Fiscal Year 2006 CEO Bonus Plan Agreement
This agreement outlines the bonus plan for the CEO for fiscal year 2006. The CEO may receive a bonus of up to 60% of their base salary, based on performance in areas such as business development, R&D, sales and marketing, and corporate finance. The bonus is determined by management and the Compensation Committee, with a portion also allocated by the Nominating and Governance Committee based on the CEO's annual evaluation. Bonuses are paid upon achievement of goals and only to those employed at the time of payment or by October 31, 2006.
EXHIBIT 10.1
FISCAL YEAR 2006 CEO BONUS PLAN
| (1). | Participant |
CEO
| (2). | Maximum Available |
Up to 60% of CEO’s base salary.
| (3). | Bonus Pool |
The amount of Base Bonus Pool received will be calculated based on the following Performance Areas: Business Development, R&D Clinical Development, Sales & Marketing, and 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 70% of the Base Bonus Pool.
In addition up to 30% of the Base Bonus Pool will be allocated by the Nominating and Governance Committee of the Board of Directors based on the annual CEO Evaluation which will assess the CEO’s leadership skills and accomplishments.
| (4). | Computation of Performance Areas |
| Goal | Percentage of Total | ||||
| a. | In-license or acquire one late-stage or marketed urology/men’s health product on terms approved by the Board of Directors. | 25 | % | ||
| b. | Acquire one marketed urology/men’s health product for co-promotion by our specialty sales force on terms approved by the Board of Directors. (Goal can also be satisfied by acquiring a second product under terms of 4a). | 25 | % | ||
| c. | Out-license one Indevus product under terms approved by Board of Directors. | 10 | % | ||
| d. | Complete enrollment in two Phase 3 Sanctura XR trials. | 15 | % | ||
| e. | Submit NDA for Nebido | 15 | % | ||
| f. | Cash management: | 10 | % | ||
– Ensure cash on hand at end of fiscal year is sufficient to last for at least the following 12 months—50% of goal.
Page 1
– Ensure cash on hand at end of fiscal year is sufficient to last for at least the following 18 months—100% of goal.
| (5). | 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, 2006. 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, 2006, whichever is earlier.
Page 2
