SOCKET COMMUNICATIONS, INC.
2001 MANAGEMENT INCENTIVE BONUS PLAN
Socket Communications, Inc. ("Company") will make quarterly incentive compensation payments to participating
officers and director level/senior professional employees of the Company. Participation and payments are subject
to the approval of the Board of Directors.
All officers and director level management personnel shall be participants unless otherwise specifically excluded.
Quarterly target compensation
The Board shall approve quarterly target compensation amounts for each participant.
Basis for payments
Target Compensation amounts shall be divided into four components tied to net revenue attainment (25%), gross
margin attainment (25%), operating expense attainment (25%) and management by objectives ("MBO")
attainment (25%). Attainment and related payouts shall be determined for each component as described in this
section. Payout shall be the sum of the four components.
Net Revenue attainment: Actual quarterly Net Revenues shall be divided by Net Revenues in the Board of
Directors approved financial plan ("Plan") and Percentage Attainment calculated. Payout will be calculated by
multiplying the Net Revenue component of Target Compensation by a factor as follows:
Gross Margin attainment : Actual quarterly gross margin dollars shall be divided by Plan gross margin dollars
and Percentage Attainment calculated. Payout will be calculated by multiplying the gross margin component of
Target Compensation by a factor as follows:
Operating Expense attainment : Plan Operating Expense dollars shall be divided by actual Operating Expense
dollars and percentage attainment calculated. Payout will be calculated by multiplying the Operating Expense
component of Target Compensation by a factor as follows:
Less than 60%
60% to 150%
Same as percentage Attainment (.6 to 1.5)
More than 150%
Less than 60%