Document:

Exhibit 10.1

 

Arena
Pharmaceuticals, Inc.

 

2008 Annual Incentive Plan

 

 

 

2008 Annual Incentive Plan - Overview

 

Overview

 

·                  Each
participant is assigned a bonus target, expressed as a percentage of annual
salary.

 

·                  Arena
Pharmaceuticals, Inc. (“Arena”) sets up to approximately eight
corporate and individual goals (which may include subparts), each individually
weighted.

 

·                  Goals will be
specific and measurable.

 

·                  At the end of
the year, individual bonus awards are determined based upon the level of goal
achievement, the quality of achievement, and the weighting of each goal.

 

·                  No award is
earned/paid if weighted average combined corporate and individual goal
completion is less than 50%.

 

·                  Certain
combinations of goal-achievement create “multipliers” of up to 125% of the
target award.

 

·                  The
Compensation Committee has the discretion to modify awards up to a
125%-of-target maximum funding level.

 

Individual Bonus Targets

 

·                  Targets are based on role,
level, and the market.

 

Target Award as a % Salary

 

	
  CEO

  	
   

  	
  50

  	
  %

  
	
  CSO, General Counsel, CFO

  	
   

  	
  35

  	
  %

  
	
  CMO

  	
   

  	
  30

  	
  %

  
	
  VP, Quality Systems, VP,
  Marketing and Business Development

  	
   

  	
  25

  	
  %

  

 

1

 

Annual Incentive Plan - Mix of Goals

 

Corporate vs. Individual Goals

 

·                  Each participant’s
goals are divided into corporate and individual components, weighted based on
role.

 

	
   

  	
   

  	
  Corporate

  	
   

  	
  Individual (MBOs)

  	
   

  
	
  CEO

  	
   

  	
  75

  	
  %

  	
  25

  	
  %

  
	
  CSO, General Counsel, CFO

  	
   

  	
  60

  	
  %

  	
  40

  	
  %

  
	
  CMO, VP, Quality Systems,
  VP, Marketing and Business Development

  	
   

  	
  50

  	
  %

  	
  50

  	
  %

  

 

·                  All
participants have the same corporate goals, which aligns their interests with
one another and stockholders.

 

·                  Corporate goals
are proposed by the CEO and approved by the Compensation Committee and/or the
Board.

 

·                  Individual
goals are set by the CEO in partnership with each participant and reviewed by
the Compensation Committee.  The CEO’s
individual goals are proposed by the CEO and approved by the Compensation
Committee and/or the Board.

 

·                  The categories
of corporate goals are set forth on Annex I.

 

Plan-year Goal Adjustment

 

·                  If a goal
becomes irrelevant during the year or if a strategic change affects a goal (or
more than one), then the Compensation Committee, in concert with the CEO, will:

 

1.               Substitute a
new goal with an appropriate weighting (the weighting of the existing goals
will be proportionately adjusted if the new goal has a different weighting than
its predecessor); or,

 

2.               Eliminate the
irrelevant goal and re-weight all other goals proportionately.

 

2

 

Annual Incentive Plan - Funding

 

Threshold

 

·                  The minimum
total weighted average completion percentage is 50% for any award to be earned.

 

Cap

 

·                  Total award
funding is capped at 125% of target.

 

Funding Relationship

 

·                  When total
weighted average completion is above 50%, the funded award will equal weighted
average completion percentage.

 

·                  For example, if
weighted average completion is 95% of the total, then the award would fund at
95% of target (subject to the review and approval of the Compensation
Committee).

 

Discretionary Adjustment

 

·                  The Compensation
Committee may use its judgment and discretion to modify or adjust the annual
bonus award.

 

3

 

Rules Governing the Plan

 

·                  Eligible plan
participants must be actively employed at Arena on the last day of the fiscal
year to receive an award.  Plan
participants who leave Arena prior to the end of the fiscal year are not
eligible to receive an award.

 

·                  Eligible plan
participants whose first date of employment is between January 1, 2008 and
September 30, 2008 will participate on a prorated basis based on their
date of hire.

 

·                  Plan
participants who are promoted to incentive-eligible positions (or positions
with a higher incentive target) before December 31, 2008 will participate
in the plan on a prorated basis, based on the effective date of the promotion.

 

·                  Payment of an
incentive to eligible plan participants who take a leave of absence for any
reason during the year will be prorated based on the time worked during the
year.

 

·                  The
Compensation Committee and the Board have the right to exclude participants and
exercise discretion, including canceling the plan or any earned awards.

 

·                  Awards earned
under this plan will be paid prior to the 15th day of March 2009.

 

·                  Participation
in the Annual Incentive Plan is not a guarantee of continued employment.  Arena reserves the right to terminate
employment and/or participation in the Annual Incentive Plan at any time and
for any reason.

 

·                  Arena and the
Board reserve the right to change or waive any provision in the incentive plan
at any time, including (but not limited to) its award formula, performance
measures and payout schedule.  Although Arena
intends to pay incentives at levels indicated by the plan, this plan shall not
obligate Arena to grant the benefits contemplated under its provisions.

 

·                  This plan is
not a contract and in no way represents a contractual obligation to pay any
amount under the plan, regardless of the performance achieved during the plan
period.

 

4

 

Annex I

 

The
corporate goals relate to the following categories:

 

(i) development
of internal clinical programs;

 

(ii) progress
of programs with partners;

 

(iii) budget,
finance and integration of new capabilities; and

 

(iv) progress
of research programs.ex4_1.htm

    
      

    

    Exhibit
      4.1

     

    
      	
              NUMBERS

            	
              SHARES

            
	
              C

            	 

    

    
       

    

    
      1ST
        CENTURY BANCSHARES, INC.

    

    
      
        	 	
                INCORPORATED
                  UNDER THE LAWS OF THE STATE OF DELAWARE

                COMMON
                  STOCK

              	
                CUSIP   31943X   I0  25

                SEE
                  REVERSE FOR CERTAIN
                  DEFINITIONS

              

      

    

    
      

    

    
      

    

    
      	
              THIS
                CERTIFIES that

            	 	 
	 	 	 
	 	
              SPECIMEN

            	 
	 	 	 
	
              the
                owner of

            	 	 

    

    
       

      FULLY
        PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, PAR VALUE $.01 PER SHARE
        OF

    

    
      1ST
        CENTURY BANCSHARES, INC.

    

    
      transferable
        only on the books of the Corporation by the holder hereof in person or by
        Attorney upon surrender of this Certificate properly endorsed.

      This
        Certificate is not valid until countersigned by the Transfer Agent and
        registered by the Registrar.

    

    
      

    

    
      IN
        WITNESS WHEREOF, the said Corporation has caused this Certificate to be signed
        by the facsimile signatures of its duly authorized officers and its Corporate
        seal to be hereunto affixed.

    

    

    DATED:

    

    
      	
              /s/
                Alan I. Rothenberg

              CHAIRMAN
                AND CEO

            	
               

            	
              /s/
                Jason P. DiNapoli

              PRESIDENT
                AND COO

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      The
        following abbreviations, when used in the inscription on the face of this
        certificate, shall be construed as though they were written out in full
        according to applicable laws or regulations:

       

    

    
      	
              TEN COM

            	
              -as tenants in common

            	 	
              UNIF GIFT MIN ACT- 

            	 	
              Custodian

            	 
	
              TEN ENT

            	
              -as tenants by the entireties

            	 	 	
              (Cust)

            	 	
              (Minor)

            
	
              JT TEN

            	
              -as joint tenants with right of

            	 	 	
              under Uniform Gifts to Minors

            
	 	
              survivorship and not as tenants

            	 	 	
              Act

            	 
	 	
              in common

            	 	 	 	
              (State)

            

    

    
      

    

    
      Additional
        abbreviations may also be used though not in the above list.

    

    
      

    

    
      For
        Value Received,___________________ do hereby sell, assign and transfer
        unto

    

    
      	
              PLEASE
                INSERT SOCIAL SECURITY OR OTHER

            	 
	
              IDENTIFYING
                NUMBER OF ASSIGNEE

            	 
	 	 
	 	 

    

    
      

    

    
      
        
          

        

      

    

    
      (PLEASE
        PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
        ASSIGNEE)

       

    

    
      ______________________________________________,  Shares
        of the Common Stock represented by the within Certificate, and do hereby
        irrevocably constitute and appoint
        ___________________________________________________ Attorney to
        transfer the said Shares on the books of the within named Corporation with
        full
        power of substitution in the premises.

    

    
      

    

    
      	
              Dated:

            	
               

            	 

    

    
      

    

    
      	
              X

            	
               

            
	 	 
	
              X

            	
               

            
	
              NOTICE:

            	
              THE
                SIGNATURE(S)TO THIS ASSIGNMENT MUST CORRESPOND WITHTHE NAME(S) AS
                WRITTEN
                UPON THE FACE OF THIS CERTIFICATE IN EVERY PARTICULAR. WITHOUT ALTERATION
                OR ENLARGEMENT OR ANY CHANGE
                WHATEVER.

            

    

    
       

    

    
      Signature(s)
        Guaranteed

    

    
      

    

    
      	
              By:

            	
               

            	 
	 	
              THE
                SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
                (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS
                WITH
                MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
                PURSUANT
                TO S.E.C. RULE 17Ad15.

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