Document:

Exhibit 10.14.2

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

 

Date:       June 15, 2011

 

To:          Management Metric Based Bonus (MBB) Participants

 

From:     Jim Lejeal

 

Regarding:            Q2-2011 MBB Algorithm

 

The Rally Management Metric Based Bonus for Q2 2011 will be attached to company performance against total product bookings.

 

The intent is to align the company management with the sales team’s bookings objectives.

 

Goal:   Achieve the Company’s Q2 “assigned quota” (aka “Don’s number”) Total Product Bookings Sales Goal:

 

Company Quota Amount Budget:

 

	
New Product Bookings
    	
 
    	
$
    	
[*]
    	
 
    
	
Renewal Product   Bookings
    	
 
    	
$
    	
[*]
    	
 
    
	
Total Product   Bookings
    	
 
    	
$
    	
[*]
    	
 
    

 

Payment Structure:

 

We will continue to have a 90% new bookings threshold as well as a total payment cap of 125%:

 

Anticipated Payout Date:

 

1 month after close of quarterExhibit 10.14.3

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

 

To:          Management Metric Based Bonus (MBB) Participants

 

From:     Jim Lejeal

 

Regarding:            Q3-2011 MBB Algorithm

 

The Rally Management Metric Based Bonus for Q3 2011 will be attached to company performance against total product bookings.

 

The intent is to align the company management with the sales team’s bookings objectives.

 

Goal:   Achieve the Company’s Q3 “assigned quota” Total Product Bookings Sales Goal:

 

Company Quota Amount Budget:

 

	
New Product   Bookings
    	
 
    	
$
    	
[*]
    	
 
    
	
Renewal Product   Bookings
    	
 
    	
$
    	
[*]
    	
 
    
	
Total Product   Bookings
    	
 
    	
$
    	
[*]
    	
 
    

 

Payment Structure:

 

We will continue to have a 90% new bookings threshold as well as a total payment cap of 125%:

 

Anticipated Payout Date:

 

1 month after close of quarterExhibit 10.14.4

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

 

	
Date:
    	
December 5, 2011
    
	
 
    	
 
    
	
To:
    	
Management Metric Based Bonus (MBB)   Participants
    
	
 
    	
 
    
	
From:
    	
Jim Lejeal
    
	
 
    	
 
    
	
Regarding:
    	
Q4-2011 (FYE 1/31/2012) MBB Algorithm
    

 

The Rally Management Metric Based Bonus for Q4 2011 will be attached to company performance against total product bookings.

 

The intent is to align the company management with the sales team’s bookings objectives.

 

Goal:   Achieve the Company’s Q4 “assigned quota” (aka “Don’s number”) Total Product Bookings Sales Goal:

 

Company Quota Amount Budget:

 

	
New Product   Bookings
    	
 
    	
$
    	
[*]
    	
 
    
	
Renewal Product   Bookings
    	
 
    	
$
    	
[*]
    	
 
    
	
Total Product   Bookings
    	
 
    	
$
    	
[*]
    	
 
    

 

Payment Structure:

 

The payment structure is different than prior quarters and allows for significantly more upside as follows:

 

·                  We will continue to have a 90% new bookings threshold to trigger the quarterly MBB at 90%, then

·                  100% of total product bookings will equate to a 100% payment of the quarterly MBB

·                  104% of total product bookings will equate to a 104% payment of the quarterly MBB

·                  105% of total product bookings will equate to a 125% payment of the quarterly MBB

·                  109% of total product bookings will equate to a 129% payment of the quarterly MBB

·                  110% of total product bookings will equate to a 176% payment of the quarterly MBB

·                  115% of total product bookings will equate to a 184% payment of the quarterly MBB

·                  120% of total product bookings will equate to a 192% payment of the quarterly MBB

·                  125% of total product bookings will equate to a 200% payment of the quarterly MBB (consistent with previous quarters the capped total award is at 125%)

·                  “Tiers” are linear and percentages in between will have a proportionate payment (by way of example 108% will pay out at 128%)

 

Anticipated Payout Date:

 

2 to 3 pay periods after close of quarterExhibit 10.14.5

 

	
Date:
    	
 
    	
May 3, 2012
    
	
 
    	
 
    	
 
    
	
To:
    	
 
    	
Management Metric Based Bonus (MBB)   Participants
    
	
 
    	
 
    	
 
    
	
From:
    	
 
    	
Jim Lejeal
    
	
 
    	
 
    	
 
    
	
Regarding:
    	
 
    	
Q1 & Q2 FY13 MBB Structure and Goal
    

 

For FY13, we are implementing a slight change to the MBB program.  Instead of paying against quarterly total product bookings performance like we have in past quarters, we will now pay against total product bookings performance measured for the 1st half of the year.

 

We believe this change better aligns the company with performance metrics and objectives outlined in our 1H FY13 operating plan approved by our Board of Directors.

 

Rally will still pay the MBB on a quarterly basis using the following guidelines:

 

·                  The Q1 MBB payment will be paid to participants at 100% of performance provided that the company exceeds 85% of new product bookings quota amount for Q1.

·                  The Q2 MBB payment will be paid to participants according to the company’s performance against the total product bookings quota amount for the first 6 months of the fiscal year.

·                  The Company must achieve 90% of the 1H new product bookings for the Q2 portion of the MBB to be paid.

 

The intent is to align MBB participants with the sales team’s bookings objectives for the 1H period.

 

Quota amounts for Q2 are not determined until mid-month of the first month of the quarter (May ’12) so as a result the final MBB target numbers for Q2 will be communicated as soon as possible at the Monday morning management meeting.

 

Payment Conditions:

 

We will have a new bookings threshold for Q1 and Q2 of 85% and 90%, respectively.

 

Further, a total payment cap will be set at 125%.

 

A “true-up” will take place on the Q2 payment.

 

·                  For example, if the Company performs to 115% of product bookings for 1H 2013 and 100% was paid for Q1 the additional 15% due on Q1 will be paid with the Q2 payment.

 

Note that in the unlikely event the 90% of 1H 2013 bookings is not attained the Q1 bonus will be deemed earned based on achieving the 85% milestone for Q1.

 

Anticipated Payout Date:

 

It is anticipated Rally will pay Q1 on May 15th, 2012 and Q2 on August 31st, 2012.Exhibit 10.14.6

 

 

Date:                      September 17, 2012

 

To:                         Management Metric Based Bonus (MBB) Participants

 

From:                    Jim Lejeal

 

Regarding:           Q3 & Q4 FY13 MBB Structure and Goal

 

 

To align MBB participants with the sales team’s bookings objectives for the 2H period, the 2H MBB program will be awarded and conditioned as follows:

 

The 2H MBB will be paid according to the Company’s performance against the Total Product Bookings assigned to the sales team as quota for the 2nd half of the year.

 

For example, if the company performs at 110% of quota assignment for total product bookings — an MBB participant will earn 110% of their award for this period.

 

Rally will pay the MBB quarterly under the following conditions:

 

·                  A Q3 MBB payment will be paid to participants at 100% provided that the company exceeds 85% of new product bookings quota amount for Q3.

·                  The Q4 MBB payment will be paid to participants according to the company’s performance against the Total Product Bookings quota assignment amount for the second 6 months of the fiscal year.

·                  However, The Company must achieve 90% of the 2H new product bookings for the Q4 portion of the MBB to be paid.

·                  A total payment cap will apply and is set at 125%.

 

Target amounts, once set, will be communicated in the “Monday Team Meeting”.

 

True Up:

 

A “true-up” will take place on the Q4 payment.

 

·                  For example, if the Company performs to 115% of product bookings for 2H 2013 and 100% was paid for Q3 the additional 15% due on 2H will be paid with the Q4 payment.

 

Q3 Payment Recoverability:

 

Note that in the unlikely event the 90% of 2H FY13 bookings is not attained the Q3 bonus will be deemed earned based on achieving the 85% “new bookings” milestone for Q3.

 

Anticipated Payout Date:

 

It is anticipated Rally will

 

·                  pay the Q3 MBB between 30 Nov 12 and 15 Dec 12 and

·                  pay the Q4 MBB between 28 Feb 13 and 15 Mar 13Exhibit 10.15.1

 

Rally Executive Vice President

2011 Sales Compensation Plan effective 2/1/2011 — Executive Vice President

 

Plan Summary: YEAR-2011

 

Notes To Plans:

 

·                  Commissions may be paid on three types (See below - Subscription, Services, Management by Objective) of transactions depending on role/start date/etc.

·                  On Target Earnings (OTE) are paid when 100% of the sales targets are met. OTE is split between the three components noted above

·                  Commissions are paid monthly on the next pay date following the end of the month (usually on the 16th of each month)

·                  Management reserves the right to change the compensation plan at any time at their sole discretion

·                  Management reserves the right to defer commission payment commensurate with cash collection on any transaction

·                  Variable compensation payments (commissions, MBOs, billable days, etc.) will be held until you accept your compensation plan. If you find an error in your plan, please notify your manager immediately so that the plan can be corrected and you can accept it.

 

1. LICENSE COMMISSIONS

 

Subscriptions:

 

·                  Quota is applied based on an ARR number (Annual Recurring Revenue) equal to the amount of a subscription revenue we would get in a 12 month period

·                  Quota credit is applied for the first 12 months on New Orders and Renewal Orders

·                  Quota is assigned on an individual basis and is rolled up to a Team (Territory/Region/Total)

·                  Individuals are paid based on the Team quota credit attainment

·                  Base Commission Rate is calculated as Quarter Subscription Commission divided by Quarter Team Subscription Quota

·                  Accelerator rates may apply as follows based on Team Quota Attainment (New and Renewal Orders):

·                  Up to 100% = Base Commission Rate

·                  Over 100% = 1.5% Accelerator Rate

·                  Commissions will be charged back to the team at the rate originally paid if the customer does not fulfill 12 months of subscription obligation or ceases to pay

·                  (For example, if a customer has a ramp or subsequent order for 8 months and they do not renew, then 4 months will be clawed back as they did not fulfill 12 months)

·                  Charge backs will apply to unpaid subscription fees only

 

Multi-Year Prepaid Subscriptions:

 

·                  Quota credit is applied based on the ARR + the ARR Prepay Discount amount (negates the prepay discount)

·                  An additional one-time spiff will be paid on: Up Front Cash Value MINUS the ARR Quota Credit above. Spiff Rate = 5%

·                  The spiff will be paid only to the individual rep who closed the deal (not team) and the Director and VP

 

Perpetual Licenses:

 

·                  Quota credit is applied for perpetual deals “as if it were a subscription deal:”

·                  Recalc ARR by taking: (seat count TIMES monthly subscription list price TIMES (100% MINUS discount % given) TIMES 12)

 

Spiff

 

·                  No spiff on a Perpetual On-Premise Deal

·                  If a Perpetual Hosted Deal, then an additional spiff is paid on: Up Front Cash Value MINUS the ARR Quota Credit above TIMES spiff Rate listed

·                  If customer moves from On-Premise to On-Demand, spiff is paid at base rate on hosting fees only.  (There are no new seats.  There is no quota credit.)

·                  The spiff will be paid only to the individual rep who closed the deal (not team) and the Director and VP

 

2. SERVICES COMMISSIONS

 

Services Contracts/SOWs Fully Executed

 

·                  Quota is applied based on dollar value of a Statement of Work (SOW)

·                  Quota is assigned on an individual basis and is rolled up to a Team (Territory/Region/Total)

·                  Individuals are paid based on the Team quota credit attainment (not individual attainment)

·                  Base Services Rate is calculated as Quarter Services Commission divided by Quarter Team Services Quota

·                  A cap will be placed on the amount of quota credit at 300% for the quarter until 90% of this has been delivered. Once 90% has been delivered, the remainder, up to 300% will be paid each quarter at the original quarter Base Services Rate, and so forth until the entire amount of the order is retired. The amount of carry over released is not added to the future quarter’s credit attainment, but rather paid in addition to the normal commission.

·                 Accelerator rates apply for attainment between 100% of services quota and 300% of quota at 1.5 times the Base Services Rate. Anything above 300% is paid at the Base Services Rate

·                  Accelerator rates are only paid once the individual has reached at least 80% of their Team Subscription Quota

·                  Once the Team Subscription Quota percent attainment has been reached, the accelerators are paid retroactively for the quarter on all attainment over 100%

·                  Any one transaction that is over 300% of quota will have commissions withheld for the entire team until the full amount of the transaction has been delivered.

·                  Management reserves the right to charge back amounts that do not eventually get delivered

 

3. VARIABLE BONUS/MANAGEMENT BY OBJECTIVE (MBO)

 

·                  Variable Bonuses are based on a Bonus Plan provided separately by management

·                  Variable Bonuses are paid either monthly or quarterly as defined in the plan

 

	
Acknowledged   and agreed on                         ,   2011
    	
 
    
	
 
    	
 
    
	
Employee   Signature
    	
Manager   Signature
    
	
 
    	
 
    
	
Printed   Name
    	
Printed   Name

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