Exhibit 10.1

 

 

 

 

PHASE FORWARD INCORPORATED

 

 

2006
Global Sales Executive Incentive
Compensation Plan

 

 

 

 

Effective Date January 1, 2006

 

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Phase Forward
2006 Global Sales Executive
Incentive Compensation Plan
Effective:    January 1, 2006

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1)             Purpose:

The Phase Forward Incorporated 2006 Global Sales Executive Incentive
Compensation Plan is established to incent and reward the Participant to achieve
certain Company sales and financial goals. The base salary and incentive
opportunity outlined in this plan is intended to reward the Participant with
total cash compensation that is equal to or above what is paid for similar
positions by similar companies upon achievement of the expected level of
performance.

2)             Effective Date:

This plan is effective on January 1, 2006 and applies to all contracts entered
into between January 1, 2006 and December 31, 2006 and supersedes all plans and
terms previously in effect.

3)             Participation:

Global Sales Executives who are eligible to participate will receive a plan
document with a personalized schedule as Attachment A.

4)             Definitions:

 (a) Base Salary

The Participant’s base salary is a fixed amount that is determined by the
Management Development and Compensation Committee who will take into
consideration the competitive market, qualifications for the position, and past
performance. The base salary is paid in accordance with the company’s normal
payroll practices. No other “annual reviews” or other salary adjustments will
occur for participants during the course of the fiscal year.

(b) Bookings

An Order is defined as a firm legal commitment for the value (amount) recorded
(booked) in the backlog of the company for the delivery of software, service,
support or product with specified delivery dates, signed by both parties and
received at the companies headquarters.

(c) Bonus Eligible Orders

These are Orders that are accepted by the company, net of pass-through items and
net of royalty/ 3rd party product payments, in the following categories:

·                  Software licenses: software fees or usage fees relating to
any Phase Forward products.

·                  Services:

·                  ASP Services: study preparation, eCRF design, server hosting,
CDD formatting, provisioning, site assessment, custom reports.

·                  Consulting Services:  project management, training,
integration services, custom reports.

·                  Customer Support:

·                  Maintenance and customer support agreements for software
transactions.

·                  Server hosting, help desk.

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                (d) Accrued Bonus

For Orders that are fixed in nature, a bonus is accrued upon acceptance of an
Order by the company. For Orders that are variable in nature, such as estimated
usage fees or future service commitments, bonus is accrued at the time the Order
becomes fixed (as usage occurs or committed amount is fixed and determinable).

                (e) Pass-Through Items

Products, services, hardware and associated items provided and/or sold at cost
or with minimal markup.   Pass-through items are not compensated for under the
plan. Service fees associated with pass through items are eligible for
compensation.

                (f) Negative Booking

A Negative Booking is a change to an Order, which results in the reduction of
the net amount of an Order, the reversal of previously recognized revenue, the
uncollectability of an account receivable related to previously recognized
revenue, or an indication of hold status or suspension for a period greater than
(six) 6 months. Bonuses paid that subsequently have events which result in a
negative booking will have a reversal in payment in the month or months
following the quarter they become a negative booking until full repayment is
achieved. Negative bookings will be reversed at the bonus amount that was
applied at the time of the transaction, and only for the original sales
executive paid.

5)              Sales Quota:

One global annual quota will be set for participants in this plan.

6)              Incentive Payments:

           The payment schedule and plan components are outlined on Attachment
A.

           7)            Termination:

Upon termination of employment, voluntary or involuntary, the Participant will
be paid the applicable base salary through the agreed upon termination date. Any
additional payments will be in accordance with the terms and conditions of any
Executive Agreement or Employment Agreement between the employee and the Company
(or a subsidiary) in effect at the time of termination. The Participant must
also return all company documents and property.

8)              Administration and Other Matters:

Administration of this policy will be the responsibility of the Vice President,
Finance and the Vice President, Human Resources of the company in consultation
with the the CEO. In the case of a dispute, interpretation of the terms,
conditions, goals, or payments from this plan will be made solely by the Vice
President of Human Resources after a full review of the facts, input from
affected parties, and appreciation of the overall intent of the Plan. The
decision of company management on all matters under this policy will be final,
and the company reserves the right to amend, modify, or terminate this policy at
any time without notice. Any change will be made in writing as far in advance as
possible, of the effective date of such change. In addition the company reserves
the right to make adjustments to the policy in its sole discretion in specific
instances based on unusual or special circumstances.

If any term or condition of this Plan is found to be in non-conformance with a
given state, federal, or country law, that term or condition will be
non-enforceable but will not negate other terms and conditions of the Plan.
However, Phase Forward Incorporated will review and modify the overall plan to
conform to such law.

Eligibility and participation in this Plan in no way infers or reflects any
guarantee of a contract of employment. Except as expressly set forth in any
employee’s agreement signed by the company and

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employee, all of the employees of the company are employees “at will”.
Participation in this plan does not confer any right to continue in Phase
Forward’s employ or limit the right of Phase Forward to terminate the
Participant at any time, with or without cause or notice.

Phase Forward Incorporated is an Equal Opportunity Employer committed to a
diverse workforce. The company will not discriminate on the basis of race,
color, religion, age, sexual orientation, national origin, physical or mental
disability, or veteran status.

9)              Extraordinary Events:

Any event deemed extraordinary by the Vice President, HR or the CEO, may result
in, changes to the terms and conditions of the plan, adjustments to quota,
changes in the payment structure and other events up to and including
termination of this plan, and the creation of a new plan. It should not be
expected by the Participant that events resulting in a revenue or bookings
windfall would be counted in determining performance as it relates to the goals
and quota and any payments resulting from this may be appropriately adjusted.

I acknowledge that I have read this document, including the Attachment A, and
agree to the terms and conditions of the plan.

 

 

 

Date

 

Signature

 

 

 

 

 

Printed Name

 

 

 

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ATTACHMENT A

FY2006 Global Annual Bookings Target — [Redacted]
Steve Powell

 

 

 

Base Salary:

 

£160,000

 

Target Bonus:

 

£120,000

 

TAE:

 

£280,000

 

 

Compensation Plan

 

 

30%

Quarterly bookings performance

£36,000

Paid quarterly

20%

Quarterly revenue performance

£24,000

Paid quarterly

20%

YTD bookings performance

£24,000

Paid quarterly

30%

Phase Forward Profitability

£36,000

Paid annually (Earned Quarterly)

           

 

 

 

 

 

 

 

 

 

 

 

 

(Global MIP)

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

Quarterly Bookings Targets

 

YTD Bookings Targets

 

Quarterly Revenue Targets

 

Before Bonus*

Q-1

 

[Redacted]

 

Q-1

 

[Redacted]

 

Q-1

 

[Redacted]

 

Q-1

 

[Redacted]

Q-2

 

[Redacted]

 

Q-2

 

[Redacted]

 

Q-2

 

[Redacted]

 

Q-2

 

[Redacted]

Q-3

 

[Redacted]

 

Q-3

 

[Redacted]

 

Q-3

 

[Redacted]

 

Q-3

 

[Redacted]

Q-4

 

[Redacted]

 

Q-4

 

[Redacted]

 

Q-4

 

[Redacted]

 

Q-4

 

[Redacted]

 

Payment Schedule Quarterly Booking Targets

 

 

 

 

 

Achievement%

 

Payout

<80%

 

0

>80% -100%

 

50% + 2.5% for each% achieved

>100%

 

.01 times actual achievement dollars over target

 

Payment Schedule Quarterly Revenue Targets

 

 

 

 

 

Achievement%

 

Payout

<95%

 

0

>95% -100%

 

Actual%

>100%

 

.01 times actual achievement dollars over target

 

Payment Schedule YTD Bookings Components

 

 

 

 

Achievement%

 

Payout

<80%

 

0

>80% - 100%

 

Actual% achieved

>100% -125%

 

3% for each% achieved over 100%

>125%

 

2% for each% achieved over 125%

 

The maximum combined quarterly payout on all components is £70,000

*This component is paid in accordance with the Phase Forward 2006 Management
Incentive Plan.

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