Document:

Exhibit 10.1

 

January 22,
2008

 

 

Dear
Shelly,

 

On
behalf of SupportSoft, Inc., a Delaware Corporation (“the Company”), we
are pleased to offer you the position of Executive Vice President and Chief
Financial Officer reporting to the Chief Executive Officer with a start date of
February 29, 2008. This offer is contingent upon the satisfactory
completion of interviews with the Board of Directors and our customary
background check.  You will start as
Executive Vice President, Finance, and will assume the title of Chief Financial
Officer upon the Company’s filing of its Annual Report on Form 10-K.

 

The
offer includes an annual equivalent base salary of $265,000. The base salary
will be paid semi-monthly in accordance with the Company’s normal payroll
procedures.  You will also be eligible
for bonus compensation under the Company’s Executive Incentive Compensation
Plan (the “Plan”).  Under the Plan, you
may receive up to 50% of your actual salary earnings paid to you during the
calendar year, for an annual equivalent On Target Earnings (OTE) of
$397,500.  50% of your bonus will be
associated with performance against the Company plan (as determined at the
beginning of 2008) and 50% will be based on individual objectives.  Individual objectives will be determined within
thirty days of hire or as soon as practicable thereafter.  Any such bonus will commence in
the Second Quarter of 2008, with the full target amount achievable over the
three remaining quarters following your hire date, and shall be paid within 30
days following the end of the quarter to which the bonus relates in accordance
with the terms of the Plan; provided that in no event will any such bonus be
paid earlier than the first day following the end of the quarter to which the
bonus relates or later than March 15 of the year following the year to
which the quarterly bonus relates. Any over-achievement associated with the
Company plan shall be paid on an annual basis, as described in the Plan
description. Target bonuses for subsequent years shall cover four quarters, as
described in the Plan.

 

We
will recommend to the Compensation Committee at the first meeting following
your start date that you be granted stock options to purchase 449,000 shares of the Company’s common stock that
will carry vesting and exercise provisions in accordance with the Company’s
standard policies. The exercise price per share will be set at the fair market
value (defined as the closing price) of the Company’s common stock on the day
the grant becomes effective.  Following the initial twelve month
period of your employment, you may be eligible to receive additional equity
compensation awards as determined by the Compensation Committee in its sole
discretion.

 

As
a Company employee, you will also be eligible to receive all employee benefits,
which will include health care (medical, vision, prescription drug, dental,
hospital) and life and disability insurance (life, accidental death and
dismemberment, long term disability, short term disability), vacation (paid
time off) of 20  days per annum and 12 public
holidays in accordance with the company’s published schedule. You should note
that the Company reserves the right to modify compensation and benefits from
time to time, as it deems prudent.

 

You
should be aware that your employment with the Company is for no specified
period and constitutes at will employment. 
As a result, you are free to resign at any time, for any reason or for
no reason.  Similarly, the Company is
free to conclude its employment relationship with you at any time, with or
without cause.

 

 

If
your employment with the Company terminates as a result of an Involuntary
Termination and you execute and deliver on a timely basis to the Company the
Company’s standard General Release and Waiver
of Claims Agreement and that release becomes effective in accordance
with its terms following the expiration of any applicable revocation period,
then you will become entitled to receive the following benefits:

 

(a)           On the first payroll date following
the earlier of (i) the effective date of the General
Release and Waiver of Claims Agreement and (ii) the sixtieth
(60th) day following the date of your Involuntary Termination, the Company
shall pay to you a lump sum payment  in
an amount equal to six months of your base salary (at the rate in effect at the
time of your termination) and 50% of the bonus target in effect for the year in
which you are terminated, less applicable withholdings; and

 

(b)           Should
you timely elect under Code Section 4980B to continue health care coverage
under the Company’s group health plan for yourself, your spouse and your
eligible dependents following your Involuntary Termination, then the Company
shall provide such continued health care coverage for you and your spouse and
other eligible dependents at its sole cost and expense. Such health care
coverage at the Company’s expense shall continue until the earlier of (i) the
expiration of the six (6)-month period measured from the date of your
Involuntary Termination and (ii) the first date you are covered under
another employer’s heath benefit program which provides substantially the same
level of benefits without exclusion for pre-existing medical conditions.

 

Notwithstanding
anything in this letter agreement, the Plan or the applicable stock option
agreements to the contrary, if the Company is subject to a Change of Control
(as defined in the Stock Option Agreement) before your employment with the
Company terminates and you are subject to an Involuntary Termination within 12
months on or after that Change of Control, then 50% of the then-unvested shares
subject to the Option will become vested and exercisable at the time of such
Involuntary Termination (as defined below). Notwithstanding anything to the
contrary in the Stock Option Agreement, a “going private” transaction shall not
constitute a Change of Control.

 

Notwithstanding
any provision in this letter agreement to the contrary, the following special
provisions shall govern the payment date of your severance payment in the event
that payment is deemed to constitute an item of deferred compensation under Section 409A
of the Code:

 

(i) The severance payment will not
be made at any time prior to the date of your Separation from Service, and

 

(ii) No payments or benefits to
which you become entitled under this letter agreement shall be made or paid to
you prior to the earlier of (i) the
expiration of the six (6)-month period measured from the date of your
Separation from Service with the Company or (ii) the date of  your death, if you are deemed at the time of
such Separation from Service a “key employee” within the meaning of that term
under Code Section 416(i) and such delayed commencement is otherwise
required in order to avoid a prohibited distribution under Code Section 409A(a)(2).  Upon the expiration of the applicable
deferral period, all payments deferred pursuant to this paragraph shall be paid
to you in a lump sum.

 

For purposes of this letter agreement,
the following definitions shall be in effect:

 

“Involuntary Termination” means either (a) that
your employment is terminated by the Company without Cause or (b) that you
resign for Good Reason (as defined below). 
You may terminate your employment hereunder for  Good
Reason upon satisfaction of the following requirements:  (A) notifying the Company within 90 days
after the occurrence of the act or omission constituting grounds for the Good
Reason termination, (B) providing the Company at least 30 days to correct
such act or omission and (C) upon the Company’s failure to take such
corrective action within such 30-day period, giving the Company written notice
of such Good Reason termination within 5 business days thereafter, with such
Good Reason termination to be effective immediately upon delivery of such
notice to the Company. In order to receive any benefits upon termination, you
will be required (i) to sign the Company’s standard General
Release and Waiver of Claims Agreement and (ii) to return all
Company property.  Involuntary
termination does not include a termination by reason of your death 

 

2

 

or
Permanent Disability.

 

“Permanent
Disability” means your inability to perform the essential functions of your
position with or without reasonable accommodation for a period of 120
consecutive days because of your physical or mental impairment.

 

“Cause” means a
determination in the reasonable good faith of the Company that you have: (a) engaged
in any act of fraud, embezzlement or dishonesty or any other act in violation
of the law, including but not limited to, the conviction of, or pleading no lo
contender to, a felony (except for ordinary traffic violations); (b) materially
breached your fiduciary duty to the Company; (c) unreasonably refused to
perform the good faith and lawful instructions of the Chief Executive Officer
of which you have been notified and have failed to correct such non-performance
within thirty (30) days following such notification (provided that such
thirty-day cure period may be shortened upon notice if reasonably necessary to
prevent harm to the Company),  (d) engaged
in willful misconduct or gross negligence (e) willfully breached the
Employment, Confidential Information and Invention Assignment Agreement; or (f) made
any willful unauthorized use or disclosure of confidential information or trade
secrets of the Company (or any parent or subsidiary).

 

“Good Reason”
means (a) your employment duties or responsibilities are materially
diminished by the Company without your prior written consent; (b) a
material change in the geographic location of your place of employment without
your approval, with a relocation of more than thirty (30) miles to be deemed
material for purposes of this letter agreement; (c) a material breach by
the Company of its obligations under the terms of this offer letter; or (d) in
connection with a Change of Control, you report to someone other than the Chief
Executive Officer of the parent or successor entity or you no longer have the
title of Chief Financial Officer of the parent or successor entity.

 

“Separation from
Service” means your cessation of Employee status and shall be deemed to occur
at such time as the level of the bona fide services you are to perform in
Employee status  (or as a consultant or
other independent contractor) 
permanently decreases to a level that is not more than twenty percent
(20%) of the average level of services you rendered in Employee status during
the immediately preceding thirty-six (36) months (or such shorter period for
which you may have rendered such service). Any such determination as to Separation
from Service, however, shall be made in accordance with the applicable
standards of the Treasury Regulations issued under Section 409A of the
Internal Revenue Code of 1986, as amended (“Code”). For purposes of
determining whether you have incurred a Separation from Service, you will be
deemed to continue in “Employee” status for so long as you remain in the employ
of one or more members of the Employer Group, subject to the control and
direction of the employer entity as to both the work to be performed and the
manner and method of performance. “Employer Group” means the Company and any
other corporation or business controlled by, controlling or under common
control with, the Company as determined in accordance with Sections 414(b) and
(c) of the Code and the Treasury Regulations thereunder, except that in
applying Sections 1563(1), (2) and (3) for purposes of determining
the controlled group of corporations under Section 414(b), the phrase “at
least 50 percent” shall be used instead of “at least 80 percent” each place the
latter phrase appears in such sections and in applying Section 1.414(c)-2
of the Treasury Regulations for purposes of determining trades or businesses
that are under common control for purposes of Section 414(c), the phrase “at
least 50 percent” shall be used instead of “at least 80 percent” each place the
latter phrase appears in Section 1.4.14(c)-2 of the Treasury Regulations.

 

For purposes of federal
immigration law, you will be required to provide to the Company documentary evidence
of your identity and eligibility for employment in the United States.  Such documentation must be provided to us
during your Orientation period (schedule to be confirmed), or our employment
relationship with you may be terminated.

 

3

 

You
agree that, during the term of your employment with the Company, you will not
actively engage in any other employment, occupation, consulting or other
business directly or indirectly related to the business in which the Company is
now involved or becomes involved during the term of your employment, nor will
you engage in any other activities that conflict with your obligations to the
Company.

 

As a Company employee,
you will be expected to abide by the Company’s rules and regulations. You
will be expected to sign and comply with an Employment, Confidential
Information and Invention Assignment Agreement (the “Employee NDA”) that
requires, among other provisions, the assignment of patent rights to any
invention made during your employment at the Company and non-disclosure of
proprietary information.  Your employment
will be contingent upon and not be deemed effective until you have executed and
returned the Employee NDA to the Company.

 

As provided in the
Employee NDA, in the event of any dispute or claim relating to or arising out
of our employment relationship, you and the Company agree that all such
disputes shall be fully and finally resolved by binding arbitration conducted
by the American Arbitration Association in San Mateo County, California (or
some other mutually agreed upon location) under the National Rules for the
Resolution of Employment Disputes.  The
Company agrees to pay the fees and costs of the arbitrator.   However, as also provided in the Employee
NDA, we agree that this arbitration provision shall not apply to any disputes
or claims relating to or arising out of the misuse or misappropriation of the
other party’s trade secrets or proprietary information.

 

This letter, along with
the agreement relating to proprietary rights between you and the Company, sets
forth the terms of your employment with the Company and supersedes any prior
representations or agreements, whether written or oral.  This letter may not be modified or amended
except by a written agreement, signed by a designated representative of the
Company and you.

 

To indicate your
acceptance of the Company’s offer, please sign, date, and return this letter to
our Human Resources department on or before
Tuesday, January 29, 2008, 5:00 PM. If we receive the signed letter
by the specified due date, the Company will authorize a payment to you of
$115,000 to compensate you for forgone opportunities in your current position.
This amount shall be paid with your first payroll following your hire date.

 

 This letter, along with the agreement relating
to proprietary rights between you and the Company, sets forth the terms of your
employment with the Company and supersedes any prior representations or
agreements, whether written or oral. 
This letter may not be modified or amended except by a written
agreement, signed by a designated representative of the Company and you. A
duplicate original is enclosed for your records.

 

We
look forward to working with you.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  /s/
  Joshua Pickus

  
	
   

  	
  Chief
  Executive Officer

  
	
   

  	
  SupportSoft, Inc.

  

 

4

 

By
signing this Offer Letter, I hereby accept, acknowledge and agree to the terms
and conditions as stated above.

 

On
this day of January 29, 2008

 

	
  /s/
  Shelly Schaffer

  	
   

  
	
  Shelly
  Schaffer

  	
   

  
	
   

  	
   

  
	
  February 29, 2008

  	
   

  
	
  Start
  Date

  	
   

  
	
   

  	
   

  
	
  Enclosures:

  	
  Duplicate
  Original Letter

  
	
   

  	
  Release
  for Background Check

  
			

 

5Exhibit
10.2

EXECUTIVE
INCENTIVE COMPENSATION PLAN DESCRIPTION

 

SUPPORTSOFT, INC.

 

SupportSoft, Inc.
(the “Company”) has adopted its 2008 Executive Incentive Compensation Plan
effective beginning January 1, 2008. 
The Executive Incentive Compensation Plan (the “Plan”) is designed to
allow employees to share in Company achievements based on attainment of
pre-established, corporate financial performance and individual performance
goals.  The Plan is designed to motivate
and reward select employees whose performance is critical to the overall
success of the Company.

 

Eligibility and Plan Year

 

Plan
eligibility is limited to Managers and above, subject to the annual review and
approval of Company management. Employees who participate in a Company sales
compensation program are not eligible for the Plan.  Eligibility is not automatic. A participant
must be nominated by their supervisor with concurrence of the next level of
management, as appropriate. Bonus eligible employees must be employed at the
end of the payment period (quarter or year) to be eligible to receive a payment
under the Plan.

 

The
Plan is annual, January 1 through December 31, with achievement
measured and bonuses paid on a quarterly basis, and overachievement paid on an
annual basis.

 

Elements of the Plan

 

Each
eligible employee has a target bonus, calculated as a specified percentage of
that employee’s annual salary.  The bonus
amount will be based upon two components: 
(1) the Company or business unit’s achievement of its financial
goals, and (2) the individual employee’s achievement of his or her
management by objective (MBO) goals.

 

·                  Employees who are assigned to a specific
business unit (Enterprise Solutions Group (ESG) or Consumer Solutions Group
(CSG)) will be eligible for a bonus based in part on that business unit’s
performance (the “Business Unit Portion”).

 

·                  Employees whose work is allocated to each
of the business units on a percentage basis will be eligible for a bonus that
includes a Business Unit Portion that is allocated proportionately to the
individual BUs.   For example, an
employee who is allocated 65% to CSG and 35% to ESG will receive a Business
Unit Portion that is based 65% on CSG’s achievement of its objectives and 35%
on ESG’s performance.

 

·                  Employees who work in General and
Administrative roles (not assigned to a BU) will be eligible for a bonus tied
to overall Company performance (the “Company Portion”).

 

·                  The remainder of each eligible employee’s
target bonus will be based upon his or 

 

1

 

her individual MBO goals (the “MBO Portion”).

 

·                  The Company/BU Portion will be a larger
percentage of the overall target bonus for more senior employees, who have a
greater influence on Company results:

 

	
  Level

  	
   

  	
  Company

  Portion

  	
   

  	
  Business Unit

  Portion

  	
   

  	
  Individual MBO

  Portion

  	
   

  
	
  GM

  	
   

  	
  —

  	
   

  	
  100

  	
  %

  	
  —

  	
   

  
	
  VP/SVP/EVP (CSG)

  	
   

  	
  —

  	
   

  	
  50

  	
  %

  	
  50

  	
  %

  
	
  VP/SVP/EVP (ESG)

  	
   

  	
  —

  	
   

  	
  50

  	
  %

  	
  50

  	
  %

  
	
  VP/SVP/EVP (corporate)

  	
   

  	
  50

  	
  %

  	
  —

  	
   

  	
  50

  	
  %

  
	
  Below VP level (CSG)

  	
   

  	
  —

  	
   

  	
  25

  	
  %

  	
  75

  	
  %

  
	
  Below VP (ESG)

  	
   

  	
  —

  	
   

  	
  25

  	
  %

  	
  75

  	
  %

  
	
  Below VP (corporate)

  	
   

  	
  25

  	
  %

  	
  —

  	
   

  	
  75

  	
  %

  

 

A
partial bonus shall be paid for partial achievement of Company goals or
individual MBO goals on a pro-rata basis. 
An employee may also receive either the Company/BU Portion or the MBO
Portion if one portion is earned but not the other.

 

The Company/BU Portion

 

At the
beginning of each fiscal year, the Company will approve financial performance
goals for the coming year to which the Plan will tie.  The Company may revise those financial
performance goals at any time in its discretion.  The Company/BU Portion of the bonus is earned
only at the close of the fiscal quarter or year to which it relates and only if
the performance goals are achieved as determined by the Company in its
discretion. In order to be eligible for a bonus, a participant must be an
active, full-time employee of the Company on the last day of the quarter or
year for which the incentive award is earned.

 

On an
annual basis, if the Company or a BU exceeds its pre-established annual
financial objectives, then the Company/BU Portion will increase
proportionately. Employees are eligible to receive a total Company/BU Portion
that is greater than 100% of his or her target amount, according to a
pre-defined formula for business overachievement determined by the Company.  Overachievement will be capped in an amount
determined by the Company in its discretion. 
Any overachievement will be earned only at the close of the Company’s
fiscal year and will be paid annually. 
Bonus eligible employees must be employed at the end of the year to be
eligible to receive any bonus payment for overachievement.

 

2

 

The MBO Portion

 

Within
the first two weeks of each quarter of the Company’s fiscal year, the employee
and their supervisor will jointly prepare and agree upon written MBO
performance goals. These goals would in turn be approved by the supervisor’s
manager and then submitted to Human Resources. 
MBOs should be specific, measurable, attainable, realistic, and
timely.  They should define what the employee
is going to do and how it will be achieved and measured, with quantifiable
outcomes and expected completion dates. 
MBOs should stretch employees outside their normal job responsibilities.  MBOs may consist of both team and individual
objectives.  To the extent possible and
consistent with the employee’s job description, the performance goals shall be
based on objective criteria.  However,
certain subjective criteria (such as “working well with co-workers”) will
necessarily be included in the goals.

 

Each
individual MBO will be weighted as a percentage of the total MBO Portion for
the quarter and will be assigned a proportionate dollar award value.  MBOs are evaluated quarterly and any bonus
payments for achievement will be calculated quarterly.  If there is a threshold of achievement for a
given MBO, the employee must meet that threshold in order for any bonus to be
paid. Each MBO may be treated differently in terms of threshold for payments.
In other words, some MBOs may require an achievement of 80% or better, while
others may not have a minimum threshold of achievement.

 

The
MBO Portion will be earned only upon completion of the employee’s quarterly
performance review demonstrating that the employee has achieved his or her
performance goals during the course of the quarter.

 

Eligibility and Payments to Participants

 

In
order to be eligible for a bonus, a participant must be an active, full-time
employee of the Company on the last day of the quarter or year for which the
incentive award is earned.  If a
participant’s employment terminates prior to the end of the quarter, the
employee will not have earned any portion of the bonus and therefore will not
be entitled to any portion of the bonus. 
The Company may make exceptions to this requirement in the event of an
employee’s death or disability, as determined by the Company in its sole
discretion.  Eligible employees who
terminate employment for any reason after the end of the applicable bonus
quarter will be entitled to full payment of any earned bonus award on the date
fixed for payment.

 

New
hires who are approved for inclusion into the plan, but become full time
regular employees after the beginning of the quarter will not receive an award
for their initial quarter of service. Exceptions will be made only with
approval of the CEO or his designee.

 

Employees
approved for inclusion in the plan arising from promotion and/or transfer after
the start of the quarter will not receive an award for their initial quarter in
their new role. Exceptions will be made only with approval of the CEO or his
designee. However, if already in the plan, they will be eligible for full
participation in their previous position’s rate based upon that position’s
metrics.

 

3

 

Awards
shall be paid by check less applicable taxes, after the quarterly corporate
performance results are available and certified by the Board of Directors and
employee performance against MBO goals is determined, and in any event within
45 days following the end of the period to which the bonus relates.  In no event will any bonus be paid earlier
than the first day following the end of the period to which the bonus relates
or later than March 15 of the year following the year to which the bonus
relates.  All appropriate taxes will be
deducted and withheld from the award payment, as required by federal, state
and/or local laws.

 

* * *

 

The
existence of, or an employee’s eligibility for, this Plan shall not be deemed
to give the participant the right to be retained in the employ of the Company
nor will the Plan, or rights thereunder, interfere with the rights of the
Company to discharge any participant at any time.  The Plan will not be deemed to constitute a
contract of employment with any participating employee, nor be deemed to be
consideration for the employment of any participant.

 

The
Plan, as set forth in this document, represents the general guidelines the
Company presently intends to utilize to determine what incentive awards, if
any, will be paid.  If, however, at the
sole discretion of the Company, the Company’s best interest is served by
applying different guidelines in special or for unusual circumstances, it
reserves the right to do so by notice to such individuals at any time.  The Company reserves the right to amend or
discontinue this Plan at any time in the best interests of the Company.  Without in anyway limiting the foregoing
rights of the Company, should a material acquisition, disposition or change in
corporate control occur during the Plan period, the Company reserves the right
to amend or discontinue the Plan following such event in such manner as the
Company, in its sole discretion, deems appropriate.

 

The
Company shall have full power and authority to interpret and administer the
Plan and shall be the sole arbiter of all manners of interpretation and
application of the Plan and the Company’s determination shall be final.  Any inconsistencies that may occur between
the Plan provisions and the calculation of the incentive results will be
interpreted and resolved on an individual basis by the Company.

 

4

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