The
following is a description of the EMCORE Corporation (“EMCORE”) Fiscal 2008
Executive Bonus Plan (the “Fiscal 2008 Executive Bonus Plan”). This
constitutes a written description of a compensatory plan when no formal document
contains the compensation information.
On March31, 2008, the Board of Directors of EMCORE adopted the Fiscal 2008 Executive
Bonus Plan. The purpose of the Fiscal 2008 Executive Bonus Plan is to
establish and implement a consistent, market-driven, performance-based approach
to compensation that is compatible with EMCORE’s compensation policy and
supports EMCORE’s strategic business plan and goals.
Under the
Fiscal 2008 Executive Bonus Plan, a bonus target for each executive is created,
representing a percentage of that executive’s base salary. The
following targets have been set based for the indicated officers:
Executive
Chairman and Chief Executive Officer: 80% of base salary
Chief
Financial Officer: 50% of base salary
General
Counsel/Chief Legal Officer and Chief Technical Officer: 35% of base
salary
The
portion of the individual officers’ targets to be paid is based on both
corporate and individual performance. Corporate performance is
evaluated based on the company’s attainment of revenue and EBITDA goals, as set
forth in EMCORE’s Fiscal 2008 Budget (the “Fiscal 2008 Budget”), both of which
goals are weighted equally. A threshold level of 75% of revenue goals
and 70% of EBITDA goals is set. Achievement of 100% of revenue and
EBITDA goals correlates to payment of 100% of the bonus targets, and attainment
of lesser percentages of the revenue and EBITDA goals correlates to payment of
lesser percentages of the bonus targets. Attainment of 110% of the
revenue and EBITDA goals will result in eligibility for 120% of the bonus
targets.
The
individual performance component acts as a multiplier and can accelerate or
decelerate the target bonus percentage based upon individual performance as
determined by the Chief Executive Officer and the Compensation
Committee. The multiplier ranges from 0% to 140% of the executive’s
target bonus. The Chief Executive’s individual performance is
reviewed by the Compensation Committee. The Chief Operating Officer’s
and other executive officers’ individual performance is reviewed by the Chief
Executive Officer and approved by the Compensation Committee.
Payment
of bonuses (if any) is normally made after the end of the performance period
during which the bonuses were earned. Bonuses normally will be paid in cash in a
single lump sum, subject to payroll taxes and tax withholdings.
The
Compensation Committee and the Chief Executive Officer retain the ability to
modify individual executive bonuses based upon individual performance and the
successful completion of business projects and other management performance
objectives. In addition, the Compensation Committee makes long-term
incentive grants to executive officers and employees which are not covered under
the terms of the Fiscal 2008 Executive Bonus Plan.
Dates Referenced Herein and Documents Incorporated by Reference
