Exhibit 10.3
Ancestry.com Inc.
Description of 2010 Performance Incentive Program
On March 18, 2010, the Compensation Committee of the Board of Directors of
Ancestry.com Inc (the “Company”) approved financial performance objectives under
the Company’s Performance Incentive Program to serve as the basis for
determining the Company-wide bonus pool to be paid under the program for 2010.
The Compensation Committee established two corporate performance measures that
are to be used in calculating the pool for awards for 2010: revenue and adjusted
EBITDA. Both measures will be weighted equally.
For revenue, no pool funding occurs below budget; at 100% of budgeted revenue,
the pool is funded at 80% of the budgeted bonus pool attributable to revenue
(i.e., 50% of the pool). The maximum funding of 120% of the budgeted bonus pool
attributable to revenue occurs at 105% of budgeted revenue. Results between 100%
and 105% of budgeted revenues are interpolated such that 100% funding of the
budgeted bonus pool attributable to revenue occurs at 102.5% of budgeted
revenue.
For adjusted EBITDA, no pool funding occurs below budget; at 100% of budgeted
adjusted EBITDA, the pool is funded at 80% of the budgeted bonus pool
attributable to adjusted EBITDA (i.e., the other 50% of the pool). The maximum
funding of 120% of the budgeted bonus pool attributable to adjusted EBITDA
occurs at 110% of budgeted adjusted EBITDA. Results between 100% and 110% of
budgeted adjusted EBITDA are interpolated such that 100% funding of the budgeted
bonus pool attributable to adjusted EBITDA occurs at 105% of budgeted adjusted
EBITDA. The Company defines adjusted EBITDA as net income (loss) plus net
interest (income) expense; income tax expense; non-cash charges including
depreciation, amortization, impairment of intangible assets and stock-based
compensation expense; and other (income) expense.
Under the Performance Incentive Program for 2010, each of the two performance
measures are reviewed separately in determining the funding of the bonus pool.
For example, if the Company achieves less than 100% of budgeted revenues but
achieves 100% of budgeted adjusted EBITDA, then employees will be eligible for a
pool funded with zero allocation from the revenue target, but 80% of the
adjusted EBITDA target (or 40% of the budgeted bonus pool).
Individual payments made from the pool to each participant in the Performance
Incentive Program, including the Chief Executive Officer (“CEO”), the Chief
Financial Officer (“CFO”), and the other executive officers, will be based on
each executive officer’s target bonus percentage of salary, as such amount may
be adjusted by (1) the achievement of individual performance goals,
(2) individual performance ratings, (3) business unit performance, and (4) such
other factors as the Board of Directors or Compensation Committee may determine.