Document:

Exhibit 10.1

 

Arena
Pharmaceuticals, Inc.

 

2007 Annual Incentive Plan

 

 

2007 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 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, 2007
and September 30, 2007 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, 2007 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 2008.

 

•                  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 partnered programs;

 

(iii) financial
goals; and

 

(iv) progress
of research programs.Exhibit
10.1

FORM OF

ev3 INC. AMENDED AND RESTATED 2005 INCENTIVE STOCK
PLAN

STOCK GRANT CERTIFICATE

This Stock Grant
Certificate evidences a Stock Grant made pursuant to the ev3 Inc. Amended and
Restated 2005 Incentive Stock Plan of [             ]
shares of restricted Stock to [             ],
who shall be referred to as “Grantee”.  This Stock Grant is granted effective as of [             ],
which shall be referred to as the “Grant Date.”

 

	
  

  	
  ev3 INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

TERMS AND CONDITIONS

§ 1.                         Plan
and Stock Grant Certificate. 
This Stock Grant is subject to all of the terms and conditions set forth
in this Stock Grant Certificate and in the Plan. If a determination is made
that any term or condition set forth in this Stock Grant Certificate is
inconsistent with the Plan, the Plan shall control.  All of the capitalized terms not otherwise
defined in this Stock Grant Certificate shall have the same meaning in this
Stock Grant Certificate as in the Plan. 
A copy of the Plan will be made available to Grantee upon written
request to the corporate Secretary of the Company.

§ 2.                         Stockholder
Status.  Grantee shall have the
right under this Stock Grant to receive cash dividends on all of the shares of
Stock subject to this Stock Grant and to vote such shares until Grantee’s right
to such shares is forfeited or becomes nonforfeitable.  If Grantee forfeits any shares under
§ 3, Grantee shall at the same time forfeit Grantee’s right to vote such
shares and to receive cash dividends paid with respect to such shares.  Any Stock dividends or other distributions of
property made with respect to shares that remain subject to forfeiture under
§ 3 shall be held by the Company, and Grantee’s rights to receive such
dividends or other property shall be forfeited or shall be nonforfeitable at
the same time the shares of Stock with respect to which the dividends or other
property are attributable are forfeited or become nonforfeitable.  Except for the rights to receive cash
dividends and vote the shares of Stock subject to this Stock Grant which are
described in this § 2, Grantee shall have no rights as a Stockholder with
respect to such shares of Stock until Grantee’s interest in such shares has
become nonforfeitable.

§ 3.                         Vesting
and Forfeiture.

(a)           Vesting.  Subject to § 3(b), Grantee’s interest in
the Stock subject to this Stock Grant shall become nonforfeitable as follows:

(1)           Grantee’s interest in [     ]%/[            ]
of the shares of Stock subject to this Stock Grant [(rounding down to the
nearest whole number of shares of Stock)] shall become nonforfeitable only if
Grantee continuously provides services to the Company or its Affiliates
(whether as an employee or as a consultant) through November 15, [            ],

(2)           Grantee’s interest in
an additional [     ]%/[            ]
of the shares of Stock subject to this Stock Grant [(rounding down to the
nearest whole number of shares of Stock)] shall become nonforfeitable only if
Grantee continuously provides services to the Company or its Affiliates
(whether as an employee or as a consultant) through November 15, [            ],

(3)           Grantee’s interest in
an additional [     ]%/[            ]
of the shares of Stock subject to this Stock Grant [(rounding down to the
nearest whole number of shares of Stock)] shall become nonforfeitable only if
Grantee continuously provides services to the Company or its Affiliates
(whether as an employee or as a consultant) through November 15, [            ],

(4)           Grantee’s interest in
all remaining shares of Stock subject to this Stock Grant shall become
nonforfeitable only if Grantee continuously provides services to the Company or
its Affiliates (whether as an employee or as a consultant) through November 15,
[            ],

(b)           Forfeiture.  If Grantee’s continuous service relationship
(including service as an employee and as a consultant) with the Company and its
Affiliates terminates for any reason whatsoever before his or her interest in
all of the shares of Stock subject to this Stock Grant have become
nonforfeitable under § 3(a), then he or she shall (except as provided in
§ 14 of the Plan) forfeit all of the shares of Stock subject to this Stock
Grant except those shares in which he or she has (pursuant to § 3(a)) a
nonforfeitable interest on the date Grantee’s service relationship with the
Company and its Affiliates so terminates.

§ 4.                         Issuance
of Shares; Stock Power.  The
Company shall issue the shares of Stock subject to this Stock Grant in book entry
in the name of Grantee upon

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Grantee’s execution
of the irrevocable stock power in favor of the Company attached as Exhibit A.  The Secretary of the Company shall direct the
Company’s transfer agent not to honor any requests by the Grantee to transfer
the shares of Stock subject to this Stock Grant or to issue a physical stock
certificate representing such shares and any distributions made with respect to
such shares (other than ordinary cash dividends) until such time as Grantee’s
interest in such shares has become nonforfeitable or has been forfeited.  As soon as practicable after each date as of
which Grantee’s interest in any shares becomes nonforfeitable under
§ 3(a), the Company shall direct the Company’s transfer agent to honor any
requests thereafter by the Grantee to transfer the shares in which his or her
interest has become nonforfeitable on such date (together with any
distributions made with respect to such shares that have been held by the
Company) or to issue a physical stock certificate representing such shares.  If shares are forfeited under § 3(a),
the shares (together with any distributions made with respect to the shares
that have been held by the Company) automatically shall revert back to the
Company.

§ 5.                         Nontransferable.  No rights granted under this Stock Grant
Certificate shall be transferable by Grantee other than by will or by the laws
of descent and distribution.

§ 6.                         Other
Laws.  The Company shall have the
right to refuse to transfer shares of Stock subject to this Stock Grant to
Grantee if the Company acting in its absolute discretion determines that the
transfer of such shares might violate any applicable law or regulation.

§ 7.                         No
Right to Continue Service.  None
of the Plan, this Stock Grant Certificate, or any related material shall give
Grantee the right to remain employed by the Company or its Affiliates or to
continue in the service of the Company or its Affiliates in any other capacity.

§ 8.                         Governing
Law.  The Plan and this Stock
Grant Certificate shall be governed by the laws of the State of Delaware.

§ 9.                         Binding
Effect.  This Stock Grant
Certificate shall be binding upon the Company and Grantee and their respective
heirs, executors, administrators and successors.

§ 10.                       Headings
and Sections.  The headings
contained in this Stock Grant Certificate are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Stock Grant
Certificate.  All references to sections
in this Stock Grant Certificate shall be to sections of this Stock Grant
Certificate unless otherwise expressly stated as part of such reference.

§ 11.                       Availability
of Copy of Plan and Plan Prospectus. 
A copy of the plan document and prospectus for the ev3 Inc. Amended and
Restated 2005 Incentive Stock Plan are available on the Company’s intranet
portal under the “Employee Tools” section, which can be accessed by opening your
web browser from your Company

 3
 

desktop or laptop
computer.  If you like to receive a paper
copy of the plan document and/or plan prospectus, please contact:

Kevin M. Klemz

Vice President, Secretary and Chief Legal Officer

ev3 Inc.
9600 54th Avenue
North
Plymouth, Minnesota 55442

(763) 398-7000

KKlemz@ev3.net

§ 12.                       Availability
of Annual Report to Stockholders and Other SEC Filings.  A copy of the Company’s most recent annual
report to stockholders and other filings made with the Securities and Exchange
Commission are available on the Company’s internet website, www.ev3.net, under
the Investors Relations—SEC Filings section. 
If you like to receive a paper copy of the Company’s most recent annual
report to stockholders and other filings made by the Company with the
Securities and Exchange Commission, please contact Kevin M. Klemz at the
address, telephone number or e-mail address above.

 4
 

Exhibit A

IRREVOCABLE STOCK POWER

As a
condition to the issuance to the undersigned of [             ]
shares of Stock which were granted to the undersigned as a Stock
Grant under the ev3 Inc. Amended and Restated 2005 Incentive Stock Plan in the
Stock Grant Certificate dated [             ],
the undersigned hereby executes this Irrevocable Stock Power in order to sell,
assign and transfer to ev3 Inc. the shares of Stock subject to such Stock Grant
for purposes of effecting any forfeiture called for under § 3(b) of the
Stock Grant Certificate and does hereby irrevocably give ev3 Inc. the power
(without any further action on the part of the undersigned) to transfer such
shares of Stock on its books and records back to ev3 Inc. to effect any such
forfeiture.

This
Irrevocable Stock Power shall expire automatically with respect to the shares
of Stock on the date such shares of Stock are no longer subject to forfeiture
under § 3(b) of such Stock Grant Certificate or, if earlier, immediately
after such a forfeiture has been effected with respect to such shares of Stock.

	
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Print Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date

  

 

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