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Exhibit 10.1    
    

The MENTOR Network

Incentive Compensation Plan  

Effective October 1, 2007  

 

 

 
 

Table of Contents    
    

	Purpose of Plan	 	1
	Incentive Compensation Philosophy	 	1
	Incentive Plan Guiding Principles	 	1
	Eligibility	 	2
	Incentive Compensation Payout Opportunity	 	2
	Performance Measurements	 	2
	Calculation of Incentive Payouts	 	3
	 	Making the Initial Calculation	 	3
	 	Using Free Cash Flow or DSO Performance to Confirm or Modify the Initial Calculation	 	4
	 	Using Quality of Services or Work to Confirm or Modify the Initial Calculation (as adjusted for Free Cash Flow or DSO performance)	 	4
	 	Redistribution of Unallocated Incentive Compensation	 	4
	 	In the Event that Calculated Payouts Exceed Funds Available to Pay Incentive Compensation	 	4
	Discretionary Incentive Pool	 	4
	Administration	 	5
	 	Plan Changes	 	5
	 	Management of Financial and Other Goals	 	5
	 	Incentive Compensation Payouts	 	5
	 	Approval of New Plan Entrants	 	5
	 	Ongoing Eligibility Management	 	6
	Participant Termination Provisions	 	6
	 	Voluntary Terminations	 	6
	 	Involuntary Terminations for Cause	 	6
	 	Retirement and Death	 	6
	Special Provisions Relating to Position and Status Changes	 	6
	 	Promotions and Job Transfers	 	6
	 	Interruptions in Work	 	7
	Plan Year and Effective Date	 	7
	Plan Amendments	 	7
	Exhibit A: Eligibility, Weighting, and Target IC Opportunity for Management Positions	 	8
	Exhibit B: Eligibility, Weighting, and Target IC Opportunity for Executive Positions	 	9
	Annex 1: Examples of Incentive Compensation Payout Calculations	 	10

i

 

  Purpose of Plan  

        The purpose of The MENTOR Network Incentive Compensation Plan (the "Incentive Plan" or the "Plan") is to provide executives, management, and other designated key
employees with the opportunity to receive an annual cash incentive award for meeting performance goals that align with the business goals of The MENTOR Network ("The Network"). 

Incentive Compensation Philosophy  

        As a national network of local human service providers, The Network's mission is to provide high-quality home and community-based human services to
individuals with mental retardation and developmental disabilities, at-risk children and youth with emotional, behavioral, or medically complex needs and their families, persons with
acquired brain injury, individuals with physical disabilities, and the elderly. The Network's vision is to provide these high-quality services to consumers in need across the United
States. To achieve this vision, The Network's primary business goal is to continuously improve the quality of services, thereby growing the business and increasing the equity value of The Network. 

        This
Incentive Plan is intended to complement the other elements of total compensation such as base salary, merit increases, and benefits. The Plan is designed to align variable
compensation with The Network's primary business goals and to support achievement of these business goals by providing: 

	•
	Incentives
that closely align pay with the attainment of high-quality services and work and the attainment of financial goals affecting equity value, including:
(1) adjusted EBITDA for The Network as reported to The Network's private equity investor ("Adjusted EBITDA"); (2) contribution to overhead ("CTO") for organizational units within The
Network; (3) revenue; (4) adjusted free cash flow for The Network, as defined by the Compensation Committee at the beginning of each fiscal year ("Free Cash Flow"); and (5) days
sales outstanding ("DSO"); and

	•
	Meaningful
and competitive incentive compensation opportunities that attract and retain high performers at the executive and management levels. 

Incentive Plan Guiding Principles  

        This Incentive Plan is based on a set of principles for providing an effective incentive compensation plan, which are: 

	•
	Variable pay.  Variable pay is an important component of total compensation for
executives, management, and other key employees. This Incentive Plan provides the opportunity for participants to receive annual incentive compensation payouts based on performance. The opportunity
available is related to a participant's level of responsibility for and impact on The Network's and/or organizational unit's performance, expressed as a percentage of annualized base salary.
(Throughout this document, "organizational unit" means operating subgroup, state, or, in the case of Minnesota, region, whichever applies to the individual participant. For example, for an Executive
Director, the organizational unit is the group of states for which the Executive Director is responsible, which is a subgroup of the larger Operating Group.)

	•
	Alignment.  Incentive payouts are directly linked to The Network's business goals. The
initial calculation of incentive payouts is based on actual Adjusted EBITDA and/or CTO and actual revenue compared against budgeted goals for The Network and/or organizational unit. In addition, the
calculation factors in Free Cash Flow or the applicable level of DSO and the participants' performance with regard to quality of services or work.

	•
	Clear line of sight.  As much as possible, incentives are linked to goals that
participants can see, understand, and impact. 

1

 

	•
	Simplicity.  The method for calculating incentive payouts and the goals on which
incentive payouts are based are easily understood. 

Eligibility  

        Eligibility for participation in the Incentive Plan is limited to employees in positions that have been approved for participation who are not eligible for
participation under another cash incentive plan of The Network. In general, to be eligible, an employee must earn at least $50,000 in base salary (as adjusted for the local labor market based on
Economic Research Institute or comparable data as determined by the Senior Director of Compensation and Benefits) and, for Program Manager and Program Director positions, must be responsible for
programs with at least $250,000 expected CTO. Exceptions must be approved by the Chief Operating Officer ("COO") and the Chief Financial Officer ("CFO"). For a list of management and other key
positions that have been approved for participation, refer to Exhibit A. For a list of executive positions that have been approved for participation, refer to Exhibit B. 

Incentive Compensation Payout Opportunity  

        A participant's target incentive compensation opportunity is based on the participant's level of responsibility for and impact on The Network's business goals.
Refer to Exhibit A for the target levels of incentive compensation payout opportunities available to management and other key positions, and to Exhibit B for executive payout
opportunities. 

Performance Measurements  

        Incentive compensation payouts are based on four performance measurements: (1) Adjusted EBITDA and/or CTO; (2) revenue; (3) Free Cash Flow or
DSO; and (4) quality of services or work. 

	•
	Adjusted EBITDA and/or CTO and revenue.  An initial calculation of a participant's
incentive compensation (the "Initial Calculation") is based on The Network's and/or organizational unit's Adjusted EBITDA and/or CTO and revenue measured against budget goals. Allocation between
Network (Adjusted EBITDA) and organizational unit (CTO) performance is determined according to a participant's position, as set out on Exhibits A and B. Adjusted EBITDA/CTO performance is
weighted 75 percent and revenue performance is weighted 25 percent.

	•
	Free Cash Flow or DSO.  The Free Cash Flow target applicable to the executive positions
listed on Exhibit B is established and approved at the beginning of the fiscal year by the Compensation Committee. When the target is met, the Initial Calculation is unaffected. When the target
is not met, the Initial Calculation is modified. For all other employees, DSO targets are established and approved for The Network and organizational units at the beginning of the fiscal year by the
CFO and COO. When the target is met, the Initial Calculation is unaffected. When the target is not met, the Initial Calculation is modified.

	•
	Quality of Services or Work.  When goals relating to quality of services or work are met
or exceeded, the Initial Calculation (after any Free Cash Flow or DSO adjustment) is unaffected. When these goals are not met, the Initial Calculation is modified. Operating Group positions (as set
out on Exhibit A) are rated based on quality of services of the participant's applicable organizational unit, including factors such as licensure issues and restrictions. Network positions (as
set out on Exhibits A and B) are rated based on an individual participant's quality of work, including factors such as quality of management, achievement of assigned goals, completion of
assigned projects, and contributions to the achievement of departmental or company goals. Supervisors will be asked to certify their ratings with respect to individual performance pertaining to
quality of work. The applicable Operating Group President must certify a participant's organizational unit's rating for quality of service. 

2

 

Calculation of Incentive Payouts  

        Plan participants are eligible to receive an incentive payout based on a percentage of their annualized base salary as of the last day of the fiscal year for
which the incentive is being paid. The following steps apply in determining a participant's incentive compensation payout: 

	1.
	Make
the Initial Calculation; i.e., calculate the incentive compensation payout attributable to Adjusted EBITDA/CTO and revenue performance based on management reporting
conventions. This calculation excludes new start investments under immunity and acquisitions other than tuck-ins (i.e., purchase price of $3 million or less and easy to
integrate, as determined by the Chief Executive Officer ("CEO")).

	2.
	Factor
in Free Cash Flow or Network/organizational unit DSO performance, as applicable, confirming or modifying the Initial Calculation, depending on outcome.

	3.
	Factor
in the participant's performance pertaining to quality of services or work, confirming or modifying the Initial Calculation, depending on outcome, and as adjusted for Free Cash
Flow or DSO performance.

	4.
	Redistribute
unallocated incentive dollars resulting from modifying payouts for Free Cash Flow, DSO, and quality performance. 

        For
examples of incentive compensation payout calculations, refer to Annex 1. 

Making the Initial Calculation  

        To make the Initial Calculation for a participant, the following formula applies. 

Formula:  

	•
	First,
determine the participant's target incentive compensation by multiplying the participant's annualized base salary as of the last day of the fiscal year by the
percentage applicable to his or her position (the Target IC Payout Opportunity set out on Exhibits A and B).

	•
	Second,
determine the portion of the participant's target incentive compensation attributable to actual Adjusted EBITDA/CTO performance by multiplying the participant's
target incentive compensation by 75 percent (i.e., Adjusted EBITDA/CTO weighting) and then by the adjusted percentage (the IC Payout Levels set out on Annex 1) associated with the
Network's and/or organizational unit's actual Adjusted EBITDA/CTO results.

	•
	Third,
determine the portion attributable to actual revenue performance by multiplying the participant's target incentive compensation by 25 percent
(i.e., revenue weighting) and then by the adjusted percentage (the IC Payout Levels set out on Annex 1) associated with the Network's and/or organizational unit's actual revenue results.

	•
	Last,
sum the portions calculated for actual Adjusted EBITDA/CTO and revenue performance. 

        The
IC Payout Level used in the Initial Calculation is the percentage payout that applies based on the level of actual Adjusted EBITDA/CTO and revenue performance achieved. At the
beginning of each fiscal year, an Adjusted EBITDA/CTO and revenue performance table is established for The Network and each organizational unit. The table (an example of which can be found in
Annex 1) sets out the target Adjusted EBITDA/CTO and revenue goals and a performance range of 92.5 to 107.5 percent of the targets. At each level of performance there is an associated IC
Payout Level. Thus, the minimum actual performance required for an incentive compensation payout is 92.5 percent of the Adjusted EBITDA/CTO and revenue target goals, and the maximum actual
performance factored into the calculation is 107.5 percent of the target goals. The IC Payout Level ranges from 50 to 150 percent, with budgeted or target incentive compensation at
100 percent. In cases where actual Adjusted 

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EBITDA/CTO
and/or revenue performance falls between two performance points in the table, the IC Payout Level used for the Initial Calculation will fall proportionately between the two IC Payout Level
percentages in the table. 

Using Free Cash Flow or DSO Performance to Confirm or Modify the Initial Calculation  

        A participant's Initial Calculation may be modified for DSO performance or, in the case of executive positions listed on Exhibit B, for Free Cash Flow
performance. If the Network or organizational unit meets its Free Cash Flow or DSO target, as applicable for the participant, the Initial Calculation is unaffected. If the Network or organizational
unit fails to meet its Free Cash Flow or DSO target, the Initial Calculation is multiplied by 90 percent. 

        In
confirming or modifying the Initial Calculation, the Free Cash Flow target applies to executive positions listed on Exhibit B, the Network DSO target applies to all other
Network positions, and the organizational unit DSO target applies to Operating Group positions. 

Using Quality of Services or Work to Confirm or Modify the Initial Calculation (as adjusted for Free Cash Flow or DSO performance)  

        The Initial Calculation may be further modified for quality performance. If a participant receives a rating of 4 ("meets or exceeds expectations") for quality of
services or work, the Initial Calculation, as modified for Free Cash Flow or DSO performance, is unaffected. If a participant receives a rating of 3 ("meets most expectations") or less, the Initial
Calculation, as modified for Free Cash Flow or DSO performance, is multiplied by 75 percent, 50 percent, or 0 percent, as set out on Annex 1. A participant's supervisor
must certify a participant's rating for quality of work. The applicable Operating Group President must certify a participant's organizational unit's rating for quality of services. Quality of service
expectations, standards, and metrics are expected to be developed, approved, and disseminated from time to time by the COO and Operating Group Presidents. A participant's supervisor sets quality of
work expectations. 

Redistribution of Unallocated Incentive Compensation  

        For incentive compensation that is not allocated as a result of modifying the Initial Calculation for DSO performance and/or quality of services or work, the
unallocated dollar amounts may be redistributed to participants within the same operating group or within the positions listed as Network positions on Exhibits A and B. The applicable Operating
Group President must approve redistribution of dollars within an operating group. The CEO must approve redistribution of dollars among Network positions. Incentive compensation that is not allocated
as a result of modifying the Initial Calculation for Free Cash Flow performance may be redistributed at the discretion of the Compensation Committee. 

In the Event that Calculated Payouts Exceed Funds Available to Pay Incentive Compensation  

        In the event that the total calculated incentive payouts, after taking into account modifications for Free Cash Flow, DSO, quality performance, and any
discretionary redistributions of unallocated incentive compensation, exceed the funds that are available to pay incentive compensation as approved by the Compensation Committee and Board of Directors,
all payouts will be reduced proportionately based on the funds available. 

Discretionary Incentive Pool  

        Each fiscal year, a discretionary pool will be budgeted equal to three percent of total budgeted incentive compensation. Based on actual Network Adjusted EBITDA
and revenue performance, the discretionary pool will be adjusted so that it is three percent of the total potential pool. The 

4

 

discretionary
pool may be used to increase incentive compensation payouts for participants whose calculated payouts may not adequately reflect their performance; for example, to a high performer
within a state or other organizational unit that does not perform well. The CEO must approve all additions to incentive compensation payouts from the discretionary pool, except for additions to
payouts for executive officers, as defined under the Securities Exchange Act of 1934, as amended (the "Executive Officers"), whose additions must be recommended by the CEO and approved by the
Compensation Committee. 

Administration  

Plan Changes  

        The Compensation Committee and the Board of Directors must approve the Incentive Plan and any changes to the Plan. 

Management of Financial and Other Goals  

        For each fiscal year, the Compensation Committee must approve: 

	•
	The
Network's Adjusted EBITDA, revenue and DSO performance goals that will be used for measuring Network performance

	•
	The
Network's Free Cash Flow performance goal that will be used in calculating incentive compensation payouts for executive positions listed on Exhibit B

	•
	The
Network's actual performance results that will be used as the basis for calculating incentive compensation payouts 

        The
CEO, CFO, and COO must approve goals and actual performance results for organizational units. 

Incentive Compensation Payouts  

        Each fiscal year, the Compensation Committee must approve all incentive compensation payouts for Executive Officers. The CEO must approve all other incentive
compensation payouts. 

Approval of New Plan Entrants  

        The Compensation Committee must approve any new Executive Officer entering the plan and the applicable performance weightings and incentive compensation payout
opportunities. 

        Approval
of new entrants other than Executive Officers is based on whether: (i) an employee's position has been approved for plan participation (as set out in Exhibit A),
(ii) the employee earns at least $50,000 in base salary (as adjusted for the local labor market) and, (iii) for Program Manager and Program Director positions, the employee is
responsible for programs with at least $250,000 expected CTO, as confirmed by the Operating Group CFO. In the case of an employee meeting the above criteria, entry in the Plan must be approved by both
the Operating Group CFO (or, for Network positions, the CFO) and the Senior Director of Compensation & Benefits. 

        In
the case of employees who do not meet the above criteria but are recommended for participation by the Operating Group CFO (or, for Network positions, the CFO), the Senior Director of
Compensation & Benefits must review the position and make a recommendation to the COO and CFO as to whether the employee should be approved for participation and, if so, also recommend
weightings and the level of incentive compensation payout opportunity. The COO and CFO have the final authority for approving new positions for participation. 

5

 
Ongoing Eligibility Management  

        At the beginning of each fiscal year, a listing of all current eligible plan participants will be provided to Operating Group Presidents and CFOs and to Network
department heads for review and confirmation. The list will include performance weightings and level of incentive compensation payout opportunity. Once reviewed, the list will be submitted to the CEO,
CFO, and COO for approval. In addition, a list of Executive Officer participants and their performance weightings and level of incentive compensation payout opportunity will be submitted to the
Compensation Committee for review and approval. 

Participant Termination Provisions  

Voluntary Terminations  

        Plan participants who terminate employment voluntarily before the actual payment date of incentive compensation, other than by retirement, will not be eligible
for any incentive payout under the Plan, with the exception of unusual situations that are approved by the CEO or, in the case of payouts for Executive Officers, approved by the Compensation
Committee. 

Involuntary Terminations for Cause  

        Plan participants whose employment is involuntarily terminated for cause will not be eligible for any incentive payments under the Incentive Plan. "Cause" shall
mean any of the following: (i) theft or embezzlement, or attempted theft or embezzlement, of money or property of the Company or any subsidiary, perpetration or attempted perpetration of fraud,
or participation in a fraud or attempted fraud, on the Company or any subsidiary, or any third party, or unauthorized appropriation of, or attempt to misappropriate, any tangible or intangible assets
or property of the Company or any subsidiary; (ii) any act or acts of disloyalty, misconduct, or moral turpitude injurious to the interest, property, operations, or business reputation of the
Company or any subsidiary; (iii) material violation of any agreement with the Company or any serious violation of the Company's policies, including its Code of Conduct; or (iv) failure
or inability (other than by reason of disability) to carry out effectively a
participant's duties and obligations to the Company and its subsidiaries or to participate effectively and actively in the management of the Company and its subsidiaries, as determined in the
reasonable judgment of the CEO or, with respect to the CEO, the Compensation Committee. 

Retirement and Death  

        Plan participants whose employment terminates because of retirement or death are eligible to receive an incentive compensation payout. The payout will be
calculated based upon actual Network and organizational unit performance for the full fiscal year and quality of work, if applicable, for the portion of the year the individual was employed, and the
resulting amount prorated for the portion of the year that was worked. Any incentive compensation payout that is earned will be paid at the normal payout date for all plan participants. 

Special Provisions Relating to Position and Status Changes  

Promotions and Job Transfers  

        Incentive plan goals and payout opportunities may be reestablished upon transfer or promotion to a new position. Unless otherwise determined by the CEO, incentive
payouts will be calculated based upon the participant's position and base salary as of the last day of the fiscal year. 

6

 
Interruptions in Work  

        A long-term illness or disability will not affect the eligibility of an employee to participate in the Incentive Plan. Performance objectives will not
be adjusted based on the work interruption, although actual performance achieved will be evaluated and the corresponding incentive payout will be prorated based upon the amount of time worked during
the performance period. 

        "Disability"
shall mean the inability, due to illness, accident, injury, physical or mental incapacity, or other disability, of any participant to carry out effectively his or her duties
and obligations to the Company or to participate effectively and actively in the management of the Company for a period of at least 90 consecutive days or for shorter periods aggregating at least
90 days (whether or not consecutive) during any 180-day period, as determined in the reasonable judgment of the CEO, or in the case of an Executive Officer, the Compensation
Committee. 

        Special
assignments generally will not affect either the target goals or incentive payout, except as may be reflected in a participant's performance review rating. However, if the
special assignment is of a significant nature or duration, incentive plan goals may be reestablished and incentive earnings prorated based on the time spent in each position during the performance
period. 

Plan Year and Effective Date  

        The Plan year is the fiscal year, which starts on October 1st and ends on September 30th. The effective date of
this plan is October 1, 2007. This Plan supersedes all other cash incentive compensation plans previously sponsored by The MENTOR Network. 

Plan Amendments  

        The MENTOR Network reserves the right to amend this plan at any time, including termination of the Plan, without prior notice to plan participants. 

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  Exhibit A: Eligibility, Weighting, and Target IC Opportunity for Management Positions  

	 
	 	 
	 	Network and Organizational

Unit Performance Weighting

	Position
 
	 	Target IC

Payout

Opportunity
	 	Network
	 	Organizational

Unit

	Operating Group Positions (Measured by Quality of Services)
	Vice Presidents, Operations	 	25%	 	25%	 	75%
	Executive Directors	 	20%	 	25%	 	75%
	State Directors	 	15%	 	0%	 	100%
	Deputy State Directors	 	10%	 	0%	 	100%
	Program Directors/Managers (Must meet minimum of $250k CTO floor or have CFO and COO approval)	 	10%	 	0%	 	100%
	Sr. Business Directors	 	20%	 	25%	 	75%
	Business Directors	 	15%	 	25%	 	75%
	Business Managers	 	10%	 	25%	 	75%
	State Accounting Managers	 	10%	 	0%	 	100%
	Operating Group level IT, QA, and HR Directors	 	15%	 	100%	 	0%
	
Network Positions (Measured by Quality of Work)
	Vice Presidents	 	25%	 	100%	 	0%
	Sr. Directors	 	20%	 	100%	 	0%
	Directors	 	15%	 	100%	 	0%
	Managers	 	10%	 	100%	 	0%
	Designated Executive Group Business Analyst positions	 	10%	 	100%	 	0%

Note: Organizational Unit means operating sub group, state, or in the case of MN, regions within the state of MN, whichever is
applicable to the individual participant. For example, for Executive Directors, unit means the operating sub group (i.e., group of states for which the Executive Director is responsible). 

8

 

Exhibit B: Eligibility, Weighting, and Target IC Opportunity for Executive Positions  

	Position
 
	 	Target IC Payout

Opportunity

	CEO	 	50%
	Executive Vice Presidents	 	50%
	Operating Group Presidents	 	50%
	Senior Vice Presidents	 	50%
	Managing Directors	 	50%

Note: For purposes of calculating incentive compensation payouts for executives, performance is based on Network performance with regard to Adjusted
EBITDA, revenue, and Free Cash Flow. Quality of work is based on individual executive performance. 

9

 

 Annex 1: Examples of Incentive Compensation Payout Calculations  

Incentive Compensation Payout Calculation

Example #1  

	Name 	 	Johan Doe
	Title 	 	Program Manager
	Salary 	 	$50,000
	Target IC Opportunity 	 	10%

	 

	Performance Scale
 
	 	 
	 	 

	CTO/Rev

Perf. Level
 
	 	IC Payout Level
	 	 
	 	IC Payout as

% of Salary

	107.5%	 	150.0%	 	 	 	15.0%
	106.0%	 	140.0%	 	 	 	14.0%
	104.5%	 	130.0%	 	 	 	13.0%
	103.0%	 	120.0%	 	 	 	12.0%
	101.5%	 	110.0%	 	 	 	11.0%
	
	 	
	 	 	 	

	100.0%	 	100.0%	 	TARGET	 	10.0%
	
	 	
	 	 	 	

	  98.5%	 	90.0%	 	 	 	9.0%
	  97.0%	 	80.0%	 	 	 	8.0%
	  95.5%	 	70.0%	 	 	 	7.0%
	  94.0%	 	60.0%	 	 	 	6.0%
	  92.5%	 	50.0%	 	 	 	5.0%

	 

	DSO—Performance Modifier

	YES	 	Meets/Exceeds DSO Target	 	100%
	NO	 	Does not meet DSO Target	 	90%

	 

	Quality/Performance Modifier

	4	 	Meets/Exceeds Expectation	 	100%
	3	 	Meets Most Expectations	 	75%
	2	 	Needs Improvement	 	50%
	1	 	Failed To Meet Expectation	 	0%

	 

	 
	 	Weighting
	 	Target Goals
	 	Actual Performance
	 	Achieved
	 	Adjustors
	 
	Performance Measures
 
	 
	 	State
	 	Network
	 	Total
	 	State
	 	Network
	 	State
	 	Network
	 	State
	 	Network
	 	State
	 	Network
	 
	 	 	100	%	0	%	100	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	
	 	
	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CTO 	 	75	%	0.0	%	75	%	5,570	 	 	 	5,836	 	 	 	104.8	%	0.0	%	131.8	%	0.0	%
	Revenue 	 	25	%	0.0	%	25	%	37,707	 	 	 	37,753	 	 	 	100.1	%	0.0	%	100.8	%	0.0	%
	DSO 	 	 	 	 	 	 	 	45	 	 	 	47	 	 	 	NO	 	 	 	90.0	%	 	 
	Quality 	 	 	 	 	 	 	 	4	 	 	 	3	 	 	 	NO	 	 	 	75.0	%	 	 

10

 

	 

	Salary
	 	$50,000
	 	Initial Calculation
	 	 
	 	 
	 	 
	 	 
	 
	Target IC %
	 	10%
	 	CTO
	 	Revenue
	 	Total
	 	 
	 	 
	 	 
	 	 
	 
	 	DSO

Modifier
	 	Adjusted

Payout
	 	Quality

Modifier
	 	Adjusted

Payout
	 
	 
	 	 
	 	State
	 	Network
	 	State
	 	Network
	 	Combined
	 
	Target IC $ 	 	$	5,000	 	$	3,750	 	$	—	 	$	1,250	 	$	—	 	$	5,000	 	 	—	 	$	5,000	 	 	—	 	$	5,000	 
	

Adjustors 	
 	
 	

 	
 	
 	

131.8	
%	
 	

 	
 	
 	

100.8	
%	
 	

 	
 	
 	

 	
 	
 	

90	
%	
 	

 	
 	
 	

75	
%	
 	

 	
 
	

IC Payout $ 	
 	
 	

 	
 	
$	

4,944	
 	
$	

—	
 	
$	

1,260	
 	
$	

—	
 	
$	

6,204	
 	
$	

(620	
)	
$	

5,584	
 	
$	

(1,396	
)	
$	

4,188	
 
	IC Payout Level 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	124.1	%	 	 	 	 	111.7	%	 	 	 	 	83.8	%
	IC Payout as % of Salary 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	12.4	%	 	 	 	 	11.2	%	 	 	 	 	8.4	%

11

 

 

 
 

Incentive Compensation Payout Calculation
  Example #2    
    

	Name 	 	Jayne Doe
	Title 	 	Business Director
	Salary 	 	$75,000
	Target IC Opportunity 	 	15%

	 

	Performance Scale
 
	 	 
	 	 

	CTO/Rev

Perf. Level
 
	 	IC Payout Level
	 	 
	 	IC Payout as

% of Salary

	107.5%	 	150.0%	 	 	 	22.5%
	106.0%	 	140.0%	 	 	 	21.0%
	104.5%	 	130.0%	 	 	 	19.5%
	103.0%	 	120.0%	 	 	 	18.0%
	101.5%	 	110.0%	 	 	 	16.5%
	
	 	
	 	 	 	

	100.0%	 	100.0%	 	TARGET	 	15.0%
	
	 	
	 	 	 	

	98.5%	 	90.0%	 	 	 	13.5%
	97.0%	 	80.0%	 	 	 	12.0%
	95.5%	 	70.0%	 	 	 	10.5%
	94.0%	 	60.0%	 	 	 	9.0%
	92.5%	 	50.0%	 	 	 	7.5%

	 

	DSO—Performance Modifier

	YES	 	Meets/Exceeds DSO Target	 	100%
	NO	 	Does not meet DSO Target	 	90%

	 

	Quality/Performance Modifier

	4	 	Meets/Exceeds Expectations	 	100%
	3	 	Meets Most Expectations	 	75%
	2	 	Needs Improvement	 	50%
	1	 	Failed To Meet Expectations	 	0%

	 

	 
	 	Weighting
	 	Target Goals
	 	Actual Performance
	 	Achieved
	 	Adjustors
	 
	Performance Measures
 
	 
	 	State
	 	Network
	 	Total
	 	State
	 	Network
	 	State
	 	Network
	 	State
	 	Network
	 	State
	 	Network
	 
	 	 	75	%	25	%	100	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	
	 	
	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CTO 	 	56	%	19	%	75	%	7,820	 	104,461	 	8,104	 	101,260	 	103.6	%	96.9	%	124.2	%	79.6	%
	Revenue 	 	19	%	6	%	25	%	57,143	 	919,547	 	58,243	 	911,748	 	101.9	%	99.2	%	112.8	%	94.3	%
	DSO 	 	 	 	 	 	 	 	48	 	 	 	52	 	 	 	NO	 	 	 	90.0	%	 	 
	Quality 	 	 	 	 	 	 	 	4	 	 	 	4	 	 	 	YES	 	 	 	100.0	%	 	 

12

 

	 

	Salary
	 	$75,000
	 	Initial Calculation
	 	 
	 	 
	 	 
	 	 
	 
	Target IC %
	 	15%
	 	CTO
	 	Revenue
	 	Total
	 	 
	 	 
	 	 
	 	 
	 
	 	DSO

Modifier
	 	Adjusted

Payout
	 	Quality

Modifier
	 	Adjusted

Payout
	 
	 
	 	 
	 	State
	 	Network
	 	State
	 	Network
	 	Combined
	 
	Target IC $ 	 	$	11,250	 	$	6,328	 	$	2,109	 	$	2,109	 	$	703	 	$	11,250	 	 	—	 	$	11,250	 	—	 	$	11,250	 
	

Adjustors 	
 	
 	

 	
 	
 	

124.2	
%	
 	

79.6	
%	
 	

112.8	
%	
 	

94.3	
%	
 	

 	
 	
 	

90	
%	
 	

 	
 	

100	
%	
 	

 	
 
	

IC Payout $ 	
 	
 	

 	
 	
$	

7,860	
 	
$	

1,678	
 	
$	

2,380	
 	
$	

663	
 	
$	

12,582	
 	
$	

(1,258	
)	
$	

11,324	
 	

—	
 	
$	

11,324	
 
	IC Payout Level 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	111.8	%	 	 	 	 	100.7	%	 	 	 	100.7	%
	IC Payout as % of Salary	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	16.8	%	 	 	 	 	15.1	%	 	 	 	15.1	%

13

QuickLinks

Exhibit 10.1

Table of Contents

Incentive Compensation Payout Calculation Example #2Filed by Automated Filing Services Inc. (604) 609-0244 - Environmental Control Corporation - Exhibit 10.1

THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN
OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN)
PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"). NONE OF THE SECURITIES, NOR THE SECURITIES INTO WHICH
THESE SECURITIES ARE EXERCISABLE, HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR
ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED
OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS
DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER
THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933
ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE 1933 ACT.

Warrant No. ___________

THESE WARRANTS WILL EXPIRE AND BECOME NULL AND VOID 
AT 4:30
P.M. (RENO, NEVADA TIME) ON FEBRUARY 12, 2010.

SHARE PURCHASE WARRANTS TO PURCHASE COMMON SHARES OF

ENVIRONMENTAL CONTROL CORP.

     THIS IS TO CERTIFY THAT
_____________________, (the "Holder") of ________________, has the right to
purchase, upon and subject to the terms and conditions hereinafter referred to,
up to _______________ fully paid and non-assessable common shares (the "Shares")
in the capital of ENVIRONMENTAL CONTROL CORP. (hereinafter called the "Company")
on or before 4:30 p.m. (Reno, Nevada time) on February 12, 2010 (the "Expiry
Date") at a price per Share of US$0.30 (the "Exercise Price") on the terms and
conditions attached hereto as Appendix A (the "Terms and Conditions").

	 	1. 	
      ONE (1) WARRANT AND THE EXERCISE PRICE ARE REQUIRED TO
      PURCHASE ONE SHARE. THIS CERTIFICATE REPRESENTS __________________
      WARRANTS.

	 	 	 
	 	2. 	
      These Warrants are issued subject to the Terms and
      Conditions, and the Warrant Holder may exercise the right to purchase
      Shares only in accordance with those Terms and Conditions.

	 	 	 
	 	3. 	
      Nothing contained herein or in the Terms and Conditions
      will confer any right upon the Holder hereof or any other person to
      subscribe for or purchase any Shares at any time subsequent to the Expiry
      Date, and from and after such time, this Warrant and all rights hereunder
      will be void and of no value.

     IN WITNESS WHEREOF the Company
has executed this Warrant Certificate this ________ day of ______________ ,
20___.

ENVIRONMENTAL CONTROL CORP.

	Per: 		 
	 	Authorized Signatory 	 

APPENDIX A

TERMS AND CONDITIONS dated _________________ , 20____, attached
to the Warrants issued by ENVIRONMENTAL CONTROL CORP.

INTERPRETATION

	(a) 	Definitions 

In these Terms and Conditions, unless there is something in the
subject matter or context inconsistent therewith:

	 	(i) 	
      "Company" means Environmental Control Corp. until a
      successor corporation will have become such as a result of consolidation,
      amalgamation or merger with or into any other corporation or corporations,
      or as a result of the conveyance or transfer of all or substantially all
      of the properties and estates of the Company as an entirety to any other
      corporation and thereafter "Company" will mean such successor
      corporation;

	 	 	 
	 	(ii) 	
      "Company's Auditors" means an independent firm of
      accountants duly appointed as auditors of the Company;

	 	 	 
	 	(iii) 	
      "Director" means a director of the Company for the time
      being, and reference, without more, to action by the directors means
      action by the directors of the Company as a Board, or whenever duly
      empowered, action by an executive committee of the Board;

	 	 	 
	 	(iv) 	
      "herein", "hereby" and similar expressions refer to these
      Terms and Conditions as the same may be amended or modified from time to
      time; and the expression "Article" and "Section," followed by a number
      refer to the specified Article or Section of these Terms and
      Conditions;

	 	 	 
	 	(v) 	
      "person" means an individual, corporation, partnership,
      trustee or any unincorporated organization and words importing persons
      have a similar meaning;

	 	 	 
	 	(vi) 	
      "shares" means the common shares in the capital of the
      Company as constituted at the date hereof and any shares resulting from
      any subdivision or consolidation of the shares;

	 	 	 
	 	(vii) 	
      "Warrant Holders" or "Holders" means the holders of the
      Warrants; and

	 	 	 
	 	(viii) 	
      "Warrants" means the warrants of the Company issued and
      presently authorized and for the time being
outstanding.

	(b) 	Gender 

Words importing the singular number include the plural and vice
versa and words importing the masculine gender include the feminine and neuter
genders.

	(c) 	Interpretation not affected by Headings
    

The division of these Terms and Conditions into Articles and
Sections, and the insertion of headings are for convenience of reference only
and will not affect the construction or interpretation thereof.

	(d) 	Applicable Law 

The Warrant and the terms hereof are governed by the laws of
the Province of British Columbia. The Holder, in its personal or corporate
capacity and, if applicable, on behalf of each beneficial purchaser for whom it
is acting, irrevocably attorns to the jurisdiction of the courts of the Province
of British Columbia.

- 2 -

	2. 	
      ISSUE OF WARRANTS  

	 	 
	(a)	Additional Warrants

The Company may at any time and from time to time issue
additional warrants or grant options or similar rights to purchase shares of its
capital stock.

	(b) 	Warrants to Rank Pari
      Passu 

All Warrants and additional warrants, options or similar rights
to purchase shares from time to time issued or granted by the Company, will rank
pari passu whatever may be the actual dates of issue or grant thereof, or
of the dates of the certificates by which they are evidenced.

	(c) 	
      Issue in substitution for Lost Warrants

	 	 	 
		(i) 	
      In case a Warrant becomes mutilated, lost, destroyed or
      stolen, the Company, at its discretion, may issue and deliver a new
      Warrant of like date and tenor as the one mutilated, lost, destroyed or
      stolen, in exchange for and in place of and upon cancellation of such
      mutilated Warrant, or in lieu of, and in substitution for such lost,
      destroyed or stolen Warrant and the substituted Warrant will be entitled
      to the benefit hereof and rank equally in accordance with its terms with
      all other Warrants issued or to be issued by the Company.

	 	 	 
		(ii) 	
      The applicant for the issue of a new Warrant pursuant
      hereto will bear the cost of the issue thereof and in case of loss,
      destruction or theft furnish to the Company such evidence of ownership and
      of loss, destruction, or theft of the Warrant so lost, destroyed or stolen
      as will be satisfactory to the Company in its discretion and such
      applicant may also be required to furnish indemnity in amount and form
      satisfactory to the Company in its discretion, and will pay the reasonable
      charges of the Company in connection therewith.

	 	 	 
	(d) 	
      Warrant Holder Not a
Shareholder

The holding of a Warrant will not constitute the Holder thereof
as a shareholder of the Company, nor entitle him to any right or interest in
respect thereof except as in the Warrant expressly provided.

	3. 	
      NOTICE

	 	 
	(a)	
       Notice to Warrant
Holders

Any notice required or permitted to be given to the Holders
will be in writing and may be given by prepaid registered post, electronic
facsimile transmission or other means of electronic communication capable of
producing a printed copy to the address of the Holder appearing on the Holder's
Warrant or to such other address as any Holder may specify by notice in writing
to the Company, and any such notice will be deemed to have been given and
received by the Holder to whom it was addressed if mailed, on the third day
following the mailing thereof, if by facsimile or other electronic
communication, on successful transmission, or, if delivered, on delivery; but if
at the time or mailing or between the time of mailing and the third business day
thereafter there is a strike, lockout, or other labour disturbance affecting
postal service, then the notice will not be effectively given until actually
delivered.

	(b) 	Notice to the Company

Any notice required or permitted to be given to the Company
will be in writing and may be given by prepaid registered post, electronic
facsimile transmission or other means of electronic communication capable of
producing a printed copy to the address of the Company set forth below or such
other address as the Company may specify by notice in writing to the Holder, and
any such notice will be deemed to have been given and received by the Company to
whom it was addressed if mailed, on the third day following the mailing thereof,
if by facsimile or other 

- 3 -

electronic communication, on successful transmission, or, if
delivered, on delivery; but if at the time or mailing or between the time of
mailing and the third business day thereafter there is a strike, lockout, or
other labour disturbance affecting postal service, then the notice will not be
effectively given until actually delivered:

	 	ENVIRONMENTAL CONTROL CORP. 
	 	Suite 605 – 1525 Robson Street 
	 	Vancouver, British Columbia 
	 	Canada V6G 1C3 
	 	  
	 	Attention: President 
	 	Fax No. 604.608.9030 
	 	  
	 	with a copy, which shall not constitute notice,
      to: 
	 	  
	 	Clark Wilson LLP 
	 	Barristers and Solicitors 
	 	800 – 885 West Georgia Street 
	 	Vancouver, British Columbia 
	 	Canada V6C 3H1 
	 	  
	 	Attention: William L. Macdonald 
	 	Fax: 604.687.6314 

	4. 	
      EXERCISE OF WARRANTS 

	 	 
	(a)	Method of Exercise of
Warrants

The right to purchase shares conferred by the Warrants may be
exercised by the Holder surrendering the Warrant Certificate representing same,
with a duly completed and executed subscription in the form attached hereto and
a bank draft or certified cheque payable to the Company for the purchase price
applicable at the time of surrender in respect of the shares subscribed for in
lawful money of the United States of America, to the Company at the address set
forth in, or from time to time specified by the Company pursuant to, Section
3.2.

	(b) 	
      Effect of Exercise of Warrants

	 	 	 
		(i) 	
      Upon surrender and payment as aforesaid the shares so
      subscribed for will be deemed to have been issued and such person or
      persons will be deemed to have become the Holder or Holders of record of
      such shares on the date of such surrender and payment, and such shares
      will be issued at the subscription price in effect on the date of such
      surrender and payment.

	 	 	 
		(ii) 	
      Within ten business days after surrender and payment as
      aforesaid, the Company will forthwith cause to be delivered to the person
      or persons in whose name or names the shares so subscribed for are to be
      issued as specified in such subscription or mailed to him or them at his
      or their respective addresses specified in such subscription, a
      certificate or certificates for the appropriate number of shares not
      exceeding those which the Warrant Holder is entitled to purchase pursuant
      to the Warrant surrendered.

	 	 	 
	(c) 	
      Subscription for Less Than
  Entitlement

The Holder of any Warrant may subscribe for and purchase a
number of shares less than the number which he is entitled to purchase pursuant
to the surrendered Warrant. In the event of any purchase of a number of shares
less than the number which can be purchased pursuant to a Warrant, the Holder
thereof upon exercise thereof will in addition be entitled to receive a new
Warrant in respect of the balance of the shares which he was entitled to
purchase pursuant to the surrendered Warrant and which were not then
purchased.

- 4 -

	(d) 	Warrants for Fractions of Shares
  

To the extent that the Holder of any Warrant is entitled to
receive on the exercise or partial exercise thereof a fraction of a share, such
right may be exercised in respect of such fraction only in combination with
another Warrant or other Warrants which in the aggregate entitle the Holder to
receive a whole number of such shares.

	(e) 	Expiration of Warrants

After the expiration of the period within which a Warrant is
exercisable, all rights thereunder will wholly cease and terminate and such
Warrant will be void and of no effect.

	(f) 	Time of Essence 

Time will be of the essence hereof.

	(g) 	Subscription Price 

Each Warrant is exercisable at a price per share (the "Exercise
Price") of US$0.30. One (1) Warrant and the Exercise Price are required to
subscribe for each share during the term of the Warrants.

	(h) 	
      Adjustment of Exercise Price

	 	 	 	 
		(i) 	
      The Exercise Price and the number of shares deliverable
      upon the exercise of the Warrants will be subject to adjustment in the
      event and in the manner following:

	 	 	 	 
			A. 	
      If and whenever the shares at any time outstanding are
      subdivided into a greater or consolidated into a lesser number of shares
      the Exercise Price will be decreased or increased proportionately as the
      case may be; upon any such subdivision or consolidation the number of
      shares deliverable upon the exercise of the Warrants will be increased or
      decreased proportionately as the case may be.

	 	 	 	 
			B. 	
      In case of any capital reorganization or of any
      reclassification of the capital of the Company or in the case of the
      consolidation, merger or amalgamation of the Company with or into any
      other Company (hereinafter collectively referred to as a
      "Reorganization"), each Warrant will after such Reorganization confer the
      right to purchase the number of shares or other securities of the Company
      (or of the Company's resulting from such Reorganization) which the Warrant
      Holder would have been entitled to upon Reorganization if the Warrant
      Holder had been a shareholder at the time of such
Reorganization.

	 	 	 	 
				
      In any such case, if necessary, appropriate adjustments
      will be made in the application of the provisions of this Article Four
      relating to the rights and interest thereafter of the Holders of the
      Warrants so that the provisions of this Article Four will be made
      applicable as nearly as reasonably possible to any shares or other
      securities deliverable after the Reorganization on the exercise of the
      Warrants.

	 	 	 	 
				
      The subdivision or consolidation of shares at any time
      outstanding into a greater or lesser number of shares (whether with or
      without par value) will not be deemed to be a Reorganization for the
      purposes of this clause 4.8(a)(ii).

	 	 	 	 
		(ii) 	
      The adjustments provided for in this Section 4.8 are
      cumulative and will become effective immediately after the record date or,
      if no record date is fixed, the effective date of the event which results
      in such adjustments.

- 5 -

	(i) 	Determination of Adjustments
  

If any questions will at any time arise with respect to the
Exercise Price or any adjustment provided for in Section 4.8, such questions
will be conclusively determined by the Company's Auditors, or, if they decline
to so act any other firm of certified public accountants in the United States of
America that the Company may designate and who will have access to all
appropriate records and such determination will be binding upon the Company and
the Holders of the Warrants.

	5. 	CALL OPTION 

The Company has the right on thirty (30) days’ written notice
(the “Call Notice”) to require the Warrant Holder to exercise the Warrant so
long as the closing price of the common shares of the Company on its primary
trading market (determined by the volume of trading of the Company’s common
shares) equals or exceeds $1.25 per common share for at least five (5)
consecutive trading days prior to the date of the Call Notice. The Warrants
evidenced by this Warrant Certificate will terminate on the date that is thirty
(30) days (the “Call Period”) from the date of the Call Notice in the event that
the Warrant Holder does not exercise the Warrant during the Call Period.

	6. 	
      WAIVER OF CERTAIN RIGHTS  

	 	 
	(a)	Immunity of Shareholders,
etc.

The Warrant Holder, as part of the consideration for the issue
of the Warrants, waives and will not have any right, cause of action or remedy
now or hereafter existing in any jurisdiction against any past, present or
future incorporator, shareholder, Director or officer (as such) of the Company
for the issue of shares pursuant to any Warrant or on any covenant, agreement,
representation or warranty by the Company herein contained or in the
Warrant.

	7. 	
      MODIFICATION OF TERMS, ETC.

	 	 
	(a)	
      Modification of Terms and Conditions for Certain
      Purposes

From time to time the Company may, subject to the provisions of
these presents, modify the Terms and Conditions hereof, for the purpose of
correction or rectification of any ambiguities, defective provisions, errors or
omissions herein.

	(b) 	Warrants Not Transferable

The Warrant and all rights attached to it are not
transferable.

DATED as of the date first above written in these Terms and
Conditions.

	 	ENVIRONMENTAL CONTROL CORP.
  
	 	  	 
	 	  	 
	 	Per: 	 
	 		Authorized Signatory
  

FORM OF SUBSCRIPTION

	TO: 	Environmental Control Corp. 
	  	Suite 605 – 1525 Robson Street 
	  	Vancouver, British Columbia 
	  	Canada V6G 1C3 

The undersigned Holder of the within Warrants hereby subscribes
for ____________ common shares (the "Shares") of Environmental Control Corp.
(the "Company") pursuant to the within Warrants at US$0.30 per Share on the
terms specified in the said Warrants. This subscription is accompanied by a
certified cheque or bank draft payable to or to the order of the Company for the
whole amount of the purchase price of the Shares.

The undersigned represents that, at the time of the exercise of
these Warrants, all of the representations and warranties contained in Section 6
of the Subscription Agreement between the Company and the undersigned pursuant
to which these Warrants were issued are true and accurate.

The undersigned hereby directs that the Shares be registered as
follows:

	NAME(S) IN FULL 	 	ADDRESS(ES) 	 	NUMBER OF SHARES 
	 	 	 	 	 
	  	 		 	  
	 	 	 	 	 
	 	 	 	 	 
	 	 	TOTAL: 	 	 

	(Please print full name in which share certificates are to
      be issued, stating whether Mr., Mrs. or Miss is applicable). 
	 
	DATED this ______________ day of ___________________,
      ______. 
	 
	In the presence of: 

	 	 	 
	Signature of Witness 	 	Signature of Warrant Holder

Please print below your name and address in full.

	Name (Mr./Mrs./Miss) 	 
	 	 
	Address 	 
	 	 
	 	 

INSTRUCTIONS FOR SUBSCRIPTION

The signature to the subscription must correspond in every
particular with the name written upon the face of the Warrant without alteration
or enlargement or any change whatever. If there is more than one subscriber, all
must sign. In the case of persons signing by agent or attorney or by personal
representative(s), the authority of such agent, attorney or representative(s) to
sign must be proven to the satisfaction of the Company. If the Warrant
certificate and the form of subscription are being forwarded by mail, registered
mail must be employed.

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