EXHIBIT 10(w)

 

Summary of Compensation Arrangements for
Named Executive Officers and Directors

 

Compensation Arrangements for Named Executive Officers

 

Following is a description of the compensation arrangements that have been approved by the Compensation & Benefits Committee of the Board of Directors of Johnson & Johnson (the “Compensation Committee”) on February 8, 2010 for the Company’s Chief Executive Officer, Chief Financial Officer and the other three most highly compensated executive officers in 2009 (the “Named Executive Officers”).

 

Annual Base Salary:

 

The Compensation Committee has approved the following base salaries, effective February 22, 2010, for the Named Executive Officers:

 

 

Annual Performance Bonus:

 

The Compensation Committee has approved the following annual performance bonus payments for performance in 2009 (paid in the form of 85% cash and 15% Company Common Stock as determined by the Compensation Committee):

 

 

Stock Option and Restricted Share Unit Grants:

 

The Compensation Committee has approved the following stock option and Restricted Share Unit (“RSU”) grants under the Company’s 2005 Long-Term Incentive Plan (the “LTI Plan”). The stock options were granted at an exercise price of $62.62, at the “fair market value” (calculated as the average of the high and low prices of the Company’s Common Stock on the New York Stock Exchange) on February 8, 2010. The options will become exercisable on February 9, 2013 and expire on February 7, 2020. The RSUs will vest on February 9, 2013, upon which, the holder, if still employed by the Company on such date, will receive one share of the Company’s Common Stock for each RSU.

 

Non-Equity Incentive Plan Awards:

 

The Compensation Committee has approved the following non-equity incentive plan awards in recognition of performance during 2009 under the Company’s Certificates of Long-Term Performance (“CLP”) program. Vested awards are not paid out until the earlier of ten years from the date of grant or retirement or other termination of employment. As of the grant date, the defined present value per CLP was $4.69. The CLP unit value will vary over time based on the performance of the Company.

 

 

Due to the change in the planning basis of CLP awards from a vesting-based approach under the Certificates of Long-term Compensation Plan (the “CLC Plan”) to a grant-based approach under the new CLP Plan, which replaced the CLC Plan effective February 2010, certain executives were adversely impacted. The Committee approved selected one-time CLP awards to transition these executives to the new CLP Plan:

 

 

Equity Compensation for Non-Employee Directors

 

Each Non-Employee Director receives non-retainer equity compensation in the first quarter of each year under the LTI Plan in the form of shares of restricted Common Stock having a fair market value of $100,000 on the grant date. Accordingly, each Non-Employee Director was granted 1,596 shares of restricted Common Stock under the LTI Plan on February 8, 2010. The restricted shares will become freely transferable on February 8, 2013.