Document:

SumTotal Systems Executive Incentive Plan 2005

 Exhibit 10.1 
  
 

 
  
 SUMTOTAL SYSTEMS 

EXECUTIVE INCENTIVE PLAN 
 2005

  
 SECTION 1 - INTRODUCTION 
  
 Plan Objectives 
  
 The goal of SumTotal Systems’ Executive Incentive Plan (the “Plan”) is to enhance and reinforce the goals of SumTotal Systems
(the “Company”) for profitable growth, by providing executives with additional financial incentives and rewards for attainment of such growth. Final approval of the payment of any awards made under the Plan is subject to the sole
discretion of the Compensation Committee of the Board of Directors (“Compensation Committee”) and the Chief Executive Officer. 
  
 Effective Date 
  
 The Plan is effective for the year beginning January 1, 2005 and ending December 31, 2005; provided, however, that the Company can modify, alter, expand, retract or cancel the Plan in its entirety, with or without
advance notice. 
  
 SECTION 2 - DEFINITIONS 
  
 Definitions of terms as used throughout this Plan document are as follows: 
  

	•	 	“Quarter” means the three-month period coinciding with the Company’s fiscal quarters. 

  

	•	 	“Year” means the twelve-month period coinciding with the Company’s annual fiscal year. 

  

	•	 	“Plan” is the SumTotal Systems Executive Incentive Plan. 

  

	•	 	“Participant” means an employee designated and approved by the Compensation Committee and/or the Chief Executive Officer to participate in the Plan.

  

	•	 	“Bookings” is the number published in the final bookings report. 

  

	•	 	“Revenue” is the number in the reported non-GAAP financials. 

  

	•	 	“Operating Profit” excludes the following non-cash and one-time charges: stock based compensation, all amortization and depreciation, certain merger related expenses and
restructuring charges. It also excludes any accruals for this incentive plan. 

  

	•	 	Gender. Except when otherwise indicated by the context, any masculine terminology used herein shall also include the feminine, and the definition of any terms herein in the singular
shall also include the plural. 

  

 Page 1 of 5 

 

 
  
 SECTION 3 - PLAN ADMINISTRATION

  
 Administration 
  
 The Plan shall be administered by the Chief Executive Officer, with oversight by the
Compensation Committee. 
  
 Participation 
  
 Participation in the Plan shall be limited to regular employees of the Company. In selecting
participants, the Chief Executive Officer shall consider an individual’s position and potential impact on the Company’s business results and performance. A Participant who joins the plan during the Year will have his bonus award prorated
for the time he was eligible to participate in the Plan. 
  
 Bonus
Awards 
  
 A bonus fund shall be established for purposes of determining
the total award allocations to each Participant. Computation of the total bonus pool is described in Part II of this Plan. Each Participant award is determined based on the Participant’s target incentive percentage of base salary, achievement
of company quantitative goals, and individual performance measures (Most Important Tasks – MITs) as discussed in Section 4. 
  
 Payment of Bonuses 
  
 Normal Payment. A quarterly or annual bonus is not earned until the day the bonus is paid for a given quarter or year, as the case may be. Since no portion of a
bonus is earned until it is paid, in order to receive any particular payout under the Plan, the Participant receiving the payout must be an active employee on the day the bonus is paid. Bonus payments are typically made within thirty days following
the end of the Plan period. If termination of employment occurs for any reason other than death, total disability, or approved leave of absence, no bonus shall be deemed earned for the Plan period in which such termination occurs. 
  
 Payment Under Conditions of Approved Leave of Absence. If an employee is on an
approved Leave of Absence (subject to SumTotal’s Leave of Absence Policy), such Participant shall be deemed to have earned a proportionate share of what would otherwise be that period’s actual bonus. The amount of such award shall be the
amount which would have been earned had the Participant been employed by the Company during the full period, multiplied by a fraction, the numerator of which is the number of days that the Participant was actively at work during that award period
and the denominator of which is the number of days in that full award period. 
  

 Page 2 of 5 

 

 
  
 Payment Under Conditions of Termination. The
right to participate in this Plan will become void upon termination of employment for any reason, except as specifically set forth below, effective as of the last day of employment. 
  
 If termination of employment occurs on account of death or total disability, such terminating Participant shall be deemed to have earned a
proportionate share of what would otherwise be that period’s actual bonus. The amount of such award shall be the amount which would have been earned had the Participant been employed by the Company during the full period, multiplied by a
fraction, the numerator of which is the number of days that the Participant was employed by the Company during that award period and the denominator of which is the number of days in that full award period. 
  
 Participant Transfer. If a Participant is transferred to another position within the
Company during the quarter or year, and experiences a change in his eligibility to participate in this Plan, partial awards will be made based on a pro rata determination as described in the preceding paragraph. 
  
 Plan Changes 
  
 The Company reserves the right to amend, revoke, or cancel this plan or any portion of it, at any time, for any reason whatsoever, with or
without cause or advance notice. Payouts may not be made under this Plan at any time if, in the sole discretion of the Chief Executive Officer or Compensation Committee, the overall financial performance of the Company does not warrant the payment
of these awards. 
  
 Other Conditions 
  
 Right of Assignment. No Participant may sell, assign, transfer, discount, or pledge
as collateral for a loan or otherwise anticipate his right to any distribution under this Plan. In the event of a Participant’s death, payment shall be made to the Participant’s designated beneficiary, or in the absence of such
designation, to the Participant’s estate. 
  
 Right of Employment.
Nothing in this Agreement alters the “at will” nature of every Participant’s employment. In other words, a Participant or SumTotal may terminate a Participant’s employment relationship for any reason or for no reason, with or
without cause or advance notice. 
  
 Withholding for Taxes. The Company
shall have the right to deduct from all payments under this Plan any federal or state taxes or other payroll withholdings as required by law to be withheld with respect to such payments. 
  

 Page 3 of 5 

 

 
  
 SECTION 4 - OPERATING RULES 
  
 Plan Design 
  
 The Plan is based 80% on Business Financials and 20% on achievement of a Participant’s Annual MIT’s. All payouts under the Plan
are subject to the overall financial performance of the Company 
  
 The maximum
payout for the total year and for each quarter is 100% of the appropriate target. For the first three (3) quarters of the year, the payment is based on the results for the relevant quarter only. Any amount above 100% of target achieved in any
quarter is not paid out but is banked and will be applied at the end of the year to make up for any shortfall for quarters where less than 100% of target was earned. 
  
 Total payouts are not “capped,” in the event the Corporate Financial Performance is stellar. The Compensation Committee may in its
sole discretion determine at the end of the year any above-cap or “super-bonus” payout for achievement of greater than 100% of financial plan results. In the event of the failure to achieve at least 90% of Plan, the Compensation Committee
may in its sole discretion approve bonus payments. 
  

	•	 	Business Financials – 80% of total bonus target (or 20% of total bonus target per quarter) 

  
 The business financials will be reviewed on a quarterly basis based on the following indicators and weightings: 

 

			
	 •      Bookings
	  	40% (or 32% of total bonus target)
	 •      Revenue
	  	30% (or 24% of total bonus target)
	 •      Operating Profit
	  	30% (or 24% of total bonus target)

  
 The quarterly payments
will be based on cumulative quarterly financials – 3 months results, 6 months results, 9 months results and year-end results. 
  
 Plan Payout based on Corporate Financial Performance: 
  

							
	 •      Achieve less than 90% of plan
	  	0% payout	  	 	  	 
	 •      Achieve 90% of plan
	  	50% payout	  	 	  	 
	 •      Achieve 100% or more of plan
	  	100% payout	  	 	  	 
	 •      Straight-line payout between 90-100% of plan.
         (e.g. Achieve 95% of plan eligible for a 75% payout)
	  	 	  	 	  	 

  
  
  
  
  
 Each business financial indicator stands on its own for purposes of assessing quarterly results subject to the overall financial performance of the
company. 
  

 Page 4 of 5 

 

 
  
 EXAMPLE 
  

	•	 	Business Financials – 80% of total bonus target 

  

					
	Potential Business Financials Bonus Under the Plan (60%)
		
	 Assumptions:
	 	 $100,000 base salary, 25% target bonus (0.25 x $100,000=$25,000)
 Business Financials at 80% of target bonus (0.8 x $25,000=$20,000)
 Target met at 100% for each
indicator

							
			
	 Indicator

	  	Per Quarter
Maximum

	  	Annual Total
Maximum

	 Bookings (0.4 x $20,000)
	  	$	2,000	  	$	8,000
	 Revenue (0.3 x $20,000)
	  	$	1,500	  	$	6,000
	 Operating Profit (0.3 x $20,000)
	  	$	1,500	  	$	7,500
	 	  	
	
	  	
	

	 Total Bonus
	  	$	5,000	  	$	20,000
	 	  	
	
	  	
	

  

	•	 	Most Important Tasks (MITs) – 20% of total bonus target 

  
 MITs are agreed upon at the beginning of the year; updated each quarter and approved by the Chief Executive Officer or his designee; and, in the case of
the Chief Executive Officer, approved by the Compensation Committee. 
  
 The MITs bonus of up to 20% of the Participant’s targeted bonus will be paid annually after year-end. 
  

					
	Potential MITs Bonus Under the Plan (20%)
		
	 Assumptions:
	 	 $100,000 base salary, 25% target bonus (0.25 x $100,000=$25,000)
 MITs at 20% of target bonus (0.2 x $25,000=$5,000)
 MITs met at 100%

						
			
	 Indicator

	  	Per Quarter

	  	Annual

	 MITs (.2 * $25,000)
	  	N/A	  	$	5,000

  

	•	 	Potential Annual Bonus: 

  

				
	 Business Financials @ 100%
	  	$	20,000
	 MITs @ 100%
	  	$	5,000
	 	  	
	

	 TOTAL
	  	$	25,000
	 	  	
	

  

 Page 5 of 5EXHIBIT 10.17

 Exhibit 10.17 
  
 Form of Executive Restricted Stock Unit 
 Agreement for the Marriott International, Inc. 
 2002 Comprehensive Stock and Cash 
 Incentive Plan 
  
 MARRIOTT INTERNATIONAL, INC. 
 EXECUTIVE RESTRICTED STOCK UNIT AGREEMENT

  
 THIS AGREEMENT is made on <GRANT DATE>
(the “Award Date”) by MARRIOTT INTERNATIONAL, INC. (the “Company”) and <NAME> (“Employee”). 
  
 WITNESSETH: 
  
 WHEREAS, on May 3, 2002, the Company adopted and approved the 2002 Marriott International, Inc. Comprehensive Stock and Cash Incentive Plan (the
“Plan”); and 
  
 WHEREAS, the Company wishes to award to
designated employees certain stock-based Awards as provided in Section 10.2 of the Plan; and 
  
 WHEREAS, Employee has been approved by the Compensation Policy Committee (the “Committee”) of the Company’s Board of Directors (the “Board”) to receive an award of “Executive Restricted
Stock Units” (“RSUs”) under the Plan; 
  
 NOW,
THEREFORE, it is agreed as follows: 
  
 1. Prospectus.
Employee has been provided with, and hereby acknowledges receipt of, a Prospectus for the Plan dated [DATE]. 
  
 2. Interpretation. The provisions of the Plan are incorporated by reference and form an integral part of this Agreement. Except as otherwise set
forth herein, capitalized terms used herein shall have the meanings given to them in the Plan. In the event of any inconsistency between this Agreement and the Plan, the terms of the Plan shall govern. A copy of the Plan is available from the
Compensation Department of the Company upon request. All decisions and interpretations made by the Committee or its delegate with regard to any question arising hereunder or under the Plan shall be binding and conclusive. 
  
 3. Award of RSUs. Subject to Employee’s acceptance of this
Agreement, and subject to satisfaction of the tax provisions of the International Assignment Policy (“IAP”), if applicable, this award (the “Award”) of <OPTIONS GRANTED> RSUs is made as of the Award Date. 

 
 4. RSU and Common Share Rights. The RSUs awarded under this
Agreement shall be recorded in a Company book-keeping account and shall represent Employee’s unsecured right to receive from the Company the transfer of title to shares of Marriott International, Inc. Class A Common Stock (“Common
Share”) in accordance with the schedule of Vesting Dates set forth in paragraph 6 below, provided that Employee has satisfied the Conditions of Transfer set forth in paragraph 7 below and subject to the satisfaction of the provision on
withholding taxes set forth in paragraph 9 below. On each such Vesting Date, if it occurs, or such later date(s) pursuant to procedures established by the Committee under Article 10 of the Plan, the Company shall reverse the book-keeping entry for
all such related RSUs and transfer a corresponding number of Common Shares (which may be reduced by the number of shares withheld to satisfy withholding taxes as set forth in paragraph 9 below, if share reduction is the method utilized for
satisfying the tax withholding obligation) to an individual brokerage account (the “Account”) established and maintained in Employee’s name. Employee shall have all the rights of a stockholder with respect to such Common Shares
transferred to the Account, including but not limited to the right to vote the Common Shares, to sell, transfer, liquidate or otherwise dispose of the Common Shares, and to receive all dividends or other distributions paid or made with respect to
the Common Shares from the time they are deposited in the Account. Employee shall have no voting, transfer, liquidation, dividend or other rights of a Common Share stockholder with respect to RSUs prior to such time that the corresponding Common
Shares are transferred, if at all, to Employee’s Account. 
  
 5. Adjustments in Shares. The term “Common Shares,” as used herein, shall also include any new or additional or different shares of stock of the Company to which Employee may become entitled with respect to such Common
Shares by virtue of a subdivision or combination of shares of common stock, a dividend payable in common stock, a reclassification of common stock, or a merger or consolidation or any other change in capital structure of shares of common stock. RSUs
recorded for Employee pursuant to this Agreement will be adjusted to reflect stock dividends, stock splits and reclassifications of common stock, but no adjustments will be made to RSUs to reflect cash dividends. 
  
 6. Vesting in RSUs. This Award shall vest in accordance with
the following schedule: 
  

			
	 Vesting Date

	 	 Number of Award Shares

	<                 >	 	<                 >

  
 Notwithstanding the foregoing, in the
event that any such Vesting Date is a day on which stock of the Company is not traded on the New York Stock Exchange or another national exchange, then the Vesting Date shall be the next following day on which the stock of the Company is traded on
the New York Stock Exchange or another national exchange. 
  
 Exhibit 10.17 
  

 1 

 7. Conditions of Transfer. With respect to any RSUs awarded to Employee, as a condition of
Employee receiving a transfer of corresponding Common Shares in accordance with paragraph 4 above, Employee shall meet all of the following conditions during the entire period from the Award Date hereof through the Vesting Date relating to such
RSUs: 
  

	 	(a)	Employee must continue to be an active employee of the Company or one of its subsidiaries (“Continuous Employment”); 

  

	 	(b)	Employee must refrain from Engaging in Competition (as defined in Section 2.23 of the Plan) without first having obtained the written consent thereto from the Company
(“Non-competition”); and 

  

	 	(c)	Employee must refrain from committing any criminal offense or malicious tort relating to or against the Company (“No Improper Conduct”). The Company’s determination
as to whether or not particular conduct constitutes Improper Conduct shall be conclusive. 

  
 If Employee should fail to meet the requirements relating to (i) Continuous Employment, (ii) Non-competition, or (iii) No Improper Conduct, then Employee
shall forfeit the right to vest in any RSUs that have not already vested as of the time such failure is determined, and Employee shall accordingly forfeit the right to receive the transfer of title to any corresponding Common Shares. The forfeiture
of rights with respect to unvested RSUs (and corresponding Common Shares) shall not affect the rights of Employee with respect to any RSUs that already have vested nor with respect to any Common Shares the title of which has already been transferred
to Employee’s Account. 
  
 8. Effect of Termination of
Employment. Notwithstanding the foregoing: 
  

	 	(a)	In the event Employee’s Continuous Employment is terminated prior to the relevant Vesting Date on account of death, and if Employee had otherwise met the requirements of
Continuous Employment, Non-competition and No Improper Conduct from the Award Date through the date of such death, then Employee’s unvested RSUs shall immediately vest in full upon death and Employee’s rights hereunder with respect to any
such RSUs shall inure to the benefit of Employee’s executors, administrators, personal representatives and assigns. 

  

	 	(b)	In the event Employee’s Continuous Employment is terminated prior to the relevant Vesting Date on account of Employee’s Disability (as defined in Section 2.17 of the Plan)
or Retirement (as defined below), and if Employee had otherwise met the requirements of Continuous Employment, Non-competition and No Improper Conduct from the Award Date through the date of such Disability or Retirement, and provided that Employee
continues to meet the requirements of Non-competition and No Improper Conduct, then Employee’s rights hereunder with respect to any outstanding, the Committee shall have the complete discretion in determining the percentage, if any, of an
Employee’s outstanding RSUs as to when the period of Restriction shall end. For purposes of this Agreement, “Retirement” shall mean termination of employment by retiring with special approval of the Committee following age 55 with ten
(10) years of service or by retiring with special approval of the Committee with twenty (20) years of service. 

  
 Except as set forth in this paragraph 8 above, no other transfer of rights with respect to RSUs shall be permitted pursuant to this Agreement. 
  
 9. Taxes. The transfer of Common Shares, pursuant to paragraphs 4 and
7 above, shall be subject to the further condition that the Company shall provide for the withholding of any taxes required by federal, state, or local law in respect of that Vesting Date by reducing the number of RSUs to be transferred to
Employee’s Account or by such other manner as the Committee shall determine in its discretion. 
  
 10. Consent. By executing this Agreement, Employee consents to the collection and maintenance of Employee’s personal information (such as
Employee’s name, home address, home telephone number and email address, social security number, assets and income information, birth date, hire date, termination date, other employment information, citizenship, marital status) by the Company
and the Company’s service providers for the purposes of (i) administering the Plan (including ensuring that the conditions of transfer are satisfied from the Award Date through the Vesting Date), (ii) providing Employee with services in
connection with Employee’s participation in the Plan, (iii) meeting legal and regulatory requirements and (iv) for any other purpose to which Employee may consent. Employee’s personal information is collected from the following sources:

  

	 	(a)	from this Agreement, investor questionnaires or other forms that Employee submits to the Company or contracts that Employee enters into with the Company; 

 

	 	(b)	from Employee’s transactions with the Company, the Company’s affiliates and service providers; 

  

	 	(c)	from Employee’s employment records with the Company; and 

  

	 	(d)	from meetings, telephone conversations and other communications with Employee. 

  

In addition, Employee further consents to the Company disclosing Employee’s personal information to the Company’s third party service
providers and affiliates and other entities in connection with the services the Company provides related to Employee’s participation in the Plan, including: 
  

	 	(a)	financial service providers, such as broker-dealers, custodians, banks and others used to finance or facilitate transactions by, or operations of, the Plan;

  

	 	(b)	other service providers to the Plan, such as accounting, legal, or tax preparation services; 

  

	 	(c)	regulatory authorities; and 

  
 Exhibit 10.17 
  

 2 

	 	(d)	transfer agents, portfolio companies, brokerage firms and the like, in connection with distributions to Plan participants. 

  
 Employee’s personal information is maintained on the Company’s
networks and the networks of the Company’s service providers, which may be in the United States or other countries other than the country in which this Award was granted. Employee may access Employee’s personal information to verify its
accuracy and update Employee’s information by contacting Employee’s local Human Resources representative. Employee may obtain account transaction information online or by contacting the Plan record keeper as described in the Plan
enrollment materials. 
  
 By accepting the terms of this
Agreement, Employee further agrees to the same terms with respect to other Awards Employee received in any prior year under the Plan. 
  
 11. No Effect on Employment. This agreement is not a contract of employment or otherwise a limitation on the right of the Company to terminate the
employment of Employee or to increase or decrease Employee’s compensation from the rate of compensation in existence at the time this Agreement is executed. 
  
 12. No Additional Rights. Benefits under this Plan are not guaranteed. The grant of Awards is a one-time
benefit and does not create any contractual or other right or claim to any future grants of Awards under the Plan, nor does a grant of Awards guarantee future participation in the Plan. The value of Employee’s Awards is an extraordinary item
outside the scope of Employee’s employment contract, if any. Employee’s Awards are not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end-of-service payments, bonuses, long-term
service awards, pension or retirement benefits (except as otherwise provided by the terms of any U.S.-qualified retirement or pension plan maintained by the Company or any of its subsidiaries), or similar payments. By accepting the terms of this
Agreement, Employee further agrees to these same terms and conditions with respect to any other Awards Employee received in any prior year under the Plan. 
  
 13. Amendment of This Agreement. The Board of Directors may at any time amend, suspend or terminate the Plan; provided, however, that no amendment,
suspension or termination of the Plan or the Award shall adversely affect the Award in any material way without written consent of the Employee. 
  
 14. Successors and Assigns. This Agreement shall bind and inure to the benefit of the parties hereto and the successors and assigns of the Company
and, to the extent provided in paragraph 8 above and in the Plan, to the personal representatives, legatees and heirs of the Employee. 
  
 IN WITNESS WHEREOF, MARRIOTT INTERNATIONAL, INC. has caused this Agreement to be signed by its Executive Vice President, Human Resources, effective the
day and year first hereinabove written. 
  

					
	 MARRIOTT INTERNATIONAL, INC.
	 	 	 	 EMPLOYEE

			
	  	 	 	 	  
	 	 	 	 	<NAME>
			
	  	 	 	 	  
	 Executive Vice President, Human Resources
	 	 	 	 
			
	  	 	 	 	  
	 	 	 	 	 Signature

  
 Exhibit 10.17

  

 3

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