EXHIBIT 10.1
TEKELEC
2001 Officer Bonus Plan
Philosophy:
The Company believes that a portion of each officer's annual compensation should
be directly related to the Company's financial performance and such officer's
achievement of certain objectives. The 2001 Officer Bonus Plan ("2001 Bonus
Plan") is designed to motivate and reward officers for the Company achieving
certain key financial results as well as certain business and strategic
objectives. The Company believes that the achievement of these results and
objectives is essential for the Company's success and for the continued growth
in shareholder value.
2001 Bonus Plan:
Each Eligible Officer (as defined below) will be eligible to receive:
(i) a quarterly bonus ("Quarterly Bonus") based on the Company's financial
performance as measured by the degree of the Company's attainment of a
pre-set, Board of Directors' approved, operating income before bonus goal
for each calendar quarter during 2001; and
(ii) an annual bonus ("Annual Bonus") based on his/her achievement of individual
objectives that the Chief Executive Officer (in the case of the Chief
Executive Officer, the Board of Directors) establishes during the first
quarter of 2001.
The Quarterly Bonuses and Annual Bonus payable to an Eligible Officer under the
2001 Bonus Plan will be calculated as a percentage of such officer's actual
earnings during a calendar quarter or the calendar year, as the case may be,
excluding certain compensation and payments (e.g., reimbursement for moving
expenses, bonus payments received under the 2000 or 2001 Bonus Plan, stock
option gains, disability benefits, sign-on bonuses, and similar payments).
Eligible Officers:
Unless additional officers are expressly deemed eligible under the 2001 Bonus
Plan pursuant to a subsequent, duly adopted Board of Directors resolution, only
the following officers shall be eligible to participate in the 2001 Bonus Plan
(all titles are positions with Tekelec unless otherwise specified): Chief
Executive Officer; Chief Operating Officer; Chief Financial Officer; Senior Vice
President and General Manager, NSD; Vice President and General Manager, NDD;
Vice President and General Counsel; Chief Technical Officer; Vice President,
Corporate Development; Vice President, Human Resources; Vice President,
Operations and Quality; Vice President and General Manager, IEX Contact Center
Division; and Managing Director, Tekelec Limited (UK).
In order to be eligible to receive a Quarterly or Annual Bonus, an Eligible
Officer must be employed by Tekelec or one of its subsidiaries as an Eligible
Officer on the date on which such bonuses are paid, unless such requirement is
waived by the Company's Chief Executive Officer in
EXHIBIT 10.1
the case of an Eligible Officer other than the Chief Executive Officer, or by
the Board of Directors in the case of the Chief Executive Officer.
Quarterly Bonuses:
The Company's pro forma operating income before bonus (which excludes the
effects of acquisition - related amortization and other merger charges)
calculated on a consolidated basis ("Operating Income before Bonus") for each
calendar quarter will be the financial measure for the Quarterly Bonuses.
The amount of bonus payable as a Quarterly Bonus to an Eligible Officer will be
calculated by multiplying (i) the product of such Eligible Officer's actual
earnings for a calendar quarter and the Quarterly Bonus Percentage listed
opposite such officer's position/title in the Bonus Participation Table set
forth below by (ii) the applicable Bonus Factor (as determined in accordance
with the matrix set forth in Schedule A attached hereto).
The amount of the Company's quarterly Operating Income before Bonus will
determine the applicable Bonus Factor. As indicated on Schedule A, minimum
quarterly Operating Income before Bonus will result in a Bonus Factor of 25%;
maximum quarterly Operating Income before Bonus will result in a maximum Bonus
Factor of 100%. There will be a linear increase in the percentage amount of the
Bonus Factor between the minimum quarterly Operating Income before Bonus and the
maximum quarterly Operating Income before Bonus.
The Quarterly Bonus will be payable in one lump sum (subject to applicable
withholding taxes and other applicable deductions) within 30 days after the
Company's quarterly results are publicly announced.
Annual Bonus:
The percentage degree (0% to 100%) to which an Eligible Officer achieves his/her
pre-set individual objectives will be the measure for the Annual Bonus. The
determination of the degree to which an Eligible Officer (other than the Chief
Executive Officer) achieves his/her objectives will be made by the Chief
Executive Officer by January 31, 2002. The determination of the degree to which
the Chief Executive Officer achieves his objectives will be made by the Board of
Directors by February 15, 2002.
The amount of a bonus payable as an Annual Bonus to an Eligible Officer will be
calculated by multiplying (i) the product of such officer's actual earnings for
2001 and the Annual Bonus Percentage listed opposite such officer's
position/title in the Bonus Participation Table set forth below by (ii) the
percentage degree to which the Chief Executive Officer or the Board of
Directors, as the case may be, determines that such Eligible Officer has
achieved his/her objectives for 2001.
The Annual Bonus will be payable in one lump sum (subject to applicable
withholding taxes and other applicable deductions) within 30 days of the Chief
Executive Officer's or Board of Directors' determination, as the case may be.
EXHIBIT 10.1
Bonus Participation Levels:
For purposes of determining an Eligible Officer's Bonus, the Quarterly Bonus
Percentages and the Annual Bonus Percentages for the Eligible Officers shall be
as follows:
Bonus Participation Table
Quarterly Annual
Bonus Bonus
Title Percentage Percentage
----- ---------- ----------
Chief Executive Officer 100% 25%
Chief Operating Officer 160 40
Senior Vice President and General Manager, NSD 60 15
Chief Financial Officer 56 14
Vice President and General Manager, NDD 56 14
Vice President and General Counsel 56 14
Vice President, Corporate Development 40 10
Vice President, Human Resources 40 10
Vice President, Operations and Quality 40 10
Vice President and General Manager,
IEX Contact Center Division 40 10
Chief Technical Officer 32 8
Managing Director, Tekelec Limited (UK) 20 5
Discretionary Bonuses:
Discretionary bonuses may also be paid under the 2001 Bonus Plan but only upon
the express approval of the Board of Directors.
* * * * *
EXHIBIT 10.1
Schedule A
2001 First Quarter Bonus Factor
Minimum Operating Income before Bonus: $10,561 25%
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Maximum Operating Income before Bonus: $15,436 100%
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2001 Second Quarter
Minimum Operating Income before Bonus: $16,864 25%
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Maximum Operating Income before Bonus: $21,559 100%
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2001 Third Quarter
Minimum Operating Income before Bonus: $24,996 25%
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Maximum Operating Income before Bonus: $29,871 100%
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2001 Fourth Quarter
Minimum Operating Income before Bonus: $35,961 25%
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Maximum Operating Income before Bonus: $40,836 100%
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