Summary
This 8-K filing by Church & Dwight Co., Inc. (CHD) on December 6, 2018, primarily announces the adoption of the Third Amended and Restated Annual Incentive Plan (Amended Plan) by its Board of Directors on October 31, 2018. This new plan supersedes the previous version. The key change in the Amended Plan is the removal of certain provisions that were designed to comply with the performance-based exception under Section 162(m) of the Internal Revenue Code, following the repeal of that exception. Despite this change, the plan retains the same maximum annual payout limit of 250% of a participant's base salary, capped at $5 million.
Key Highlights
- 1Church & Dwight adopted a Third Amended and Restated Annual Incentive Plan (Amended Plan) effective October 31, 2018.
- 2The Amended Plan replaces the Second Amended and Restated Annual Incentive Plan.
- 3Provisions related to the Section 162(m) performance-based exception have been removed due to its repeal.
- 4The maximum annual incentive payout remains unchanged.
- 5The maximum payout is 250% of base salary.
- 6There is a cap of $5 million on the maximum annual incentive payout per participant.
- 7The full text of the Amended Plan is available as an exhibit to this filing.
Frequently Asked Questions
The main purpose of this filing is to inform investors that Church & Dwight's Board of Directors has approved an updated Annual Incentive Plan, specifically the Third Amended and Restated Annual Incentive Plan.
The changes were primarily to remove provisions intended to comply with the now-repealed performance-based exception under Section 162(m) of the Internal Revenue Code. The core mechanics and payout limits remain largely the same.
While certain technical provisions related to tax deductibility have been removed, the plan maintains the same maximum annual payout limits (250% of base salary, up to $5 million), suggesting that the potential incentive amounts for participants are not altered.
The full text of the Third Amended and Restated Annual Incentive Plan is filed as Exhibit 10.1 to this 8-K report and is incorporated by reference.