EHEALTH, INC.
EXECUTIVE BONUS PLAN
2017
1.Plan Objectives.
•Reward management for achieving stated business objectives
•Build long-term stockholder value
•Provide competitive compensation for senior management
2.    Administration. The Compensation Committee of eHealth, Inc. (the
“Company”) will administer the Executive Bonus Plan (the “Plan”). The
Compensation Committee reserves the right at any time during the fiscal year to
modify the Plan in total or in part. This Plan may be amended, suspended or
terminated at any time at the sole and absolute discretion of the Compensation
Committee.
3.    Eligibility. Senior management of the Company, as nominated by the CEO and
approved by the Compensation Committee, but not including the CEO,
(collectively, “Participants”) are eligible to participate in this Plan.
Participation in the Plan in one year does not imply continued Plan
participation in any subsequent year. Participants must be employed at the time
of payment to earn any payment under the Plan. The initial list of Participants
is included in Exhibit A hereto.
Eligible senior management hired during the Plan year will have their Target
Incentive Percentage and Maximum Incentive Percentage set by the Compensation
Committee (see Section 5). Such Participant’s incentive payout will be pro-rated
from the first day of employment; provided that the Compensation Committee
determines that the Participant is eligible to participate. Employees hired
after September 30, 2017 are not eligible for incentive payout for the 2017 Plan
year, unless the Compensation Committee determines otherwise.
4.    Term. Twelve (12) months, commencing on January 1, 2017 and ending on
December 31, 2017.
5.    Target Incentive Payout. The Compensation Committee will approve a Target
Incentive Percentage and a Maximum Incentive Percentage for each Participant.
The incentives under this Plan are expressed as a percentage of annual base
salary as of the time the Compensation Committee approves a Participant’s
participation in the Plan, provided that the Compensation Committee will be
permitted (but not required) to make adjustments to the annual base salary to
use for these purposes to reflect changes in annual base salary during the year
that may occur (for instance, with respect to a Participant who is promoted
during the Plan year) (the “Annual Salary”). Attached, as Exhibit A, is a
schedule of the Annual Salary, Target and Maximum Incentive Percentages and
aggregate incentive for each 2017 Plan Participant. The aggregate “Target
Incentive Award” for each Participant is equal to that Participant’s Annual
Salary multiplied by the Target Incentive Percentage for that Participant.
6.    Incentive Determination. One hundred percent (100%) of each Participant’s
potential Target Incentive Award is based upon achievement of performance goals
as set forth on Exhibit B for the 2017 fiscal year of the Company (each, a
“Goal”), as approved by the Compensation Committee in connection with the
adoption of this Plan and subject to adjustment as set forth elsewhere in this
Plan, including on Exhibit B. Notwithstanding any contrary provision of the
Plan, the Compensation Committee, in its sole discretion, may (a) increase,
eliminate or reduce the actual award that otherwise would be payable under the
payout formula set forth above, and (b) determine whether or not any Participant
will receive an actual award in the event the Participant incurs a termination
of employment prior to the date the actual award is to be paid pursuant
Section 7.
7.    Payment. Payments under the Plan will be made following the release of the
Company’s earnings to the public and only after the Compensation Committee has
approved all executive officer incentive awards, and are expected to be paid no
later than March 15, 2018. All payments under the Plan are intended to fall
within the “short-term deferral” exemption from Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), and under Section 1.409A-1(b)(4)
of the Treasury Regulations or comply with any requirements necessary to avoid
the imposition of additional tax under Code Section 409A(a)(1)(B), and the Plan
will be interpreted consistent with that intent. All Plan payments will be made
net of applicable tax withholding.
8.    Employment at Will. The employment of all employees at the Company is
terminable at any time by either party, with or without cause being shown or
advance notice by either party. This Plan will not be construed to create a
contract of employment for a specified period of time between the Company and
any employee.
9.    Entire Agreement. This Plan is the entire agreement between the Company
and the Participants regarding the subject matter of this Plan and supersedes
all prior bonus compensation or bonus incentive plans or any written or verbal
representations regarding the subject matter of this Plan.
******

EXHIBIT A

 
 
 
 
 
 
 
 
 
 
Salaries, Incentives and Incentive Percentages for 2017 Plan Participants
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCENTIVE %
INCENTIVE $
 
 
OFFICERS
SALARY
TITLE
TARGET
MAX
TARGET
MAX
 
 
Francis, David
$
400,000
 
CFO and COO
60
%
90
%
$
240,000
 

$360,000

 
 
Hurley, Robert
$
325,000
 
President, Medicare Business
60
%
90
%
$
195,000
 

$292,500

 
 
Tom Tsao
$
380,000
 
President, Small Business, Individual and Family Products
60
%
89
%
$
228,000
 

$336,528

 
 
 
 
 
 
 
 
 
 

EXHIBIT B

In the case of each of the participants other than Robert Hurley and Tom Tsao
(the “General Executive Group”), Company performance will be measured by the
achievement of specific financial goals related to revenue (60%) and adjusted
EBITDA (40%). In the case of Robert Hurley, in addition to the goals relating to
revenue and adjusted EBITDA (collectively, 25%), Company performance will also
be measured by the achievement of specific goals relating to the Company’s
Medicare health insurance business (collectively, 75%). In the case of Tom Tsao,
in addition to the goals relating to revenue and adjusted EBITDA (collectively,
25%), Company performance will also be measured by the achievement of specific
goals relating to the Company’s individual, family and small business health
insurance business (collectively, 75%). The percentages in this paragraph
reflect the proportion of the bonus that would be represented by each goal if
all goals are met at target. Each of the Goals with respect to the General
Executive Group, Mr. Hurley and Mr. Tsao are set forth below on this Exhibit B.
Adjusted EBITDA is calculated by adding stock-based compensation, depreciation
and amortization expense, including intangible asset amortization expense, other
expense, net, provision (benefit) for income taxes and restructuring charges to
GAAP net income (loss).
If the threshold target with respect to a particular Goal is achieved above the
threshold targets, then a Participant’s Target Incentive Award with respect to
that particular Goal will be multiplied by the following multipliers (noted as
“Payout Percentage” in the tables below). Achievement between goals will be
interpolated on a linear basis to determine the payout percentage.
For purposes of determining achievement of the Goals, the Compensation Committee
may exclude, in its sole discretion, (i) the effect of mergers and acquisitions
closing in 2017 (if any), (ii) any item as determined by the Compensation
Committee to be extraordinary or non-recurring in its sole discretion, and (iii)
the effect of any changes in accounting principles affecting the Company’s or a
business units’ reported results.

-1-