Exhibit 10.1


 


ADAPTEC, INC.


 


Adaptec Incentive Plan Document


Fiscal Year 2005


 


1.             Plan Name and
Effective Date


 


The name of the plan is the Adaptec Incentive Plan (the “AIP”). The AIP
is effective for Adaptec’s 2005 fiscal year from April 1, 2004 through March
31, 2005 (“Fiscal Year 2005”).


 


2.             Purpose


 


The purpose of the AIP is to provide a direct financial incentive for
eligible executives, managers and individual contributors to make a significant
contribution to Adaptec’s established goals in order to help Adaptec’s
stockholders realize increased value from their investment.


 


3.             Eligibility


 


All full or part-time exempt employees in grade 21 and above are
eligible to participate in the AIP. Employees in grades 21 and above working in
Singapore are not eligible to participate in the AIP except for 8 or 9 key
managers and executives as determined by the Compensation Committee of Adaptec’s
Board of Directors (the “Compensation Committee”). All eligible employees must
have worked for Adaptec at least six months and must still be an employee of
Adaptec at the time payments are made, as discussed below, in order to qualify
to participate in the AIP. Commissioned sales employees, temporary employees
and independent contractors are not eligible to participate in the AIP.  All Adaptec employees that are eligible to
participate in the AIP are deemed to be “Participants” in the AIP.


 


4.             Timing of AIP
Payments


 


Except for holdback payments as described in Section 8 below, payments
that become due under the AIP will be paid to Participants as soon as
administratively feasible after the overall budget is approved by the
Compensation Committee following the close of the second quarter of Fiscal Year
2005 or the fourth quarter of Fiscal Year 2005, as applicable.


 


5.             Funding the AIP Pool


 


The AIP reinforces two key goals that support Adaptec’s strategic
plans: maximizing Adaptec’s revenue (“Revenue”) and maximizing Adaptec’s
Operating Profit Before Taxes (“OPBT”). 
In order for the Compensation Committee to fund the AIP incentive pool
(the “AIP Pool”) and in order for Participants to be eligible to receive
payments 


 





















 


from the AIP Pool, Revenue and OPBT each must meet minimum thresholds
as determined by the Compensation Committee.


 


The matrix for determining the size of the AIP Pool for Adaptec’s Q1
and Q2 performance is set forth in Chart A and the matrix for determining the
size of the AIP Pool for Adaptec’s Q3 and Q4 performance is set forth in Chart
B. The size of the AIP Pool will be determined by the amount that each of
Adaptec’s Revenue and OPBT exceeds the minimum thresholds established by the
Compensation Committee; as Revenue and OPBT increase, the AIP Pool will
increase as set forth in Chart A and Chart B. Revenue and OPBT are each
weighted equally in determining the size of the AIP Pool.  In addition, the Compensation Committee may
increase or decrease the size of the AIP Pool by 25% based on Adaptec’s
performance during Fiscal Year 2005.


 


If the Revenue and OPBT minimum thresholds set by the Compensation
Committee are both not met, then no AIP Pool will be established.
Notwithstanding the foregoing, in extraordinary and extenuating circumstances,
the Compensation Committee may determine to fund the AIP Pool and make payments
to Participants if Revenue and/or OPBT do not meet the established minimum
thresholds.  In all cases, the
Compensation Committee must review and approve the funding of the AIP Pool.


 


Chart A


 


	
   

  	
   

  	
  Q1 and
  Q2

  	
   

  
	
   

  	
   

  	
  AIP Pool

  	
   

  	
  Revenue

  	
   

  	
  OPBT

  	
   

  
	
   

  	
   

  	
  (in millions)

  	
   

  	
  (in millions)*

  	
   

  	
  (in millions)**

  	
   

  
	
   

  	
   

  	
  6.38

  	
   

  	
  X + 26.00

  	
   

  	
  Y + 6.50

  	
   

  
	
  100% Payout==>

  	
   

  	
  5.88

  	
   

  	
  X + 24.00

  	
   

  	
  Y + 6.00

  	
   

  
	
   

  	
   

  	
  5.38

  	
   

  	
  X + 22.00

  	
   

  	
  Y + 5.50

  	
   

  
	
   

  	
   

  	
  4.88

  	
   

  	
  X + 20.00

  	
   

  	
  Y + 5.00

  	
   

  
	
   

  	
   

  	
  4.38

  	
   

  	
  X + 18.00

  	
   

  	
  Y + 4.50

  	
   

  
	
   

  	
   

  	
  3.88

  	
   

  	
  X + 16.00

  	
   

  	
  Y + 4.00

  	
   

  
	
   

  	
   

  	
  3.38

  	
   

  	
  X + 14.00

  	
   

  	
  Y + 3.50

  	
   

  
	
   

  	
   

  	
  2.88

  	
   

  	
  X + 12.00

  	
   

  	
  Y + 3.00

  	
   

  
	
   

  	
   

  	
  2.38

  	
   

  	
  X + 10.00

  	
   

  	
  Y + 2.50

  	
   

  
	
   

  	
   

  	
  1.88

  	
   

  	
  X + 8.00

  	
   

  	
  Y + 2.00

  	
   

  
	
   

  	
   

  	
  1.38

  	
   

  	
  X + 6.00

  	
   

  	
  Y + 1.50

  	
   

  
	
   

  	
   

  	
  0.88

  	
   

  	
  X + 4.00

  	
   

  	
  Y + 1.00

  	
   

  
	
   

  	
   

  	
  0.00

  	
   

  	
  X + 2.00

  	
   

  	
  Y + 0.50

  	
   

  
	
   

  	
   

  	
  0.00

  	
   

  	
  X

  	
   

  	
  Y

  	
   

  



 





















 


Chart B


 


	
   

  	
   

  	
  Q3 and Q4 

  	
   

  
	
   

  	
   

  	
  AIP Pool

  	
   

  	
  Revenue

  	
   

  	
  OPBT

  	
   

  
	
   

  	
   

  	
  (in millions)

  	
   

  	
  (in millions)*

  	
   

  	
  (in millions)**

  	
   

  
	
   

  	
   

  	
  7.50

  	
   

  	
  A + 30.00

  	
   

  	
  B +7.50

  	
   

  
	
   

  	
   

  	
  7.00

  	
   

  	
  A + 28.00

  	
   

  	
  B +7.00

  	
   

  
	
   

  	
   

  	
  6.50

  	
   

  	
  A + 26.00

  	
   

  	
  B +6.50

  	
   

  
	
   

  	
   

  	
  6.00

  	
   

  	
  A + 24.00

  	
   

  	
  B +6.00

  	
   

  
	
  100% Payout==>

  	
   

  	
  5.50

  	
   

  	
  A + 22.00

  	
   

  	
  B +5.50

  	
   

  
	
   

  	
   

  	
  5.00

  	
   

  	
  A + 20.00

  	
   

  	
  B +5.00

  	
   

  
	
   

  	
   

  	
  4.50

  	
   

  	
  A + 18.00

  	
   

  	
  B +4.50

  	
   

  
	
   

  	
   

  	
  4.00

  	
   

  	
  A + 16.00

  	
   

  	
  B +4.00

  	
   

  
	
   

  	
   

  	
  3.50

  	
   

  	
  A + 14.00

  	
   

  	
  B +3.50

  	
   

  
	
   

  	
   

  	
  3.00

  	
   

  	
  A + 12.00

  	
   

  	
  B +3.00

  	
   

  
	
   

  	
   

  	
  2.50

  	
   

  	
  A + 10.00

  	
   

  	
  B +2.50

  	
   

  
	
   

  	
   

  	
  2.00

  	
   

  	
  A + 8.00

  	
   

  	
  B +2.00

  	
   

  
	
   

  	
   

  	
  1.50

  	
   

  	
  A + 6.00

  	
   

  	
  B +1.50

  	
   

  
	
   

  	
   

  	
  1.00

  	
   

  	
  A + 4.00

  	
   

  	
  B +1.00

  	
   

  
	
   

  	
   

  	
  0.50

  	
   

  	
  A + 2.00

  	
   

  	
  B +0.50

  	
   

  
	
   

  	
   

  	
  0.00

  	
   

  	
  A

  	
   

  	
  B

  	
   

  



 


6.             Calculation of
Payments


 


Chart C shows the targeted incentives by a Participant’s grade/position
and as a percentage of a Participant’s base salary if Adaptec were to reach the
100% funding level set forth in Chart A and Chart B, as applicable. Chart C
also shows what percentage of the eligible employee population would be
targeted to receive an incentive payment.


 


Chart C


 


Participants: AIP Payments (for six months)


 


	
  Grade/Position

  	
   

  	
  Target % of Base Salary

  	
   

  	
  Target Receiving

  	
   

  
	
  Chief
  Executive Officer

  	
   

  	
  85

  	
  %

  	
  100

  	
  %

  
	
  Chief
  Financial Officer

  	
   

  	
  60

  	
  %

  	
  100

  	
  %

  
	
  Vice
  President/General Manager

  	
   

  	
  50

  	
  %

  	
  100

  	
  %

  
	
  Vice
  President

  	
   

  	
  40

  	
  %

  	
  100

  	
  %

  
	
  31-33

  	
   

  	
  25

  	
  %

  	
  70-90

  	
  %

  
	
  29-30

  	
   

  	
  15

  	
  %

  	
  70-90

  	
  %

  
	
  27-28

  	
   

  	
  12

  	
  %

  	
  70-90

  	
  %

  
	
  24-26

  	
   

  	
  10

  	
  %

  	
  70-90

  	
  %

  
	
  21-23

  	
   

  	
  8

  	
  %

  	
  70-90

  	
  %

  



 





















 


7.             AIP Payments


 


Once the AIP Pool amount is determined for each six-month period, the
actual payment to a Participant is based on the Participant’s performance and
can range from 0 to 200% of target incentive amount. In no case will the sum of
all payments exceed the amount funded by the AIP. All payments from the AIP
Pool made to Section 16(b) officers of Adaptec will be recommended by Adaptec’s
CEO and will be reviewed by the Compensation Committee. In addition, the
Compensation Committee will approve the CEO’s payment from the AIP Pool.


 


8.             Holdback AIP
Payments for Executive Participants


 


Payments under the AIP that are to be made to Participants with a
position of Vice President or higher (“Executive Participants”) for first and
second fiscal quarter achievements will be paid as follows.  Fifty percent (50%) of payments earned by
Executive Participants during the first half of Fiscal Year 2005 will be paid
at the same time as AIP payments are made to other Participants and fifty
percent (50%) will be held back pending the performance of Adaptec in the
second half of Fiscal Year 2005. This holdback will be paid to Executive
Participants at the same time that other Participants receive payments under
the AIP following the close of the fourth quarter of Fiscal Year 2005 and could
be funded at 0% to 150% depending on how Adaptec performs relative to the
Revenue and OPBT thresholds established by the Compensation Committee.