EXHIBIT 10.12

 

 

 

 

PCTEL, INC.

 

AMENDED AND RESTATED SALES COMPENSATION PLAN

 

Prepared specifically for:

 

Arnt Arvik

 

FY 2019

 

PCTEL, Inc.

2019 Sales Compensation Plan

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EXHIBIT 10.12

I.

Introduction

 

This PCTEL Sales Compensation Plan (the “Plan”) has been designed by the Company
(as hereinafter defined) to:

 

 

▪

Align sales compensation with corporate profitability;

 

▪

Motivate, incent and reward sales behavior in order to achieve PCTEL’s corporate
and financial objectives; and

 

▪

Provide a compensation plan that is equitable and consistent across regions and
product lines.

 

This Plan supersedes all prior sales compensation plans and any discussions or
verbal agreements to the contrary between Participant and the Company.

 

II.

Definitions

 

Adjusted EBITDA – Adjusted EBITDA is GAAP operating profit excluding stock
compensation expenses, amortization of intangible assets, depreciation,
restructuring charges, impairment charges, gain/loss on sale of product lines,
and expenses included in GAAP operating profit to the extent their recovery is
recorded below operating profit.

 

Base Salary – Base Salary is the amount payable to Participant as non-variable
compensation for services rendered to the Company.  It is determined by Company
management on an annual basis.  

 

CEO – Chief Executive Officer

 

CFO – Chief Financial Officer

 

Commission – Commission is a portion of the variable compensation payable to
Participant and is related to sales to customers.  It is calculated in
accordance with Section V below.

 

Commission Payout Factor – Commission Payout Factor has the meaning set forth in
Section V(a).

 

Commissionable Revenue – Revenue earned by the Company (determined in accordance
with GAAP) from sales of products, services, NRE, maintenance charges, royalties
and training charges, excluding freight, loans, interest charges, and other
similar charges.  

 

Company – PCTEL, Inc. and its subsidiaries

 

EBITDA Goal – EBITDA Goal has the meaning set forth in Section V(b).

 

EBITDA Payout Factor – EBITDA Payout Factor has the meaning set forth in Section
V(b).

 

GAAP – Generally Accepted Accounting Principles in the United States of America

 

Individual Quota – Company management assigns an Individual Quota that
represents the total anticipated Commissionable Revenue that management expects
Participant to generate based upon the accounts assigned to Participant.  Your
Individual Quota is set forth on Attachment A.

 

Participant – The sales professional for whom this Plan is prepared and whose
name is found on the cover page of this Plan.

 

Plan – Plan has the meaning assigned in Section I.

 

PCTEL, Inc.

2019 Sales Compensation Plan

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EXHIBIT 10.12

Plan Administrators – The Plan Administrators are the CEO, CFO and Vice
President-Corporate Resources.  

 

Plan Year – The Plan Year is January 1, 2019 through December 31, 2019.

 

Quota Assignment Statement – The Quota Assignment Statement is the statement in
the form of Attachment A signed by the Company and Participant defining the
amount of the Individual Quota, Target Commission, Target Adjusted EBITDA and
target total variable compensation.

 

Sales Team – The Sales Team refers to all sales personnel who report directly or
indirectly to Participant.

 

Target Commission – The Target Commission, as identified in Attachment A, is the
percentage of Base Salary that Participant is anticipated to earn as Commission
if Participant achieves his Individual Quota.

 

III.

General

 

(a) Plan Administration.  The Plan Administrators will manage the Plan and have
full discretion to construe and interpret the terms of the Plan, determine
eligibility to participate in the Plan, and determine whether Commission is
payable under the Plan. The determination of the Plan Administrators is final
and binding.

 

(b) Adjustments.  PCTEL reserves the right, without notice, to make any
adjustments or revisions to the Plan; provided, however, in the event of any
adjustment to the information on the Quota Assignment Statement after execution
thereof, an amended Plan will be prepared and must be signed by all parties in
order to become effective.  

 

(c) Termination of Employment.  The final amount of Commission due to
Participant upon termination of employment is the Commission earned as provided
in this Plan up to and including the termination date.

 

(d) Participation. Plan participants are not eligible for any other management
bonus or similar plan offered by the Company.

 

IV.

Quota

 

(a) Individual Quota. At the beginning of each fiscal year, the Plan
Administrators will specify on a Quota Assignment Statement for each member of
the Sales Team, including Participant, the applicable Individual Quota and
Target Commission.  The Plan Administrators have assigned Participant, as Chief
Sales Officer, an Individual Quota equal to the total target revenue of the
Company, as approved by the Board of Directors in the Company’s 2019 financial
plan.  

 

(b) Modifications due to Product Discontinuation.  During the fiscal year,
Company may discontinue products previously sold by the Sales Team, which may
impact Participant’s ability to reach his Individual Quota.  For example, this
can occur when a product is discontinued as a result of insufficient sales, for
lack of component parts, or as a result of the sale of business segment offering
the product.  If, based upon sales by the Sales Team of such discontinued
product in the current and/or prior fiscal year, the discontinuation of the
product could have a material effect on Participant’s ability to meet the
Individual Quota, the Plan Administrators will determine in good faith whether
Participant’s Individual Quota should be adjusted accordingly.

PCTEL, Inc.

2019 Sales Compensation Plan

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EXHIBIT 10.12

 

V.

Variable Compensation; Commission

 

Variable Compensation: Participant’s variable compensation for 2019 will be
comprised of two components: (i) Commission, and (ii) 2019 Adjusted EBITDA.

 

(a) Commission Earned: Commission is calculated based upon the amount of
Commissionable Revenue generated by the Sales Team during the 2019 fiscal
year.  

 

(1) Returns and Credits:  In the event that a product for which the Sales Team
received credit as Commissionable Revenue is returned (or the Company credited
the customer’s account as though the product was returned), the corresponding
amount of Commissionable Revenue related to the returned or credited product
shall be subtracted from the Commissionable Revenue otherwise credited to the
Sales Team.  The amount of Commissionable Revenue will be subtracted in the
quarter the product return or product credit is processed.  Further, if one or
more assigned accounts are greater than 90 days past the due date established by
the applicable payment terms, the corresponding amount of Commissionable Revenue
previously credited to the Sales Team shall be subtracted and the next quarterly
Commission payment shall be adjusted accordingly.  Such Commissionable Revenue
will be added back in the quarter in which the payment is received from the
customer and will be included in the next succeeding Commission payment.  No
Commission will be payable for any amounts written down or written off in
accordance with GAAP.

 

(2) Commission Calculation - The Company’s Finance Department will calculate the
year-to-date Commissionable Revenue from invoices issued to the Sales Team’s
customers and determine the percentage of Individual Quota attained.  The
“Commission Payout Factor” is determined by locating the percentage of
Individual Quota attained year-to-date in the table below and identifying the
corresponding Commission Payout Factor.  If the Individual Quota attained falls
between the listed percentages in the Commission Table, the Finance Department
will extrapolate to identify the Commission Payout Factor (e.g., 77% Individual
Quota attainment would be a 61.67% Commission Payout Factor).  The Commission
earned is calculated as follows:

 

COMMISSION PAYOUT FACTOR x TARGET COMMISSION (on Attachment A)

x BASE SALARY.

 

The amount of Commission payable to Participant will be calculated after the
Company’s books are closed for the first fiscal quarter and after each calendar
month thereafter. Commissions paid in prior periods of the fiscal year are
deducted from the Commission payable for the year-to-date. 

There is a “cap” or upper limit at 200% of Individual Quota attainment so that
achieving greater Commissionable Revenue beyond 200% of Individual Quota, which
equates to a 250% Commission Payout Factor, will not result in additional
Commission.  In addition, regardless of actual results, if the percentage of
EBITDA Goal attained (as hereinafter defined) is less than 100%, then the
percentage of Individual Quota attained will also be deemed to be capped at
100%.

PCTEL, Inc.

2019 Sales Compensation Plan

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EXHIBIT 10.12

 

Commission Table:

% Individual Quota Attained

Commission

Payout Factor

0%

0%

10%

6%

20%

12%

30%

18%

40%

24%

50%

30%

60%

36%

70%

42%

75%

60%

80%

64%

90%

81%

100%

100%

110%

121%

120%

144%

130%

169%

140%

196%

150%

205%

160%

214%

170%

223%

180%

232%

190%

241%

≥ 200%

250%

 

(b)  Adjusted EBITDA Calculation – The Company’s Finance Department will
calculate the year-to-date Adjusted EBITDA in accordance with its established
non-GAAP procedures.  The Company has assigned an Adjusted EBITDA goal equal to
the Company’s total target Adjusted EBITDA, as approved by the Board of
Directors in the Company’s 2019 financial plan (“EBITDA Goal”).  The “EBITDA
Payout Factor” is determined by locating the percentage of the EBITDA Goal
attained in the table below and identifying the corresponding EBITDA Payout
Factor.  If the percentage of EBITDA Goal attained falls between the listed
percentages in the Adjusted EBITDA Table, the Finance Department will
extrapolate to identify the EBITDA Payout Factor (e.g., 77% attainment would be
a 61.67% EBITDA Payout Factor).  The Adjusted EBITDA component of Variable
Compensation is calculated as follows:

 

EBITDA PAYOUT FACTOR x TARGET ADJUSTED EBITDA (on Attachment A)

x BASE SALARY.

 

The amount payable to Participant as a result of attaining the EBITDA Goal will
be calculated after the Company’s books are closed for each fiscal quarter.
There is a “cap” or upper limit of 250% as the EBITDA Payout Factor.  In
addition, regardless of actual results, if the percentage of Individual Quota
attained is less than 100%, then the percentage of EBITDA Goal attained will
also be deemed to be capped at 100%.

PCTEL, Inc.

2019 Sales Compensation Plan

--------------------------------------------------------------------------------

EXHIBIT 10.12

Adjusted EBITDA Table:

% EBITDA Goal Attained

EBITDA Payout Factor

0%

0%

10%

6%

20%

12%

30%

18%

40%

24%

50%

30%

60%

36%

70%

42%

75%

60%

80%

64%

90%

81%

100%

100%

110%

121%

120%

144%

130%

169%

140%

196%

150%

205%

160%

214%

170%

223%

180%

232%

190%

241%

≥ 200%

250%

 

 

VI.

Payment Timing

 

All payments of Variable Compensation to Participant will be paid forty-five
(45) days after the close of the applicable period.  

PCTEL, Inc.

2019 Sales Compensation Plan

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EXHIBIT 10.12

 

ATTACHMENT A

 

PCTEL, INC.

 

QUOTA ASSIGNMENT STATEMENT

 

 

Name:  Arnt Arvik

 

Sales Accounts:  All accounts of the Sales Team

 

Individual Quota assigned: as stated in Section IV(a)

 

Target Commission is:  47% of your Base Salary

 

Target Adjusted EBITDA is: 20% of your Base Salary

 

Total Target Variable Compensation is:  67% of Base Salary

 

 

 

 

 

 

 

 

 

I acknowledge, as of this 15th day of March, 2019, that I have read, understand
and agree to the terms and conditions of this specifically prepared PCTEL, INC.
Sales Compensation Plan for FY 2019.

 

/s/ Arnt Arvik

 

 

Employee/Participant

 

/s/ David Neumann

 

Chief Executive Officer

 

/s/ Les Sgnilek

 

Vice President-Corporate Resources & Chief Risk Officer

 

/s/ Kevin McGowan

 

Chief Financial Officer

 

 

 

 

 

 

 

PCTEL, Inc.

2019 Sales Compensation Plan