EX-10.1






Exhibit 10.1




Pendrell Corporation

2015 Incentive Plan




I. INTRODUCTION



a. Objective: The objective of this 2015 Incentive Plan (the “2015 Plan”) is to (i) enhance
shareholder value by promoting a strong connection between employee contributions and financial
performance of Pendrell Corporation and its subsidiaries (collectively, the “Company”);
(ii) encourage and support achievement of the business objectives of the Company ; and (iii)
promote retention of employees of the Company.



b. Participants: This plan applies to all Company employees who have discretionary performance
bonus target percentages in their employment letters (the “Participants”).



c. Effective Date: This 2015 Plan is effective for 2015, beginning January 1, 2015 and
automatically expiring on December 31, 2015.



d. Discretionary Plan: All benefits under this 2015 Plan are benefits provided at the discretion of
the Company. Participation in this 2015 Plan does not convey any entitlement to participate in this
or future plans or to the same or similar incentive awards. The Company’s chief executive officer
(the “CEO”) and the Compensation Committee (the “Compensation Committee”) of Pendrell Corporation’s
Board of Directors (the “Board”) have the discretion to award less than the amounts calculated
pursuant to this 2015 Plan (including to award zero percent), subject to applicable legal
restrictions.



e. Changes in the Plan: The Company reserves the right to modify this 2015 Plan, in total or in
part, at any time. Any such modification must be approved by the Compensation Committee.



f. Interpretations: The Compensation Committee retains discretion to construe and interpret this
2015 Plan and any awards granted under it. Such interpretations shall be final, conclusive and
binding on all persons, and shall be given the maximum deference permitted by law.



g. Entire Agreement: This 2015 Plan is the entire agreement between the Company and the Participant
regarding the subject matter of this 2015 Plan and supersedes all prior incentive plans, or any
written or verbal representations regarding the subject matter of this 2015 Plan.



II. ELIGIBILITY AND INCENTIVE PLAN ELEMENTS



a. Eligibility: Participants are eligible for an incentive award under this 2015 Plan if they meet
all the following requirements: (i) have a performance bonus target percentage stated in their
employment letter; (ii) are not on a performance improvement plan at the time of the Compensation
Committee’s approval of incentive awards; and (iii) are employed by the Company on the day
incentive awards are paid or issued, with the expectation that payment or issuance will occur no
later than March 15, 2016. Any exception to the foregoing must be approved by the CEO for
Participants other than the Function Heads, and by the Compensation Committee for Function Heads.



b. Base Salaries: A Participant’s annualized base salary in effect at the end of 2015 represents
the basis for the calculation of the Participant’s incentive award, unless the Participant reduces
his or her work schedule during 2015, in which case the basis for the calculation of the
Participant’s incentive award shall be the actual base salary paid for work performed in 2015.
Nothing in this 2015 Plan, or arising as a result of a Participant’s participation in this 2015
Plan, shall prevent the Company from changing a Participant’s annual base salary at any time based
on such factors as the Company in its sole discretion determines appropriate.



c. Performance Bonus Target Percentages: A Participant’s performance bonus target percentage is the
percentage set forth in the Participant’s employment letter, as updated from time to time.



d. Company Performance Factor: The Company’s performance will be reflected as a percentage
determined by the Company’s achievement of budgeted revenue, expense and AEBITDA targets for 2015,
per the budget approved by the Board. The manner by which the Company performance factor is
calculated is described in the attached Exhibit A.



e. Individual Performance Factor: A Participant’s individual performance factor will be reflected
as a percentage determined by reference to achievement of individual objectives. If the
Participant’s manager determines that the Participant exceeded expectations, the CEO shall set the
Participant’s individual performance factor at no less than 75% and no greater than 125%. If the
Participant’s manager determines that the Participant met expectations, the CEO shall set the
Participant’s individual performance factor at no less than 35% and no greater than 65%. If the
Participant’s manager determines that the Participant failed to meet expectations, the individual
performance factor will be 0%. Notwithstanding the forgoing, the CEO retains discretion to
designate an individual performance factor that is greater or less than the individual performance
factor derived from the forgoing calculation.



f. Weighted Performance Factor: A Participant’s role in the Company will determine the extent to
which Company performance and individual performance factor into the Participant’s incentive award.
Roles are defined as Function Head, People Manager, Subject Matter Expert, and Individual
Contributor. Specifically, a Participant’s weighted performance factor is the sum of (a) the
Company performance factor multiplied by the percentage by which Company performance impacts the
Participant’s incentive award, plus (b) the Participant’s individual performance factor multiplied
by the percentage by which individual performance affects the Participant’s incentive award. This
weighting of Company performance and individual performance by employee category is as follows:



	 	 	 	 	 	 	 	 	 
	 	 	Company	 	Individual
	Position	 	Performance	 	Performance
	Function Heads

	 	 	85	%	 	 	15	%
	 

	 	 	 	 	 	 	 	 
	People Managers

	 	 	60	%	 	 	40	%
	 

	 	 	 	 	 	 	 	 
	Subject Matter Experts

	 	 	50	%	 	 	50	%
	 

	 	 	 	 	 	 	 	 
	Individual Contributors

	 	 	20	%	 	 	80	%
	 

	 	 	 	 	 	 	 	 






g. Proration: A Participant’s weighted performance factor will be pro-rated for the number of
calendar days during 2015 that the Participant is eligible for an incentive award. For example, the
proration factor for a Participant who has been eligible for an incentive award under the 2015 Plan
the entire year will be 1.00. For a Participant who has been eligible for an incentive award under
the 2015 Plan for 6 months, the factor will be 0.50. Participants in the following situations will
have a proration factor of less than 1.00: (i) Participants who have been in the 2015 Plan less
than 12 months (such as new hires); (ii) Participants who have been on a leave of absence of any
length during 2015; and (iii) Participants who were subject to a performance improvement plan for
part of 2015.



h. Incentive Award Calculation: The incentive award for each Participant other than the CEO shall
be determined by multiplying the Participant’s base salary by the Participant’s performance bonus
target percentage, then multiplying by the Participant’s weighted performance factor, and then
pro-rated (if applicable) pursuant to paragraph (g) above.



i. Form of Award: The Company may pay an incentive award solely in cash, or may pay up to fifty
percent (50%) of an incentive award in Pendrell Corporation’s Class A common stock (“Stock”). If
the Company elects to pay a portion of an incentive award in Stock, the Stock will be issued
pursuant to the Pendrell Corporation 2012 Equity Incentive Plan, and shall be valued at its closing
price on the date on which the Compensation Committee approves incentive awards. The Company shall,
as required by law, withhold tax on the Stock award by: (i) withholding a portion of the cash
incentive award in an amount equal to the required withholding; (ii) allowing the Participant to
tender a cash payment for the required withholding; or (iii) allowing the Participant to relinquish
Stock from the incentive award with a value of the required withholding.



III. MISCELLANEOUS



a. Procedure: A copy of this 2015 Plan will be made available to each Participant. All incentive
awards will be made after all required or elected withholdings have been deducted.



b. Governing Law: This 2015 Plan is governed by the laws of the State of Washington.



c. Dispute Resolution: Any dispute concerning this 2015 Plan or any awards made or entitlements
claimed under this 2015 Plan will be resolved in binding arbitration in a proceeding in Kirkland,
WA administered by and under the rules and regulations of National Rules for the Resolution of
Employment Disputes of the American Arbitration Association. All participants in any such dispute
or claim will treat the arbitration process and the activities that occur in the proceedings as
confidential.



1



EXHIBIT A




Pendrell 2015 Company Performance Factors




The Company performance factor is the sum of the four (4) percentages as described below; provided,
however, the CEO may, for high performing business units, increase the Company performance factor
by up to 15%.



1) Meet or exceed 2015 Budget for non-variable cash expenses1 – Weight 50% (40% for
Function Heads)



	 	 	 
	Variance to Expense Budget	 	Achievement %
	>30% over expense budget

	 	30% achievement (minimum)
	 

	 	 
	30% over expense budget

	 	60% achievement
	 

	 	 
	20% over expense budget

	 	75% achievement
	 

	 	 
	10% over expense budget

	 	90% achievement
	 

	 	 
	At expense budget

	 	100% achievement
	 

	 	 
	10% under expense budget

	 	110% achievement
	 

	 	 
	20% under expense budget

	 	120% achievement
	 

	 	 
	30% under expense budget

	 	130% achievement
	 

	 	 
	40% or > under expense budget

	 	140% achievement
	 

	 	 






2) Meet or exceed 2015 Budget for revenue– Weight 40%



	 	 	 
	% of Annual Revenue	 	Achievement %
	100% or less of target
	 	50% achievement (minimum)

	 
	 	 

	101-116%
	 	100% achievement

	 
	 	 

	116-144%
	 	125% achievement

	 
	 	 

	144%-197%
	 	135% achievement

	 
	 	 

	197% or greater
	 	150% achievement

	 
	 	 







3) Meet or exceed 2015 Budget for AEBITDA– Weight 10%



	 	 	 
	Variance from AEBITDA target	 	Achievement %
	20% or greater adverse variance

	 	20% achievement (minimum)
	 

	 	 
	12-19% adverse variance

	 	50% achievement
	 

	 	 
	1-11% adverse variance

	 	80% achievement
	 

	 	 
	0-13% favorable variance

	 	90% achievement
	 

	 	 
	14-32% favorable variance

	 	110% achievement
	 

	 	 
	33%-57% favorable variance

	 	135% achievement
	 

	 	 
	58% or more favorable variance

	 	175% achievement
	 

	 	 






4) For Function Heads: achieve favorable variance from their cost center P&L – Weight 10%



	 	 	 
	P&L	 	Achievement %
	Unfavorable variance to Budget

	 	25% achievement
	 

	 	 
	Favorable variance to Budget

	 	125% achievement
	 

	 	 







	1	 	Extraordinary expenses associated with
unbudgeted initiatives may be excluded






2