EX-10.1



 Exhibit 10.1 

ZOGENIX, INC. 
 ANNUAL
INCENTIVE PLAN 
 (As Amended and Restated Effective July 22, 2014) 

 

	1.	PURPOSE 

 This Zogenix, Inc. Annual Incentive Plan (the “Plan”)
is intended to provide an incentive for eligible employees of Zogenix, Inc. (the “Company”) to perform to the best of their abilities, to further the growth, development and financial success of the Company, and to enable the
Company to attract and retain highly qualified employees. 
  

	2.	PARTICIPANTS 

 All employees of the Company and its subsidiaries meeting the eligibility
requirements set forth in this Section 2 shall be eligible to receive a bonus award (an “Award”) hereunder (each such eligible employee, a “Participant”). To receive an Award under the Plan with
respect to any Incentive Plan Year (as defined below), a Participant must: 
 (a) Be an “Active” employee as of the
date of payment of his or her Award. For purposes of this Plan, “Active” shall mean an employee who is actively employed by the Company, including an employee on an approved leave of absence, such as medical, personal or
military leave, but not an employee who has been moved to “inactive” status pursuant to the Company’s employee handbook. 

(b) Be a “Regular Full-Time Employee” at the end of the relevant Incentive Plan Year. For purposes of this Plan,
“Regular Full-Time Employee” shall mean an employee who actually worked at least 1,560 regular hours during the relevant Incentive Plan Year (or the equivalent of 30 hours per week). The preceding hours requirement will be
prorated for employees out on a medical leave of absence covered by the federal Family and Medical Leave Act or similar state law. Temporary or seasonal employees, interns, independent contractors and consultants are ineligible to participate in the
Plan. 
 (c) Have been an eligible employee for at least three (3) consecutive months prior to the end of the relevant Incentive
Plan Year. 
 (d) Be performing at a minimum level of “Needs Improvement” or higher at the time his or her Award is paid.

 (e) Not engage in and/or be involuntarily terminated as a result of serious misconduct (e.g., theft, dishonesty, workplace
violence) or a violation of Company policy during the Incentive Plan Year or prior to the payment of his or her Award, as determined by the Company. 
  

	3.	THE COMMITTEE 

 The Plan shall be administered by a committee (the
“Committee”) of the Board of Directors of the Company (the “Board”), which shall be appointed by the Board. Initially, the Compensation Committee of the Board shall constitute the Committee. The
Committee shall have the discretion and authority to administer and interpret the Plan, including the authority to establish one or more bonus programs under the Plan from time to time containing such terms and conditions as the Committee may
determine or deem appropriate in its discretion. 

  
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	4.	PERFORMANCE GOALS 

 The Plan is intended to provide incentive for the achievement of
approved annual corporate and individual objectives (the “Performance Goals”) with respect to each calendar year during the term of the Plan (each an “Incentive Plan Year”). 

(a) Corporate Performance Goals. Prior to or at the beginning of each Incentive Plan Year, the Committee shall select such
objective corporate Performance Goals for such Incentive Plan Year as the Committee may determine in its sole discretion. It is intended that the corporate Performance Goals be objectively determinable and based upon financial metrics set forth in
the Company’s annual business plan or strategic objectives consistent with the Company’s annual business plan, with the weighting of the various objectives to be approved by the Committee. 

(b) Individual Performance Goals. All Participants in the Plan will work with their managers to develop a list of key individual
Performance Goals, which individual Performance Goals will be subject to the approval of each Participant’s manager. The individual Performance Goals for the executive officers of the Company, if applicable, will be approved by the Chief
Executive Officer of the Company. 
  

	5.	TARGET AWARD PERCENTAGES  

 Each Participant will be assigned a “Target Award
Percentage” based on his or her job classification and responsibilities. A Participant’s Target Award Percentage for any given Incentive Plan Year will be based on his or her job classification as of December 31 of such
Incentive Plan Year. The Target Award Percentages will be reviewed annually by the Committee and adjusted as necessary or appropriate. The initial Target Award Percentages for purposes of the Plan will be as follows: 

 

					
	 Position
	  	Target Award Percentage (% of base salary)	 
	 Chief Executive Officer
	  	 	65	%
	 President
	  	 	55	% 
	 COO/CFO/CCO/CMO
	  	 	45	%
	 CDO/SVP/GM
	  	 	35	%
	 Vice Presidents
	  	 	35	%
	 Executive Directors
	  	 	25	% 
	 Senior Directors/Controller
	  	 	22.5	%
	 Directors
	  	 	20	%
	 Associate Directors
	  	 	17.5	% 
	 Managers
	  	 	15	% 
	 Administrative Staff
	  	 	10	% 

 A “Target Award” for each Participant for each Incentive Plan Year will be determined
by multiplying his or her “Target Award Percentage” by his or her base salary as of December 31 of such Incentive Plan Year. 
  

	6.	WEIGHTINGS

 Other than the Chief Executive Officer of the Company, whose Award will be
determined solely by reference to corporate Performance Goal achievement as set forth below, a portion of each 







 
Participant’s Award will be based on corporate Performance Goal achievement and a portion will be based on individual Performance Goal achievement. The relative weight between these goals
will vary based on levels within the organization. The weighting will be reviewed annually by the Committee and be adjusted, as necessary or appropriate. 

The initial weightings for purposes of the Plan will be as follows: 
  

									
	 	  	Corporate	 	 	Individual	 
	 Chief Executive Officer
	  	 	100	% 	 	 	0	%
	 President/COO/CFO/CCO/CMO
	  	 	90	% 	 	 	10	% 
	 CDO/ SVP/GM
	  	 	80	% 	 	 	20	% 
	 Vice Presidents
	  	 	70	% 	 	 	30	% 
	 Executive Directors
	  	 	60	% 	 	 	40	% 
	 Senior Directors/Directors
	  	 	50	% 	 	 	50	% 
	 All other employees
	  	 	30	% 	 	 	70	% 

  

	7.	PERFORMANCE MEASUREMENT 

 Separate “Performance Factors” will be
established for each of the corporate and individual Performance Goals applicable to each Award for each Incentive Plan Year. 

(a) Corporate Performance Factor. The Chief Executive Officer of the Company will present to the Committee for its approval his
assessment of the level of the Company’s achievement of its corporate Performance Goals, in the Committee’s sole discretion. The corporate “Performance Factor” shall be expressed as a percentage within the range specified by the
Committee with respect to each Incentive Plan Year, which percentage may exceed 100%. The same corporate “Performance Factor,” as approved by the Committee, shall be used for the corporate component of each Participant’s Award. Unless
otherwise determined by the Committee, if the corporate Performance Factor for an Incentive Plan Year is below 50%, Participants will not be entitled to any Awards under the Plan for such Incentive Plan Year, regardless of a Participant’s
individual Performance Factor. Unless otherwise determined by the Committee, the corporate Performance Factor will be within the range of 50% to 125%. 

(b) Individual Performance Factor. A Participant’s achievement level relative to his or her individual Performance Goals will
be used to calculate a Performance Factor for such Participant, which shall be expressed as a percentage within the range specified by the Committee or its designee with respect to each Incentive Plan Year, which percentage may exceed 100%. Unless
otherwise determined by the Committee, a Participant’s individual Performance Factor will be within the range of 0% to 125%. While a Participant’s direct manager shall take a Participant’s achievement with respect to his or her
individual Performance Goals for the Incentive Plan Year into account in determining the individual Performance Factor, any such determination remains in the sole discretion of the direct manager based on their subjective assessment of a
Participant’s overall performance. The proposed individual Performance Factors for the executive officers of the Company will be presented by the Chief Executive Officer of the Company to the Committee for its approval, which shall retain the
sole discretion to determine such executives’ individual Performance Factors based on its subjective assessment of each executive’s overall performance. 
  

	8.	AWARD CALCULATIONS 

 The actual Award for a Participant will be calculated by allocating
the Target Award for such Participant between the corporate and individual weightings for the relevant Incentive Plan Year, and then applying the corresponding corporate and individual Performance Factors to each such amount, respectively. 







 The example below shows a sample Award calculation under the Plan. First, a total Target Award is
calculated by multiplying the Plan Participant’s base salary by the Target Award Percentage. The resulting amount is then divided into its corporate component and its individual component, if any, based on the relative weightings for that
Participant’s specific position. This calculation establishes specific dollar Target Award for the Plan year for each component of the Award. 
  

									
		 	 Example:
	  	 Position:
	  	Vice President	 	
		 		  	 Base Salary:
	  	$200,000	 	
		 		  	 Target Award Percentage:
	  	35%	 	
		 		  	 Target Award (in dollars):
	  	$70,000	 	

 Assumed Performance Factors based on the following assessment of corporate and individual performance: 

 

							
		 		  	 Corporate Performance Factor
	  	90%
		 		  	 Individual Performance Factor
	  	100%
				
		 		  	 Award Calculation:
	  	
				
		 		  	 Target Award components (based on weightings):
	  	
				
		 		  	 Corporate performance (70%):
	  	$49,000
		 		  	 Individual performance (30%):
	  	$21,000
				
		 		  	 Corporate component
	  	$44,100 ($49,000 x 90%)
		 		  	 Individual component
	  	$21,000 ($21,000 x 100%)
			
	 Total Award:
	  		  	$65,100 (93% of Target Award)

 Award calculations will be based on a Participant’s base salary as of the last day of the applicable
Incentive Plan Year. 
 A Participant who has been an eligible employee for less than a year, but who is an eligible employee for at least
three months prior to the end of an Incentive Plan Year and remains continuously employed through the end of such Incentive Plan Year, will receive a pro-rata Award based on the portion of the Incentive Plan Year he or she was an eligible employee.
Award payments may also be prorated for any portion of an Incentive Plan Year that an otherwise eligible employee was not classified as an Active employee or Regular Full-Time Employee during such Incentive Plan Year, in the discretion of the
Committee. Other than as stated above, Awards will not be prorated for partial year service. 
 The Committee may, in its discretion, reduce
or eliminate an Award otherwise payable to any Participant. Any such reduction or elimination may be made based on such objective or subjective determinations as the Committee determines appropriate. 








	9.	PAYMENT OF AWARDS 

 The payment of Awards under the Plan shall be made on any date or
dates determined by the Committee during the calendar year following the Incentive Plan Year to which such Awards relate and shall be subject to such terms and conditions as may be determined by the Committee in its sole discretion. As provided in
Section 2, a Participant must be an Active employee of the Company or its subsidiaries and in good standing as of the date on which the Award is paid in order to be entitled to receive such Award. If a Participant dies or a Participant’s
employment is terminated for any reason prior to the payment of his or her Award, the payment of any Award (and in the case of death, the person or persons to whom such payment shall be made) shall be determined at the sole discretion of the
Committee. 
 Any Award that becomes payable under the Plan may be paid in the form of cash, shares of the Company’s common stock or a
combination of both, as determined by the Committee in its sole discretion. To the extent that the Committee determines to pay an Award in the form of shares of the Company’s common stock, such shares shall be awarded under the Company’s
2010 Equity Incentive Award Plan, as amended from time to time, and shall be subject to the terms and conditions thereof. 
  

	10.	AMENDMENT, SUSPENSION AND TERMINATION 

 The Company may amend, suspend or terminate the
Plan at any time in its sole discretion. Such discretion may be exercised any time before, during, and after the Plan year is completed. No Participant shall have any vested right to receive any payment until actual delivery of such compensation.

  

	11.	MISCELLANEOUS 

 (a) The Company shall deduct all federal, state, and local taxes
required by law or Company policy from any Award paid hereunder. 
 (b) In no event shall the Company be obligated to pay to any
Participant an Award for any period by reason of the Company’s payment of an Award to such Participant in any other period, or by reason of the Company’s payment of an Award to any other Participant or Participants in such period or in any
other period. 
 (c) This Plan does not, and Company policies and practices in administering this Plan do not, constitute an express or
implied contract or other agreement concerning the payment of any Award or 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. 
 (d) The Plan shall be unfunded. Amounts payable under the Plan are not
and will not be transferred into a trust or otherwise set aside. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Award under the Plan. Any accounts
under the Plan are for bookkeeping purposes only and do not represent a claim against the specific assets of the Company. 
 (e) No
rights of any Participant to payments of any amounts under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated. All rights with respect to an Award granted to a Participant under the Plan shall be available
during his or her lifetime only to the Participant. 







 (f) Any provision of the Plan that is prohibited or unenforceable shall be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions of the Plan. 
 (g) The Plan shall be
construed, interpreted and the rights of the parties determined in accordance with the laws of the State of California (without regard to principles of conflicts of law). 

* * * * * 







 I hereby certify that the foregoing Plan was duly adopted by the Board on July 22, 2014.

  

			
	 /s/ Ann D. Rhoads

	Name:	 	Ann D. Rhoads
	Title:	 	Executive Vice President, Chief Financial Officer, Treasurer and Secretary