EXHIBIT 10.1
 

 
company logo [companylogo.jpg] 
innovation at work

 
Certain portions of this exhibit have been omitted pursuant to Rule 24b-2 and
are subject to a confidential treatment request. Copies of this exhibit
containing the omitted information have been filed separately with the
Securities and Exchange Commission. The omitted portions of this document are
marked with a ***.

Altairnano 2008 Incentive Bonus
Plan Document

Purpose – The annual Incentive Bonus is intended to compensate all regular
employees for achieving pre-determined individual (for Level 2 - 6 employees
only) and corporate goals. The Bonus is a key element of the Company’s total
compensation plan for all employees. This document outlines the scope and
administration of the 2008 Incentive Bonus Plan.

Eligibility – All regular employees are included in the plan. The extent of
their participation is based on their actual earned covered compensation for
2008. A participant must be an employee on the date the bonus is paid to receive
a bonus award. We do not consider a bonus under this plan to be earned until the
date it is paid. This plan is not a contract and may be amended, eliminated or
replaced at Altairnano’s sole discretion.

Overview of Plan
The 2008 Incentive Bonus Plan is based upon the Individual Employee and Total
Company Performance, equally weighted for Levels 2 – 6, 50% of Incentive Bonus
Opportunity based on Individual Employee Performance and 50% of Incentive Bonus
Opportunity based on Company Performance. The Incentive Bonus for Levels 7 –13
is based on 100% on Company Weighted Performance.

The Company Weighted Performance has four components:
 
Component
Target
Weighting
      Total  Revenue 
$ *** million
25%
      Order Backlog 
$ *** million
25%
      Cash at Year End 
$ *** million
45%
     
Safety 
*** OSHA Incidence Rate
5%

The Incentive Bonus is triggered when Employee Performance meets or exceeds 100%
of the individual objectives. The Incentive Bonus for Company Weighted
Performance is triggered when 100% of target performance is achieved, as well.
The multiplier achieved increases linearly from 100% to 150% for 100% to 125%
Performance, as illustrated below in Chart 1. Employee performance is capped at
125%; Company weighted performance is also capped at 125 %.
 

--------------------------------------------------------------------------------

 
 
Chart 1 [chart1.jpg]

 
The amount of the Incentive Bonus varies by Employee Level (Chart 2):
 
Employee Level
Incentive Bonus Opportunity
(% of Employee Salary)
Opportunity
Cash Payout
Stock  Payout
2 to 6
15%
100%
0%
7 to 8
25%
60%
40%
9 to 10
40%
60%
40%
11 to 12
60%
60%
40%
13
80%
60%
40%

Bonus Generation – The Bonus Pool is determined after year-end when the audited
financial results are made available. The calculation of bonus will be made by
the CFO or his designee, confirmed by the independent auditor and approved by
the Board Compensation, Nominating and Corporate Governance Committee before
distribution.

The four weighted components of the Company Performance are defined as:

Total Revenue – The total revenues recorded for 2008 in accordance with GAAP as
reported on the audited financial statements.

Order Backlog – The amount any customer is firmly committed to purchase during
2009 or thereafter as set forth in any signed PO or contract, customer
collaboration or grant, measured at year-end in accordance with GAAP and SEC
reporting standards.

Cash at Year End – The sum of Cash and Cash Equivalents reported on the audited
financial statements at year end, net of any cash raised from the sale or
exercise of options, warrants and new issuance of shares.

Safety – The OSHA incidence rate for the Company as reported by EH&S.

--------------------------------------------------------------------------------

Bonus Payout – There are target payouts for each Level (Chart 2). Each employee
may receive more or less than the target payout for their Level. (However, the
total bonus pool award earned by the Company is not affected by these
adjustments.)

Employees for Levels 2 – 6 receive a cash payment; employees at Levels 7 – 13
(including all executive officers) will receive payment as 60% cash and 40% ALTI
stock grant. The Compensation, Nominating and Corporate Governance Committee
must approve the overall Plan award and the individual awards for all executive
officers.

The number of shares issued is determined using the value weighted average price
(VWAP) of ALTI shares during the bonus earnings period of January – December
2008.  The Grant Date establishes the taxable value of the bonus stock to the
employee, regardless of the award date. An example follows.

Chart 3 -  Payout Example – Assuming $25,000 bonus for a level 7 employee

Bonus Calculation
Cash Allocation at 60%
$15,000
Stock Allocation at 40%
$10,000
Total
$25,000
   
Stock Allocation
$10,000
Divided by VWAP Price
$3.78
Equals Number of Shares Granted
2,646

Calculation for Stock Grant Earnings
Taxable Shares Granted
2,646
Closing Price on day prior to Grant Date (03/02/09)
x        $3.15
Taxable Stock Value
$8,335

Reported Earnings (W2)
Gross Cash Distribution
$15,000
Taxable Stock Value
$8,335
Total Taxable Bonus Value
$22,335

(note – tax withholding on both earnings elements will be deducted from the cash
portion)

Discretionary Bonus & Adjustments – The Compensation, Nominating and Corporate
Governance Committee may also make discretionary bonuses from time to time if it
determines, after considering the total base salary, annual incentive bonus and
equity-based compensation to an employee(s), that the total compensation
otherwise earned by the employee(s) underrepresented the value or contribution
of the employee(s) during the year. Conversely, an employee may receive less
than the target payout for his or her level if the value or contribution of the
employee during the year was inadequate or inferior to what was expected from an
employee in his or her position.

Disability, FMLA and Workers’ Comp – The intent of the Incentive Bonus Plan is
to reward individual performance and company performance contributions per the
stated rules and procedures in this document. If an eligible employee is absent
from their regular position due to FMLA, workers' compensation or disability,
they are still eligible for an earned award based on the pro-rata number of
actual days worked and the resultant covered compensation. Amounts of funds
received from Workers’ Compensation, disability insurance benefits or other
sources are not to be included in the calculation of earned covered
compensation.
 

--------------------------------------------------------------------------------

 
Extraordinary Events – In the event of a merger, consolidation, plan of
exchange, acquisition of property or stock, split-up, split-off, spin-off,
reorganization or liquidation to which Altair Nanotechnologies Inc. or the
subsidiary for which employee primarily provides services is a party, any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of Altair
Nanotechnologies Inc. or the subsidiary for which employee primarily provides
services, or the transfer by one or more shareholders, in one transfer or
several related transfers, of 50% of more of the common shares outstanding on
the date of such transfer (or the first of such related transfers) to persons,
other than wholly-owned subsidiaries or family trusts,  who were not
shareholders of the Altair Nanotechnologies Inc. prior to the first such
transfer (each, a “Transaction”), the Board of Directors shall, in its sole
discretion and to the extent possible under the structure of the Transaction,
select, prior to the consummation of the Transaction, one of the following
alternatives for treating this incentive bonus plan: (a) this incentive bonus
plan shall be remain in effecting accordance with its terms; (b) this incentive
bonus plan shall remain in effect in accordance with its terms but shall be
assumed (in total and/or with respect to employees who primarily provide
services to transferred subsidiaries or business units) by the surviving
corporation of any Transaction (including, if applicable, the purchaser of a
business unit or its assets); or (c) any future accruals under this incentive
bonus plan shall terminate as of the consummation of the Transaction and all
bonus components, target bonuses and other aspects of this incentive bonus plan
shall be pro-rated based upon the number of days that have elapsed have elapsed
in the calendar year.
 
Example Scenarios – Several example scenarios of Bonus Award calculation are
illustrated as Chart 4.

                             
Scenario 1 - All Target Components are met at 100%
                                     
Objective
 
Actual
 
%
     
Weighted
   
Criteria
 
($ in millions)
 
($ in millions)
 
Performance
 
Weighting
 
Performance %
   
Total Revenue
(meet or exceed)
 
***
 
***
 
100.0%
 
25.0%
 
25.0%
   
Order Backlog
(meet or exceed)
 
***
 
***
 
100.0%
 
25.0%
 
25.0%
   
Cash at Year End
(meet or exceed)
 
***
 
***
 
100.0%
 
45.0%
 
45.0%
   
Safety
(meet or less than)
 
***
 
***
 
100.0%
 
5.0%
 
5.0%
                         
100.0%
                                             
Payout % (See calculation below)
 
100.0%
                               
Employee at level 2-6 with 100% individual performance:
                             
Weighting
 
Results %
 
% Target
       
Company performance
     
50.0%
 
100.0%
 
50.0%
       
Individual performance
 
100.0%
 
50.0%
 
100.0%
 
50.0%
                         
100.0%
                 
Opportunity level
 
15.0%
                     
Total Bonus as % of earned compensation
15.0%
                                   
Employee at level 7-13 would earn their Opportunity % at
         
100.0%
                                 

 

--------------------------------------------------------------------------------

 

                             
Scenario 2 - Target Components in combination are above 100%
                                     
Objective
 
Actual
 
%
     
Weighted
   
Criteria
 
($ in millions)
 
($ in millions)
 
Performance
 
Weighting
 
Performance %
   
Total Revenue
(meet or exceed)
 
***
 
***
 
90.4%
 
25.0%
 
22.6%
   
Order Backlog
(meet or exceed)
 
***
 
***
 
135.5%
 
25.0%
 
33.9%
   
Cash at Year End
(meet or exceed)
 
***
 
***
 
120.0%
 
45.0%
 
54.0%
   
Safety
(meet or less than)
 
***
 
***
 
96.5%
 
5.0%
 
4.8%
                         
115.3%
                                             
Payout % (See calculation below)
 
130.0%
                               
Employee at level 2-6 with 100% individual performance:
                             
Weighting
 
Results %
 
% Target
       
Company performance
     
50.0%
 
130.0%
 
65.0%
       
Individual performance
 
125.0%
 
50.0%
 
150.0%
 
75.0%
                         
140.0%
                 
Opportunity level
 
15.0%
                     
Total Bonus as % of earned compensation
21.0%
                                   
Employee at level 7-13 would earn their Opportunity % at
         
130.0%
                                 

 

                             
Scenario 3 - Target Components in combination are below 100%
                                     
Objective
 
Actual
 
%
     
Weighted
   
Criteria
 
($ in millions)
 
($ in millions)
 
Performance
 
Weighting
 
Performance %
   
Total Revenue
(meet or exceed)
 
***
 
***
 
90.4%
 
25.0%
 
22.6%
   
Order Backlog
(meet or exceed)
 
***
 
***
 
130.3%
 
25.0%
 
32.6%
   
Cash at Year End
(meet or exceed)
 
***
 
***
 
88.0%
 
45.0%
 
39.6%
   
Safety
(meet or less than)
 
***
 
***
 
96.5%
 
5.0%
 
4.8%
                         
99.6%
                                             
Payout % (See calculation below)
 
0.0%
                               
Employee at level 2-6 with 100% individual performance:
                             
Weighting
 
Results %
 
% Target
       
Company performance
     
50.0%
 
0.0%
 
0.0%
       
Individual performance
 
90.0%
 
50.0%
 
0.0%
 
0.0%
                         
0.0%
                 
Opportunity level
 
15.0%
                     
Total Bonus as % of earned compensation
0.0%
                                   
Employee at level 7-13 would earn their Opportunity % at
         
0.0%
                                 

 
 
 

--------------------------------------------------------------------------------

 
 

                             
Scenario 4 - Company Target Components in combination are below 100% but
Employee Target is above 100%
                                     
Objective
 
Actual
 
%
     
Weighted
   
Criteria
 
($ in millions)
 
($ in millions)
 
Performance
 
Weighting
 
Performance %
   
Total Revenue
(meet or exceed)
 
***
 
***
 
90.4%
 
25.0%
 
22.6%
   
Order Backlog
(meet or exceed)
 
***
 
***
 
130.3%
 
25.0%
 
32.6%
   
Cash at Year End
(meet or exceed)
 
***
 
***
 
88.0%
 
45.0%
 
39.6%
   
Safety
(meet or less than)
 
***
 
***
 
96.5%
 
5.0%
 
4.8%
                         
99.6%
                                             
Payout % (See calculation below)
 
0.0%
                               
Employee at level 2-6 with 100% individual performance:
                             
Weighting
 
Results %
 
% Target
       
Company performance
     
50.0%
 
0.0%
 
0.0%
       
Individual performance
 
115.0%
 
50.0%
 
130.0%
 
65.0%
                         
65.0%
                 
Opportunity level
 
15.0%
                     
Total Bonus as % of earned compensation
9.8%
                                   
Employee at level 7-13 would earn their Opportunity % at
         
0.0%
                                 

 

                             
Payout % Calculation
                               
Payout %  = mx + b
   
m = (Incentive Multiplier delta) / (Performance delta)
     
                    2.00
         
x  = (Weighted Performance % results)
         
See scenarios above
         
b  = ((Incentive Multiplier base) - m*(Performance Base))
     
                  (1.00)
                               
Note:  Both Individual Employee Performance and Company Performance are
identical.
           
Incentive Multiplier base
 
100.0%
     
Performance base
     
100.0%
   
Incentive Multiplier maximum
 
150.0%
     
Performance maximum
 
125.0%
   
Incentive Multiplier delta (change)
 
                0.50
     
Performance delta (change)
 
                    0.25
                                         
Scenario 1
 
Scenario 2
 
Scenario 3
 
Scenario 4
                                 
  Weighted Performance % is as calculated    
100.0%
 
115.3%
 
99.6%
 
99.6%
                                     
Payout % calculation    
100.0%
 
130.6%
 
99.2%
 
99.2%
                               
Payout % must be within Incentive Multiplier range
                         
Payout % per plan
 
100.0%
 
130.6%
 
0.0%
 
0.0%
                                                         

 
 
Note - Nothing in this Plan Document should be construed as a contract of
employment or otherwise alter the at-will nature of each participant’s
employment with the Company.