Document:

EX-10.1

 Exhibit 10.1 

Arena Pharmaceuticals, Inc. 

Non-Employee Director Compensation 

Beginning July 1, 2014 
 Equity

  

	 	•	 	Continuing directors and new directors elected at our annual stockholders’ meeting: A number of Restricted Stock Units (“RSUs”) determined by dividing $165,000 by the Fair Market Value (as
defined below) of our common stock on the grant date. The RSUs are granted effective on the date of our annual stockholders’ meeting, and vest in equal monthly installments over one year from the date of grant, subject to vesting conditions set
forth below. 

  

	 	•	 	New directors appointed or elected other than at our annual stockholders’ meeting: A prorated number of RSUs determined by (a) dividing $165,000 by the Fair Market Value of our common stock on
the applicable grant date for the new director and (b) multiplying that number by a fraction, the numerator of which is the number of months following the applicable grant date until the one-year anniversary of our most recent preceding annual
stockholders’ meeting (the “Prior Meeting”) and the denominator of which is 12. The RSUs are granted to such new director effective on the Prior Meeting monthly anniversary date that coincides with or first follows the date of the new
director’s appointment or election, and vest in equal monthly installments (except as otherwise necessary to avoid vesting of a fractional share) beginning on the grant date and ending on the one-year anniversary of the Prior Meeting, subject
to vesting conditions set forth below. 

 RSU Vesting Conditions 

 

	 	•	 	Except in the event of a director’s Separation From Service due to death or Disability, (a) vesting of the RSUs is subject to the director’s provision of continued services to Arena through the applicable
vesting date, and (b) unvested RSUs terminate upon the director’s Separation From Service for any reason. 

  

	 	•	 	In the event of a director’s Separation From Service due to death or Disability, or a Change in Control of Arena that occurs upon or prior to a Separation From Service, all of the director’s RSUs become fully
vested. 

 Issuance of Shares 

Each RSU covers one share of our common stock, subject to capitalization adjustments in certain circumstances in accordance with the applicable
long-term incentive plan. The issuance of the shares of common stock underlying the vested RSUs will be mandatorily delayed until the earliest of the following dates: (a) the three year anniversary of the grant date; (b) the
director’s Separation From Service (for any reason); or (c) a Change in Control of Arena. It is intended that the issuance of shares in settlement of the RSUs will be in compliance with the requirements of Section 409A of the Internal
Revenue Code and any ambiguities herein shall be interpreted accordingly. 
 Certain Definitions 

 

	 	•	 	 “Change in Control” shall mean an event that: (a) is a “Change in Control” as such term is defined in the applicable
long-term incentive plan, and (b) also qualifies as either: (i) a change in the ownership of 

  
 1 

	 	 
Arena, (ii) a change in the effective control of Arena, or (iii) a change in the ownership of a substantial portion of Arena’s assets (as each of these events are defined in Treas. Reg.
§ 1.409A-3(i)(5), or as these definitions may later be modified by other regulatory pronouncements). 

  

	 	•	 	“Disability” shall mean the Participant’s becoming disabled within the meaning of Section 22(e)(3) of the Code, or as otherwise determined by the Committee in its discretion. 

 

	 	•	 	“Fair Market Value” is as defined in the applicable long-term incentive plan. 

  

	 	•	 	“Separation From Service” means the director has had a separation from service with Arena for purposes of Section 409A of the Internal Revenue Code. 

Cash 
  

	 	•	 	Annual retainer for directors: $10,000 per quarter, paid in advance, subject to continuing service as a director. New directors will receive a prorated amount of the quarterly payment for the quarter
within which they are appointed or elected. 

  

	 	•	 	Additional annual retainer for lead independent director: An additional $6,250 per quarter, paid in advance, subject to continuing service as lead independent director. New lead independent directors will
receive a prorated amount of the quarterly payment for the quarter within which they are appointed to such position. 

  

	 	•	 	Meeting attendance fees: 

  

	 	•	 	General: $1,000 

  

	 	•	 	Exceptions for committee meetings: 

  

	 	•	 	Audit Chair Meeting Attendance Fee: $3,500 

  

	 	•	 	Audit Member Attendance Fee: $2,000 

  

	 	•	 	Other Chair Meeting Attendance Fee: $2,500 

 In addition, our Board of Directors and the Compensation Committee
may authorize additional fees for significant work in informal meetings or for other service to us in the recipient’s capacity as a director or committee member. Each non-employee director is also entitled to reimbursement for all of such
director’s reasonable out-of-pocket expenses incurred in connection with performing Board business. 

  
 2Exhibit 10.1 ZBC 2014-16 VSPPlan Doc-revOct14

            

EXHIBIT 10.1
Zions Bancorporation
2014 - 2016 Value Sharing Plan

Objective:  The purpose of the 2014 – 2016 The Zions Bancorporation Value Sharing Plan (the “Plan”) is to provide a two and one-half year cash incentive plan for selected members of the senior management team and other key employees of Zions Bancorporation (the “Company”). It is designed to create long-term shareholder value by focusing the Participant’s attention on achieving superior results relative to financial objectives, credit quality and other important initiatives over a two and one-half year period. 

Eligibility:  Selected key members of the senior management group and other key managers of the Bank (“Participants”) as determined by the Zions Bancorporation Board of Directors (the “Board”) or its Compensation Committee (the “Committee”), or by the Company’s CEO, under authority delegated by the Committee. 

Effective Date: July 1, 2014 through December 31, 2016 (the “Award Period”) with performance measured over the time period from July 1, 2014 to June 30, 2015 (the “Performance Period”)

Payment of Awards: Subject to limitations enumerated in the “Other Administrative Provisions” section of the Plan, the incentive awards, if any, earned under this Plan will be paid within ninety days after the end of the Award Period. 

Plan Administrator: The Plan is to be governed and interpreted by the Committee.

How the Plan Works:  

		
	1)
	Establishment of Award Fund

An Award Fund will be established, the size of which will be determined by the Committee. The Committee will use informed judgment to determine and assign a quartile rating to the Company’s overall performance, based upon its performance as measured by the quartile ratings it achieves for each of seven performance categories. The Committee will further determine, within that quartile rating, whether performance was in the “low,” “medium,” or “high” range within that quartile, each of which is assigned a per-unit award value (refer to Appendix II). 
 
The seven performance categories include: 
 
		
	1.)
	Adjusted Pre-tax Pre-Provision Earnings (“PTPP Earnings”); 

		
	2.)
	Net Charge-Offs; 

		
	3.)
	Adjusted Total Direct Expense; 

		
	4.)
	Adjusted Non-Interest Income; 

		
	5.)
	Strategic Progress; 

		
	6.)
	Zions Bancorporation’s Return on Average Assets (relative to Zions Bancorporation peer companies); and, 

		
	7.)
	Zions Bancorporation’s Tier 1 Common Ratio (relative to Zions Bancorporation peer companies). 

These metrics are more fully defined in Section 5 and Appendix I.

Page 1

2014 – 2016 Value Sharing Plan 
Page 2

		
	2)
	Participation Units

Each Participant designated by the Committee shall be awarded a specific number of Participation Units (“Units”), representing a pro-rata claim, in proportion to the total number of authorized Units, on any Award Fund established under this Plan during the Award Period.

		
	3)
	Grant of Phantom Restricted Common Stock Units:

The assigned per-unit value will be multiplied by the total number of units awarded to each Participant to determine their individual nominal award values. Shortly following the conclusion of the performance period, each Participant will be “provisionally” granted phantom restricted stock units (“RSUs”) of Zions Bancorporation, based on each Participant’s initial nominal award value divided by the average closing price for Zions Bancorporation’s common shares for each trading day during July, 2015.

		
	4)
	Final Cash Settlement of the Phantom Restricted Common Stock Units:

The phantom RSUs granted under this plan are subject to potential reductions of all or a portion of the phantom RSUs, upon the occurrence of certain dramatic events at the sole discretion of the Committee. Dramatic events would include (but, not be limited to) the Company or Bank experiencing significant stress due to severe deterioration in asset quality, earnings, fraud, malfeasance, material errors or reputational harm during the 18 month deferral period running from July 1, 2015 to December 31, 2016. 
 
The value of the phantom restricted stock units, if any, will be settled in cash during the first quarter of 2017 based on the average closing price of Zions Bancorporation common stock for each trading day during January 2017.

		
	5)
	Definitions of Factors:

A)Pre-tax Pre-provision (PTPP) Earnings is defined as the total of the following items (but, not limited to) during the Performance Period:

Net interest income plus non-interest income, less non-interest operating expenses 
adjusted for the following items: 

		
	▪
	Equity securities gains (losses)

		
	▪
	Fixed income securities gains (losses)

		
	▪
	Net impairment losses on investment securities

		
	▪
	Debt extinguishment costs

		
	▪
	Income and expense associated with FDIC supported loan portfolios

		
	▪
	Fair value and nonhedge derivative income (losses)

		
	▪
	Provision for unfunded lending commitments

 
Plus or (minus), 

Equitable adjustments, as follows:

		
	•
	any adjustment deemed necessary by the Committee to normalize PTPP Earnings as a result of unusual and extraordinary changes in internal cost or income allocations during the Performance 

2014 – 2016 Value Sharing Plan 
Page 3

Period resulting from reclassifications or changes in allocation methodologies which produce material changes in costs or income which are not offset by a corresponding change in income or costs within the Company; 

		
	•
	any other adjustments, which, in the sole discretion of the Committee, are required to equitably reflect operating performance during the Performance Period. This may include, at the Committee’s discretion, adjustments to reflect the financial impact of the Company’s CRE downsizing initiative 

		
	B)
	Net Charge Offs will be calculated using the net charge-off amounts reflected in the Bank’s regulatory call reports for the relevant periods. 

C)Adjusted Total Direct Expense     Total direct expense adjusted for the following:

		
	•
	Income and expense associated with FDIC supported loan portfolios

		
	•
	Provision for unfunded lending commitments

		
	•
	Debt extinguishment costs

     
D)Adjusted Non-Interest Income:  Non-Interest Income adjusted for the following: 

		
	•
	Fair value and nonhedge derivative income (losses)

		
	•
	Equity securities gains (losses)

		
	•
	Fixed income securities gains (losses)

		
	•
	Net impairment losses on investment securities

      
E)Strategic Progress:  
		
	•
	Produce solid risk management outcomes and continually enhance risk management practices and maintain regulatory relationships.

		
	•
	Strong focus on expanding fee income.

		
	•
	Progress on the implementation of the “Big 4” and related projects.

		
	•
	Balance CRE exposure and optimize our production capacity to maximize value. 
       

F)Return on Average Assets:  Zions Bancorporation Return on Average Assets during the performance period measured relative to the same metric for Zions Bancorporation peer companies during the same time period
          
G)Tier 1 Common Ratio:  Zions Bancorporation Tier 1 Common Ratio during the performance period measured relative to the same metric for Zions Bancorporation peer companies during the same time period 

2014 – 2016 Value Sharing Plan 
Page 4

		
	4)
	Other Administrative Provisions

		
	(1)
	This is a discretionary Plan governed and interpreted by the Committee, whose decisions shall be final. The intent of the Plan is to fairly reward Participants for increasing shareholder value. If any adjustments need to be made to allow this Plan to accomplish its purpose, the Committee in its sole discretion can make those adjustments.

		
	(2)
	The Committee may, at its sole discretion, alter the terms of the Plan at any time during an Award Period.

		
	(3)
	Participants will not vest in any benefits available under the Plan until any payments hereunder are made after the conclusion of the Award Period. Dividends will not be paid on phantom RSUs.

		
	(4)
	A Participant must be employed by the Company or one of its affiliates at the time payment is made in order to receive a payout of Participant’s Unit award and if Participant ceases to be so employed at any time Participant’s Unit award shall automatically be forfeited and cancelled without consideration and without further action by Participant; provided, however, that 

		
	(i)
	In the event of Participant’s termination by the Company or an affiliate or normal or early retirement, management or, if Participant is a member of the Executive Management Committee (or “EMC”), the Committee shall have the discretion to make a “Pro Rata Adjustment” to Participant’s Unit award, provided further that notwithstanding the foregoing any such adjusted Unit award shall automatically be forfeited and cancelled without consideration and without further action by Participant immediately upon (x) Participant’s commencement of, or agreement to commence, employment with or provision of services (whether as a director, consultant or otherwise) to another company that is in the financial services industry unless such employment or provision of services is specifically approved by management or the Committee, as the case may be, (y) Participant making any derogatory or damaging statements (verbally, in writing or otherwise) about the Company or any of its affiliates, the management or the board of directors of the Company or any affiliate, the products, services or business condition of the Company or any affiliate in any public way to anyone who could make those statements public or to customers of, vendors to or counterparties of the Company or any affiliate, or (z) Participant violating any duty of confidentiality owed to the Company or its affiliates under the policies or procedures of the Company and its affiliates, including the Company’s employee handbook, code of conduct and similar materials, or under federal or state law, or Participant misappropriating or misusing any proprietary information or assets of the Company and its affiliates, including intellectual property rights; and 

		
	(ii)
	In the event of Participant’s “Termination of Employment” by reason of Participant’s death or “Disability”, a Pro Rata Adjustment shall be made to Participant’s unit award.  

2014 – 2016 Value Sharing Plan 
Page 5

In the event a Participant’s Unit award is subjected to a “Pro Rata Adjustment”, Participant (or his/her estate) shall be entitled to receive a pro-rata incentive payout of his or her Unit award at the conclusion of the Award Period. This award will be based upon the Participant’s calculated award for the full Award Period as approved by the Committee and will be prorated for the number of full calendar quarters within the Award Period the Participant was engaged as an officer of the Company or its affiliates prior to Termination of Employment in the circumstances described above. For purposes of this Plan, the terms “Termination of Employment,” “Retirement” and “Disability” shall have the meanings assigned to them in the form of Standard Restricted Stock Unit Award Agreement used by the Company in making annual equity awards to employees in May 2014.

		
	(5)
	The Company shall retain the right to withhold payment of incentives otherwise earned under this Plan to any individual Participant or to all Participants as a group in the event of a significant deterioration in the Company’s or the Bank’s financial condition, if so required by regulatory authorities, or for any other reason considered valid by the Board in its sole discretion including but not limited to those set out in the Company’s Incentive Compensation Clawback Policy as in effect at any time during or subsequent to the Award Period. 

		
	(6)
	The terms of this plan are subject to and limited by applicable law, including, without limitation, the Sarbanes Oxley Act of 2002, the Dodd-Frank Act, and regulations or guidance issued by the Board of Governors of the Federal Reserve System or other regulatory agencies.

		
	(7)
	Designation as a Participant in the Plan does not create a contract of employment for any specified time, nor shall such act to alter or amend the Company’s “at-will” policy of employment. 

		
	(8)
	In the event a Participant transfers within Zions Bancorporation during the Award Period, management or, if Participant is a member of the EMC, the Committee shall have the discretion to maintain such Participant’s full Unit award under this plan, to divide and allocate such full award between Zions entities with which Participant has been employed during the Award Period or to transfer and allocate such award to a single other Zions entity with which Participant has been employed during the Award Period (and to make corresponding adjustments to Award Funds).

 
		
	(9)
	In the event of a change in control of the Company (as defined in the Company’s Change in Control Agreements), the Plan will be terminated and payments shall be made in accordance with the provisions of section 3 (b) of the Change in Control Agreements, provided that the reference in Section 3(b) to “average annual growth in Earnings per Share and the average Tangible Return on Equity” shall be deemed to refer to the award determination methodology set forth in this plan.

		
	(10)
	This document is intended to provide a guideline for the creation and distribution of incentive compensation. Nothing herein creates a contractual obligation binding on the Board or the Committee, and no Participant shall have any legal rights with respect to an Award until such Award is distributed.

2014 – 2016 Value Sharing Plan 
Page 6

APPENDIX I

The following is the VSP Scorecard applicable over the Performance Period.

1 Zions Bancorporation Strategic Progress Goals:
a) Produce solid risk management outcomes and continually enhance risk management practices and maintain regulatory relationships
b) Strong focus on expanding fee income
c) Progress on the implementation of the "Big 4" and related projects
d) Balance CRE exposure and optimize our production capacity to maximize value

2 Note: M = Millions

2014 – 2016 Value Sharing Plan 
Page 7

APPENDIX II

The following is the VSP funding determination chart to be used by the Board Compensation Committee

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