Document:

exv10w1

 

Exhibit 10.1

Asset Acceptance Capital Corp.

2007 Annual Incentive Compensation Plan for Management

General

     Each year, in connection with the approval of the annual budget and forecast, the Compensation
Committee (the “Committee”) of the Board of Directors (the “Board”) of Asset Acceptance Capital
Corp. (the “Company”) establishes an annual incentive compensation plan for key executives and
certain other management level employees (the “Plan Participant(s)”) of the Company.

     The Annual Incentive Compensation Plan will establish for each Plan Participant a bonus target
(the “Bonus Target”) equal to a specified percentage of Base Salary (as defined below). The Bonus
Target will be set by the Committee at a level consistent with each executive’s responsibilities.
As used in this Plan, “Base Salary” shall be the Plan Participant’s base compensation (excluding
incentive and any other compensation) paid during 2007. For individuals who become Plan
Participants during 2007, Base Salary shall be the base compensation (excluding incentive and any
other compensation) paid in 2007 beginning on the date the individual first becomes eligible to
participate in the Annual Incentive Compensation Plan.

     The Annual Incentive Compensation Plan will be comprised of two parts: (a) Financial
Objectives; and (b) Personal Objectives. Bonus amounts will be computed separately for achievement
of Financial Objectives and Personal Objectives, as set forth below under the captions “Financial
Objectives” and “Personal Objectives”, respectively. Final payments under the Annual Incentive
Compensation Plan will be made after receipt and approval by the Board of the annual audited
financial statements of the Company for the year ending December 31, 2007. A Plan Participant will
not be paid a bonus unless the Plan Participant is employed by the Company on the date the Board
approves the annual audited financial statements for 2007.

     Payments shall be made under the Plan in a manner necessary to preserve the exemption from
Section 409A of the Internal Revenue Code.

     The Compensation Committee recognizes the need of the Plan Participants to conduct themselves
in compliance with the Code of Business Conduct. In addition to the non-financial consequences
contained in the Code of Business Conduct, any violation of the Code of Business Conduct shall
result in complete forfeiture of any bonus which would otherwise be paid under this Plan.

     Financial Objectives

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     The financial performance of the Company will be measured against Earnings Before Interest,
Taxes, Depreciation and Amortization (“EBITDA”), after accrual of all incentive compensation plan
payments. EBITDA will be determined in a manner consistent with the definition of EBITDA contained
in Exhibit 1.

     For the fiscal year ended December 31, 2007, the Financial Objective goal will be set at the
2007 budgeted EBITDA of $XXX,XXX,XXX (the “2007 Financial Objective Goal”). The minimum goal will
be set at a percentage of the 2007 Financial Objective Goal equal to the greater of (i) 2006 EBITDA
achieved by the Company (expressed as a percentage of the 2007 EBITDA Financial Objective Goal), or
(ii) 90% of the 2007 Financial Objective Goal (the “Minimum Goal”). The maximum goal will be set
at 110% of the 2007 Financial Objective Goal (the “Maximum Goal”).

     The bonus payout under the Financial Objective portion of the Plan shall be 50% of the Target
Bonus at achievement of the 2007 Financial Objective Goal. If the 2007 actual EBITDA achieved is
at least equal to the Minimum Goal, the bonus payout under the Financial Objective portion of the
Plan shall be expressed as 50% of the Target Bonus multiplied by the following percentage (provided
that the bonus payout shall not exceed the Maximum Goal):

     The sum of:

     (1) 100%, plus

     (2) the product of (a) 10, multiplied by (b) the
difference of actual EBITDA as a percentage of the 2007 Financial
Objective Goal, less 100%

     The following examples illustrate the application of the Financial Objectives:

     (1) If a Plan Participant had a Target Bonus of $100, the 2007 Financial Objective Goal was
$5,000 and the actual 2007 achieved EBITDA was equal to the 2007 Financial Objective Goal, then the
bonus payout under the Financial Objective portion of the Plan would be $50.

     (2) However, if the actual 2007 achieved EBITDA exceeded the Minimum Goal and was equal to 98%
of the 2007 Financial Objective Goal, then the bonus payout under the Financial Objective portion
of the Plan would be $50 multiplied by 80%, or $40, calculated as follows:

     The sum of:

     (1) 100%, plus

     (2) the product of (a) 10, multiplied by (b) the
difference of 98%, less 100%

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     (3) Moreover, if the actual 2007 achieved EBITDA exceeded the Minimum Goal and was equal to
105% of the 2007 Financial Objective Goal, then the bonus payout under the Financial Objective
portion of the Plan would be $50 multiplied by 150%, or $75, calculated as follows:

     The sum of:

     (1) 100%, plus

     (2) the product of (a) 10, multiplied by (b) the
difference of 105%, less 100%

Personal Performance Objectives

     Personal Objectives should be measurable goals jointly developed by the Plan
Participant and his/her immediate supervisor (subject to approval by the Chairman, President and
Chief Executive Officer or his designee(s), and for certain participants, the Compensation
Committee of the Board of Directors). The points earned under Personal Performance will be
calculated based on the percentage of completion of each assigned objective, recognizing the
determination of such percentage completion is in part subjective. If there is any disagreement
as to the scoring of each assigned objective, the determination of the Chairman, President and
Chief Executive Officer or his designee(s) shall be final and binding.

     Each Plan Participant may earn up to a maximum of 50% of his or her Target Bonus based on the
achievement of Personal Objectives. No Plan Participant will be eligible to earn any part of his
or her bonus based on the achievement of Personal Objectives unless 2007 EBITDA achieved by the
Company equals or exceeds the 2006 EBITDA achieved by the Company.

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AACC 2007 BONUS PLAN

	 	 	 
	Name:

	 	Insert Name
	 
	 	 
	Title:

	 	Insert Title
	 
	 	 
	Estimated Salary:

	 	2007 Base Comp.
	 
	 	 
	Target Bonus Rate

	 	Insert Target Bonus %

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Bonus as %	 	 
	 	 	Objectives	 	% of Target	 	of Salary	 	$Bonus
	%
Based on Company Objectives
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Minimum

	 	50.0%
	 	As determined
	 	0.0%
	 	$ -
	Target

	 	50.0%
	 	100.0%
	 	50% of Target Bonus Rate
	 	Computed
	Maximum

	 	50.0%
	 	110.0%
	 	100% of Target Bonus Rate
	 	Computed
	 
	 	 	 	 	 	 	 	 
	% Based on Personal Objectives
	 	 	 	 	 	 	 	 
	Target

	 	50.0%
	 	 	 	50% of Target Bonus Rate
	 	Computed
	 
	 	 	 	 	 	 	 	 
	Total Bonus Opportunity
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Minimum

	 	 	 	As determined
	 	Computed
	 	Computed
	Target

	 	 	 	100.0%
	 	Computed
	 	Computed
	Maximum

	 	 	 	110.0%
	 	Computed
	 	Computed
	 
	 	 	 	 	 	 	 	 
	Personal Objectives

	 	 	 	 	 	 	 	% of Personal Bonus
	     (1) Insert Goal 1

	 	 	 	 	 	 	 	Goal 1 Weight
	 
	 	 	 	 	 	 	 	 
	     (2) Insert Goal 2

	 	 	 	 	 	 	 	Goal 2 Weight
	 
	 	 	 	 	 	 	 	 
	     (3) Insert Goal 3

	 	 	 	 	 	 	 	Goal 3 Weight
	 
	 	 	 	 	 	 	 	 
	     (4) Insert Goal 4

	 	 	 	 	 	 	 	Goal 4 Weight
	 
	 	 	 	 	 	 	 	 
	     (5) Insert Goal 5

	 	 	 	 	 	 	 	Goal 5 Weight
	 
	 	 	 	 	 	 	 	 
	           Total

	 	 	 	 	 	 	 	100.0%

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Exhibit 1

     EBITDA: The earnings of the Company before interest, income taxes, depreciation and
amortization (including amortization of purchased receivables). The determination of EBITDA, for
purposes of this Plan, shall be made by the Board in accordance with generally accepted accounting
principles in effect in the United States, applied on a consistent basis (“GAAP”); provided,
however, that EBITDA shall be adjusted for this purpose to (A) exclude net gains and losses on the
disposal of assets and other non-operating income or expense items and (B) exclude EBITDA generated
from acquisitions of new businesses or companies during the year (an acquisition of a new office
would not be deemed to be a material acquisition). EBITDA will be determined after accrual for all
bonuses, including bonuses to be paid under this and all other Company annual incentive
compensation plans.

5exv10w1

 

EXHIBIT 10.1

SECOND AMENDMENT TO

EMPLOYMENT AGREEMENT

     This Second Amendment to Employment Agreement (this “Amendment”), dated as of February 16,
2007, is made and entered into by and between Input/Output, Inc., a Delaware corporation
(hereinafter referred to as “Employer”), and Robert P. Peebler, an individual currently residing in
Harris County, Texas (hereinafter referred to as “Employee”).

W I T N E S S E T H:

     WHEREAS, Employer and Employee entered into an Employment Agreement effective on March 31,
2003, and amended by that certain First Amendment to Employment Agreement dated September 6, 2006
(the “Agreement”);

     WHEREAS, the Agreement provided for Employee to receive certain shares of restricted common
stock of Employer and for such shares to vest in equal annual amounts over a stated period on the
anniversary of the grant date; and

     WHEREAS, the parties desire to amend the Agreement to reflect that the above shares of
restricted common stock will vest three years after the date of grant of such award.

     NOW, THEREFORE, in consideration of the mutual promises contained herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Employer
and Employee agree as follows:

     1. Section 2(c)(ii) of the Agreement is hereby amended to read in its entirety as follows:

     (ii) In 2007, in addition to the award of shares described in Section 2(c)(i)
above, Employee shall be entitled to receive a grant of the number of shares of
restricted common stock of Employer determined by dividing (a) the annual Base
Salary of Employee as in effect on the date of grant by (b) the Final 10-Day Average
Price in 2006. This restricted stock award will provide for vesting of all of the
            shares of restricted stock on the date that is the third anniversary date of the
date of grant of such award. The date of grant of this award will be the same grant
date as provided for the restricted stock award to Employee pursuant to Section
2(c)(i) above. The remaining terms and conditions of this restricted stock award
will be governed by the applicable restricted stock agreement and the terms and
conditions of the Plan.

     2. The Agreement, as amended hereby, is in all respects ratified, approved and confirmed.

     3. This Amendment may be executed in any number of counterparts, all of which together make
and shall constitute one and the same instrument and either party may execute this Amendment by
signing any such counterpart.

 

 

     4. This Amendment shall in all respects be governed by, and construed in accordance with, the
laws of the State of Texas, including all matters of construction, validity and performance.

     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this
Amendment as of the date set forth above.

	 	 	 	 	 
	 	EMPLOYER:

INPUT/OUTPUT, INC.

 	 
	 	By:  	/s/ David L. Roland
 	 
	 	 	Title:  /s/ Senior Vice President and General Counsel 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	EMPLOYEE:

 	 
	 	/s/ Robert P. Peebler
 	 
	 	Robert P. Peebler 	 
	 	 	 
	 

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