Document:

Exhibit 10.5

NUVASIVE, INC.

NOTICE OF GRANT OF PERFORMANCE CASH AWARD

 

NuVasive, Inc. (the “Company”) has granted to the participant identified below (the “Participant”) a performance cash award (the “Award”) pursuant to the NuVasive, Inc. 2014 Executive Incentive Compensation Plan (the “Plan”), which represents the right to receive – on the Settlement Date provided in the Performance Cash Award Agreement attached hereto (together with this Grant Notice, the “Agreement”) – a cash amount as set forth in, and subject to the terms and conditions of, this Agreement.  This Award is subject to all of the terms and conditions set forth in the Agreement and the Plan, each of which is incorporated herein by reference.  Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Plan or the Agreement, as appropriate, and, in the event of any inconsistency between the Plan and the Agreement, the terms of the Plan shall control.

 

				
	
Participant:
	

	
Participant ID:
	

	
Date of Grant:
	

	
Base Cash Amount:
	
, subject to adjustment as provided by the Agreement.

	
Performance Period:
	
.

	
Performance Measure:
	
The Company’s operating margin (as listed in Section 2(t)(vi) of the Plan), determined in accordance with generally accepted accounting principles in the United States (“GAAP”) as recorded on the Company’s [  ] year-end financial statements, adjusted to (i) exclude the effect of currency fluctuations, (ii) exclude litigation liability expense, intangible asset impairment, leasehold related charges, acquisition related items (including expenses associated with prior mergers-and-acquisitions-related activity and as incurred) and certain one-time and business consolidation costs, and (iii) include the effect of acquisitions and divestitures based on the actual results compared to the preceding 12 month run rate for the applicable businesses, consistent with the Company’s non-GAAP policy, and subject to such further adjustments as the Committee may in its discretion determine and specify in writing prior to  (“[  ] Non-GAAP Operating Margin”). 

	
Vesting Schedule:
	
Subject to the terms and conditions of the Agreement (including, without limitation, conditions requiring continued Service with the Company through the applicable date), this Award vests on  (the “Scheduled Vesting Date”).

By accepting the Award/signing the Agreement, the Participant agrees that the Award is governed by this Grant Notice and by the provisions of the Plan and the Agreement, both of which are made a part of this document.

 

The Participant acknowledges that copies of the Plan and the Agreement have been furnished or made available by the Company.

 

The Participant represents that the Participant has read and is familiar with the provisions of the Plan and the Agreement, and hereby accepts the Award subject to all of their terms and conditions.

 

 

NUVASIVE, INC.

PERFORMANCE CASH AWARD AGREEMENT

 

NuVasive, Inc. has granted to the Participant named in the Notice of Grant of Performance Cash Award (the “Grant Notice”) to which this Performance Cash Award Agreement is attached (together, the Performance Cash Award Agreement and the Grant Notice being referred to collectively herein as this “Agreement”) an Award subject to the terms and conditions set forth in this Agreement.  The Award has been granted pursuant to, and shall - in all respects - be subject to the terms and conditions of the NuVasive, Inc. 2014 Executive Incentive Compensation Plan (the “Plan”), as amended from time-to-time, the provisions of which are incorporated herein by reference.  By accepting the Award (as provided in the Grant Notice), the Participant: (a) acknowledges receipt of, and represents that the Participant has read and is familiar with, this Agreement and the Plan, (b) accepts the Award subject to all of the terms and conditions of this Agreement and the Plan, and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee or its delegate (to the extent delegation is permitted under the Plan) in the event any questions arise (and/or interpretation may be required) regarding this Agreement or the Plan.

1.Definitions and Construction.

1.1Definitions.  Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice or the Plan.

(a) “Performance Multiplier” means the respective percentage calculated using (or as identified in) the table below:

			
	
[  ] Non-GAAP Operating Margin
	
% of Goal Achieved
	
Performance Multiplier

	
[  ]
	
[  ]
	
[  ]

	
[  ]
	
[  ]
	
[  ]

	
[  ]
	
[  ]
	
[  ]

	
[  ]
	
[  ]
	
[  ]

	
[  ]
	
[  ]
	
[  ]

	
[  ]
	
[  ]
	
[  ]

	
[  ]
	
[  ]
	
[  ]

	
[  ]
	
[  ]
	
[  ]

	
[  ]
	
[  ]
	
[  ]

	
[  ]
	
[  ]
	
[  ]

	
[  ]
	
[  ]
	
[  ]

If the Company achieves a [  ] Non-GAAP Operating Margin that falls between the foregoing levels, the Performance Multiplier will be will be determined by linear interpolation between the applicable levels noted above and using the following guiding principles:

	
·
	
a [  ]% decrease in funding for every [  ]% of goal achieved below target (up to [  ]% of goal achieved, below which the Performance Multiplier shall be zero);

	
·
	
a [  ]% increase in funding for every [  ]% of goal achieved between [  ]% and [  ]% of goal achieved; and 

	
·
	
a [  ]% incremental increase in funding for [  ]% of goal achieved above [  ]%, up to a maximum funding of [  ]% of target.

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In each case, the Performance Multiplier shall be rounded up to the nearest tenth of a percent.

1.2Construction.  Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement.  Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.  Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

2.Administration.

2.1Committee Actions.  All questions of interpretation concerning this Agreement, the Plan or any other form of agreement or other document employed by the Company in the administration of the Plan or the Award shall be determined by the Committee or its delegate.  All such determinations by the Committee or its delegate shall be final, binding and conclusive upon all persons having an interest in the Award, unless fraudulent or made in bad faith.  Any and all actions, decisions and determinations taken or made by the Committee in the exercise of its discretion pursuant to the Plan or the Award or other agreement thereunder (other than determining questions of interpretation pursuant to the preceding sentence) shall be final, binding and conclusive upon all persons having an interest in the Award.  

2.2Express Authority Required.  Only individuals expressly designated by the Committee shall have the authority to act on behalf of the Committee with respect to certain of the matters, rights, obligations, modifications, or elections allocated to the Company herein (or in the Plan).

3.Payment.  Subject to certification by the Committee in writing of the cash amount (if any) that is payable under this Agreement, which certification and determination shall be made by the Committee no later than the January 31st that next follows the end of the Performance Period (or, in the event of a Change in Control, the closing date of such transaction), and except as otherwise specified below, the cash amount that shall be payable in settlement of this Award on the date specified in Section 5 below, shall be equal to the Base Cash Amount multiplied by the Performance Multiplier, rounding up to the nearest whole dollar.  If the Performance Multiplier is 0%, the Award is forfeited and no cash payment will be paid.

3.1Death or Disability.  Upon the Participant’s death or termination of Service due to Disability, the cash amount that shall be payable in settlement of this Award on the date specified in Section 5 below shall be the Base Cash Amount (as provided in the Notice of Grant, with no application of the Performance Multiplier).

3.2Change in Control.  Upon any Change in Control that occurs in [  ], the amount of cash that shall be paid in settlement of this Award shall be equal to the Base Cash Amount (as set forth in the Notice of Grant).  Upon any Change in Control that occurs in [  ], the amount of cash that shall be paid in settlement of this Award shall be equal to the greater of (i) the Base Cash Amount, or (ii) such Base Cash Amount multiplied by the Performance Multiplier (determined using a period that begins on [  ] and ends on the last day of the month prior to such Change in Control transaction), rounding up to the nearest whole dollar.

4.Vesting; Forfeiture.

4.1Vesting of Award.  Provided that the Participant’s Service has not terminated prior to the applicable date, the Award shall become vested upon the earliest date to occur of the following (the “Vesting Date”):

(a)the Scheduled Vesting Date (as provided in the Grant Notice);

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(b)the Participant’s death;

(c)termination of the Participant’s Service due to Disability; and

(d)immediately before any Change in Control.

4.2Leaves of Absence.

(a)If Participant takes an approved medical, FMLA (or other statutorily protected leave), or military leave (each, an “Approved Leave”) and returns from such leave for at least thirty calendar days, then Participant shall be treated as if the period of such Approved Leave had been a period of continuous Service with the Company or Affiliate, and the Award shall be settled in accordance with Section 5.

(b)In the event the Participant takes a leave of absence other than an Approved Leave, the cash amount payable as determined under Section 3, shall be prorated by multiplying such amount by a fraction the numerator of which is the number of whole months during the period commencing on [  ] and ending on the earlier of the date of a Change in Control or [  ] (the “Vesting Period”) that Participant had been in continuous Service with the Company or Affiliate, and the denominator of which is the number of months the Vesting Period spans, rounding up to the nearest whole number.

(c)In the event of Participant’s termination of Service during any leave of absence, then the Award shall expire in accordance with the provisions set forth in Section 4.3 below.

4.3Forfeiture of Award Upon Termination of Service.  Except as otherwise provided in Section 4.1, the Award will terminate automatically without any further action by the Company and be forfeited without further notice and at no cost to the Company upon Participant’s termination of Service.

5.Settlement of Award.  Subject to the terms and conditions of the Plan and this Agreement, any cash amount that is determined to be payable pursuant to Section 3 shall be distributed to Participant (or Participant’s estate in the event of death) with respect to Participant’s Award within thirty days following the Vesting Date for such Award, except as otherwise provided in Section 8.1 (the “Settlement Date”).

6.Tax Withholding.  By accepting the Award (as provided in the Grant Notice), the Participant hereby authorizes withholding from payroll and any other amounts payable to the Participant, including withholding of a portion of the cash amount otherwise payable to the Participant in settlement of the Award, and otherwise agrees to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax (including any social insurance) withholding obligations of the Participating Company, if any, which arise in connection with the Award, the vesting of the Award or the payment of cash in settlement of the Award.

7.Rights as a Director, Employee or Consultant.

If the Participant is an Employee, the Participant understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Participant, the Participant’s employment is “at will” and is for no specified term.  Nothing in this Agreement shall confer upon the Participant any right to continue in the Service of a Participating Company or interfere in any way with any right of the Participating Company Group to terminate the Participant’s Service at any time.

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8.Compliance with Section 409A.

It is intended that the settlement of the Award as set forth in this Agreement qualify for exemption from, or comply with, the requirements of Section 409A, and any ambiguities herein will be interpreted to so qualify or comply.  Notwithstanding the foregoing, if it is determined that the Award fails to satisfy the requirements of the “short-term deferral” exemption and are otherwise Section 409A Deferred Compensation, it is intended that any payment or benefit which is made or provided pursuant to or in connection with this Award shall comply in all respects with the applicable requirements of Section 409A (including applicable regulations or other administrative guidance thereunder, as determined by the Committee in good faith) to avoid the unfavorable tax consequences provided therein for non‐compliance.  In connection with effecting such compliance with Section 409A, the following shall apply:

8.1Separation from Service; Required Delay in Payment to Specified Employee.  Notwithstanding anything set forth herein to the contrary, no amount payable pursuant to this Agreement on account of the Participant’s termination of Service which constitutes a “deferral of compensation” within the meaning of the Treasury Regulations issued pursuant to Section 409A of the Code (the “Section 409A Regulations”) shall be paid unless and until the Participant has incurred a “separation from service” within the meaning of the Section 409A Regulations.  Furthermore, to the extent that the Participant is a “specified employee” within the meaning of the Section 409A Regulations as of the date of the Participant’s separation from service, no amount that constitutes a deferral of compensation which is payable on account of the Participant’s separation from service shall be paid to the Participant before the date (the “Delayed Payment Date”) which is first day of the seventh month after the date of the Participant’s separation from service or, if earlier, the date of the Participant’s death following such separation from service.  All such amounts that would, but for this Section, become payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date.

8.2Other Changes in Time of Payment.  Neither the Participant nor the Company shall take any action to accelerate or delay the payment of any benefits under this Agreement in any manner which would not be in compliance with the Section 409A Regulations.

8.3Amendments to Comply with Section 409A; Indemnification.  Notwithstanding any other provision of this Agreement to the contrary, the Company is authorized to amend this Agreement, to void or amend any election made by the Participant under this Agreement and/or to delay the payment of any monies and/or provision of any benefits in such manner as may be determined by the Company, in its discretion, to be necessary or appropriate to comply with the Section 409A Regulations without prior notice to or consent of the Participant.  The Participant hereby releases and holds harmless the Company, its directors, officers and stockholders from any and all claims that may arise from or relate to any tax liability, penalties, interest, costs, fees or other liability incurred by the Participant in connection with the Award, including as a result of the application of Section 409A.

8.4Advice of Independent Tax Advisor.  The Company has not obtained a tax ruling or other confirmation from the Internal Revenue Service with regard to the application of Section 409A to the Award, and the Company does not represent or warrant that this Agreement will avoid adverse tax consequences to the Participant, including as a result of the application of Section 409A to the Award.  The Participant hereby acknowledges that he or she has been advised to seek the advice of his or her own independent tax advisor prior to entering into this Agreement and is not relying upon any representations of the Company or any of its agents as to the effect of or the advisability of entering into this Agreement.

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9.Miscellaneous Provisions.

9.1Termination or Amendment.  The Committee may terminate or amend the Plan or this Agreement at any time; provided, however, that no such termination or amendment may have a materially adverse effect on the Participant’s rights under this Agreement without the consent of the Participant unless such termination or amendment is necessary to comply with applicable law or government regulation, including, but not limited to, Section 409A.  No amendment or addition to this Agreement shall be effective unless in writing.

9.2Nontransferability of the Award.  Prior to the payment of cash on the applicable Settlement Date, neither this Award nor any cash amount payable under this Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution.  All rights with respect to the Award shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s guardian or legal representative.

9.3Repayment/Forfeiture.  Any benefits the Participant may receive hereunder shall be subject to repayment or forfeiture as may be required to comply with (a) any applicable listing standards of a national securities exchange adopted in accordance with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations of the U.S. Securities and Exchange Commission adopted thereunder, (b) similar rules under the laws of any other jurisdiction, and (c) the Company’s Incentive Compensation Recoupment Policy or any policies adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to the Participant.

9.4Further Instruments.  The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

9.5Binding Effect.  This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors and assigns.

9.6Delivery of Documents and Notices.  Any document relating to participation in the Plan or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Participant by a Participating Company, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address of such party set forth in the Grant Notice or at such other address as such party may designate in writing from time to time to the other party.

(a)Description of Electronic Delivery.  The Plan documents, which may include but do not necessarily include: the Plan, this Agreement, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically.  In addition, if permitted by the Company, the Participant may deliver electronically the Grant Notice to the Company or to such third party involved in administering the Plan as the Company may designate from time to time.  Such means of electronic delivery may include but do not necessarily include the delivery 

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of a link to a Company intranet or the Internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.

(b)Consent to Electronic Delivery.  The Participant acknowledges that the Participant has read Section 9.6(a) of this Agreement and consents to the electronic delivery of the Plan documents and, if permitted by the Company, the delivery of the Grant Notice, as described in Section 9.6(a).  The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing.  The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails.  Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails.  The Participant may revoke his or her consent to the electronic delivery of documents described in Section 9.6(a) or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail.  Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described in Section 9.6(a), but has nevertheless knowingly and voluntarily chosen to do so by accepting the Award (as provided in the Grant Notice).

9.7Integrated Agreement.  This Agreement and the Plan shall constitute the entire understanding and agreement of the Participant and the Participating Company Group with respect to the subject matter contained herein or therein and supersede any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Participating Company Group with respect to such subject matter.  To the extent contemplated herein or therein, the provisions of this Agreement and the Plan shall survive any settlement of the Award and shall remain in full force and effect.

9.8Applicable Law.  This Agreement shall be governed by the laws of the State of Delaware as such laws are applied to agreements between Delaware residents entered into and to be performed entirely within the State of Delaware.

9.9Terms and Conditions Subject to Change in the Event the Participant Transfers Outside of the United States.  Should the Participant transfer his or her residence and/or employment with the Company to another country, the Company, in its sole discretion, shall determine whether application of certain additional and/or supplemental terms and conditions is necessary or advisable in order to comply with respective laws, rules and regulations or to facilitate the operation and administration of the Award and the Plan.  In all circumstances, the Company will provide the Participant with its ordinary-course terms and conditions for such country(ies) in the form of an amendment and/or addendum, which shall thereafter be part of this Agreement.

 

Please sign below indicating your understanding and acceptance of the terms and conditions of this Agreement and return the signed Agreement to Anders Strothman.  Please also keep a copy of your executed Agreement for your records.

 

Participant:                                                Date:                                   

7EX-10.1

 Exhibit 10.1 

ModusLink FY 2015 Management Incentive Plan 
  

	1.	Purpose 

 The objective of the FY 2015 Management Incentive Plan (“2015 MIP Plan” or
“Plan”) is to recognize and reward the achievement of financial, business and management goals that are essential to the success of ModusLink Corporation and ModusLink PTS (collectively “ModusLink” or the “Company”) by
means of short and long term compensation incentives. 
  

	2.	Period of Effectiveness 

 This Plan relates to the 2015 Fiscal Year, August 1, 2014 to
July 31, 2015. 
  

	3.	Eligibility 

  

	 	A.	Approval for any Participant to join the Plan must be received from the Chief Human Resources Officer and the President and CEO, and the Committee of ModusLink Global Solutions, Inc. (the “Corporation”) in the
case of members of the Executive Leadership Team (“ELT”) and Section 16 Officers. The Company will issue Participants a notice of their eligibility and their individual Plan components by providing a Plan document to each. Further,
eligibility requires Participant’s receipt, signed and returned Certificate of Acknowledgement, Appendix B of this Plan document. Eligibility requires date of hire or promotion to MIP eligible status prior to beginning of the fourth fiscal
quarter of the Plan Year. 

  

	 	B.	In addition, Participant must be an active employee of the Company in good standing on the date actual Plan payments are made, provided, however, that a Participant will remain eligible for a payment under the Plan to
the extent such Participant (i) was employed by the Company for the Plan Period and (ii) has his or her employment with the Company involuntarily terminated by the Company without Cause after the Plan Period. 

 

	4.	Payout 

 Participants will be assigned a Payout Percentage for the 2015 Plan, expressed as a
percentage of Base Salary for the cash portion of the Award. A Participant may also receive a Performance Based Restricted Share (PBRS) grant as his/her performance warrants and 

 
calculated from a value determined and communicated to each Participant. The cash or grant Award will vary according to the Participant’s position or level, and schedule of compensation
based on Company performance based on the factors described in Section 6 below. 
  

	5.	Components and Performance Levels  

 Awards are subject to minimum achievement of Adjusted EBITDA
(the “Gate” for the Plan Year). No Plan Awards result if the Gate is not met. Once the Gate is achieved, Awards may be calculated independently for two Award components, Return on Invested Capital (ROIC), and Book and Bill of New Business.
Further, ROIC and Book and Bill components are weighted 70% and 30% respectively. The cash or grant Award calculated from the components may be adjusted by an Individual Performance Factor (IPF). Each Participant will be informed of the
“Threshold,” the “Target” and the “Maximum” performance levels achieved for each component. 
  

	6.	Calculation of Achievement and Overachievement Adjustments  

 When the Gate is met or exceeded,
Awards are calculated subject to independent Threshold achievement of each of the ROIC and Book and Bill Award components. 
  

	 	A.	ROIC 

  

	 	i.	Should the achieved ROIC be equal to or greater than the Threshold amount but less than the Target amount, a Participant would be eligible to receive a weighted portion of the ROIC component of his or her Payout based
on a pro rata scale running from 70% to 100% of that component of the Payout Percentage on a corresponding scale of 85% to 100% ROIC Target achievement. 

  

	 	ii.	Should the achieved ROIC equal the Target a Participant would be eligible to receive 100% of the ROIC weighted component of his or her Payout (i.e. 100% of the 70% attributable to ROIC). 

	 	iii.	Should the achieved ROIC exceed the Target, a Participant would be eligible to receive a weighted portion of the ROIC component of his or her Payout based on a pro rata scale on that component of the Payout Percentage
between 100% and 200% of the Target Payout on a corresponding scale between 100% and 150% ROIC Target achievement The Maximum Award is 200% of Target Payout regardless of achievement. 

 

	 	B.	Book and Bill 

  

	 	i.	Should the achieved Book and Bill be equal to or greater than the Threshold amount but less than the Target amount, a Participant would be eligible to receive a weighted portion of the Book and Bill component of his or
her Payout based on a pro rata scale running from 70% to 100% of that component of the Payout Percentage on a corresponding scale of 90% to 100% Book and Bill Target achievement. 

 

	 	ii.	Should the achieved Book and Bill equal the Target a Participant would be eligible to receive 100% of the Book and Bill weighted component of his or her Payout (i.e. 100% of the 30% attributable to Book and Bill).

  

	 	iii.	Should the achieved Book and Bill exceed the Target, a Participant would be eligible to receive a weighted portion of the Book and Bill component of his or her Payout based on a pro rata scale on that component of the
Payout between 100% and 200% of the Target Payout Percentage on a corresponding scale between 100% and 150% Book and Bill Target achievement. The Maximum Award is 200% of the Target Payout regardless of achievement. 

 

	 	C.	Individual Performance Factor (“IPF”) 

  

	 	i.	An IPF will be determined by the Participant’s manager, based on the Participant’s performance against written goals to be developed with such Participant and the Participant’s manager. The IPFs shall be
determined and applied such that on an aggregated basis, the sum of all Payout Amounts shall not increase above the stated Maximum amount as determined by applying Sections 6A and 6B to each Participant. For example, if by applying Sections 6A and
6B, Payout Amounts at Maximum equal $10,000 in the aggregate, the impact of the IPFs will not result in actual payouts in excess of $10,000. 

	 	ii.	If Participant’s performance has been unsatisfactory, the President and CEO (or the Committee in the case of any ELT member or any Section 16 Officer) reserves the right to reduce an Award below Threshold or
void an Award entirely. 

  

	7.	Payout Calculations 

  

	 	A.	Should the Gate be met or exceeded and subject to achievement of the Threshold for each of the ROIC and Book and Bill Awards, cash Awards will be payable and PBRS Awards will be issued following the Grant Date.
Participant’s Payout Amount for each component will be calculated by multiplying (A) the Payout Percentage, by (B) the weight percentage associated with each component per Section 5 above, by (C) the achievement level for such
component computed in accordance with Section 6 above, by (D) the Participant’s Base Salary for cash Awards and by the PBRS dollar value for PBRS Awards and then adding the resulting amounts. Each amount will then be multiplied by the
Individual Performance Factor, resulting in the actual payout to the Participant. 

  

	 	B.	If the Participant’s Payout changes during the Fiscal Year, the bonus payout will be pro-rated as follows: The new Payout will apply to the number of full months following the change. The previous Payout will apply
to the full prior months. 

  

	 	C.	Any payments under this Plan will be made in accordance with the Company’s normal payroll practices, following release of the Company’s annual financial results. Subject to performance, the cash Award is
payable following the Grant Date. Also subject to performance, PBRS will be issued on or about the Grant Date and will vest in three equal annual amounts on each of the first, second and third anniversary of the Grant Date. 

 

	8.	Administration of Plan; Miscellaneous Matters 

  

	 	A.	Awards to the President and CEO or his Executive Leadership Team are subject to approval by Committee. All other awards require the approval of the President and CEO. 

 

	 	B.	Payment on any particular occasion of any bonus amount in accordance with this Plan shall not create the presumption that any further bonus amount will be paid to the Participant thereafter under this Plan or otherwise.

  

	 	C.	Participants who live and work in a non-United States location will have their Plan payout calculations performed and payouts issued in their local currency, unless a specific ex-patriate or other employment agreement
specifically provides otherwise. 

	 	D.	The adoption of this Plan shall not be deemed to give any Participant the right to be retained in the employ of the Company or its subsidiaries or to interfere with the right of the Company to dismiss any Participant at
any time, for any reason not prohibited by law nor shall it be deemed to give the Company the right to require any employee to remain in its employ. 

  

	 	E.	Payments under this Plan are not to be considered for any purpose as part of the Participant’s base salary or wages. 

  

	 	F.	The financial targets assigned and recognized as goals on any of the performance factors may be removed, revised or otherwise modified by the Committee at any time for any reason or for no reason. 

 

	 	G.	The Committee’s interpretation of the Plan is final and is in the sole and absolute discretion of the Committee. The Committee shall define and interpret the Plan components in their sole discretion. The Committee
reserves the right to make final and binding decisions regarding the amount of incentive, if any, to be paid to any Participant. The Committee also reserves the right to amend, terminate and modify this Plan at any time in its sole discretion with
or without notice. Each Participant, by signing a Certificate of Acknowledgment attached hereto as Appendix B, specifically acknowledges this right and agrees to be bound by the terms of the Plan. 

 

	 	H.	No Participant or third party acting on behalf of or through a Participant shall have any power or right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify or otherwise encumber in advance any
amounts that may be payable hereunder, nor shall any of said amounts be subject to seizure for payment of debt, judgments, alimony or separate maintenance owed by a Participant, or be transferable by operation of law in the event of a bankruptcy, or
otherwise. 

  

	 	I.	This Plan is administered by, and all decisions regarding any payments hereunder shall be made from the Company regardless of whether a Participant is employed by the Company. 

 

	 	J.	If any term or condition of this Plan is found to be in non-conformance with a given state or federal or other law, that term or condition will be non-enforceable but will not negate other terms and conditions of the
Plan. 

  

	 	K.	The Plan shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. Any legal actions arising out of or relating to this Plan shall be brought exclusively in the state and
federal courts located in Middlesex or Suffolk County, Massachusetts. 

	9.	Definitions 

 In this document, the following capitalized terms shall have the following
definitions: 
  

	 	A.	“Adjusted EBITDA” means budgeted EBITDA of the Corporation before incentive compensation, plus the following items: restructuring expense (up to the budgeted amount, unless otherwise approved by the
Corporation’s Board of Directors), impairments or legal or other fees related to the SEC inquiry, stock based compensation and such other items as may be determined by the Committee. 

 

	 	B.	“Award(s)” means a Payout Amount by means of a cash payment or granting of performance based restricted stock (PBRS) grant under this Plan. 

 

	 	C.	“Base Salary” means the total actual amount of base salary earned by the Participant during the Plan Period (or portion thereof) during which the Participant was a Participant. 

 

	 	D.	“Book” or “Booked” or “Bookings” means New Business, Closed after May 21, 2014 through July 31, 2015. 

 

	 	E.	“Book and Bill’ means invoicing in FY15 of any New Business closed after May 21, 2014 regardless of profitability. 

  

	 	F.	“Cause” means a good faith finding by a majority of the members of the Board of Directors of the Corporation, after giving the Participant an opportunity to be heard, of: (i) grossly negligent or willful
misconduct by the Participant in connection with his or her employment duties, (ii) failure by the Participant (other than due to disability) to perform his or her duties or responsibilities required pursuant to his or her employment, after
written notice and an opportunity to cure, (iii) misappropriation by the Participant of the assets or business opportunities of the Corporation, or its affiliates, (iv) embezzlement or other financial or other fraud committed by the
Participant, (v) the Participant knowingly allowing any third party to commit any of the acts described in any of the preceding clauses (iii) or (iv), or (vi) the Participant’s indictment for, conviction of, or entry of a plea of
no contest with respect to, any felony or any crime involving moral turpitude. 

  

	 	G.	“Client” means an end user customer of the Company. 

	 	H.	“Client Agreement” means all agreements governing the sale of product or services by the Company to its clients which may include master service agreements, letters of intent and similar agreements as approved
in accordance with the Company’s Delegation of Authority policies. 

	 	I.	“Close” means New Business committed to between the Company and a Client by a legally binding agreement including an obtained Letter of Intent, Memorandum of Understanding or other such legally binding
contract that documents Client’s commitment of New Business to the Company at the price and terms the Company approved through the DOA process. 

  

	 	J.	“Committee” means the Human Resources and Compensation Committee of the Board of Directors of ModusLink Global Solutions, Inc. 

 

	 	K.	“Gate” means the minimum annual Adjusted EBITDA that must be achieved for Awards that may result from ROIC and Book and Bill financial components Award calculations. 

	 	L.	“Grant Date” means the third business day following the public release of the ModusLink Global Solutions fiscal year financial results. 

	 	M.	“Individual Performance Factor” means a factor between 0.8 and 1.2 (inclusive). 

  

	 	N.	“Invested Capital” means the Company’s investment comprised of accounts receivable, accounts payable, inventory, prepaids and other current assets (excluding trading securities and other investments,
property, plant and equipment (PP&E), accrued expenses and Net Cash. 

  

	 	O.	“Maximum” means to the percentage of Base Salary for a cash Award or PBRS value. 

  

	 	P.	“ModusLink” or the “Company” means ModusLink Corporation and ModusLink PTS, Inc. and their subsidiaries. 

  

	 	Q.	“New Business” means a new Program where there was active competition, a Request for Proposal and a Client Agreement. New Business includes any of the following, 

 

	 	•	 	A new logo 

	 	•	 	A new customer group of an existing logo, with autonomous decision making authority 

	 	•	 	An additional geographic market for an existing Program 

	 	•	 	A new distribution channel (e.g., fulfillment to end users vs. distribution vs. retail) 

	 	•	 	A new solution or service 

	 	•	 	An additional product category (excluding new versions, replacements, upgrades or line extensions) as long as it does not have a direct and negative impact on the same Customer volumes already handled by the Company.

  

	 	R.	“Net Cash” means the cash shown on the Company’s balance sheet excluding client cash and reduced by the amount outstanding on any loan facility. 

 

	 	S.	“Participants” for the Plan Period mean Vice President level or above employees of the Company who meet eligibility requirements per section 3 of this Plan. 

 

	 	T.	“Payout Amount” means any cash payout made under this Plan. 

  

	 	U.	“Payout” means the cash or grant Awards made under the Plan subject to performance. 

  

	 	V.	“PBRS Grant” means a performance based restricted stock grant as calculated by the fair market value on the Grant Date vesting in equal amounts over the three years period following the Grant Date. PBRS grants
are subject to the appropriate ModusLink Global Solutions, Inc. Restricted Stock Plan documents. 

  

	 	W.	“Plan” means the Management Incentive Plan for fiscal 2015 including both the FY15 BIP and the FY 15 MIP. 

  

	 	X.	“Plan Period” or “Fiscal Year” means the time period from August 1, 2014 through July 31, 2015. 

  

	 	Y.	“Program” means an engagement for a Client which is identified as “opportunity” in the Company’s CRM System. 

 

	 	Z.	“Return on Invested Capital or “ROIC” means Adjusted EBITDA as a percent of the average Invested Capital for the Plan Year. 

	 	AA.	“Stock Based Compensation” means the value of equity grants recorded by the Company in its financial reporting. 

  

	 	BB.	“Target” means budgeted performance of a financial component and corresponding percent of Base Salary expressed for a cash Award 

 

	 	CC.	“Threshold” means minimum performance of a financial component and percent of Base Salary recognized for a cash Award. For purposes of PBRS, Threshold, Target and Maximum mean the dollar value and subsequent
calculation of shares to award a stock grant. 

  
  

Appendix A 
 Payout
Percentage 
  

													
	 Metric
	  	Threshold	 	 	Target	 	 	Maximum	 
	 ROIC (70%)
	  	 	70	% 	 	 	100	% 	 	 	200	% 
	 Book& Bill (30%)
	  	 	70	% 	 	 	100	% 	 	 	200	% 

 The same weightings and percentage payouts apply to PBRS awards. 

 
 Appendix B 

Certificate of Acknowledgement 
 I,
_______________________, hereby certify that I have read the ModusLink FY 2015 Management Incentive Plan. I understand and agree with the terms of the Plan and agree to be bound thereby. 

 

					
			
	   
	 		 	   

	Participant Signature	 		 	Date
			
	   
	 		 	  

	Printed Name	 		 	

  
  

Return this completed form to the attention of Phil Worrick in Waltham or 

compensation@moduslink.com.

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