Adamis Pharmaceuticals Corporation 8-K


 


Exhibit 10.1


 





ADAMIS PHARMACEUTICALS CORPORATION


2018 BONUS PLAN


 


* Excludes those covered under the Field Sales Incentive
Plans


 






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Adamis Pharmaceuticals
Corporation


2018 Bonus Plan


 


The Adamis Pharmaceuticals Corporation (“Adamis”
or the “Company”) 2018 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
(the “Committee”) 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 Committee 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, 2018 and remained
continuously employed through December 31, 2018 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, 2018 or an unacceptable performer as determined during the 2018
review cycle), as determined by the Committee 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 Committee
a list of the overall corporate goals for the Plan year, which is subject to approval by both the Committee and (if different)
the independent members of the Board of Directors, with the Committee and/or such independent members having final authority with
respect to such goals. Corporate goals may include, without limitation, goals relating to matters such as the Company’s financial
results, revenues, net income, EBITDA, return on equity, stock price, capital raising activities, pre-clinical or clinical trial
activities (including without limitation initiation or completion of trials), regulatory filings relating to product candidates,
other regulatory activities or approvals, product development, product commercialization activities, strategic commercial agreements
or arrangements, or other corporate goals. All participants in the Plan will then develop a list of key individual goals, which
will be subject to approval 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 2018 corporate goals and, where applicable, the individual’s annual performance review rating.


 


Notwithstanding anything else in this Plan, including
without limitation the weighting factors, target bonus percentages or goal multipliers described elsewhere in this Plan, the Committee
or the President and/or CEO of the Company may, in their discretion, develop and specify different corporate goals, individual
performance goals, weighting factors, target bonus percentages and/or goal multipliers that will apply to one or more officers
or employees of the Company and that may differ from those developed and specified for other officers or employees, including officers
or employees within similar Groups.


 


Bonus Awards


 


The Bonus will be paid in cash and is based on
achievement of the 2018 corporate goals and achievement of individual goals. The Bonus will be calculated by using the base salary
as of December 31, 2018, 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 2018 will be as follows (subject to the authority of the Committee
and the President or CEO to specify different relative weighting factors in individual cases):


 


	Position	Corporate	Individual
	President and CEO	100%	 
	Group K (SVP & EVP Level Officers)	100%	 
	Group J (VP Officers)	100%	 
	Group I (Non-Officer 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 2018 target bonus percentages
(subject to the authority of the Committee and the President or CEO to specify different relative target bonus percentages in individual
cases):


 


		Target Bonus
	President and CEO	60%
	Group K	45%
	Group J	40%
	Group I	30%
	Group H	30%
	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, 2018 times
the target bonus percentage will be used to establish the target Bonus amount for the 2018 year.


 


Goal Multipliers


 


Corporate Goal Multiplier: The following
scale will be used by the Committee and (if applicable) 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 Committee will evaluate each corporate goal as follows (subject to the authority of the Committee and the President or CEO
to specify different goal multipliers in individual cases):


 


	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

         
	40-100%
	
        4.     
        Performance for the year was significantly less than the goal (i.e., below 40%)

         
	0%


 






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Each goal is evaluated separately, weighting
applied and a total corporate goal multiplier is reached. A total corporate goal multiplier of at least 40% is required prior to
any payout of Bonuses under the Plan (provided, however, that the Committee shall retain the discretion to determine otherwise
and to approve payouts based on a multiplier of less than 40%), and the total corporate goal multiplier may not exceed 150%.


 


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 2018 review cycle as well as any other relevant criteria relating to the individual’s
job performance during 2018.


 


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


 






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Payment of the Bonus Amounts


 


The target date for completion of annual performance
reviews for Plan participants will be January 31, 2019 or as soon thereafter as reasonably practicable. Payments of actual Bonus
amounts will be made as soon as practical, but not later than March 15, 2019. 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.


 


Company’s Absolute Right to Alter or Abolish
the Plan


 


The Committee 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 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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