exv10w2



 






Exhibit 10.2




Asset Acceptance Capital Corp.

2007 Annual Incentive Compensation Plan for Management




     General



     Each year, in connection with the approval of the annual budget and forecast, the Compensation
Committee (the “Committee”) of the Board of Directors (the “Board”) of Asset Acceptance Capital
Corp. (the “Company”) establishes an annual incentive compensation plan for key executives and
certain other management level employees (the “Plan Participant(s)”) of the Company.



     The Annual Incentive Compensation Plan will establish for each Plan Participant a bonus target
(the “Bonus Target”) equal to a specified percentage of Base Salary (as defined below). The Bonus
Target will be set by the Committee at a level consistent with each executive’s responsibilities.
As used in this Plan, “Base Salary” shall be the Plan Participant’s base compensation (excluding
incentive and any other compensation) paid during 2007. For individuals who become Plan
Participants during 2007, Base Salary shall be the base compensation (excluding incentive and any
other compensation) paid in 2007 beginning on the date the individual first becomes eligible to
participate in the Annual Incentive Compensation Plan.



     The Annual Incentive Compensation Plan will be comprised of two parts: (a) Financial
Objectives; and (b) Personal Objectives. Bonus amounts will be computed separately for achievement
of Financial Objectives and Personal Objectives, as set forth below under the captions “Financial
Objectives” and “Personal Objectives”, respectively. Final payments under the Annual Incentive
Compensation Plan will be made after receipt and approval by the Board of the annual audited
financial statements of the Company for the year ending December 31, 2007. A Plan Participant will
not be paid a bonus unless the Plan Participant is employed by the Company on the date the Board
approves the annual audited financial statements for 2007.



     Payments shall be made no later than 2-1/2 months after the end of the fiscal year to which
the bonus amount relates (or such later time as is allowed in accordance with Treasury Regulation
1.409A-3(d)) in order to preserve the exemption from Section 409A of the Internal Revenue Code.



     The Compensation Committee recognizes the need of the Plan Participants to conduct themselves
in compliance with the Code of Business Conduct. In addition to the non-financial consequences
contained in the Code of Business Conduct, any violation of the Code of Business Conduct shall
result in complete forfeiture of any bonus which would otherwise be paid under this Plan.



     Financial Objectives



     The financial performance of the Company will be measured against Earnings Before Interest,
Taxes, Depreciation and Amortization (“EBITDA”), after accrual of all incentive compensation plan
payments. EBITDA will be determined in a manner consistent with the definition of EBITDA contained
in Exhibit 1.



     For the fiscal year ended December 31, 2007, the Financial Objective goal will be set at the
2007 budgeted EBITDA of $XXXXXX (the “2007 Financial Objective Goal”). The minimum goal will
be set at a percentage of the 2007 Financial Objective Goal equal to the greater of (i) 2006 EBITDA
achieved by the Company (expressed as a percentage of the 2007 EBITDA Financial Objective Goal), or
(ii) 90% of the 2007 Financial Objective Goal (the “Minimum Goal”). The maximum goal will be set
at 110% of the 2007 Financial Objective Goal (the “Maximum Goal”).



     The bonus payout under the Financial Objective portion of the Plan shall be 50% of the Target
Bonus at achievement of the 2007 Financial Objective Goal. If the 2007 actual EBITDA achieved is
at least equal to the Minimum Goal, the bonus payout under the Financial Objective portion of the
Plan shall be expressed as 50% of the Target Bonus multiplied by the following percentage (provided
that the bonus payout shall not exceed the Maximum Goal):



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The sum of:




                    (1)      100%, plus




              (2)      the product of (a) 10, multiplied by (b) the difference of actual EBITDA as
a percentage of the 2007 Financial Objective Goal, less 100%



          The following examples illustrate the application of the Financial Objectives:




          (1)      If a Plan Participant had a Target Bonus of $100, the 2007 Financial Objective Goal was
$5,000 and the actual 2007 achieved EBITDA was equal to the 2007 Financial Objective Goal, then the
bonus payout under the Financial Objective portion of the Plan would be $50.



          (2)      However, if the actual 2007 achieved EBITDA exceeded the Minimum Goal and was equal to 98%
of the 2007 Financial Objective Goal, then the bonus payout under the Financial Objective portion
of the Plan would be $50 multiplied by 80%, or $40, calculated as follows:



          The sum of:



                            (1)      100%, plus



                            (2)      the product of (a) 10, multiplied by (b) the difference of 98%, less 100%



          (3)      Moreover, if the actual 2007 achieved EBITDA exceeded the Minimum Goal and was equal to
105% of the 2007 Financial Objective Goal, then the bonus payout under the Financial Objective
portion of the Plan would be $50 multiplied by 150%, or $75, calculated as follows:



          The sum of:



                            (1)      100%, plus



                            (2)      the product of (a) 10, multiplied by (b) the difference of 105%, less 100%



          Personal Performance Objectives



          Personal Objectives should be measurable goals jointly developed by the Plan
Participant and his/her immediate supervisor (subject to approval by the Chairman, President and
Chief Executive Officer or his designee(s), and for certain participants, the Compensation
Committee of the Board of Directors). The points earned under Personal Performance will be
calculated based on the percentage of completion of each assigned objective, recognizing the
determination of such percentage completion is in part subjective. If there is any disagreement as
to the scoring of each assigned objective, the determination of the Chairman, President and Chief
Executive Officer or his designee(s) shall be final and binding.




          Each Plan Participant may earn up to a maximum of 50% of his or her Target Bonus based on the
achievement of Personal Objectives. No Plan Participant will be eligible to earn any part of his
or her bonus based on the achievement of Personal Objectives unless 2007 EBITDA achieved by the
Company equals or exceeds the 2006 EBITDA achieved by the Company.





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AACC 2007 BONUS PLAN




	 	 	 	 	 
	Name:

	 	Insert Name
	 	 
	 
	 	 	 	 
	Title:

	 	Insert Title	 	 
	 
	 	 	 	 
	Estimated Salary:

	 	2007 Base Comp.	 	 
	 
	 	 	 	 
	Target Bonus Rate

	 	Insert Target Bonus %	 	 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Bonus as %	 	 	 	 
	 	 	Objectives	 	 	% of Target	 	 	of Salary	 	 	$Bonus
	% Based on Company Objectives
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Minimum
	 	 	50.0	%	 	As determined	 	 	0.0%	 	 	$	—
	Target
	 	 	50.0	%	 	 	100.0	%	 	50% of Target Bonus Rate	 	 	Computed
	Maximum
	 	 	50.0	%	 	 	110.0	%	 	100% of Target Bonus Rate	 	 	Computed
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	% Based on Personal Objectives
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Target
	 	 	50.0	%	 	 	 	 	 	50% of Target Bonus Rate	 	 	Computed
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Bonus Opportunity
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Minimum
	 	 	 	 	 	As determined	 	Computed	 	 	Computed
	Target
	 	 	 	 	 	 	100.0	%	 	Computed	 	 	Computed
	Maximum
	 	 	 	 	 	 	110.0	%	 	Computed	 	 	Computed
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Personal Objectives
	 	 	 	 	 	 	 	 	 	 	 	 	 	%of Personal Bonus
	(1) Insert Goal 1
	 	 	 	 	 	 	 	 	 	 	 	 	 	Goal 1 Weight 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(2) Insert Goal 2
	 	 	 	 	 	 	 	 	 	 	 	 	 	Goal 2 Weight 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(3) Insert Goal 3
	 	 	 	 	 	 	 	 	 	 	 	 	 	Goal 3 Weight 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(4) Insert Goal 4
	 	 	 	 	 	 	 	 	 	 	 	 	 	Goal 4 Weight 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(5) Insert Goal 5
	 	 	 	 	 	 	 	 	 	 	 	 	 	Goal 5 Weight 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	100.0% 






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Exhibit 1




     EBITDA: The earnings of the Company before interest, income taxes, depreciation and
amortization (including amortization of purchased receivables). The determination of EBITDA, for
purposes of this Plan, shall be made by the Board in accordance with generally accepted accounting
principles in effect in the United States, applied on a consistent basis (“GAAP”); provided,
however, that EBITDA shall be adjusted for this purpose to (A) exclude net gains and losses on the
disposal of assets and other non-operating income or expense items and (B) exclude EBITDA generated
from acquisitions of new businesses or companies during the year (an acquisition of a new office
would not be deemed to be a material acquisition). EBITDA will be determined after accrual for all
bonuses, including bonuses to be paid under this and all other Company annual incentive
compensation plans.





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