EXHIBIT 10.25

 

2010 PERFORMANCE OBJECTIVES – CEO AND PRESIDENT

 

 

TARGET BONUS AS A PERCENTAGE OF BASE SALARY

The 2010 target bonus for the Chief Executive Officer (“CEO”) of Allergan, Inc.
(the “Company”) will be an amount equal to 130% of the CEO’s annual base salary
as of the last day of the 2010 fiscal year. The 2010 target bonus for the
President of the Company (“President”) will be an amount equal to 77% of the
President’s annual base salary as of the last day of the 2010 fiscal year. The
2010 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.”

 

 

2010 PERFORMANCE OBJECTIVES AND BONUS AMOUNT DETERMINATION

If the Company’s 2010 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) 2010 Adjusted EPS, (ii) 2010 Revenue Growth and (iii) 2010 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 2010 Adjusted EPS does not exceed the
Threshold EPS. For sake of clarity, if the Company’s performance exceeds any of
the targets for 2010 Revenue Growth and/or 2010 R&D Reinvestment Rate, but
actual 2010 Adjusted EPS does not exceed the Threshold EPS, no bonus will be
payable. Payment of the CEO’s and President’s 2010 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 2010 performance bonus,
the following terms will have the following meanings:

“2010 Adjusted EPS” means the Company’s 2010 Adjusted Net Earnings divided by
the weighted average number of common shares outstanding on a diluted basis
during 2010, rounded to the fourth decimal place.

“2010 Adjusted Net Earnings” means the Company’s net earnings from continuing
operations for the 2010 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.

 

 

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2010 PERFORMANCE OBJECTIVES

   ALLERGAN, INC.

 

 

“2010 Revenue Growth” means the percentage increase (if any) in net product
sales for the 2010 fiscal year relative to net product sales for the 2009 fiscal
year, adjusted for the translation effect of changes in foreign exchange rates
between each fiscal year, rounded to the nearest one-hundredth of one percent.

“2010 R&D Reinvestment Rate” means total research and development expenses for
the 2010 fiscal year as a percentage of the Company’s total net sales, for the
2010 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 2010 Adjusted EPS, (b) the Company’s 2010
Revenue Growth, and (c) the Company’s 2010 R&D Reinvestment Rate, in each case
as determined in accordance with the tables set forth on Exhibit A.

“Threshold EPS” means the EPS Target, less $0.15.

 

 

2010 METHOD OF BONUS PAYMENT

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 2008 Incentive Award Plan. Subject to the terms of the 2008
Incentive Award 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. For purposes of the foregoing, (i) “Total
Disability” has the meaning set forth in Section 22(e)(3) of the Internal
Revenue Code (generally defined as the inability of a recipient, by reason of
mental or physical illness, to perform any substantial gainful activity, which
disability is expected to result in death or continue for a period of at least
12 months) and (ii) a recipient’s “Normal Retirement Eligibility Date” means the
date on which the recipient has (a) attained age 55 and (b) been employed by the
Company for a minimum of 5 years.

 

 

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2010 PERFORMANCE OBJECTIVES

   ALLERGAN, INC.

 

 

EXHIBIT A

TO

2010 PERFORMANCE OBJECTIVES – CEO AND PRESIDENT

2010 ADJUSTED EPS, 2010 REVENUE GROWTH AND

2010 R&D REINVESTMENT RATE PERFORMANCE

 

 

 

 

 

Earnings Per Share

 

    

 

Revenue Growth

 

    

 

R&D Reinvest Rate

 

EPS Range %

 

  

EPS Range

 

 

 

Bonus % of

Target

 

    

 

Revenue Growth

 

 

 

Bonus % of

Target

 

    

 

~R&D Reinvest Rate

 

 

 

Bonus % of

Target

 

           

-4.8%

   -$0.150     0.0%                              

-2.6%

   -$0.080   46.0%      0.4%     0.0%      14.75%     0.0%            

-2.2%

   -$0.070   57.0%      1.4%     2.0%      15.00%     2.0%            

-1.4%

   -$0.045   68.0%      2.4%     4.0%      15.25%     4.0%            

-1.1%

   -$0.035   72.0%      3.4%     6.0%      15.50%     6.0%            

-0.6%

   -$0.020   76.0%      4.4%     8.0%      15.75%     8.0%                 
Target   80.0%      5.4%   10.0%      16.00%   10.0%            

 1.0%

    $0.030   84.0%      6.4%   13.8%      16.25%   13.8%            

 1.9%

    $0.060   88.0%      7.4%   17.5%      16.50%   17.5%            

 2.6%

    $0.080   92.0%      8.4%   21.3%      16.75%   21.3%            

 3.2%

    $0.100   96.0%      9.4%   25.0%      17.00%   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., 2010 Adjusted EPS,
2010 Revenue Growth, and 2010 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
2010 Adjusted EPS equals EPS Target + $0.11, the “% of Target Bonus Amount” will
nonetheless be 96% 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 2010 Adjusted EPS does not exceed the
Threshold EPS.

 

 

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