Exhibit 10.1

 

UNITED THERAPEUTICS CORPORATION

SECTION 162(M) BONUS PLAN

 

1.                                      Purpose. The purpose of this Plan is to
provide certain employees of United Therapeutics Corporation and its
Subsidiaries with incentive compensation based upon the level of achievement of
financial, business and other performance criteria. This Plan is intended to
permit the payment of amounts that may qualify as performance-based compensation
under Section 162(m) of the Code.

 

2.                                      Definitions.

 

(a)                                 “Board” means the Board of Directors of the
Company.

 

(b)                                 “Bonus” means a cash payment made pursuant
to this Plan with respect to a particular Performance Period, as determined
pursuant to Section 8 below.

 

(c)                                  “Bonus Formula” means, with respect to any
Performance Period, the formula established by the Committee pursuant to
Section 6 in order to determine the Bonus amounts, if any, to be paid to
Participants based upon the level of achievement of targeted goals for the
selected Performance Measures. The formula may differ from Participant to
Participant. The Bonus Formula shall be of such a nature that an objective third
party having knowledge of all the relevant facts could determine whether the
targeted goals for the Performance Measures have been achieved.

 

(d)                                 “Code” means the Internal Revenue Code of
1986, as amended.

 

(e)                                  “Committee” means the Compensation
Committee of the Board or any subcommittee thereof formed by the Compensation
Committee for the purpose of acting as the Committee hereunder. For purposes of
satisfying the requirements of Section 162(m) of the Code and the regulations
thereunder, the Committee is intended to consist solely of “outside directors”
as such term is defined in Section 162(m) of the Code.

 

(f)                                   “Company” means United Therapeutics
Corporation.

 

(g)                                  “Fiscal Year” means the calendar year.

 

(h)                                 “Participant” means a “covered employee”
within the meaning of Section 162(m) of the Code.

 

(i)                                     “Performance Measure” means any one or
more of the following performance criteria, or derivations of such performance
criteria, either individually, alternatively or in any combination, applied to
either the Company as a whole or to a business unit or Subsidiary, either
individually, alternatively or in any combination, and measured either annually
or cumulatively over a period of years, on an absolute basis or relative to a
pre-established target, to previous years’ results or to a designated comparison
group, in each case as specified by the Committee: (i) net earnings or earnings
per share (including earnings before interest, taxes, depreciation, license
fees, share-based compensation, and/or amortization, or other non-GAAP
profitability measures), (ii) income, net income or operating income,
(iii) revenues, (iv) net sales, (v) return on sales, (vi) return on equity,
(vii) return on capital (including return on total capital or return on invested
capital), (viii) return on assets or net assets, (ix) economic value added
measurements, (x) return on invested capital, (xi) return on operating revenue,
(xii) cash flow (before or after dividends), (xii) stock price, (xiv) total
shareholder return, (xv) market capitalization, (xvi) economic value added,
(xvii) debt leverage (debt to capital), (xviii) operating profit or net
operating profit, (xix) operating margin or profit margin, (xx) cash from
operations, (xxi) market share, (xxii) product development or release schedules,
(xxiii) new product innovation, (xxiv) cost reductions, (xxv) customer service,
or (xxvi) customer satisfaction. To the extent consistent with Section 162(m) of
the Code, the Committee (A) shall appropriately adjust any evaluation of
performance under a Performance Measure to eliminate the effects of charges for
restructurings, discontinued operations, extraordinary items and all items of
gain, loss or expense determined to be extraordinary or unusual in nature or
related to the disposal of a segment of a business or related to a change in
accounting principle all as determined in accordance with applicable accounting
provisions, as well as the cumulative effect of accounting changes, in each case
as determined in accordance with generally accepted accounting principles or
identified in the Company’s financial statements or notes to the financial
statements, and (B) may appropriately adjust any evaluation of

 

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performance under a Performance Measure to exclude any of the following events
that occurs during a performance period: (i) asset write- downs,
(ii) litigation, claims, judgments or settlements, (iii) the effect of changes
in tax law or other such laws or provisions affecting reported results, and
(iv) accruals of any amounts for payment under this Plan or any other
compensation arrangement maintained by the Company.

 

(j)                                    “Performance Period” means any Fiscal
Year or such other period as determined by the Committee.

 

(k)                                 “Plan” means this United Therapeutics
Corporation Section 162(m) Bonus Plan.

 

(l)                                     “Predetermination Date” means, for a
Performance Period, (i) the earlier of 90 days after commencement of the
Performance Period or the expiration of 25% of the Performance Period, provided
that the achievement of targeted goals under the selected Performance Measures
for the Performance Period is substantially uncertain at such time; or (ii) such
other date on which a performance goal is considered to be pre-established
pursuant to Section 162(m) of the Code.

 

(m)                             “Subsidiary” means any corporation (other than
the Company), limited liability company or other form of entity in an unbroken
chain of entities beginning with the Company where each of the entities in the
unbroken chain other than the last entity owns stock possessing at least
50 percent or more of the total combined voting power of all classes of stock in
one of the other entities in the chain, and if specifically determined by the
Committee, may include an entity in which the Company has a significant
ownership interest or that is directly or indirectly controlled by the Company.

 

3.                                      Eligibility. The individuals eligible to
participate in this Plan for a given Performance Period shall be the Company’s
“covered employees” (within the meaning of Section 162(m) of the Code).

 

4.                                      Plan Administration.

 

(a)                                 The Plan shall be administered by the
Committee. The Committee shall have full power and authority, subject to the
provisions of the Plan and subject to such orders or resolutions not
inconsistent with the provisions of the Plan as may from time to time be adopted
by the Board, to: (i) select the Participants to whom Bonuses may from time to
time be paid hereunder; (ii) determine the terms and conditions, not
inconsistent with the provisions of the Plan, of each Bonus; (iii) determine the
time when Bonuses will be granted and paid and the Performance Period to which
they relate; (iv) certify the achievement of Performance Measures and the
maximum amount of the Bonus payable for each Participant in respect of
Performance Periods; (v) determine the effect of a change in control on Bonuses;
(vi) determine whether payment of Bonuses may be deferred by Participants as
provided in Section 8(b); (vii) interpret and administer the Plan and any
instrument or agreement entered into in connection with the Plan; (viii) correct
any defect, supply any omission or reconcile any inconsistency in the Plan or
any Bonus award in the manner and to the extent that the Committee shall deem
desirable to carry it into effect; (ix) establish such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; and (x) make any other determination and take any other action that
the Committee deems necessary or desirable for administration of the Plan.

 

(b)                                 Decisions of the Committee shall be final,
conclusive and binding on all persons or entities, including the Company, any
Subsidiary, any Participant and any person claiming any benefit or right under
an award or under the Plan.

 

(c)                                  Notwithstanding the foregoing, to the
extent consistent with Section 162(m) of the Code, the Committee may delegate
the responsibility for administering the Plan, subject to such limitations as
the Committee deems appropriate. All references in the Plan to the “Committee”
shall be, as applicable, to the Committee or any other committee or officer to
whom the Board or the Committee has delegated authority to administer the Plan.

 

5.                                      Term. This Plan shall be effective upon
approval of the Plan at the Company’s 2014 meeting of shareholders. Once
approved by the Company’s shareholders, this Plan shall continue until the
earlier of (i) a termination under Section 9 of this Plan, (ii) the date any
shareholder approval requirement under Section 162(m) of the Code ceases to be
met or (iii) the date that is five years after the shareholder meeting in 2014
(provided that no such termination shall adversely impact Bonuses granted prior
to the date of such meeting).

 

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6.                                      Bonuses. Prior to the Predetermination
Date for a Performance Period, the Committee shall designate or approve in
writing, the following:

 

(a)                                 Performance Period;

 

(b)                                 Positions or names of employees who will be
Participants for the Performance Period;

 

(c)                                  Targeted goals for selected Performance
Measures during the Performance Period; and

 

(d)                                 Applicable Bonus Formula for each
Participant, which may be for an individual Participant or a group of
Participants.

 

7.                                      Determination of Amount of Bonus.

 

(a)                                 Calculation. After the end of each
Performance Period, the Committee shall certify in writing (to the extent
required under Section 162(m) of the Code) the extent to which the targeted
goals for the Performance Measures applicable to each Participant for the
Performance Period were achieved or exceeded. The Bonus for each Participant
shall be determined by applying the Bonus Formula to the level of actual
performance that has been certified by the Committee. Notwithstanding any
contrary provision of this Plan, the Committee, in its sole discretion, may
eliminate or reduce the Bonus payable to any Participant below that which
otherwise would be payable under the Bonus Formula. The aggregate Bonus(es)
payable to any Participant with respect to any Performance Period shall not
exceed $5 million (and, for the avoidance of doubt, two periods that do not
exactly coincide are different Performance Periods for this purpose).

 

(b)                                 Right to Receive Payment. Each Bonus under
this Plan shall be paid solely from general assets of the Company and its
Subsidiaries. This Plan is unfunded and unsecured; nothing in this Plan shall be
construed to create a trust or to establish or evidence any Participant’s claim
of any right to payment of a Bonus other than as an unsecured general creditor
with respect to any payment to which he or she may be entitled.

 

8.                                      Payment of Bonuses.

 

(a)                                 Timing of Distributions. The Company and its
Subsidiaries shall distribute amounts payable to Participants at such time(s) as
determined by the Committee following the determination and written
certification of the Committee for a Performance Period, but in no event later
than two and one-half months after the end of the calendar year in which the
applicable Performance Period ends, except to the extent a Participant has made
a timely election to defer the payment of all or any portion of such Bonus under
a Company-approved deferred compensation plan or arrangement.

 

(b)                                 Payment. Unless otherwise determined by the
Committee, the payment of a Bonus, if any, with respect to a specific
Performance Period is subject to the Participant remaining an active employee on
the Company’s or a Subsidiary’s payroll through the applicable payment date.

 

(d)                                 Code Section 409A. The Bonuses payable under
the Plan are intended to be excluded from coverage under Code Section 409A
pursuant to the “short-term deferral rule.” However, to the extent that any
Bonus under the Plan is subject to Code Section 409A, the terms and
administration of such Bonus shall comply with the provisions of such Section,
applicable IRS guidance and good faith reasonable interpretations thereof, and,
to the extent necessary to achieve compliance, shall be modified, replaced, or
terminated at the discretion of the Committee.

 

9.                                      Amendment and Termination. The Committee
may amend, modify, suspend or terminate this Plan, in whole or in part, at any
time, including the adoption of amendments deemed necessary or desirable to
correct any defect or to supply omitted data or to reconcile any inconsistency
in this Plan or in any Bonus granted hereunder; provided, however, that no
amendment, alteration, suspension or discontinuation shall be made which would
increase the amount of compensation payable pursuant to such Bonus.

 

10.                               Withholding. Distributions pursuant to this
Plan shall be subject to all applicable taxes and contributions required by law
to be withheld in accordance with procedures established by the Company.

 

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11.                               No Additional Participant Rights.

 

(a)                                 No individual or Participant shall have any
claim to be granted any Bonus under the Plan, and the Company has no obligation
for uniformity of treatment of Participants under the Plan.

 

(b)                                 Furthermore, nothing in the Plan or any
Bonus granted under the Plan shall be deemed to constitute an employment
contract or confer or be deemed to confer on any Participant any right to
continue in the employ of, or to continue any other relationship with, the
Company or any Subsidiary or limit in any way the right of the Company or any
Subsidiary to terminate a Participant’s employment or other relationship at any
time, with or without cause.

 

12.                               Successors. All obligations of the Company or
its Subsidiaries under the Plan with respect to Bonuses shall be binding on any
successor to the Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all the business and/or assets of the Company.

 

13.                               Nonassignment. The rights of a Participant
under this Plan shall not be assignable or transferable by the Participant
except by will or the laws of descent and distribution, except to the extent a
Participant designates one or more beneficiaries on a Company-approved form who
may receive payment under the Plan after the Participant’s death.

 

14.                               Severability. If any provision of the Plan or
any Bonus is determined to be invalid, illegal or unenforceable in any
jurisdiction, or as to any person, or would disqualify the Plan or any Bonus
under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to applicable laws, or, if it cannot be
so construed or deemed amended without, in the Committee’s determination,
materially altering the intent of the Plan or the Bonus, such provision shall be
stricken as to such jurisdiction, person or Bonus, and the remainder of the Plan
and any such Bonus shall remain in full force and effect.

 

15.                               Governing Law. The Plan, all Bonuses granted
thereunder and all determinations made and actions taken pursuant hereto, to the
extent not otherwise governed by the laws of the United States, shall be
governed by the laws of the State of Delaware without giving effect to
principles of conflicts of law.

 

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