Exhibit
10.2


 




	
  

  	
  

  






 


 


MANAGEMENT INCENTIVE COMPENSATION PLAN (MICP)


 


2006
PLAN DOCUMENT


 


                Table of Contents


 


 


	
  1.0

  	
  Plan
  Objectives

  
	
   

  
	
  2.0

  	
  Participation

  
	
   

  
	
  3.0

  	
  Target
  Bonus

  
	
   

  
	
  4.0

  	
  Funding

  
	
   

  
	
  5.0

  	
  Payout
  Calculation

  
	
   

  
	
  6.0

  	
  Payment
  of Awards

  
	
   

  
	
  7.0

  	
  Plan
  Administration

  
	
   

  
	
  8.0

  	
  Plan
  Approval

  



 


 





















 


1.0          PLAN OBJECTIVES


 


The Dade Behring Management Incentive
Compensation Plan was developed to link a significant portion of Dade Behring’s
management employees’ total cash compensation to the financial success of the
company.


 


This program is an integral component of the
company’s “pay-for-performance” philosophy. 
The objectives of the Plan are to:


 


•       Support
Dade Behring’s business plans and financial goals;


•       Motivate
and reward both individual performance and teamwork;


•       Enable
Dade Behring to attract and retain high quality managers.


 


The MICP plan structure is kept mostly
consistent year over year for continuity and simplicity purposes.  The emphasis on global Dade Behring results
reinforce one Dade Behring.  In addition,
the understanding by participants will enhance the drive for results.  Financial measures are reviewed each year to
ensure they correlate with the Dade Behring overall strategy and creation of
shareholder value.  The 2006 plan
continues to place emphasis on global Dade Behring results to encourage a
company-wide focus on teamwork.  Having
said that, individual performance is also a vital part of the plan.


 


 


2.0          PARTICIPATION


 


All US employees in salary grade level 17 and
above are eligible to participate in the Plan. 
Salary grade level 16 Product Managers are also eligible to participate
in the Plan.


 


For non-US employees, the participation is
based on the US equivalent grade level since global compensation structure is
not formally in place in all countries.


 


All participants will be reviewed and
approved by the Compensation Administrative Committee contingent upon the
participant’s submission of Individual Performance Objectives (IPOs).


 


Individuals hired or promoted into a bonus
eligible position on or before September 30 of the current year are eligible
for a pro-rated bonus target based on the number of full months of
participation in the Plan.  (Note:  The September 30 deadline does not apply to
job changes impacting current participants in the plan.  See Section 3.1 for clarification.)


 


Individuals hired or promoted into a bonus
eligible position after September 30 are not eligible to participate
until the succeeding plan year.


 


 


3.0          TARGET
BONUS


 


The target bonus percentage will be communicated directly to
individuals through a participant letter from the CEO.


 





















 


The MICP target bonus amount is determined by
multiplying the participant’s annual base salary at the end of the plan year
(as of December 31) by the participant’s target bonus percentage.


 


3.1          Pro-rated
Target Bonus


 


An individual hired or promoted into a bonus
eligible position on or before September 30 is eligible for a pro-rated bonus
target based on the number of full months of participation in the Plan.  The participant’s target bonus percentage and
pro-ration (number of eligible months in the Plan) should be outlined and
communicated in the offer or promotion letter.


 


For Example:


 


	
  Example

  	
   

  	
  Hire or

  Promotion Date

  	
   

  	
  Proration

  (# of mo)

  	
   

  	
  Target

  %

  	
   

  	
  Year end

  Annual Salary

  	
   

  	
  Calculation

  	
   

  	
  Target

  Bonus $

  	
   

  
	
  #1

  	
   

  	
  March 13

  	
   

  	
  10

  	
   

  	
  10

  	
  %

  	
  $

  	
  70,000

  	
   

  	
  ($70,000 x 10%) x 10/12

  	
   

  	
  $

  	
  5,833

  	
   

  
	
  #2

  	
   

  	
  July 17

  	
   

  	
  5

  	
   

  	
  15

  	
  %

  	
  $

  	
  80,000

  	
   

  	
  ($80,000 x 15%) x 5/12

  	
   

  	
  $

  	
  5,000

  	
   

  



 


If a participant changes jobs during the
year, resulting in a higher or lower target bonus percentage, the MICP target
bonus amount is calculated on a pro-rated basis.  The total target bonus amount is determined
by multiplying the participant’s December 31 annual base salary by each
applicable target percentage for the number of full months at that target
percentage level.


 


For Example:


 


	
  Effective

  Date

  	
   

  	
  Grade

  Level

  	
   

  	
  Proration

  (# of mo)

  	
   

  	
  Target

  %

  	
   

  	
  Year end

  Annual Salary

  	
   

  	
  Calculation

  	
   

  	
  Target

  Bonus $

  	
   

  
	
  Jan 2

  	
   

  	
  17

  	
   

  	
  5

  	
   

  	
  10

  	
  %

  	
  $

  	
  90,000

  	
   

  	
  ($90,000 x 10%) x 5/12

  	
   

  	
  $

  	
  3,750

  	
   

  
	
  May 22

  	
   

  	
  18

  	
   

  	
  7

  	
   

  	
  15

  	
  %

  	
  $

  	
  90,000

  	
   

  	
  ($90,000 x 15%) x 7/12

  	
   

  	
  $

  	
  7,875

  	
   

  
	
  Total Target Bonus:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  11,625

  	
   

  



 


3.2          Pro-ration
Rule


 


The number of months of full participation
will be based on Dade Behring’s “15th Day Rule”. That is, the
effective date of the job change or hire date must be on or before the 15th
day of the month for the whole month to be counted.  If the job change or hire date takes place
after the 15th of the month, the pro-ration will count from the
following month.


 





















 


4.0          FUNDING


 


Plan funding reflects performance of four Global
Dade Behring financial measures.  These
measures fund independently of each other, meaning that one may fund while the
others may not.


 


	
  •

  	
   

  	
  Earnings per Share:

  	
   

  	
  Net income adjusted for
  changes in foreign currency rates divided by the diluted weighted average
  outstanding common shares.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  Cash Flow:

  	
   

  	
  For MICP purposes: Cash
  from operations less capital spending and sale of assets as presented in SEC
  filed financial statements, plus cash from the exercise of stock options and
  employee stock purchase plan contributions. Target will be adjusted for
  changes in foreign currency.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  EBITDA:

  	
   

  	
  Earnings Before Interest,
  Taxes, Depreciation, Amortization and non-recurring and non-cash charges.
  Target will be adjusted for changes in foreign currency.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  Revenue Growth:

  	
   

  	
  Growth in sales over 2005
  reported sales. The 2005 reported sales will be adjusted for changes in
  foreign currency so that the growth will be on a constant currency basis.

  



 


The 2006 MICP will fund 50% based on Dade Behring’s
Earnings per Share performance, 20% on Cash Flow performance, 20% on EBITDA
performance, and 10% on Revenue Growth performance.


 


The funding measurement targets have been approved by
the Board of Directors and may be subject to technical adjustments as a result
of business events or accounting transactions. 
Results that fall between performance levels will be interpolated.


 


 


5.0          PAYOUT
CALCULATION


 


Once the MICP payout pools have been funded
and approved by the Board of Directors, individual bonus payouts will be
calculated.  The actual MICP award will
be based on two components:


 


 


a)     Dade
Behring Overall Financial Performance


 


Sixty percent (60%) of a
participant’s MICP award is based on how well Global Dade Behring has met its
financial objectives (EPS, Cash Flow, EBITDA and Revenue Growth).


 


b)     Individual
Performance


 


Forty percent (40%) of a
participant’s award is based upon individual performance.  Each participant’s overall performance rating
will be determined by his or her supervisor, using the LEADR process.


 


Some functions may
mandate that 15% of the 40% individual performance payout will be measured by
individual financial objectives.  These
financial objectives should reflect the


 





















 


way an individual
supports his/her organization (such as region target, functional target, cost
center budget, etc.).  One financial
target should be of immediate control (country target or cost center budget),
with another financial target measured at a higher level to reinforce teamwork
(region instead of countries, functional instead of departmental).


 


Other functions will
measure individual performance based primarily on the overall LEADR performance
rating as well as the results of individual performance objectives.  These IPO’s may still include individual
financial objectives, along with other project or initiative based goals.


 


Using the payout pool and
distribution of performance ratings, the Corporate Compensation Department will
develop a payout schedule.  Final
performance ratings and payouts will be approved by Dade Behring’s CEO.  The total dollars granted under this portion
cannot exceed the funded pool.  Also, the
total MICP payout for all participants cannot exceed the total funded pool.


 


 


5.1          Example 2006 Payout Calculation


 


The following example assumes that
the participant’s target bonus is $10,000 and the participant’s individual
performance is at target.


 


	
  Measures

  	
   

  	
  Performance

  to Plan

  	
   

  	
  Funding

  Percent

  	
   

  	
  Threshold

  	
   

  	
  Target

  	
   

  	
  Maximum

  	
   

  	
  Bonus

  Payout

  	
   

  
	
  Global Dade Behring Results (60%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30.0% Global DB EPS

  	
   

  	
  105

  	
  %

  	
  130

  	
  %

  	
  $

  	
  750

  	
   

  	
  $

  	
  3,000

  	
   

  	
  $

  	
  6,000

  	
   

  	
  $

  	
  3,900

  	
   

  
	
  12.0% Global DB Cash Flow

  	
   

  	
  105

  	
  %

  	
  130

  	
  %

  	
  $

  	
  300

  	
   

  	
  $

  	
  1,200

  	
   

  	
  $

  	
  2,400

  	
   

  	
  $

  	
  1,560

  	
   

  
	
  12.0% Global DB EBITDA

  	
   

  	
  100

  	
  %

  	
  100

  	
  %

  	
  $

  	
  240

  	
   

  	
  $

  	
  1,200

  	
   

  	
  $

  	
  2,400

  	
   

  	
  $

  	
  1,200

  	
   

  
	
  6.0% Global DB Revenue Growth

  	
   

  	
  87

  	
  %

  	
  80

  	
  %

  	
  $

  	
  120

  	
   

  	
  $

  	
  600

  	
   

  	
  $

  	
  1,200

  	
   

  	
  $

  	
  480

  	
   

  
	
  Individual Performance (40%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  40.0% Individual Performance

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  4,000

  	
   

  	
  $

  	
  8,000

  	
   

  	
  $

  	
  4,000

  	
   

  
	
  Total Bonus Opportunity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,410

  	
   

  	
  $

  	
  10,000

  	
   

  	
  $

  	
  20,000

  	
   

  	
   

  	
   

  
	
  Total MICP Payout

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  11,140

  	
   

  



 


 


6.0          PAYMENT OF AWARDS


 


Awards will be paid on or around March 15 of
the following year.  A participant must
be an active employee on December 31 of the current plan year in order to
receive an MICP award.


 


If a participant dies, retires at age
fifty-five (55) or older, or is involuntarily terminated (except for cause),
plan participation will be pro-rated.  If
the termination date is on or before the 15th of the month, that
month will not be counted.  If the
termination takes place after the 15th of the month, the pro-ration
will include that month.


 





















 


If a participant resigns prior to January 1of
the following year, or is terminated for cause at any time prior to the current
year MICP payout, no bonus award will be granted.  Note:  “Cause”
is defined per Dade Behring’s “Performance and Conduct” policy.


 


The attainment of financial objectives does not
guarantee a payment of an MICP award. 
MICP awards may be adjusted at the discretion of management based upon,
but not limited to, the employee’s performance, conduct, and contribution.


 


In the United States, appropriate
withholdings are deducted from the bonus award, such as income taxes, FICA,
Saving Investment Plan (SIP) and Employee Stock Purchase Plan (ESPP).  Withholdings will be made as appropriate for
those employees who are subject to the tax laws of other countries.


 


 


7.0  PLAN ADMINISTRATION


 


This document outlines the 2006 Management Incentive
Compensation Plan (Plan) for Dade Behring Inc. 
This Plan is a statement of intention and does not constitute a
guarantee of a particular payment.  This
Plan does not create a contractual relationship or any contractually
enforceable rights between Dade Behring and the participants.


 


The Dade Behring Management Incentive Compensation Plan is administered
by the Compensation Administrative Committee, as directed by the Board of
Directors.  The Compensation
Administrative Committee consists of the CEO, the SVP Human Resources and VP
Compensation, Benefits and HRIS.


 


The Board of Directors reserves the right within its sole
discretion:


 


•      To
amend, modify or cancel any provision of the Plan in whole or in part at any
time;


•      To
eliminate, reduce, modify, or withhold awards based on such factors as changes
in business conditions, individual performance, company performance, or any
other reason;


•      To interpret the Plan and
make decisions on all questions and issues arising under the Plan and its
decisions are final.


 


Any
questions about this document should be directed to Corporate Compensation.


 


 


8.0          PLAN APPROVAL


 


The 2006 MICP plan was approved by the Dade
Behring Board of Directors.