exv10w1






			
	Tollgrade Communications, Inc. 

Management Incentive Compensation Plan 

Appendix I for Award Year 2010
	 	Exhibit 10.1






APPENDIX I

for

AWARD YEAR 2010



Set forth in this Appendix I are the Financial Performance and other criteria to be applied in
determining the amounts of Incentive Bonus Awards to be paid to Participants under the Plan for the
2010 Award Year (the “2010 Bonus Program”). Capitalized terms used and not otherwise defined in
this Appendix I shall have the meanings assigned to such terms in the Plan.




     1. Participation Percentages and Target Bonus Amounts. For Award Year 2010, the
target cash Incentive Bonus Award amount for each participant (the “Target Bonus Amount”) will be
calculated based on a percentage of such participant’s Salary. Percentages applicable to each
Participant will be communicated to each Participant, and the record of participation percentages
applicable to Participants under the 2010 Bonus Program will be maintained in the Company’s
confidential Human Resources files.



     2. Financial Performance Thresholds Established. The payment of Incentive Bonus
Awards, and the amount of any such awards paid, under the 2010 Bonus Program will be subject to the
satisfaction of performance thresholds associated with Adjusted EBITDA, revenue, and individual
performance objectives for 2010 (“Performance Thresholds”). As used herein, “Adjusted EBITDA”
means earnings before income, taxes, depreciation and amortization, adjusted to exclude the effects
of any proposed or completed merger and acquisition activities, and any severance or restructuring
charges. The Committee has approved three levels of Performance Thresholds for Adjusted EBITDA and
revenue (low, medium, and high).



     3. Composition of Awards. Under the 2010 Bonus Program, seventy percent (70%) of the
bonus amount paid to each Participant will be subject to satisfaction of the thresholds established
for Adjusted EBITDA, ten percent (10%) of the bonus amount paid will be subject to satisfaction of
the thresholds established for revenue, and the remaining twenty percent (20%) of the bonus amount
paid will be subject to satisfaction of individual performance objectives, as established by the
participant’s supervisor and approved by the Company’s VP, Human Resources, consistent with the
Company’s strategic objectives. Amounts payable for individual performance objectives may be
prorated based on partial satisfaction of those objectives, as determined by the Company in its
sole discretion. In any event, no bonuses will be paid unless at least the lowest Performance
Threshold for Adjusted EBITDA is met.



     4. Calculation of Individual Incentive Bonus Award Amounts. Actual Incentive Bonus
Award amounts paid to Participants under the 2010 Bonus Program will be scaled based on actual
Company performance as compared with the Performance Thresholds, as follows:



     (a) Adjusted EBITDA




     (i) Low Threshold. If the Company meets the low threshold target for Adjusted
EBITDA, each participant would be eligible to receive 50% of the portion of Target Bonus
Amount attributable to satisfaction of that Performance Threshold, as well as 50% of the
Target Bonus Amount attributable to the satisfaction of individual performance objectives.




     (ii) Medium Threshold. If the Company meets the medium threshold target for
Adjusted EBITDA, each non-executive participant would be eligible to receive 100% of the
portion of Target



Page 1 of 2









 





Tollgrade Communications, Inc.

Management Incentive Compensation Plan

Appendix I for Award Year 2010





Bonus Amount attributable to satisfaction of that Performance Threshold, as well as
100% of the Target Bonus Amount attributable to the satisfaction of individual performance
objectives. Each executive participant would be eligible to receive 60% of the portion of
Target Bonus Amount attributable to satisfaction of that Performance Threshold, as well as
60% of the Target Bonus Amount attributable to satisfaction of individual performance
objectives.




     (iii) High Threshold. If the Company meets the high threshold target for
Adjusted EBITDA, each participant would be eligible to receive 100% of the portion of Target
Bonus Amount attributable to satisfaction of that Performance Threshold, as well as 100% of
the portion of Target Bonus Amount attributable to the satisfaction of individual
performance objectives. The foregoing percentages may be increased to 150% or 200% for
certain senior managers and executive Participants. Employees eligible to receive the
higher percentages will be notified and a record of such employees will be maintained in the
Company’s confidential Human Resources files.


If the Company’s actual Adjusted EBITDA for 2010 falls between threshold levels, bonus amounts
attributable to satisfaction of the Adjusted EBITDA Performance Threshold and to individual
performance objectives will be prorated accordingly.




     (b) Revenue




     (i) Low Threshold. Provided the Company has attained at least the low
threshold for Adjusted EBITDA (a condition to the payment of any bonus under the 2010 Bonus
Program), if the Company meets the low threshold target for revenue, each participant would
be eligible to receive 50% of the portion of Target Bonus Amount attributable to
satisfaction of that Performance Threshold.




     (ii) Medium Threshold. Provided the Company has attained at least the low
threshold for Adjusted EBITDA (a condition to the payment of any bonus under the 2010 Bonus
Program), if the Company meets the medium threshold target for revenue, each non-executive
participant would be eligible to receive 100% of the portion of Target Bonus Amount
attributable to satisfaction of that Performance Threshold, and each executive participant
would be eligible to receive 60% of the portion of Target Bonus Amount attributable to
satisfaction of that Performance Threshold.




     (iii) High Threshold. Provided the Company has attained at least the low
threshold for Adjusted EBITDA (a condition to the payment of any bonus under the 2010 Bonus
Plan), if the Company meets the high threshold target for revenue, each participant would be
eligible to receive 100% of the portion of Target Bonus Amount attributable to satisfaction
of that Performance Threshold. The foregoing percentages are increased to 150% for certain
senior managers and to 200% for executive participants (including the principal executive
officer and the principal financial officer) for attainment of the high threshold target.
Employees eligible to receive the higher percentages will be notified and a record of such
employees will be maintained in the Company’s confidential Human Resources files.


If the Company’s actual revenue for 2010 falls between threshold levels, bonus amounts attributable
to the revenue Performance Threshold will be prorated accordingly.





Page 2 of 2