Document:

exv10w31

 

EXHIBIT 10.31

THORATEC CORPORATION

EXECUTIVE INCENTIVE PLAN (EIP)

Cardiovascular Business

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 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.
	 
	 	 	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.

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	 	 	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 >
	 	 = to, or >
	 	$	*	 	 	 	50	%	 	$	*	 	 	 	50	%
	Target = to, or >
	 	 = to, or >
	 	$	*	 	 	 	100	%	 	$	*	 	 	 	100	%

	Note:	 	 If Cardiovascular division revenue is less than $* (95% of target), no payment is earned for that objective. If Cardiovascular 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) Cardiovascular NGIBT earnings is defined as GAAP net income before taxes for
the Cardiovascular division excluding, as applicable, amortization of intangibles,
in-process R&D, impairment of intangibles, certain litigation, restructuring and CEO
transition expenses and certain 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 Cardiovascular 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 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

 

			
	*	 	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.

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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	 	 

35exv10w32

 

EXHIBIT 10.32

INTERNATIONAL TECHNIDYNE CORPORATION

EXECUTIVE INCENTIVE PLAN (EIP)

FY 2006

36

 

	I.	 	Objective
	 
	 	 	ITC’s Executive Incentive Plan, hereinafter referred to as EIP is intended to reward
executive personnel who significantly impact and influence ITC’s productivity in proportion
to their accomplishment of specified objectives.
	 
	 	 	The purpose of the plan is to ensure maximum return to ITC 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 those in comparable levels of responsibility who
have a direct and significant influence on ITC’s growth and profitability. Employees must be
regular and not eligible for any other ITC 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 ITC 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 Senior Management 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 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.

37

 

	 	 	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)
	 	 	 	 	ITC	 	ITC
	 	 	 	 	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 ITC NGIBT earnings is less than $* (95% 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 income information may be released at the end of each quarter, after earnings have
been disclosed to the public.

	 	(1)	 	ITC NGIBT earnings is defined as GAAP net income before taxes for the ITC
Division excluding, as applicable, amortization of intangibles, in-process R&D,
impairment of intangibles, certain litigation, restructuring and CEO transition
expenses and certain 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 ITC 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.

 

			
	*	 	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.

38

 

	 	•	 	Nothing in this plan shall be construed to limit in any way the right of
International Technidyne Corporation to terminate an 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. ITC reserves the right
to discontinue or alter the plan at its sole discretion at any time with or without
notice.

39

 

ACKNOWLEDGEMENT

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

	 	 	 	 	 	 	 
	 
	 

	 	 
	 	 

	 	 
	 
	 	 	 	 	 	 
	Signature

	 	 	 	Date	 	 

40

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