Exhibit 10.123
FISCAL YEAR 2002 SENIOR EXECUTIVE BONUS PLAN
(1). Participants
Glenn Cooper (President), Mark Butler (Executive Vice President),
Michael Rogers (Executive Vice President), and Bobby Sandage (Executive
Vice President).
(2). Maximum Available
Base Bonus Pool: Up to 60% of Glenn Cooper's base salary; up to 50% of
the base salaries of the Executive Vice Presidents (Messrs. Butler,
Rogers, and Sandage)
(Base Salary is defined as the Base Salary at the time bonuses are
paid.)
(3). Bonus Pool
The amount of Base Bonus Pool received will be calculated based on the
following Performance Areas: (a) Business Development; (b) R&D Clinical
Development; (c) Acquisition/In-licensing; (d) Common Stock
Performance; and (e) Corporate Finance. The relative weighting of each
area has been determined by management and the Compensation Committee,
and the total of all areas in Section 4 is equal to 100% of the Base
Bonus Pool.
The allocation of the pool will be made by the President to the other
participants based on participant's performance particularly as it
relates to his objectives for the year as jointly established with the
President. The President may allocate any amount to any Executive Vice
President, including none, but he may not exceed the pool for each
individual (50%).
The allocation of the President's pool will be made at the discretion
of the Board of Directors.
(4). Computation of Performance Areas
Goal Percentage of Total
---- -------------------
a. Business Development 20%
-Out-license one product to a development/marketing partner on terms
approved by the Board of Directors
b. R&D/Clinical Development (#1) 10%
-Last patient complete by the end of the fiscal year in Phase 3
clinical trial for Trospium
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Goal Percentage of Total
---- -------------------
c. R&D/Clinical Development (#2) 10%
-Conduct Phase I trial for newly-acquired compound
d. R&D/Clinical Development (#3) 10%
-Begin initial efficacy trial for PRO 2000
e. Acquisition/In-license 20%
-Acquire or in-license a significant new asset (significance to be
determined by the Compensation Committee)
f. Common Stock Performance 15%
-All or a portion of this goal will be earned based on the higher of
the formulas derived from either the (a) relative stock performance of
Interneuron's Common Stock during the fiscal year or (b) the actual
percentage increase in Interneuron's Common Stock during the fiscal
year. Since achievement of a large increase in Interneuron's Common
Stock either over an Index or over its price at the beginning of the
fiscal year is beneficial to the Company's shareholders, the
calculation is made based on the higher one.
IPIC % pts. Increase over initial IPIC price
% of Performance Area IPIC% pts. above Index
--------------------- -----------------------
25% 10%
50% 20%
75% 30%
100% 40%
The Index is calculated based on the publicly available AMEX
Biotechnology Index (or close equivalent if unavailable).
In order to capture the return to shareholders during the fiscal year,
the calculation of the percentage points increase above Index and the
percentage points increase over IPIC stock during the year will be made
from the average of two calculations: (1) from 10/1/01 to 3/31/02 (six
months) and (2) from 10/1/01 to 9/30/02 (12 months). Due to the
potential for short term news driven fluctuations in stock price, the
average of the closing common stock price for the five trading days up
to and including 9/30/01, 3/31/02 and 9/30/02 will be used instead of
the closing common stock price on that day.
g. Corporate Finance 15%
-Ensure cash on hand at end of fiscal year is sufficient to last for at
least the following 12 months - 50% of goal.
-Ensure cash on hand at end of fiscal year is sufficient to last for at
least the following 18 months - 100% of goal.
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(5). Additional Goal
This additional goal would be over and above any bonuses earned
pursuant to Sections 2-4. Complete the acquisition, on terms approved
by the Board of Directors, of strategic, new assets (excluding 4(e)
above) that significantly enhances long-term shareholder value.
Achievement of this goal will result in a bonus of 20-60% of base
salary, at the discretion of the Compensation Committee.
(6). Calculation and Payment
A recommended calculation of the bonus will be made by management and
will be reviewed and approved by the Compensation Committee. Bonuses
may be paid periodically during the fiscal year upon attainment of
goals, but not later than October 31, 2002. Payment will be made only
to recipients who are still employees of the Company at the time of
payment of the bonuses or October 31, 2002, whichever is earlier.
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