EXHIBIT 10.16

 

 

 

 

PCTEL, INC.

 

SALES COMPENSATION PLAN

 

Prepared specifically for:

 

Arnt Arvik

 

Plan Year 2020

 

PCTEL, Inc.

2020 Sales Compensation Plan

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EXHIBIT 10.16

I.

Introduction

 

This PCTEL Sales Compensation Plan (the “Plan”) has been designed by the Company
(as hereinafter defined) to:

 

 

▪

Align sales compensation with corporate profitability;

 

▪

Motivate, incent and reward sales behavior in order to achieve PCTEL’s corporate
and financial objectives; and

 

▪

Provide a compensation plan that is equitable and consistent across regions and
product lines.

 

This Plan supersedes all prior sales compensation plans and any discussions or
verbal agreements between Participant and the Company.

 

II.

Definitions

 

Adjusted EBITDA – Adjusted EBITDA is GAAP operating profit excluding stock
compensation expenses, amortization of intangible assets, depreciation,
restructuring charges, impairment charges, gain/loss on sale of product lines,
and expenses included in GAAP operating profit to the extent their recovery is
recorded below operating profit.

 

Base Salary – Base Salary is the amount payable to Participant as non-variable
compensation for services rendered to the Company.  It is determined by Company
management on an annual basis.  

 

CEO – Chief Executive Officer

 

CFO – Chief Financial Officer

 

Commission – Commission is a portion of the variable compensation payable to
Participant and is related to sales to customers.  It is calculated in
accordance with Section V below.

 

Commission Payout Factor – Commission Payout Factor has the meaning set forth in
Section V(a)(1).

 

Commissionable Revenue – Revenue earned by the Company (determined in accordance
with GAAP) from sales of products, services, NRE, maintenance charges, royalties
and training charges, excluding freight, loans, interest charges, and other
similar charges.  

 

Company – PCTEL, Inc. and its subsidiaries

 

EBITDA Goal – EBITDA Goal has the meaning set forth in Section V(b).

 

EBITDA Payout Factor – EBITDA Payout Factor has the meaning set forth in Section
V(b).

 

GAAP – Generally Accepted Accounting Principles in the United States of America

 

Individual Quota – Company management assigns an Individual Quota that
represents the total anticipated Commissionable Revenue that management expects
the Sales Team to generate for the Plan Year.  Your Individual Quota is set
forth on Attachment A.

 

Participant – The sales professional for whom this Plan is prepared and whose
name is found on the cover page of this Plan.

 

Plan – Plan has the meaning assigned in Section I.

PCTEL, Inc.

2020 Sales Compensation Plan

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EXHIBIT 10.16

 

Plan Administrators – The Plan Administrators are the CEO, CFO and Vice
President-Corporate Resources.  

 

Plan Year – The Plan Year is January 1, 2020 through December 31, 2020.

 

Quota Assignment Statement – The Quota Assignment Statement is the statement in
the form of Attachment A signed by the Company and Participant defining the
amount of the Individual Quota, Target Commission, Target Adjusted EBITDA and
target total variable compensation.

 

Sales Team – The Sales Team refers to all sales personnel who report directly or
indirectly to Participant.

 

Target Commission – The Target Commission, as identified in Attachment A, is the
percentage of Base Salary that Participant is anticipated to earn as Commission
if Participant achieves his Individual Quota.

 

III.

General

 

(a) Plan Administration.  The Plan Administrators will manage the Plan and have
full discretion to (i) make adjustments or revisions to the Plan, (ii) construe
and interpret the terms of the Plan, (iii) determine eligibility to participate
in the Plan, and (iv) determine whether Commission is payable under the Plan;
provided, however, that the Plan Administrators will not make changes to (1) the
accounts assigned to Participant, (2) the Individual Quota as set forth on the
executed version of Attachment A, or (3) the Commission Payout Factor or the
EBITDA Payout Factor as they appear in the executed version of this Plan, except
to address situations that were unforeseen at the time the Plan was established
or as set forth in Section IV(b).  The determination of the Plan Administrators
is final and binding.  In the event of any revision or adjustment to the Plan,
including Attachment A, an amendment to the Plan will be prepared and signed by
the Participant and the Policy Administrators.

 

(b) Termination of Employment.  The final amount of Commission due to
Participant upon termination of employment is the Commission earned, as provided
in this Plan, up to and including the termination date.  Subject to applicable
law, the final payment of Commission will be made at the times set forth in
Section VI.

 

(c) Participation. Participant is not eligible for the short-term incentive
program offered by the Company, but is eligible for the long-term incentive
program.

 

IV.

Quota

 

(a) Individual Quota. At the beginning of each fiscal year, the Plan
Administrators will specify on a Quota Assignment Statement for each member of
the Sales Team, including Participant, the applicable Individual Quota and
Target Commission.  The Plan Administrators have assigned Participant, as Chief
Sales Officer, an Individual Quota equal to the total target revenue of the
Company, as approved by the Board of Directors in the Company’s 2020 financial
plan.  

 

(b) Modifications due to Product Discontinuation.  During the Plan Year, Company
may discontinue products previously sold by the Sales Team, which may impact
Participant’s ability to reach his Individual Quota.  For example, this can
occur when a product is discontinued as a result of insufficient sales, lack of
component parts, or the sale of the business segment offering the product.  If,
based upon sales by the Sales Team of such discontinued product in the current
and/or prior fiscal year, the discontinuation of the product could have a
material effect on Participant’s ability to meet

PCTEL, Inc.

2020 Sales Compensation Plan

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EXHIBIT 10.16

the Individual Quota, the Plan Administrators will determine in good faith
whether Participant’s Individual Quota should be adjusted accordingly.

 

 

V.

Variable Compensation; Commission

 

Variable Compensation: Participant’s variable compensation for 2020 will be
comprised of two components: (i) Commission, and (ii) 2020 Adjusted EBITDA.

 

(a) Commission Earned: Commission is calculated based upon the amount of
Commissionable Revenue generated by the Sales Team during the 2020 Plan Year.  

 

(1) Commission Calculation - Commissionable Revenue will be calculated on a
year-to-date basis from invoices issued to the Sales Team’s customers and will
determine the percentage of Individual Quota attained.  The “Commission Payout
Factor” is determined by locating the percentage of Individual Quota attained
year-to-date in the table below and identifying the corresponding Commission
Payout Factor. If the Individual Quota attained falls between the listed
percentages in the Commission Table, the Commission Payout Factor will be
extrapolated (e.g., 77% Individual Quota attainment would be a 61.67% Commission
Payout Factor).  The Commission earned is calculated as follows:

 

COMMISSION PAYOUT FACTOR x TARGET COMMISSION x BASE SALARY.

 

Commission Table:

% Individual Quota Attained

Commission

Payout Factor

0%

0%

10%

6%

20%

12%

30%

18%

40%

24%

50%

30%

60%

36%

70%

42%

75%

60%

80%

64%

90%

81%

100%

100%

110%

121%

120%

144%

130%

169%

140%

196%

150%

205%

160%

214%

170%

223%

180%

232%

190%

241%

≥ 200%

250%

 

PCTEL, Inc.

2020 Sales Compensation Plan

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EXHIBIT 10.16

 

(2) Cap on Commission - There is a “cap” or upper limit on the amount of
Commission the Company will pay Participant for the 2020 Plan Year.  If
Participant were to achieve Commissionable Revenue in excess of 200% of
Individual Quota, which equates to a 250% Commission Payout Factor, the excess
Commissionable Revenue will not result in additional Commission for Participant.

 

(3) Returns and Credits - In the event that a product for which the Sales Team
received credit as Commissionable Revenue is returned (or the Company credited
the customer’s account as though the product was returned), the corresponding
amount of Commissionable Revenue related to the returned or credited product
shall be subtracted from the Commissionable Revenue otherwise credited to the
Sales Team. The amount of Commissionable Revenue will be subtracted in the
quarter the product return or product credit is processed.  Further, if one or
more assigned accounts are greater than 90 days past the due date established by
the applicable payment terms, the corresponding amount of Commissionable Revenue
previously credited to the Sales Team shall be subtracted and the next quarterly
Commission payment shall be adjusted accordingly.  Such Commissionable Revenue
will be added back in the quarter in which the payment is received from the
customer and will be included in the next succeeding Commission payment.  No
Commission will be payable for any amounts written down or written off in
accordance with GAAP.

 

(4) Commission Payments - The amount of Commission payable to Participant will
be calculated after the Company’s books are closed for the first fiscal quarter
and after each calendar month thereafter.

 

(b) 2020 Adjusted EBITDA Payment –The Company has assigned an Adjusted EBITDA
goal equal to the Company’s target total Adjusted EBITDA, as approved by the
Board of Directors in the Company’s 2020 financial plan (“EBITDA Goal”).  

 

(1) Adjusted EBITDA Calculation. The Company’s Finance Department will calculate
the year-to-date Adjusted EBITDA in accordance with its established non-GAAP
procedures.  The “EBITDA Payout Factor” is determined by locating the percentage
of the EBITDA Goal attained in the table below and identifying the corresponding
EBITDA Payout Factor. If the percentage of EBITDA Goal attained falls between
the listed percentages in the Adjusted EBITDA Table, the Finance Department will
extrapolate to identify the EBITDA Payout Factor (e.g., 77% attainment would be
a 61.67% EBITDA Payout Factor).  The Adjusted EBITDA component of Variable
Compensation is calculated as follows:

 

EBITDA PAYOUT FACTOR x TARGET ADJUSTED EBITDA (on Attachment A)

x BASE SALARY.

PCTEL, Inc.

2020 Sales Compensation Plan

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EXHIBIT 10.16

 

Adjusted EBITDA Table:

% EBITDA Goal Attained

EBITDA Payout Factor

0%

0%

10%

6%

20%

12%

30%

18%

40%

24%

50%

30%

60%

36%

70%

42%

75%

60%

80%

64%

90%

81%

100%

100%

110%

121%

120%

144%

130%

169%

140%

196%

150%

205%

160%

214%

170%

223%

180%

232%

190%

241%

≥ 200%

250%

 

(2) Limits on EBITDA - There is a “cap” or upper limit on the amount of the
Adjusted EBITDA payment the Company will pay Participant for the 2020 Plan
Year.  If Participant were to achieve Adjusted EBITDA in excess of 200% of the
EBITDA Goal, which equates to a 250% EBITDA Payout Factor, the excess Adjusted
EBITDA will not result in a higher EBITDA Payout Factor than 250%. In addition,
regardless of actual results, if the percentage of Individual Quota attained is
less than 100%, then the percentage of EBITDA Goal attained will also be deemed
to be capped at 100%.

 

(3) Adjusted EBITDA Payments - The amount payable to Participant as a result of
attaining the EBITDA Goal will be calculated after the Company’s books are
closed for each fiscal quarter.

 

VI.

Payment Timing

 

All payments of Variable Compensation to Participant will be paid forty-five
(45) days after the close of the applicable period.  

PCTEL, Inc.

2020 Sales Compensation Plan

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EXHIBIT 10.16

 

ATTACHMENT A

 

PCTEL, INC.

 

QUOTA ASSIGNMENT STATEMENT

 

 

Name:  Arnt Arvik

 

Sales Accounts: All accounts of the Sales Team

 

Individual Quota assigned: as stated in Section IV(a)

 

Target Commission is: 47% of your Base Salary

 

Target Adjusted EBITDA is: 20% of your Base Salary

 

Target Total Variable Compensation is:  67% of Base Salary

 

 

 

 

 

 

 

 

 

I acknowledge, as of this 30th day of January 2020, that I have read, understand
and agree to the terms and conditions of this specifically prepared PCTEL, INC.
Sales Compensation Plan for Plan Year 2020.

 

/s/ ARNT ARVIK

 

Employee/Participant

 

/s/ DAVID A. NEUMANN

 

Chief Executive Officer

 

/s/ RISHI BHARADWAJ

 

Vice President-Corporate Resources & Chief Risk Officer

 

/s/ KEVIN J. MCGOWAN

 

Chief Financial Officer

 

 

 

PCTEL, Inc.

2020 Sales Compensation Plan