Exhibit 10.1


 


MAJESCO ENTERTAINMENT COMPANY 

SHORT-TERM INCENTIVE PLAN


 


1.          Purpose.
The purpose of this Short-Term Incentive Plan (this “STI Plan”) is to incentivize designated employees of Majesco Entertainment
Company (the “Company”) and its Subsidiaries for the achievement of each year’s business plan objectives and
individual performance goals in a manner consistent with the Company’s strategies for achieving sustainable long-term stockholder
value.


 


2.          Definitions.
The following capitalized words as used in this STI Plan shall have the following meanings:


 


“Award Opportunity”
means a cash award opportunity established under the STI Plan for a Participant by the Committee pursuant to such terms, conditions,
restrictions and/or limitations, if any, as the Committee may establish.


 


“Board” means
the Board of Directors of the Company.


 


“Chief Executive
Officer” means the Chief Executive Officer of the Company.


 


“Code” means
the Internal Revenue Code of 1986, as amended.


 


“Committee”
means the Compensation Committee of the Board.


 


“Company”
has the meaning given such term in Section 1 of this STI Plan.


 


“Discretionary
Bonus” has the meaning given such term in Section 7 of this STI Plan.


 


“Employee”
means any person employed by the Company or its Subsidiaries, whether such Employee is so employed at the time the STI Plan is
adopted or becomes so employed subsequent to the adoption of the STI Plan.


 


“Participant”
means, as to any Performance Period, any Employee who is selected by the Committee to be eligible to participate in the STI Plan
for that Performance Period, as provided herein.


 


“Payout Formula”
means the formula established by the Committee for determining Award Opportunities for a Performance Period based on the level
of achievement of the Performance Objectives for the Performance Period.


 






    	 



    	 



    

 


“Performance Objectives”
means the measurable or subjective performance objective or objectives established pursuant to this STI Plan for Participants who
have received Award Opportunities. Performance Objectives may be described in terms of Company-wide objectives or objectives that
are related to the performance of a Subsidiary, division, business unit, department, region or function within the Company or Subsidiary
in which the Participant is employed (i.e., “financial objectives”) or in terms of the performance of the individual
Participant (i.e., “individual objectives”) and may be based on the following criteria: revenues, earnings from
operations, operating income, earnings before or after interest and taxes, net income, cash flow, earnings per share, return on
total capital, return on invested capital, return on equity, return on assets, total return to shareholders, earnings before or
after interest, taxes, depreciation, amortization or extraordinary or special items, return on investment, free cash flow, cash
flow return on investment (discounted or otherwise), net cash provided by operations, cash flow in excess of cost of capital, operating
margin, profit margin, contribution margin, stock price, new customers, cost controls, operating efficiencies, product development,
strategic partnering, research and development, market penetration, geographic business expansion, cost targets, productivity,
employee satisfaction, management of employment practices and employee benefits, supervision of litigation or labor negotiations,
dealings with regulatory bodies, acquisitions or divestitures, customer satisfaction, program development, and/or strategic business
criteria related to a Participant’s area or areas of responsibility. The Performance Objectives may be made relative to the
performance of other corporations or entities.


 


“Performance Period”
means the Company’s fiscal year or such other period as determined by the Committee in its discretion, within which the Performance
Objectives relating to an Award Opportunity are to be achieved. The Committee may establish different Performance Periods for different
Participants, and the Committee may establish concurrent or overlapping Performance Periods.


 


“STI Plan”
means this Majesco Entertainment Company Short-Term Incentive Plan, as amended from time to time.


 


“Subsidiary”
means any corporation or other entity (including, but not limited to, partnerships, limited liability companies and joint ventures)
controlled by the Company.


 


3.          Administration.
The Committee shall be responsible for administration of the STI Plan. The Committee, by majority action, is authorized to interpret
the STI Plan, to prescribe, amend, and rescind regulations relating to the STI Plan, to provide for conditions and assurances deemed
necessary or advisable to protect the interests of the Company and its Subsidiaries, and to make all other determinations necessary
or advisable for the administration of the STI Plan, but only to the extent not contrary to the express provisions of the STI Plan.
Determinations, interpretations, or other actions made or taken by the Committee pursuant to the provisions of the STI Plan shall
be final, binding and conclusive for all purposes and upon all Participants. No member of the Committee shall be liable for any
such action or determination made in good faith. The Committee may delegate to the Chief Executive Officer or other senior officers
or senior managers of the Company, subject to such terms as the Committee shall determine, authority to administer all or any portion
of the STI Plan, or the authority to perform certain functions, including administrative functions. In the event of such delegation,
all references to the Committee in this STI Plan shall be deemed references to such senior officers or senior managers as it relates
to those aspects of the STI Plan that have been delegated. In this regard, the Committee specifically authorizes each senior officer
and senior manager to establish the individual Performance Objectives for his or her direct reports who participate in the STI
Plan and determine whether and to what extent the individual Performance Objectives for those direct reports have been achieved.
Notwithstanding the foregoing, and to the extent required by the Committee charter or the applicable exchange listing standards,
the Committee shall retain exclusive authority to establish and administer Award Opportunities and determine payouts for any Board-appointed
officers of the Company who are designated by the Board as “Section 16 officers.”


 






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4.          Eligibility.
The Committee, in its sole discretion, shall determine which Employees will be eligible to participate in the STI Plan for any
given Performance Period. When making this determination, the Committee shall consider the recommendations of the Chief Executive
Officer. Eligible Participants shall be designated by the Committee following the beginning of the Performance Period. An Employee
who is a Participant for a given Performance Period is neither guaranteed nor assured of being selected for participation in any
subsequent Performance Period.


 


5.          Award Opportunities.



 


a.          Following the beginning
of each Performance Period, the Committee shall establish the Award Opportunity for each Participant, including the applicable
Performance Objectives and Payout Formula. Each Performance Objective will be weighted by the Committee to reflect its relative
importance to the Company in the applicable Performance Period. The Payout Formulas, Performance Objectives and weighting of the
Performance Objectives need not be uniform with respect to any or all Participants. The Committee shall consider the recommendations
of the Chief Executive Officer in determining the applicable Payout Formulas, Performance Objectives or weighting of the Performance
Objectives with respect to Participants other than the Chief Executive Officer. The Committee may also establish Award Opportunities
for newly hired or newly promoted employees without compliance with such timing and other limitations as provided herein, which
Award Opportunities may be based on performance during less than the full Performance Period and may be pro-rated in the discretion
of the Committee.


 


b.          Participants must
achieve the Performance Objectives established by the Committee in order to receive payment of an Award Opportunity under the STI
Plan. However, the Committee may determine that only a threshold level relating to a Performance Objective must be achieved for
Award Opportunities to be paid under the STI Plan. Similarly, the Committee may establish a minimum threshold performance level,
a maximum performance level, and one or more intermediate performance levels or ranges, with target award levels or ranges that
will correspond to the respective performance levels or ranges included in the Payout Formula.


 


c.          The Committee may
in its sole discretion modify the Payout Formulas, Performance Objectives or the related minimum acceptable level of achievement,
in whole or in part, as the Committee deems appropriate and equitable (i) to reflect a change in the business, operations, corporate
structure or capital structure of the Company or its Subsidiaries, the manner in which it conducts its business, or other events
or circumstances or (ii) in the event that a Participant’s responsibilities materially change during a Performance Period
or the Participant is transferred to a position that is not designated or eligible to participate in the STI Plan.


 






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6.          Determination
of Award Opportunities.


 


a.          Following the end
of each Performance Period, the Committee shall determine in writing whether and to what extent the Performance Objectives with
respect to each Participant for the applicable Performance Period have been achieved and, if such Performance Objectives have been
achieved, to approve actual payment of each Award Opportunity under the STI Plan pursuant to the applicable Payout Formulas. The
Committee shall consider the recommendations of the Chief Executive Officer when determining whether the Performance Objectives
have been achieved with respect to Participants other than the Chief Executive Officer.


 


b.          Except as otherwise
provided by an employment agreement between a Participant and the Company, or unless otherwise agreed, in order to receive payment
of an Award Opportunity for a Performance Period, a Participant must be employed by the Company or a Subsidiary on the date of
payment of the award as set forth in Section 8 below. Except as otherwise provided in the immediately following sentence, in the
event a Participant terminates employment with the Company and its Subsidiaries for any reason prior to payment of an Award Opportunity
for a Performance Period, the Participant shall not be entitled to payment of an Award Opportunity with respect to that Performance
Period. However, in the case of a Participant’s termination of employment by reason of death or disability (as defined by
reference to the long-term disability plan covering the Participant) prior to payment of an Award Opportunity for a Performance
Period, the Participant (or the Participant’s estate or legal representative, as applicable) shall be eligible to receive
a pro-rated Award Opportunity based on actual financial results for the entire Performance Period and assuming that the Participant’s
individual objectives, if any, were achieved at the “target” level.


 


c.          Notwithstanding
anything in this STI Plan to the contrary, the Committee may, in its sole discretion, reduce (but not increase) the resulting Award
Opportunity otherwise payable to any Participant for a particular Performance Period, regardless of the level of attainment of
the Performance Objectives, at any time prior to the payment of the Award Opportunity, in light of such Participant’s individual
performance during the Performance Period, the quality of the financial results, or such other factors as the Committee deems relevant,
including changed or special circumstances that arose during the Performance Period. The Committee shall consider the recommendations
of the Chief Executive Officer when determining whether to reduce an Award Opportunity under this Section 6(c), and the amount
of any such reduction, with respect to Participants other than the Chief Executive Officer.


 


7.          Discretionary
Bonus. Notwithstanding anything in this STI Plan to the contrary, after the end of each Performance Period, the Committee may,
in its sole discretion, make a discretionary bonus award (a “Discretionary Bonus”) to any Participant in light of such
Participant’s individual performance during the Performance Period, the quality of financial results, or such other factors
as the Committee deems relevant, including changed or special circumstances that arose during the Performance Period. The Committee
shall consider the recommendations of the Chief Executive Officer when determining whether to award a Discretionary Bonus under
this Section 7, and the amount of any such award, with respect to Participants other than the Chief Executive Officer.


 






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8.          Payment.
Any Award Opportunity or Discretionary Bonus earned by a Participant for a particular Performance Period shall be paid in cash
after the end of the Performance Period, but in no event later than 120 days after the end of the Performance Period. The Committee
may, in its sole discretion, determine that all or part of an Award Opportunity or Discretionary Bonus shall be paid in the form
of an equivalent amount of Company common shares; provided that the shares shall be issued under the Company’s equity compensation
plans in existence at the time of grant.


 


9.          Tax Withholding.
The Company and its Subsidiaries shall have the right to deduct from all payments made to any person under the STI Plan any federal,
state, local, foreign or other taxes which, in the opinion of the Company and its Subsidiaries, are required to be withheld with
respect to such payments.


 


10.          No Employment
Contract. Nothing contained in this STI Plan shall confer upon a Participant any right with respect to continuance of employment
by the Company and its Subsidiaries, nor limit or affect in any manner the right of the Company and its Subsidiaries to terminate
the employment or adjust the compensation of a Participant. For purposes of the STI Plan, the transfer of employment of a Participant
between the Company and any one of its Subsidiaries (or between Subsidiaries) shall not be deemed a termination of the Participant’s
employment.


 


11.          Transferability.
No right or benefit under this STI Plan will be subject to anticipation, alienation, sale, assignment, pledge, encumbrance, or
charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge such right or benefit will be void.
No such right or benefit will in any manner be liable for or subject to the debts, liabilities, or torts of a Participant.


 


12.          Successors.
All obligations of the Company under the STI Plan shall be binding on any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the
business or assets of the Company.


 


13.          Governing
Law. The STI Plan and all Award Opportunities shall be construed in accordance with and governed by the laws of the State of
Delaware, but without regard to its conflict of law provisions.


 


14.          Amendment
or Termination. The Committee reserves the right, at any time, to amend, suspend or terminate the STI Plan, in whole or in
part, in any manner, and for any reason, and without the consent of any Participant, Employee or other person; provided, that no
such amendment, suspension or termination shall adversely affect the payment of any amount for a Performance Period ending prior
to the action of the Board amending, suspending or terminating the STI Plan.


 


15.          Source
of Payment. Each Award Opportunity that may become payable under the STI Plan will be paid solely from the general assets of
the Company and its Subsidiaries. Nothing in this STI Plan will be construed to create a trust or to establish or evidence any
Participant's claim of any right to payment of an Award Opportunity other than as an unsecured general creditor with respect to
any payment to which he or she may be entitled.


 






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16.          Clawback.
In addition to any other remedies available to the Company or a Subsidiary, any Award Opportunity granted or paid to a Participant
shall be subject to forfeiture or repayment pursuant to the terms of any applicable compensation recovery policy adopted by the
Company, including any such policy that may be adopted or amended to comply with the Dodd-Frank Wall Street Reform and Consumer
Protection Act or any rules or regulations issued by the Securities and Exchange Commission rule or applicable securities exchange.


 


17.          Section 409A.
The Company intends that Award Opportunities granted under the STI Plan be exempt from the requirements of Section 409A of the
Code, and the STI Plan shall be interpreted, administered and governed in accordance with that intent. In that regard, in no event
shall an Award Opportunity be paid to a Participant later than two and one-half months after the end of the calendar year in which
the Award Opportunity is no longer subject to a substantial risk of forfeiture (within the meaning of Section 409A of the Code).
Although the Company intends to administer the STI Plan so that Award Opportunities will be exempt from the requirements of Section
409A of the Code, the Company does not warrant that any Award Opportunity under the STI Plan will qualify for favorable tax treatment
under Section 409A of the Code or any other provision of federal, state, local, or non-United States law. The Company shall not
be liable to any Participant for any tax, interest, or penalties the Participant might owe as a result of the grant, vesting or
payment of any Award Opportunity under the STI Plan.


 


[END OF DOCUMENT]


 






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