Exhibit 10.1

KARYOPHARM THERAPEUTICS INC. ANNUAL BONUS PLAN

 

I.

Objective

The Karyopharm Therapeutics Inc. (“Karyopharm” or the “Company”) Annual Bonus
Plan (the “Plan”) has been established to attract, motivate, and retain
employees by promoting and rewarding the achievement of key short-term corporate
objectives as well as individual performance and to align the interests of
employees and stockholders. Cash-based annual performance bonus awards (“Actual
Bonus Awards”) may be granted and earned according to the Plan.

 

II.

Plan Year and Participant Eligibility

 

  A.

Plan Year

A Plan Year is defined as the calendar year from January 1 to December 31 (“Plan
Year”), although the Plan’s terms will apply through the date Actual Bonus
Awards for the applicable Plan Year are paid.

 

  B.

Participant Eligibility

To be a participant for any applicable Plan Year, both Criteria #1 and Criteria
#2, as defined below, must be met:

 

Criteria #1:   The individual is considered a regular full-time employee of
Karyopharm who is regularly scheduled to work 30 or more hours per week and must
have been a regular full-time employee as of September 30 of the applicable Plan
Year. Criteria #2:   The employee must not be eligible to participate in any
other cash incentive plan or program, including any sales commission plan.

Each participant’s Actual Bonus Award shall be prorated based on the number
months that the participant met Criteria #1. The number of months that a
participant’s Bonus Award shall be prorated (“Months Eligible”) shall be
determined by the following guidelines:

 

  -

If a participant first meets Criteria #1 on or prior to the fifteenth day of a
month prior to September 30, he or she will be eligible for that month’s full
bonus accrual.

 

  -

If a participant meets Criteria #1 after the fifteenth day of a month prior to
September 30, he or she will not be eligible for that month’s full bonus
accrual.

 

  -

If a participant meets Criteria #1 between October 1 and December 31, the
appropriate number of months based on the two preceding guidelines shall be
added to the calculation for the participant’s Actual Bonus Award for the
following Plan Year.

Examples to determine Months Eligible:

 

Date Criteria #1 is First Met

  

Months Eligible

August 1    5 August 18    4 September 20    3 October 15    Zero in applicable
Plan Year. If Participant remains eligible, during the following Plan Year,
Months Eligible for that Plan Year shall be 15.

 

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For a participant to remain eligible to earn an Actual Bonus Award for a Plan
Year, the participant must:

 

  1.

Remain an active employee in good standing through the date that Actual Bonus
Awards are paid to Participants (“Payout Date”). Determination of whether an
employee is in good standing is solely up to the Company on a case by case
basis. Examples of reasons an employee may not be considered in good standing
include, but are not limited to, an employee resigning prior to the Payout Date
with a final date of employment after the Payout Date, or an employee is found
to be in violation of their applicable Non-Disclosure, Inventions Assignment,
Non-Competition, and Non-Solicitation Agreement; and

 

  2.

Achieve 25% or more of the participant’s Individual Performance (as defined
below) for the applicable Plan Year.

Other factors, as discussed in V. Impact of Participant Eligibility, may affect
a Participant’s payout.

 

III.

Target Bonus Percentage and Target Bonus Award Calculation

 

  A.

Target Bonus Percentage

Each participant’s Target Bonus Percentage is determined by his or her grade as
of December 31 of the applicable Plan Year.

 

Grade

   Target Bonus
Percentage  

14

     50% – 60%  

13

     40%  

12

     30%  

11

     25%  

10

     20%  

7 – 9

     15%  

1 – 6

     10%  

 

  B.

Target Bonus Award Calculation

A participant’s Target Bonus Award is calculated by multiplying the
participant’s annual base salary on December 31 of the applicable Plan Year
(“Annual Salary”), Target Bonus Percentage, and Months Eligible out of 12.

Target Bonus Award = Annual Salary x Target Bonus Percentage x (Months
Eligible/12)

See VI. Example to Calculate Target and Actual Bonus Awards, below.

 

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IV.

Performance Measures and Weighting

Actual Bonus Awards can be allocated into two components, corporate and
individual. The criteria upon which each of these components are measured are
described below.

 

  A.

Performance Measures

Corporate Component

On or before March 31 of a Plan Year, the Compensation Committee of the
Company’s Board of Directors (the “Compensation Committee”) shall set corporate
goals and weight each corporate goal according to its priority and anticipated
impact on the Company.

Following the end of a Plan Year, the Compensation Committee has discretion to
determine the Company’s overall actual corporate performance for that Plan Year
as a cumulative percentage of goals achieved (“Corporate Performance”). Partial
or excess achievement as compared to the original goal weighting may be
determined for each goal, at the discretion of the Compensation Committee.

Individual Component

For each Plan Year, managers and executives of the Company (or in the case of
executive officers of the Company, the Board of Directors or the Compensation
Committee) shall determine each participant’s Individual Performance Goals
(“Individual Goals”) and weight each goal according to its priority and
anticipated impact on the Company.

Following the end of a Plan Year, the managers and executives of the Company (or
in the case of executive officers of the Company, the Board of Directors or the
Compensation Committee) have discretion to determine the participant’s actual
individual performance percentage (“Individual Performance”) for that Plan Year
as a cumulative percentage of Individual Goals. Partial or excess achievement as
compared to the original goal weighting may be determined for each goal.

In addition to achievement of Individual Goals, as described above, to determine
Individual Performance, managers and executives (or in the case of executive
officers of the Company, the Board of Directors or the Compensation Committee)
may also consider qualitative factors related to the Company’s core values and
individual performance.

 

  B.

Weighting

The weight of corporate and individual components in the calculation of Actual
Bonus Award for each Participant will depend on his or her grade:

 

Grade

   Component Weight      Corporate     Individual  

14

     100 %      0 % 

13

     85 %      15 % 

11 – 12

     70 %      30 % 

8 – 10

     60 %      40 % 

1 – 7

     50 %      50 % 

 

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If the Compensation Committee, in its sole discretion, determines that the
cumulative percentage of goals achieved does not meet a minimum threshold for
payout based on the corporate component, participants may be eligible to receive
a payout based on their individual component.

 

V.

Actual Bonus Award Calculation

Actual Bonus Awards for a participant will be calculated by multiplying a
participant’s Target Bonus Award by the sum of the applicable Corporate and the
participant’s Individual Performance (adjusted by each applicable weight).

Actual Bonus Award = Target Bonus Award x [(corporate weight x Corporate
Performance) + (individual weight x Individual Performance)]

See VI. Example to Calculate Target and Actual Bonus Awards, below.

 

VI.

Example to Calculate Target and Actual Bonus Awards

An example participant’s bonus inputs are below:

 

Annual Base Salary = $85,000    Target Bonus Percentage = 10% Bonus Eligibility
Date = August 1    Corporate Performance = 95% Months Eligible = 5    Individual
Performance = 90% Grade = 6   

Target Bonus Award:

Target Bonus Award = Annual Salary x Target Bonus Percentage x (Months
Eligible/12)

 

Target

Bonus

Award

     

Annual

Base

Salary

     

Target

Bonus

Percentage

     

Months Eligible

$3,542

  =   $85,000   x   10%   x   (5/12)

Actual Bonus Award:

Actual Bonus Award = Target Bonus Award x [(corporate weight x Corporate
Performance) + (individual weight x Individual Performance)]

 

Actual

Bonus

Award

     

Target Annual Bonus

     

Weighted Corporate
Performance
Achievement

     

Weighted Individual
Performance
Achievement

 

(50% weighting)

 

(50% Weighting)

$3,276

  =   $3,542   x   [ (50% x 95%)   +   (50% x 90%)]

 

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VII.

Impact of Participant Status

 

  A.

Terminations

As described above, a participant must remain employed with Karyopharm through
the Payout Date in order to receive an Actual Bonus Award for a Plan Year.
Therefore, if a participant’s employment terminates for any reason prior to the
Payout Date, the participant will not be eligible for an Actual Bonus Award,
with the following exception:

 

  •  

If a participant’s employment ceases by reason of death prior to the Payout
Date, the participant’s estate may receive the Actual Bonus Award, if any, that
would have been paid had the participant continued to be employed on the Payout
Date, and which amount will be paid on the date that Actual Bonus Awards are
paid to other plan participants.

 

  B.

Changes in Target Bonus Percentage

Participants who are promoted during a Plan Year to a grade with a higher Target
Bonus Percentage and/ or different corporate and individual weighting are
eligible for the Target Bonus Percentage and weightings for their grade in
effect as of December 31st of the Plan Year.

Participants who change grades resulting in a lower Target Bonus Percentage as
of December 31 are eligible for a prorated Actual Bonus Award based on the
number of months in the Plan Year they were employed in a grade at the higher
target percentage plus a prorated Actual Bonus Award based on the number of
months in the Plan Year they were employed at the lower Target Bonus Percentage.

 

  C.

Changes in Hours

Participants who have a change in their regularly scheduled hours, described
above as Criteria #1, will be eligible for a prorated Actual Bonus Award based
on the number of weeks that their regularly scheduled weekly hours were 30
hours/week or more.

 

  D.

Leaves of Absence

Short-Term Disability, FMLA, and other state-specific family and medical leave
acts. Participants will continue to be eligible for an Actual Bonus Award during
the period of the leave of absence.

Long-Term Disability (“LTD”), including LTD combined with Workers’ Compensation.
Participants who are on LTD in excess of Federal or State mandated family and
medical leave provisions, will not be eligible for an Actual Bonus Award for the
period of the LTD.

Personal Unpaid Leaves of Absence. Participants who are on a personal unpaid
leave of absence, which is not covered by any of the above provisions, are not
eligible for an Actual Bonus Award for the period of the personal leave of
absence.

 

  E.

Transfers in and Out of the Plan

Participants who transfer in or out of a position eligible to receive an Actual
Bonus Award under the Plan will be eligible for a pro-rated portion of the
participant’s Actual Bonus Award based on the number of months they qualified
for participation under the Plan during the applicable Plan Year.

 

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VIII.

Payout Date

The Payout Date for Actual Bonus Awards is made in the calendar year following
the applicable Plan Year, on or before March 15th of such following calendar
year, to all participants who remain eligible as of the Payout Date, including
those on any type of leave of absence and those whose employment has previously
terminated on account of death but who are eligible for an Actual Bonus Award
per the terms of the Plan.

 

IX.

Termination, Suspension or Modification and Plan Administration

The Board of Directors may terminate, suspend or modify (and if suspended, may
reinstate with or without modification) all or part of the Plan at any time,
with or without notice to participants. The Compensation Committee has sole
authority to administer or interpret the Plan, and the Compensation Committee
retains its right to exercise discretion as it sees fit. Notwithstanding
anything herein to the contrary, the Board of Directors may determine that no
Actual Bonus Awards shall be paid hereunder for a particular Plan Year or to a
particular participant or participants, notwithstanding the level of achievement
of Corporate and/ or Individual Performance for such Plan Year.

The Compensation Committee reserves the exclusive right to determine eligibility
to participate in this Plan and to interpret all applicable terms and
conditions, including eligibility criteria, performance objectives and payment
conditions, for the Company’s executive officers. The Compensation Committee
delegates to each of the Company’s Chief Executive Officer, President, highest
human resources officer and highest finance officer the authority to administer,
and determine eligibility to participate in, the Plan and interpret all
applicable terms and conditions for employees who are not executive officers of
the Company. The determinations and interpretations of the Compensation
Committee and its delegates will be conclusive.

All Actual Bonus Awards are paid from the Company’s general assets. No trust,
account or other separate collection of amounts will be established for the
payment of Actual Bonus Awards under the Plan. Actual Bonus Awards are unfunded
obligations of the Company, so if and when an Actual Bonus Award becomes due, a
participant’s rights to payment are no greater than the rights of a general
unsecured creditor.

 

X.

Other Terms

Section 409A It is intended that this Plan comply with or be exempt from
Section 409A of the Internal Revenue Code of 1986 (the “Code”), and the Treasury
Regulations and IRS guidance thereunder (collectively referred to as
“Section 409A”), and notwithstanding anything to the contrary herein, it shall
be administered, interpreted, and construed in a manner consistent with
Section 409A. If and to the extent required to comply with Section 409A, no
payment or benefit required to be paid under this Plan on account of termination
of a participant’s employment shall be made unless and until the participant
incurs a “separation from service” within the meaning of Section 409A. If and to
the extent any portion of any payment, compensation or other benefit provided to
a participant in connection with the participant’s employment termination is
determined to constitute “nonqualified deferred compensation” within the meaning
of Section 409A of the Code, and the participant is a specified employee as
defined in Section 409A(a)(2)(B)(i) of the Code, as determined by the Company in
accordance with its procedures, by which determination participants hereby agree
to be bound, such portion of the payment, compensation or other benefit shall
not be paid before the earlier of (i) the expiration of the six month period
measured from the date of the participant’s “separation from service” (as
determined under Section 409A of the Code) or (ii) the tenth day following the
date of the participant’s death following such separation from service (the “New
Payment Date”). The aggregate of any payments that otherwise would have been
paid to the participant during the period between the date of separation from
service and the New Payment Date shall be paid in a lump sum in the first
payroll period beginning after such New Payment Date. Notwithstanding anything
herein to the contrary, the Company shall have no liability to any Plan
participant or to any other person in the event that the payments that may be
earned hereunder do not comply with or are not exempt from Section 409A.

 

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Withholding. The Company shall withhold from any Actual Bonus Award any federal,
state and local income, employment, other similar taxes, or 401(k) deferrals as
may be required to be withheld pursuant to any applicable law, regulation, or
Company 401(k) policy.

At-Will Employment. This document sets forth the terms of the Plan and is not
intended to be a contract or employment agreement between you or any other
participant and the Company. Nothing in this Plan shall alter the at-will nature
of your employment. You are free to resign at any time, and for any or no
reason. Similarly, the Company is free to terminate its employment relationship
with you at any time, with or without cause.

 

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