Document:

exv10w12

 

Exhibit 10.12

Non-Employee Director Compensation Summary

     Effective October 1, 2004, directors who are not employees of Renaissance Learning, Inc. (the
“Company”) receive a $6,000 annual cash retainer, to be paid quarterly. In addition to this
retainer, non-employee directors will continue to receive a fee of $1,000 for each board meeting
attended, plus out-of-pocket expenses incurred in connection with attendance at each such meeting.
For each committee meeting attended, these directors will continue to receive the following fees,
plus out-of-pocket expenses: (a) the chairman of the Audit Committee receives $1,000 for each
Audit Committee meeting attended, while the other Audit Committee members receive $750 for each
such meeting, and (b) the chairman of the Compensation Committee receives $750 for each
Compensation Committee meeting attended, while other Compensation Committee members receive $500
for each such meeting. Meeting fees for attendance at Nominating Committee meetings will be
established if and when that committee meets.

     In addition, each non-employee director receives a semi-annual option grant under the
Company’s 1997 Stock Incentive Plan. The number of shares for which each option is granted to a
director is equal to $75,000, for each semi-annual grant amount, divided by the exercise price per
share. Options are granted with an exercise price equal to the fair market value of the Company’s
common stock on the date of grant, vest immediately and expire ten years from the date of grant.
In addition, such options are exercisable by the directors for up to two years after termination of
service on the board.exv10w13

 

Exhibit 10.13

Executive Officer Compensation Summary

     Renaissance Learning, Inc.’s (the “Company’s”) executive officers consist of Mr. John Hickey,
President and Chief Executive Officer; Mr. Steven Schmidt, Executive Vice President; Ms. Mary
Minch, Chief Financial Officer; Mr. Terrance Paul, Co-Chairman of the Board; and Ms. Judith Paul,
Co-Chairman of the Board.

     The compensation structure for executive officers of the Company consists of base salary, cash
bonus, and stock option grants. The Company’s Incentive Bonus Plan permits participants in the
plan to receive up to 100% of their base salary in a cash bonus which is tied to the performance of
the Company. Bonus awards are subject to a four year vesting period, vesting 25% per year
beginning one year from the date of the initial award. The vested portion of the award is then
paid out promptly upon vesting. Options granted under the Company’s Stock Incentive Plan are
granted at the fair market value of the stock on the date of grant, are subject to a four year
vesting schedule (vesting 25% per year beginning one year from the date of grant), and expire 10
years from the date of grant (subject to earlier termination in the event of termination of
employment; but see discussion of Mr. Hickey’s option grants below).

     Each executive receives a base salary, but only Mr. Schmidt and Ms. Minch participate in the
Company’s Incentive Bonus Plan. Only Mr. Hickey and Mr. Schmidt participate in the Company’s Stock
Incentive Plan. In addition, each executive is entitled to receive 401(k) plan and supplemental
executive retirement plan (“SERP”) matching amounts contributed by the Company. The Company does
not have employment agreements with any of its executive officers.

     Compensation decisions affecting the Company’s executive officers are made in July of each
year by the Compensation Committee of the Board of Directors. On July 21, 2004 (or November 22,
2004, in the case of Ms. Minch), the Compensation Committee approved the terms of compensation to
be paid to the Company’s executive officers for the subsequent 12 month period, as follows:

	 	•  	Mr. Hickey. The Committee approved a 5% increase in Mr. Hickey’s
base salary, as well as a 5% increase in the current dollar value
of stock options granted to him. As a result of these increases,
Mr. Hickey’s base salary is now $439,425 and the current dollar
value of stock options granted to him (as of the date of grant) is
$1,837,500. Regarding Mr. Hickey’s options, so long as he remains
employed with the Company until July 17, 2008, his options will
continue to vest after that date in the normal course, even if he
terminates his employment, and he will be permitted to continue to
exercise his options for their full 10 year term.
	 
	 	•  	Mr. Schmidt. The Committee approved a 5% increase in Mr.
Schmidt’s base salary, as well as a 5% increase in the current
dollar value of stock options granted to him. As a result of
these increases, Mr. Schmidt’s base salary is now $286,650 and the
current dollar value of stock options granted to him (as of the
date of grant) is $210,000. The Committee also approved a cash
bonus for Mr. Schmidt of up to 100% of his base salary.
	 
	 	•  	Ms. Minch. The Committee approved a 20% increase in Ms. Minch’s
base salary. As a result of this increase, Ms. Minch’s base
salary is now $153,500. The Committee also approved a cash bonus
for Ms. Minch of up to 70% of her base salary.
	 
	 	•  	Mr. Paul. The Committee decreased the base salary of Mr. Paul by
23%. As a result of this decrease, Mr. Paul’s base salary is now
$250,000.
	 
	 	•  	Ms. Paul. The Committee made no changes to the base salary of Ms.
Paul, which remains at $175,000.

 3<PAGE>

                                                                    EXHIBIT 10.1

                                 SANTARUS, INC.

                                2004 BONUS PLAN*

*Excludes those covered under the Sales Incentive Plan

<PAGE>
                                  SANTARUS, INC.

                                 2004 BONUS PLAN

The Santarus, Inc. ("Santarus") Bonus Plan is designed to offer employees a
performance-based plan that rewards the achievement of corporate goals, as well
as individual goals that are consistent with the corporate goals. The Bonus Plan
will create an environment that focuses employees on the achievement of the 2004
goals. A combination of corporate performance and individual performance will
determine individual bonus payouts.

Purpose of the Plan

The Santarus Bonus Plan (the "Plan") is designed to:

      -     Provide a bonus program that helps achieve overall corporate goals
            and enhances shareholder value

      -     Reward individuals for achievement of corporate and individual goals

      -     Encourage teamwork among all disciplines within the Company

      -     Offer an attractive bonus program to help attract and retain key
            employees

Plan Governance

The Compensation Committee of the Board of Directors is responsible for
reviewing and approving the Plan and any proposed modifications to the Plan. The
President and CEO of Santarus is responsible for administration of the Plan;
provided that the Compensation Committee of the Board of Directors is
responsible for reviewing and approving all compensation, including compensation
under this Plan, for all officers, vice presidents and any other employees with
an annual base salary greater than or equal to $200,000.

Eligibility

All regular employees working at least 20 hours per week will be eligible to
participate in the Plan. Temporary employees are not included in this Plan.

Corporate and Individual Performance

The President and CEO will present to the Compensation Committee and the Board a
list of the overall corporate goals for the Plan year, which is subject to
approval. All participants in the Plan will then develop a list of key
individual goals, which will be approved by the responsible Vice President.

The total bonus pool for the Plan will be based on achievement of the 2004
corporate goals and individual objectives that have been approved as indicated
above.

<PAGE>

BONUS AWARDS ("BONUS")

The Bonus will be paid in cash and is based on achievement of the 2004 corporate
goals and achievement of individual objectives. The Bonus will be calculated by
using the Base Salary, Weighting Factor, Target Bonus Percentage and Goal
Multipliers as identified below:

Weighting Factor

The relative weight between corporate and individual performance factors will
vary based on levels within the organization. The weighting factors will be
reviewed annually and adjusted, as necessary or appropriate. The weighting for
2004 will be as follows:

<TABLE>
<CAPTION>
Position                 Corporate               Individual
--------                 ---------               ----------
<S>                      <C>                     <C>
President and CEO          100%
Group F & G                100%
Group E                     80%                      20%
Group D                     60%                      40%
Group C                     40%                      60%
Group A & B                 20%                      80%
</TABLE>

Target Bonus Percentages

Bonus awards will be determined by applying a "target bonus percentage" to the
base salary of employees in the Plan. Following are the 2004 target bonus
percentages:

<TABLE>
<CAPTION>
Position                  Target Bonus Percentages
--------                  ------------------------
<S>                       <C>
President and CEO                   50%
Group G                             35%
Group F                             30%
Group E                             20%
Group D                             15%
Group C                             10%
Group B                            7.5%
Group A                              5%
</TABLE>

The base salary as of December 31, 2004 times the target bonus percentage will
be used to establish the target bonus award for the 2004 year.

Goal Multipliers

<PAGE>

Corporate Goal Multiplier: The following scale will be used by the Board of
Directors to determine the actual "corporate goal multiplier" based upon
measurement of actual corporate performance versus pre-established corporate
goals and objectives. The goal multiplier will be used with the calculated
target bonus award and the weighting factor to determine the actual cash award
for each individual based on corporate performance.

<TABLE>
<CAPTION>
         Performance Category                                         Goal Multiplier
         --------------------                                         ---------------
<S>      <C>                                                          <C>
1.       Performance for the year met or exceeded goals                 90% - 150%
         or was excellent in view of prevailing conditions

2.       Performance generally met most of the year's goals             50% -  90%
         or was acceptable in view of prevailing conditions

3.       Performance for the year met some, but not all goals           25% -  50%

4.       Performance for the year was not acceptable in view                    0%
         of prevailing conditions
</TABLE>

Individual Goal Multiplier: The "individual goal multiplier" will be determined
by taking into account the performance rating (Pinnacle, Standing Ovation, Great
Performance, etc.) given to the individual through the 2004 review cycle as well
as any other relevant criteria relating to the individual's job performance
during 2004. The specific multipliers for each performance rating level is
reviewed and approved by Executive Management each year.

Calculation of Award

The example below shows a sample bonus award calculation under the Plan. First,
a target bonus award is calculated for each Plan participant by multiplying the
employee's base salary by the target bonus percentage. This dollar figure is
then divided between the corporate component and the individual component based
on the weighting factor for that position. This calculation establishes specific
dollar target bonus awards for the performance period for each of the corporate
and individual components.

At the end of the performance period, corporate and individual goal multipliers
will be established using the criteria described above. The corporate goal
multiplier, which is based on overall corporate performance, is used to
calculate the corporate bonus awards for all Plan participants. This is
accomplished by multiplying the target corporate bonus award established for
each individual by the actual corporate goal multiplier. The individual goal
multiplier, which is based on an individual's performance rating, is used in the
same way to calculate the actual individual bonus award.

<PAGE>

Example: Actual Cash Bonus Award Calculation

<TABLE>
<S>                                                          <C>
Group Level                                                  B
Position                                                     Executive Assistant
Base Salary as of December 31, 2004                          $ 50,000
Target Bonus Percentage                                           7.5%
Target Bonus Award                                           $  3,750

Target Bonus Award Components:
Target Bonus Award based on corporate performance (20%):     $    750
Target Bonus Award based on individual performance (80%):    $  3,000

Corporate Goal Multiplier                                          80%
Individual Goal Multiplier                                         90%
</TABLE>

Actual Cash Bonus Award Calculation:

<TABLE>
<S>                                                          <C>
Corporate Bonus Award                                        $   600($  750 x 80%)
Individual Bonus Award                                       $ 2,700($3,000 x 90%)
                                                             -------
Total Actual Cash Bonus Award                                $ 3,300
</TABLE>

Payment of the Actual Cash Bonus Award

Annual performance reviews for Plan participants will be completed by February
28, 2005. Payments of actual cash bonus awards will be made as soon as
practical, but not later than April 15, 2005.

Participants who join the Company prior to November 15 of the Plan year will be
eligible to participate in the Plan and have their actual cash bonus award
prorated based on their actual base salary earned during the Plan year.

Any individual on a performance improvement plan or receiving a Needs
Improvement rating for 2004 will be evaluated by the department SVP, VP Human
Resources and CEO for eligibility for any Bonus award. Any Vice President
receiving a Needs Improvement rating or who is on a performance improvement plan
in 2004 will be evaluated by the CEO and Compensation Committee for eligibility
for a Bonus Award and any resulting amount of award.

Individuals must remain employed through the business year which ends December
31 and be an employee in good standing (not on a performance improvement plan or
Needs Improvement performer) in order to be eligible to receive a bonus payment.

Company's Absolute Right to Alter or Abolish the Plan

Santarus reserves the right in its absolute discretion to abolish the Plan at
any time or to alter the terms and conditions under which bonus compensation
will be paid. Such discretion may be exercised any time before, during, and
after the Plan year is completed.

<PAGE>

No participant shall have any vested right to receive any payment until actual
delivery of such compensation.

Employment Duration/Employment Relationship

This Plan does not, and Santarus' policies and practices in administering this
Plan do not, constitute a contract or other agreement concerning the duration of
any participant's employment with the Company. The employment relationship of
each participant is "at will" and may be terminated at any time by Santarus or
by the participant with or without cause.

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