Document:

exv10w1

 

EXHIBIT 10.1

E M U L E X   C O R P O R A T I O N

EXECUTIVE BONUS PLAN

Plan Purpose

To focus members of the management team on the achievement of specific Company and individual
accomplishments that contribute to the creation of shareholder value.

To assist in attracting and retaining top quality management.

General Plan Description

The Bonus Plan provides for a quarterly cash award based upon Company performance against net
revenue and net operating income plan goals and specified business goals. In addition, a
discretionary bonus for recognition of extraordinary contributions to the success of the company
may be recommended. All bonus recommendations are subject to the approval of the Compensation
Committee.

Eligibility

Corporate officers, executive officers, operating officers, vice presidents, and senior directors,
excluding those eligible for sales commission (unless otherwise indicated within this plan), are
eligible for selection to participate in the Executive Bonus Plan. A participant must be an active
regular full-time employee.

Participation and Term

Actual Executive Bonus Plan participants will normally be selected from among those eligible
annually, prior to the start of each fiscal year, by the Chairman and Chief Executive Officer and
approved by the Compensation Committee. The Plan is based on a fiscal year and may be modified,
extended, or canceled annually at the discretion of the Compensation Committee. A participant must
be an employee for the entire quarter to be eligible for a quarterly bonus. No proration formula
will be in effect.

Target Bonus Opportunity

Each eligible participant will be assigned a target award opportunity expressed as a percentage of
their actual gross base salary at the end of the respective quarter. The target award opportunity
for:

[Category 1] is 90%

[Category 2] is 70%

[Category 3] is 70%

[Category 4] is 35%

[Category 5] is 10%

  

 

Bonus Award Criteria

Bonus award criteria will be based upon achieving a combination of corporate performance goals.

The weighting factors are:

	 	 	 	 	 
	 	 	Category 1, 2, 4, and 5	 	Category 3
	Net revenue performance
	 	45%	 	50%
	Net operating income
	 	55%	 	50%

The actual goals for measurement purposes will be the Company’s fiscal Annual Operating Plan (AOP)
as approved by the Board of Directors. Corporate bonus components will be calculated according to
the following procedure:

	 	1.	 	The target bonus percentage times the participant’s quarterly gross base salary equals
	 
	 	 	 	the overall award target.
	 
	 	 	 	Example : 35% x $25,000 (quarterly salary) = $8,750 target award
	 
	 	2.	 	The weighting factors for net revenue, net operating income, and subjective as stated above
times the overall target award potential give the bonus target for each weighting factor.
	 
	 	 	 	Example : 45% x $8,750 = $3,938.00 (net revenue target)

55% x $8,750 = $4,812.00 (net operating income target)

	 	3.	 	An accelerator formula of 1.5 x % of performance less 50% (Category 3 employee: 2.0 x % of
performance less 100%) will be used for each part of the quantitative bonus award calculation
to reinforce over-achievement opportunity as well as to minimize any bonus payments for
performance below fiscal AOP planned levels.

Using the Example if the first quarter performance is 105% of net revenue and 110% of net
income:

(105% x 1.50) less 50% = 157.5% — 50% = 107.5% of net revenue target: 1.075

x $3,938.00 = $4,233.35 net revenue bonus payment

(110% x 1.50) less 50% = 165% — 50% = 115% of net operating income target:

1.15% x $4,812.00 = $5,533.80 net operating income bonus payment

total first quarter bonus award for revenue and income = $9,767.15.

 

 

Using the Example if the second quarter performance is 90% of net revenue and 80% of net

operating income:

(90% x 1.50) less 50% = 135% — 50% = 85% of net revenue target:

..85 x $3,938.00= $3,347.30 net revenue bonus payment

(80% x 1.50) less 50% = 120% — 50% = 70% of net operating income target:

..70% x $4,812.00 = $3,368.40 net operating income bonus payment

total second quarter bonus award for revenue and income = $6,715.70

	 	4.	 	Revenue and operating income will be treated as separate bonuses independent of one another
regardless of the award formula. However, a minimum threshold of 80% of the Board of
Directors’ approved AOP for revenue must be achieved for a revenue bonus payout. Likewise, a
minimum threshold of 80% of the Board of Directors’ approved AOP for operating income must be
achieved for an operating income payout. No bonus payout of any kind shall be made if
operating income falls below 50% of the AOP approved plan.

Discretionary Bonuses

Occasionally, an individual makes an extraordinary contribution to the success of the company, a
contribution that deserves special recognition and financial reward. It is the intention of this
“Discretionary Bonus” provision to provide the Chairman/CEO with the latitude to recommend unusual
bonus payments to be made to such contributors when they occur. Such bonus recommendations are not
subject to the guidelines of the plan described above, but are subject to the review and prior
approval of the Compensation Committee.

Payment of Awards

Any proposed awards by the Chairman/CEO must be reviewed and approved by the Compensation
Committee.

Awards will be paid approximately 30 days following the end of each quarter. All legally required
deductions will be withheld.

Plan Administration

The plan will be administered under the direction of the Chairman/CEO of Emulex Corporation upon
approval by the Emulex Compensation Committee. The administrator’s authority will include, but not
be limited to:

	 	 	Final approval of plan participants, corporate performance goals, award opportunity and
award payment.
	 
	 	 	Interpretation of all rules pertaining to the plan.
Changes to the plan or termination of the plan, provided such changes or termination
do not adversely affect the award opportunity or difficulty of earning awards following
the beginning of the fiscal year.
	 
	 	 	Treatment of special events in calculating performance versus plan, such as a major
acquisition or changes in accounting regulations.

 

 

Plan Term

This Plan will become effective on the first day of the fiscal year and end on the last day of the
fiscal year.

Foreign Currency Considerations

All plan participants whose gross base salary is not denominated in U.S. dollars will be paid in
the same currency as their gross base salary as will all bonus calculations will be made using the
equivalent base salary in US currency as indicated in the most recent payroll information.

Definitions

Active Regular Full-time Employee: An employee working 40 hours per week.

Gross Base Salary: An employee’s base salary plus shift differential and lead bonus, if
applicable. Does not include payment for overtime, bonus payments of any type, or other income
such as relocation allowances, employee referral payments, etc.

Net Revenue: Refers to consolidated net sales.

Net Operating Income: Refers to consolidated earnings from operations before interest/
bonus/profit sharing/retirement savings plan/other income & expense, any workers compensation
related expense and income taxes.

Termination for Cause: Termination of employment as a result of violation of one or more
written or unwritten Company policies, procedures, principles or rules regarding employee conduct
and behavior. If an employee is terminated for cause prior to payment of a quarterly bonus, the
employee will not be eligible for the payment.

Approved by Compensation Committee:

	 	 	 
	/s/ Bruce C. Edwards
	 	July 10, 2006
	 
	 	 
	Bruce C. Edwards
	 	Date
	 
	/s/ Don M. Lyle
	 	July 24, 2006
	 
	 	 
	Don M. Lyle
	 	Date

 

Approved by Chairman/CEO:

	 	 	 
	/s/ Paul F. Folino
	 	July 24, 2006
	 
	 	 
	Paul F. Folino
	 	Dateexv10w1

 

Exhibit 10.1

CONSULTING AGREEMENT

     THIS CONSULTING AGREEMENT (the “Agreement”) is made and entered into as of the 13th day of
July, 2006 (the “Effective Date”), by and between JOHN KLIEGL, a resident of the State of Iowa
(“Consultant”), and SOUTHERN IOWA BIOENERGY LLC, an Iowa limited liability company (“SIBE”).

WITNESSETH:

     WHEREAS, SIBE intends to develop, finance and construct a biodiesel plant (the “Project”); and

     WHEREAS, SIBE desires to temporarily engage Consultant to provide consulting and advice
concerning the Project pursuant to the terms set forth herein.

     NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION given, received and acknowledged, the
parties agree as follows:

     1. Engagement; Term/Termination. SIBE hereby engages Consultant as a consultant and
advisor in connection with the Project; and Consultant hereby accepts such engagement, upon the
terms and conditions hereinafter set forth. The term of Consultant’s engagement shall commence
immediately, and shall continue until terminated by either party. Either party may terminate this
Agreement at any time, with or without cause, upon Ten (10) days prior written notice, or
immediately in the event of a material default by the other party.

     2. Duties; Limitations on Authority. SIBE may, from time to time, request that
Consultant provide consulting and advisory services to SIBE in connection with the Project. Such
services may include, without limitation: (i) assistance in planning equity marketing efforts;
(ii) training SIBE’s officers and directors to conduct equity marketing efforts; and (iii)
scheduling informational meetings with potential investors to be conducted by SIBE’s officers and
directors.

     Notwithstanding any other provision in this Agreement, the parties covenant, acknowledge and
agree that: (a) Consultant shall have no right or authority, and not shall hold himself out as
having any such authority, express or implied, to assume or create any duty, responsibility,
obligation or liability, for, on behalf of, or in the name of SIBE, or to otherwise bind SIBE in
any respect; (b) Consultant will comply with all applicable laws, rules and regulations in
providing services hereunder, and (c) under no circumstances will Consultant solicit, orally or in
writing, any potential investor in SIBE’s securities, make any sale of SIBE’s securities, or
respond directly to questions from potential investors relating to SIBE’s securities. Consultant
will indemnify and hold harmless SIBE for any loss, liability, cost, damage or expense suffered or
incurred by SIBE due to Consultant’s breach of this paragraph.

     3. Compensation; Expense Reimbursement. In consideration for Consultant’s consulting
and advisory service hereunder, SIBE shall pay Consultant an initial fee of $25,000, and a
conditional bonus of $225,000, which bonus shall be payable only if and upon SIBE’s closing of
permanent financing sufficient for the completion and operation of the Project. In addition,
Consultant will be entitled to reimbursement of reasonable, ordinary and necessary expenses
incurred by Consultant in rendering services hereunder; provided, however, that any expense in
excess of One Hundred Dollars ($100) shall be subject to prior approval by SIBE.

     4. Confidentiality; Return of Information. Consultant shall keep and maintain in
confidence all non-public information relating to SIBE and shall return all such information to
SIBE upon termination of this Agreement.

     5. Relationship of the Parties. The parties’ relationship hereunder is that of
independent contracting parties. Consultant shall be solely responsible for payment of any taxes
incurred in connection with compensation received from SIBE hereunder. Furthermore, Consultant
acknowledges and agrees that SIBE will not be responsible for, and Consultant hereby releases, and
agrees to indemnify and hold SIBE and its officers,

 

 

Managers and employees harmless from and against, any injuries suffered by Consultant in
providing services hereunder. Consultant will be responsible for providing his own insurance
coverage.

     6. Miscellaneous. This Agreement constitutes the entire understanding between the
parties concerning the subject matter hereof. No prior or contemporaneous representations,
inducements, promises or agreements not contained herein are of any force or effect. This
Agreement shall be governed by and construed in accordance with Iowa law, and shall not be modified
except in a writing signed by all parties. This Agreement is binding upon the parties and their
heirs, representatives, agents, successors and permitted assigns. Neither this Agreement or any
parties’ rights, duties, responsibilities or obligations shall be assigned by either party, in
whole or in part, without the prior written consent of the other party hereto. If any provision
herein is held to be invalid, unenforceable, or contrary to public policy, in whole or in part, the
remaining provisions shall not be affected. No omission or delay by either party in enforcing any
right or remedy or in requiring any performance hereunder shall constitute a waiver of any such
right, remedy or required performance, nor shall it affect the right of either party to enforce
such provision thereafter. The remedies set forth herein are cumulative and in addition to all
other remedies available hereunder, at law and in equity. The headings contained herein are for
convenience only and shall not be considered in interpreting or construing this Agreement. All
covenants, warranties, representations and indemnification obligations set forth in this Agreement
shall survive the termination or expiration hereof. This Agreement may be executed in
counterparts, and facsimile signatures shall be binding upon the parties.

     IN WITNESS WHEREOF, the parties hereto have duly executed this CONSULTING AGREEMENT as of the
Effective Date.

	 	 	 	 	 	 	 
	SOUTHERN IOWA BIOENERGY LLC	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	      /s/ William T. Higdon
	 	     /s/ John Kliegl	 	 
	 

	 	 

     William T. Higdon, President
	 	 

     John Kliegl
	 	 

2

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