Exhibit 10.18**ShoreTel Executive Bonus Plan**     The purpose of the ShoreTel Executive Bonus Plan is to incentivize executives, includingthe CEO, to achieve key company objectives. Executives will have the opportunity to earn a cashbonus based on their individual and departmental performance and the achievement of companyobjectives. The bonus plan applies to all executives, except as set forth in “Exceptions” below.To participate in the plan, an executive must be employed on a regular basis and meet otherrequirements set forth below.**Company Objectives; Bonus Pool**     The key measurement metrics are revenues, non-GAAP operating profit and customersatisfaction ratings (“**Company Performance Targets**”). The goals for these three metrics will beestablished and approved by the Board of Directors near the beginning of each six-month fiscalperiod (July-December and January-June). The six-month targets will be recommended by the CEO andapproved by the Board of Directors near the beginning of each six-month period. The Board ofDirectors has discretion to modify the key measurement metrics and weighting thereof.     The total amount of incentive compensation available for distribution to participants underthis bonus plan in each six-month period (the “**Bonus Pool**”) is equal to the product of (a)percentage achievement of the Company Performance Targets (which may be subject to minimum andmaximum percentages), and (b) the sum of each participant’s base salary for the six-month periodmultiplied by 45% (85% in the case of the CEO).**Individual Target Levels**     Payments to participants are based on the size of the Bonus Pool and each participant’sindividual performance rating. The actual amount paid to a participant is equal to the product of(a) percentage achievement of the Company Performance Target (which may be subject to minimum andmaximum percentages), (b) the participant’s base salary for the six-month period, (c) 45% (85% inthe case of the CEO) and (d) the participant’s performance rating, as adjusted (which could bezero, or could be subject to a maximum multiplier).     The CEO will have the discretion to recommend bonus payment allocations for the executiveofficers, up to a maximum of 150% of the Bonus Pool. However, to prevent total bonus paymentsunder this plan from exceeding the Bonus Pool, each participant’s performance rating is subject todownward adjustment to reflect his/her achievement relative to the achievement of otherparticipants.**Exceptions**     **VP Sales**. The VP Sales bonus is not part of the Bonus Pool. The VP Sales bonusarrangement is a target of $140,000 per year, instead of 45% of base salary. In addition, for theVP Sales, performance targets are based on revenues, expenses, and customer satisfaction. VP Salesbonus is paid quarterly.     **Former CFO**. For the first half of fiscal 2008, John, Finegan, our former CFO, isentitled to a bonus that provides for a payout at the 150% level so long as he remains employed bythe company at December 31, 2007.
1

 
**Plan Payout**     Based on company performance for each six-month period, the CFO will compute the overallBonus Pool for the executives. The CEO will recommend allocation of the Bonus Pool for allexecutives other than himself. For the CEO, the Compensation Committee will review CEO performanceagainst strategic company goals and objectives and recommend a bonus to the Board. TheCompensation Committee of the Board of Directors will recommend to the Board all executive bonuspayments. The Board of Directors will approve the pool of funds payable to employees and directorsand will approve the specific bonus payments to the executive officers, including the CEO.**Other Provisions****•** Participation in this plan is not an agreement (express or implied) between the planparticipant and ShoreTel that the participant will be employed by ShoreTel for any specificperiod of time, nor is there any agreement for continuing or long-term employment. The planparticipant and ShoreTel each have right to terminate the employment relationship at any timefor any reason. This at-will employment relationship can only be modified by an agreementsigned by the participant and CEO or HR Manager.**•** Any determination of performance, payment or other matter under this plan by the Board ofDirectors or Compensation Committee is binding.**•** This summary highlights the principle features of the ShoreTel Executive Bonus Plan, butdoes not describe every situation that can occur. The Board of Directors retains the right tointerpret, revise, modify or delete the plan at its sole discretion at any time.**•** The executive must be employed in a full time capacity for at least three consecutivemonths in the six-month bonus period to be eligible to participate in the executive bonusplan, and must be employed at the time bonuses are paid in order to receive a bonus.**•** This plan is intended to be effective for at least fiscal year 2008, and shall remain ineffect until amended or terminated by the Board of Directors.
2