What is the purpose of the Zoetis Supplemental Savings Plan (SSP)?

The SSP is a nonqualified deferred compensation plan established to allow a select group of management and highly compensated employees, including named executive officers, to defer compensation that would otherwise be lost due to the annual compensation limitations imposed by the Internal Revenue Code (Section 401(a)(17)) on the company's tax-qualified Zoetis Savings Plan. It enables these employees to continue saving for retirement on a tax-advantaged basis beyond the IRS limits.

Who is eligible to participate in the SSP?

Eligibility is for participants in the Zoetis Savings Plan who are adversely affected by the compensation limitations or are otherwise designated by the Zoetis Savings Plan Committee. All named executive officers of the company are eligible to participate in the SSP.

How are deferrals and company contributions handled under the SSP?

Participants can elect to defer up to 30% of their base salary and bonus compensation that exceeds the 2013 compensation limit of $255,000. The company matches these elective deferrals at 100% of the first 5% of the participant's compensation. Additionally, any company profit sharing contributions that are limited by the compensation cap will also be credited to the SSP. Certain executives can defer an additional 60% of their bonus compensation above the limit, but these additional deferrals are not matched by the company.

What happens to existing deferred compensation amounts from previous plans?

Liabilities from certain previous deferred compensation plans sponsored by Pfizer Inc., Pharmacia, and Wyeth that were transferred to Zoetis will be subject to the SSP's terms. However, the distribution provisions for these specific transferred amounts will generally follow the terms of the original plans, which are noted as not being materially different from the SSP's provisions. Participants are 100% vested in these transferred amounts.

ZTS 8-K: Leadership Changes

Summary

This 8-K filing by Zoetis Inc. (ZTS) details the adoption of the Zoetis Supplemental Savings Plan (SSP), a nonqualified deferred compensation plan, effective July 1, 2013. The SSP is designed to provide benefits to a select group of management and highly compensated employees who are affected by limitations in the company's tax-qualified Zoetis Savings Plan, specifically the Internal Revenue Code's Section 401(a)(17) compensation limit. This plan allows eligible employees, including named executive officers, to defer a portion of their compensation that exceeds the annual compensation limit. The plan offers participants the ability to defer up to 30% of their base salary and bonus compensation above the $255,000 limit in 2013. The company will match these deferrals at a rate of 100% of the first 5% of the participant's compensation, mirroring the Savings Plan. Additionally, certain executives can defer an extra 60% of their bonus compensation above the limit, without company match. The SSP also includes provisions for company profit sharing contributions that are limited by the compensation cap and allows for notional investments in Zoetis common stock or other funds, with specific trust funding requirements upon a change of control.

Key Highlights

1Zoetis Inc. has established a Supplemental Savings Plan (SSP), a nonqualified deferred compensation plan, effective July 1, 2013.
2The SSP is designed for a select group of management and highly compensated employees impacted by IRS compensation limits ($255,000 in 2013) on the tax-qualified Savings Plan.
3Participants, including named executive officers, can defer up to 30% of compensation exceeding the compensation limit.
4The Company will provide matching contributions of 100% on the first 5% of deferred compensation, aligning with the Savings Plan.
5Profit sharing contributions limited by the compensation cap under the Savings Plan will also be credited to the SSP.
6The SSP allows for notional investments in company common stock or other funds, mirroring Savings Plan options.
7Transferred amounts from previous Pfizer, Pharmacia, and Wyeth deferred compensation plans will be subject to the SSP's terms.

Zoetis Inc. 8-K Report, Executive Changes (Jun 19, 2013)

Summary

Key Highlights

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