EXHIBIT 10.1

 

 

 

Internet Security Systems, Inc.

[YEAR] ISS Executive

Incentive Plan

 

[Approval Date]

I. PURPOSE

This Executive Incentive Plan (the "Plan") sets forth the Company's policies
governing compensation effective January 1, [YEAR] through December 31, [YEAR]
or until such time as the Plan is amended in writing. Your individual base
salary level and quarterly and annual incentive targets are reflected on the
attached Individual Compensation Opportunity Statement.

In order to receive incentive compensation payments under this Plan, you must
sign and return a copy of this Plan to the VP, Human Resources. Further, you
must be employed through the end of a performance period to qualify for an
incentive payment for that period (quarterly or annual).

II. OBJECTIVES

The objectives of the Executive Incentive Plan are to reward you for:

 * Executing our plan in accordance with corporate revenue, profitability and
   operational goals
 * Representing ISS' best interests in all business relationships
 * Contributing to the successful development and achievement of ISS' strategic
   goals and objectives
 * Working with other key members of the management team in clarifying and
   communicating a winning market and product strategy and translating this
   strategy into clear market plans
 * Developing a corporate culture based upon performance, integrity, compassion
   and ISS core values

III. RESPONSIBILITIES

Your responsibilities in keeping with the objectives stated above are to:

 * Represent yourself and ISS at all times in the most ethical and professional
   manner
 * Lead your individual unit with integrity and in accordance with ISS core
   values
 * Take full responsibility to execute company plans and meet performance
   objectives

established in accordance with our strategic imperatives.

 * Meet or exceed performance targets as set forth in this Plan
 * Manage expenses associated with your activities wisely, prudently and in
   accordance with the company's expense policies
 * Ensure that your behavior and leadership continually perpetuate the GO ISS
   culture

 

IV. INCENTIVE COMPENSATION PLAN

Your variable compensation opportunity will be made up of Quarterly and Annual
Incentive Opportunities as outlined in the Individual Compensation Opportunity
Statement furnished to you.

V. PAYMENTS

Incentive Payments will be made quarterly within 30 days from ISS announced
earnings and performance. All payments will be made for achievement against the
[YEAR] ISS measures and approved by the Compensation Committee of the Board of
Directors.

VI. QUARTERLY INCENTIVE PLAN MEASURES

The quarterly incentive plan measures for Corporate Executives are:

 * ISS consolidated quarterly revenue
 * Quarterly earnings per share (non-GAAP, as adjusted)
 * Days Sales Outstanding at end of quarter

The quarterly incentive plan measures for Theatre Heads are:

 * Theatre product quarterly revenue
 * Theatre total quarterly revenue
 * Theatre quarterly contribution margin
 * Theatre Days Sales Outstanding at end of quarter

The relative weighting among the incentive plan measures is provided in the
Individual Compensation Opportunity Statement furnished to you.

VII. ANNUAL INCENTIVE MEASURES

The annual incentive plan measures for Corporate Executives are:

 * ISS consolidated annual revenue
 * Annual earnings per share (non-GAAP, as adjusted)

The annual incentive plan measures for Theatre Heads are:

 * Theatre total annual revenue
 * Theatre annual contribution margin

The relative weighting among the incentive plan measures is provided in the
Individual Compensation Opportunity Statement furnished to you.

In addition to the above quarterly and annual incentives, Corporate Executives
and Theatre Heads may be eligible to participate in an additional bonus
opportunity that is contingent upon the achievement of extraordinary annual
revenue growth for the [YEAR] fiscal year. The incentive opportunity is stated
in the Individual Compensation Opportunity Statement furnished to you if
applicable.

VIII. GENERAL PROVISIONS

Modification of the Plan

ISS reserves the right to modify this Plan as deemed necessary by the
Compensation Committee of the Board of Directors.

Final Authority on Disputes

Final authority for issues not specifically addressed in this Plan, and for all
matters of administration of the Plan shall be decided by the Compensation
Committee of the Board of Directors.

Right to Terminate

Nothing in this Plan shall be construed to imply a contract of employment
between ISS and you. ISS reserves the right to terminate your employment or
participation in this Plan at any time with or without cause. Should you
terminate employment, either voluntarily or involuntarily, then all incentive
payments/commissions under this Plan not yet earned, as defined in the Plan,
shall be forfeited.

Governing Law

This Plan shall be governed by and construed in accordance with the laws of the
State of Georgia.

 

IX. FORM OF -

[YEAR] INDIVIDUAL COMPENSATION OPPORTUNITY STATEMENT

Participant:

Title:

    Quarterly and Annual Metrics for Corporate Executives and Theatre Heads.
 1. The total incentive opportunity will be split between quarterly and annual
    components as follows:

    

    Participant
    
    Quarterly
    
    Annual
    
    Corporate Executives
    
       
    
    Theatre Heads
    
       

    

    
 2. The quarterly incentive plan measures for Corporate Executives are allocated
    among the following performance metrics:
    

    Measure
    
    Description
    
    Weight
    
    Quarterly Revenue
    
    ISS Revenue
    
     
    
    Profitability
    
    Earnings Per Share
    
     
    
    DSO
    
    Days Sales Outstanding
    
     

    The quarterly incentive plan measures for Theatre Heads are allocated among
    the following performance metrics:

    

    Measure
    
    Description
    
    Weight
    
    Theatre Product Revenue
    
    Total quarterly revenues from software licenses and products
    
     
    
    Theatre Total Revenue
    
    Total quarterly revenues from products, subscriptions and services
    
    
    
    Contribution Margin
    
    Measured as the percentage of (theatre operating revenues minus theatre
    operating expenses) to theatre operating revenues
    
     
    
    Theatre DSO
    
    Days Sales Outstanding
    
     

    

    The annual incentive plan measures for Corporate Executives are allocated
    among the following performance metrics:

    Measure
    
    Description
    
    Weight
    
    Annual Revenue
    
    ISS Revenue
    
     
    
    Annual Profitability
    
    Earnings per Share
    
     

    
 3. The annual incentive plan measures for Theatre Heads are allocated among the
    following performance metrics:
    

    Measure
    
    Description
    
    Weight
    
    Annual Revenue
    
    Theatre Revenues
    
     
    
    Annual Profitability
    
    Contribution Margin
    
     

    Incentive weights and specific Q1 and [YEAR] annual targets for the measures
    were approved by the Compensation Committee on [DATE]. Specific targets for
    subsequent quarters, any changes to the [YEAR] annual targets, and
    calculations for payment of quarterly and annual incentive compensation are
    subject to approval of the Compensation Committee of the Board of Directors.
    Its decisions are final.

Your Individual Compensation.

Annual Base Salary As of January 1, [YEAR]:

$

   

Quarterly Incentive Opportunity for [YEAR]:

 

Q1

$

Q2

$

Q3

$

Q4

$

[YEAR] Total Quarterly Opportunity

$

   

[YEAR] Annual Incentive Plan Opportunity

$

   

[YEAR] Total Cash Compensation Opportunity

$

   

Additional Bonus Opportunity (Contingent upon achieving stated ISS [YEAR]
Consolidated Revenues)

 

 

$

   

Long-Term Incentives:

 * Stock Options Granted in [DATE]

     

 

In order to receive incentive compensation payments under this Plan, you must
sign and return the original to the VP Human Resources. Please retain a copy for
your records.

ACCEPTED:

Participant's Name: _______________________________

Signature: ____________________________

Date: ________________________________