Exhibit 10.1


 


Silicon
Laboratories Inc.


2009 Bonus
Plan


 


Overview


 


Silicon
Laboratories Inc. (“Silicon Labs”) is committed to sharing its success with the
people who make it possible — the Silicon Labs employees.  The
Compensation Committee of the Board of Directors approved this 2009 Bonus Plan
(the “Plan”) to encourage participation by Silicon Labs employees in achieving
company goals and to permit Silicon Labs employees to share in the rewards of
our success.  The term of this Plan is for the 2009 fiscal year.


 


Eligible Employees


 


To
be eligible to participate in the Plan, a person must be a regular full-time or
part-time employee of Silicon Labs or one of its wholly-owned subsidiaries and
not a participant in any other bonus plan or cash incentive plan (including any
sales commission plan) unless participation under the Plan is permitted under
the terms of such other plan.


 


Bonus Calculation


 


Our
business strategy has always been for Silicon Labs to be a growth company with
strong profitability.  Accordingly, bonuses under the Plan will be largely
dependent on Silicon Labs’ adjusted operating income as a percentage of
revenue, rounded to the nearest tenth of a percent with 0.05% rounded up (the “Adjusted
Operating Income %”).  Adjustments will be made from time to time at the
sole discretion of the Compensation Committee to include or exclude certain
items.  An example of a potential adjustment would be the exclusion of an
expense item such as stock compensation.  Bonuses may also be made dependent
on individual or company performance criteria as established by the
Compensation Committee (or its designee).  In addition to adjusted
operating income, such alternative criteria may include, without limitation,
revenue, revenue by product area(s), gross margin, gross margin by product area(s) or
management-based objectives set by the Compensation Committee (or its designee)
such as the introduction of new products.


 


Unless
an eligible employee receives written notice from the CEO of Silicon Labs that
different bonus criteria is applicable to such employee, such employee’s bonus
will be determined on a quarterly basis as follows:


 


	
   

  	
   

  	
  Adjusted Operating Income

   %

  	
   

  	
  Bonus as a

  percent of

  Eligible

  Earnings for such

  Quarter

  	
   

  
	
  Maximum

  	
   

  	
  >30

  	
  %

  	
  15

  	
  %

  
	
  Target

  	
   

  	
  25

  	
  %

  	
  10

  	
  %

  
	
   

  	
   

  	
  20

  	
  %

  	
  7

  	
  %

  
	
   

  	
   

  	
  15

  	
  %

  	
  5

  	
  %

  
	
  Minimum

  	
   

  	
  10

  	
  %

  	
  3

  	
  %

  
	
  No bonus

  	
   

  	
  <10

  	
  %

  	
  0

  	
  %

  



 


As
illustrated by the chart above, the bonus increases by 0.04% for every 0.1%
increase in Adjusted Operating Income % over the 10% minimum until reaching an
Adjusted Operating Income % of 20%. Thereafter, the bonus increases by 0.06%
for every 0.1% increase in Adjusted Operating Income % until reaching the
Target Adjusted Operating Income % of 25%.  Thereafter, the bonus
increases by 0.1% for every 0.1% increase in Adjusted Operating Income % until
reaching the maximum bonus payment of 15% at the Maximum Adjusted Operating
Income % of 30%.  The bonus shall be rounded to the nearest tenth of a
percent with 0.05% rounded up.


 

















 


Eligible Earnings


 


Bonuses
are paid as a percentage of Eligible Earnings earned by such employee during
such quarter.  Eligible Earnings include only an employee’s base salary or
hourly wages.  Eligible Earnings do not include, among other things, “extra
months” bonuses or payments, disability pay, bonus payments from a previous
bonus period or other payments that are taxable but not considered regular base
earnings.  For non-exempt employees, overtime pay would be considered
Eligible Earnings.


 


Timing of Payments


 


Bonus
checks will generally be issued within approximately one month after the end of
each quarterly period.  Bonus payments
are not considered earned by the employee until the payment is received.


 


General Provisions


 


· Bonuses are
subject to all applicable taxes and other required deductions.  Bonus payments are not subject to benefit
plan deductions or 401(k) plan contributions.


 


· The Plan will
not be available to employees subject to the laws of any jurisdiction which
prohibits any provisions of this Plan or in which tax or other business
considerations make participation impracticable in the judgment of the
Compensation Committee.


 


· The Plan does
not constitute a guarantee of employment nor does it restrict Silicon Labs’
rights to terminate employment at any time or for any lawful reason.


 


· The Plan does
not create vested rights of any nature nor does it constitute a contract of
employment or a contract of any other kind.  The Plan does not create any
customary concession or privilege to which there is any entitlement from
year-to-year, except to the extent required under applicable law.  Nothing
in the Plan entitles an employee to any remuneration or benefits not set forth
in the Plan nor does it restrict Silicon Labs’ rights to increase or decrease
the compensation of any employee, except as otherwise required under applicable
law.


 


· The Plan shall
not become a part of any employment condition, regular salary, remuneration
package, contract or agreement, but shall remain gratuitous in all
respects.  Bonuses are not to be taken into account for determining
severance pay, termination pay, “extra months” bonuses or payments, or any
other form of pay or compensation.


 


· The Plan is
provided at Silicon Labs’ sole discretion and Silicon Labs may modify or
eliminate it at any time, individually or in the aggregate, prospectively or
retroactively, without notice or obligation. In addition, there is no
obligation to extend or establish a similar plan in subsequent years.


 


· The Plan shall
not be pre-funded. Silicon Labs shall not be required to establish any special
or separate fund or to make any other segregation of assets to assure the
payment of bonuses.


 


· All references
to a quarterly period refer to fiscal quarters of Silicon Labs.


 


· This Plan
constitutes the entire arrangement regarding the Plan, supersedes any prior
oral or written description of the Plan and may not be modified except by a
written document that specifically references this Plan and is signed by the
Silicon Labs CEO.


 


· Employees who
resign or are terminated prior to the actual payment of a bonus shall not
receive a bonus.


 


· Eligible
employees who begin employment with Silicon Labs after the first day of a
fiscal quarter for which a bonus is paid shall be eligible to receive a bonus
for such quarter.  The bonus will be based on actual Eligible Earnings
earned by such employee during such quarter.


 

















 


· Employees who
are separated from employment with Silicon Labs due to divestiture, closure, or
dissolution of a business are not eligible to receive a bonus.


 


· Independent
contractors, consultants, individuals who have entered into an independent
contractor or consultant agreement, temporary employees, contract employees and
interns are not eligible to participate in the Plan.


 


· The bonus for
an otherwise eligible employee who has died prior to the end of a quarter while
actively employed will be paid to the decedent’s estate.