Exhibit 10.31

 

LOGO [g88532img001.jpg]   

2006 Executive Financial

Performance Incentive Plan

This plan document outlines the 2006 InfoSpace Executive Financial Performance
Incentive Plan (“the Plan”). Each participant will also receive a personal
confirmation letter.

PLAN OBJECTIVES

 

  •   Align the compensation of executive management to key financial drivers.

 

  •   Provide variable pay opportunities and targeted total cash compensation
that is competitive within our labor markets.

 

  •   Increase the competitiveness of executive pay without increasing fixed
costs, making bonus payments contingent upon organizational and individual
success.

 

  •   Create internal consistency and standard guidelines among the executive
peer group.

EFFECTIVE DATE

The Plan is effective on January 1, 2006. However, the Plan may be changed at
any time at the sole discretion of the Compensation Committee of the Board of
Directors.

PARTICIPATION ELIGIBILITY

The eligible positions for 2006 will be:

 

  •   Executive Vice President, Technology & Operations

 

  •   President, Mobile and Online Media

 

  •   Chief Administrative Officer

 

  •   Chief Financial Officer

 

  •   Senior Vice President, Corporate Development

If the executive leadership team changes composition, any additions will be
recommended by the CEO and approved by the Compensation Committee.

PERFORMANCE PERIODS

The Chief Financial Officer and Chief Administrative Officer will be paid
annually. The remaining executives will be paid semi-annually.

BONUS TARGETS

The participant’s annual bonus target will be 75% of annual base salary. The
bonus target will be determined at the Compensation Committee’s discretion based
on a combination of factors including current-year operating plan challenges and
risks, market pay competitiveness, and the past performance of the incumbent.
The bonus target will also be set in accordance with the participant’s
employment agreement.

PLAN DESIGN

The Plan will have the following financial bonus components with the associated
weightings, measurement periods, payment scales, and bonus achievement
percentages:

 

Bonus Component

   Weighting     Measurement
Period   

Bonus Payment Scale

   Bonus
Achievement
Percentage  

Revenue

   50 %   Quarterly    Financial Performance    0% - 150 %

EBITDA

   50 %   Quarterly    Financial Performance    0% - 150 %

Revenue and EBITDA Financial Performance Bonuses

Revenue and EBITDA targets will be established and measured on a consolidated,
worldwide basis. The bonus plan financial targets will match the 2006 operating
plan targets approved by the Board of Directors in December 2005.

 

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2006 Executive Financial Performance Incentive Plan

The bonus payment scale below will be used to calculate the revenue and EBITDA
bonuses on a quarterly basis.

Financial Performance Bonus Payment Scale

 

Performance Level

   Revenue or EBITDA
Performance vs. Target   Bonus Achievement
Percentage

Below Threshold

  

0% - 89%

 

0%

Threshold

  

90% - 94%

 

50%

  

95% - 99%

 

80%

Target

  

100% - 114%

 

100% - 114%

Acceleration

  

115%

 

120%

  

116% - 145%

 

121% - 150%

Maximum

  

> 145%

 

150%

 

  •   Rounding. Performance results will be rounded up to the nearest whole
percentage point. For example, if the calculated performance achievement
percentage is 89.1%, it will be rounded up to 90%.

 

  •   Performance Thresholds. There will be no payout for the revenue or EBITDA
component if the financial target is not at least 90% achieved. However, if the
threshold for one financial target is not achieved, a bonus may still be earned
on the other financial component, provided performance for that measure exceeds
the 90% threshold.

 

  •   Acceleration. For each whole percentage point of performance that exceeds
115% of target, the bonus achievement percentage will be 5% above the
performance percentage, up to a maximum of 150%.

Financial bonus amounts will be calculated and accrued on a quarterly basis, but
final bonus payment amounts will be determined on a semi-annual basis. Actual
bonus payments will be made in accordance with the performance periods on page
one.

Individual Performance: MBO Achievement

Executives must achieve individual performance objectives (MBOs) to receive full
bonus payments. Each executive will have 3-5 MBOs tied to bonus eligibility
within each six-month performance period. The Compensation Committee will review
and approve the MBOs for each executive at the beginning of the performance
period.

 

  •   If an executive does not achieve at least 50% of his or her written MBOs,
he or she will not earn a bonus payment for the period.

 

  •   If an executive achieves more than 50%, but less than 100% of the written
MBOs, the CEO will reduce the financial bonus payout accordingly. The CEO will
reduce the bonus by 5-50% to reflect his assessment of the individual’s
performance shortfall.

Bonus Calculation Example

An example is illustrated below for a Plan participant who has a semi-annual
performance period, a 75% bonus target, and an annualized base salary of
$225,000.

 

Quarter

   Performance
Achievement vs. Target     Bonus Achievement
Percentage     Final Bonus
Achievement
Percentage
“A”    

Base
Salary/4

“B”

  

Bonus
Target

“C”

   

Calculated,
Accrued
Bonus

A x B x C

   Revenue     EBITDA     Revenue     EBITDA           

Q1

   95 %   107 %   80 %   107 %   93.5 %   $ 56,250    75 %   $ 39,445

Q2

   103 %   116 %   103 %   121 %   112.0 %   $ 56,250    75 %   $ 47,250

Total Q1 + Q2

                  $ 86,695

The semi-annual bonus payments would then be calculated as follows on the next
page, depending upon MBO bonus achievement.

 

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2006 Executive Financial Performance Incentive Plan

 

MBO Bonus
Achievement    Q1 + Q2
Financial Bonus    Semiannual
Bonus Payment  100%    $ 86,695    $ 86,695    80%    $ 86,695    $ 69,356
   75%    $ 86,695    $ 65,021    60%    $ 86,695    $ 52,017    50%    $ 86,695
   $ 43,348 < 50%    $ 86,695    $ 0

Semiannual bonus payments will be made in August 2006 and February 2007. For
participants with annual performance periods, similar calculations will be made
for each of the two semi-annual periods. For the annual participants, the two
semi-annual bonus payments will be added together and paid out in February 2007.

EMPLOYMENT REQUIREMENTS

In order to be eligible for a bonus payment under the Plan, participants must be
employed for the entire performance period.

If an executive resigns on good terms, exercises termination for good reason, or
takes an approved leave of absence during the performance period, the CEO has
the discretion to recommend to the Compensation Committee to pay a partial bonus
if the executive worked a significant portion of a performance period and
achieved the majority of the MBO’s, subject to the terms of any written
employment agreement.

For executives who join the company after the beginning of a performance period
but before the last 60 days of it, he or she may be eligible for pro-rated
participation at the sole discretion of the CEO.

APPROVAL

All bonus payments made to executives will be submitted to the Compensation
Committee for final approval. The Compensation Committee may adjust the final
bonus amount as it deems appropriate. The Committee has complete discretion to
adjust bonus awards to reflect changes in the industry, company, the executive’s
job duties or performance, or any other circumstance the Committee determines
should impact bonus awards.

 

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