Exhibit 10.6

2011 Short-Term Incentive Plan Policy

 

Policy:    2011 Short-Term Incentive Plan Policy    Policy Accountability:   
Human Resources- Compensation    Approved: EVP—Human Resources Administrative
Accountability:    Human Resources- Compensation    Date: 03/23/11

PURPOSE:

Radiant Systems believes that incentive programs that incent and recognize
achievement of critical short-term objectives promote the success of the
organization, increase shareholder value, and promote the attraction and
retention of critical talent.

OBJECTIVES & PRINCIPLES:

The objectives of the STI Plan are aligned with overall company compensation
program objectives:

 

  •  

Provide total potential compensation equal to or greater than market for the
role

 

  •  

Incent healthy cross-functional behavior and reward results that are aligned
with company business objectives and our shareholders

 

  •  

Keep the plan simple

Some key principles of our STI plan include:

 

  •  

Self funding – STI payout is funded via financial metrics (team profitability),
based on the 12-month financial plan.

 

  •  

Annual payout except for sales-oriented roles. With base salary ranges at
market, STI reinforces the pay-for-performance culture.

 

  •  

Payout triggered on financial milestones aligned with Budget and Target. Partial
payout of STI occurs at Budget with linear payout of remaining STI up to Target.

 

  •  

ROI to shareholders – our STI plans reflect a philosophy to provide an
acceptable return to shareholders before rewarding management or employees for
delivering results.

DEFINITIONS:

Adjusted Operating Income – Operating Income per published financial reports,
excluding amortization, stock based compensation expense and investment in new
dining network pilot, but including small to moderate acquisitions (less than
$50 million).

Contribution Margin – A measure used for industry groups which shows the revenue
generated by the industry minus the expenses associated with the industry. This
is also published in financial reports.

Budget – Minimum performance level where a partial payout of STI occurs. Budget
assumes moderate revenue and profit growth year over year and will vary from
Industry Group to Industry Group based on growth assumptions in each Industry’s
financial plan.

Target – A higher performance level where full payout of STI occurs.

ELIGIBILITY:

All leadership employees (Director and above) are eligible for a short-term
incentive plan.

PLAN DESIGN:

Profitability Goals – A minimum of 50% of each employee’s plan will be tied to
the achievement of a profitability goal, such as adjusted operating income or
contribution margin. In addition to determining part of the payout, this goal
will also govern whether any non-profit goals are eligible for a payout. For
2011, 20% of the STI payout for Industry Presidents will be based on the
achievement of the annual company adjusted Operating Income Budget and 10% of
other Industry employees’ STI will be based on the achievement of the annual
company adjusted Operating Income Budget. For Industry employees, the majority
of STI payout will be associated with either the Industry CM or a segment of the
Industry CM as appropriate based on the employee’s role. Corporate and Central
Services employees continue to have company adjusted operating income as their
primary financial metric.

Non-Profitability Goals – Some plans have either non-profit related financial
goals or non-financial goals. When these types of goals are used, they must be
clearly defined, and measurable. These goals are also subject to the
profitability goal mentioned above in determining whether they are eligible for
payout if met. If the profitability goal is not achieved, then non-profitability
goals are not paid out even if they are achieved. This is necessary in order to
assure that STI plans are self-funded, and to deliver an acceptable return to
our shareholders.

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International Goals – Employees in North America who have a role in supporting
the International Business Unit will have a portion of their STI based on the
International Solutions GP. The portion of STI tied to International GP will
typically be 10%. The Industry President and the International BU Industry
President will agree on the employees who will have an international component,
and on the percentage to be tied to this component. The COO will approve this
list. If the company achieves its adjusted Operating Income Budget, and the
Industry achieves its CM Budget, a full Budget level payout (excluding missed
quarters for those with quarterly payouts) will be made even if the split
between the Americas and International is not achieved. This same rule applies
at the Target level if both Target adjusted Operating Income and Target CM are
achieved.

Payout Calculations – Most plans have two levels of performance for each
financial goal – Budget and Target. Typically, 50% of an employee’s bonus is
paid out based on the achievement of Budget, which corresponds with the
company’s financial plan. The remaining 50% is paid linearly between Budget and
Target. For most Industry employees, 10% of Budget level payout will be tied to
company results and 40% will be tied to Industry results (Industry Presidents
will have 20% tied to company results and 30% tied to Industry results). The
payout between Budget and Target is governed by Industry results.

EXAMPLE: Assume that the employee’s annual STI Target is $20,000. The employee
has two objectives: Company Adjusted Operating Income Budget, and Industry CM.
Budget Adjusted Operating Income = $40 million, Budget CM = $20 million, Target
CM = $21 million, Actual Adjusted Operating Income = $41 million, and Actual CM
= $20.6 million. The bonus would be calculated as follows:

 

  •  

10% of annual STI, or $2,000, is earned since Operating Income Budget was
achieved.

 

  •  

40% of annual STI, or $8,000, is earned since Industry CM Budget was achieved.

 

  •  

The remaining 50% is earned ratably between Budget and Target CM. 1% of each
dollar between Budget and Target is earned as STI ($10,000 STI divided by
$1,000,000 difference between Budget and Target = 1%). Therefore, $6,000 would
be earned (1% x $600,000 difference between Actual and Budget = $6,000).

 

  •  

Total STI earned = $16,000 ($2,000 + $8,000 + $6,000).

Payout Considerations – Quarterly financial statements will be evaluated to
ensure that any decisions driven outside the industry that result in the team
not making budget are handled fairly. Based on this review, industry level
financials may be modified or discretionary payments provided to ensure
individuals are not penalized for corporate decisions around total company
financials.

Currency Conversions – For bonus payouts affected by financial results in
international currencies, bonus calculations are based on the results at the
budgeted FX rate, which is calculated each quarter and posted in the management
books.

Cross Industry Sales – At times, one industry will have the opportunity to sell
the products of another industry. Due to accounting system limitations, the
industry that sells the product receives all of the revenue for the sale.
However, in the event that a sale is material and may impact STI payout, at the
discretion of the COO, the industry who owns the product may also receive credit
for some or all of the revenue generated.

Quarterly Plans – Employees with responsibility for generating revenues may have
a portion of their plan paid on a quarterly plan. This portion will be defined
in the individual plan document. Typically, quarterly plans are paid based on
the achievement of the cumulative quarterly Budget, and possibly Target. Failure
to achieve the cumulative quarterly number results in no payout for the quarter.
However, if at the end of the year, the annual number has been achieved, 50% of
the payout associated with the missed goal will be paid as a make-up. For
example, assume that an employee’s quarterly potential is $5,000. $2,500 is paid
out based on Budget, and $2,500 is paid out between Budget and Target. If one
quarter’s payout is missed, because Budget was not achieved, but the annual
Budget was achieved, 50% of the missed Budget level quarterly Budget level
payout would be paid. In this example, this would be $1,250 ($2,500 x 50%). Any
missed quarterly payout associated with performance between Budget and Target is
paid out only if the annual Target is achieved.

Upside – The Industry President receives an upside payment of 5% of every dollar
achieved above Target plus a 5% pool for every dollar achieved above Target to
be shared at his discretion with the leadership employees in the Industry. The
distribution of the discretionary payouts are reviewed and approved by the COO
and the CEO.

TIMING OF PAYOUTS:

STI is calculated and processed after year-end earnings are released and
internal financial reports are published, approximately eight weeks after
year-end. Approvals are required from BU leadership, EVP-HR, CFO, COO (for
Industry groups) and CEO. Projected timing of Q4 earnings release is mid- to
late February, and projected timing for annual STI payout is mid-March.

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Employees who have responsibility for generating revenue may have a portion of
their plan paid out on a quarterly basis. The planned schedule for quarterly
payouts is as follows:

 

     Q1      Q2      Q3      Q4  

earnings release

     Late April         Late July         Late Oct         Late Feb   

in paychecks-U.S.

     Late May         Late Aug         Late Nov         Mid Mar   

in paychecks-Geelong & Prague

     Late May         Late Aug         Late Nov         Late Mar   

 

  •  

Once approved, STI will be submitted to Payroll for processing. All STI will be
paid out net of applicable taxes.

 

  •  

If you have questions about this STI plan or a specific STI calculation, please
contact your manager. S/he will involve others from Accounting, BU leadership,
and HR as appropriate.

OTHER RULES:

In addition to the above, the following rules also govern this plan:

 

  •  

The individual must be employed at year-end to earn STI for that year. If an
individual’s employment is terminated, all future STI is forfeited.

 

  •  

Transfers must be in the new group for a full quarter to be eligible for
pro-rata payout in the new group. Therefore, payouts for transfers will be
calculated as follows:

 

  •  

Q1 transfer — 1 quarter in old group, 3 quarters in new group

 

  •  

Q2 transfer — 2 quarters in old group, 2 quarters in new group

 

  •  

Q3 transfer — 3 quarters in old group, 1 quarter in new group

 

  •  

Q4 transfer — 4 quarters in old group, next year in new group

 

  •  

Annual payouts are based on annual results, prorated according to the above
schedule.

 

  •  

If the individual is on a reduced work load, part-time schedule, or on leave of
absence, the STI calculation will be adjusted based on base wages earned that
year per Payroll.

 

  •  

Accounting owns the calculation and approval process. HR owns plan
documentation. BU leadership owns communication.

EXCEPTIONS:

Although it is the intention of the company for most STI plans to conform to the
above design, at times exceptions to this design may be warranted due to the
employee’s role. Any exceptions to the STI plan design described above must be
approved in advance by the CEO or the COO (in the case of the Industry groups),
Division President or Business Unit head and EVP-HR.

ADMINISTRATIVE PROCESS:

 

1) In Q4 and Q1, the Compensation team works with business unit management to
determine plans for each employee.

 

2) In Q4 or Q1, the specific numbers for each goal are finalized.

 

3) Compensation provides business unit management with documentation of the STI
plan. Business unit management may go ahead and distribute the plan in person.

 

4) After plans are finalized, Compensation e-mails plans to employees and copies
appropriate Business Unit Manager. Receipt of e-mail indicates acceptance and
understanding of plan unless the employee indicates otherwise.

 

5) The Compensation team also provides Finance with copies of plans for their
groups, so Finance can accurately calculate the accruals and payouts.

 

6) Each quarter, Finance calculates accruals and payouts, and forwards this
information to the Industry President or Business Unit head for approval.

 

7) Once approved, Finance forwards the spreadsheet to the EVP-HR, and the
VP-Finance.

 

8) EVP-HR reviews the payouts and approves for payment.

 

9) VP-Finance approves the payouts, and forwards final payouts to CEO and COO
for their approval.

 

10) Once approved, VP-Finance forwards payout file to Payroll for processing.