Exhibit 10.1





Exhibit 10.1




SXC HEALTH SOLUTIONS CORP.

INCENTIVE PLAN




I. Purposes




The purposes of the SXC Health Solutions Corp. Incentive Plan (the “Plan”) are to retain and
motivate the officers and other employees of SXC Health Solutions Corp. and its subsidiaries who
have been designated by the Committee to participate in the Plan for a specified Performance Period
by providing them with the opportunity to earn incentive payments based upon the extent to which
specified performance goals have been achieved or exceeded for the Performance Period. It is
intended that all amounts payable to Participants who are “covered employees” within the meaning of
Section 162(m) of the Code will constitute “qualified performance-based compensation” within the
meaning of U.S. Treasury regulations promulgated thereunder, and the Plan and the terms of any
Awards hereunder shall be so interpreted and construed to the maximum extent possible.



II. Definitions




“Annual Base Salary” shall mean for any Participant an amount equal to the rate of annual base
salary in effect or approved by the Committee or other authorized person at the time or immediately
before performance goals are established for a Performance Period, including any base salary that
otherwise would be payable to the Participant during the Performance Period but for his or her
election to defer receipt thereof.



“Applicable Period” shall mean, with respect to any Performance Period, a period commencing on
or before the first day of the Performance Period and ending not later than the earlier of (a) the
90th day after the commencement of the Performance Period and (b) the date on which
twenty-five percent (25%) of the Performance Period has been completed. Any action required to be
taken within an Applicable Period may be taken at a later date if permissible under Section 162(m)
of the Code or U.S. Treasury regulations promulgated thereunder.



“Award” shall mean an award to which a Participant may be entitled under the Plan if the
performance goals for a Performance Period are satisfied. An Award may be expressed in U.S. dollars
or pursuant to a formula that is consistent with the provisions of the Plan.




“Board” shall mean the Board of Directors of the Company.




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



“Committee” shall mean the Compensation Committee of the Board comprised of members of the
Board that are “outside directors” within the meaning of Section 162(m) of the Code, or such other
committee designated by the Board that satisfies any then applicable requirements of the principal
national stock exchange on which the common stock of the Company is then traded to constitute a
compensation committee, and which consists of two or more members of the Board, each of whom is an
“outside director” within the meaning of Section 162(m) of the Code.



“Company” shall mean SXC Health Solutions Corp., a corporation existing under the laws of the
Yukon Territory of Canada, and any successor thereto.



“Participant” shall mean an officer or other employee of the Company or any of its
subsidiaries who is designated by the Committee to participate in the Plan for a Performance
Period, in accordance with Article III.



“Performance Period” shall mean any period commencing on or after January 1, 2011 for which
performance goals are established pursuant to Article IV. A Performance Period may be coincident
with one or more fiscal years of the Company or a portion of any fiscal year of the Company.


 


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“Plan” shall mean the SXC Health Solutions Corp. Incentive Plan as set forth herein, as it may
be amended from time to time.



III. Administration



3.1 General. The Plan shall be administered by the Committee, which shall have the full power and
authority to interpret, construe and administer the Plan and Awards granted hereunder (including in
each case reconciling any inconsistencies, correcting any defaults and addressing any omissions).
The Committee’s interpretation, construction and administration of the Plan and all its
determinations hereunder shall be final, conclusive and binding on all persons for all purposes.



3.2 Powers and Responsibilities. The Committee shall have the following discretionary powers,
rights and responsibilities in addition to those described in Section 3.1.





	 	(a)	 	to designate within the Applicable Period the Participants for a Performance
Period;

	 
	 	(b)	 	to establish within the Applicable Period the performance goals and targets and
other terms and conditions that are to apply to each Participant’s Award;

	 
	 	(c)	 	to certify in writing prior to the payment with respect to any Award that the
performance goals for a Performance Period and other material terms applicable to the
Award have been satisfied;

	 
	 	(d)	 	subject to Section 409A of the Code, to determine whether, and under what
circumstances and subject to what terms, an Award is to be paid on a deferred basis,
including whether such a deferred payment shall be made solely at the Committee’s
discretion or whether a Participant may elect deferred payment; and

	 
	 	(e)	 	to adopt, revise, suspend, waive or repeal, when and as appropriate, in its
sole and absolute discretion, such administrative rules, guidelines and procedures for
the Plan as it deems necessary or advisable to implement the terms and conditions of
the Plan.





3.3 Delegation of Power. The Committee may delegate some or all of its power and authority
hereunder to the Chief Executive Officer or other executive officer of the Company as the Committee
deems appropriate; provided, however, that with respect to any person who is a “covered employee”
within the meaning of Section 162(m) of the Code or who, in the Committee’s judgment, is likely to
be a covered employee at any time during the applicable Performance Period or during any period in
which an Award may be paid following a Performance Period, only the Committee shall be permitted to
(a) designate such person to participate in the Plan for such Performance Period, (b) establish
performance goals and Awards for such person, and (c) certify the achievement of such performance
goals.




IV. Performance Goals



4.1 Establishing Performance Goals. The Committee shall establish within the Applicable Period of
each Performance Period one or more objective performance goals (the outcome of which, when
established, shall be substantially uncertain) for each Participant or for any group of
Participants (or both). Performance goals shall be based on the attainment of specified levels of
one or any combination of the following: revenue growth; new revenue growth; earnings before taxes;
earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization;
operating income; pre- or after-tax income; cash flow; cash flow per share; net earnings; earnings
per share; return on equity; return on invested capital; return on assets; economic value added (or
an equivalent metric); share price performance; total shareholder return; improvement in or
attainment of expense levels; improvement in or attainment of working capital levels; attainment of
strategic and operational initiatives; market share; gross profits; and/or comparisons with various
stock market indices of the Company or any affiliate, division or business unit of the Company for
or within which the Participant is primarily employed. Such performance goals also may be based
solely by reference to the Company’s performance or the performance of an affiliate, division or
business unit of the Company, or based upon the relative performance of other companies or upon
comparisons of any of the indicators of performance relative to other companies. With respect to
Participants who are not “covered employees” within the meaning of Section 162(m) of the Code and
who, in the Committee’s


 


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judgment, are not likely to be covered employees at any time during the
applicable Performance Period or during
any period in which an Award may be paid following a Performance Period, the performance goals
established for the Performance Period may consist of any objective or subjective corporate-wide or
subsidiary, division, operating unit or individual measures, whether or not listed herein.
Performance goals shall be subject to such other special rules and conditions as the Committee may
establish at any time within the Applicable Period; provided, however, that to the extent such
goals relate to Awards to “covered employees” within the meaning of Section 162(m) of the Code,
such special rules and conditions shall not be inconsistent with the provisions of Treasury
regulation Section 1.162-27(e) or any successor regulation describing “qualified performance-based
compensation.”



4.2 Impact of Extraordinary Items or Changes in Accounting. The measures utilized in establishing
performance goals under the Plan shall, to the extent applicable (i.e., if the relevant performance
goal is based on a GAAP measure), be determined in accordance with GAAP and in a manner consistent
with the methods used in the Company’s audited consolidated financial statements, without regard to
(a) extraordinary or other nonrecurring or unusual items, as determined by the Company’s
independent public accountants in accordance with GAAP, (b) changes in accounting, as determined by
the Company’s independent public accountants in accordance with GAAP, or (c) special charges, such
as restructuring or impairment charges, unless, in each case, the Committee decides otherwise
within the Applicable Period or as otherwise required under Section 162(m) of the Code.




V. Terms of Awards



5.1 Performance Goals and Targets. At the time performance goals are established for a Performance
Period, the Committee also shall establish an Award opportunity for each Participant or group of
Participants, which shall be based on the achievement of one or more specified targets of
performance goals. The targets shall be expressed in terms of an objective formula or standard
which may be based upon the Participant’s Annual Base Salary or a multiple thereof. In all cases
the Committee shall have the sole and absolute discretion to reduce the amount of any payment with
respect to any Award that would otherwise be made to any Participant or to decide that no payment
shall be made. With respect to each Award, the Committee may establish terms regarding the
circumstances in which a Participant will be entitled to payment notwithstanding the failure to
achieve the applicable performance goals or targets (e.g., where the Participant’s employment
terminates due to death or disability or where a change in control of the Company occurs);
provided, however, that with respect to any Participant who is a “covered employee” within the
meaning of Section 162(m) of the Code, the Committee shall not establish any such terms that would
cause an Award payable upon the achievement of the performance goals not to satisfy the conditions
of Treasury regulation Section 1.162-27(e) or any successor regulation describing the “qualified
performance-based compensation.”



5.2 Payments. At the time the Committee determines an Award opportunity for a Participant, the
Committee shall also establish the payment terms applicable to such Award. Such terms shall
include when such payments will be made; provided, however, that the timing of such payments shall
in all instances either (A) satisfy the conditions of an exception from Section 409A of the Code
(e.g., the short-term deferrals exception described in Treasury Regulation Section 1.409A-1(b)(4)),
or (B) comply with Section 409A of the Code and provided, further, that in the absence of such
terms regarding the timing of payments, such payments shall occur no later than the 15th
day of the third month of the calendar year following the calendar year in which the Participant’s
right to payment ceased being subject to a substantial risk of forfeiture.



5.3 Maximum Awards. No Participant shall receive a payment under the Plan with respect to any
Performance Period having a value in excess of $3,000,000, which maximum amount shall be
proportionately adjusted with respect to Performance Periods that are less than or greater than one
year in duration.




VI. General



6.1 Effective Date. The Plan shall be submitted to the shareholders of the Company for approval at
the 2010 annual meeting of shareholders and, if approved by the affirmative vote of a majority of
the shares of common stock present in person or represented by proxy at such meeting, shall become
effective for Performance Periods beginning on and after January 1, 2011. In the event that the
Plan is not approved by the shareholders of the Company, the Plan shall be null and void with
respect to Participants who are “covered employees” within the meaning of Section 162(m) of the
Code.




 


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6.2 Amendments and Termination. The Board may amend the Plan as it shall deem advisable, subject
to any requirement of shareholder approval required by applicable law, rule or regulation,
including Section 162(m) of the Code. The Board may terminate the Plan at any time.



6.3 Non-Transferability of Awards. No award under the Plan shall be transferable other than by
will, the laws of descent and distribution or pursuant to beneficiary designation procedures
approved by the Company. Except to the extent permitted by the foregoing sentence, no award may be
sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by
operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any
attempt to sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any such
award, such award and all rights thereunder shall immediately become null and void.



6.4 Tax Withholding. The Company shall have the right to require, prior to the payment of any
amount pursuant to an award made hereunder, payment by the Participant of any Federal, state, local
or other taxes which may be required to be withheld or paid in connection with such award.



6.5 No Right of Participation or Employment. No person shall have any right to participate in the
Plan. Neither the Plan nor any award made hereunder shall confer upon any person any right to
continued employment by the Company or any subsidiary or affiliate of the Company or affect in any
manner the right of the Company or any subsidiary or affiliate of the Company to terminate the
employment of any person at any time without liability hereunder.



6.6 Designation of Beneficiary. If permitted by the Company, a Participant may file with the
Committee a written designation of one or more persons as such Participant’s beneficiary or
beneficiaries (both primary and contingent) in the event of the Participant’s death.




Each beneficiary designation shall become effective only when filed in writing with the
Committee during the Participant’s lifetime on a form prescribed by the Committee. The spouse of a
married Participant domiciled in a community property jurisdiction shall join in any designation of
a beneficiary other than such spouse. The filing with the Committee of a new beneficiary
designation shall cancel all previously filed beneficiary designations.



If a Participant fails to designate a beneficiary, or if all designated beneficiaries of a
Participant predecease the Participant, then each outstanding award shall be payable to the
Participant’s executor, administrator, legal representative or similar person.


6.7 Governing Law. The Plan and each award hereunder, and all determinations made and actions
taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United
States, shall be governed by the laws of the State of Delaware and construed in accordance
therewith without giving effect to principles of conflicts of laws.



6.8 Other Plans. Payments pursuant to the Plan shall not be treated as compensation for purposes
of any other compensation or benefit plan, program or arrangement of the Company or any of its
subsidiaries, unless either (a) such other plan provides that compensation such as payments made
pursuant to the Plan are to be considered as compensation thereunder or (b) the Board or the
Committee so determines in writing. Neither the adoption of the Plan nor the submission of the
Plan to the Company’s shareholders for their approval shall be construed as limiting the power of
the Board or the Committee to adopt such other incentive arrangements as it may otherwise deem
appropriate.



6.9 Binding Effect. The Plan shall be binding upon the Company and its successors and assigns and
the Participants and their beneficiaries, personal representatives and heirs. If the Company
becomes a party to any merger, consolidation or reorganization, then the Plan shall remain in full
force and effect as an obligation of the Company or its successors in interest, unless the Plan is
amended or terminated pursuant to Section 6.2.





 


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6.10 Unfunded Arrangement. The Plan shall at all times be entirely unfunded and no provision shall
at any time be made with respect to segregating assets of the company for payment of any benefit
hereunder. No Participant
shall have any interest in any particular assets of the Company or any of its affiliates by reason
of the right to receive a benefit under the Plan and any such Participant shall have only the
rights of an unsecured creditor of the Company with respect to any rights under the Plan.




 


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