Document:

Exhibit 10.2 - CIC Plan

Exhibit 10.2

Third Amended and Restated
Mead Johnson & Company, LLC
Executive Change in Control
Severance Plan
and
Summary Plan Description

 

Third Amended and Restated Executive Change in Control Severance Plan & SPD    Mead Johnson & Company, LLC

Contents

Introduction and Highlights    1
Eligibility to Participate     2
Eligibility for Severance Benefits     3
Severance Payments and Benefits     7
Continuation of Employee Benefits/Special Benefits     9
Amendment and Plan Termination     14
Additional Plan Information     15
Code Section 409A     17
Administrative Information About Your Plan     19
Your Rights and Privileges Under ERISA     21
Other Administrative Facts     23
Glossary     24

 

Third Amended and Restated Executive Change in Control Severance Plan & SPD    Mead Johnson & Company, LLC

Introduction and Highlights

Mead Johnson & Company, LLC (the "Company") adopted the Mead Johnson & Company, LLC Executive Change in Control Severance Plan (the "Plan") effective as of December 23, 2009 for eligible executive level employees of the Company and its subsidiaries and affiliates.  The purpose of the Plan is to encourage eligible executives to remain employed by the Company and/or its subsidiaries and affiliates and to provide such eligible executives with additional protections in the event their employment is terminated in connection with a Change in Control.  The Company further believes that the Plan will aid the Company and its affiliates in attracting and retaining highly qualified executive level employees who are essential to the success of the Company and its affiliates.
The Plan has previously been amended and restated to clarify certain provisions and provide enhanced alternatives for Plan participants.  The Plan has been further amended and restated to clarify certain provisions of the Plan relating to payment of bonuses, to update the eligibility provisions and to make other technical and clarifying changes.  This document sets out the Plan's provisions as of June 12, 2014 which is the effective date of this third amendment and restatement of the Plan.  This document serves as the Plan's official document and summary plan description.  It replaces and supersedes any plan document, summary, or description you may have previously received regarding the severance benefits of the Company and its affiliates as they apply to you following a change in control, other than as described herein.  The Glossary at the end of this document defines the capitalized terms used in the Plan or tells you where in this document to find a term's meaning.  When you encounter a capitalized term, turn to the Glossary to find its meaning.
You are eligible to receive Severance Pay and other benefits under the Plan if (i) you meet the eligibility criteria, (ii) your employment terminates in a Qualifying Termination, (iii) you timely sign and return an Executive Separation Agreement & General Release, and (iv) the Executive Separation Agreement & General Release has become effective, all as described below.  The “Release Requirements” will be considered satisfied as of a specified date if the requirements set forth in paragraphs (iii) and (iv) are met as of such date.

1

Eligibility to Participate

You are eligible to participate in the Plan only if (and during the period that) your position for MJN and its affiliates is described in one of the Tiers described below under “Cash Severance Payments”.  
Who Is Not Eligible to Participate 
Notwithstanding any other Plan provision, you are not eligible to participate in the Plan and will be excluded from coverage under the Plan if you are an employee who is a party to an individual arrangement or a written employment agreement providing severance payments other than pursuant to the Plan provided, however, that if your individual arrangement or written employment agreement provides you only with statutory severance payments under applicable local law and you meet the other requirements for participation in the Plan, you will be eligible to participate only to the extent the severance payments under the Plan exceed the severance payments provided by your individual agreement or employment agreement.  You will not be entitled to Severance Pay or other benefits under the Senior Executive Severance Plan if you are entitled to Severance Pay or other benefits under the Plan.  Finally, you will not be entitled to Severance Pay unless you are employed in a position described in one of the Tiers described below under “Cash Severance Payments”.

2

Eligibility for Severance Benefits 

Right To Severance Payments And Benefits 
You will be eligible to receive severance payments and benefits from the Company or one of its affiliates that is your employer (sometimes referred to as a “Participating Employer”) as set forth in the Severance Payments and Benefits Section of this Plan if you are eligible to participate in the Plan and your Termination Date occurs as the result of a Qualifying Termination.  For purposes of the Plan, your Termination Date will be considered to have occurred as the result of a “Qualifying Termination” if your Termination Date occurs during the Protected Period for any one or more of the following reasons:  
		
	(A)
	Your employment is terminated involuntarily by the Company or a Participating Employer, other than for Cause; or 

		
	(B)
	You voluntarily terminate your employment for Good Reason.

To qualify for severance payments and benefits under the Plan upon voluntary termination for Good Reason, you must notify the Company in writing of termination for Good Reason, specifying the event constituting Good Reason, within 90 days after you first become aware of the event that you believe constitutes Good Reason.  Failure for any reason to give written notice of termination of employment for Good Reason in accordance with the foregoing will be deemed a waiver of the right to terminate your employment for that Good Reason event.  The Company will have a period of 30 days after receipt of your notice in which to cure, or cause your Participating Employer to cure, the Good Reason.  If the Good Reason is cured within this period, you will not be entitled to severance payments and benefits under the Plan.  If the Company or the Participating Employer waives its right to cure or does not, within the 30 day period, cure the Good Reason, you may terminate your employment for Good Reason within 30 days following the earlier of the date on which the Company or the Participating Employer waives its right to cure or the end of the cure period.  If you do not terminate your employment within such 30 day period, you will waive your right to terminate your employment for that Good Reason event.
Ineligibility for Severance Benefits 
Notwithstanding any other provision of the Plan, you will not be eligible for severance payments and benefits under the Plan if your Termination Date occurs for any reason other than a Qualifying Termination, including if your Termination Date occurs as the result of any of the following:  
		
	•
	Voluntary termination or voluntary retirement other than for Good Reason;

		
	•
	Mandatory retirement from employment in accordance with the policy of the Company and its affiliates or statutory requirements;

		
	•
	Disability (as defined in the Company's Long-Term Disability Plan); 

		
	•
	For Cause; or

		
	•
	Termination of employment other than during the Protected Period.

3

Cause 
"Cause" means the following
		
	(A)
	Willful and continued failure by you to substantially perform your duties with the Company, a Participating Employer or any of their affiliates (except where the failure results from incapacity due to Disability) for a period of 30 consecutive days after a written demand for substantial performance is delivered to you by the MJN Board, which demand specifically identifies the manner in which the MJN Board believes that you have not substantially performed your duties; 

		
	(B)
	Willful engaging by you in conduct which is demonstrably and materially injurious to the Company or its subsidiaries or affiliates, monetarily or otherwise; or

		
	(C)
	You are convicted of, or have entered a plea of nolo contendere to, a felony.

For purposes of paragraphs (A) and (B) next above, no act, or failure to act, on your part shall be deemed “willful” unless done, or omitted to be done, by you not in good faith and without reasonable belief that your act, or failure to act, was in the best interest of the Company and its affiliates.  "Cause" will be interpreted by the Compensation Committee (or its designee) in its sole discretion and such interpretation will be conclusive and binding on all parties.  
Good Reason
"Good Reason" means the occurrence of any one or more of the following events which occur without your express written consent:  
		
	(A)
	the assignment to you of any duties materially inconsistent with your status as an officer of MJN (e.g., no longer reporting to the CEO) or a substantial adverse alteration in the nature or status of your authorities, duties or responsibilities for the Company and its affiliates from those in effect immediately prior to the Change in Control (e.g., reduction in signing authority); 

		
	(B)
	a material adverse change in your reporting relationships;

		
	(C)
	a material reduction by the Company, a Participating Employer or any of their affiliates in your base salary or bonus from the levels in effect immediately prior to a Change in Control or as the same may be increased from time to time after a Change in Control;

		
	(D)
	the relocation of your principal place of employment to a location more than 50 miles from the location of such place of employment immediately prior to a Change in Control, except for required travel on business of the Company and its affiliates to an extent substantially consistent with your business travel obligations prior to the Change in Control or, if you have consented to a relocation, the failure by the Company or any of is affiliates to provide you with all of the benefits of the relocation policy of the Company or its affiliates, as applicable, as in operation immediately prior to a Change in Control; 

		
	(E)
	the failure of the Company, a Participating Employer or any of their affiliates to pay to you any material amount or portion of your compensation or to pay to you any portion of an installment of deferred compensation under any deferred compensation program of the Company or any of its affiliates within seven days of the date on which such compensation was due; or 

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	(F)
	the failure by the Company, a Participating Employer or their affiliates, as applicable, to continue in effect any compensation or benefit plan which is material to your compensation and in which you participated immediately prior to the Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company, a Participating Employer or any of their affiliates, as applicable, to continue your participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amounts of benefits provided and the level of your participation relative to other participants, as existed at the time of the Change in Control.

Change in Control
For purposes of the Plan, a “Change in Control” shall be deemed to have occurred upon the first to occur of any of the following: 
		
	(A)
	Any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) (a “Person”) shall have become the direct or indirect beneficial owner of thirty percent (30%) or more of (i) the then outstanding shares of common stock of MJN (the “Outstanding MJN Common Shares”) or (ii) the combined voting power of the then outstanding voting securities of MJN entitled to vote generally in the election of directors (the “Outstanding MJN Voting Securities”)(other than, in each case, in connection with a merger or consolidation as a result of which (1) MJN becomes a direct or indirect wholly-owned subsidiary of a holding company, (2) the direct or indirect holders of the common stock and the voting securities of such holding company immediately following the transaction are substantially the same as the holders of the Outstanding MJN Common Shares and the Outstanding MJN Voting Securities, as the case may be, immediately prior to the transaction, and (3) immediately following the transaction no Person is the beneficial owner, directly or indirectly, of thirty percent (30%) or more of the common stock or the voting securities of such holding company);

		
	(B)
	The consummation of a reorganization, merger, statutory share exchange, consolidation, or similar transaction involving MJN or any of its subsidiaries, the sale or other disposition of all or substantially all of the assets of MJN and its subsidiaries (taken as a whole), or the acquisition of assets or stock of another entity by MJN or any of its subsidiaries (each a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding MJN Common Shares and the Outstanding MJN Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the then outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of members of the board of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity surviving or resulting from such Business Combination (including an entity that, as a result of such transaction, owns all or substantially all of the common stock or the voting securities of MJN or all or substantially all of MJN’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding MJN Common Shares and the Outstanding MJN Voting Securities, as the case may be, (ii) no Person (excluding MJN or any employee benefit plan (or related trust) of MJN or such entity surviving or resulting from such Business Combination) beneficially owns, directly or indirectly, thirty percent (30%) or more of, respectively, the then outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) of the entity surviving or resulting from such Business Combination (or any parent thereof) or the combined voting power of the then outstanding voting securities of such entity (or any parent 

5

thereof) entitled to vote generally in the election of members of the board of directors (or, for a non-corporate entity, equivalent governing body) and (iii) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity  surviving or resulting from such Business Combination (or any parent thereof) were members of the MJN Board at the time of the execution of the initial agreement or action of the MJN Board providing for such Business Combination;
		
	(C)
	The stockholders of MJN approve a plan of complete liquidation or dissolution of MJN; or

		
	(D)
	There shall have been a change in the composition of the MJN Board within a two (2) year period such that a majority of the MJN Board does not consist of directors who were serving at the beginning of such period together with directors whose initial nomination for election by MJN stockholders or, if earlier, initial appointment to the MJN Board was approved by the vote of two-thirds of the directors then still in office who were in office at the beginning of the two (2) year period together with the directors who were previously so approved (either by a specific vote of approval or by approval of MJN’s proxy statement in which such person was named as a nominee for election as a director).

6

Severance Payments and Benefits 

Cash Severance Payments
If your Termination Date occurs as the result of a Qualifying Termination, then, subject to the terms and conditions of the Plan, you will be entitled to a cash severance benefit (“Severance Pay”) in accordance with the following:
	
		
	Tier
	Amount of Severance Pay

	Tier 1 (Chief Executive Officer)
	(A) Three times the sum of Base Salary and Bonus and (B) the Bonus Portion

	Tier 2 (Members of Executive Committee as constituted from time to time, other than the Chief Executive Officer and any other Senior Executives designated by the Company’s Chief Executive Officer and approved by the Compensation Committee)
	(A) Two times the sum of Base Salary and Bonus and (B) the Bonus Portion

	Tier 3 (Senior Executives not otherwise in Tier 1 or Tier 2 who are designated by the Company’s Chief Executive Officer and approved by the Compensation Committee)
	(A) One or One and one half (as determined by the Compensation Committee) times the sum of Base Salary and Bonus and (B) the Bonus Portion

As part of your Severance Pay, you will also receive a pro rata portion of your Bonus for the year in which your Qualifying Termination occurs (the “Bonus Portion”).  Payments of Severance Pay (including the Bonus Portion) will be made in a lump sum as of the date that is 60 days after your Termination Date (the “Payment Start Date”) provided that the Release Requirements are satisfied as of such date.  If the Release Requirements are not satisfied as of the Payment Start Date, you will not receive any Severance Pay (or other benefits) under the Plan.  
Notwithstanding the foregoing, if a payment of Severance Pay is a direct payment or a substitute or replacement for a right to payment that constitutes nonqualified deferred compensation within the meaning of Code Section 409A, including, to the extent applicable, amounts payable under the Senior Executive Severance Plan or another plan or agreement between you and the Company or any of its affiliates (the “Protected Amount”) and if the Protected Amount is payable upon termination of employment, and if a Change in Control does not constitute a change in control event within the meaning of Code Section 409A, then the Severance Pay shall be paid at the same time and in the same form as the Protected Amount. 
No Duplication of Benefits/No Substitution 
Nothing in the Plan, a change in control plan or agreement, an offer letter or letter agreement from the Company or any of its subsidiaries or affiliates, a prevailing practice of the Company or any of its subsidiaries or affiliates, or any oral statement made by or on behalf of the Company or 

7

any of its subsidiaries or affiliates will entitle you to receive duplicate benefits in connection with a voluntary or involuntary termination of employment.  The Company's obligation to make payments under the Plan will be expressly conditioned upon you not receiving duplicate payments.  In addition, if you are entitled to Severance Pay under the Plan, you will not receive payment of your annual incentive bonus for the year in which your Termination Date occurs (other than the Bonus Portion of your Severance Pay). 
To the extent that any amounts would otherwise be payable (or benefits would otherwise be provided) to you under another plan of the Company or its subsidiaries or affiliates or an agreement with you and the Company or its subsidiaries or affiliates, including a change in control plan or agreement, an offer letter or letter agreement, or to the extent that you are an eligible employee under the Plan and you move between Tiers, and to the extent that such other payments or benefits or the severance payments and benefits provided under this Plan are subject to Code Section 409A, the Plan shall be administered to ensure that no payment or benefit under the Plan will be (i) accelerated in violation of Code Section 409A or (ii) further deferred in violation of Code Section 409A.  

Offset for International Assignees 
If you are an international assignee, the amount of the total Severance Pay to which you are entitled under the Plan will be reduced (but not below zero) by an amount equal to any (i) payments of severance required to be paid by law in any country other than the U.S. and (ii) tax equalization payments due to the Company or a Participating Employer, and the payments and benefits under the Plan are conditioned upon any such payments required to be paid by law and/or tax equalization payments due being offset.  Any offset shall be applied in a manner consistent with Code Section 409A to the extent that either the Severance Pay or the payments described in paragraphs (i) or (ii) next above are subject to Code Section 409A.

8

Continuation of Employee Benefits/Special Benefits 

During your Severance Pay Period (and from and after your Termination Date), you are not considered an employee of the Company or any of its subsidiaries or affiliates for any purpose -- including eligibility under any employee benefit plan of the Company or any of its affiliates.  The following benefits, however, will continue to be available as outlined below:  
Health Care Plans 
If you and your dependents were enrolled in the Company's medical and/or dental plan on your Termination Date, this coverage will continue until the end of the month in which you are no longer employed with the Company.  At termination of employment, you and your enrolled eligible dependents will be offered the opportunity to elect to continue your current plan coverage beyond the end of the month in which your Termination Date occurs under one of two options.  The option that applies to you will depend upon whether or not the Release Requirements have been satisfied as of the Payment Start Date.
Option I applies to you if the Release Requirements are satisfied as of the Payment Start Date.  Under Option I, your eligibility for employer-subsidized medical and/or dental plan coverage will continue for you and your family until the earliest of (i) the end of your Severance Pay Period, (ii) the date you begin new employment, or (iii) the date that COBRA coverage would otherwise end by its terms, provided, in any case, that you timely elect COBRA continuation coverage for you and your family on the forms provided to you. (Option I continuation coverage is COBRA continuation coverage, but its cost is subsidized by your former employer to the same extent as coverage for similarly situated active employees and their families from time to time.)  Please remember that your eligible dependents will be able to continue their medical and/or dental coverage under Option I only if you are also entitled to continue coverage under this option.
Option II applies to you if the Release Requirements are not satisfied as of the Payment Start Date. Option II provides for the continuation of medical and/or dental plan coverage as required under COBRA.  Under COBRA you are required to pay the full cost of coverage for you and your covered dependents plus a 2% administrative fee.  The COBRA continuation period begins as of the first day following the month in which your Termination Date occurs.  As with Option 1, you are only entitled to COBRA continuation coverage if you timely elect the coverage on forms provided to you. 
If Option I applies to you, then after your employer-subsidized continuation coverage ends, you can continue COBRA coverage, if any.   In any event, any medical and/or dental coverage that continues during your Severance Pay Period is also applied toward the maximum continuation period and does not extend the COBRA continuation coverage period.  
Detailed information about the two benefit continuation options described above will be mailed to your home at the time of termination.
Note that if you are eligible for severance benefits but not eligible to retire1, you may qualify for the "Rule of 70" benefits under the group health plan.  More information regarding this benefit is included in the summary plan description for the health plan. 

1.  To be eligible to retire, you must be at least age 55 with 10 years of service or age 65.

9

 
Life Insurance 
Your level of employee life insurance coverage as of your Termination Date will continue at the same level until the end of the month in which your Termination Date occurs.  Thereafter, if the Release Requirements are satisfied by the Payment Start Date, employer-provided life insurance coverage equal to one times your Base Salary at your Termination Date will be continued until the earlier of (i) the end of your Severance Pay Period or (ii) the date you begin new employment.  
If you have survivor income coverage or dependent life insurance coverage under the life insurance plan of the Company or one of its affiliates as of your Termination Date, that coverage will end on the last day of the month in which your Termination Date occurs.  When your employment terminates, you may have the opportunity to elect to convert all or part of any terminating life insurance coverage to an individual policy with the insurer.  Those conversion rights, if any, are determined under the terms of the life insurance plan.
Employee Assistance Program (EAP)
You may continue to participate in the Company's employee assistance program (EAP) during the Severance Pay Period, as long as you remain eligible for benefits under the Company's medical plan.  If you elect COBRA continuation coverage under the Company’s medical plan, you may continue to participate in the EAP.  You will receive additional information regarding participation at the time of your termination.
Outplacement 
You will be eligible for outplacement services with one of the Company’s preferred providers in accordance with the Company's outplacement services that are in effect for employees at your level as of your Termination Date for up to 12 months following the Payment Start Date; provided, however, that no outplacement services will be provided unless the Release Requirements are satisfied as of the Payment Start Date.  
Financial Planning Assistance
You will be eligible for financial planning assistance up to a maximum $15,000; provided, however, that no financial planning assistance will be provided unless the Release Requirements are satisfied as of the Payment Start Date.  The assistance may be provided as an in-kind benefit or through a reimbursement arrangement, as determined by the Company.  In any event, any expenses that you incur for financial planning assistance (including pursuant to an in-kind arrangement) must be incurred within the first twelve months following your Termination Date.  In addition, to the extent that any such financial planning assistance is taxable to you (whether provided as a in-kind benefit or a reimbursement), the amount of the financial planning assistance that will be provided to you during one calendar year may not affect the amount of financial planning assistance that is to be provided to you in any subsequent calendar year, your right to receive financial planning assistance shall not be subject to liquidation or exchange for any other benefit and if the assistance is provided through a reimbursement arrangement, the reimbursement will be made on or before the last day of your taxable year following the year in which the expense was incurred.  
Repatriation Benefits 
You will be entitled to repatriation benefits in accordance with the applicable repatriation policy of the Company, your Participating Employer or one of its affiliates for a period of three months following your Termination Date if you are on an international assignment and you are covered under the international assignment policy of the Company or your Participating Employer. 

10

Enhanced Supplemental Retirement Benefits
Supplemental Retirement Benefit
You will be entitled to a lump sum cash payment (the “Supplemental Retirement Benefit”) in an amount (if any, but not less than zero) equal to the actuarial present value of:
		
	(A)
	the BEP Benefit, if any, to which you are entitled under the Benefit Equalization Plan—Retirement Plan as of your Termination Date calculated (i) without regard to the reduction provided in the BEP Benefit formula for the benefit payable under the Retirement Plan (the “Gross BEP Benefit”), and (ii) for purposes of calculating the Gross BEP Benefit, as if your Severance Pay had been taken into account as Final Average Compensation under the Retirement Plan for the Severance Pay Period; MINUS

		
	(B)
	your accrued benefit under the Retirement Plan determined as of your Termination Date; MINUS;

		
	(C)
	your BEP Benefit determined as of your Termination Date.

All determinations of your accrued benefit under the Retirement Plan and/or the benefit to which you would have been entitled under the Retirement Plan taking into account the foregoing provisions shall be determined in accordance with the terms of the Retirement Plan, including by application of any actuarial assumptions applicable under the Retirement Plan.  All determinations of your Supplemental Retirement Benefit, BEP Benefit, your Gross BEP Benefit and any benefit to which you would have been entitled under the Benefit Equalization Plan taking into account the foregoing provisions shall be determined in accordance with the Benefit Equalization Plan, including by application of any actuarial assumption applicable under the Benefit Equalization Plan. The Supplemental Retirement Benefit will be made in a lump sum as of the Payment Start Date provided that the Release Requirements are satisfied as of such date.  If the Release Requirements are not satisfied as of the Payment Start Date, you will not receive the Supplemental Retirement Benefit (or Severance Pay or any other benefits) under the Plan.  
In addition to the foregoing and notwithstanding the provisions of the Benefit Equalization Plan—Retirement Plan, (i) your BEP Benefit will be fully vested upon your Qualifying Termination, and (ii) your BEP Benefit will be paid to you in a lump sum as of the Payment Start Date notwithstanding your payment elections under the Benefit Equalization Plan—Retirement Plan provided that (1) the Change in Control is a change in control event within the meaning of Section 409A of the Code, and (2) a lump sum payment of your BEP Benefit as of the Payment Start Date would be permitted without violating the provisions of Section 409A of the Code.  Unless both of the requirements of paragraphs (1) and (2) above are satisfied, your BEP Benefit will be paid at the time and in the form determined under the Benefit Equalization Plan—Retirement Plan without regard to the provisions of paragraph (2) above. 
Supplemental Retirement Savings Plan Benefit
You will be entitled to a lump sum cash payment (the “Supplemental Retirement Savings Plan Benefit”) in an amount (if any, but not less than zero) equal to the sum of:
		
	(A)
	the amount of the Employing Company Contributions which would have been credited to you under the Retirement Savings Plan for the Severance Period if (i) you had continued in employment with the Company through the last day of the Severance Period, (ii) the Severance Payment had been taken into account under Retirement Savings Plan as benefit eligible compensation or wages ratably over the Severance Period and if the Severance Payment had been the only benefit eligible compensation or wages you 

11

received during such period, and (iii) you had contributed at the maximum rate permitted under the Retirement Savings Plan during the Severance Period; PLUS
		
	(B)
	the amount of Employer Credits which would have been credited to you under the Benefit Equalization Plan—Retirement Savings Plan for the Severance Period if (i) you had continued in employment with the Company through the last day of the Severance Period, (ii) the Severance Payment had been taken into account under Benefit Equalization Plan—Retirement Savings Plan as compensation for purposes of Employer Credits ratably over the Severance Period and if the Severance Payment had been the only compensation you received during such period, and (iii) you had contributed at the maximum rate permitted under the Benefit Equalization Plan—Retirement Savings Plan during the Severance Period.

All determinations of the benefits to which you would have been entitled under the Retirement Savings Plan and/or the Benefit Equalization Plan—Retirement Savings Plan shall be determined in accordance with the terms of the Retirement Savings Plan and the Benefit Equalization Plan—Retirement Savings Plan, as applicable.  The Supplemental Retirement Savings Plan Benefit will be made in a lump sum as of the Payment Start Date provided that the Release Requirements are satisfied as of such date.  If the Release Requirements are not satisfied as of the Payment Start Date, you will not receive the Supplemental Retirement Savings Plan Benefit (or Severance Pay or any other benefits) under the Plan.  
In no event shall the amount of your Supplemental Retirement Plan Benefit be contingent on the amount of your actual contributions to the Retirement Savings Plan and/or whether or to what extent you actually made contributions to the Retirement Savings Plan. 
In addition to the foregoing and notwithstanding the provisions of the Benefit Equalization Plan—Retirement Savings Plan, (i) your Account Balance will be fully vested upon your Qualifying Termination, and (ii) your Account Balance will be paid to you in a lump sum as of the Payment Start Date notwithstanding your payment elections under the Benefit Equalization Plan—Retirement Savings Plan provided that (1) the Change in Control is a change in control event within the meaning of Section 409A of the Code, and (2) a lump sum payment of your Account Balance as of the Payment Start Date would be permitted without violating the provisions of Section 409A of the Code.  Unless both of the requirements of paragraphs (1) and (2) above are satisfied, your Account Balance will be paid at the time and in the form determined under the Benefit Equalization Plan—Retirement Savings Plan without regard to the provisions of paragraph (2) above. 
Other Benefits 
Accrued and unused vacation days (including banked vacation), long-term performance awards, vesting and exercising of stock options, vesting of restricted stock and restricted stock units, and bonus payments will be determined in accordance with the applicable plans, programs and/or policies of the Company and your Participating Employer (and their affiliates).  All other benefits coverage and eligibility to participate in the benefit plans of the Company, your Participating Employer (and their affiliates) will end as of your Termination Date except as otherwise expressly provided by the terms of the applicable benefit plans  
Notwithstanding the foregoing, if you are entitled to Severance Pay under the Plan, you will not receive payment of any portion of your annual incentive bonus for the year in which your Termination Date occurs (other than the Bonus Portion of your Severance Pay).
The benefits that will end include, but are not limited to:

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	•
	Contributions to the Dependent Care Reimbursement Account;

		
	•
	Contributions to the Company's Retirement Savings Plan;

		
	•
	Earning additional service for vesting and benefit accrual purposes under the Company's Retirement Plan; and 

		
	•
	Participation in the Company's disability plans.

Reduction of Payments and Benefits in Certain Circumstances
If (A) any payment or benefit to which you are entitled from the Company and/or any affiliate of the Company under the Plan or otherwise (collectively, “Payments”) are subject to an Excise Tax, and (B) reduction of the Payments to the amount necessary to avoid the application of the Excise Tax would result in you retaining an amount that is greater than the amount you would retain if the Payments were made without such reduction but after the application of the Excise Tax, then, in accordance with the following, you may elect to have the Payments reduced to the extent required to avoid application of the Excise Tax.  The determination of whether the Payments would result in the application of the Excise Tax, and the amount of reduction that is necessary so that no such Excise Tax is applied, shall be made by the independent accounting firm selected by the Company. To the extent that you elect to have any of the Payments reduced, you shall be treated as having forfeited such Payments and you will have no further rights to them. 
Any reductions in your Payments shall be made in the following order:
		
	(i)
	first, by reducing Payments (other than Low Ratio Benefits) that are not subject to section 409A of the Code (in the order that you elect);

		
	(ii)
	next, if further reduction is necessary, from Payments (other than Low Ratio Benefits) that are subject to section 409A of the Code, which Payments shall be reduced in the order of lowest to highest value and if more than one Payment has the same value, the reduction shall be in the order that such Payments would have been paid or provided beginning with the last such Payment to be paid or provided and ending with the first such Payment to be paid or provided and if the Payments would have been provided at the same time, the reduction will be made first from cash benefits and next from non-cash benefits; 

		
	(iii)
	next, if further reduction is necessary, from Low Ratio Benefits that are subject to section 409A of the Code, which Low Ratio Benefits shall be reduced in the order of lowest to highest value and if a Low Ratio Benefit has the same value, the reduction shall be in the order that such Low Ratio Benefits would be paid or provided beginning with the last Low Ratio Benefits to be paid or provided and ending with the first such Low Ratio Benefit to be paid or provided and if the Low Ratio Benefits would have been provided at the same time, the reduction will be made first from cash benefits and next from non-cash benefits; and 

		
	(iv) 
	finally, if further reduction is necessary, from Low Ratio Benefits that are not subject to section 409A of the Code (in the order that you elect). 

13

Amendment and Plan Termination 

MJN has the authority to terminate or amend the Plan, in whole or in part, at any time in MJN’s sole discretion.  MJN reserves the right to implement changes even if the changes have not been reprinted or substituted in this document.  Notwithstanding the foregoing, the Plan may not be amended during the Protected Period in a manner that reduces payments or benefits to be provided to any person who was eligible to participate in the Plan on the date of a Change in Control.

14

Additional Plan Information

Employment Status
The Plan does not constitute a contract of employment, and nothing in the Plan provides or may be construed to provide that participation in the Plan is a guarantee of continued employment with the Company or any of its subsidiaries or affiliates.
Withholding of Taxes
The Company or your employer will withhold from any amounts payable under the Plan all Federal, state, local or other taxes that are legally required to be withheld from your severance payments.
No Effect on Other Benefits
Neither the provisions of this Plan nor the severance payments and benefits provided for under the Plan will reduce any amounts otherwise payable to you under any incentive, retirement, stock option, stock bonus, stock ownership, group insurance or other benefit plan; provided, however, that if you are entitled to Severance Pay or other benefits under the Plan, you will not be entitled to severance pay or benefits under any other severance or termination pay plan of the Company or any of its affiliates except as otherwise specifically provided herein relating to severance benefits pursuant to a plan or agreement that provides only statutory severance payments under applicable local law.
Validity and Severability
The invalidity or unenforceability of any provision of the Plan will not affect the validity or enforceability of any other provision of the Plan, which will remain in full force and effect, and any prohibition or unenforceability in any jurisdiction will not invalidate that provision, or render it unenforceable, in any other jurisdiction.
Unfunded Obligation
All severance payments and benefits under the Plan constitute unfunded obligations of the Company.  Severance payments will be made, as due, from the general funds of the Company.  The Plan constitutes solely an unsecured promise by the Company to provide severance benefits to you to the extent provided in the Plan.  For avoidance of doubt, any medical, dental or life insurance coverage to which you may be entitled under the Plan will be provided under other applicable employee benefit plans of the Company.
Type of Plan and Governing Law
This plan is designed to qualify as a severance pay arrangement within the meaning of Section 3(2)(B)(i) of ERISA and is intended to be excepted from the definitions of "employee pension benefit plan" and "pension plan" set forth under Section 3(2) of ERISA and is intended to meet the descriptive requirements of a plan constituting a "severance pay plan" within the meaning of the regulations published by the Secretary of Labor.  The Plan and all rights under it will be governed and construed in accordance with ERISA and, to the extent not preempted by Federal law, with the laws of the state of Illinois.

15

Assignment
The Plan will inure to the benefit of and will be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If you should die while any amount is still payable to you under the Plan had you continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of the Plan to your estate.  Your rights under the Plan will not otherwise be transferable or subject to lien or attachment.
Other Benefits
Nothing in this document is intended to guarantee that benefit levels or costs will remain unchanged in the future in any other plan, program or arrangement of the Company.  The Company and its affiliates and subsidiaries reserve the right to terminate, amend, modify, suspend, or discontinue any other plan, program or arrangement of the Company or its subsidiaries or affiliates in accordance with the terms of that plan, program or arrangement and applicable law.
Oral Statements
The provisions of this document supersede any oral statements made by any employee, officer, or Board member of the Company or any of its subsidiaries or affiliates regarding eligibility, severance payments and benefits.
Successors and Assigns
This Plan will be binding upon and inure to the benefit of the Company and its successors and assigns and will be binding upon and insure to the benefit of you and your legal representatives, heirs and legatees.

16

Code Section 409A 

Exemption 
It is intended that payments of Severance Pay under the Plan will be exempt from Code Section 409A to the extent payments (i) do not exceed two times the lesser of (1) the employee's total annual compensation based on the employee's annual rate of pay for the prior taxable year (adjusted for any increase that was expected to continue indefinitely) or (2) the limitation under Code Section 401(a)(17) for the year in which the employee has a separation from service within the meaning of Code Section 409A and Treasury regulation Section 1.409A-1(h) ($245,000 in 2010 (2x = $490,000)), and (ii) are paid in full no later than December 31 of the second year following a separation from service or to the extent that such payments otherwise fit within an exemption provided by Code Section 409A or applicable guidance.  Similarly, other benefits provided under the Plan are intended to be exempt from Code Section 409A to the extent an exemption is applicable.
Specified Employees 
In general, Code Section 409A prohibits certain payments of nonqualified deferred compensation (within the meaning of Code Section 409A) to “Specified Employees” (generally defined as an officer of MJN and its affiliates who is one of the top 50 highest paid employees as determined by MJN) within 6 months following the Specified Employee’s separation from service.  This rule does not apply to amounts which are exempt from the requirements of Code Section 409A.  To comply with this rule and notwithstanding any other provision of the Plan to the contrary, if any payment or benefit under the Plan is subject to Code Section 409A, and if such payment or benefit is to be paid or provided on account of the employee’s Termination Date and if the employee is a Specified Employee (within the meaning of Code Section 409A(a)(2)(B)) and if any such payment or benefit is required to be made or provided prior to the first day of the seventh month following the employee’s Termination Date, such payment or benefit shall be delayed until the first day of the seventh month following the employee’s separation from service and shall at that time be paid in a lump sum (or, in the case of a non-cash benefit, shall be provided in a manner that is consistent with Code Section 409A).  Any amount that would have been paid or provided during this six month period will be paid on the first business day of the seventh month following the separation from service, or, if earlier, the date of the individual’s death.  
Statement of Intent  
To the fullest extent possible, amounts and other benefits payable under the Plan are intended to be exempt from the definition of "nonqualified deferred compensation" under Code Section 409A in accordance with one or more exemptions available under the final Treasury regulations promulgated under Code Section 409A.  To the extent that any such amount or benefit is or becomes subject to Code Section 409A, this Plan is intended to comply with the applicable requirements of Code Section 409A with respect to those amounts or benefits so as to avoid the imposition of taxes and penalties.  This Plan will be interpreted and administered to the extent possible in a manner consistent with the foregoing statement of intent.
If you notify the Company (specifying the reasons for your position) that you believe that any provision of this Plan or of any payment to be made or benefit granted under this Plan would cause you to incur any additional tax, penalty or interest under Code Section 409A and if the 

17

Company and MJN concur, or if the Company or MJN (without any obligation whatsoever to do so) independently makes such a determination, MJN will, after consulting with you and to the extent permitted by law, reform the provision to try to comply with Code Section 409A or to be exempt from Code Section 409A to the extent possible without thereby creating other liability, including liability for any other Plan participant.  MJN in its sole discretion may modify, or cause to be modified, the timing of payments and benefits under the Plan for the sole purpose of exempting those payments and benefits from Code Section 409A.  To the extent that any payment or benefit under the Plan is modified to comply with Code Section 409A or to be exempt from Code Section 409A, the modification or exemption will be made in good faith and will, to the maximum extent reasonably possible, maintain the original intent and economic benefit to you and the Company and its affiliates of the applicable payment or benefit without violating the provisions of Code Section 409A.
In no event whatsoever will the Company, your Participating Employer or any of their affiliates be liable for any additional tax, interest or penalties that may be imposed on you by Code Section 409A or any damages for failing to comply with Code Section 409A.

18

Administrative Information About Your Plan 

	
	
	Employer Identification Number

The Company’s employer identification number is 35-1140848.
Claim for Benefits

If you believe that you are entitled to payments and benefits under the Plan that are not provided to you, or you disagree with any other action taken by the Plan Administrator with respect to the Plan, then you may submit a claim to the Plan Administrator in writing.  A claim must be made in writing and submitted within 6 months of your Termination Date.  In the event you make a claim for benefits beyond 6 months of your Termination Date, then you are expressly precluded from receiving any severance payments and/or benefits under the Plan.
Claims Review Procedures 
You will be notified in writing by the Plan Administrator if your claim under the Plan is denied.
If a claim for benefits under the Plan is denied in full or in part, you∗ may appeal the decision to the Plan Administrator.
To appeal a decision, you* must submit a written document through the U.S. Postal Service or other courier service appealing the denial of the claim within 60 days after you receive notice of the claim denial described above.  You* may also include information or other documentation in support of your claim.  
You* will be notified of a decision within 90 days (which may be extended to 180 days, if required) of the date your appeal is received.  This notice will include the reasons for the denial and the specific provision(s) on which the denial is based, a description of any additional information needed to resubmit the claim, and an explanation of the claims review procedure.  If the Plan Administrator requires an extension of time to respond to your appeal, you* will receive notice of the reason for the extension within the initial 90-day period and a date by which you can expect a decision.
If the original denial is upheld on first appeal, you* may request a review of this decision.  You* may submit a written request for reconsideration to the Plan Administrator (as listed below) within 60 days after receiving the denial.
You* can review all plan documents in preparing your appeal and you* may have a qualified person represent you* during the appeal process.  Any documents or records that support your position must be submitted with your appeal letter.
The case will be reviewed, and you* will receive written notice of the decision within 60 days (which may be extended to 120 days, if required).  The written notice will include the specific reasons for the decision and specific reference to the Plan provision(s) on which the decision is based.
* Or your duly authorized representative

19

Any decision on final appeal will be final, conclusive and binding upon all parties.  If the final appeal is denied, however, you will be advised of your right to file a claim in court.  It is the Company's intent that in any challenge to a denial of benefits on final appeal under these procedures, the court of law or a professional arbitrator conducting the review will apply to  a deferential ("arbitrary and capricious") standard and not a de novo review.
Legal Action 
You may not bring a lawsuit to recover benefits under the Plan until you have exhausted the internal administrative process described above.  No legal action may be commenced at all unless commenced no later than 1 year following the issuance of a final decision on the claim for benefits, or the expiration of the appeal decision period if no decision is issued.  This one-year statute of limitations on suits for all benefits will apply in any forum where you may initiate such a suit.
Plan Administrator 

The administration of the Plan is the responsibility of the Plan Administrator.  The Plan Administrator has the discretionary authority and responsibility for, among other things, determining eligibility for benefits and construing and interpreting the terms of the Plan.  In addition, the Plan Administrator has the authority, at its discretion, to delegate its responsibility to others.  The chart at the end of this Section contains the name and address of the Plan Administrator.  Notwithstanding the foregoing, if and to the extent required by applicable law, the rules of any applicable securities exchange on which the shares of MJN common stock is traded or MJN’s by-laws or articles of incorporation, the Plan will be administered by the MJN Board or the Compensation Committee.

20

Your Rights and Privileges Under ERISA 

As a participant in the Plan, you are entitled to certain rights and protection under the Employee Retirement Income Security Act of 1974 ("ERISA").  ERISA provides that you shall be entitled to:
Receive Information About Your Plan and Benefits 
		
	•
	Examine, without charge, at the Company's offices and at other specified locations all documents governing the plan filed by the plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

		
	•
	Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the plan and updated summary plan description.  The administrator may make a reasonable charge for the copies.

Prudent Actions by Plan Fiduciaries 
In addition to creating certain rights for you, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan.  The people who operate your plan, called "fiduciaries" of the plan, have a duty to do so prudently and in the interest of you and other plan participants and beneficiaries.  No one, including your employer, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a welfare benefit or exercising your rights under ERISA.
Enforce Your Rights 
If your claim for a welfare benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.
Under ERISA, there are steps you can take to enforce the above rights.  For instance, if you request a copy of plan documents or the latest annual report from the plan and do not receive them within 30 days, you may file suit in a Federal court.  In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the administrator.
If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court.  In addition, if you disagree with the plan's decision or lack thereof concerning the qualified status of a medical child support order, you may file suit in a Federal court.
If it should happen that plan fiduciaries misuse the plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court.  The court will decide who should pay court costs and legal fees.  If you are successful, the court may order the person you sued to pay these costs and fees.  If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.
Assistance with Your Questions 
If you have any questions about your plan, you should contact the Plan Administrator.  If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the 

21

Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.
You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration at 1-866-444-EBSA (3272) or accessing their website at http://www.dol.gov/ebsa.

22

Other Administrative Facts 

	
		
	Severance Plan

	Name of Plan
	Mead Johnson & Company, LLC Executive Change in Control Severance Plan, a component plan of the Mead Johnson & Company, LLC Welfare Benefit Plan

	Type of Plan
	"Welfare" plan

	Plan Records
	Kept on a calendar-year basis

	Plan Year
	January 1 – December 31

	Plan Funding
	Company and Participating Employers provide severance benefits from general assets.

	Plan Sponsor
	Mead Johnson & Company, LLC

	Plan Number
	501

	Plan Administrator  
and Named Fiduciary
	Mead Johnson & Company, LLC  
2701 Patriot Blvd.
4th Floor
Glenview, IL  60026

	Agent for  
Service of Legal  
Process on the Plan
	Mead Johnson & Company, LLC  
c/o Senior Vice President, Human Resources and c/o Senior Vice President and General Counsel 
2701 Patriot Blvd.
4th Floor
Glenview, IL  60026
  

	Trustee
	Not applicable

	Insurance Company
	Not applicable

23

Glossary 

It is important to know about the following terms as they apply to the Plan.
	
		
	Account Balance
	Account Balance has the meaning set forth in the Benefit Equalization Plan—Retirement Savings Plan.

	Base Salary
	Your annual base rate of salary in effect as of your Termination Date (determined without regard to any reduction in your rate of base salary under circumstances that constitute an event of Good Reason), including salary reductions under Code Sections 132(f), 125, 137, or 401(k), and excluding overtime, bonuses, income from stock options, stock grants, dividend equivalents, benefits-in-kind, allowances (including, but not limited to, car values, vacation bonuses, food coupons) or other incentives, and any other forms of extra compensation.  No foreign service or expatriate allowances shall be included in determining base salary or the amount of severance payments payable under the Plan.

	Benefit Equalization Plan—Retirement Plan
	The Mead Johnson & Company Benefit Equalization Plan—Retirement Plan.

	Benefit Equalization Plan—Retirement Savings Plan
	The Mead Johnson & Company Benefit Equalization Plan—Retirement Savings Plan.

	BEP Benefit
	BEP Benefit has the meaning set forth in the Benefit Equalization Plan—Retirement Plan.

	Board
	The Board of Directors of the Company.

	Bonus
	Your target annual incentive bonus for the year in which your Termination Date occurs as determined under the annual incentive bonus plan of the Company or your Participating Employer (or their affiliates), as applicable, and determined without regard to any reduction in your target annual bonus under circumstances that constitute an event of Good Reason.

	Bonus Portion
	The Bonus Portion of your Severance Pay as defined in the Severance Payments and Benefits Section, under the subheading “Cash Severance Payments”.

	Business Combination
	Business Combination is defined in the Eligibility for Benefits Section, under the subheading “Change in Control”.

	Cause
	Cause is defined in the Eligibility For Severance Benefits Section, under the subheading "Cause".

	Change in Control
	Change in Control is defined in the Eligibility for Severance Benefits Section, under the subheading “Change in Control”.

	COBRA
	The continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.  It is a federal law allowing certain individuals, under certain circumstances, to continue group health coverage that would otherwise end due to certain qualifying events, including termination of employment.

24

	
		
	Code
	The Internal Revenue Code of 1986, as amended, which is the Federal tax code.

	Company
	Mead Johnson & Company, LLC.

	Compensation Committee
	The Compensation and Management Development Committee of the MJN Board.

	Disability
	Disability is defined in the Eligibility for Severance Benefits Section, under the subheading “Ineligibility for Severance Benefits”.

	Employer Credits
	Employer Credits has the meaning set forth in the Benefit Equalization Plan—Retirement Savings Plan.

	Employing Company Contributions
	Employing Company Contributions has the meaning set forth in the Retirement Savings Plan.

	ERISA
	The Employee Retirement Income Security Act of 1974, as amended, which is a Federal employee benefits law.

	Executive Separation Agreement & General Release
	An Executive Separation Agreement & General Release in a form determined by the Company which an employee is required to execute and which must become effective as a condition of severance pay and benefits under the Plan.  The Agreement will include, but is not limited to: a general release of claims against the Company, its subsidiaries, its affiliates and their respective officers, directors, employees and agents; certain restrictive covenants and obligations including, but not limited to, non-competition and non-solicitation covenants for a period of one-year following the Termination Date; and agreements not to make use of confidential or proprietary information of the Company, its subsidiaries or its affiliates, not to disparage or encourage or induce others to disparage the Company, its subsidiaries or its affiliates or their respective products, and to cooperate with the Company, its subsidiaries and its affiliates concerning legal matters.

	Good Reason
	Good Reason is defined in the Eligibility for Severance Benefits Section, under the subheading "Good Reason".

	Gross BEP Benefit
	Gross BEP Benefit is defined in the Continuation of Employee Benefits/Special Benefits Section, under the subheading “Supplemental Retirement Benefit”.

	Excise Tax
	An excise tax imposed under section 4999 of the Code or any similar federal or state law.

	Low Ratio Benefit
	A payment or benefit which is taken into account for purposes of calculating an Excise Tax and which has a value for purposes of calculating the Excise Tax that is less than the actual value of such payment or benefit such that the ratio of the value of the payment or benefit for purposes of calculating the Excise Tax to the actual value of the payment or benefit is less than one hundred percent (100%).

	MJN
	Mead Johnson Nutrition Company.

	MJN Board
	The Board of Directors of MJN.

	Outstanding MJN Common Shares
	Outstanding MJN Common Shares is defined in the Eligibility for Benefits Section, under the subheading “Change in Control”.

	Outstanding MJN Voting Securities
	Outstanding MJN Voting Stock is defined in the Eligibility for Benefits Section, under the subheading “Change in Control”.

	Participating Employer
	Participating Employer is defined in the Eligibility for Severance Benefits Section, under the heading “Right to Severance Payments and Benefits”.

25

	
		
	Payments
	Payments is defined in the Severance Payments and Benefits Section, under the subheading “Reduction of Payments and Benefits in Certain Cases”.

	Payment Start Date
	Payment Start Date is defined in the Severance Payments and Benefits Section, under the subheading “Cash Severance Payments”.

	Person
	Person is defined in the Eligibility for Benefits Section, under the subheading “Change in Control”.

	Plan
	The Third Amended and Restated Mead Johnson & Company, LLC Executive Change in Control Severance Plan, as set forth in this document and as it may be amended from time to time.

	Protected Amount
	Protected Amount is defined in the Severance Payments and Benefits Section, under the subheading “Cash Severance Payments”.

	Protected Period
	The two year period beginning on the date of a Change in Control.

	Qualifying Termination
	Qualifying Termination is defined in the Eligibility for Severance Benefits Section, under the subheading “Right to Severance Payments and Benefits”.

	Release Requirements
	Release Requirements is defined in the Introduction and Highlights Section.

	Retirement Plan
	The Mead Johnson & Company, LLC Retirement Plan.

	Retirement Savings Plan
	The Mead Johnson & Company, LLC Retirement Savings Plan.

	Senior Executive Severance Plan
	Amended and Restated Mead Johnson & Company, LLC Senior Executive Severance Plan, as the same be amended from time to time.

	Severance Pay
	Severance Pay is the cash severance benefits to which you are entitled under the Plan, as described in the Severance Payments and Benefits Section, under the subheading “Cash Severance Payments”.

	Severance Pay Period
	The number of years (or years and months) of Base Salary and Bonus included in your Severance Pay (i.e., 3 years for Tier 1, 2 years for Tier 2, and one year for Tier 3).

	Specified Employee
	Specified Employee is defined in the Section 409A Section, under the subheading "Specified Employees".

	Supplemental Retirement Benefit
	Supplemental Retirement Benefit is defined in the Continuation of Employee Benefits/Special Benefits Section, under the subheading “Supplemental Retirement Benefit”.

26

	
		
	Supplemental Retirement Savings Plan Benefit
	Supplemental Retirement Savings Plan Benefit is defined in the Continuation of Employee Benefits/Special Benefits Section, under the subheading “Supplemental Retirement Savings Plan Benefit”.

	Termination Date
	The date on which your employment with the Company, its subsidiaries and its affiliates terminates for any reason.  To the extent that any payments or benefits under the Plan are subject to Code Section 409A, the determination of whether your Termination Date has occurred (or whether you have otherwise had a termination of employment) shall be made in accordance with the provisions of Code Section 409A and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder.

27Ex. 10.1 Restricted Stock Agreement

EXHIBIT 10.1

RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made and entered into as of June 11 , 2014 (the “Effective Date”), by and between Steadfast Income REIT, Inc., a Maryland corporation (“Company”), and Steadfast Income Advisor, LLC, a Delaware limited liability company (“Advisor”).  
WHEREAS, pursuant to Section 24 of the Advisory Agreement, by and among Company, Advisor and Steadfast Income REIT Operating Partnership, L.P., the Company’s operating partnership (the “Advisory Agreement”), Company has agreed to pay to Advisor $5,000,000 in fees in the event that the Company’s cumulative distributions are covered (subject to limitations) by the Company’s cumulative modified funds from operations; and
WHEREAS, in consideration of the Advisor and its affiliates’ assistance in consummating the Company’s initial public offering, the board of directors of the Company (the “Board”) has determined that it is advisable to replace such performance-based fee requirement with a grant of restricted stock of the Company on the terms and conditions set forth in this Agreement and to amend the Advisory Agreement pursuant to Amendment No. 6 to the Advisory Agreement, a form of which is attached hereto as Exhibit A; and
WHEREAS, the Company has determined that the fair market value of Company common stock on the Effective Date is equal to $10.24 per share; 
NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the parties hereby agree as follows:
ARTICLE I

ISSUANCE OF RESTRICTED STOCK

1.1    Issuance of Restricted Stock.  Pursuant to the terms of this Agreement, Company is issuing to Advisor 488,281.25 restricted shares of Company common stock (the “Shares”), upon the terms and conditions set forth in this Agreement.
1.2    Issuance Date.  The Shares shall be granted on the Effective Date.  
1.3    Vesting.  The Restrictions (as defined in Section 2.1 of this Agreement) shall lapse, and Shares shall become non-forfeitable, pursuant to the terms set forth on Annex A hereto (the “Vesting Schedule”).
1.4    Rights as Stockholder.  Except as otherwise provided herein, Advisor shall have all the rights of a stockholder with respect to said Shares during the Restricted Period (as defined in Section 2.2 of this Agreement) and after vesting, including the right to vote the Shares and to receive all dividends or other distributions paid or made with respect to the Shares.  If Advisor forfeits any of the Shares pursuant to this Agreement, Advisor shall no longer have any rights as a stockholder with respect to such forfeited Shares or any interest therein, and Advisor shall no longer be entitled to vote or to receive dividends on such Shares.    

ARTICLE II

RESTRICTIONS ON SHARES
2.1    Restrictions.  The Shares are subject to each of the following restrictions (the “Restrictions”). “Restricted Shares” mean those Shares that are subject to the Restrictions imposed hereunder which Restrictions have not then expired or terminated. Restricted Shares may not be sold, transferred, exchanged, assigned, pledged, hypothecated or otherwise encumbered to or in favor of any party, or be subjected to any lien, obligation or liability of Advisor to any other party.   If Advisor’s service to the Company under the Advisory Agreement terminates for any reason other than as set forth in clause (iv) of the Vesting Schedule, then Advisor shall forfeit all of Advisor’s right, title and interest in and to the Restricted Shares as of the date of termination, and such Restricted Shares shall revert to the Company immediately following the event of forfeiture.  The Restrictions imposed under this Section 2.1 shall apply to all Shares or other securities issued with respect to Restricted Shares hereunder in connection with any merger, reorganization, consolidation, recapitalization, stock dividend or other change in corporate structure affecting the Shares.  
2.2    Release of Shares from Restrictions.  The Shares shall be released from the Restrictions as indicated on the Vesting Schedule. The period prior to such expiration is referred to herein as the “Restricted Period.” 
2.3    No Registration.  Advisor understands that (a) the Shares have not been registered with the Securities and Exchange Commission and are being offered and sold in reliance on an exemption from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and (b) the Shares have not been registered under state securities laws and are being offered and sold pursuant to exemptions specified in said laws, and unless registered, the Shares may not be re-offered for sale or resold except in a transaction or as a security exempt under those laws and in accordance with the terms and conditions of the limitations set forth in the Company’s Second Amended and Restated Articles of Amendment and Restatement (as may be amended from time to time).
ARTICLE III

OTHER PROVISIONS
3.1    Adjustment for Certain Transactions.  In the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification, or similar change in the capital structure of  Company, the Board shall make such appropriate and equitable adjustments in the Restricted Shares as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction.  The provisions of this Agreement shall apply, to the full extent set forth herein with respect to the Shares, to any and all shares of capital stock or other securities, property or cash which may be issued in respect of, in exchange for, or in substitution of the Shares, and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof.
3.2    Taxes.  Advisor has reviewed with its own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement.  Advisor is relying solely on such advisors and not on any statements or representations of Company or any of its agents.  Advisor understands that Advisor (and not Company) shall be responsible for Advisor’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

LEGAL02/34849741v3

3.3    Restrictive Legends and Stop-Transfer Orders.
(a)    The Shares will be registered in the name of the Advisor as of the Effective Date and may be held by the Company during the Restricted Period in certificated or uncertificated form.
(b)    Any share certificate(s) evidencing the Shares issued hereunder shall be endorsed with the following legend and any other legend(s) that may be required by any applicable federal or state securities laws:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE AND RESTRICTIONS AGAINST TRANSFER) CONTAINED IN A RESTRICTED STOCK AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.  RELEASE FROM SUCH TERMS AND CONDITIONS MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SUCH AGREEMENT.
(c)    If shares of the Company’s common stock are certificated, stock certificates for the Shares, without the first above legend, shall be delivered to Advisor upon request of Advisor after the expiration of the Restricted Period, but delivery may be postponed for such period as may be required for the Company with reasonable diligence to comply, if deemed advisable by the Company, with registration requirements under the 1933 Act, listing requirements under the rules of any stock exchange, and requirements under any other law or regulation applicable to the issuance or transfer of the Shares.
(d)    Advisor agrees that, in order to ensure compliance with the Restrictions referred to herein, Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if Company transfers its own securities, it may make appropriate notations to the same effect in its own records.
(e)    Company shall not be required: (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement, or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.
3.4    Taxes.  Company shall be entitled to require payment of any sums required by federal, state or local tax law to be withheld with respect to the transfer of the Shares or the lapse of the Restrictions with respect to the Shares, or any other taxable event related thereto.  Advisor agrees that it will not make an election to be taxed upon grant of the Restricted Shares under Section 83(b) of the Internal Revenue Code.  
3.5    Notices.  Any notice to be given under the terms of this Agreement to Company shall be addressed to the Company in care of the Secretary of the Company, and any notice to be given to Advisor shall be addressed to Advisor at the address given beneath Advisor’s signature hereto.  By a notice given pursuant to this Section 3.6, either party may hereafter designate a different address for notices to be given to that party.  Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.
3.6    Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

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3.7    Governing Law; Severability.  This Agreement shall be administered, interpreted and enforced under the laws of the State of Delaware without regard to conflicts of laws thereof.  Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.
3.8    Authority of Board.  The Board will administer the Restricted Shares and may correct any defect, supply any omission or reconcile any inconsistency in this Agreement in the manner and to the extent it deems necessary to carry out its intent in granting the Restricted Shares.  The Board’s interpretation of this Agreement and all decisions and determinations by the Board with respect to the Restricted Shares are final, binding, and conclusive on all parties.  
3.9    Amendments.  This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by Advisor and by a duly authorized representative of the Company.
3.10    Successors and Assigns.  Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of Company.  Advisor may not assign any of its rights and obligations under this Agreement without the prior written consent of Company.  

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IN WITNESS WHEREOF, the parties have executed this Restricted Stock Agreement as of the date first written above.
	
				
	 
	Very truly yours,
STEADFAST INCOME REIT, INC.:

	 
	By:
	/s/ Ella S. Neyland

	 
	 
	Name: Ella S. Neyland                                         Title: President

	 
	 
	 
	 

	 
	Address:
	18100 Von Karman Avenue
Suite 500
Irvine, California 92612

	 
	 

	 
	 

	 
	STEADFAST INCOME ADVISOR, LLC:

	 
	By:
	/s/ Ana Marie del Rio

	 
	 
	Name: Ana Marie del Rio 
Title: Secretary

	 
	Address:
	18100 Von Karman Avenue
Suite 500
Irvine, California 92612

	 
	 
	 
	 

LEGAL02/34849741v3

EXHIBIT A

[PLEASE REFER TO EXHIBIT 10.2 TO THIS CURRENT REPORT ON FORM 8-K]

LEGAL02/34849741v3

ANNEX A

VESTING SCHEDULE	
						
	 	Vesting Schedule:
	Subject to the terms and conditions of the Restricted Stock Agreement, the Restrictions (as defined in the Restricted Stock Agreement) shall expire on the earliest to occur of the following:

	 
	 
	 	(i)
	as to the percentages of the Restricted Shares and on the respective dates specified in the following schedule, provided that Advisor remains the advisor providing services to the Company pursuant to the Advisory Agreement on each such date:

	 	 
	 
	 
	 
	 

	 	 
	 
	 
	Vesting Date
	Percentage of Shares Vested

	 	 
	 
	 
	December 31, 2015
	50%

	 	 
	 
	 
	December 31, 2016
	50%

	 	 
	 
	 
	 
	 

	 	 
	 
	(ii)
	as to all of the Restricted Shares upon a Liquidity Event (as defined in the Company’s Second Amended and Restated Articles of Amendment, as may be amended from time to time);

	 	 
	 
	(iii)
	as to all of the Restricted Shares on the date that the Company’s cumulative modified funds from operations (as defined in the Company’s Annual Report on Form 10-K) since October 13, 2009 exceed the lesser of (1) the cumulative amount of any distributions paid to the Company’s stockholders or (2) an amount that is equal to a 7.0% cumulative, non-compounded, annual return on the Company’s stockholders’ invested capital; and

	 	 
	 
	(iv)
	as to all of the Restricted Shares upon the Company’s termination of, or failure to renew, the Advisory Agreement other than for “cause” (as defined in the Advisory Agreement).

    

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