Artes Medical, Inc.
Annual Bonus Incentive Plan
(Approved April 10, 2007)
The objective of
the Annual Bonus Incentive Plan (the “Bonus Plan”) is
to focus the efforts of our executives and employees on achieving
specific goals and objectives that are critical to the success and
long-term value of Artes Medical, Inc. (the “Company”).
The Bonus Plan is designed to align each eligible employee’s
efforts with specific corporate and individual goals by providing
them with an opportunity to earn an annual cash bonus with the
actual bonus amount paid determined based on the Company’s
success in achieving its corporate goals, the eligible
employee’s success in achieving his or her individual goals
and the eligible employee’s position within the
Company.
2.
Effective Date and Expiration Date
This Bonus Plan is
effective for the Company’s fiscal year beginning on
January 1, 2007 (the “Effective Date”), and will
continue through the Company’s fiscal year ending on December
31, 2010, at which time the Bonus Plan will expire automatically
(the “Expiration Date”).
The Bonus Plan is
a performance-based cash incentive program designed to accomplish
the following objectives:
(a) To link
annual corporate and business priorities with individual and group
performance goals, reinforcing the concept that compensation is
tied to overall corporate results as well as to individual
contributions and performance.
(b) To
reinforce a high performance culture which ties compensation awards
to measurable accountabilities and goal achievement.
(c) To
recognize and reward outstanding individual performance and to
differentiate award levels based on individual
contributions.
(d) To
provide a competitive total compensation package that is typical in
our industry in order to attract, retain and motivate our talented
employees.
4. Bonus
Plan Administration
(a) The Bonus
Plan will be administered by the Compensation Committee (the
“Compensation Committee”, also referred to herein as
the “Administrator”) of the Company’s Board of
Directors. The Compensation Committee has the authority to delegate
all or part of its authority and powers under the Bonus Plan to the
Company’s Chief Executive Officer (“CEO”), other
than with respect to the bonus amounts offered or paid to the
Company’s executive officers which are to be determined by
the Compensation Committee. Pursuant to such authority, the CEO,
with assistance from the Human Resources Department and our
Executive Chairman of the Board, so long as he or she is an
employee of the Company (the “Executive Chairman”),
will be responsible for implementing and administering the Bonus
Plan.
(b) For each
fiscal year under the Bonus Plan (a “Bonus Plan Year”),
the CEO will recommend specific written corporate goals for that
Bonus Plan Year (the “Corporate Goals”). The
Compensation Committee in its sole discretion may accept or adjust
the recommended Corporate Goals provided by the CEO, and will be
responsible for approving the final Corporate Goals applicable to a
Bonus Plan Year.
(c) In
connection with adopting this Bonus Plan, the CEO recommended and
the Compensation Committee approved specific target bonus award
amounts (“Target Awards”) for eligible employees,
including the Company’s executive officers, for Bonus Plan
Year 2007. As provided in Section 6(b) below, the Target Awards are
based on an employee’s position with the Company and are
calculated as a percentage of an employee’s base salary. The
Target Awards approved by the Compensation Committee for Bonus Plan
Year 2007 will apply to future Bonus Plan Years, unless the
Compensation Committee in its sole discretion revises the Target
Awards for a future Bonus Plan Year.
(d) For each
Bonus Plan Year, the CEO, with the assistance of the Human
Resources Department and the Executive Chairman, will be
responsible for approving departmental goals for the
Company’s various departments (the “Departmental
Goals”) and the individuals goals applicable to each eligible
employee (other than for the CEO and the Executive Chairman as
discussed below) (the “Individual Goals”). It is
anticipated that Individual Goals for eligible employees will
support one or more Departmental Goals. The Individual Goals for
the CEO and for the Executive Chairman for each Bonus Plan Year
will be the Corporate Goals, and any other objectives set by the
Compensation Committee for these individuals.
(e) After the
end of each Bonus Plan Year, the CEO will provide documentation to
the Compensation Committee evaluating the Company’s
accomplishment of the approved Corporate Goals along with a
recommendation regarding the Company’s overall success in
achieving the Corporate Goals, expressed as a percentage. The
Compensation Committee in its sole discretion may accept or adjust
the percentage recommended by the CEO, and will retain
responsibility for determining the Company’s success
percentage in achieving the Corporate Goals for purposes of the
Bonus Plan.
(f) The CEO,
with the assistance of the Human Resources Department and the
Executive Chairman, will be responsible for ensuring that an
evaluation of the accomplishment of the Departmental Goals and the
performance of each employee (other than the CEO and the Executive
Chairman who will each be evaluated by the Compensation Committee)
related to the accomplishment of his or her Individual Goals,
expressed as a percentage, is conducted in accordance with the
conditions of this Bonus Plan. The Compensation Committee will also
be responsible for determining whether the CEO and the Executive
Chairman accomplished the additional objectives, if any, set by the
Compensation Committee for these individuals. With respect to the
Company’s other executive officers, the Compensation
Committee in its sole discretion may accept or adjust the
Individual Goals success percentage recommended by the CEO for the
Company’s executive officers.
(g) All
determinations and decisions made by the Compensation Committee,
the Board of Directors and any delegate of the Compensation
Committee pursuant to the provisions of the Bonus Plan shall be
final, conclusive and binding on all persons, and shall be given
the maximum deference permitted by law.
Each full-time
regular employee of the Company wh
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