INC. |
EXHIBIT A
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2007 PERFORMANCE OBJECTIVES — CEO AND PRESIDENT
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2007 PERFORMANCE OBJECTIVES — CEO AND PRESIDENT
2007 ADJUSTED EPS, 2007 REVENUE GROWTH AND
2007 R&D REINVESTMENT RATE PERFORMANCE
2007 R&D REINVESTMENT RATE PERFORMANCE
| % of Target | 2007 | % of Target | 2007 R&D | % of Target | |||||||||
| Bonus | Revenue | Bonus | Reinvestment | Bonus | |||||||||
| 2007 Adjusted EPS | Amount | Growth | Amount | Rate | Amount | ||||||||
| EPS Target — $0.150 | 0.0% | 15.1% | 0.0% | 15.31% | 0.0% | ||||||||
| EPS Target — $0.120 | 50.0% | 16.1% | 2.0% | 15.56% | 2.0% | ||||||||
| EPS Target — $0.090 | 60.0% | 17.1% | 4.0% | 15.81% | 4.0% | ||||||||
| EPS Target — $0.060 | 70.0% | 18.1% | 6.0% | 16.06% | 6.0% | ||||||||
| EPS Target — $0.030 | 80.0% | 19.1% | 8.0% | 16.31% | 8.0% | ||||||||
EPS Target | 90.0% | 20.1% | 10.0% | 16.56% | 10.0% | ||||||||
| EPS Target + $0.025 | 95.0% | 21.1% | 13.8% | 16.81% | 13.8% | ||||||||
| EPS Target + $0.050 | 100.0% | 22.1% | 17.5% | 17.06% | 17.5% | ||||||||
| EPS Target + $0.075 | 105.0% | 23.1% | 21.3% | 17.31% | 21.3% | ||||||||
| EPS Target + $0.100 | 110.0% | 24.1% | 25.0% | 17.56% | 25.0% |
If the Company’s performance exceeds the highest performance level shown above for one or more of the specified performance measures (i.e., 2007 Adjusted EPS, 2007 Revenue Growth, and 2007 R&D Reinvestment Rate), the “% of Target Bonus Amount” achieved with respect to that performance measure will be the maximum “% of Target Bonus Amount” specified for that performance measure. For example, if 2007 Adjusted EPS equals EPS Target + $0.13, the “% of Target Bonus Amount” will nonetheless be 110% for that performance measure.
If actual results for any one or more of the performance measures falls between the performance levels shown above, the bonus will be prorated accordingly.
Each component of the Target Bonus Multiplier will be determined independently of each other component of the Target Bonus Multiplier; provided that no bonus will be payable in the event the Company’s 2007 Adjusted EPS does not exceed the Threshold EPS.