ADAMIS PHARMACEUTICALS CORPORATION 8-K


 


 


 


Exhibit 10.1


 


 


 


 


 


ADAMIS
PHARMACEUTICALS CORPORATION


2016
BONUS PLAN


 





 


 


 


 


 


 


 


* Excludes those covered
under the Field Sales Incentive Plans


 









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Adamis
Pharmaceuticals Corporation


2016
Bonus Plan


 


 


The Adamis Pharmaceuticals Corporation (“Adamis”
or the “Company”) 2016 Bonus Plan (the “Plan”) is designed to offer employees a performance based plan
that rewards the achievement of corporate goals, as well as individual goals that are consistent with the corporate goals.


 


Purpose of the Plan


 


The Plan is designed to:


 


	•		Provide
                                         a bonus program that helps achieve overall corporate goals and enhances shareholder value






	•		Reward
                                         individuals for achievement of corporate and individual goals






	•		Encourage
                                         teamwork among all disciplines within the Company






	•		Offer
                                         an attractive bonus program to help attract and retain key employees



 


 


Plan Governance


 


The Compensation Committee of the Board of Directors is responsible
for reviewing and approving the Plan and any proposed modifications to the Plan. The President and CEO of Adamis is responsible
for administration of the Plan; provided that the Compensation Committee of the Board of Directors is responsible for reviewing
and approving all compensation, including compensation under this Plan, for all officers, vice presidents, executive directors
and any other employees with an annual base salary greater than or equal to $250,000.


 


Eligibility


 


All regular employees of the Company who are regularly scheduled
to work at least 20 hours per week will be eligible to participate in the Plan, other than any employee eligible to participate
in the Company’s Field Sales Incentive Plans. Temporary employees and part-time employees (who are regularly scheduled to
work less than 20 hours per week) are not included in this Plan. In order to be eligible to receive any bonus award (or “Bonus”)
under this Plan, a participant: (a) must have commenced their employment with the Company prior to October 1, 2016 and remained
continuously employed through December 31, 2016 and until the time Bonuses are paid; and (b) must be an employee in good
standing (e.g., not on a performance improvement plan as of December 31, 2016 or an Unacceptable performer as determined during
the 2016 review cycle), as determined by the Compensation Committee of the Board of Directors or the President and CEO of Adamis,
as applicable in their sole discretion. Employees joining during the bonus plan year will have their actual bonus amount prorated
based on their actual time with the Company during the Plan year.


 


A participant whose employment terminates voluntarily
prior to the payment of a Bonus award will not be eligible to receive a Bonus award. Continued employment is a condition of payout
for the plan. If a participant’s employment is terminated involuntarily during the Plan year, or prior to payment of Bonus
awards, it will be at the absolute discretion of the Company whether or not a Bonus award payment is made.


 



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Corporate and Individual
Performance


 


The President and CEO will present to the Compensation Committee
of the Board of Directors a list of the overall corporate goals for the Plan year, which is subject to approval by both the Compensation
Committee and the independent members of the Board of Directors. All participants in the Plan will then develop a list of key
individual goals, which will be approved by their manager and used for the basis of the performance review and individual performance
rating.


 


The total bonus pool for the Plan will be based on achievement
of the 2016 corporate goals and, where applicable, the individual’s annual performance review rating.


 


Bonus Awards


 


The Bonus will be paid in cash and is based on achievement
of the 2016 corporate goals and achievement of individual goals. The Bonus will be calculated by using the base salary as of December
31, 2016, weighting factor, target bonus percentage, and goal multipliers as identified below:


 


Weighting Factor


 


The relative weight between the corporate and individual Bonus
components will vary based on levels within the organization. The weighting factors will be reviewed annually and adjusted, as
necessary or appropriate. The weighting for


2016 will be as follows:


 


 


	Position	 	Corporate	 	Individual
	President and CEO	 	 	100	%	 	 	 	 
	Group K (EVP Level Officer)	 	 	100	%	 	 	 	 
	Group J (SVP Officers)	 	 	100	%	 	 	 	 
	Group I (NonOfficer VPs)	 	 	80	%	 	 	20	%
	Group H (Executive Directors)	 	 	80	%	 	 	20	%
	Group G (Senior Directors)	 	 	80	%	 	 	20	%
	Group F (Directors)	 	 	80	%	 	 	20	%
	Group E (Senior Managers)	 	 	60	%	 	 	40	%
	Group D (Managers)	 	 	60	%	 	 	40	%
	Group C	 	 	40	%	 	 	60	%
	Group A & B	 	 	20	%	 	 	80	%



 






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Target Bonus
Percentages


 


Bonus amounts will be determined by applying a “target
bonus percentage” to the base salary of employees in the Plan. Following are the 2016 target bonus percentages:


 


 


	Position	 	Target Bonus 

Percentages
	President and CEO	 	 	50	%
	Group K	 	 	45	%
	Group J	 	 	40	%
	Group I	 	 	30	%
	Group H	 	 	25	%
	Group G	 	 	20	%
	Group F	 	 	17	%
	Group E	 	 	15	%
	Group D	 	 	12	%
	Group C	 	 	10	%
	Group B	 	 	10	%
	Group A	 	 	10	%



 


 


The base salary as of December 31, 2016 times the target bonus
percentage will be used to establish the target Bonus amount for the 2016 year.


 


Goal Multipliers


 


 


Corporate Goal Multiplier: The following scale will
be used by the Compensation Committee of the Board of Directors and the independent members of the Board of Directors to determine
the “total corporate goal multiplier” based upon measurement of actual corporate performance versus the pre-established
corporate goals. The Compensation Committee will evaluate each corporate goal as follows:


 


	Performance Category	Goal Multiplier
	
        1.      
        Performance for the year significantly exceeded the goal or was excellent in view of prevailing
        conditions

         
	100-150%
	
        2.      
        Performance fully met the year’s goal or is considered achieved in view of prevailing
        conditions

         
	100%
	
        3.      
        Performance for the year met some aspects of the goal but not all or met most aspects in view
        of prevailing conditions

         
	75-100%
	
        4.      
        Performance for the year was significantly less than the goal (i.e., below 75%)

         
	0%


 


Each goal is evaluated separately, weighting applied
and a total corporate goal multiplier is reached. A total corporate goal multiplier of at least 75% is required prior to any payout
of Bonuses under the Plan (provided, however, that the Compensation Committee shall retain the discretion to determine otherwise
and to approve payouts based on a multiplier of less than 75%), and the total corporate goal multiplier may not exceed 150%.


 






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Individual Goal Multiplier:
The “individual goal multiplier” will be determined by taking into account the performance rating (Outstanding, Exceeds,
Meets, Fair, etc.) given to the individual through the 2016 review cycle as well as any other relevant criteria relating to the
individual’s job performance during 2016.


 


Calculation
of Bonus Amount


 


The example below shows a
sample Bonus amount calculation under the Plan. First, a target Bonus amount is calculated for each Plan participant by multiplying
the employee’s base salary by the target bonus percentage. This dollar figure is then divided between the corporate component
and the individual component based on the weighting factor for that position. This calculation establishes specific dollar target
Bonus amounts for the performance period for each of the corporate and individual components.


 


At the end of the performance
period, corporate and individual goal multipliers will be established using the criteria described above. The corporate goal multiplier,
which is based on overall corporate performance, is used to calculate the corporate component of the Bonus amount for all Plan
participants. This is accomplished by multiplying the target corporate Bonus amount established for each individual by the total
corporate goal multiplier. The individual goal multiplier, which is based on an individual’s performance rating, is used
in the same way to calculate the actual individual component of the Bonus amount.


 


	Example: Actual Bonus Amount Calculation	 
	   Group Level	B
	   Position	Executive Assistant
	   Base Salary as of December 31	$50,000
	   Target Bonus Percentage	10%
	   Performance Rating	Exceeds
	   Target Bonus Amount	$5,000
	 	 
	   Target Bonus Components:	 
	   Target Bonus Amount based on corporate performance (20%)	$1,000
	   Target Bonus Amount based on individual performance (80%)	$4,000
	 	 
	   Corporate Goal Multiplier	80%
	   Individual Goal Multiplier 	105%
	 	 
	Actual Bonus Amount Calculation:	 
	Corporate Bonus Amount	$800 ($1,000 x 80%)
	Individual Bonus Amount	$4,200 ($4,000 x 105%)
	Actual Cash Bonus Amount	$5,000


 


 


Payment of the Bonus
Amounts


 


Annual performance reviews for Plan
participants will be completed by January 31, 2017 or as soon thereafter as practicable. Payments of actual Bonus amounts will be
made as soon as practical, but not later than March 15, 2017. Participants’ entitlement to Bonuses under this Plan does
not occur until the Bonuses are actually paid. This plan is not intended to be subject to Section 409A of the Internal
Revenue Code of 1986, as amended.


 



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Company’s Absolute
Right to Alter or Abolish the Plan


 


The Compensation Committee of the Board of Directors reserves
the right in its absolute discretion to terminate and/or abolish all or any portion of the Plan at any time or to alter the terms
and conditions under which a Bonus will be paid. In the event of the Plan’s termination prior to the payment of a Bonus,
such Bonus will not be payable under this Plan. Such discretion may be exercised any time before, during, and after the Plan year
is completed. No participant shall have any right to receive any payment until actual delivery of such compensation. Notwithstanding
the generality of the foregoing, at the Company’s discretion, and subject to compliance in all events with, and if and only
if permitted by, applicable federal and state securities laws and the listing rules and requirements of any stock exchange or
trading market on which the Company’s common stock is listed or traded, all or a portion of a Bonus payment may be made
in vested shares of the Company’s common stock. No payment in stock or other equity under this Plan may be made if such
issuance or payment would conflict with any such securities laws or listing rules or requirements.


 


The Compensation Committee, in its discretion,
may also determine whether to increase the payout under the Plan for extraordinary achievement or to reduce payout if economic
and business conditions warrant such action.


 


Employment
Duration/Employment Relationship


 


This Plan does not, and the Company's policies
and practices in administering this Plan do not, constitute an express or implied contract or other agreement concerning the duration
of any participant's employment with the Company. The employment relationship of each participant is "at will" and may
be terminated at any time by the Company or by the participant with or without cause.




 






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