Exhibit 10.2

Sonus Pharmaceuticals, Inc.

Executive Compensation Program

I.                                        PURPOSE

The Sonus Pharmaceuticals, Inc. (Company) Executive Compensation Program
describes the components of the Company Compensation Policy (Policy) as it
relates to executives.

II.                                    ADMINISTRATION

The program is administered by the President & CEO and the Vice President of
Human Resources pursuant to Sonus’ Compensation Policy within maximum amounts
approved by the Board of Directors and subject to performance measures,
weightings and performance levels for the short-term incentive program
established by the Board.  All decisions on base pay, short-term incentive
(bonus), and long-term incentive (performance awards) are made in December of
each year.

The Compensation Committee and the Board of Directors administer the annual
compensation program as it applies to the President & CEO and consider all
relevant factors, including all of the executive criteria stated in the Policy
and the Program.

III.                                COMPONENTS OF COMPENSATION

A.  BASE SALARY

See Appendix A, Components of Executive Compensation, for New-Hire Salary and
Annual Merit Increases.

B.            SHORT-TERM INCENTIVE PROGRAM (STIP)

See Appendix A, Components of Executive Compensation, for STIP.

Target Award Levels

Target award levels for each STIP participant have been established based on
competitive practice and Sonus’ compensation philosophy.  Threshold and maximum
award levels represent 50% and 150% of target, respectively.

Title

 

Target STIP Award (as a % of base salary)

 

 

 

 

 

President & CEO

 

45

%

 

 

 

 

Senior Vice President

 

35

%

 

 

 

 

Vice President

 

25

%

 

AWARD PAYOUT OF STIP

THE COMPENSATION COMMITTEE RETAINS THE DISCRETION TO RECOMMEND THAT STIP AWARDS
BE PAID IN CASH, RESTRICTED STOCK, STOCK OPTIONS, PROMISSORY NOTE, OR TO DEFER
PAYMENTS VIA A NONQUALIFIED DEFERRED COMPENSATION PROGRAM.

C.  LONG-TERM INCENTIVE PROGRAM (LTIP)

SEE APPENDIX A, COMPONENTS OF EXECUTIVE COMPENSATION, FOR LTIP FOR NEW-HIRE
AWARDS AND FOR PERFORMANCE AWARDS.

All stock option awards are based on practices for similarly-situated employees
at other life sciences organizations.  Target award levels reflect multiple
perspectives, including number of shares, typical ownership levels for similar
positions, and aggregate share use (dilution.)  Awards for annual performance
include individual performance, strategic value of the individual, and retention
objectives.

Target Award Levels

 

 

Performance Award Range

 

 

Title/Level

 

Target

 

Maximum

 

 

CFO/SVP

 

40,000

 

60,000

 

 

CMO

 

40,000

 

60,000

 

 

Vice Presidents

 

20,000

 

30,000

 

 

 

               

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IV.                                MISCELLANEOUS PROVISIONS

A.                                   This Program is effective as of July 25,
2006 and will continue until the Compensation Committee and/or Board terminates
the Program.  The Compensation Committee and/or Board retain the right to amend,
alter, or terminate this Program at any time.

B.                                     All decisions made by the Compensation
Committee and/or Board regarding administration and interpretation of the
Program shall be final and binding on all persons, including the Company and all
employees.

C.                                     Nothing contained in this document shall
be deemed to alter the relationship between the Company and an employee or the
contractual relationship between an executive and the Company if there is a
written contract regarding such relationship.  Furthermore, nothing contained in
this document shall be construed to constitute a contract of employment between
the Company and an executive.  The Company and each of the Participants continue
to have the right to terminate the employment or service relationship at any
time for any reason, except as provided in a written contract.

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APPENDIX A

COMPONENTS OF EXECUTIVE COMPENSATION

COMPONENTS

 

NEW HIRES

 

EXISTING EMPLOYEES

NEW-HIRE BASE SALARY

 

Benchmark comparable position in peer and competitor companies; consult
published salary surveys; evaluate skill set, experience, education, prior
performance, aptitude for success in position and at Sonus. May consider
strategic importance, scarcity of skills, and other pertinent factors.

 

NA

 

 

 

 

 

ANNUAL MERIT INCREASES

 

Eligibility

Hired on or before Sept. 30. Any increase will be pro-rated per date of hire.

Amount

Based upon achievement against corporate, team, and individual goals and
objectives, strategic value of the position, internal equity, market analysis,
salaries for comparable positions in specified comparator companies, and other
relevant factors. Determined during Q4.

 

Eligibility

Currently an active employee.

 

 

Amount

Based upon achievement against corporate, team, and individual goals and
objectives, strategic value of the position, internal equity, market analysis,
salaries for comparable positions in specified comparator companies, and other
relevant factors. Determined during Q4.

 

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COMPONENTS

 

NEW HIRES

 

EXISTING EMPLOYEES

SHORT-TERM INCENTIVE (STIP)

 

Eligibility

Hired on or before Sept. 30. Pro-rated per date of hire. If hired on or after
Oct. 1 may be eligible for personal objectives only.

Calculation

Aggregate total calculated for each goal. If threshold not achieved, no points
are earned. If superior achieved, no more than maximum points will be earned.
Total aggregate points are multiplied by each executive’s target STIP award to
establish the earned award percentage. This percentage is then multiplied by
each executive’s base salary to determine the dollar value of the award.

Award Payout

Bonuses are paid during Q1 of the year following the review year. An executive
must be actively employed on the date awards are paid in order to receive an
award. Pro-rated per date of hire.

 

Eligibility

Currently an active employee.

 

 

 

Calculation

Aggregate total calculated for each goal. If threshold not achieved, no points
are earned. If superior achieved, no more than maximum points will be earned.
Total aggregate points are multiplied by each executive’s target STIP award to
establish the earned award percentage. This percentage is then multiplied by
each executive’s base salary to determine the dollar value of the award.

 

 

 

Award Payout

Bonuses are paid during Q1 of the year following the review year. An executive
must be actively employed on the date awards are paid in order to receive an
award.

 

 

 

 

 

LONG-TERM INCENTIVE (LTIP)

 

Eligibility New-hire Award

As soon as administratively possible after hire date.

 

 

Exercise Price

The closing price of Sonus stock on the day the award is approved. Approvals of
awards shall be made effective as of the last business day of the month during
which employment commences.

 

Vesting

Vesting shall commence as of the last business day of the month during which
employment commences. Four-year time-based vesting with one-quarter of the total
award vesting after one year and the remainder in 36 equal monthly installments.

 

Eligibility Annual Performance Award

Hired on or before June 30 of the review year. If less than a full year, will be
pro- rated per date-of-hire.

 

Exercise Price

The closing price of Sonus stock on the day the award is approved. Approvals of
awards shall be made effective as of the last business day of the year.

 

 

 

Vesting

Vesting shall commence as of the last business day of the year. Four-year
time-based vesting with one-quarter of the total vesting after one year and the
remainder in 36 equal monthly installments.

 

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