CSMG 2012 SVP/Managing Director Bonus Plan

 

 

 

This 2012 SVP/Managing Director Bonus Plan covers only the SVP/Managing Director
of Cambridge Strategic Management Group, Inc. and Cambridge Adventis Ltd.
(together “CSMG”) – i.e. Susan Simmons. The available bonus pool is calculated
as follows:

 

1.If the 2012 Direct Contribution Margin (DCM) for CSMG is equal to or greater
than $2,000,000, the SVP/MD will be eligible to receive a bonus of $50,000.

 

2.The SVP/MD will be eligible to receive an additional bonus based upon the 2012
Unit Contribution Margin (UCM) for CSMG as the UCM thresholds in the table below
are met.

 

UCM Threshold Additional Eligible Bonus Cumulative Additional Eligible Bonus
$1,000,000 $50,000 $50,000 $1,500,000 $35,000 $85,000 $2,000,000 $65,000
$150,000

 

 

Bonus will be paid under the SVP/Managing Director Bonus Plan within ninety days
of calendar year end once all revenue and expense numbers have been finalized
for the year.

 

Definitions

 

Controllable Selling General and Administrative (SG&A) – Includes non-billable
salaries & benefits, sign on bonus and delivery bonus (a portion of these
bonuses is allocated to SG&A based on professional staff non-billable time),
non-billable travel and entertainment, non-billable consultant time, recruiting
fees, bad debt expense, severance and Controllable G&A Expenses. See Appendix A
for a list of Controllable G&A Expenses.

 

Cost of Services – The actual cost incurred to provide the services – including
salaries, taxes and benefits, out of pocket expense, surcharges, Research &
Information Fees, external consultant fees and agent fees and delivery and sign
on bonuses (a portion of these bonuses is allocated to Cost of Service based on
utilization of professional staff).

 

Direct Contribution Margin (DCM) – Total Revenue minus Cost of Services and
minus Controllable Selling General and Administrative (SG&A) expenses.

 

Expense Revenue – GAAP revenues recognized within the period for reimbursed
project expenses.

 

Fee Revenue – GAAP revenues for professional services performed working on
client engagements within the period. Fee Revenue includes Expense Revenue (or
charge) to the extent that Expense Revenues exceed or fall short of actual
expenses booked against the project.

 

Non – Controllable SG&A expenses – Reference Appendix B for a listing of
accounts included. Disputes regarding whether a cost is controllable or
non-controllable will be addressed in a fair and appropriate manner. The final
determination of what will be included will be made by the CFO.

 

 

 

 

CSMG, Inc. – 2012 SVP/MD Bonus Plan

Page 2 of 4

 

Research & Information Fees – includes charges for 3rd party paid research
services including but not limited to IDC, Thompson Financial and other third
party research and information services. These fees are assessed as a cost to
the project at a rate of 3% of Fee Revenue.

 

Total Revenue – GAAP Fee Revenue for professional services performed working on
client engagements plus Expense Revenue billed to and reimbursed by the client
(including Research & Information Fees).

 

Unit Contribution Margin (UCM) – DCM minus Non-Controllable SG&A Expenses and
minus VP Bonus.

 

VP Bonus – Any bonus paid under the CSMG 2012 Sales Bonus Plan.

 

 

 

 

CSMG, Inc. – 2012 SVP/MD Bonus Plan

Page 3 of 4

 

APPENDIX A: Controllable G&A Expenses - consist of the following P&L accounts

 

 

Description   Cellular Service Photocopy Blackberry Postage Bridge Payroll Fees
Legal – Services Research & Data Fees Legal – Expenses Surveys Consulting
Training External Consultants Dues/Memberships Outside/Temp Help Sales Support
Presentation Commission – Agent Proposal Support Facilitator Fees Sales Training
Advertising Sales/Project Tracking System Marketing Contributions Product
Development Memberships Direct Marketing Computer Allowance Tradeshows Meetings
Newsletter Meetings Expense Holiday Gifts, Cards, Etc. Special Events – TMC's
Gifts – Consult/Clients/Other Client Events Brochure/Collateral Auto Lease Auto
Insurance Car Allowance D&O Insurance Courier Stationery Cleaning Research &
Data Fees Storage Fees Office Supplies Rental Equipment Computer Supplies Repair
& Maintenance Printing Federal Express Stationery Currency Gain/Loss
Subscriptions Misc. Exp    

 

 

 

 

 

APPENDIX B: Non-Controllable G&A Expenses - consists of the following P&L
Accounts

 

CSMG, Inc. – 2012 SVP/MD Bonus Plan

Page 4 of 4

 

Description 

Website

ISP/Net Circuit

Local – Voice

Long Distance Service

Database Management

Accounting

Legal Settlement

Bank Service Charges

Credit Card Charges

Credit inquiry fees

Penalties and Fines

Taxes – Personal Property

Interest Expense – Miscellaneous

Commercial Liab Ins

Auto Insurance

D&O Insurance

Mark-Up Expense Clearing

Extraordinary Items

Gain & Loss On Disposal

Repair & Maintenance – Contract

Investor Relations

Public Relations

NASDAQ Fees

Office Relocation

General Taxes & Licenses

Sales Use Tax

Operating Taxes

Rent Office Space

Accretion Expense

Electric

Gas

Water

 

 

 

 

 

CSMG 2012 Sales Bonus Plan

(also referred to as Incentive Compensation Agreement in some Employment
Agreements)

 

 

Who is Eligible for the CSMG 2012 Sales Bonus Plan?

 

This 2012 Sales Bonus Plan covers only the Vice Presidents (VP’s) of Cambridge
Strategic Management Group, Inc. and Cambridge Adventis Ltd. (together “CSMG”).
This plan does not cover projects that are sold and delivered by employees of
any other TMNG Global company, i.e. TMNG US, TMNG Europe or Cartesian.

 

In order to be eligible to participate in the 2012 Sales Bonus Plan, the VP must
have high enough Potential VP Compensation to cover their Annual Base Salary. If
the Potential VP Compensation for that VP is not high enough to cover the VP’s
Annual Base Salary, that VP will not receive a sales bonus.

 

The bonus shall become earned in whole and shall become fully vested if the VP
remains continuously employed until December 31, 2012 and qualifies for a bonus
payment under the terms outlined herein.

 

The VP is not required to make any monetary payment as a condition to being
eligible to participate and receive bonus compensation under the Plan. The sole
consideration for participation shall be the services rendered to CSMG or for
its benefit during the 2012 fiscal year.

 

VP Bonus Determinants and Calculations

 

The VP Earned Bonus is calculated as follows:

 

1.Determine the VP’s Individual Contribution Margin % (ICM%). The ICM% is
calculated from Individual Contribution Margin Reports (see attached CSMG 2012
Sales Bonus Plan – Proforma ICM Report Illustration tab for an example). While
the ICM% calculation will be analyzed quarterly, ultimately it is an annual
calculation that will determine the final amount earned under the Plan.

 

2.Each ICM % range (see attached CSMG 2012 Sales Bonus Plan - Bonus Calculator
Matrix ICM tab) corresponds to a VP Bonus Percentage.

 

3.That VP Bonus Percentage is then multiplied by an individual VP’s Fee Revenue
to calculate the Potential VP Compensation for that VP.

 

4.Each VP’s Annual Base Salary is then subtracted from their Potential VP
Compensation. If for any VP, this calculation results in a negative number, that
VP is not eligible to receive any pay-outs under this Plan. Only VP’s that have
Potential VP Compensation in excess of their Annual Base Salary are eligible for
bonus.

 

Cross-Selling and Co-Selling Bonus Calculations

 

The VP’s of CSMG are able to earn bonus through Cross-Selling and Co-Selling. It
is understood that the sale of a consulting project involves both a relationship
and content delivery. Each sale may involve a different level of effort (i.e.
lead, qualifying, proposal development and close). The CSMG VP has the
opportunity to evaluate level of effort required and whether or not to pursue
that opportunity given bonus sharing arrangements. We will not double count
revenue for “cross selling”.

 

There are 3 possible scenarios for VP’s to participate in Cross-Selling and
Co-Selling:

 

Scenario 1 – cross-selling – A non-strategy project is sold & delivered solely
by a CSMG VP utilizing a combination of CSMG and non-CSMG professional staff.
The CSMG VP gets credit for 100% of the project’s Fee Revenue and the CSMG Sales
Bonus Plan applies.

 

Scenario 2 – cross-selling – A strategy project is sold solely or jointly by a
non-CSMG company but delivered by CSMG. The CSMG VP responsible for delivering
the project gets credit for 100% of the project’s Fee Revenue and the CSMG Sales
Bonus Plan applies.

 

 

 

CSMG – 2012 Sales Bonus Plan

Page 2 of 5

 

Scenario 3 – co-selling – multiple CSMG VPs are involved in the sale of a
strategy project. The project revenue is split among the VPs (as agreed to by
the VPs) and the CSMG Bonus Plan applies. The revenue split must be identified
on the project set-up sheet.

 

Treatment of Significant Events

 

The following situations are considered significant events and may result in a
pro-rata calculation of CSMG’s VP’s Earned Bonus:

 

i)If TMNG experiences a Change in Control, any bonus that has been earned but
not paid under the CSMG 2012 Sales Bonus Plan as of the date of the Change in
Control, shall be assumed by the acquiring or successor entity and settled in
accordance with the terms and guidelines as set forth in this document.
Notwithstanding the above, in the event of a Change in Control wherein CSMG
continues in existence after such Change in Control and actively continues the
conduct of its ongoing business, the CSMG 2012 Sales Bonus Plan shall be deemed
to remain in effect through the end of 2012 and CSMG shall remain responsible
for the settlement of any vested or future bonus payments in accordance with the
terms and conditions outlined in this document;

 

ii)If TMNG sells CSMG, any bonus that has been earned but not yet paid under the
CSMG 2012 Sales Bonus Plan as of the date of the sale, shall either be paid by
CSMG or TMNG on the date of sale. Notwithstanding the above, in the event of a
sale wherein CSMG continues in existence after such sale and actively continues
the conduct of its ongoing business, the CSMG 2012 Sales Bonus Plan shall be
deemed to remain in effect through the end of 2012 and CSMG shall remain
responsible for the settlement of any vested or future bonus payments in
accordance with the terms and conditions outlined in this document.;

 

iii)If TMNG shuts down CSMG and CSMG ceases to be an ongoing concern, any bonus
that has been earned under the CSMG 2012 Sales Bonus Plan as of the date the
business is terminated, shall be paid at the time of the termination. In order
to allow a fair and reasonable amount of time to close the books and determine
controllable expenses in order to calculate the payouts, the VP Bonus
Compensation will be determined as of the last date that CSMG is considered a
going concern, or not more than 30 days after the company ceases marketing
efforts.

 

  

When Bonus Will be Paid

 

When business projections warrant it, individual sales bonus will be paid on a
quarterly basis within 60 days of the close of the quarter with the exception of
the fourth quarter, which will be paid within ninety days of the fiscal year
end. The first three quarterly payments are considered to be “recoverable
payments”. Recoverable payments take into consideration a VP’s full Annual Base
Salary, along with Fee Revenue to-date, pipeline, etc. Any recoverable payment
may or may not be made at the discretion of TMNG’s CFO. The fourth quarter will
be a true up for the year based upon final operating results for CSMG. If any
quarterly bonus calculation produces negative results, management reserves the
right to adjust payroll accordingly.

 

 

 

 

CSMG – 2012 Sales Bonus Plan

Page 3 of 5

 

Definitions

 

Annual Base Salary – the gross wages paid to the US VP on a regular bi-weekly
basis multiplied by twenty-six or to the UK VP on a regular monthly basis times
twelve. STD and LTD gross ups are not included in Annual Base Salary.

 

Bonus % - Bonus % is determined by the ICM%. See the Bonus Calculator Matrix ICM
tab in the CSMG 2012 Sales Bonus file for the Bonus % assigned to each ICM%.

 

Change in Control – a Change in Control shall be deemed to occur upon the
occurrence of any of the following events: (i) the sale, lease or conveyance or
other disposition of at least fifty percent (50%) of TMNG’s assets as an
entirety or substantially as an entirety to any person, entity or group of
persons acting in concert other than in the ordinary course of business; (ii)
any transaction or series of related transactions (as a result of a tender
offer, merger, consolidation or otherwise) that results in any Person (as
defined in Section 13(h)(8)(E) under the Securities Exchange Act of 1934)
becoming the beneficial owner (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of more than 50% of the aggregate
voting power of all classes of common equity of TMNG, except if such Person is
(a) a subsidiary of TMNG, (b) an employee stock ownership plan for employees of
TMNG or (c) a company formed to hold TMNG’s common equity securities, provided
that, at the time such company became such holding company, substantially all
the stockholders of TMNG comprise such holding company’s stockholders and hold
at least a majority of the voting power of such holding company; or (iii) a
merger (in which TMNG is not the surviving operating entity), consolidation,
liquidation or dissolution of TMNG or winding up of the business of TMNG.

 

Co-Selling – occurs when two or more business development VPs are involved in
the sale of a project. In the case of a co-sale, project revenue may be split
among multiple VPs. Any co-sales should be designated as such on the project
set-up sheet and a list of VPs and the percent of revenue they will receive
credit for should be included.

 

Cost of Service – The actual cost incurred to provide the services – including
salaries, taxes, benefits, out of pocket expenses, surcharges, external
consultant fees and agent fees.

 

Cross Selling – occurs when a strategy project is sold by a non-CSMG employee or
when CSMG sells a non-strategy project that is delivered by a non-CSMG business
unit.

 

Earned Bonus - that VP’s Fee Revenue multiplied by that VP’s Bonus % minus that
VP’s Annual Base Salary.

 

Fee Revenue – GAAP revenues for professional services performed working on
client engagements.

 

Gross Margin – Total Revenue minus Cost of Service and minus Cross Selling
Expense.

 

Individual Contribution Margin (ICM) – The Gross Margin for that VP’s projects
minus the Non-Billable VP Salaries & Benefits for that VP, minus the T&E – VP
Non-billable for that VP and minus Research & Information Fees.

 

Individual Contribution Margin % (ICM%) – Individual Contribution Margin divided
by Fee Revenue.

 

Non-Billable VP Salaries & Benefits – the non-billable portion of VP salaries,
taxes & benefits.

 

Potential VP Compensation – the VP’s Fee Revenue multiplied by that VP’s Bonus
Percentage.

 

Research & Information Fees – includes charges for 3rd party paid research
services including but not limited to IDC, Thompson Financial and other third
party research and information services. These fees are assessed as a cost to
the project at a rate of 3% of Fee Revenue.

 

 

 

 

CSMG – 2012 Sales Bonus Plan

Page 4 of 5

 

T&E – VP Non-billable – includes the VP’s non-billable airfare, hotel, meals,
entertainment, rental car, transportation, parking and any other applicable
non-billable travel expenses.

 

Total Revenue –GAAP revenue for professional services performed working on
client engagements plus expenses billed to and reimbursed by the client
(including Research & Information Fees).

 

 

 

 

CSMG – 2012 Sales Bonus Plan

Page 5 of 5

 

BONUS CALCULATOR MATRIX Based Upon individual Contribution Margin (ICM) %      
    ICM VP BONUS Factor %     30% 0.00%     31% 12.25%     32% 12.50%     33%
12.75%     34% 13.00%     35% 13.25%     36% 13.50%     37% 13.75%     38%
14.00%     39% 14.25%     40% 14.50%     41% 14.75%     42% 15.00%     43%
15.25%     44% 15.50%     45% 15.75%     46% 16.00%     47% 16.25%     48%
16.50%     49% 16.75%     51% 17.00%     52% 17.25%     53% 17.50%     54%
17.75%     55% 18.00%     56% 18.25%     57% 18.50%     58% 18.75%     59%
19.00%     60% 19.25%     61% 19.50%     62% 19.75%     63% 20.00%     64%
20.25%     65% 20.50%     66% 20.75%     67% 21.00%     68% 21.25%     69%
21.50%     70% 21.75%