8-KMaterial AgreementsCorporate ChangesExhibits & Filings

BRISTOL MYERS SQUIBB CO 8-K Report, Material Agreement (Mar 13, 2006)

Filed March 13, 2006For Securities:BMYCELG-RIBMYMP

Summary

This 8-K filing by Bristol-Myers Squibb Company, filed on March 13, 2006, details compensation decisions made by its Compensation and Management Development Committee on March 7, 2006. Key events include the authorization of annual cash bonuses for 2005 to Named Executive Officers, determination of 2006 annual cash bonus award formulas, approval of base salaries effective April 1, 2006, and the granting of long-term incentive awards, including stock options, restricted stock, and performance share units. Investors should note the performance-based criteria for both annual and long-term incentives, which align executive compensation with company financial performance (pre-tax earnings, sales, earnings per share) and relative total shareholder return. The filing also notes the retirement of John L. McGoldrick and the termination of Donald J. Hayden, Jr., with corresponding adjustments in compensation disclosures. Additionally, an amendment to the company's bylaws regarding stockholder rights plans is reported.

Key Highlights

  • 1Annual cash bonuses for 2005 were awarded to Named Executive Officers, with amounts determined by company pre-tax earnings targets and individual performance.
  • 2Base salaries for Named Executive Officers were approved, with increases for some executives effective April 1, 2006.
  • 3Long-term incentive awards, including stock options with performance-based exercise thresholds, restricted stock, and performance share units, were granted to Named Executive Officers.
  • 4Performance metrics for long-term awards (2006-2008) include cumulative earnings per share and cumulative sales, with a modifier based on total shareholder return relative to peers.
  • 5The 2003-2005 Long-Term Performance Award payout was made at 75.1% of target, based on cumulative earnings per share, cumulative sales, and relative total shareholder return.
  • 6An amendment to the company's bylaws requires a two-thirds Board of Directors' approval for stockholder rights plans and limits their duration unless approved by stockholders.

Frequently Asked Questions

The filing discloses annual cash bonuses for 2005, base salaries effective April 1, 2006, stock options, restricted stock awards, and performance share units granted under various incentive plans. Compensation is tied to company performance metrics and individual executive performance.

Both annual bonuses and long-term incentives are performance-based. Annual bonuses are tied to company pre-tax earnings targets. Long-term incentives, such as performance share units, are contingent on achieving cumulative earnings per share and sales goals over a three-year period, with additional modification based on total shareholder return compared to a peer group.

The stock options granted have a performance-based exercise threshold. Executives can only exercise these options if Bristol-Myers Squibb's stock price closes at least 15% above the option grant price for seven consecutive trading days. This aims to ensure that executives benefit from stock option gains only when the company's stock performance demonstrably exceeds a certain level.

Yes, the company amended its bylaws to require a two-thirds majority vote from the Board of Directors for the approval of any stockholder rights plans or amendments. Furthermore, these plans will automatically expire one year after adoption unless subsequently approved by the company's stockholders.