Exhibit 10.5

 

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Worldwide Sales Manager

Compensation Plan

FY 2015

For the period from May 1, 2014 through July 31, 2015

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1.0 GENERAL TERMS & CONDITIONS

 

1.1 INTRODUCTION

This 2015 Apigee Corporation Sales Manager Compensation Plan (the “Plan”) has
been designated to maximize the earnings potential of individual sales and sales
management professionals who consistently exceed their goals and thereby help
the Company achieve its business objectives.

 

1.2 PLAN YEAR

The Plan is effective May 1, 2014 through July 31, 2015 (the “Plan Year”).

 

1.3 PLAN ELIGIBILITY AND PARTICIPATION

The Plan is applicable to all sales managers employed by the Company (the “Plan
Participants”). Each Plan Participant must confirm his or her receipt of the
Plan and understanding of its provisions, agree to its term and conditions in
writing, and treat the Plan as ‘Apigee Corporation Private & Confidential’
material pursuant to the nondisclosure agreement previously executed by the Plan
Participant.

Each Plan Participant MUST sign the Plan Acknowledgment (Attachment I) and
return it to the Chief Financial Officer (the “CFO”). Failure to do so will
result in delay, or denial, of your compensation payments and, possibly, other
remedies.

 

1.4 PLAN CHANGES AND DURATION

This Plan supersedes all prior Sales Compensation Plans. Its terms may be
modified only with the prior written approval of the CFO. While every effort
will be made to hold plan changes to a minimum, the Company reserves the right
to modify the Plan at any time in order to correct errors, or omissions in the
Plan or unanticipated changes to the business environment. Notices of any
changes will be made in writing and may be delivered via electronic mail to all
Plan Participants that are affected by such changes.

 

1.5 PLAN INTERPRETATION

The Plan will be interpreted on behalf of the Company by the Vice President of
Worldwide Sales and the CFO. The Plan is not intended, and will not be construed
as, an employment contract between the Company and the Plan Participant.

 

1.6 BUSINESS QUALIFICATIONS

Commissions, bonuses, contest payments and quota credit will be earned and paid
only on sales that are accepted by the CFO for purposes of “bookings” as
specified in the Company’s then current accounting policies (as such accounting
policies are interpreted by the CFO).

 

1.7 TERRITORY ASSIGNMENT

Plan Participants will be assigned a territory by the Vice President of
Worldwide Sales.

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1.8 TERRITORY MODIFICATION

The Vice President of Worldwide Sales can modify a Plan Participant’s territory
at any time for any or no reason upon notice. The Plan Participant whose
territory is being modified may receive transitionary commissions and quota
credit for sales that occur within his or her original territory during the
fiscal quarter (each, a “Quarter”) that the modification is put into effect, if
agreed to in writing with the Vice President of Worldwide Sales.

 

1.9 COMMISSION SHARING

Plan Participants are expected to share information and work cooperatively with
each other, whenever appropriate, across territory boundaries. In certain
instances it may be appropriate to compensate two Plan Participants across
multiple territories that cooperate to achieve sales results. In such
circumstances, the Vice President of Worldwide Sales will determine any split of
commission if deemed necessary. It is the Company policy that the sum of all
commission splits for an individual deal not exceed 100%.

 

1.10 RENEWALS

Plan Participants will not be entitled to quota credit or commissions for
customer contract renewals, regardless of whether or not that customer account
is in the assigned territory.

 

1.11 EVIDENCE OF A DEAL

An authorized representative of the customer must sign the Company’s standard
license or service agreement. All changes or modifications to the Company’s
standard license agreement must be reviewed and approved by the Apigee
Corporation Legal and Finance departments and approved by the CFO. In the event
that the customer requires Apigee to sign their license terms and conditions,
these terms must be reviewed and approved by the Apigee Corporation Legal and
Finance departments and approved by the CFO.

In no event is a Plan Participant authorized to make changes to the Company’s
form agreements or to provide customers with modifications to the terms and
conditions in the form of a side letter, regardless of whether the modification
is written or verbal. All agreements and understandings with the customer must
be incorporated into the final signed license or services agreement. The use of
side letters is prohibited and is grounds for disciplinary action including the
forfeiture of commission and potential termination of employment.

The Company’s CEO or CFO are the only individuals authorized to sign final
customer agreements.

All orders (including Purchase Orders, if required by our Customers) must be
received by orders@apigee.com, including authorized signatures from both
Customer and Company, on or before midnight Pacific Time on the last day of the
period (month, quarter, year) in order to count as a Booking for that period.

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2.0 COMPENSATION

 

2.1 QUOTA ASSIGNMENTS

At the beginning of each fiscal period, Plan Participants will be assigned a
sales quota (the “Quota”) that will be distributed to the Plan Participant in
the form of ATTACHMENT I. A Plan Participant that is hired during the Plan
period will be assigned a pro-rated Quota based on his or her hire date. The
Quota will remain in effect for the entire plan period. Any and all changes to
assigned quotas must be approved in writing by the Vice President of Worldwide
Sales and the CFO.

All Quotas will be stated in terms of “Bookings.” Bookings may arise from the
license of the Company’s licensed software, maintenance and support,
Professional Services and Cloud service offerings, and are defined in more
detail below.

 

2.2 BASE SALARY

Plan Participants will be paid a base salary as determined by the Company.
Salary will be paid in accordance with the Company’s regular payroll schedule.

 

2.3 COMMISSIONS AND ACCELERATORS

For transactions that receive quota credit, Plan Participants will earn a base
commission rate and are then eligible for accelerators paid for performance
above quota. Commission base rates and accelerator rates are specified on
ATTACHMENT I.

 

2.4 DEFINITION OF BOOKING VALUE

Quota credit is earned based on the Booking Value of a deal. Booking Value is
equal to the dollars charged to the customer for the licensed software, Cloud
services, maintenance and support fees, and professional services that are
revenuable to the Company. Revenuable is defined as meeting the revenue
recognition requirements of the Company at the time the order is placed. If
acceptance criteria is granted, then the order will not be considered a booking
until acceptance has occurred.

Upfront Sales:

For transactions where the customer is paying 100% of the fees upfront,
including subscription based transactions and multi-year transactions, the
Booking Value is equal to the amount that the customer will be billed upfront
for all non-cancelable, non-terminable fees, subject to the following
calculation. For multi-year transactions, commission will be calculated at the
following rates: 100% quota credit for first year value, 50% quota credit for
second year value, and 25% quota credit for third year value. For perpetual
license sales, quota credit will only be given for the first year of support
fees, regardless of how many years’ support are included in the transaction.

Installment Sales:

For transactions where the customer is paying the fees owed over a period of
time, the Booking Value will be equal to the fees scheduled to be paid by the
customer for noncancelable, non-terminable transactions for the first twelve
months after effective date of the contract. Any

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fees paid after the initial twelve months are not available for Bookings credit
and will be considered a renewal when invoicable. Under no circumstance will a
Plan Participant receive more than twelve months commission credit when
installment Sales are agreed to with the customer.

Quota credit is earned in the month the transaction is considered booked by
Finance.

All OEM transactions are non-commissionable under this plan, and will be
compensated on a case-by-case basis.

Professional Services:

Bookings credit associated with professional services will be made once all
appropriate documentation has been received (e.g. contract, SOW, PO, etc.) For
engagements that will be billed on a Time & Materials basis, the booking credit
will be based on the total estimated value of the engagement (subject to the Cap
mentioned below.)

Prepayments for future services work will also be considered a booking.

For Training courses, booking credit will be earned for any On-Site course sold
or Open Enrollment seats sold in conjunction with a license agreement.

Professional Services Commission Cap: If sold in conjunction with a license
transaction, services will be paid at the level of 25% of the license value. For
example, if a license transaction is sold for $200,000, then any associated
services value will be paid up to $50,000.

If a services transaction is sold as a stand-alone event, then the cap for
commission credit is $50,000 for Enterprise accounts and $100,000 for Telco
accounts. A “stand-alone” services transaction is any order/PO received for
Services that is separated by one month (plus or minus) from a license order
(not including renewal orders).

No retroactive commission or quota credit will be given if new first year
license or support transactions are subsequently received. Renewals are excluded
from determining the historical license and support amounts.

Unpaid SOWs carried over from FY 2014 will be paid in FY15 in the month they are
invoiced until the balances reach zero.

 

2.5 PAYMENT AND EARNING OF COMMISSIONS

100% of the commission value related to a transaction will be paid in the month
following the month that a fully executed contract and related paperwork is
delivered to and accepted by the Finance Department in accordance to the
Company’s then current contract administration policies for contract Booking
Values defined above.

Commission payments are processed in the last payroll of each month.

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2.6 CUSTOMER ACCOUNTS IN DEFAULT OF PAYMENT TERMS/REVERSAL OF COMMISSIONS AND
QUOTA CREDIT

In the event that a Customer is 60 days or more in default of the payment terms
specified in the sales contract, all bookings arising from the unpaid amount
will be deducted from the Plan Participant’s quota credit and commission
calculation if the Company ‘de-books’ the order. Commission credits will be
reversed according to the accounting method used to calculate the original
commissions. Quota credit will be reversed at the same time that the Company
reverses the booking. If the order is subsequently paid for, commission credit
will be recovered at 75% of the original value.

 

2.7 RECOVERY OF COMMISSIONS AND BONUSES

The Company will be entitled to recover from a Plan Participant, including any
Plan Participant that is no longer eligible to participate in the Plan, 100% of
any reversed commissions and, if applicable, any bonuses that were based on such
reversed commissions (the “Recoverable Payment”). The Company will deduct up to
100% of any Recoverable Payment from any future commission, bonus and contest
payments earned by the Plan Participant until the Recoverable Payment has been
recovered in full.

 

3.0 TERMINATION

 

3.1 FINAL COMPENSATION

If a Plan Participant’s employment as an active sales manager is terminated for
any reason, voluntary or involuntary, including, without limitation, if the Plan
Participant’s employment is terminated, or he or she commences a leave of
absence or other inactive employment status, or if he or she assumes a non-sales
role with the Company, he or she will no longer be eligible to participate in
the Plan as of the date of such termination (the “Termination Date”).

All Quota credits and commissions for future bookings, e.g., those related to
installment sales, extended payment terms or other arrangements will be
irrevocably forfeited upon the Termination Date.

Notwithstanding any other provision of the Plan, the Company will offset up to
100% of any Recoverable Payment from any commission, bonus, contest payments,
base salary, unused vacation credit, expense reimbursement and other amounts
owed by the Company to the Plan Participant upon the Termination Date until the
Recoverable Payment has been recovered in full. Any Recoverable Payment in
excess of the amount to offset is immediately due and payable to the Company by
the Plan Participant upon the Termination Date.

 

3.2 RECOVERABLE COMMISSIONS

If the Plan Participant has a negative commission balance on his or her
Termination Date due to mistakes, commission overpayments, recoverable
commission amounts, cancellations or charge-backs or any other causes, these
amounts become immediately due and payable to the Company by the Plan
Participant upon the Termination Date.

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ATTACHMENT I

 

FISCAL 2015 PLAN ACKNOWLEDGEMENT

PLAN PARTICIPANT’S NAME:

 

This fully completed Plan Acknowledgment must be signed and returned to the CFO
to ensure proper

and prompt commission payments.

The Plan Participant named is eligible to participate in the Apigee 2015 Sales
Manager Compensation Plan. The Plan is not intended as, and will not be
construed to imply, a contract of employment between the Plan Participant and
the Company. All interpretations of the Plan by the Vice President of Worldwide
Sales and/or the CFO are final, binding and are not subject to appeal. The
Company reserves the right to modify or terminate the Plan at any time, for any
or no reason, with or without notice. No payment will be made under the Plan
until the Plan Participant has met all the terms and conditions of the Plan and
the Plan Participant has signed and returned this Plan Acknowledgment to the
CFO.

I, the undersigned Plan Participant, have received, read, and fully understand
the contents of the Apigee 2015 Sales Manager Compensation Plan and acknowledge
and agree to its terms and conditions.

 

 

 

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