exv10w1



 






Exhibit 10.1




APPLIX, INC.




2006 Executive Officer Bonus Plan




     1.      Purpose



     The purpose of this 2006 Executive Officer Bonus Plan of Applix, Inc., a Massachusetts
corporation (the “Company”), is to enhance the Company’s ability to attract, retain and motivate
executive officers of the Company and to tie a significant portion of the compensation of executive
officers to the attainment of corporate success, thus aligning the objectives and rewards of the
executive officers with those of the stockholders of the Company.



     2.      Period Covered by Plan



     This Plan shall cover the fiscal year ending December 31, 2006. Bonus payments based on
Revenue and Adjusted Operating Income (each as defined below) shall be calculated and paid with
respect to each of the four quarters in 2006. Bonus payments based on individual performance shall
be determined and paid with respect to 2006 as a whole.



     3.      Eligibility



     All of the Company’s executive officers, within the meaning of Rule 3b-7 under the Securities
Exchange Act of 1934 (the “Participants”), are eligible to receive bonus payments under this Plan.
In order to be eligible to receive a bonus payment, the Participant must be employed by the Company
as of the time the Company first publicly reports its financial results for the fiscal quarter or
fiscal year, as applicable, based upon which the bonus payment is determined.



     4.      Administration 



     This Plan will be administered by the Compensation Committee of the Company’s Board of
Directors. The Compensation Committee shall have authority to adopt, amend and repeal such
administrative rules, guidelines and practices relating to this Plan as it shall deem advisable.
The Compensation Committee shall have broad discretion to construe and interpret the terms of this
Plan, to make adjustments or amendments to this Plan, and to make determinations as to whether the
criteria for bonus payments have been satisfied. All decisions by the Compensation Committee shall
be made in the Compensation Committee’s sole discretion and shall be final and binding on all
Participants and all persons having or claiming any interest in this Plan. No member of the
Compensation Committee shall be liable for any action or determination relating to or under this
Plan unless it is demonstrated that such action or determination was made in bad faith.



     5.      Bonus Payments



            (a)      Target Bonuses. Each Participant shall have a target bonus for 2006 under this
Plan (the “Target Bonus”). In addition, each Participant’s Target Bonus shall be allocated among,
and determined based upon, one or more of the following three measurement criteria:




	 	•	 	the Company’s revenue, as determined in accordance with generally accepted
accounting principles (“GAAP”) and reported in the Company’s Quarterly	 




 









 






	 	 	 	Reports on
Form 10-Q and Annual Report on Form 10-K filed with the SEC (“Revenue”);	 
	 
	 	•	 	the Company’s operating income, as determined in accordance with GAAP and
reported in the Company’s Quarterly Reports on Form 10-Q and Annual Report on Form
10-K filed with the SEC, plus the amount of operating expenses attributable to
outstanding stock options in accordance with FASB Statement of Financial Accounting
Standards No. 123R (“Adjusted Operating Income”); and	 
	 
	 	•	 	Individual performance.	 




The portion of a Participant’s Target Bonus that is allocated to Revenue shall be referred to in
this Plan as the “Revenue Target Bonus”; the portion of a Participant’s Target Bonus that is
allocated to Adjusted Operating Income shall be referred to in this Plan as the “Adjusted Operating
Income Target Bonus”; and the portion of a Participant’s Target Bonus that is allocated to
individual performance shall be referred to in this Plan as the “Individual Performance Target
Bonus”. Each Participant’s Revenue Target Bonus and Adjusted Operating Income Target Bonus shall
be divided into four equal quarterly portions.




     The Target Bonus, and allocation of that Target Bonus among the Revenue Target Bonus, Adjusted
Operating Income Target Bonus and Individual Performance Target Bonus, for each Participant shall
be as follows:



	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Adjusted	 	Individual
	 	 	 	 	 	 	Revenue	 	Operating Income	 	Performance
	Name	 	Target Bonus	 	Target Bonus	 	Target Bonus	 	Target Bonus
	 
	 	 	 	 	 	 	 	 	 	 
	David Mahoney

	 	$	235,000	 	 	$82,250 (35% of
Target Bonus) —
$20,562.50 per
quarter
	 	$82,250 (35% of
Target Bonus) —
$20,562.50 per
quarter
	 	$70,500 (30% of
Target Bonus)
	 
	 	 	 	 	 	 	 	 	 	 
	Milton Alpern

	 	$	125,000	 	 	$43,750 (35% of
Target Bonus) —
$10,937.50 per
quarter
	 	$43,750 (35% of
Target Bonus) —
$10,937.50 per
quarter
	 	$37,500 (30% of
Target Bonus)
	 
	 	 	 	 	 	 	 	 	 	 
	Michael Morrison

	 	$	220,000	 	 	$99,000 (45% of
Target Bonus) —
$24,750 per quarter
	 	$99,000 (45% of
Target Bonus) —
$24,750 per quarter
	 	$22,000 (10% of
Target Bonus)
	 
	 	 	 	 	 	 	 	 	 	 
	Chanchal Samanta

	 	$	60,000	*	 	$24,000 (40% of
Target Bonus) —
$6,000 per quarter
	 	$24,000 (40% of
Target Bonus) —
$6,000 per quarter
	 	$12,000 (20% of
Target Bonus)
	 






*Mr. Samanta has been guaranteed a bonus of at least $12,000 for the first quarter






            (b)      Revenue Targets, Adjusted Operating Income Targets and Individual Performance
Objectives. For purposes of this Plan, (i) the Company’s Revenue targets for each quarter of
2006 (the “Revenue Targets”) shall be as set forth in the 2006 Operating Plan approved by the Board
of Directors at its February 1, 2006 meeting and attached to the minutes of such meeting (the “2006
Plan”) and (ii) the Company’s Adjusted Operating Income targets for each quarter of 2006 (the
“Adjusted Operating Income Targets”) shall be as set forth in the 2006 Plan. In the event the
Company acquires another company or business during 2006, the



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Compensation Committee shall adjust
the quarterly Revenue Targets and the quarterly Adjusted Operating Income Targets in such manner as
they shall determine in their discretion.




     The individual performance objectives for each Participant for 2006 (the “Individual
Performance Objectives”) shall be established, in the case of the Chief Executive Officer, by the
Compensation Committee and, in the case of all other Participants, by the Chief Executive Officer.



            (c)      Calculation of Revenue Bonus. The Company shall pay to each Participant a
quarterly bonus based on Revenue during each quarter of 2006, calculated as follows:




	 	•	 	no quarterly Revenue bonus shall be paid unless the Company attains 90% of its
Revenue Target for such quarter;	 
	 
	 	•	 	if the Company attains from 90% up to and including 100% of its Revenue Target
for such quarter, the Company shall pay each Participant a Revenue bonus for such
quarter equal to (i) such Participant’s quarterly Revenue Target Bonus multiplied
by (ii) 50% plus 5% for each 1% by which Revenue for such quarter exceeded 90% of
the Revenue Target for such quarter (for example, attainment of 94% of the Revenue
Target for a quarter would result in the payment of 70% of each Participant’s
quarterly Revenue Target Bonus);	 
	 
	 	•	 	if the Company attains more than 100% up to and including 110% of its Revenue
Target for such quarter, the Company shall pay each Participant a Revenue bonus for
such quarter equal to (i) such Participant’s quarterly Revenue Target Bonus
multiplied by (ii) 100% plus 6% for each 1% by which Revenue for such quarter
exceeded 100% of the Revenue Target for such quarter (for example, attainment of
106% of the Revenue Target for a quarter would result in the payment of 136% of
each Participant’s quarterly Revenue Target Bonus); and	 
	 
	 	•	 	if the Company attains more than 110% of its Revenue Target for such quarter,
the Company shall pay each Participant a Revenue bonus for such quarter equal to
(i) such Participant’s quarterly Revenue Target Bonus multiplied by (ii) 160% plus
7% for each 1% by which Revenue for such quarter exceeded 110% of the Revenue
Target for such quarter (for example, attainment of 120% of the Revenue Target for
a quarter would result in the payment of 230% of each Participant’s quarterly
Revenue Target Bonus	 





     The Company shall pay the bonuses payable under this Section 5(c) for each quarter of 2006 as
promptly as practicable following the meeting of the Compensation Committee at which the Company’s
operating results for such quarter and the bonuses due pursuant to this Section 5(c) are presented
to the Compensation Committee.



            (d)      Calculation of Adjusted Operating Income Bonus. The Company shall pay to each
Participant a quarterly bonus based on Adjusted Operating Income during each quarter of 2006,
calculated as follows:



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	 	•	 	no quarterly Adjusted Operating Income bonus shall be paid unless the Company
attains 80% of its Adjusted Operating Income Target for such quarter;	 
	 
	 	•	 	if the Company attains from 80% up to and including 100% of its Adjusted
Operating Income Target for such quarter, the Company shall pay each Participant an
Adjusted Operating Income bonus for such quarter equal to (i) such Participant’s
quarterly Adjusted Operating Income Target Bonus multiplied by (ii) 25% plus 3.75%
for each 1% by which Adjusted Operating Income for such quarter exceeded 80% of the
Adjusted Operating Income Target for such quarter (for example, attainment of 88%
of the Adjusted Operating Income Target for a quarter would result in the payment
of 55% of each Participant’s quarterly Adjusted Operating Income Target Bonus);	 
	 
	 	•	 	if the Company attains more than 100% up to and including 110% of its Adjusted
Operating Income Target for such quarter, the Company shall pay each Participant an
Adjusted Operating Income bonus for such quarter equal to (i) such Participant’s
quarterly Adjusted Operating Income Target Bonus multiplied by (ii) 100% plus 3.75%
for each 1% by which Adjusted Operating Income for such quarter exceeded 100% of
the Adjusted Operating Income Target for such quarter (for example, attainment of
106% of the Adjusted Operating Income Target for a quarter would result in the
payment of 122.5% of each Participant’s quarterly Adjusted Operating Income Target
Bonus); and	 
	 
	 	•	 	if the Company attains more than 110% of its Adjusted Operating Income Target
for such quarter, the Company shall pay each Participant an Adjusted Operating
Income bonus for such quarter equal to (i) such Participant’s quarterly Adjusted
Operating Income Target Bonus multiplied by (ii) 137.5% plus 4.75% for each 1% by
which Adjusted Operating Income for such quarter exceeded 110% of the Adjusted
Operating Income Target for such quarter (for example, attainment of 120% of the
Adjusted Operating Income Target for a quarter would result in the payment of 185%
of each Participant’s quarterly Adjusted Operating Income Target Bonus).	 





     The Company shall pay the bonuses payable under this Section 5(d) for each quarter of 2006 as
promptly as practicable following the meeting of the Compensation Committee at which the Company’s
operating results for such quarter and the bonuses due pursuant to this Section 5(d) are presented
to the Compensation Committee.



            (e)      Determination of Individual Performance Bonus. No later than February 28, 2007,
the Compensation Committee shall determine what percentage – which may range form 0% to 150% of
each Participant’s Individual Performance Target Bonus shall be paid to such Participant, based
upon the extent to which such Participant has satisfied his or her Individual Performance
Objectives for 2006. The Company shall pay the bonuses payable under this Section 5(e) as promptly
as practicable following the meeting of the Compensation Committee at which such determination is
made.



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     6.      Acquisition of the Company



     This Plan shall terminate effective immediately prior to an Acquisition (as defined below) of
the Company, provided that any bonus payments due with respect to a fiscal period that ended prior
to such Acquisition shall nevertheless be paid. “Acquisition” shall mean (a) any merger or
consolidation in which (i) the Company is a constituent party or (ii) a subsidiary of the Company
is a constituent party and the Company issues shares of its capital stock pursuant to such merger
or consolidation (except, in the case of both clauses (i) and (ii) above, any such merger or
consolidation involving the Company or a subsidiary in which the holders of capital stock of the
Company immediately prior to such merger or consolidation continue to hold immediately following
such merger or consolidation at least 51% by voting power of the capital stock of (x) the surviving
or resulting corporation or (y) if the surviving or resulting corporation is a wholly owned
subsidiary of another corporation immediately following such merger or consolidation, of the parent
corporation of such surviving or resulting corporation) or (b) the issuance, sale or transfer, in a
single transaction or series of related transactions, of capital stock representing at least 51% of
the voting power of the outstanding capital stock of the Company immediately following such
transaction or (c) the sale of all or substantially all of the assets of the Company.



     7.      Withholding Taxes



     The Company may deduct from any payment otherwise due to Participants under this Plan any
amount required to be withheld by the Company under applicable federal, state, and local or other
income and employment tax withholding laws and regulations. If the Company elects not to or cannot
withhold such amounts from payments due to a Participant, each Participant must pay the Company the
full amount, if any, required for withholding.



     8.      Miscellaneous Provisions



            (a)      Non-transferability of Rights. The rights to a payment of a bonus under this Plan
may not be sold, transferred, pledged, hypothecated or otherwise disposed of.



            (b)      No Right to Continued Employment. The opportunity to receive a bonus under this
Plan shall not be construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any time to dismiss or
otherwise terminate its relationship with a Participant free from any liability or claim under this
Plan.



            (c)      Severability. The invalidity or unenforceability of any provision of this Plan
shall not affect the validity or enforceability of any other provision of this Agreement, and each
other provision of this Plan shall be severable and enforceable to the extent permitted by law.



            (d)      Amendment and Termination. The Compensation Committee may amend or terminate this
Plan or any portion thereof at any time.



            (e)      Compliance With Code Section 409A. Notwithstanding any other provision of this
Plan to the contrary, all bonus payments made hereunder should be made no later than March 15,
2007. The Company shall have no liability to a Participant, or any other party, if an Award that
is intended to be exempt from, or compliant with, Section 409A is not so exempt or compliant or for
any action taken by the Compensation Committee.



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            (f)      Governing Law. This Plan shall be construed, interpreted and enforced in
accordance with the internal laws of the Commonwealth of Massachusetts without regard to any
applicable conflicts of laws.




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