exv10w1






EXHIBIT 10.1




I-FLOW CORPORATION

Summary of the 

2009 Executive Performance Incentive Plan

(as amended on August 11, 2009)



Eligibility. The President and Chief Executive Officer, Executive Vice President and Chief
Operating Officer and Chief Financial Officer are the three executives eligible to receive cash and
equity awards under the incentive plan. All awards will be made pursuant to the I-Flow Corporation
Amended and Restated 2001 Equity Incentive Plan (the “Equity Plan”).



Objectives. In the plan, the compensation committee established 2009 target achievements
for the following criteria: (i) revenue (the “Revenue Target”) and (ii) net operating profit
(excluding interest income, interest expense, income taxes, stock-based compensation, InfuSystem
Holdings stock impairment/gain or loss, any board-of-directors-related expenses in excess of
$500,000 and changes to the reserves established in 2008 for litigation and insurance items) as a
percentage of revenue (the “Net Operating Profit Target”). Measuring actual 2009 results against
the Revenue Target and the Net Operating Profit Target will determine whether and to what extent
the plan objectives have been achieved.



Administrative. The amount of cash and equity awards available under the plan will depend
upon the extent to which the Revenue Target and the Net Operating Profit Target have been achieved,
with each factor having equal weight in the computation; provided, however, that
the compensation committee is retaining the discretion, in consultation with management, to reduce
any awards otherwise earned in highly unusual circumstances where the committee deems it necessary
and appropriate. In order to provide flexibility to management to operate and grow the company,
the performance criteria may also be adjusted for any major events during the year;
provided, however, that any adjustment must be approved in advance by the
compensation committee and the board of directors, and the plan impact of any such events will be
decided at the time of such approval. The allocation of the aggregate awards, if any, among the
officers will be determined by the compensation committee and the board of directors based on their
assessment of the contributions of each officer.



Award Minimums/Maximums. In order to receive an award under the plan, both (i) the
Revenue Target must be at least 94.83% achieved and (ii) the Net Operating Profit Target must be at
least 57.1% achieved. At this minimum achievement level, the cash incentive award for the three
officers combined is an aggregate of $375,000, and the equity incentive award for the three
officers combined is an aggregate of 55,000 shares of restricted stock, subject to the compensation
committee’s discretion to modify all awards as described above. If both the Revenue Target and the
Net Operating Profit Target are 100% achieved, the cash incentive award for the three officers
combined is, subject to the compensation committee’s discretion to reduce all awards as described
above, an aggregate of $1,250,000, and the equity incentive award for the three officers combined
is an aggregate of 180,000 shares of restricted stock. The maximum cash incentive award for the
three officers combined is an aggregate of $1,625,000, plus a future opportunity for an additional
$375,000 to be awarded and paid during 2011 contingent upon the earning of any award under the
company’s yet-to-be-determined 2010 Executive Performance Incentive Plan. The maximum equity
incentive award for the three officers combined is an aggregate of 215,000 shares of restricted
stock, plus a future opportunity for an additional 35,000 shares (the “Withheld Stock”) to be
granted and paid during 2011 contingent upon the granting of any award under the company’s
yet-to-be-determined 2010 Executive Performance Incentive Plan. For amounts earned above or below
the 100% performance level, the exact amount of the cash incentive awards and shares of restricted
stock available under the plan will be determined on a linear graduated scale.



Vesting of Equity Awards. Equity awards will consist of grants of restricted stock
pursuant to the Equity Plan. The restrictions will lapse and the shares will vest 50% on January
1, 2011 and 50% on January 1, 2012, with accelerated vesting pursuant to the Equity Plan upon a
change in control or in the event of the death or permanent disability of the executive;
provided, however, that any shares of Withheld Stock will vest 100% immediately
upon payment thereof as described in the prior paragraph.



Payment of Awards. After completion of the fiscal year, the compensation committee will
review the plan objectives and results and the recommendations of executive management. The
independent directors of the board of directors will assess the performance of the President and
Chief Executive Officer, the Executive Vice President and Chief


 









 






Operating Officer and the Chief Financial Officer and will, upon recommendation from the
compensation committee, approve any cash and equity incentive awards. Earned cash incentive awards
are typically paid each year in February. To be eligible for awards under the plan, an executive
must be on the Company’s payroll through February 28, 2010; provided, however,
that, in the event that a binding agreement for the sale of I-Flow Corporation is signed during
2009 and such sale is consummated on or before December 31, 2010, or in the event of the death or
permanent disability of an executive during 2009, the relevant awards will be deemed earned in 2009
for purposes of all employment and change in control agreements and payable, with no proration, at
the higher of (i) the year-to-date actual percentage achievement to plan, or (ii) 100% of the full
plan-year target awards. Awards paid in any such sale transaction will be made only after, and
subject to, the consummation of such sale by December 31, 2010. An executive may also be entitled
to an award under the plan, pursuant to the terms of his employment agreement with the Company, in
the event that he is terminated without cause after an award has been earned but before it has been
paid.