Exhibit 10.1

 

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iPic Entertainment Inc.

 

 

 

 

ANNUAL INCENTIVE PLAN DOCUMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

iPic Entertainment Inc.

ANNUAL INCENTIVE PLAN

 

For Plan Year 2018

 

TABLE OF CONTENTS

 

1. Definitions 1 2. Administration 2 3. Participation 2 4. Determination of
Bonus Awards 3 5. Bonus Targets 3 6. Form of Payment 4 7. Eligibility 4 8.
Miscellaneous Terms and Provisions 5

 

 

 

 

INTRODUCTION

 

The iPic Entertainment Inc. Annual Incentive Plan (hereinafter referred to as
the ‘Plan’) has been established for the purpose of providing bonus compensation
to eligible designated employees of iPic Entertainment Inc. and its Affiliates
(hereinafter collectively referred to as the ‘Company’). The Company intends and
desires to create individual performance incentives for designated employees by
providing bonus compensation awards based upon individual contributions to
Company profitability. Such bonus compensation is intended to encourage levels
of individual performance that will assure focus by employees on continued
Company profitability. It is further intended that when added to other forms of
compensation the bonus compensation awards will result in total compensation to
employees in amounts that are competitive when Company performance is compared
to peer organizations.

 

Article 1 - Definitions

 

For purposes of the Plan, unless the context requires otherwise, the following
terms should have the meanings set forth below.

 

1.1“Affiliate” means (a) any entity that, directly or indirectly through one or
more intermediaries, is controlled by the Company and (b) any entity in which
the Company has a significant equity interest, in each case determined by the
Committee.

 

1.2“Board” means the Board of Directors of the Company.

 

1.3“Bonus Target” means a percentage established to represent a normal or
average bonus percentage determined through competitive survey analysis and
based on each position’s relative importance to the overall financial success of
the Company.

 

1.4“CEO” means the Chief Executive Officer of the Company.

 

1.5“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

1.6“Committee” means the Compensation Committee of the Board.

 

1.7“Company” means iPic Entertainment Inc.

 

1.8“Employee” means an employee of the Company.

 

1.9“Executive Officers” means the individuals elected and confirmed by the
Board.

 

1.10“Participant” means an Employee who is selected by the Company to
participate in the Plan.

 

1.11“Performance Criteria” means those performance measures approved by the Plan
Administrator that determine the level of Bonus Target to be earned.

 

1.12“Plan” means the iPic Entertainment Inc. Annual Incentive Plan.

 

1.13“Plan Administrator” means the Committee in its capacity as administrator of
the Plan, or the CEO, in his capacity as administrator of the Plan, to the
extent that the Committee shall have delegated administration authority to the
CEO pursuant to Article 2 hereof.

 

1.14“Plan Year” means the Company’s fiscal year.

 

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Article 2 - Administration

 

2.1The Plan shall be administered by the Committee; provided that the Committee
may delegate authority to administer the Plan to the CEO with respect to all
Participants who are not Executive Officers. Subject to Board approval of the
Annual Budget, the Plan Administrator is empowered to:

 

2.1.1Review and approve all determinations relating to the eligibility of
Participants;

 

2.1.2Make rules and regulations for the administration of the Plan which are not
inconsistent with the terms and provisions hereof;

 

2.1.3Construe all terms, provisions, conditions, and limitations of the Plan in
good faith. All such determinations shall be final and conclusive on all parties
of interest;

 

2.1.4Review and approve determinations and computations concerning the amounts
to which any Participant or his beneficiary is entitled under the Plan;

 

2.1.5Select, employ, and compensate from time to time consultants, accountants,
attorneys and other agents as the Company may deem necessary or advisable for
the proper and efficient administration of the Plan.

 

2.2The foregoing list of express powers is not intended to be either complete or
exclusive, but the Plan Administrator shall, in addition, have such powers,
whether or not expressly authorized, that it may deem necessary, desirable,
advisable, or proper for the supervision and administration of the Plan. Except
as otherwise specifically provided herein, the decision or judgment of the Plan
Administrator on any question arising hereunder in connection with the exercise
of any of its powers shall be final, binding, and conclusive upon all parties
concerned.

 

2.3The Plan Administrator shall have the responsibility of authorizing payment
to each eligible Participant and directing that such payment be disbursed by the
Company.

 

2.4The Committee may, at any time, amend or terminate the Plan. Such amendments
or terminations may be made without the consent of the Participants; provided
that the Plan shall not be amended without the consent of the Company’s
stockholders to the extent required by applicable law, rule or regulation.

 

Article 3 - Participation

 

3.1The designation of Employees of the Company as Participants under the Plan
shall be approved by the Plan Administrator, and no Employee of the Company will
have the right to require the Plan Administrator to make him or her a
Participant or to allow him or her to remain a Participant under the Plan.

 

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Article 4 - Determination of Bonus Awards

 

4.1During the course of the Plan Year, the Plan Administrator shall review and
approve those Performance Criteria which will measure the Company’s financial
and/or operational performance for the applicable Plan Year. Additional
Performance Criteria (“APC”) may be developed by the Plan Administrator and the
department managers and submitted to the Plan Administrator for review and
approval. Once approved, the APC will be provided in writing to the applicable
Participant. The individual APCs will form the basis of the APC portion of the
bonus. The Plan Administrator, with the assistance of Company department
managers, as applicable, will determine threshold, target, and maximum levels of
performance for each Performance Criteria and APC considered.

 

4.2The Company’s performance will be evaluated on an absolute basis by
determining the Company’s achievement versus a budgeted or pre-established level
of performance approved by the Plan Administrator.

 

4.3The Plan Administrator will weigh each of the APC based upon the strategic
importance of the respective APC in consideration of the Company’s annual
business plan, and will determine what portion of the bonus award will be
allocated to Performance Criteria and APC on an individual by individual basis.
The weightings of the Performance Criteria and the agreed upon APC may change
from one Plan Year to the next, without notice or input from the Participants.

 

4.4In determining the Company’s performance during a measurement period,
Performance Criteria and APC will be utilized. Performance Criteria and APC may
be modified, deleted, or added to from one Plan Year to the next as determined
by the Plan Administrator in its judgment and discretion.

 

4.5Following the close of the Plan Year, the Plan Administrator will evaluate
the Company’s performance and individual performance compared to the Performance
Criteria and APC. The results of this evaluation will serve as the basis for the
determination of the amount of Bonus Target earned, which may range from 0
percent to as much as 125 percent of Participants’ Bonus Targets.

 

Article 5 - Bonus Targets

 

5.1Bonus Targets for each position are established based upon the position’s
relative importance to the overall financial success of the Company. The Plan
Administrator shall review and approve a Bonus Target for each eligible
Participant based upon the schedule attached hereto as Exhibit ‘A.’

 

5.2Each bonus award shall be calculated by using the established Bonus Target
for Participants in the Plan, adjusted by the results of the Performance
Criteria and the APC. A qualitative evaluation of the Participant’s performance
will also be used to adjust a Participant’s bonus award. The established Bonus
Target, as adjusted, will serve as the norm for a range of possible bonus
awards.

 

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Article 6 - Form of Payment

 

6.1Bonuses payable under the Plan shall be paid via payroll after deductions for
all applicable taxes.

 

6.2Bonuses will typically be paid under the Plan in the second quarter after the
end of the Plan Year. The Committee may approve a deferral of the payment of
bonuses with payment in whole at a later date or in installments over a period
of time. The length of time of deferral or installment period will be determined
at the discretion of the Committee.

 

6.3Each award or bonus hereunder, including any amounts paid on a differed basis
at the direction of the Company shall be construed and administered such that it
either (i) qualifies for an exemption from the requirements of section 409A of
the Code or (ii) satisfies the requirements of section 409A of the Code. If an
award or bonus subject to section 409A of the Code, (A) distributions shall only
be made in a manner and upon an event permitted under section 409A of the Code,
(B) payments to be made upon a termination of employment shall only be made upon
a “separation from service” under section 409A of the Code, (C) unless the award
or bonus specifies otherwise, each installment payment shall be treated as a
separate payment for purposes of section 409A of the Code, and (D) in no event
shall a Participant, directly or indirectly, designate the calendar year in
which a payment is made except in accordance with section 409A of the Code. Any
award or bonus that is subject to section 409A of the Code and that is to be
paid to a “specified employee” (within the meaning of section 409A of the Code
and its corresponding regulations) upon separation from service shall be
administered so that any payment shall be postponed for six months following the
date of the Participant’s separation from service, if required by section 409A
of the Code.

 

Article 7 - Eligibility

 

7.1Upon hire to an eligible position, the Participant will be eligible for the
iPic Entertainment Inc. Annual Incentive Plan after ninety (90) days of
continuous service; the bonus payment will be prorated from date of hire.

 

7.2If a Participant is promoted into a bonus eligible position, Participant will
receive a prorated payment from the promotion date into the bonus eligible
position. If a Participant is promoted into a different bonus level position,
the bonus will be prorated for both positions (if applicable). Participants who
are granted an official leave of absence for any reason allowed by Company
policy will be eligible for a prorated payment.

 

7.3Payment is contingent upon continuous employment at the time of bonus payout,
except for (i) termination due to the death or permanent disability of the
Participant and (ii) payment of bonus amounts which have been deferred pursuant
to Section 6.2. In the event a Participant dies or becomes permanently disabled
at any time during the Plan Year, if otherwise eligible under the Plan, such
Participant shall be entitled to receive a bonus, prorated as of the date of
death or permanent disability of such Participant. In the event that a
Participant terminates employment prior to the payment of all bonus amounts the
payment of which has been deferred pursuant to Section 6.2, such Participant
shall continue to be eligible to receive payment of the deferred bonus amounts
on the deferral schedule established pursuant to Section 6.2.

 

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Article 8 - Miscellaneous Terms and Provisions

 

8.1No Employee shall have any claim or right to be paid a bonus or any form of
award, and the award of a bonus will not be construed as giving a Participant
the right to be retained in the employ of the Company. Further, the Company
expressly reserves the right at any time to terminate the employment of any
Participant free from any liability under the Plan.

 

8.2The validity, construction, and effect of the Plan and any actions taken or
relating to the Plan shall be determined in accordance with the laws of the
State of Florida and applicable Federal law.

 

8.3The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business and/or assets of the Company, expressly to assume and agree to
perform the Company’s obligations under this Plan in the same manner and to the
same extent that the Company would be required to perform them if no such
succession had taken place. As used herein, the “Company” shall mean the Company
as hereinbefore defined and any aforesaid successor to its business and/or
assets.

 

8.4No member of the Board, the Plan Administrator, Committee, nor any other
officer or Employee of the Company acting on behalf of the Board, the Plan
Administrator, or the Committee shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Board, the Plan Administrator, the Committee, and
each and any officer or Employee of the Company acting on their behalf shall, to
the extent permitted by law, be fully indemnified and protected by the Company
in respect of any such action, determination, or interpretation.

 

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iPic Entertainment Inc.

 

Exhibit A

Participation and Target

 

The Ipic Entertainment Inc. Annual Incentive Plan is designed to reward
participation resulting in improvements to our previous year’s results along
with other critical measures that drive the success of the business. This Annual
Incentive Plan is effective for the 2018 Plan Year, and modifies any existing
incentive plans.

 

Eligible Participants and target bonus in certain percentages are as follows:

 

Level  % of Annual Earned Base Salary  President & CEO   125%* COO, CFO and
Secretary and General Counsel   50% Senior Executive (VP level and higher)   30%
Area and Regional Directors   20%** Director Level   15% Management Level   10%
Administrative Level   5%

 

*Bonus Conditions for President & CEO Level: 75% of the bonus upon achieving 90%
of the targeted EBITDA budget, 100% of the bonus upon achieving the targeted
EBITDA budget, and 125% of the bonus achieving 110% of the targeted EBITDA
budget. Bonus is payable following the end of the financial year.

 

**Positions with regional or department responsibility, direct reports and or
have a direct reporting relationship to the COO.

 

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Components of Plan:

 

Unless otherwise determined by the Board of Directors, the Budgeted EBITDA goal
must be achieved for Participants to qualify to receive payout as described
below:

 

Percent of Bonus Paid   Performance Criteria  100%   Company targeted EBITDA
budget achieved and APC met  75%   Company achieves 90% of targeted EBITDA
budget and APC met  125%   Company achieves 110% of targeted EBITDA budget and
APC met

 

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