Exhibit 10.8

 

Certain confidential information contained in this document, marked by brackets,
has been omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

 

KLDiscovery

2020 Americas Legal Technology Sales Commission Plan

 

1.

Plan Purpose

1.1

This document outlines the terms and conditions of the Sales Commission Plan
commencing from January 1, 2020 through December 31, 2020 (the “2020 Commission
Plan”) for KLDiscovery (the “Company”). The 2020 Commission Plan is designed to
compensate, reward and provide incentive to each Legal Technology sales employee
(“Employee”) to achieve superior sales performance, whilst at the same time
encouraging the highest level of client satisfaction in an ethical and
responsible manner.

1.2

The definitions that apply to certain terms of the 2020 Commission Plan are set
out in Appendix 1.

2.

Legacy Plans

2.1

The 2018 Commission Plan for Legacy LDiscovery (Virginia only) covering matters
with a FID from April 1, 2017 and before April 1, 2018 that were subject to
commission payments upon paid invoicing will continue in place through December
31, 2020. The related commission payments will only be made once the outstanding
balance on the invoice is paid in full.

3.

Summary of Employee Compensation

3.1

Each Employee will be remunerated through two types of compensation: (i) Monthly
Draw; and (ii) Commission pursuant to the terms of the 2020 Commission Plan (as
described in section 5 below)

4.

Monthly Draw

4.1

An Employee’s monthly draw equals their base salary divided by twelve (12)
months to establish a base monthly amount (“Monthly Draw”).  Irrespective of any
Commission payable pursuant to the 2020 Commission Plan, an Employee will always
receive their Monthly Draw. The Monthly Draw amount is important as it regulates
the Commission payments due to the Employee under the 2020 Commission
Plan.  Note that the Monthly Draw amount applies to the Calculation Period
regardless of the Payment Period and regardless of the Employee’s employment
status with the Company (such as termination).

5.

Description of 2020 Commission Plan

5.1

Commission is based upon invoiced customer revenue multiplied by the appropriate
commission rate % relating to the applicable service as set out in the
commission table below (“Commission”).

Standard Revenue

5.2

An Employee will receive Commission based on the applicable Commission rate in
the table below for all invoiced revenue other than Professional Services
(products detailed in section 5.3 below).  Commission rates are based on list
price and vary depending on type of services and timing of the FID for a matter
or subscription. Subscription renewals will be paid out using the initial
subscriptions FID as the base for determining the Commission rate, unless
otherwise approved in writing by the EVP, Global LT Sales.

The following definitions apply:

[*] = Invoice [*]

[*] = Invoice [*]

[*] = Invoice [*]

 

 

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[*]

[*]

[*]

[*]

[*]

[*](1)

[*]%

[*]%

[*]%

[*]

[*]%

[*]%

[*]%

[*]

[*]%

[*]%

[*]%

[*](2)

[*]%

[*]%

[*]%

 

Notes:

 

1.

[*]% rate for [*] if pricing does not exceed minimum pricing thresholds for
established services.  In addition, projects where outside contractors are used
to perform the services will be paid commission only on the gross margin dollars
of the project for the Company versus the full revenue invoiced to the
customer.  

 

2.

Including but not limited to [*], travel expenses, supplies, freight, delivery
media, etc. These are all items where the Company makes zero to small profit
margins

 

Professional Services Revenue

5.3

Professional Services includes all billed revenue relating to [*] services.  

General Principles relating to Commission

5.4

It is at Company’s discretion to modify the commission rates on specified large
client accounts and Employees may be compensated at different commission rates
and thresholds for such matters.    

5.5

All Commission is based on invoiced revenue only excluding any sales or value
added taxes added to any invoices.  Invoiced revenue is calculated after taking
into consideration: (i) any sales credits issued against the invoice or
estimated sales reserves; and (ii) any service credits issued against the
invoice (e.g. for poor or defective work performance or other disputes with
clients).  Fully executed customer contracts are required for all commissionable
revenue with the exception of transactional paper services. Commissions will not
be earned or paid unless an executed customer contract is available by the end
of the Calculation Period.  

5.6

For the sake of clarity, unless specifically approved by the EVP, Global LT
Sales, any and all customer credits, debits, voids, returns or other adjustments
to a customer’s invoice will be deducted from the Employee’s revenue and
individual Quota attainment used in determining Commissions.

5.7

Commissions will only be paid to an Employee in the applicable Payment Period to
the extent that the total Commissions in the Calculation Period exceeds the
Employee’s Monthly Draw.  For example, in the event that the Employee’s Monthly
Draw is $[*] a month and their monthly Commission total was

 

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$[*], the Employee would only receive the Monthly Draw for that month.  If the
Commission total was $[*], the Employee would receive an additional $[*] in
Commission, which is the amount by which the Commission exceeds the Monthly
Draw.

5.8

A worked example of how Commission and Monthly Draw may operate is set out in
Appendix 2.  

6.

Clawback Adjustments

6.1

If customer payment is not received within [*] days from the invoice date, any
Commission previously paid to the Employee will be deducted from any Commission
payment due to the Employee in the Calculation Period in which the [*] day limit
is reached (“Claw Back”).  Commissions subject to Claw Back adjustment will
subsequently be re-evaluated during the regular Commission calculations to
determine if customer payment has been received in full prior to the end of any
subsequent Calculation Period for which Commission is being calculated.  In such
an event, the Commission will be paid to the Employee at the next possible
payment date and will not be subject to the Monthly Draw. Should the Employee
not exceed the Monthly Draw in the period when a Claw Back is due, the Claw Back
will carry forward until such time that either the invoice is paid or an amount
is earned above the Monthly Draw in subsequent months to cover the Claw Back
amount Any commissions subject to Claw Back that remain without customer payment
in excess of [*] months from the invoice date will be subject to permanent Claw
Back unless specifically approved otherwise by the EVP, Global LT
Sales.  Partial payments will not qualify for return of a portion of the Claw
Back adjustments.  For the sake of clarity, any invoices or portion of invoices
which are written off as bad debts are considered permanent Claw Backs.  In the
event of a negative balance to any Employee, the Claw Back amount will be rolled
over into subsequent months until the Claw Back balance is cleared.

7.

Data Recovery Commissions

7.1

Data Recovery will be compensated based on selling strategy:

i) Signed Master Service Agreement for a legitimate opportunity within an [*]
will be compensated with a $[*] bonus.  This is not subject to the Monthly Draw;
and

ii) Data recovery invoices greater than $[*] will be compensated at [*]% of the
invoiced revenue. Data recovery Commissions in this 7.1(ii) are subject to the
Monthly Draw.

8.

Additional Calendar Year 2020 Accelerators and Incentives

8.1

Accelerator for [*] Projects

[*] matters with a FID from November 1, 2020 or after and invoiced at greater
than $[*] per gigabyte will be paid an incremental [*]% on the invoiced amount
for all commissionable revenue except Managed Review and Paper Services.   [*]
matters priced below $[*] per gigabyte may be subject to reduced commission
rates at the discretion of the EVP, Global LT Sales.  Subscription renewals do
not qualify for this Accelerator.  Final decisions of whether a [*] client
qualifies for this incentive will be determined solely by the EVP, Global LT
Sales. Any Accelerator earned for the Calculation Period will be combined with
any other Commissions in the Calculation Period and shall be expressly subject
to the Monthly Draw.

8.2

Accelerator for Net [*]clients

Net [*]clients will be paid an incremental [*]% on the invoiced amount for all
commissionable revenue except Managed Review and Paper Services.  This incentive
applies to all [*] matters with a FID from November 1, 2020 or after for
qualifying clients.  Subscription renewals do not qualify as ‘net new’. New
buyers or new offices for existing clients do not qualify as ‘net new’.  Final
decisions of whether an [*] client is considered ‘net new’ for this incentive
will be determined solely by the EVP, Global LT Sales.  Any Accelerator earned
for the Calculation Period will be combined with any other Commissions in the
Calculation Period and shall be expressly subject to the Monthly Draw.

 

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8.3

Bonus for selling Managed Review

A one-time per annum bonus of $[*] will be paid to any sales employee who sells
$[*] or more in managed review revenue.  Revenue from projects that are
outsourced or below floor pricing will be excluded from the cumulative revenue
used for this calculation.  Final decisions of whether a project is considered
outsourced or below floor pricing for this incentive will be determined by the
EVP, Global LT Sales.

9.

Employee Quota

9.1

Each Employee will be given a yearly quota which will be the yearly expected
sales revenue expected by that individual Employee (“Quota”).  Individual 2020
Quotas are determined based on growth factors applied to 2019 individual
Employees sales results, business needs and potential for clients.   The Quota
is based off all revenue credited to the Employee regardless whether a
particular subset of the revenue is non-commissionable (for example [*]).  
Likewise, achievement of Quota is based on the same.   The final 2020 Quota for
each Employee is included in the signature page of this document.   The yearly
Quota value may be adjusted during the year at the discretion of the EVP, Global
LT Sales.  These adjustments to Quota may be made for factors not present when
the Quota was established and can include:  a) customer accounts reassigned from
a former Employee to the current Employee; b) windfall new accounts where the
Employee did not participate in a significant way to acquire the business; and
c) other unforeseen changes not considered when the Employee’s Quota was
created.  Any adjusted yearly Quota shall be communicated to Employee prior to
implementation of the adjusted Quota.  

9.2

Accelerator Upon Quota Achievement

The 2020 Commission Plan will incentivize individual Employee’s with a [*]%
accelerator (“Accelerator”).  The Accelerator will be earned on every dollar
over the Employee’s 2020 Quota [*]% year over year.  In the event the mix shifts
toward [*] by more than [*]%, any excess DR will not apply toward Quota
attainment.  The Accelerator will start to be paid in the next Commission
payment cycle following the month the Employee exceeds their Quota.  Once
triggered, it will continue to be paid out on all subsequent 2020 invoiced
revenue.   Note that the Accelerator will only be paid on the commissionable
revenue subset of any invoiced revenue in excess of the Employee’s Quota.

10.

At what point Commissions are deemed “Earned”

10.1

Commissions are considered fully earned for the Calculation Period only
following payment by the customer and only to the extent they exceed the
Employee’s Monthly Draw. Any payments made prior to customer payment are
expressly subject to the terms of the 2020 Commission Plan, including all its
conditions, including but not limited to any amounts subject to Clawback.

11.

Other Conditions

11.1

Exception Approval Process

Any exceptions to the 2020 Commission Plan must be documented and approved in
Salesforce at the time of the sale by the EVP, Global LT Sales. Commission rates
are subject to modification at any time in whole or for a specific
project/subscription at the discretion of the Company. The Company may consider,
without limitation, the following factors in determining commission rates: (i)
changes in Company policy; (ii) pricing services at discounted rates; (iii) the
size and scope of the client matter; (iv) deals deemed as “windfalls”; and (v)
actual or anticipated profit margins for a specific client matter, customer,
type of service or the Company generally.

11.2

Commission Allocation

The Company may allocate credit for revenue, and so divide Commissions, between
more than one Employee as it deems appropriate and to the extent they are
actively involved in the sales process and materially contributed to the sale.
Employees can also agree to split Commission, but any proposed

 

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split is subject to approval by the EVP, Global LT Sales prior to the Commission
being allocated.  Any allocation must be documented and approved in Salesforce
at the time of the sale.  Subsequent changes in splits must be approved and
communicated prior to the end of the Calculation Period and updated in
Salesforce as soon as possible.

11.3

Employees will only receive Commissions on future projects or subscriptions from
accounts which have been re-assigned from House Account status or a prior
Employee. No Commissions will be earned or paid to a new Employee on existing
projects, subscriptions, or new projects related to an existing client matter.
These matters will be considered House Accounts unless otherwise approved by the
EVP, Global LT Sales.

11.4

Continuation of 2020 Commission Plan beyond December 31, 2020

Notwithstanding that the 2020 Commission Plan is scheduled for the calendar year
2020, the terms of the 2020 Commission Plan shall apply into 2021 until such
time as the 2021 commission plan (“2021 Commission Plan”) is
finalised.  However, only Standard Revenue (set out in section 5.2 above) for
the purposes of Commission shall apply during the period from December 31, 2020
until the 2021 Commission Plan is finalised.  Any accelerators set out in this
2020 Commission Plan (set out in sections 8 and 9 above) shall cease on December
31, 2020.  For the avoidance of doubt, Commission will still be subject to the
terms of this 2020 Commission Plan including but not limited to Claw Back
adjustment, Monthly Draw and the Employee’s 2020 Quota.  Once the 2021
Commission Plan is finalised, any adjustments to Commission already earned shall
be made to each individual Employee overall compensation.  

11.5

Global Sales Commission Allocation

Employees will have assigned regional territories for global crediting purposes.
The current regions are the Americas, EMEA and APAC and will be deemed to be an
Employee’s “home territory”. Any time an Employee pursues an opportunity outside
their home territory, they must engage sales management and determine the sales
approach and related crediting for Commissions. Global crediting guidelines to
address the various sales crediting scenarios will be provided as a separate
document. Management reserves the right to modify sales crediting based on
influence and effort.

11.6

Taxation

Compensation in the form of both cash and non-cash incentives is included as
income and FICA taxable wages. As a result, all incentives will be recorded and
reported according to applicable state and federal tax regulations. All payments
are subject to all applicable withholdings, including without limitations,
401(k) contributions, state, federal and FICA withholdings.  Employees expressly
authorize the Company to recover/Claw Back any outstanding overpayment from
future Commission payments, unless prohibited by law.  

11.6

Termination

The Employee must be actively employed by the Company through to the end of the
month in order to qualify for the Calculation Period sales Commission for that
month.  In the event an Employee resigns, or their employment is terminated by
the Company, prior to the end of any month, for Commission purposes, they shall
not be eligible for any Commission in that partial month.  In addition, if the
Employee has ongoing substantial job duties to the customer after the sale
closing, the Employee must be actively working and performing such additional
duties in order to earn any Commission.  Employee shall be paid any Monthly Draw
for the pro rata period in the month of termination.  For the avoidance of
doubt, Commission payments in the months following termination are subject to
the Monthly Draw.

11.8

Problem Resolution

The Employee must report any errors or discrepancies to their line manager in
writing within 60 days from receipt of the applicable Commission statement. Any
claim for additional Commissions, not

 

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submitted in writing within this time period, will not be considered and will be
treated as conclusively resolved, unless otherwise determined by the Company.
Corrections to Commission will be paid in the payroll for the next pay period
after the correction is approved. It is understood that there will be situations
requiring the Company to exercise discretion and judgment to address conflicts.
Where intervention is deemed necessary, the Company’s decision in resolving such
conflicts shall be final, binding and conclusive on all concerned.

11.9

2020 Commission Plan Administration

This 2020 Commission Plan constitutes highly confidential and proprietary
information of the Company. Disclosure of the contents of this 2020 Commission
Plan to any third party without the Company’s prior written consent is expressly
prohibited.

11.10

All Employees are expected to fully abide by the Company’s practices regarding
proper conduct in business dealings. Such practices include, but are not limited
to, not creating or participating in situations where the Employee has a
conflict of interest, not engaging in antitrust activities or reciprocal
business dealings, and not providing or accepting third party gratuities.
Violation of these policies may be cause for disciplinary action which may lead
to termination.

11.11

This 2020 Commission Plan is not intended and shall not be construed to create
or imply a guarantee of employment for any specific period of time. Nothing in
this 2020 Commission Plan shall modify, limit or restrict the standard terms and
conditions governing the employment relationship between the Company and the
Employee.  Company continues to employ individuals “at will”, subject to
applicable law.

11.12

Employees subject to the 2020 Commission Plan will be asked to sign an
individual 2020 Commission Plan document acknowledging acceptance of the terms
of the 2020 Commission Plan. It is a condition of eligibility to earn Commission
under the 2020 Commission Plan that the Employee timely signs and returns the
Employee’s 2020 Commission Plan document.  For the avoidance of all doubt,
unless and until the Employee has executed the 2020 Commission Plan containing
the Quota, the Employee will not receive any Commission that may be due pursuant
to the 2020 Commission Plan.  

11.13

The Company will have the right to administer, interpret and construe the terms
of this 2020 Commission Plan and resolve all issues and disputes all in its sole
and absolute discretion. In the event of any inconsistency or conflict between
the provisions of any separate communications (other than an amendment or
revision of this 2020 Commission Plan) and the terms of the 2020 Commission
Plan, the terms outlined in this 2020 Commission Plan shall prevail.
Specifically, the 2020 Commission Plan and/or its application to a given
Employee may be modified or terminated at any time in the Company’s discretion,
with or without advance notice.  Such modification may apply retrospectively.  
Employees shall not have the right to assign, pledge, or otherwise transfer any
payments to which they may be eligible under the 2020 Commission Plan.

11.14

The Company reserves the right to deduct any monies owed to the Company by an
Employee from any payment under this 2020 Commission Plan, unless otherwise
required by federal, state, or local laws. If any term or condition of this 2020
Commission Plan is found not to conform with a given state or federal law, that
term or condition will not be enforced in the jurisdiction in which it does not
conform, but this will not negate other terms and conditions of the 2020
Commission Plan.

11.15

If any provision of this 2020 Commission Plan is held to be unenforceable for
any reason, it shall be adjusted, if possible, rather than voided in order to
preserve the original intent of this 2020 Commission Plan. In any event, all
other provisions of this 2020 Commission Plan will be deemed valid and
enforceable. Any such determination will be final, conclusive and binding,
unless otherwise specifically determined in writing by the Company, in its
discretion.

 

 

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Employee Krystina Jones

 

2020 Quota [*]

 

Signature: /s/ Krystina Jones

Date: March 25, 2020

 

Company Authorised Representative

 

Name: Andrew Southam , GC

 

Signature:  /s/ Andrew Southam

Date: March 25, 2020

 

 

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Appendix 1 – Definitions

In this 2020 Commission Plan, when the following capitalized terms are used,
they shall refer to the description below:

Accelerator: means an additional % Commission in addition to regular Commission
determined according to this 2020 Commission Plan;

Calculation Period:  means the calendar month for which the commission is being
calculated;

Commission: means the % of commission that an Employee may earn based on the
commission tables set out in section 5;

Claw Back:  means the Company’s right to reclaim commission advances previously
paid to the Employee as defined in Section 6.1;

Employee: as defined in section 1.1;

FID:   means “first invoice date” and refers to the date a matter/SO number is
first invoiced by the Company. The FID governs commission rates for the ongoing
matter/SO number;

House Account:  means customer sales brought in by a non-Sales representative
and are not eligible for commission payment. When an Employee eligible for
Commission payments contract of employment is terminated, their customer
accounts and matters default to House Accounts for future Calculation Periods
unless specifically approved otherwise by the EVP, Global LT Sales;

Monthly Draw: as defined in Section 4;

Payment Period:  means the month in which the commission is paid to the
Employee. Commissions are paid two months in arrears on the bi-weekly payroll
scheduled during the second half of each month. By way of example, commissions
for revenue invoiced in the month of May (i.e. the “Calculation Period”) would
be paid during the second half of July (i.e. the “Payment Period”);

Quota: as defined in section 9.1;

 

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Appendix 2 – Worked Example

Worked Examples of Commissions and Monthly Draw

Employee has an annual salary of $[*] (equally a Monthly Draw of $[*]) and for
the month of April 2020, Employee has 6 customer invoices:

 

1.

An [*] Service matter invoiced for $[*] with a FID of April 2017 will earn
Commission at the [*]% rate for Year 3 or $[*].

 

2.

A [*]matter invoiced for $[*] with a FID of May 2019 will earn commission at the
[*]% rate for Year 1 or $[*] of gross Commission.

 

3.

A matter with a [*] of January 2020 invoiced for $[*]consisting of: (a) $[*]of
[*] will earn Commission at [*]% or $[*]; (b) $[*]of [*] will earn at [*]% or
$[*];  and (c) $[*]of Managed Review will earn Commission at [*]% or $[*].  This
matter is split 50%/50% with another sales employee, so Employee’s gross
Commission share is $[*] (i.e. half of the total Commission of $[*]).

 

4.

An [*] Service matter invoiced for $[*]with a FID of April 2018 will earn
Commission at the [*]% rate for Year 2 or $[*]of gross Commission.

 

5.

A [*] matter with a FID of December 2019 invoiced for $[*]consisting of: (a)
$[*] of [*] will earn Commission at the [*]% rate for Year 1 or $[*]; and (b)
$[*]of Managed Review will earn Commission at the [*]% rate for Year 1 or
$[*].   As the [*] was priced at $[*] per [*], Joe will earn an additional [*]%
or $[*] for this project as it is part of the Accelerator.   The Managed Review
portion is ineligible for the additional [*]%.

 

6.

A Professional Services invoice for $[*]with a FID of March 2017 (Year 3) will
earn Commission at [*]% or $[*].  

 

7.

Employee’s gross Commission would be $[*] ($[*]+ $[*] + $[*] + $[*]+ $[*]+
$[*]).   Employee’s draw of $[*] per month will be subtracted from the gross
Commission to arrive at a net commission of $[*].

Next, for the purposes of this Worked Example, the review date is April 30,
2020.  At this time, of Employee’s four customer invoices from November 2019:
(a) three have been paid off in full by the customers; and (b) one is still
outstanding or uncollected.   The outstanding invoice is for $[*] of eDiscovery
Service with a FID of December 2017 (calculated for Commission at [*]% or $[*])
on this invoice.   The outstanding invoice has now exceeded [*] days from the
invoice date and was previously paid out as Commission.  Accordingly, it
qualifies for Claw Back in April 2020.  The $[*]Commission is deducted from
Employee’s net Commission of $[*] to arrive at an adjusted Commission payment
for April of $[*].   The $[*] in Commission would be paid out to Employee in a
payroll during the 2nd half of June.

Worked Example of Individual Accelerator

For the example above, an assumption that it is November (later in the calendar
year).   Employee’s Quota  for the calendar year 2020 is $[*].    Assume
Employee’s cumulative revenue through October was $[*] (i.e. so Employee
surpassed the Quota) and in November Employee sold an additional
$[*].    Employee’s individual accelerator payment for November (paid in
January) would be [*]% of $[*] ($[*]+ $[*]- $[*]) or $[*]. This example assumes
all revenue is commissionable as accelerators do not apply to non-commissionable
items as outlined in Section 5.2.