Exhibit 10.1

AAC HOLDINGS, INC.

2016 ANNUAL BONUS PLAN

 

I. Administration of the Plan

The 2016 Annual Bonus Plan (the “Bonus Plan”) is based on the 2016 fiscal year,
January 1, 2016 through December 31, 2016 for AAC Holdings, Inc. (the
“Company”). The awards pursuant to this Bonus Plan shall be administered as
performance awards pursuant to the Company’s 2014 Equity Incentive Plan (the
“Equity Plan”). All provisions hereof shall be interpreted accordingly.
Capitalized terms not otherwise defined herein shall have the meaning set forth
in the Equity Plan. All incentive payouts will be calculated and paid by the
Company as described in Schedule A hereto or on a date selected by the Company
in its sole discretion that is not later than March 15, 2017. All Bonus Plan
payouts are subject to required local, state and federal withholding taxes.

The Bonus Plan shall be administered by the Compensation Committee of the
Company’s Board of Directors (the “Compensation Committee”). The Compensation
Committee may delegate to certain associates the authority to manage the
day-to-day administrative operations of the Bonus Plan as it may deem advisable.

The Compensation Committee reserves the right to amend, modify, or terminate the
Bonus Plan at any time prior to the end of the 2016 fiscal year in its sole
discretion. The Compensation Committee shall have the authority to modify the
terms of any award under the Bonus Plan that has been granted; to determine the
time when awards under the Bonus Plan will be made, the amount of any payments
pursuant to such awards, and the performance period to which they relate; to
establish performance objectives in respect of such performance periods; and to
determine whether such performance objectives were attained. The Compensation
Committee is authorized to interpret the Bonus Plan, to establish, amend and
rescind any rules and regulations relating to the Bonus Plan, and to make any
other determinations that it deems necessary or desirable for the administration
of the Bonus Plan. The Compensation Committee may correct any defect or omission
or reconcile any inconsistency in the Bonus Plan in the manner and to the extent
the Compensation Committee deems necessary or desirable. Any decision of the
Compensation Committee in the interpretation and administration of the Bonus
Plan, as described herein, shall be subject to the terms of the Equity Plan, but
shall otherwise lie within its sole and absolute discretion and shall be final,
conclusive and binding on all parties concerned. Determinations made by the
Compensation Committee under the Bonus Plan need not be uniform and may be made
selectively among Participants in the Bonus Plan, whether or not such
Participants are similarly situated. Any and all changes will be communicated to
those executives participating in the Bonus Plan that are affected by the
changes.

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II. Bonus Plan Eligibility

The Compensation Committee shall determine the executive officers and other
members of the Company’s senior management eligible for participation in the
Bonus Plan. A Participant in the Bonus Plan hired or promoted from January 1,
2016 through December 31, 2016 will be eligible for a prorated payout if he or
she achieves the required performance metrics of his or her individual program.
Such prorated payout shall be made in accordance with the payment provisions of
Section I above. Additionally, if any Participant receives a change in base
salary during the performance period, the bonus payout earned by the Participant
under the Bonus Plan, if any, will be prorated accordingly.

All Bonus Plan Participants must accept the commitment and responsibility to
perform all duties in compliance with the Company’s Code of Business Conduct and
Ethics. Any Participant who manipulates or attempts to manipulate the Bonus Plan
for personal gain at the expense of customers, other associates or Company
objectives will be subject to appropriate disciplinary actions.

Participants must not divulge to any outsider any non-public information
regarding this Bonus Plan or any specific performance metrics applicable to the
Participant.

Participation in the Bonus Plan does not constitute a contract or promise of
employment between the Company and any Participant in the Bonus Plan. Any
promise or representations, oral or written, which are inconsistent with or
different from the terms of the Bonus Plan are invalid.

 

III. Termination Provisions

Except as the Board may otherwise determine in its sole and absolute discretion
(i) termination of the Participant’s employment (x) prior to January 1, 2017, or
(y) at any time for Cause (as defined below), will result in the forfeiture of
any further amounts that would otherwise have been payable to a Participant
following the termination (inclusive of any quarterly payment not yet
distributed to a Participant as of the date of termination) and (ii) termination
of the Participant’s employment on or after January 1, 2017 (other than
termination for Cause) will not result in the forfeiture of any further amounts
that would otherwise have been payable to a Participant following the
termination pursuant to the Bonus Plan. If a Participant becomes disabled during
the 2016 fiscal year or is granted a leave of absence during that time, a pro
rata share of the Participant’s award based on the period of actual
participation may, in the Compensation Committee’s sole discretion, be paid to
the Participant after the end of the performance period if it would have become
earned and payable had the Participant’s employment status not changed.

For purposes of this Bonus Plan, “Cause” means (i) conviction of the Participant
under applicable law of a felony or any misdemeanor involving moral turpitude;
(ii) unauthorized acts intended to result in the Participant’s personal
enrichment at the material expense of the Company or a Subsidiary or Affiliate;
or (iii) any violation of the Participant’s duties or responsibilities to the
Company or a Subsidiary or Affiliate which constitutes willful misconduct or
dereliction of duty. For purposes of this definition, no act, or failure to act,
on the Participant’s part shall be considered “willful” unless done, or omitted
to be done, by the Participant not in good faith and without reasonable belief
that the Participant’s action or omission was in the best interests of the
Company.

 

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IV. Performance Measures

Participants in the Bonus Plan may receive a cash award upon the attainment of
performance goals which may be corporate and/or individual goals and which will
be communicated to the Participant by the Compensation Committee. The percentage
of any award payable pursuant to the Bonus Plan shall be based on the weights
assigned to the applicable performance goal by the Compensation Committee. Each
Participant’s incentive award is based on a designated percentage of the
Participant’s base pay and is established by the Compensation Committee. The
targets for the performance criteria shall be determined by the Compensation
Committee in its discretion within the first ninety (90) days of the fiscal
year.

Each Participant in the Bonus Plan will be eligible for a bonus payout
conditioned on the achievement of performance measures as set forth on Schedule
A hereto. The Compensation Committee shall determine and certify whether and to
what extent each performance or other goal has been met prior to the payment of
any award hereunder. In determining whether and to what extent a performance
goal has been met, the Compensation Committee may consider such matters as the
Compensation Committee deems appropriate.

In addition to any adjustments enumerated in the definition of the performance
goals set forth on Schedule A hereto, the Compensation Committee is hereby
authorized to make adjustments in the terms and conditions of, and the criteria
included in, awards in recognition of unusual or nonrecurring events affecting
any Participant, the Company, or any subsidiary or affiliate, or the financial
statements of the Company or of any subsidiary or affiliate; in the event of
changes in applicable laws, regulations or accounting principles; or in the
event the Compensation Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Bonus Plan. The
Compensation Committee is also authorized to adjust performance targets or
awards downward to avoid unwarranted windfalls. Notwithstanding the foregoing,
the Committee shall not have the discretion to increase any award payable to any
Covered Officer in excess of that provided by the application of the terms and
conditions of Schedule A attached hereto.

 

V. Recoupment Policy

The Company may recover any incentive compensation awarded or paid pursuant to
this Bonus Plan based on (i) achievement of financial results that were
subsequently the subject of a restatement due to material noncompliance with any
financial reporting requirement under either GAAP or the federal securities
laws, other than as a result of changes to accounting rules and regulations, or
(ii) a subsequent finding that the financial information or performance metrics
used by the Compensation Committee to determine the amount of the incentive
compensation were materially inaccurate, in each case regardless of individual
fault. In addition, the Company may recover any incentive compensation awarded
or paid pursuant to this Bonus Plan based on a Participant’s conduct which is
not in good faith and which materially disrupts, damages, impairs or interferes
with the business of the Company and its affiliates. This Recoupment Policy
applies to any incentive compensation earned or paid to a Participant pursuant
to this Bonus Plan. Subsequent changes in status, including retirement or
termination of employment, do not affect the Company’s rights to recover
compensation under this policy. The Compensation Committee will administer this
policy and exercise its discretion and business judgment in the fair application
of this policy based on the facts and circumstances as it deems relevant in its
sole discretion. More specifically, the Compensation Committee shall determine
in its discretion any appropriate amounts to recoup, the officers from whom such
amounts shall be recouped (which need not be all officers who received the bonus
compensation at issue) and the timing and form of recoupment; provided, that
only compensation paid or settled within three years prior to the Compensation
Committee taking action under this Recoupment Policy shall be subject to
recoupment; provided further, that any recoupment pursuant to clause (i) or
(ii) of the first sentence of this paragraph shall not exceed the portion of any
applicable bonus paid hereunder that is in excess of the amount of
performance-based or incentive compensation that would have been paid or granted
based on the actual, restated financial statements or actual level of the
applicable financial or performance metrics as determined by the Compensation
Committee in its sole discretion.

 

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For avoidance of doubt, the Company may set off the amounts of any such required
recoupment against any amounts otherwise owed by the Company to a Participant as
determined by the Compensation Committee in its sole discretion, solely to the
extent any such offset complies with the requirements of Section 409A of the
Code and the guidance issued thereunder.

If any restatement of the Company’s financial results indicates that the Company
should have made higher performance-based payments than those actually made
under the Bonus Plan for a period affected by the restatement, then the
Compensation Committee shall have discretion, but not the obligation to cause
the Company to make appropriate incremental payments to affected Participants
then-currently employed by the Company. The Compensation Committee will
determine, in its sole discretion, the amount, form and timing of any such
incremental payments, which shall be no more than the difference between the
amount of performance-based compensation that was paid or awarded and the amount
that would have been paid or granted based on the actual, restated financial
statements.

 

VI. Miscellaneous Provisions

Notwithstanding anything to the contrary herein, the Compensation Committee, in
its sole discretion, may reduce any amounts otherwise payable to a Participant
hereunder in order to satisfy any liabilities owed to the Company or any of its
subsidiaries by the Participant; provided such offsets otherwise are consistent
with Section 409A of the Code. None of the compensation payable pursuant to this
Bonus Plan is intended to constitute a “deferral of compensation” within the
meaning of Section 409A of the Code, and the provisions of this Bonus Plan shall
be interpreted consistently therewith. The Company does not warrant, however,
that any Award under the Plan will qualify for favorable tax treatment under
Section 409A of the Code or any other provision of federal, state, local or
foreign law. The Company shall not be liable to any Participant for any tax,
interest, or penalties that Participant might owe as a result of participating
in this Bonus Plan.

In the event of any material change in the business assets, liabilities or
prospects of the Company, any division or any subsidiary, the Compensation
Committee (subject to the Equity Plan but otherwise in its sole discretion and
without liability to any person) may make such adjustments, if any, as it deems
to be equitable as to any affected terms of outstanding awards.

The Company is the sponsor and legal obligor under the Bonus Plan and shall make
all payments hereunder, other than any payments to be made by any of the
subsidiaries (in which case payment shall be made by such subsidiary, as
appropriate). The Company shall not be required to establish any special or
separate fund or to make any other segregation of assets to ensure the payment
of any amounts under the Bonus Plan, and the Participant’s rights to the payment
hereunder shall be not greater than the rights of the Company’s (or
subsidiary’s) unsecured creditors. All expenses involved in administering the
Bonus Plan shall be borne by the Company.

The Bonus Plan shall be governed by and construed in accordance with the laws of
the State of Nevada applicable to contracts made and to be performed in the
State of Nevada.

Notwithstanding anything herein to the contrary, the Compensation Committee, in
its sole discretion, may make payments (including pro rata payments) to
Participants who do not meet the eligibility requirements of the Bonus Plan,
including, without limitation, the length of service requirements described in
Section II above if the Compensation Committee determines that such payments are
in the best interests of the Company.

 

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SCHEDULE A

Performance Goals

Bonus awards payable pursuant to this Bonus Plan (each, an “Award”) with respect
to each Participant shall be calculated based on the Company’s achievement of
adjusted EBITDA (“AEBITDA”) goals during each quarter of the 2016 fiscal year
(each, a “Fiscal Quarter”) and the 2016 fiscal year as a whole (the “Fiscal
Year”, and each of the foregoing, a “Performance Period”). In order for a
Participant to qualify for an Award with respect to any Fiscal Quarter, the
Company must meet the AEBITDA Target (each, a “Performance Goal”) for such
Fiscal Quarter. If the Performance Goal for a Fiscal Quarter is met, the
Participant will be entitled to an Award equal to 25% of the target bonus amount
for such Participant as set by Compensation Committee. If the Performance Goal
for a Fiscal Quarter is not met, the Participant will not be entitled to an
Award for such Fiscal Quarter (except to the extent the Performance Goal for the
Fiscal Year is subsequently met). Notwithstanding the foregoing, in the event
the Company would have achieved the Performance Goal for a Performance Period
but for the expense of bonus amounts payable pursuant to the Bonus Plan, the
target bonus payable for such period shall be proportionately reduced to the
level at which the AEBITDA for the Performance Period, including the reduced
bonus amounts, equals the Performance Goal with respect to such period.

For purposes of this Bonus Plan, “AEBITDA” means Consolidated Net Income, plus,
without duplication, to the extent reducing Consolidated Net Income,
(i) interest expense, (ii) depreciation expense, (iii) amortization expense,
(iv) tax expense, (v) non-cash stock compensation, (vi) acquisition-related
expenses, (vii) de-novo startup expenses and (viii) other expenses that are
either unusual in nature or infrequently occurring, within the meaning of GAAP.

If the Company achieves at least 90% of the Performance Goal with respect to the
2016 Fiscal Year, a Participant shall be entitled to an Award with respect to
such Fiscal Year according to the following formula: (a) the percentage of the
AEBITDA Target (but not to exceed 100%) that actual AEBITDA for the 2016 Fiscal
Year represents, multiplied by (b) the Participant’s target bonus amount, with
the product of (a) and (b) reduced (but not below zero) by (c) payments made
during the Fiscal Year with respect to the achievement of the Performance Goal
with respect to each Fiscal Quarter; provided, that the maximum Award with
respect to the Fiscal Year that a Participant may receive shall be the target
bonus amount for such Participant. The Performance Goal for each Performance
Period of the Company shall be as set by the Compensation Committee.

The amount payable under this Bonus Plan with respect to the Participants shall
be determined by the Compensation Committee based on whether and to what extent
the Performance Goals have been met.