EXHIBIT 10.3

 

 

Management Incentive Bonus Plan FY2014

 

The Management Incentive Bonus Plan (“MIBP”) is the executive bonus plan for all
executives . The plan includes two key performance targets for ARI, Adjusted
EBITDA and Recurring Revenue (“RR”), each worth 50% of the total on target bonus
potential.  Based on the company’s performance in those two areas, the following
Grids dictate the ultimate payout of the MBO bonus as a percentage:

Management Bonus Grid

FY 2014

 

Recurring Revenue Growth:

% of planpayout %incremental increase

 

1st break70%50.0% 1.50

2nd break80%65.0% 2.00  

3rd break90%90.0% 1.00

4th break100%110% 2.00  

5th break110%120% 3.00  

6th break>120%see note 1

 

Adjusted EBITDA Growth:

% of planpayout %incremental increase

 

1st break70%50.0%1.50

2nd break80%65.0% 2.00

3rd break90%90.0% 1.00

4th break100%110.0%2.00  

5th break110%120.0%3.00  

6th break>120%see note 1 

 

Note 1:  >120% payment % is at Compensation Committee discretion for Executives;
CEO for non‐executives.

Note 2:  No bonus earned for specific target if actual results for that target
are < 70% achievement.

Note 3:  >100% multiplier earned only if achievement is at least 100% on both
targets.

Note 4:  >120% payment % is at Compensation Committee discretion for Executives;
CEO for non‐executives.

Equity Performance Bonus Plan FY2014 

Effective beginning in fiscal 2013, the Company established a Long Term
Executive Bonus Plan (“LTEB”) for executives of ARI. The purpose of the LTEB is
to advance the interests of ARI by providing a competitive level of incentive
for eligible executives, which will encourage them to more closely identify with
shareholder interests and to place additional emphasis on achieving the
corporate strategic objectives. In addition, the LTEB is intended to attract and
retain key executives by offering a competitive incentive program based on
ownership in ARI.

The LTEB is administered by the Compensation Committee. All Awards require the
approval of the ARI Board of Directors. The amount of the Award will be
determined after the close of the fiscal year based on a percentage of base
salary. Except as otherwise provided by the Committee, awards will consist of
(i) restricted stock as determined by the closing price of the shares at the
time the Committee grants the award and (ii) cash, to cover the minimum
withholding taxes on the Award. The restricted stock will be granted under the
ARI 2010 Equity Incentive Plan and will vest in four installments beginning on
the date of grant and the next 3 anniversaries of the date of grant. 

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Performance criteria will be approved by the Compensation Committee (after its
evaluation of the recommendations of the CEO) as soon as possible after the
beginning of each fiscal year and the actual Award will be measured based upon
the satisfaction of the performance criteria during the fiscal year. Adjustments
may be made, at the sole discretion of the Committee, to the value of the Award
where performance results for the fiscal year are below the criteria established
for the maximum award.

Except as otherwise determined by the Committee, where the award is earned by
satisfaction of the performance criteria, the portion of the Award to be made in
restricted stock will be equal to the dollar amount of (i) 15% of base salary
for officers and 25% of base salary for the CEO, less (ii) the minimum amount of
any withholding taxes due (as calculated with respect to both the taxes on the
restricted stock and the cash portion of the award). The remaining portion of
the award will be paid in cash and will be equal to the minimum amount of
withholding taxes required to be withheld by ARI in connection with the full
value of the Award (restricted stock and cash portions). In determining the
minimum amount of withholding taxes required to be withheld by ARI, it will be
assumed and is required that all recipients will make a Code Section 83(b)
election at the time they receive the restricted stock portion of the Award. The
cash portion of such Award shall be paid (in the form of withholding taxes) on
the same date as the grant date of the restricted stock or on the first payroll
date immediately thereafter.  Executives may not transfer vested shares of
restricted stock for at least one year after the grant date. Executives may not
sell more than 50% of their accumulated vested restricted shares until
terminating employment. Upon termination of employment, any unvested restricted
shares will be forfeited, except as otherwise provided in any Change in Control
Agreement between the Executive and ARI.

The shares to be issued pursuant to the LTEB are expensed over the requisite
service period plus the vesting period.  The Company expensed $162,000 and
$40,000 during fiscal 2014 and 2013 related to the LTEB. A portion of this
expense relates to the amortization of restricted shares issued and expensed
over their vesting period and a portion relates to bonus expense accrued, but
unissued, recognized over the requisite service period.  The Company issued
27,461 shares in connection with the fiscal 2013 LTEB in January 2014 and 29,819
shares in connection with the fiscal 2014 LTEB in October 2014.  

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