Document:

ex10-1.htm

Exhibit 10.1

 

 

 

 

 

 

 

 

 

 

Annual Incentive Plan

Fiscal Year 2016

 

Effective April 1, 2015 – March 31, 2016 

 

 

 

 

  

Contents

 

 

	 	
I.
	
Purpose of the Plan
	 
	 	 	 	 
	 	
II.
	
Eligibility 
	 
	 	 	 	 
	 	
III.
	
Administration 
	 
	 	 	 	 
	 	
IV.
	
Plan Design
	 
	 	 	 	 
	 	
V.
	
Financial Objectives
	 
	 	 	 	 
	 	
VI.
	
Individual Objectives
	 
	 	 	 	 
	 	
VII.
	
Incentive Payments
	 
	 	 	 	 
	 	
VIII.
	
Amendment, Suspension and Termination
	 
	 	 	 	 
	 	
IX.
	
Unfunded Plan
	 
	 	 	 	 
	 	
X.
	
Other Benefit and Compensation Programs
	 
	 	 	 	 
	 	
XI.
	
Governing Law
	 
	 	 	 	 
	 	 	 	 
	 	Exhibit I:  	Apportionment of Performance Objectives	 
	 	 	 	 
	 	Exhibit II: 	Financial Objective Performance Threshold – Net Sales	 

  

 

Page 2 of 8

 

 

I.                Purpose of the Plan

 

The purpose of the Annual Incentive Plan is to align the senior managers of Speed Commerce, Inc. and its subsidiaries (the “Company”), with the Company’s business objectives by motivating, rewarding and recognizing participants for their achievements and contribution to the Company’s success. 

 

II.               Eligibility

 

Many of the senior managers of the Company are eligible to participate in the Plan. Personnel hired during the course of the fiscal year will be eligible on a pro-rata basis for any bonus payout earned under this plan. Participants whose employment is terminated from the Company prior to the date of the incentive payment, for any reason, are not eligible to receive a bonus payout under this plan.

 

III.             Administration

 

The Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”). The Chief Executive Officer of the Company (the “CEO”) will make recommendations to the Compensation Committee regarding participation, level of awards, changes to the Plan, financial objectives, and other aspects of the Plan’s administration. The Compensation Committee has the authority to interpret the Plan, and, subject to the Plan’s provisions, to make and amend rules and to make all other decisions necessary for the Plan’s administration. Any decision of the Compensation Committee in the interpretation and administration of the Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. Specifically, the Compensation Committee has the authority to approve payout percentages and to approve individual awards, including discretionary awards, for the members of the Company’s executive committee. The CEO has the authority to approve individual awards, including discretionary awards, for other participants consistent with the Plan.

 

IV.             Plan Design

 

The Annual Incentive Plan has two major components:

 

	 	
●
	
Financial Objectives

 

	 	
●
	
Individual Objectives

 

The potential bonus payout for each participant is determined as a percentage of the participant’s base salary and is apportioned between elements of these two components. This apportionment is summarized in Exhibit I attached hereto.

 

The annual “Bonus Pool” is the amount available for payout of bonuses as determined by the Compensation Committee, based upon the aggregate bonus potential of all participants, as determined by the extent to which the objectives have been achieved.

 

 

Page 3 of 8

 

   

V.              Financial Objectives

 

The following Financial Objectives are measured based on attainment of specific targeted levels of performance of the Company as follows: 

 

	 	
●
	
Consolidated adjusted EBITDA target equal to its budgeted consolidated adjusted EBITDA for FY 2016 (inclusive of the impact of the Bonus Pool accrual) must be attained before any bonus is earned pursuant to this plan (other than as a discretionary pool payout, where applicable), regardless of achievement of the consolidated net sales target or the participant’s individual objectives.

 

	 	
●
	
Consolidated net sales target equal to its budgeted consolidated net sales for FY 2016, with a threshold of 90% or greater of this consolidated net sales target to be achieved before any payment is made in connection with this component of the plan (as detailed on Exhibit II attached hereto).

 

 

Growth Pool

 

If the Company’s consolidated adjusted EBITDA exceeds the consolidated adjusted EBITDA target (including the impact of the Bonus Pool accrual), the Bonus Pool will be increased by 25% of the amount that the Company’s consolidated adjusted EBITDA exceeds the consolidated adjusted EBITDA target. Participants will share in the enhanced Bonus Pool on a pro-rata basis, subject to the maximum payment provision in Paragraph VII herein. 

 

VI.             Individual Objectives

 

Goal Setting

 

Plan participants and their managers will share accountability for establishing annual goals for the Individual Objectives component of the incentive plan. Generally, participants will have a number of specific and measurable goals which may be weighted or prioritized. These goals should tie directly to the overall Company and department goals. 

 

Goal Monitoring

 

Participants will meet with their managers on a regular basis to review progress on the established goals.

 

Goal Modification

 

Goals may be modified in response to changes to the Company’s business or the individual’s position. If the goals of a member of the Company’s executive committee are adjusted, approval by the Compensation Committee is required.

 

Goal Measurement

 

Plan participants and their managers will discuss the participant’s goal achievement on their Individual Objectives and managers must submit the achievement to Human Resources for approval in a timely manner. The Compensation Committee will evaluate and determine achievement of the CEO’s individual performance and review the achievement for the members of the Company’s executive committee.

 

 

Page 4 of 8

 

   

VII.            Incentive Payments 

 

Results and Adjustments

 

Actual business results for the fiscal year will be provided by the Chief Financial Officer and approved by the Compensation Committee. The Compensation Committee may approve adjustments to actual business results to reflect organizational, operational, or other changes which have occurred during the year, e.g., acquisitions, dispositions, expansions, contractions, material non-recurring items of income or loss, extraordinary items, effects of accounting changes or other events. 

 

Discretionary Pool

 

A discretionary pool may also be established to reward participants in the plan with exemplary performance. If the Compensation Committee determines that discretionary awards will be made, they may authorize a discretionary pool up to the maximum amount of $500,000. Discretionary pool payments to members of the Company’s executive committee require the prior approval of the Compensation Committee.

 

Payments

 

Payments under the Plan are anticipated to be provided within 45 days of the conclusion of the Company’s annual audit by its certified public accountants. Payment will be made for the number of full months that the participant held a qualifying position during the plan year and amounts paid will be taxed in compliance with Internal Revenue Service guidelines for bonuses. 

 

Maximum Payment

 

Notwithstanding anything to the contrary provided in this Plan, payouts under the Plan to any one participant will not exceed 150% of the participant’s target bonus.

 

Communication

 

Upon determining the payments to be made under the Plan, if any, managers will meet individually with each participant to communicate the achievement of Financial Objectives, Individual Objectives, and the individual’s incentive payment amount. Human Resources will prepare a communication document to assist managers to effectively communicate this information. 

 

VIII.          Amendment, Suspension and Termination

 

The Compensation Committee or the Board of Directors may at any time, and without prior notice, terminate, suspend, amend or modify this Plan or any incentive payments under the Plan not yet paid. No payments pursuant under this Plan will be made during any suspension of the Plan or after its termination.

 

 

Page 5 of 8

 

   

IX.             Unfunded Plan

 

The Plan is unfunded and the Company shall not be required to segregate any assets for incentive payments under the Plan.

 

X.              Other Benefit and Compensation Programs

 

Payments received by a participant under this Plan shall not be deemed a part of a participant’s regular, recurring compensation for purposes of the termination, indemnity or severance pay law of any state and shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided by the Company unless expressly so provided by such other plan, contract or arrangement. Nothing in the Plan shall be construed as a contractual payment obligation or guarantee of employment for any participant.

 

XI.             Governing Law

 

To the extent that Federal laws do not otherwise control, the Plan and all determinations made and actions taken pursuant to the Plan shall be governed by the laws of Texas and construed accordingly.

 

 

Page 6 of 8

 

   

Exhibit I

Apportionment of Performance Objectives

 

 

 

	
Participant Level
	
Adjusted EBITDA
	
Net Sales
	
Individual Objectives

	
Executive Leadership Team
	
75%
	
25%
	
0%

	
Divisional Vice Presidents
	
50%
	
30%
	
20%

	
Directors
	
50%
	
20%
	
30%

   

 

Page 7 of 8

 

  

Exhibit II

Financial Objective Performance Threshold – Net Sales

 

 

 

	
Performance Threshold – Net Sales

	
 
	
Percent of 
	  
	
 
	
Target Achieved
	
Payout %

	
Target
	
100%
	
100%

	  	
99%
	
95%

	
 
	
98%
	
90%

	  	
97%
	
85%

	  	
96%
	
80%

	  	
95%
	
75%

	  	
94%
	
50%

	  	
93%
	
40%

	  	
92%
	
30%

	  	
91%
	
20%

	
Minimum 
	
90%
	
10%

	  	
Below 90%
	
0% Payout

 

 

 Page 8 of 8exh101dellossojuly2015

      Personal and Confidential                    July 17, 2015            Mr. David Dell’Osso      Dear David,      As a follow up to our conversation outlining the below, I am pleased to detail the promotion and   compensation arrangement changes discussed.   Effective July 20, 2015, you will assume the   role of Vice President, Corporate Controller & Chief Accounting Officer.      Cash Compensation      Current % USD Effective 7/20/15 % USD   Base Salary  $249,312 Base Salary  $285,000   AIP 35% $87,259 AIP 50% $142,500   Total Cash Opportunity  $336,571 Total Cash Opportunity  $427,500      Stock Option Grant:   Subject to approval by the Board of Directors or its delegate, you will be   awarded options to purchase 28,000 shares of common stock of Avaya Holdings Corp., the   parent company of Avaya. The strike price of these options will be determined by the Board of   Directors or its delegate based on the fair market value of Avaya Holdings common stock at the   earlier of the future valuation of, or an initial public offering with respect to Avaya Holdings   common stock.  Generally, the award will vest over a four (4) year period, according to the   following schedule:  1/4 on the first anniversary of the grant date and 1/16 on each quarterly   anniversary thereafter.       The specific terms of your award are contained in the Amended and Restated Avaya Holdings   Corp. (formerly known as Sierra Holdings Corp.) 2007 Equity Incentive Plan and in the related   individual award agreement, which exclusively control your stock options and supersede any   other written or oral representations concerning your options, including this letter. You will   receive a final copy of the plan and the agreement after your award has been approved by the   Board of Directors.  You must be an employee of Avaya on the vesting dates specified in your   award agreement to receive your award.        Restricted Stock Units (RSUs): Subject to approval by our Board of Directors, you will be   awarded a grant of Restricted Stock Units (RSUs). The value of these RSUs is USD $65,000;   the specific number of shares will be determined by the Board of Directors or its delegate based   on the fair market value of Avaya Holdings common stock at the earlier of the future valuation of     

 

or an initial public offering with respect to Avaya Holdings common stock.  Each RSU represents   one share of common stock of Avaya Holdings Corp. The award will be governed by the terms   and conditions of the Amended and Restated Avaya Holdings Corp. 2007 Equity Incentive Plan   and your individual RSU Award Agreement. In addition, any shares received on vesting would   be subject to the terms and conditions of a stockholders’ agreement, including restrictions on   the sale or other permitted transfers of the issued shares.  Generally, the RSUs will vest and   become non-forfeitable over a four (4) year period, according to the following schedule:  1/4 on   the first anniversary of the grant date and 1/16 on each quarterly anniversary thereafter. You   must be an employee of Avaya on each vesting date in order for each respective portion of your   award to vest. This award is subject to change at the Company’s sole discretion between the   time of this letter and Board of Directors’ approval.      Long-Term Cash Award: Subject to approval by our Board of Directors, you will be awarded a   cash grant in the amount of USD $100,000. The award will be governed by the terms and   conditions of your individual Award Agreement. Generally, this award will vest over a four   (4) year period, according to the following schedule:   1/4 on the first anniversary of the grant   date and 1/16 on each quarterly anniversary thereafter. You must be an employee of Avaya on   each vesting date in order for each respective portion of your award to vest.  The award   agreement is subject to change at the Company’s sole discretion between the time of this letter   and Board of Directors’ approval. You will receive a final copy of the agreement after your award   has been approved by the Board of Directors.        David, we consider you to be integral part of our future success and look forward to your   continued leadership.      To accept this offer, please sign below and return a copy of this letter to Carol Bonura in   Executive Compensation at execcomp@avaya.com      Sincerely,      /s/ David W. Vellequette      David W. Vellequette   SVP and Chief Financial Officer            Acknowledgement      I, David Dell’Osso, acknowledge that I have read and understood the terms and conditions of   the awards as outlined in this letter.               Signature:  ________/s/ L. David Dell’Osso______________________      Date:   _______July 20, 2015______________________________

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