Summary of McDATA Corporation Management Bonus Program

Summary

McDATA Corporation's Management Bonus Program provides eligible executive officers and senior employees with bonuses based on meeting specific annual or quarterly goals. The board of directors sets these objectives each year. Bonus amounts are calculated as a percentage of base salary, ranging from 10% to 35% for non-executive officers and 25% to 50% for executive officers. Executive bonuses are mainly based on annual profit or revenue targets and quarterly objectives, while non-executive bonuses focus on quarterly goals. There is no formal contract for this program.

EX-10.21 16 0016.txt DESC. OF REGISTRANTS MANAGEMENT BONUS PROGRAM 1 EXHIBIT 10.21 Summary of the Management Bonus Program for McDATA Corporation All of our executive officers and many of our other senior employees are eligible for a bonus based upon achievement of specified annual or quarterly objectives. There is no formal agreement with respect to this program and objectives for bonuses are set annually by the board of directors. Currently the bonus is calculated as a percentage of base compensation and can range from 10% to 35% for non-executive officers and from 25% to 50% for executive officers. For non-executive officers, the bonus is tied to achievement of quarterly objectives agreed to by the employee and their manager. For executive officers, the bonus is tied to achievement of annual planned operating profit or revenue and achievement of quarterly objectives. Typically, 70% of an executive officer's bonus is tied to achievement of annual planned profit and 30% to achievement of quarterly objectives. To date, no executive officer has received any portion of a bonus tied to operating profitability.