Document:

exv10w1

 

EXHIBIT 10.0

EXECUTION VERSION

FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

     This FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (hereinafter referred to
as the “Amendment”) executed as of the 21st day of March, 2006, by and among
RANGE RESOURCES CORPORATION, a Delaware corporation (“Company”), GREAT LAKES ENERGY
PARTNERS, L.L.C., a Delaware limited liability company (“GLEP”, and together with the
Company and each of their respective successors and permitted assigns, the “Borrowers” and
each a “Borrower”), JPMORGAN CHASE BANK, N.A. (successor by merger to Bank One, N.A.
(Illinois)), a national banking association (“JPMorgan Chase”), each of the financial
institutions which is a party hereto (as evidenced by the signature pages to this Amendment) or
which may from time to time become a party to the Credit Agreement pursuant to the provisions of
Section 29 thereof or any successor or permitted assignee thereof (hereinafter collectively
referred to as “Lenders”, and individually, “Lender”), JPMorgan Chase, as
Administrative Agent (in its capacity as Administrative Agent and together with its successors in
such capacity, “Agent”). Capitalized terms used but not defined in this Amendment have the
meanings assigned to such terms in that certain Second Amended and Restated Credit Agreement dated
as of June 23, 2004, by and among Borrower, Agent and Lenders (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”).

WITNESSETH:

     WHEREAS, the Borrowers have requested that the Agent and the Lenders amend the Credit
Agreement to (i) extend the Maturity Date to January 1, 2011, (ii) permit the Borrowers to
transfer, sell, or dispose of Oil and Gas Properties which do not exceed ten percent (10%) of the
Borrowing Base in the aggregate between Borrowing Base redeterminations and (iii) permit the
Borrowers to make investments which do not exceed ten percent (10%) of the Borrowing Base in effect
on the date hereof; and Agent and the Lenders have agreed to do so on the terms and conditions
hereinafter set forth; and

     NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and confessed, the Borrowers, Agent and the Lenders, hereby agree as follows:

SECTION 1. Amendments to Credit Agreement. Subject to the satisfaction or waiver in writing of
each condition precedent set forth in Section 2 hereof, and in reliance on the
representations, warranties, covenants and agreements contained in this Amendment, the Credit
Agreement shall be amended in the manner provided in this Section 1.

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Amendment to Second Amended and Restated Credit Agreement — Page 1

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     1.1 Additional Definition. The following definition shall be added to Section 1 of the Credit
Agreement in alphabetical order:

     Fifth Amendment Effective Date shall mean March 21, 2006.

     1.2 Amended Definition. The following definition set forth in Section 1 of the Credit
Agreement shall be and it hereby is amended in its entirety to read as follows:

     Maturity Date shall mean January 1, 2011.

     1.3 Restricted Payments. Section 13(a)(ii) of the Credit Agreement shall be and it
hereby is amended in its entirety to read as follows:

     (ii) sell, lease, transfer or otherwise dispose of, in any fiscal year, any of its
assets including any Capital Stock owned by it except for (A) sales, leases, transfers or
other dispositions made in the ordinary course of such Borrower’s or such Guarantor’s oil and
gas businesses, (B) sales, leases, transfers or other dispositions of Oil and Gas Properties
with an Engineered Value that does not exceed ten percent (10%) of the Borrowing Base in the
aggregate between Borrowing Base redeterminations; (C) transfers or other dispositions of Oil
and Gas Properties to Marbel upon the exercise of its Deep Participation Rights and (C) other
sales, leases, transfers or other dispositions made with the consent of Super Majority
Lenders.

     1.4 Loans, Advances and Investments. Section 13(g) of the Credit Agreement shall be
and it hereby is amended by deleting clauses (iii) and (iv) of such section and inserting the
following as clause (iii) of such section:

     (iii) other loans, advances or investments; provided that, on the date any such
investment is made, the amount of such investment, together with all other investments made
after the Fifth Amendment Effective Date pursuant to this clause (in each case determined
based on the cost of such investment) does not exceed ten percent (10%) of the Borrowing
Base in effect on the Fifth Amendment Effective Date.

SECTION 2. Conditions. The amendments to the Credit Agreement contained in Section 1 of
this Amendment shall be effective upon the satisfaction of each of the conditions set forth in this
Section 2.

     2.1 Execution and Delivery. Each Borrower and each Guarantor shall have executed and
delivered this Amendment.

     2.2 Representations and Warranties. The representations and warranties of each Borrower under
this Amendment are true and correct in all material respects as of such date, as if then made
(except to the extent that such representations and warranties relate solely to an earlier date).

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     2.3 No Event of Default. No Event of Default shall have occurred and be continuing nor shall
any event have occurred or failed to occur which, with the passage of time or service of notice, or
both, would constitute an Event of Default.

     2.4 Other Documents. The Agent shall have received such other instruments and documents
incidental and appropriate to the transaction provided for herein as the Agent or its special
counsel may reasonably request, and all such documents shall be in form and substance satisfactory
to the Agent.

     2.5 Legal Matters Satisfactory. All legal matters incident to the consummation of the
transactions contemplated hereby shall be reasonably satisfactory to special counsel for the Agent
retained at the expense of the Borrowers.

SECTION 3. Representations and Warranties of Borrowers. To induce the Lenders to enter
into this Amendment, the Borrowers hereby represent and warrant to the Lenders as follows:

     3.1 Reaffirmation of Representations and Warranties/Further Assurances. After giving effect
to the amendments herein, each representation and warranty of any Borrower or any Guarantor
contained in the Credit Agreement or in any of the other Loan Documents is true and correct in all
material respects on the date hereof (except to the extent such representations and warranties
relate solely to an earlier date).

     3.2 Corporate Authority; No Conflicts. The execution, delivery and performance by each
Borrower and each Guarantor (to the extent a party hereto or thereto) of this Amendment and all
documents, instruments and agreements contemplated herein are within each such Borrower’s or such
Guarantor’s corporate or other organizational powers, have been duly authorized by necessary
action, require no action by or in respect of, or filing with, any court or agency of government
and do not violate or constitute a default under any provision of any applicable law or other
agreements binding upon any Borrower or any Guarantor or result in the creation or imposition of
any Lien upon any of the assets of any Borrower or any Guarantor except for Permitted Liens and
otherwise as permitted in the Credit Agreement.

     3.3 Enforceability. This Amendment constitutes the valid and binding obligation of each
Borrower and each Guarantor enforceable in accordance with its terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditor’s rights generally, and (ii) the availability of equitable remedies may be limited by
equitable principles of general application.

SECTION 4. Miscellaneous.

     4.1 Reaffirmation of Loan Documents and Liens. Any and all of the terms and provisions of the
Credit Agreement and the Loan Documents shall, except as amended and modified hereby, remain in
full force and effect. Each Borrower hereby agrees that the amendments and modifications herein
contained shall in no manner affect or impair the liabilities, duties and obligations of such
Borrower or any Guarantor under the Credit Agreement and the other Loan Documents or the Liens
securing the payment and performance thereof.

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     4.2 Parties in Interest. All of the terms and provisions of this Amendment shall bind and
inure to the benefit of the parties hereto and their respective successors and assigns.

     4.3 Legal Expenses. The Borrowers hereby agree, jointly and severally, to pay all reasonable
fees and expenses of special counsel to the Agent incurred by the Agent in connection with the
preparation, negotiation and execution of this Amendment and all related documents.

     4.4 Counterparts. This Amendment may be executed in one or more counterparts and by different
parties hereto in separate counterparts each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one and the same
instrument; signature pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically attached to the same document.
However, this Amendment shall bind no party until the Borrowers, the Lenders, and the Agent have
executed a counterpart. Delivery of photocopies of the signature pages to this Amendment by
facsimile or electronic mail shall be effective as delivery of manually executed counterparts of
this Amendment.

     4.5 Complete Agreement. THIS AMENDMENT, THE CREDIT AGREEMENT, AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.

     4.6 Headings. The headings, captions and arrangements used in this Amendment are, unless
specified otherwise, for convenience only and shall not be deemed to limit, amplify or modify the
terms of this Amendment, nor affect the meaning thereof.

[Signature Pages Follow]

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     IN WITNESS WHEREOF, the parties have caused this Fifth
Amendment to Amended and Restated Credit Agreement to be duly executed as of the date first above
written.

	 	 	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 	 	 
	 	 	RANGE RESOURCES CORPORATION

a Delaware corporation
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Roger S. Manny	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Roger S. Manny
	 	 	Title: Senior Vice President  

	 	 	 	 	 	 	 	 	 
	 	 	GREAT LAKES ENERGY PARTNERS, L.L.C.

a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Range Holdco, Inc.	 	 
	 	 	 	 	Its member	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Roger S. Manny	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	Roger S. Manny	 	 
	 	 	Title:	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Range Energy I, Inc.	 	 
	 	 	 	 	Its member	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Roger S. Manny	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	Roger S. Manny	 	 
	 	 	Title:	 	Senior Vice President	 	 

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	 	 	JPMORGAN CHASE BANK, N.A.,

formerly known as JPMorgan Chase Bank and

(successor by merger to Bank One, N.A. (Illinois)),

as Agent and a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Wm. Mark Cranmer	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Wm. Mark Cranmer
	 	 	Title: Vice President  

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	 	 	BANK OF SCOTLAND
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Karen Weich	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Karen Weich
	 	 	Title: Assistant Vice President

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	 	 	CALYON NEW YORK BRANCH
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Page Dillehunt	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Page Dillehunt
	 	 	Title: Managing Director
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael Willis	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Michael Willis
	 	 	Title: Vice President

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	 	 	COMPASS BANK
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Murray E. Brasseux	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Murray E. Brasseux
	 	 	Title: Executive Vice President

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	 	 	FLEET NATIONAL BANK
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jeffrey H. Rathkamp	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Jeffrey H. Rathkamp
	 	 	Title: Principal

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	 	 	FORTIS CAPITAL CORP.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michele Jones	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Michele Jones
	 	 	Title: Senior Vice President
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Darrell Holley	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Darrell Holley
	 	 	Title: Managing Director

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	 	NATEXIS BANQUES POPULAIRES

 	 
	 	By:  	/s/ Donovan C. Broussard
 	 
	 	 	Donovan C. Broussard 	 
	 	 	Vice President & Group Manager 	 
	 
	 	 	 
	 	By:  	     /s/ Timothy L. Polvado
 	 
	 	 	Timothy L. Polvado 	 
	 	 	Vice President & Group Manager 	 
	 

Range
Resources Corp.
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	 	 	COMERICA BANK
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Peter L. Sefzik	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Peter L. Sefzik
	 	 	Title: Vice President

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	 	 	HIBERNIA NATIONAL BANK
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Nancy G. Moragas	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Nancy G. Moragas
	 	 	Title: Vice President

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Amendment to Second Amended and Restated Credit Agreement —
Signature Page

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	 	AMEGY BANK NATIONAL ASSOCIATION (f/k/a Southwest Bank of Texas N.A.)

 	 
	 	By:  	/s/ W. Bryan Chapman
 	 
	 	 	W. Bryan Chapman 	 
	 	 	Senior Vice President, Manager - Energy Lending 	 
	 

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	 	 	HARRIS NESBITT FINANCING, INC.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James V. Ducote	 	 
	 

	 	 	 	 	 	 
	 	 	Name: James V. Ducote
	 	 	Title: Vice President

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	 	 	KEY BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas Rajan
 

	 	 
	 

	 	Name:
	 	Thomas Rajan	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

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	 	 	WACHOVIA BANK, NATIONAL	 	 
	 	 	ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Dwight Battle
 

	 	 
	 

	 	Name:
	 	Dwight Battle	 	 
	 

	 	Title:
	 	Vice President	 	 

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	 	 	UNION BANK OF CALIFORNIA, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kimberly Coll
 

	 	 
	 

	 	Name:
	 	Kimberly Coll	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Alison Fuqua
 

	 	 
	 

	 	Name:
	 	Alison Fuqua	 	 
	 

	 	Title:
	 	Investment Banking Officer	 	 

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	 	 	THE BANK OF NOVA SCOTIA	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ N. Bell
 

	 	 
	 

	 	Name:
	 	N. Bell	 	 
	 

	 	Title:
	 	Senior Manager	 	 

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	 	 	THE FROST NATIONAL BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John S. Warren
 

	 	 
	 

	 	Name:
	 	John S. Warren	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

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CONSENT AND REAFFIRMATION

     The undersigned (each a “Guarantor”) hereby (i) acknowledges receipt of a copy of the
foregoing Fifth Amendment to Second Amended and Restated Credit Agreement (the “Fifth
Amendment”); (ii) consents to Borrower’s execution and delivery thereof; (iii) agrees to be
bound thereby; (iv) affirms that nothing contained therein shall modify in any respect whatsoever
its guaranty of the obligations of the Borrower to Lenders pursuant to the terms of its Guaranty in
favor of Agent and the Lenders (the “Guaranty”) and (v) reaffirms that the Guaranty is and
shall continue to remain in full force and effect. Although Guarantor has been informed of the
matters set forth herein and has acknowledged and agreed to same, Guarantor understands that the
Lenders have no obligation to inform Guarantor of such matters in the future or to seek Guarantor’s
acknowledgment or agreement to future amendments or waivers, and nothing herein shall create such
duty.

     IN WITNESS WHEREOF, the undersigned has executed this Consent and Reaffirmation on and as of
the date of this Fifth Amendment.

	 	 	 	 	 	 	 
	 	 	GUARANTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	RANGE ENERGY I, INC.	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Roger S. Manny	 	 
	 

	 	Name:
	 	 

Roger S. Manny
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	RANGE HOLDCO, INC.	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Roger S. Manny	 	 
	 

	 	Name:
	 	 

Roger S. Manny
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	RANGE PRODUCTION COMPANY	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Roger S. Manny	 	 
	 

	 	Name:
	 	 

Roger S. Manny
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

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	 	 	RANGE ENERGY VENTURES	 	 
	 	 	CORPORATION, a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Roger S. Manny	 	 
	 

	 	Name:
	 	 

Roger S. Manny
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	GULFSTAR ENERGY, INC.	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Roger S. Manny
 

	 	 
	 

	 	Name:
	 	Roger S. Manny	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	RANGE ENERGY FINANCE CORPORATION	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Roger S. Manny	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Roger S. Manny	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

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	 	 	RANGE PRODUCTION I, L.P.	 	 
	 	 	a Texas limited partnership	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	RANGE PRODUCTION COMPANY

Its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Roger S. Manny	 	 
	 

	 	Name:
	 	 

Roger S. Manny
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	RANGE RESOURCES, L.L.C.	 	 
	 	 	a Oklahoma limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	RANGE PRODUCTION COMPANY

Its member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Roger S. Manny	 	 
	 

	 	Name:
	 	 

Roger S. Manny
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	RANGE HOLDCO, INC.

Its member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/  Roger S. Manny	 	 
	 

	 	Name:
	 	 

Roger S. Manny
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

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EXHIBIT 10.30

THORATEC CORPORATION

EXECUTIVE INCENTIVE PLAN (EIP)

Corporate

FY 2006

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	I.	 	Objective
	 
	 	 	Thoratec’s Executive Incentive Plan, hereinafter referred to as EIP is intended to reward
executive personnel who significantly impact and influence Thoratec’s productivity in
proportion to their accomplishment of specified objectives.
	 
	 	 	The purpose of the plan is to ensure maximum return to Thoratec by encouraging greater
initiative, resourcefulness, teamwork and efficiency on the part of senior management whose
performance and responsibilities directly affect company profits.
	 
	 	 	Awarding of the bonus will be based on accomplishing a set of annual objectives, determined
by the Chief Executive Officer (“CEO”) and the Board of Directors, typically at the
beginning of the year. Bonus determinations and payouts will take place after the financial
statements have been prepared for the fiscal year.
	 
	II.	 	Determination Of The Fund
	 
	 	 	The availability of, and participants in, the fund will be set by the CEO and approved by
the Board of Directors as part of the annual budgeting process.
	 
	III.	 	Effective Date
	 
	 	 	The effective date of this program is January 1, 2006, the beginning of the plan year, and
will continue in effect until December 30, 2006, or until terminated or amended by the Board
of Directors. This plan supersedes all prior EIP plans.
	 
	IV.	 	Eligibility
	 
	 	 	Participation in the plan is limited to Officers and others in comparable levels of
responsibility who have a direct and significant influence on Thoratec’s growth and
profitability. Employees must be regular and not eligible for any other Thoratec commission,
bonus or incentive plan in order to be eligible to participate in the EIP.
	 
	 	 	Participating employees will be determined at the beginning of the fiscal year, or at such
time during the Fiscal Year that an employee achieves an eligible position. Employees will
be notified of their eligibility and plan objectives, as soon as possible after the
determination by the CEO or Board of Directors.
	 
	 	 	Individuals must be employed by Thoratec at the close of the fiscal year in order to be
eligible for an award under the EIP except participants who are involuntarily terminated due
to a divestiture, plant closing, reorganization or reduction in force during the plan year
may receive an award on the prorated basis described in Section VIII, Plan Administration,
Prorated Awards, [subject to approval by the CEO]. These monies will be paid out at the
usual and customary time of payment of all bonuses. For purposes of this plan, termination
shall mean the day the employee leaves the job, which may not necessarily be the last day on
the payroll.
	 
	V.	 	Incentive Objectives
	 
	 	 	Objectives will be agreed to by the CEO with the Executive Officers reporting to him and
with concurrence by the Board of Directors as necessary. Generally, there will be a minimum
of four up to a maximum of seven objectives, which will include two or more corporate
financial objectives. Each objective will be weighted according to its importance, which
weight will determine the percentage of the bonus awarded for completion of that objective.
(See Section VI below.)
	 
	 	 	After approval, copies of these goals must be submitted to the Vice President of
Administration.
	 
	VI.	 	Bonus Opportunity and Award
	 
	 	 	The award opportunity will be expressed as a percentage of the participant’s base salary at
the close of the fiscal year. The award will be approved by the Board of Directors or the
CEO, and will be consistent with the participant’s peers within the company.

29

 

	 	 	The amount that a participant actually receives for the full fiscal year will be based upon
the extent to which the set objectives have been achieved. The participant will receive a
percentage of the total award opportunity corresponding to the percentage of each objective
accomplished and the weight assigned to the objective. Evaluations of performance against
management and business plan objectives are made for the full year prior to fiscal year-end
payment.
	 
	VII.	 	Performance Goal and Payout
	 
	 	 	In addition to your individual goals, everyone will have two company-oriented financial
goals that will be achieved according to the following guidelines:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	(1)
	 	 	 	 	Revenue	 	Non-GAAP Income Before Tax
	 	 	 	 	Goal	 	Award	 	Goal	 	Award
	 	 	 	 	 
	Threshold
	 	= to, or >
	 	$	*	 	 	 	50	%	 	$	*	 	 	 	50	%
	Target
	 	= to, or >
	 	$	*	 	 	 	100	%	 	$	*	 	 	 	100	%

	Note:	 	 If revenue is less than $* (95% of target), no payment is earned for that objective. If consolidated NGIBT earnings is less than $* (90% of
target), no payment is earned for that objective. If actual results fall between threshold and target, interpolate between them to get actual
payout percentage. This percentage will be multiplied times the weight given the objective in your individual plan to determine the
achievement. Quarterly revenue and NGIBT earnings information may be released at the end of each quarter, after earnings have been disclosed
to the public.
	 
		 	(1) NGIBT earnings is defined as consolidated GAAP net income before taxes
excluding, as applicable, amortization of intangibles, in-process R&D, impairment of
intangibles, certain litigation, restructuring and CEO transition expenses and other unusual
or non-recurring costs, and also excluding share-based compensation expense under SFAS No.
123(R) and changes in the value of the “make-whole” provision of our convertible notes and
special incentive awards.
	 
	VIII.	 	Over-Achievement Award Opportunity/Performance Accelerator
	 
	 	 	In addition, each EIP participant will receive a [x]**% increase for every [y]**% increase
in consolidated NGIBT earnings over the target level.
	 
	IX.	 	Plan Administration
	 
	 	 	Prorated Awards. Individuals who are promoted to eligible positions during the plan
year, new hires into eligible positions and eligible employees who are either on
leave or on active written warning for part of the year may be awarded partial bonuses
under this program, based on the accomplished objectives and their respective weights,
subject to the approval of the CEO.
	 
	 	 	Transfers. In the event of transfer of an eligible participant to another position or
department, the transferring manager will evaluate EIP results for prorated award (see
Prorated Awards above) at the end of the year, and forward copies to the Human Resources
Department. The hiring manager will be responsible for setting the key business plan
objectives for the balance of the year, if applicable, and forwarding the original to Human
Resources for approval. Awards based on these objectives will be prorated (see Prorated
Awards above) as well, for end of the year payment.
	 
	 	 	Authority. The Board of Directors shall have the full power and authority to construe,
interpret and administer the plan. All decisions, actions or interpretations of the Board
of Directors shall be final and conclusive and binding on all parties. This program shall
be administered by the Human Resources Department.
	 
	X.	 	General Provisions

	 	•	 	The Executive Incentive Plan for 2006 may be reviewed and revised at the Board’s
discretion.
	 
	 	•	 	Nothing in this plan shall be construed to limit in any way the right of Thoratec
Corporation to terminate an

 

			
	*	 	Amounts to be determined by the Compensation
and Option Committee of the Board of Directors.
	 
	**	 	Percentages for [x] and [y] to be determined
by the Compensation and Option Committee of the Board of Directors.

30

 

employee’s employment at any time, with or without cause or notice, nor shall it be
evidence of any agreement or understanding, expressed or implied, that Thoratec or any of
its subsidiaries will employ an employee in any particular position, for any particular
period of time, ensure participation in any incentive programs, or the granting of awards
from such programs as they may from time to time exist or be constituted. Thoratec
reserves the right to discontinue or alter the plan at its sole discretion at any time
with or without notice.

ACKNOWLEDGEMENT

I                                          hereby acknowledge that I have received, read and
understand the 2006 Executive Incentive Plan and agree to the conditions therein.

	 	 	 	 	 	 	 
	 
	 

	 	 
	 	 

	 	 
	 
	 	 	 	 	 	 
	Signature

	 	 	 	Date	 	 

31

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