Exhibit 10.1
SonoSite, Inc.
FY2007 Variable Incentive Bonus
Plan
1. Purpose
The SonoSite, Inc FY2007 Variable
Incentive Bonus Plan (the "Plan") is intended to: (i) enhance
shareholder value by promoting strong linkages between employee
contributions and company performance; (ii) support achievement of
the business objectives of SonoSite, Inc. and its subsidiaries (the
"Company"); and (iii) promote retention of participating
employees.
2. Effective
Date
This Plan is only effective for
the Company's 2007 fiscal year beginning January 1, 2007, through
December 31, 2007 (the "Plan Year"). This Plan is limited in time
and will expire automatically on December 31, 2007 ("Expiration
Date"). This Plan also supersedes all prior bonus or commission
incentive plans, whether with the Company or any subsidiary or
affiliate thereof, or any written or verbal representations
regarding the subject matter of this Plan.
3.
Administration
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(a)
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The Plan shall be
administered by the Compensation Committee of the Board of
Directors of the Company (the "Administrator"). The Administrator
shall have all powers and discretion necessary or appropriate to
administer the Plan and to control its operation, including, but
not limited to, the power to (a) determine which employees are
eligible to participate in the Plan, (b) prescribe the terms
and conditions of the variable incentive plan payouts hereunder (as
further defined in Section 5 below, the "VIP Payouts"),
(c) interpret the Plan and the VIP Payouts, (d) adopt
rules for the administration, interpretation and application of the
Plan as are consistent therewith, and (e) interpret, amend or
revoke any such rules. The Company's President and its Vice
President, Human Resources will be responsible for implementing the
Plan.
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(b)
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All determinations
and decisions made by the Administrator, the Board, and any
delegate of the Administrator pursuant to the provisions of the
Plan shall be final, conclusive, and binding on all persons, and
shall be given the maximum deference permitted by law.
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(c)
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The Administrator, in
its sole discretion and on such terms and conditions as it may
provide, may delegate all or part of its authority and powers under
the Plan to one or more directors and/or officers of the
Company.
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(d)
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The Company shall
provide a copy of the Plan to each Participant (as defined in
Section 4 below) and communicate to each Participant his or her
Incentive Target Percentage as well as provide information about
the Performance Graph (as each such term in defined in Section 5
below).
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4. Eligibility
Any full-time regular employee of
the Company may be eligible to participate in this Plan, provided
he or she is designated by the Administrator as a participant and
as to whom the Administrator has not, in its sole discretion,
withdrawn such designation (a "Participant") and he or she meets
all the following conditions:
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(a)
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he or she has signed
the individualized Executive Compensation Plan to which this Plan
is attached;
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(b)
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is a full-time
regular employee of the Company as of both (1) the last day of the
Plan Year, and (2) the date the payment is made (subject to Section
6 below);
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(c)
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is not concurrently
participating in a sales incentive or commission plan, or in any
other bonus plan operated by or bonus contract with the
Company;
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(d)
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has not entered into
an agreement relating to termination of his or her employment with
the Company (other than an employment agreement or offer letter,
change of control agreement, or equity compensation agreement that
provides for certain benefits in connection with the Participant's
future termination of employment);
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(e)
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has not transferred
to a position with the Company that either (1) is not eligible for
participation in this Plan (as determined in the Administrator's
sole discretion), or (2) is eligible for participation in another
annual bonus program offered by the Company; and
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(f)
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is not subject to a
Performance Improvement Plan or other disciplinary actions,
including has not engaged in any activity that the Administrator
determines to be competitive with the Company and its
business.
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5. Plan Metrics
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(a)
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Subject to Section 5(b), the
VIP Payout under this Plan for each Participant will be calculated
based upon the following formula (the "Payout Formula"):
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Base
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X
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Incentive
Target
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X
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Matrix
Percentage
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(Revenue Factor and
Operating
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=
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VIP
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Salary
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Percentage
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Factor
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Profits
Factor)
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Payout
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The Base Salary is the
Participant's base salary actually paid to the Participant for the
Plan Year; provided that such base salary will be pro-rated based
on hire or promotion date or to take into account any leaves of
absence. Nothing in this Plan, or arising as a result of a
Participant's participation in this Plan, shall prevent the Company
from changing a Participant's Base Salary at any time based on such
factors as the Company shall in its discretion determine
appropriate.
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Incentive Target Percentage is a
percentage of Base Salary determined by the Administrator according
to such factors as it, in its sole discretion, de
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