Exhibit 10.1

 

ViroPharma Cash Bonus Plan

 

The ViroPharma Incorporated Cash Bonus Plan applies to each of our employees,
including the members of our management team. Each employee receives a target
bonus, expressed as a percentage of his or her base salary for the year. The
amount of a specific employee’s target bonus varies by the employee’s role in
the Company and his or her applicable pay band, as identified in the table
below:

 

Exempt Positions

 

Position

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   Pay Band(s)

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   Target

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    Maximum

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CEO

   17    50 %   62.5 %

Management Team

   16B    50 %   62.5 %

Management Team

   16A    40 %   50 %

Director

   15B    30 %   37.5 %

Director

   15A    20 %   25 %

Manager

   14    20 %   25 %

Manager

   13B    20 %   25 %

Manager

   13A    15 %   18.75 %

Senior Professional

   12    15 %   18.75 %

Senior Professional

   11B    15 %   18.75 %

Senior Professional

   11A    12 %   15 %

Mid-level Professional

   10    12 %   15 %

Professional

   9    12 %   15 %

Entry Level

   7-8    10 %   12.5 %

Non-Exempt Positions

                 

Senior Non-Exempt

   6    10 %   12.5 %

Non-Exempt

   5    10 %   12.5 %

Non-Exempt

   2-4    8 %   10 %

Non-Exempt

   1    6 %   7.5 %

 

For employees with less than one year of service, the bonus will be pro-rated
based on the actual base pay earnings during the bonus year. Overtime earnings
are not eligible to be included in bonus calculations.

 

Awards pursuant to the plan are based upon two factors: Company and Individual.
The Company factor represents the degree to which we achieved our overall
corporate goals in a given year. Each employee also is given an Individual
factor by his or her supervisor to reflect the employee’s performance against
his or her individual goals for the year. Each factor can be assigned a value of
up to 125% for maximum performance. Thus, depending on the performance of the
Company and the individual employee, an employee may receive up to 125% of his
or her target bonus.

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Each of the Company and Individual factors is itself separately weighted for
each employee. The weighting assigned to each factor varies by employee
depending on the role he or she plays with the Company and his or her applicable
pay band. For example, for the members of the company’s management team, the
Company factor is weighted significantly higher than the Individual factor in
order to ensure that the bonus system for the company’s management team is
closely tied to the company’s performance.

 

The weighting of the factors is as follows:

 

Exempt Positions

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   Company Factor

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    Individual Factor

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Pay Bands 16A, 16B, 17

   70 %   30 %

Pay Bands 15A, 15B

   60 %   40 %

All others

   50 %   50 %

 

For any bonus funds to be made available, we must achieve 75% or more of our
Company goals for the year, and the individual employee must also achieve at
least 75% of his or her individual goals for the year, in each case after giving
effect to the weighting described above. This threshold does not apply with
respect to the guaranteed portion of the bonus described below.

 

To determine the actual bonus paid, an employee’s target payout percentage is
multiplied by the sum of the Company factor plus the Individual factor as each
is weighted for such employee. The result of that calculation is then multiplied
by the employee’s target bonus. Notwithstanding the foregoing, in order to
promote employee retention during the critical period following the Company’s
January 2004 restructuring, for each employee that was employed at the time of
our January 2004 restructuring or is hired through October 2004, 50% of the
target bonus for each of 2004 and 2005 is guaranteed, up to a maximum guarantee
of $50,000. The guaranteed portion of the bonus does not apply to the Company’s
Chief Executive Officer, and is available to every other eligible employee only
if he or she is employed at the time that the applicable bonus is paid.

 

Bonuses, if any, are paid during the first quarter of the year immediately
following the year being measured.