exv10w1



 






Exhibit 10.1




ACE*COMM 2006 INCENTIVE COMPENSATION PLAN

ICP OVERVIEW




FY2006 CORPORATE FINANCIAL PERFORMANCE OBJECTIVES

AND

PLAN DOCUMENT




Corporate Financial Performance Objectives — FY2006




	 	 	 
	Revenue
	 	$
	Operating Income
	 	$
	Bookings
	 	$






FY2006 PLAN DOCUMENT



Executive Management recommends the following Incentive Compensation Plan (ICP) effective for FY06:




 









 








ACE*COMM 2006 INCENTIVE COMPENSATION PLAN

ICP OVERVIEW




The following information regarding the ACE*COMM 2006 Incentive Compensation Plan

(ICP) is intended as a brief summary of the Plan. Complete details are available in the

Plan Document below.





     AWARDS:




	•	 	Target Awards are a percentage of each participant’s base salary.
	 
	•	 	Calculated Awards are based on performance achieved relative to targets established at the
beginning of the Plan Year. Award levels between the threshold and maximum will be
calculated on actual results using the following tables:





	 	 	 	 	 
	 	 	Performance Relative to	 	Percent of Target
	 	 	Plan	 	Earned
	For Revenue and Bookings:
	 	 	 	 
	 
	 	Below 90%	 	0
	 
	 	90	 	50.00%
	 
	 	91	 	55.00%
	 
	 	92	 	60.00%
	 
	 	93	 	65.00%
	 
	 	94	 	70.00%
	 
	 	95	 	75.00%
	 
	 	96	 	80.00%
	 
	 	97	 	85.00%
	 
	 	98	 	90.00%
	 
	 	99	 	95.00%
	 
	 	100	 	100.00%
	 
	 	101	 	105.00%
	 
	 	102	 	110.00%
	 
	 	103	 	115.00%
	 
	 	104	 	120.00%
	 
	 	105	 	125.00%
	 
	 	110	 	150.00%
	 
	 	115	 	175.00%
	 
	 	120	 	200.00%






 









 






ACE*COMM 2006 INCENTIVE COMPENSATION PLAN

ICP OVERVIEW




	 	 	 	 	 	 	 	 	 
	 	 	Performance Relative to	 	Percent of Target
	 	 	Plan	 	Earned
	For Operating Income:

	 	Below 95%
	 	0
	 

	 	 	95	 	 	50.00%
	 

	 	 	96	 	 	60.00%
	 

	 	 	97	 	 	70.00%
	 

	 	 	98	 	 	80.00%
	 

	 	 	99	 	 	90.00%
	 

	 	 	100	 	 	100.00%
	 

	 	 	101	 	 	105.00%
	 

	 	 	102	 	 	110.00%
	 

	 	 	103	 	 	115.00%
	 

	 	 	104	 	 	120.00%
	 

	 	 	105	 	 	125.00%
	 

	 	 	110	 	 	150.00%
	 

	 	 	115	 	 	175.00%
	 

	 	 	120	 	 	200.00%





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ACE*COMM 2006 INCENTIVE COMPENSATION PLAN

ICP OVERVIEW





	•	 	Calculated Awards are determined following the end of the Fiscal Year, based on the level of achievement on each
of the weighted performance targets and objectives.






	•	 	Calculated Awards may be further adjusted (up or down) at the discretion of the CEO and the Committee for
exceptional circumstances (e.g. outstanding contribution not reflected in annual appraisal or performance targets
and objectives; poor demonstration of critical competencies).






	•	 	Final total payout pool cannot exceed the sum of the participants’ target awards multiplied by the weighted
corporate performance factor. If awards exceed the pool, participants’ awards will be pro-rated uniformly to stay
within the pool.






	•	 	Earned Awards will be paid in cash, as determined by the Committee.






	•	 	No awards will be paid out if Corporate Operating Income is 50% or less of plan after accruing fro awards.





     PERFORMANCE MEASURES:,




	•	 	Awards will be based on performance relative to ACE*COMM Corporate, Group, Area of Business and individual
targets, as appropriate.






	•	 	The Corporate Performance Component consists of Revenue, Operating Income, and Bookings.




 









 











ACE*COMM 2006 INCENTIVE COMPENSATION PLAN

ICP OVERVIEW





	•	 	The Group and Area of Business Performance Components consist of financial measurements such as Revenue,
Operating Income, and Bookings.






	•	 	The Individual Performance Objective consists of specific objectives reflective of each participant’s area of
responsibility with results measured on the basis of determinations by top management.






	•	 	Participants who terminate prior to the end of the Fiscal Year, except for reasons of death, disability or
retirement, are ineligible to receive any Earned Award.






	•	 	Participation in the ICP does not imply any contract or guarantee of employment.






	•	 	The Company may modify or terminate the ICP at any time.






	•	 	The final interpretation of the ICP and determination of awards shall be at the discretion of the CEO and the
Committee.





 









 





ACE*COMM 2006 INCENTIVE COMPENSATION PLAN

PLAN DOCUMENT




1.0 PLAN OBJECTIVES





     The Plan objectives are:




	 	1.1	 	To encourage individual effort and group teamwork toward the
accomplishment of overall Company objectives which include Group, Area of
Business, and individual goals.
	 
	 	1.2	 	To reward outstanding managerial performance.
	 
	 	1.3	 	To provide total direct compensation (salary plus annual
incentive), which is competitive with the businesses with which the Company
competes and which is sufficient to ensure the Company’s ability to attract,
retain and motivate outstanding executives.
	 
	 	1.4	 	To focus the attention of participants on Corporate, Group and Area
of Business goals; other performance measures may also be used from time to
time.





2.0 DEFINITIONS





	 	2.1	 	Bookings: Awards or contracts.
	 
	 	2.2	 	Calculated: Award: Total Performance Score multiplied by
the Target Award established at the beginning of the Plan Year.
	 
	 	2.3	 	Committee: The Executive Compensation Committee of the
Board of Directors of ACE*COMM Corporation, Inc.
	 
	 	2.4	 	Company: ACE*COMM Corporation, Inc. and its affiliates.
	 
	 	2.5	 	Corporate Performance: ACE*COMM’s annual financial and
operational performance measures and specific objectives established by top
management and approved by the Committee. The attainment of these performance
objectives will be used. to determine ICP awards. For FY2006, Corporate
Performance will consist of Revenue, Operating Income, and Bookings, weighted at
50%, 25% and 25% respectively.
	 
	 	2.6	 	ACE*COMM: ACE*COMM Corporation, Inc.
	 
	 	2.7	 	Earned Award: The Calculated Award which may be
adjusted based upon a review of a participant’s contributions and other
performance considerations by top management, with input from group senior
management.
	 
	 	2.8	 	EBIT: Earnings Before Interest and Taxes; operating income
performance measure used at the Corporate level.
	 
	 	2.9	 	Free Cash Flow: Operating cash flow minus capital expenditures.




 









 











ACE*COMM 2006 INCENTIVE COMPENSATION PLAN

PLAN DOCUMENT





	 	2.10	 	Group: The major business units of ACE*COMM Corporation,
Inc., reporting directly to the corporate level.
	 
	 	2.11	 	Group Performance: The specific financial and/or operational
targets established for each Group, the attainment of which will be the basis for
granting the Group Award Component. For FY2006, the three major Group financial
measures consist of Revenue, Operating Income, and Bookings, weighted at 50%, 25%
and 25% respectively.
	 
	 	2.13	 	ICP: The ACE*COMM 2006 Incentive Compensation Plan.
	 
	 	2.14	 	Individual Performance Objectives: Specific performance
objectives established for each participant reflective of his/her functional area
and individual responsibilities. This also considers top management’s evaluation
of performance relative to objectives.
	 
	 	2.15	 	Invested Capital: Total assets net of intercompany
receivables less total liabilities net of intercompany payables.
	 
	 	2.16	 	Operating Income: Revenue less the sum of all allowable
expenses which typically include labor, material, overhead, SG&A and allowable
Corporate allocation plus unallowable costs which include unallowable Corporate
allocation plus amortization of good will and related intangibles.
	 
	 	2.17	 	Plan Year: The twelve month performance period for 2006
corresponding to the Company’s fiscal year, beginning July 1, 2005, and ending
June 30, 2006.
	 
	 	2.18	 	Retirement: The voluntary termination of employment of the
participant.
	 
	 	2.19	 	Revenue: The actual sales revenue results achieved during
the Plan Year as reported in ACE*COMM’s audited Profit & Loss Statement.
	 
	 	2.20	 	Area of Business: A major business area of a Group,
reporting directly to the Group level.
	 
	 	2.21	 	Area of Business Performance: The specific financial and/or
operating targets established for each Area of Business, the attainment of which
will be the basis for granting the Area of Business Award Component. For FY2006,
the three major Area of Business financial measures consist of Revenue, Operating
Income, and Bookings, weighted at 50%, 25% and 25% respectively.
	 
	 	2.22	 	Target Award: The established award a participant is
eligible to receive if all performance requirements are achieved at 100%. The
Target Award is shown as a percentage of the participant’s base salary.




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ACE*COMM 2006 INCENTIVE COMPENSATION PLAN

PLAN DOCUMENT





	 	2.23	 	Target Performance Level: The fully satisfactory performance
level at which awards will equal 100% of the Target Award established for that
performance measure.
	 
	 	2.24	 	Threshold Performance Level: The minimum level of acceptable
performance for which incentive awards will be earned for any of the established
performance objectives or measures.
	 
	 	2.25	 	Total Performance Score: The sum of all of the performance
scores.





3.0 PARTICIPATION





	 	3.1	 	Participation is limited to the officers and key managers of ACE*COMM, who
are selected by top management. Participants must have an on-going opportunity
to contribute significantly to the success and profitability of ACE*COMM.
	 
	 	3.2	 	A participant who has been employed by ACE*COMM for less than one
year, but more than six months, may receive a pro-rated Earned Award. A
participant employed by the Company for less than six months may be eligible to
receive a pro-rated Earned Award at the discretion of the CEO, subject to
approval of the Committee.





4.0 PERFORMANCE MEASURES





	 	4.1	 	Corporate Financial Performance targets will be established annually by top
management and approved by the Committee, based on the desired performance
consistent with ACE*COMM’s Strategic Business Plan. The Earnings related targets
will contain accruals to cover ICP awards.
	 
	 	4.2	 	The Committee will establish the Target Threshold (minimum) for each
financial performance measure each year. For FY2006, the Target minimums and
maximums are shown in the tables on pages 1 and 2.
	 
	 	4.3	 	Individual Performance Objectives will be established for each
participant that focus attention on measurable key desired results.
	 
	 	4.4	 	The relative weighting of the performance components (appropriate
Corporate, Group, Area of Business, and individual for each position) will be
established for each Plan Year, based on the desired focus.





5.0 TARGET AWARDS




     Target Award levels are based upon a percentage of each participant’s base salary.



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ACE*COMM 2006 INCENTIVE COMPENSATION PLAN

PLAN DOCUMENT




6.0 DETERMINATION OF EARNED AWARDS





	 	6.1	 	Earned Awards reflect achievement of Corporate, Group, Area of Business,
and/or individual objectives, which are indicative of each participant’s
performance and contribution. Each component may range from 0% to 200% of Target
Performance.
	 
	 	6.3	 	The Calculated Award is the sum of the weighted performance
components. The Earned Award is determined by multiplying the Calculated Award
by a discretionary portion as determined by top management.
	 
	 	6.4	 	Actual Earned Awards will be calculated and rounded to the nearest
one hundred dollars.
	 
	 	6.5	 	Earned Award recommendations will be reviewed and approved by the
CEO. The Committee and the Board of Directors will approve the overall award
budget, as well as the specific awards payable to the CEO and his direct
subordinates and Group Presidents.





7.0 AWARD DISTRIBUTION





	 	7.1	 	A participant must be actively employed through the last day of the Fiscal
Year (i.e., June 30) in order to be eligible to receive an Earned Award.
	 
	 	7.2	 	Earned Awards will be calculated and paid within a reasonable
period following the end of the Plan Year.
	 
	 	7.3	 	Participants who terminate during the Plan Year due to death,
disability or retirement may receive a pro-rated Earned Award at the conclusion
of the Plan Year, as determined by top management and the Committee.
	 
	 	7.4	 	During the Plan Year, in the event that a participant voluntarily
terminates his/her employment with the Company, or he/she is terminated by the
Company for cause, he/she will be ineligible to receive any Earned Award at the
conclusion of the Plan Year.
	 
	 	7.5	 	If a participant is terminated by the Company other than for cause
(e.g., job elimination, poor performance, etc.), he/she may be eligible to
receive a pro-rated award after the conclusion of the Plan Year, at the sole
discretion of the CEO.
	 
	 	7.6	 	In the event that a participant’s status changes during the Plan
Year as a result of promotion, demotion, position re-evaluation or
re-assignment, the Target Award may be changed following review and approval by
top management. Awards will typically be prorated





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ACE*COMM 2006 INCENTIVE COMPENSATION PLAN

PLAN DOCUMENT





	 	 	 	based on the amount of time
spent in each position and the corresponding Target Awards and base salary.





8.0 GENERAL





	 	8.1	 	The CEO or his designee shall be responsible for the implementation and
on-going administration of the Plan.
	 
	 	8.2	 	Interpretation of all matters related to this Plan, including, but
not limited to, eligibility, calculation and determination of Earned Awards, as
well as the resolution of any questions relating to accounting of the Plan,
shall be at the sole and final discretion of the CEO and the Committee.
	 
	 	8.3	 	The Company may amend or discontinue this Plan at any time with
respect to future awards; however, any awards earned up to the date of
modification or termination will be distributed in accordance with Plan
provisions at the time they were earned.
	 
	 	8.4	 	Nothing in this Plan shall be interpreted as giving any participant
the right to be retained as an employee of the Company, or of limiting the
Company’s rights to control or terminate the service of any employee at any time
in the course of its business.






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