{"id":40552,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/short-term-achievement-reward-program-procter-amp-gamble-co.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"short-term-achievement-reward-program-procter-amp-gamble-co","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/short-term-achievement-reward-program-procter-amp-gamble-co.html","title":{"rendered":"Short-Term Achievement Reward Program – Procter & Gamble Co."},"content":{"rendered":"

Summary of the Company’s Short Term Achievement RewardProgram<\/strong><\/p>\n

\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

\n<\/p>\n

\n

SHORT TERM ACHIEVEMENT REWARD PROGRAM<\/u><\/strong>\n<\/p>\n

\n<\/p>\n

The Short Term Achievement Reward (“STAR”) Program is The Procter &
\nGamble Company’s (the “Company”) annual bonus program designed to motivate and
\nreward employees for achieving outstanding short term business results for the
\nCompany and its subsidiaries. STAR awards are made pursuant to authority
\ndelegated to the Compensation & Leadership Development Committee (the
\n“C&LD Committee”) by the Board of Directors for awarding compensation to the
\nCompany’s principal officers and for making awards under the Procter &
\nGamble 2009 Stock and Incentive Compensation Plan (the “2009 Plan”) or any
\nsuccessor stock plan approved in accordance with applicable listing standards.\n<\/p>\n<\/p>\n<\/p>\n

I.<\/strong> ELIGIBILITY<\/u><\/strong><\/p>\n<\/p>\n<\/p>\n

Employees at Band 3 or above and who worked at least 28 days (four calendar
\nweeks) during the applicable fiscal year are eligible to participate. Eligible
\nemployees who do not work a full schedule (e.g., leaves of absence, disability,
\nand less-than-full time schedules) in the fiscal year in which the award is
\npayable may have awards pro-rated.<\/p>\n<\/p>\n<\/p>\n<\/p>\n

II.<\/strong> Calculation<\/u><\/strong><\/p>\n<\/p>\n<\/p>\n

The individual STAR Award is calculated as follows:<\/p>\n<\/p>\n<\/p>\n

(STAR Target<\/strong>) x (Business Unit Performance
\nFactor<\/strong>) x (Total Company Performance Factor<\/strong>)<\/p>\n<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

The STAR Target <\/strong>for each participant is calculated as:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

(Base Salary) x (STAR Target percent)<\/p>\n<\/p>\n<\/p>\n

Base Salary<\/em> at the end of the applicable fiscal year is used to
\ncalculate the STAR award.<\/p>\n<\/p>\n<\/p>\n

Generally, the STAR Target Percent<\/em> is dependent on the individual’s
\nposition and level (Band) in the organization. The STAR Target percent for
\nparticipants at Band 7 or above is set by the C&LD Committee. The STAR
\nTarget percent for all other participants is set by the Chief Executive Officer,
\nwith the concurrence of the Global Human Resources Officer, pursuant to
\nauthority delegated to them by the C&LD Committee. If an individual’s
\nposition and\/or level changes during a fiscal year, and that change results in a
\nnew STAR Target Percent, the STAR Target Percent is pro-rated according to the
\namount of time in each position\/level during the fiscal year.<\/p>\n<\/p>\n<\/p>\n

The Business Unit Performance Factor<\/strong> is based on the fiscal
\nyear success for the appropriate STAR business unit. The STAR business units are
\ndefined by the Global Human Resources Officer and may consist of business
\ncategories, segments, geographies, functions, organizations or a combination of
\none or more of these items. The STAR business units will be defined within
\nninety (90) days of the beginning of the fiscal year, but may be adjusted as
\nnecessary to reflect business and\/or organizational changes (e.g.,
\nreorganization, acquisition, merger, divestiture, etc.). The Business Unit
\nPerformance Factors can range from 53% to 167% with a target of 100%. In
\ngeneral, a committee consisting of at least two of the Chairman of the Board,
\nChief Executive Officer, Chief Financial Officer, Global Human Resources Officer
\nand\/or the Chief Operating Officer (the “STAR Committee”), conducts a
\ncomprehensive retrospective assessment of the fiscal year performance of each
\nSTAR business unit against previously established goals for one or more of the
\nfollowing measures: Operating Total Shareholder Return, Key Competitor
\nComparison, After Tax Profit, Operating Cash Flow, Value Share, Volume, Net
\nOutside Sales, Customer spending effectiveness, SRAP cost progress,
\nTransportation and warehouse cost progress, Internal controls, Accounts
\nreceivable payscore (collection effectiveness), Organization Head Self
\nAssessment, and Cross Organization Assessment. The STAR Committee makes a
\nrecommendation of an appropriate Business Unit Performance Factor to the
\nC&LD Committee. There may also be other factors significantly affecting STAR
\nbusiness unit results positively or negatively which can be considered by the
\nSTAR Committee when making its recommendation. No member of the STAR Committee
\nmakes any recommendation or determination as to their<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

own STAR award. As a result, there are certain instances in which a Business
\nUnit Performance Factor recommendation to the C&LD Committee must be made
\nexclusively by the Chief Executive Officer.<\/p>\n<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

The Total Company Performance Factor<\/strong> is based on the total
\nCompany’s success during the fiscal year and ranges from 80% to 130%, with a
\ntarget of 100%. The same Total Company Performance Factor is applied to all STAR
\naward calculations, regardless of STAR business unit. It is determined using a
\nmatrix which compares results against pre-established goals for fiscal year
\norganic sales growth and core earnings per share (“EPS”) growth for the fiscal
\nyear.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

While the STAR Committee makes recommendations to the C&LD Committee
\nregarding the Business Unit and Total Company performance factors to be applied
\nto all STAR awards (except those for the STAR Committee members), only the final
\naward amounts for principal officers are approved specifically by the C&LD
\nCommittee. The C&LD Committee has delegated the approval of STAR awards for
\nother participants to the Chief Executive Officer. The C&LD Committee has
\ndiscretion to use, increase or decrease the performance factors recommended by
\nthe STAR Committee and\/or to choose not to pay STAR awards during a given year.\n<\/p>\n<\/p>\n<\/p>\n

Each year the C&LD Committee approves a cash pool for STAR awards equal
\nto a percentage of profit, and the C&LD Committee sets a limit on the
\nportion of that pool which can be awarded to each of the Named Executives
\nsubject to Section 162(m) of the Internal Revenue Service code. This ensures
\nthat any STAR awards paid to such executives are fully tax deductible by the
\nCompany.<\/p>\n<\/p>\n<\/p>\n

III.<\/strong> timing and form<\/u><\/strong><\/p>\n<\/p>\n<\/p>\n

STAR awards are determined after the close of the fiscal year and are paid on
\nor about September 15. The award form choices and relevant considerations are
\nexplained in payment preference materials generally in the form of Appendix
\n1<\/u>. Participants receive written notice of their award detailing the
\ncalculation, generally in the form of Appendix 2<\/u>. The grant letters used
\nfor those employees who elect to receive awards in stock options or restricted
\nstock units are generally in the form of Appendix 3<\/u>.<\/p>\n<\/p>\n<\/p>\n

Generally, STAR awards are paid in cash. However, before the end of the
\ncalendar year preceding the award date, eligible participants can elect to
\nreceive their STAR award in forms other than cash. Alternatives to cash include
\nstock options, local deferral programs (depending on local regulations in some
\ncountries), or restricted stock units and\/or deferred compensation (for
\nparticipants also in the Business Growth Program). The Company converts cash to
\nother forms of payment (e.g., stock options, restricted stock units, etc.) using
\na conversion factor that is reviewed and approved by the C&LD Committee
\nannually. Any STAR award paid in stock options, restricted stock units or other
\nform of equity shall be awarded pursuant to this program and the terms and
\nconditions of the 2009 Plan or any successor stock plan approved in accordance
\nwith applicable listing standards, as they may be revised from time to time.<\/p>\n<\/p>\n<\/p>\n

IV.<\/strong> SEPARATION FROM THE COMPANY<\/u><\/strong><\/p>\n<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

Retirement, Death or Special Separation with a Separation
\nPackage<\/strong>: If a participant worked at least 28 days (4 calendar weeks)
\nduring the fiscal year, the STAR award is pro-rated by dividing the number of
\ncalendar days the participant was an “active employee” during the fiscal year by
\n365.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

Voluntary Resignation or Termination for cause: <\/strong>Separating
\nemployees must have been active employees as of June 30 (the close of the fiscal
\nyear for which the award is payable) to receive an award.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

Eligible participants who have left the Company will receive a cash payment
\n(equity such as stock options and RSUs can only be issued to active employees)
\non the same timing as STAR awards or as soon thereafter as possible.<\/p>\n<\/p>\n<\/p>\n<\/p>\n

V.<\/strong> CHANGE IN CONTROL<\/u><\/strong><\/p>\n<\/p>\n<\/p>\n

Notwithstanding the foregoing, if there is a Change in Control in any fiscal
\nyear, STAR awards will be calculated in<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

accordance with Section II above, but each factor will be calculated for the
\nperiod from the beginning of the fiscal year in which a Change in Control
\noccurred up to and including the date of such Change in Control (“CIC Period”).
\n“Change in Control” shall have the same meaning as defined in the 2009 Plan or
\nany successor stock plan.<\/p>\n<\/p>\n<\/p>\n<\/p>\n

VI.<\/strong> GENERAL TERMS AND CONDITIONS<\/u><\/strong><\/p>\n<\/p>\n<\/p>\n

While any STAR award amount received by one individual for any year shall be
\nconsidered as earned remuneration in addition to salary paid, it shall be
\nunderstood that this plan does not give to any officer or employee any contract
\nrights, express or implied, against any Company for any STAR award or for
\ncompensation in addition to the salary paid to him or her, or any right to
\nquestion the action of the Board of Directors or the C&LD or STAR
\nCommittees.<\/p>\n<\/p>\n<\/p>\n

Each award to the Chairman of the Board, Chief Executive Officer,
\nVice-Chairs, Group Presidents, Presidents, Global Function Heads and Senior Vice
\nPresidents and equivalents, made pursuant to this plan, is subject to the Senior
\nExecutive Recoupment Policy adopted by the C&LD Committee in December 2006.\n<\/p>\n<\/p>\n<\/p>\n

This program document may be amended at any time by the C&LD Committee.\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n

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