Attached files
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8-K - ARTHROCARE CORP | v168932_8k.htm |
Exhibit
10.1
2009
Executive Officer Bonus Plan
Objective:
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Align
the interests of employees and shareholders in the future growth and
success of ArthroCare Corporation (the “Company”) by rewarding employee
performance.
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Bonus
Pool:
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Up
to 100% of the Total Bonus Potential of all Eligible Participants during
the period of January 1, 2009 through December 31, 2009 (the “Bonus
Period”). The Total Bonus Potential for an Eligible Participant
(other than the Company’s CEO) with a base salary of $200,000 shall be
$120,000. The Total Bonus Potential of an Eligible Participant,
other than the Chief Executive Officer, may be increased or decreased at
the sole discretion of the Chief Executive Officer of the
Company. The Total Bonus Potential of the Chief Executive
Officer may be increased or decreased at the sole discretion of the
Company’s Board of Directors.
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Eligible
Participants:
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All
executive officers of the Company from the period of January 1, 2009
through the payment date of a bonus (the “Bonus Payment Date”) who began
employment with the Company on or before December 31, 2009, other than
those employees who are ineligible due to performance issues, as approved
by the Compensation Committee of the Company’s Board of Directors. Executive officers
must be employed on the bonus payment date to be eligible for any
payment. Pro rata eligibility for executive officers who start
after January 1, 2009 and remain employed by the Company through the Bonus
Payment Date. Executive officers who go on leave of absence
will have their bonus prorated for time worked through the Bonus Payment
Date.
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Bonus
Potential:
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60%
of base salary for fiscal year end December 31, 2009 for Vice Presidents
who are executive officers of the
Company.
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75%
of base salary for fiscal year end December 31, 2009 for the Chief
Executive Officer.
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Bonus
Factors:
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In
the event the Company achieves at least 85% (the “Minimum Achievement
Level”) of the Net Product Revenue Goal and the Cash Management Goal, a
bonus will be earned by each Eligible Participant. The Net
Product Revenue Goal shall be as set forth in the Company’s sales forecast
for the full year of 2009 and the Cash Management Goal will be as approved
by the Board of Directors for the period of January 1, 2009 through
December 31, 2009.
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The
Net Product Revenue Goal and the Cash Management Goal shall be ascribed a
percentage weight totaling 100% in the aggregate, as
follows:
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Net
Product Revenue Goal – 60% weight
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Cash
Management Goal – 40% weight
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The
Minimum Achievement Level is determined by adding the weighted average of
the full year Net Product Revenue Goal (i.e., Net Product Revenue Goal
Achieved (as defined below) multiplied by 60%), plus the weighted average
of the Cash Management Goal (same formula). If the sum of these
percentages is equal to or greater than 85%, a bonus is
payable.
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If
the Bonus Achievement Level is between 85% and 100%, then Eligible
Participants are eligible for a prorated bonus equal to a 1 to 3 ratio of
the bonus achieved. For example, if the Bonus Achievement Level
is 85%, then Eligible Participants are eligible for 55% of their Total
Bonus Potential.
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Bonus
Multiplier:
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If
the Bonus Achievement Level is in excess of 100%, then Eligible
Participants are eligible for 100% of their Total Bonus Potential, plus a
percentage of their Total Bonus Potential equal to three times the portion
in excess of 100%. For example, if the Bonus Achievement Level
is 110%, then Eligible Participants are eligible for 100% of their Total
Target Bonus Potential, plus 30% of the Total Target Bonus
Potential. The Bonus Achievement Level maximum is 115% and the
maximum Total Bonus Potential is
145%.
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Defined
Terms:
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Net Product Revenue
shall mean the amount of ArthroCare total net product revenue from
the period of January 1, 2009 through December 31,
2009.
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Cash Management shall
mean the management of cash as defined by the Board of Directors for the
period January 1, 2009 through December 31,
2009.
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Net Product Revenue Goal
Achieved shall mean the percentage determined by dividing the full
year net product revenue by the Net Product Revenue
Goal.
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Cash Management Goal Achieved
shall mean the management of cash achieved as defined by the Board
of Directors for the period January 1, 2009 through December 31,
2009.
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Bonus Achievement Level
shall mean the actual level of bonus
achieved.
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Any
bonuses payable under this 2009 Bonus Plan are subject to the approval of the
Company’s Board of Directors. The Company has the right to make
changes in plan participation, the bonus pool or any other aspect of this plan
at any time and without prior notice.
The
Company must have filed all financial statements required by the Securities and
Exchange Commission and be considered a current filer for any bonuses to be
payable under this Plan.