WWW.EXFILE.COM, INC. -- 14022 -- MATRITECH, INC. -- EXHIBIT 10.1 TO FORM 8-K


    EXHIBIT
      10.1

    Matritech,
      Inc.

    


    Amended
      and Restated

    Management
      Bonus Plan

    as
      of
      December 9, 2005

    


    


    1.    Purpose
      of Plan

    


    1.1    The
      Management Bonus Plan (the “Plan”) is intended to focus management’s attention
      and activities on Matritech’s (the “Company”) strategic long range progress and
      to encourage attainment of each year’s annual operating plan. The
      Plan:

    


    	·  	
            rewards
              performance by allocating compensation to the achievement of specific
              goals;

          


    	·  	
            reinforces
              the Company’s corporate mission and
              objectives;

          


    	·  	
            motivates
              key managers and executives through a combination of appropriate job
              challenges and financial rewards for performance above
              expectations;

          


    	·  	
            attracts,
              develops, retains and fairly compensates well-qualified managers and
              executive officers.

          


    


    1.2    The
      Plan
      shall not be deemed an exclusive method of providing compensation to eligible
      employees, nor shall it preclude the Company’s Board of Directors or its
      Compensation Committee from authorizing or approving other forms of incentive
      compensation.

    


    2.    Administration
      of the Plan

    


    2.1    The
      Plan
      shall be administered by the Compensation Committee of the Board of Directors
      of
      the Company (the “Committee”). The Committee may, from time to time, amend,
      suspend, terminate or reinstate any or all of the provisions of the Plan as
      it
      may deem necessary or advisable for the administration of the Plan. The
      Committee shall, subject to express provisions of the Plan, have the power
      to
      interpret the Plan, to prescribe, amend or repeal rules and regulations relating
      to the Plan, to correct the provisions of the Plan and any Incentive Award,
      and
      to make all other determinations necessary or advisable for the administration
      of the Plan.

    


    2.2    In
      the
      event of a merger, acquisition, sale of assets, or other corporate transaction,
      or in the case of any unexpected circumstances, or any unusual or material
      event
      (whether or not constituting an Acquisition, as defined in Section 6.2 hereof),
      the Committee may make adjustments to the awards (including modification of
      the
      performance goals, the substitution of other consideration, the deferral of
      payments, and the reduction of the size of awards) as it determines
      appropriate.

    


    2.3    All
      expenses and costs incurred in connection with the administration and operation
      of the Plan shall be borne by the Company.

     

    
      
         

      

      
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    3.    Eligibility
      for Participation

    


    3.1    Eligibility
      to participate in the Plan shall be limited to executive officers and other
      key
      management personnel, including employees of any subsidiary of the Company,
      who
      can have a major impact on the results of their own functional areas and/or
      on
      the overall performance of the Company. All executive officers are eligible
      to
      participate in the Plan effective with their election to such an office.
      Selection of key management participants, other than executive officers, will
      be
      made annually by the CEO.

    


    3.2    Prior
      to
      the start of each fiscal year, or as soon as practical thereafter but in no
      event later than February 1, the CEO shall advise the Committee of those
      non-executive officer employees selected for participation in the Plan.
      Selection as a participant for any particular fiscal year shall not
      automatically entitle an individual to participate in any other fiscal
      year.

    


    3.3    Following
      the selection by the CEO of non-executive officer participants for the fiscal
      year, the list of eligible participants may be revised only upon hire or
      promotion of an employee. Any participant added during the fiscal year (after
      the initial selection) shall participate only on a pro-rata basis for service
      that year.

    


    3.4    Nothing
      in this Plan shall confer upon any employee or participant any right with
      respect to continuation of employment with the Company (or any subsidiary of
      the
      Company), nor shall this Plan restrict in any way the right of the Company
      (or
      any subsidiary of the Company) to terminate an employee’s or participant’s
      employment at any time. The Company and each subsidiary of the Company expressly
      reserves the right at any time to dismiss or otherwise terminate its
      relationship with a participant free from any liability or claim under the
      Plan.

    


    3.5    A
      participant may not assign, sell, encumber or otherwise transfer any rights
      or
      interest under the Plan, except by will or the laws of descent and
      distribution.

     

    4.    Earning
      an Incentive Award 

    


    4.1    Each
      participant is assigned an annual Target Incentive as a percentage of annual
      base salary. The target incentive percentages are set forth below, by grade
      level, as a percentage of salary for the measuring year.

     

    
      	 	Position 	
              Target
                Incentive 

            	 
	 	Chairman and CEO 	
              60% 

            	 
	 	President/COO 	
              50% 

            	 
	 	Vice President 	
              40% 

            	 
	 	Director 	
              30% 

            	 
	 	Manager 	
               20% 

            	 


    

    


    
      
         

      

      
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    The
      annual Target Incentive as a percentage of annual base salary for any executive
      officer of the Company who serves as the head of a subsidiary of the Company
      shall be 40%. The CEO shall establish the Target Incentive as a percentage
      of
      annual base salary for other participants who are employees of any subsidiary
      of
      the Company, taking into consideration the relative level of such employee
      compared to the above chart for US positions. 

    


    4.2    Each
      participant, other than the CEO and President, shall have objectives established
      for his/her performance during the fiscal year. Establishment of each individual
      participant’s objectives for the year shall be completed no later than March 1
      of the measuring year. Individual objectives shall serve as the basis for fifty
      (50%) percent of such participant’s Incentive Award. 

    


    4.3    There
      shall also be established corporate objectives for the fiscal year. These
      corporate objectives shall be recommended by management but shall be finally
      established as performance objectives for the year by the Committee. The full
      Board of Directors may also review and approve corporate objectives as part
      of
      an overall business plan, but the Committee shall be responsible for
      establishing the objectives as part of the CEO’s and President’s compensation
      and for the review and approval of the objectives as part of the other executive
      officers’ compensation. 

    


    4.4    The
      corporate objectives shall serve as the basis for fifty (50%) percent of the
      Incentive Award for all participants other than the CEO and President. For
      the
      CEO and President, the corporate objectives shall serve as the basis for all
      of
      the participant’s Incentive Award. 

    


    4.5    Both
      the
      individual performance objectives and the corporate objectives may, at the
      time
      of establishment, be weighted, so that achievement of some portions of the
      corporate objectives, or the individual objectives as the case may be, merits
      a
      greater Incentive Award than do other portions. The total of all weighting
      of an
      individual’s objectives shall equal 100% and the total of all weighting of the
      corporate objectives shall equal 100%.

    


    4.6    After
      the
      end of the fiscal year, a determination will be made as to the achievement
      of
      corporate objectives and the achievement of individual objectives. The Committee
      will determine achievement of the corporate objectives, but may consult with
      the
      full Board of Directors about the level of achievement. The CEO and President
      will report to the Committee on the achievement of individual objectives by
      each
      participant. All decisions as to achievement of performance objectives for
      the
      year shall be made on or before March 1 of the next fiscal year. 

    


    4.7    In
      making
      decisions on achievement of corporate objectives, the following rating scale
      shall be used:

    



    
      
         

      

      
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      	 	Rating of Performance 	
              Performance
                Rating
                Factor 

            	 
	 	Greatly Exceeded 	
              111-120% 

            	 
	 	Exceeded	
              101-110% 

            	 
	 	Fully Satisfactory 	
              90-100% 

            	 
	 	Minimum	
              70-89% 

            	 
	 	Unacceptable	
              zero 

            	 


    

     

    The
      Performance Rating Factor shall be used as a multiplier to the corporate
      objective performance component of the Incentive Award for each participant.
      

    


    4.8    In
      making
      decisions on achievement of individual objectives, the following rating scale
      shall be used:

    
       

      
        	 	Rating of Performance 	
                Performance
                  Rating
                  Factor 

              	 
	 	Outstanding	
                110%

              	 
	 	Excellent	
                100%

              	 
	 	Good 	
                90%

              	 
	 	Average	
                75%

              	 
	 	Below Average	
                zero 

              	 


      

       

    

    The
      average of the above Performance Rating Factors achieved by an individual on
      his/her individual performance objectives shall be used as a multiplier to
      the
      portion of the Incentive Award based on achievement of such individual
      performance objectives.

    


    4.9    By
      way of
      example, for a participant other than the CEO or President, the Incentive Award
      shall be calculated:

     

    
      	 	(a) 	Base Salary x Target Incentive
              %  


      	 	
              (b)

            	
              The
                product is then multiplied by the average Performance Rating Factor
                for
                such participant’s individual objective achievement to obtain 1⁄2 of the
                Incentive Award.

            


    

    
      	 	
              (c)

            	
              The
                product is also multiplied by the corporate Performance Rating Factor
                to
                obtain the other 1⁄2 of the Incentive
                Award.

            


    

    


    4.10    The
      Incentive Award is considered fully earned by a participant once he/she has
      completed the fiscal year as an employee of the Company (or any subsidiary
      of
      the Company). However, except as provided in Section 6 hereof, the Incentive
      Award shall be forfeited, and is subject to an ongoing substantial risk of
      forfeiture, if the participant does not remain an employee of the Company (or
      any subsidiary of the Company) through the time designated for pay-out of
      specific parts of the Incentive Award. 



    
      
         

      

      
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    5.    Payment
      of Incentive Award

     

    5.1    Provided
      that the participant remains an employee of the Company (or any subsidiary
      of
      the Company) through the first payment date (the “Initial Pay-out Date”), fifty
      (50%) percent of the Incentive Award will be paid to the participant in cash,
      minus applicable withholding taxes, on or before March 15 of the next fiscal
      year following the measuring year. 

    


    5.2.1    Provided
      that the participant remains an employee of the Company (or any subsidiary
      of
      the Company) through the Initial Pay-out Date and that the employee’s primary
      place of work is in the United States, twenty-five (25%) percent of the
      Incentive Award will be paid to the Plan participant on the Initial Pay-out
      Date
      in shares of restricted stock of the Company pursuant to, and subject to the
      provisions of, the Company’s 2002 Stock Option and Incentive Plan, or pursuant
      to and subject to the provisions of any successor or replacement plan. To the
      extent that any payment of par value shall be required in connection with the
      issuance of the shares of restricted stock, the Company shall increase the
      amount of the cash payment on the Initial Pay-out Date by such par value amount
      and shall subtract such par value payment amount from the twenty-five (25%)
      percent restricted stock award value. The participant, by accepting the first
      payment on the Initial Pay-out Date, expressly authorizes and directs the
      Company to withhold and retain such portion of the cash payment as is necessary
      to cover the par value of the restricted stock shares. For purposes of
      determining the number of shares of restricted stock to be awarded, the shares
      shall be valued at the fair market value of such stock, without regard to
      restrictions, on the Initial Pay-out Date. Fair market value shall be determined
      as of the last business day for which the prices or quotes discussed in this
      sentence are available prior to the Initial Pay-out Date and shall mean (i)
      the
      last reported sale price of the common stock on the principal national
      securities exchange on which the common stock is traded, if the common stock
      is
      then traded on a national securities exchange; or (ii) the last reported sale
      price of the common stock on the Nasdaq National Market, if the common stock
      is
      not then traded on a national securities exchange; or (iii) the closing bid
      price last quoted by an established quotation service for over-the-counter
      securities, if the common stock is not reported on the Nasdaq National Market.
      For example, if (x) the Company’s common stock is traded on the American Stock
      Exchange, (y) the closing price of shares of the Company’s common stock on the
      last trading day immediately preceding the Initial Pay-out Date is $2.00 per
      share and (z) 25% of the Incentive Award earned by the Plan participant is
      $4,000 (after making any required par value deduction), such participant shall
      receive 2,000 shares of restricted stock. The Company and the participant will
      execute a Restricted Stock Award Agreement containing customary terms and
      conditions of the grant and specifying that (a) provided the participant remains
      an employee of the Company (or any subsidiary of the Company), the restrictions
      will lapse with respect to one-third (1/3) of the shares granted on each of
      the
      first three annual anniversaries of the Initial Pay-out Date and (b) any Plan
      participant who is an executive officer of the Company will have a retention
      obligation to hold fifty (50%) percent of the shares of common stock of the
      Company acquired through the Restricted Stock Award even after annual
      anniversary dates have passed, to the extent that such executive officer does
      not 

     

    
      
         

      

      
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    then
      hold
      by himself/herself or through members of his/her immediate family a minimum
      of
      50,000 shares of common stock of the Company or shares of common stock of the
      Company with a value of $50,000, whichever is the lower standard; provided,
      however, that there shall be excluded from the retention obligation any shares
      the executive officer sells to pay withholding taxes due in connection with
      the
      anniversary pay-outs including those due on account of the lapse of restrictions
      on the shares of restricted stock. 

    


    5.2.2    Provided
      that the participant remains an employee of the Company (or any subsidiary
      of
      the Company) through the Initial Pay-out Date and that the employee’s primary
      place of work is outside the United States and that the employee is not an
      expatriate working temporarily outside the United States, twenty-five (25%)
      percent of the Incentive Award will be paid to the Plan participant on the
      Initial Pay-out Date in restricted stock units, payable upon vesting only in
      shares of common stock of the Company. The number of restricted stock units
      to
      be awarded shall be equal to the number of shares of restricted stock the
      participant would have received if s/he were a US employee of the Company.
      See
      Section 5.2.1 above. The Company and the participant will execute a Restricted
      Stock Unit Award Agreement containing customary terms and conditions of the
      grant and specifying that (a) provided the participant remains an employee
      of
      the Company (or any subsidiary of the Company), the units will vest at the
      rate
      of one-third (1/3) of the total units granted on each of the first three annual
      anniversaries of the Initial Pay-out Date and (b) any Plan participant who
      is an
      executive officer of the Company will have a retention obligation to hold fifty
      (50%) percent of the shares of common stock of the Company acquired through
      the
      Restricted Stock Unit Award even after annual anniversary dates have passed,
      to
      the extent that such executive officer does not then hold by himself/herself
      or
      through members of his/her immediate family a minimum of 50,000 shares of common
      stock of the Company or shares of common stock of the Company with a value
      of
      $50,000, whichever is the lower standard; provided, however, that there shall
      be
      excluded from the retention obligation any shares the executive officer sells
      to
      pay withholding taxes due in connection with the anniversary pay-outs including
      those due on account of the vesting of restricted stock units. Upon vesting
      of
      any restricted stock units, the restricted stock units so vested shall convert
      into shares of common stock of the Company representing the same number of
      shares of common stock as the units, provided that to the extent that any
      payment of par value shall be required in connection with the issuance of the
      shares of common stock, the participant must pay such par value either directly
      or through an additional withholding from the payment to be made pursuant to
      Section 5.3 hereof. The participant, by accepting the first payment on the
      Initial Pay-out Date, expressly authorizes and directs the Company (or any
      subsidiary by which s/he is employed) to withhold and retain such portion of
      the
      cash payment as is necessary to cover the par value of the common stock to
      be
      issued upon vesting of any restricted stock units. 

    


    5.3    Provided
      that the participant remains an employee of the Company (or any subsidiary
      of
      the Company) through the first year anniversary of the Initial Pay-out Date,
      eight and one-third (8.33%) percent of the Incentive Award shall be paid to
      the
      participant in cash, minus applicable withholding taxes, on such anniversary;
      provided, 

     

    
      
         

      

      
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    however,
      that the participant, by accepting the first payment on the Initial Pay-out
      Date, expressly authorizes and directs the Company (or any subsidiary by which
      s/he is employed) to withhold all or such portion of this cash payment towards
      the amount due as applicable withholding taxes on income recognized by the
      Plan
      participant on the first year anniversary date in connection with the lapse
      of
      restrictions on restricted stock or the vesting of restricted stock units
      granted to the participant on the Initial Pay-out Date. Further payments of
      eight and one-third (8.33%) percent of the Incentive Award shall be paid in
      cash
      to the participant on second and third year anniversaries of the Initial Pay-out
      Date, provided the participant remains an employee of the Company (or any
      subsidiary of the Company); provided, however, that the participant, by
      accepting the first payment on the Initial Pay-out Date, expressly authorizes
      and directs the Company (or any subsidiary by which s/he is employed) to
      withhold all or such portion of each such additional cash payment towards the
      amount due as applicable withholding taxes on income recognized by the
      participant on such anniversary dates in connection with the lapse of
      restrictions on restricted stock or the vesting of restricted stock units
      granted to the participant on the Initial Pay-out Date. 

    


    5.4    In
      the
      event the amounts to be withheld, as provided above with respect to annual
      anniversary date pay-outs, are insufficient to pay in full the participant’s
      withholding taxes due in connection with the annual anniversary date pay-outs,
      the participants shall pay to the Company (or any subsidiary by which s/he
      is
      employed), or make provisions satisfactory to the Company (or any subsidiary
      by
      which s/he is employed) for payment of, any taxes required by law to be withheld
      no later than the date of the event creating the tax liability. The Committee
      may allow participants to satisfy such tax obligations in whole or in part
      by
      transferring shares of common stock, including shares retained from the Award
      creating the tax obligation, valued at their fair market value (determined
      as
      provided above). If no other provision has been made by the participant for
      payment of withholding taxes due, the Company (or any subsidiary by which s/he
      is employed) may, to the extent permitted by law, deduct any such tax
      obligations from any payment of any kind otherwise due to a participant. By
      accepting the first payment on the Initial Pay-out Date, the participant
      expressly authorizes and directs the Company (or any subsidiary by which s/he
      is
      employed) to withhold amounts from other payments of any kind due to
      him/her.

    


    5.5    Any
      sale
      or other disposition of shares of restricted stock awarded or shares of common
      stock issued upon vesting of restricted stock units under this Plan must be
      made
      in compliance with Section 16 of the Securities Exchange Act of 1934, the rules
      promulgated thereunder, and the Company's insider trading requirements.


    


    6.    Special
      Acceleration Events

    


    6.1    In
      the
      event the employment of a participant is terminated prior to the full payout
      of
      all portions of the earned Incentive Award by reason of death, disability or
      retirement on or after age 62 with the consent of the Company, then the full
      earned Incentive Award shall be accelerated and shall vest in the participant
      (or in his/her estate in the event of his/her death) and the restrictions and
      substantial risk of forfeiture shall lapse. 

     

    
      
         

      

      
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    6.2    In
      the
      event of an Acquisition (as defined herein) prior to the full payout of all
      portions of the earned Incentive Award to a participant, the full earned
      Incentive Award shall be accelerated and shall vest in the participant, and
      the
      restrictions and substantial risk of forfeiture shall lapse, at the moment
      immediately preceding the consummation of the Acquisition. For purposes of
      this
      Plan, an “Acquisition” shall mean the consummation and closing of: (x) the sale
      of the Company by merger in which the shareholders of the Company in their
      capacity as such no longer own a majority of the outstanding equity securities
      of the Company (or its successor); or (y) any sale of all or substantially
      all
      of the assets or capital stock of the Company (other than in a spin-off or
      similar transaction) or (z) any other acquisition of the business of the
      Company, as determined by the Board. 

     

    


    


    


     

    


    


    


    
 

     

     

     

     

     

     

     

    
      
         

      

      
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