Exhibit 10.1
Executive Officer Bonus Plan
Objectives
The objectives of the Aruba Networks, Inc. (the “Company”) Executive Officer
Bonus Plan (the “Plan”) are:

•  
To emphasize meeting/exceeding Company financial goals.
  •  
To reward Section 16 officers for maximizing results.
  •  
To reward the results of individual and collective actions.
  •  
To position the Company competitively in the employment marketplace.

Description
Performance Period. The Plan is based on achieving defined objectives
established for two consecutive fiscal quarters. A new and separate Plan
performance period begins on the first day of the first and third quarter and
ends on the last day of second and fourth quarter, respectively.
Performance Targets. As described further below, a bonus pool, in an amount to
be determined by the Board of Directors of the Company (the “Board”), will be
funded based upon the extent to which the Company meets or exceeds the
Board-approved internal operating plan revenue and profit targets (the
“Operating Plan revenue” and “Operating Plan profit”, respectively) set by the
Board at the start of the Company’s fiscal year. Beginning with fiscal 2011, the
Board may, in its discretion, determine that different performance metrics will
be used to fund the bonus pool.
Plan Award. The budget for the Plan award payout will be based on a percentage
of the participant’s eligible base pay for the applicable performance period, as
further described below. For purposes of the Plan, “base pay” will include only
gross base wages or gross base salary, as applicable, and will exclude all other
payments including, but not limited to, bonuses, commissions, overtime, and
equity compensation.
Any bonus payment under the Plan will be made in the form of a restricted stock
unit award (an “Award”) granted under the Company’s 2007 Equity Incentive Plan
(the “Equity Plan”) and will be subject to the terms and conditions of the
Equity Plan and an Award agreement between the Company and the participant. Each
Award will be scheduled to vest in full approximately one year following the
date of grant, with the actual vesting date to be determined by the Compensation
Committee on or before the Award’s date of grant in accordance with the
Company’s Equity Award Grant Policy, subject to the participant’s remaining a
Service Provider (as defined in the Equity Plan) through the applicable vesting
date.
The number of restricted stock units subject to an Award will be determined
based on the dollar value attributable to the participant’s bonus for a given
performance period, divided by the closing Company share price on the Award’s
date of grant.
The dollar value of a participant’s bonus for a given performance period will
equal the target percentage of his or her base pay for the performance period
multiplied by the percentage of funding of the bonus pool, subject to the
approval by the Compensation Committee of the Board (the “Compensation
Committee”). For example, if the bonus pool is funded at a level of 105%, each
participant would be eligible to receive a bonus valued at 105% of his or her
target percentage of base salary for the performance period, unless the
Compensation Committee determines otherwise.

 

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Unless determined otherwise by the Compensation Committee, the Plan award
targets as a percentage of base pay for the performance period are as follows:

                    Grade   Target as a % of base pay  
 
             
•
  CEO and COO*     125 %  
•
  CFO     75 %  
•
  CTO     50 %  

      *  
See “Eligibility” section below.

The funding of the bonus pool shall be based on achievement of the Operating
Plan revenue and Operating Plan profit as follows:

  •  
(1) Failing to meet the Operating Plan profit target for the performance period,
or (2) meeting 90% or less of the Operating Plan revenue target for the
performance period: No pool will be funded and there will be no bonus payment
under the Plan for the performance period.
    •  
(1) Meeting the Operating Plan profit target for the performance period, and (2)
meeting more than 90% but less than or equal to 110% of Operating Plan revenue
target: The bonus pool is funded at the percentage achievement amount of the
Operating Plan revenue target. For example: Meeting the Operating Plan profit
target and meeting 105% of the Operating Plan revenue target will result in
funding of a bonus pool equal to 105% of the target amounts of all participants
in the Plan for that performance period.
    •  
(1) Meeting the Operating Plan profit target for the performance period, and (2)
meeting more than 110% of the Operating Plan revenue target: The bonus pool is
funded at 110% of the target amounts of all participants in the Plan for that
performance period.

The Compensation Committee will determine, in good faith, whether and to what
extent Operating Plan revenue and Operating Plan profit targets have been
achieved for a given performance period.
Payment. Awards are scheduled to be approved by the Compensation Committee after
the end of the performance period, if the goals have been achieved, pursuant to
the terms of the Company’s Equity Award Grant Policy. A participant will not be
entitled to an Award under the Plan if his or her employment with the Company is
terminated for any reason prior to the date of Award grant, nor will such
participant be entitled to receive the shares of the Company’s common stock
underlying such Award if his or her employment with the Company is terminated
for any reason prior to the date such Award vests.

 

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Policies and Practices
Eligibility. All regular, full-time and non-commissionable Company employees in
good standing who are “officers” within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended (“Section 16”) are eligible to
participate in the Plan. Notwithstanding the foregoing, Mr. Hitesh Sheth will
not be eligible to participate in the Plan during fiscal 2010, as he is eligible
for a fiscal 2010 performance bonus as provided in his July 16, 2009 offer
letter with the Company. If an employee ceases to be an “officer” for purposes
of Section 16 during a performance period but otherwise remains eligible to
participate in the Plan, he or she shall remain a participant in the Plan for
the remainder of the performance period. An employee whose employment begins
during a performance period that has already commenced will be eligible to
participate in the Plan for that performance period and to receive a pro-rated
Award reflecting the length of his or her employment during the performance
period, provided such employee was employed by the Company for at least one full
fiscal quarter in the performance period, subject to the other terms and
conditions of the Plan.
Performance Improvement Plan (PIP) — if an employee is on a PIP within that
performance period, he or she will no longer be eligible to receive an Award
until the PIP has been successfully completed.
Employees out on leave or who will be out on leave during any given performance
period are not eligible to participate in the Plan for such performance period.
Right of Employment and Company Discretion. The Plan will remain in effect until
and unless terminated by the Compensation Committee. The Company reserves the
right to alter, amend, suspend, or in any other way, to align the Plan with the
changing needs of the Company.
The Company reserves the right to restrict participation in the Plan at any
time. Participation under this Plan does not guarantee the right to continued
employment. A participant or the Company may terminate the employment
relationship at any time, for any reason, with or without cause.
Administration and Discretion. The Compensation Committee will administer the
Plan and has all powers and discretion to administer the Plan and to control its
operation. Notwithstanding anything in the Plan to the contrary, the
Compensation Committee may, in its discretion, increase or decrease (including
to zero) the amount of the bonus pool that is funded, the percentage or dollar
value of Plan award targets for participants, and the number of shares to be
granted under an Award. Any determination, decision or action of the
Compensation Committee with respect to the Plan will be final, conclusive, and
binding upon all persons, and will be given the maximum possible deference
permitted by law.
Miscellaneous
Captions. Captions are provided herein for convenience only, and will not serve
as a basis for interpretation or construction of the Plan.
Governing Law; Severability. The Plan and all Awards will be construed in
accordance with and governed by the laws of the State of California, but without
regard to its conflict of law provisions. In the event any provision of the Plan
will be held illegal or invalid for any reason, the illegality or invalidity
will not affect the remaining parts of the Plan, and the Plan will be construed
and enforced as if the illegal or invalid provision had not been included.
Requirements of Law. The granting of Awards under the Plan will be subject to
all applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.

 

oOo

 

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