exv10w1



 







Exhibit 10.1




2005 Bonus Program




The Board of Directors of Alexza Pharmaceuticals, Inc. (the “Company”) approved a bonus program for
eligible employees of the Company for the fiscal year 2005 (the “2005 Bonus Program”). The 2005
Bonus Program is administered by the Board of Directors and management. The purpose of the 2005
Bonus Program is to reward employees for successful achievement of corporate, department and
individual goals.



To be considered an eligible employee of the Company under the 2005 Bonus Program, an employee must
have been employed with the Company for at least six (6) months (that is, a start date prior to
July 1, 2005). Eligible employees who have been employed with the Company for less than one (1)
year (that is, a start date between January 1 and June 30, 2005) will be eligible to receive a
pro-rated bonus. In order to receive any applicable bonus, an eligible employee must be employed
with the Company as of December 31, 2005.



The 2005 Bonus Program is based in part on the Company’s 2005 corporate goals. The Board of
Directors, in consultation with management, established the 2005 corporate goals, as well as
individual and department goals for the Company’s employees. At least 70% of the Company’s 2005
corporate goals must be achieved before any eligible employee of the Company will be entitled to
receive a bonus under the 2005 Bonus Program. If at least 70% of the Company’s corporate goals are
achieved, then each employee’s potential bonus would be based on such employee’s level and based on
the following two factors: (1) a certain percentage of the Company’s 2005 corporate goals and (2)
a certain percentage of that employee’s department/individual goals. Eligible employees are
divided into the following levels: chief executive officer, vice president, director-level
manager, manager and employee. Set forth below is a table listing the different employee levels
and the goal achievements.



	 	 	 	 	 	 	 	 	 
	 	 	 	Goal Achievements	 	 	 
	Employee Level	 	 	Corporate Goals	 	Department/Individual
 Goals	 
	Chief Executive Officer
	 	 	100%	 	 	 	   0%	 
	Vice President
	 	 	  80%	 	 	 	  20%	 
	Director-Level Manager
	 	 	  60%	 	 	 	  40%	 
	Manager
	 	 	  40%	 	 	 	  60%	 
	Employee
	 	 	  20%	 	 	 	  80%	 






For example, a director-level manager would have his/her bonus calculation based on 60% corporate
goals and 40% department/individual goals.



Under the
2005 Bonus Program, the bonus can include a combination of cash and stock determined
by employee level.



 









 







The bonus will consist of a percentage of an employee’s
base salary determined by employee level. Set forth below is a table listing the percentage of an
employee’s base salary which may be attributable to the bonus and the break down between cash and
stock of any applicable bonus.



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Percentage of Base	 	 	 	 	 	 	 
	Employee Level	 	Salary	 	Cash Component	 	Stock Component	 
	CEO
	 	 	  40%	 	 	 	100%	 	 	 	   0%	 
	Vice President
	 	 	  30%	 	 	 	  30%	 	 	 	  70%	 
	Director-Level
Manager
	 	 	  20%	 	 	 	  50%	 	 	 	  50%	 
	Manager
	 	 	  15%	 	 	 	  80%	 	 	 	  20%	 
	Employee
	 	 	  10%	 	 	 	  90%	 	 	 	  10%	 






For
example, a manager would be eligible to receive a bonus that is up to 15% of that manager’s
base salary, and any applicable bonus would consist of 70% cash and
30% stock.



At the end of 2005, the Board of Directors and management will determine the degree to which the
Company’s 2005 corporate goals were met and will further determine the degree to which
department/individuals goals were met.