Exhibit 10.1


 


The Compensation Package in this memorandum has been submitted to and
approved by the Compensation Committee of the Board of Directors of Evolving
Systems, Inc.  This Compensation
Plan (the “Plan”) is effective during calendar year 2006, and is provided to
you to give you information regarding compensation offered to you as [Insert
Title].  This Plan
supersedes all prior Compensation plans or other compensation agreements, oral
or written, you have with the Company, other than stock options previously
granted to you, the Management Change in Control Agreement, as amended, and the
Indemnification Agreement which shall continue in full force and effect.  Your Plan includes a base salary paid in
accordance with the normal payroll practices of Evolving Systems, as well as
eligibility for quarterly and annual incentive compensation.


 


This
Plan is not a contract of employment and shall not be construed to guarantee
employment for any particular period of time. 
All Evolving Systems’ employees are employed at will.  You, or Evolving Systems, may terminate the
employment relationship at any time, with or without notice, for any reason or
no reason.  The Plan may be changed or discontinued
by the Company at any time with or without prior notice.


 





















 


I.  Compensation


 


	
  Annual Base Salary

  	
   

  	
  [Insert Amount]

  
	
  Target Incentive Compensation

  	
   

  	
  [Insert applicable percentage] of Base Salary, paid as described below

  



 


B.                                    Incentive
Compensation


 


Incentive Compensation will be paid in five (5) equal payments,
based upon attainment of defined Company quarterly results and annual
results.  Quarterly Incentive
Compensation is computed and earned at the end of each quarter in which you
work; the Annual Incentive compensation is computed and earned at the end of
the calendar year. Two measurement categories will be used as the basis for
Incentive Compensation – Revenue and Earnings
Before Interest, Taxes, Depreciation and Amortization (EBITDA).  The following criteria will apply:


 


	
  Period

  	
   

  	
  •    Measure

  	
   

  	
  •    Combined
  Payout

  
	
  1st Quarter

  	
   

  	
  Attainment of 1st Quarter
  Results, weighted 1⁄2 on Revenue and 1⁄2 on EBITDA

  	
   

  	
  20% of Target Incentive Compensation

  
	
  2nd Quarter

  	
   

  	
  Attainment of 2nd Quarter
  Results, weighted 1⁄2 on Revenue and 1⁄2 on EBITDA

  	
   

  	
  20% of Target Incentive Compensation

  
	
  3rd Quarter

  	
   

  	
  Attainment of 3rd Quarter
  Results, weighted 1⁄2 on Revenue and 1⁄2 on EBITDA

  	
   

  	
  20% of Target Incentive Compensation

  
	
  4th Quarter

  	
   

  	
  Attainment of 4th Quarter
  Results, weighted 1⁄2 on Revenue and 1⁄2 on EBITDA

  	
   

  	
  20% of Target Incentive Compensation

  
	
  Full Year

  	
   

  	
  Attainment of Annual Results, weighted 1⁄2 on
  Revenue and 1⁄2 on EBITDA

  	
   

  	
  20% of Target Incentive Compensation

  



 


Attainment of Quarterly and Annual Results, and the percentage payout
attributable to such attainment, will be determined based upon the Incentive Targets
established by the Board of Directors.


 


In the event your employment terminates prior to the end of any
calendar quarter, for reasons other than Cause (as described below), the
Quarterly Incentive Compensation that would have been paid at the end of the
calendar quarter will be pro-rated to the date of termination of your
employment.  There will be no pro-ration
for the Annual Incentive Compensation; you must be employed by the Company on December 31,
2006, to be eligible for the Annual Incentive Compensation amount.


 





















 


II.                                     Severance


 


1)              In the event your
employment is terminated by the Company other than for (a) Cause; (b) Disability;
or (c) death, you will be paid severance compensation in an amount equal
to [insert applicable amount: (3)(6)(9) months]
of your then current Base Salary.


 


2)              “Cause” and “Disability”
for purposes of the severance provisions described in this Section II
shall mean:


 


(a) ”Cause”  shall
mean:


 


(i)            Willful
action or failure to act by you that in the reasonable opinion of the Board of
Directors materially injures the reputation, business or business relationships
of the Company or any of its officers, directors or executives and such action
or failure is not remedied or reasonable steps to effect such remedy are not
commenced within ten (10) days following receipt of written notice;


 


(ii)           Your
failure to perform your duties or to follow the reasonable directions of the
Board of Directors of the Company within ten (10) business days after
receipt by you of written notice of such failure;


 


(iii)          Any
act involving moral turpitude or a crime, other than a vehicle offense
(excepting vehicular manslaughter), which could reflect in some material
fashion unfavorably upon the business or business relationships of the Company
or any of its officers, directors or executives.


 


(b)                                 “Disability”
shall mean a physical or mental impairment that substantially limits a major
life activity, other than on a temporary basis, which prevents you from
performing the essential functions of your job for any period, and for which no
reasonable accommodation can be made. As an officer of the Company, you are
considered a “key employee” under the Family and Medical Leave Act (“FMLA”).  As such, you will be provided a reasonable
opportunity to return to work from any FMLA leave.  However, the possibility exists that
restoration to employment may be denied following FMLA leave if the Company, in
its sole discretion, determines that your position is critical and must be
filled.


 


3)              In exchange for the
severance payment described in this Section II, the Company will require
that you execute a Separation Agreement, in which you release all claims
against the Company arising out of your employment or termination of your
employment.  In addition, the Separation
Agreement will provide that during the period of time during which you receive
severance payments you will refrain from (a) soliciting Evolving Systems’
employees to leave the employ of the Company; 
(b) interfering with the relationship of the Company with any such
employees, including, but not limited to, hiring such employees; (c) targeting
or soliciting customers of the Company to purchase products or services in
competition with the Company’s products or services or to terminate a
relationship with the Company and (d) competing directly or indirectly
with the Company as is described in the Management Change in Control Agreement.


 


4)              Severance payments will be paid in equal
installments, in the Company’s normal payroll cycle, over the applicable
severance period. (The Company reserves the right to modify this provision to
comply with the provisions of the American Jobs Creation Act.)  Under no circumstances will the Company be
obligated to pay any amounts to you under this Section II if your
employment has been terminated by the Company for Cause, Disability or death.


 





















 


5)              The severance provisions of this 2006
Compensation Plan are not intended to apply in the event of a Change in
Control, as defined in the Management Change in Control Agreement.  Accordingly, if severance described in this
Plan is paid, and the Management Change in Control Agreement is subsequently
triggered, payments made under this Plan shall be credited against, and shall
NOT be in addition to, amounts paid under the Change In Control Agreement.


 


III.                                 Benefits


 


You
will receive benefits in accordance with the Company’s standard benefits plan
and policies, with the following modifications:


 


1.                                      Paid Time Off:  Your
Paid Time Off (PTO) will be set at one level above the “standard” rates for
employees, as follows:


 


	
  Years of Service

  	
   

  	
  Hours Accrued per Pay Period

  	
   

  	
  Annual # of Days of PTO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0-2

  	
   

  	
  6.16

  	
   

  	
  20

  
	
  3-5

  	
   

  	
  7.69

  	
   

  	
  25

  
	
  6+

  	
   

  	
  9.23

  	
   

  	
  30

  



 


You
will be expected to record your PTO in accordance with standard Company policy
and all other provisions of the Company’s PTO policy will apply.


 


2.                                      Life Insurance Benefits:  In
addition to the standard life insurance benefits payable to employees of the
Company, the Company will provide life insurance to you in the amount of
$300,000, subject to your insurability. 
The Company pays the premium, but the premium attributable to insurance
over $50,000 is taxable to you.


 


3.                                      Disability Benefits:  The Company will provide you with short term and long term disability
insurance coverage per the Company’s general plan for all employees.  The general plan for employees pays benefits
at the rate of 66 2/3% of your base pay, with a base pay cap of $8,501 per
month (resulting in total monthly benefit payable to you under the Company plan
of $5,667).  This benefit, if payable, terminates
at age 65.  In addition, the Company will
make available to you, at your expense, additional long term disability
coverage that will pay the lesser of the difference between 66 2/3% of your
monthly base salary and the benefit provided under the general Company plan or
$6,000 per month. (For example, if your monthly base salary is $15,000, the
additional long-term disability policy will provide $4,334, the difference
between the general Company plan benefit ($5,667) and 66 2/3% of your base
salary.)  This additional benefit is
payable until age 65, or, in some cases has a 5 year payout.   If you have any questions about the
disability benefits, please see the HR Director.


 


4.                                      Travel. Upgrades to first class domestic
travel/business class international travel will be made available to you in
accordance with the Company’s standard travel policies.  This benefit does NOT imply that you are
authorized to buy first class tickets.


 


5.                                      Miscellaneous Benefits.    The Company will provide you
with a cell phone and cell phone service and reimburse you for the cost (basic
service) of a second phone line to your home. 
You will also be provided with a laptop computer and a second docking
station to be used in your home.


 





















 


IV.                                SEC Filing Requirements.


 


You
will be considered an “Executive Officer” for purposes of the SEC rules relating
to trading of stock and reporting your stock trading.  You are required to pre-clear your trading in
Company stock with the Company’s General Counsel prior to buying or selling Company
stock.  You are expected to familiarize
yourself with the Insider trading regulations and to comply with those
regulations, in particular, to abide by Company trading-blackout rules and
to advise the Company’s General Counsel in advance of all stock trades so that
appropriate SEC forms can be timely filed.


 


•                                          Acknowledgment


 


I have received and read my 2006 Compensation Plan.  I understand the details of the Plan and how
it applies to me.  I acknowledge that the
Plan represents Confidential and Proprietary Information of Evolving Systems.  I understand that the Plan may
be changed or discontinued by the Company at any time with or without notice,
and that no representations or promises, either express or implied, have been
made to me about my continued employment, about my compensation or about the
Plan other than what is written here or in any Management Change in Control
Agreement that may be executed.  I understand the responsibilities of my
position and the critical nature of the performance of this position on the
success of Evolving Systems.  I
understand that I am employed on an at-will basis, and that this Plan does not
alter or modify the at-will nature of my employment.  I understand that I can resign my position at
any time, or Evolving Systems can terminate my employment at any time, with or
without prior written notice. I agree that the compensation I receive under the
Plan is fair and adequate compensation for my services.


 


	
   

  	
   

  	
   

  	
   

  
	
  [Name of
  Executive Officer]

  	
   

  	
  Date