Document:

Exhibit
10.1

MANAGEMENT
AGREEMENT

THIS MANAGEMENT AGREEMENT (this “Agreement”) is
made as of June 12, 2006, between Transaction Network Services, Inc., a
Delaware corporation (“Employer”), and Heidi Goff, an individual
residing at 100 Central, #713, Sarasota, FL 34236 (“Executive”).

Employer and
Executive desire to enter into an agreement setting forth the terms pursuant to
which Employer will employ and compensate Executive.

NOW, THEREFORE, in
consideration of the mutual covenants contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement, intending to be legally bound,
hereby agree as follows:

1.             Employment.  Employer and Executive acknowledge that
Executive’s term of employment with Employer began May 21, 2004, and Employer
agrees to employ Executive, and Executive accepts such employment, until
Executive’s separation pursuant to Section 1(c) hereof (the “Employment
Period”).

(a)           Position and Duties.

(i)  Executive
shall serve as the Executive Vice President and General Manager, POS, of
Employer and shall have the normal duties, responsibilities and authority of
the Executive Vice President and General Manager, POS, subject to the power of
Employer’s Chief Executive Officer (the  “CEO”)
or Employer’s Chief Operating Officer (the “COO”) to reasonably expand
or limit such duties, responsibilities and authority.

(ii)  Executive
shall report to the COO, and Executive shall devote her best efforts and her
full business time and attention to the business and affairs of Employer and
its subsidiaries.

(b)           Salary, Bonus and Benefits.  Employer will pay Executive a base salary
(the “Annual Base Salary”) of $226,600 per annum, subject to any
increase as determined by the CEO or the COO based upon achievements of
budgetary and other objectives set by the CEO or the COO.  For any fiscal year, Executive shall be
eligible for an annual bonus of up to 35% of Executive’s then-applicable Annual
Base Salary based upon the achievement by Employer and its subsidiaries of
budgetary and other objectives set by the CEO or the COO.  In addition, during the Employment Period,
Executive will be entitled to the benefits set forth on the Summary of Executive
Benefits attached to this Agreement as Exhibit A and such other benefits
approved by Employer’s board of directors and made available to the senior
management of Employer or its subsidiaries. 
Executive shall also be entitled to annual commission payments mutually
agreed by the CEO or the COO and the Executive tied to the annual performance
of 

 1
 

 

Employer’s Point-of-Sale
division.  The Executive’s 2006
commission plan is attached as Exhibit B hereto.  Executive hereby acknowledges that Exhibit B
will be revised annually after calendar year 2006 to set forth the commission
plan that shall govern Employer’s payment of commissions to Executive in
subsequent calendar years during the Employment Period.

(c)           Separation.  The Employment Period will continue until
Executive’s resignation, disability (as determined by the CEO or the COO in his
or her good faith judgment) or death or until the CEO or the COO decides to
terminate Executive’s employment with or without Cause (as defined in Section
3(e) below) (each, a “Separation”).  If, following the date of this
agreement, Executive’s employment is terminated by Employer without Cause or by
Executive for Good Reason (as defined in Section 3(f) below), during the
Noncompete Period (as defined in Section 3(a) below), Employer will
continue to pay to Executive an amount equal to her Annual Base Salary in
effect as of the end of the Employment Period, payable in equal installments on
Employer’s regular salary payment dates. 
The amounts payable pursuant to this Section 1(c) shall not be
reduced by the amount of any compensation Executive receives with respect to
any other employment during the period in which she is receiving severance.

2.             Confidential Information.

(a)           Obligation to Maintain
Confidentiality.  Executive
acknowledges that the information, observations and data obtained by her during
the course of her performance under this Agreement concerning the business and
affairs of Employer and its affiliates are the property of Employer or such
affiliates, including information concerning acquisition opportunities in or
reasonably related to Employer’s business or industry of which Executive
becomes aware during the Employment Period. Therefore, Executive agrees that
she will not disclose to any unauthorized person or use for her own account any
of such information, observations or data without the prior written consent of
the CEO or the COO, unless, and then only to the extent that, the
aforementioned matters become generally known to and available for use by the
public other than as a result of Executive’s acts or omissions to act.  Executive agrees to deliver to Employer at
Separation, or at any other time Employer may request in writing, any and all
property belonging to Employer and its affiliates in her possession or under
her control including, but not limited to, any memoranda, notes, plans,
records, reports, documents, discs and other data storage media (and any copies
thereof).

(b)           Ownership of Property.  Executive expressly understands and agrees
that any and all right, title or interest she has or obtains in any
documentation, trade secrets, technical specifications, data, know-how,
inventions, concepts, ideas, techniques, innovations, discoveries,
improvements, developments, methods, processes, programs, designs, analyses,
drawings, reports, memoranda, marketing plans, and all similar or related
information  (whether or not patentable)
conceived, devised, developed, contributed to, made, reduced to practice or
otherwise had or obtained by Executive (either solely or jointly with others)
during the Employment Period that relate to Employer’s or any of its affiliates’
actual or anticipated business, research and development, or existing or future
products or services, or that arise out of Executive’s employment with Employer
or any of its affiliates (including any of the foregoing that constitutes any
proprietary information or records) (“Work Product”) belong to Employer
or the respective affiliate, and Executive hereby assigns, and agrees to
assign, all of the above Work 

 2
 

 

Product to Employer or to
such affiliate.  Any copyrightable work
prepared in whole or in part by Executive in the course of her work for any of
the foregoing entities shall be deemed a “work made for hire” under the
copyright laws, and Employer or such affiliate shall own all rights therein.  To the extent that any such copyrightable
work is not a “work made for hire,” Executive hereby assigns, and agrees to
assign, to Employer or the respective affiliate all of her right, title and
interest in and to such copyrightable work. 
Executive shall promptly disclose such Work Product and copyrightable
work to the CEO or the COO and perform all actions reasonably requested by the
CEO or the COO (whether during or after the Employment Period) to establish and
confirm Employer’s or the respective affiliate’s ownership therein (including
executing and delivering any assignments, consents, powers of attorney and
other instruments).

(c)           Third Party Information.
Executive understands that Employer and its affiliates will receive from third
parties confidential or proprietary information (“Third Party Information”)
subject to a duty on Employer’s and such affiliates’ part to maintain the
confidentiality of such information and to use it only for certain limited
purposes.  During the Employment Period and
thereafter, and without in any way limiting the provisions of Section 2(a)
above, Executive will hold Third Party Information in the strictest confidence
and will not disclose to anyone (other than personnel of Employer or its
affiliates who need to know such information in connection with their work for
Employer or such affiliates) or use, except in connection with her work for
Employer or such affiliates, Third Party Information without the prior written
consent of the CEO or the COO.

(d)           Use of Information of Prior
Employers.  During the Employment
Period, Executive will not improperly use or disclose any confidential
information or trade secrets, if any, of any former employers or any other
person to whom Executive has an obligation of confidentiality, and will not
bring onto the premises of Employer or any of its affiliates any unpublished
documents or any property belonging to any former employer or any other person
to whom Executive has an obligation of confidentiality unless consented to in
writing by the former employer or person. 
Executive will use in the performance of her duties only information
which is (i)(x) common knowledge in the industry or (y) is otherwise legally in
the public domain, (ii) is otherwise provided or developed by Employer or its
affiliates or (iii) in the case of materials, property or information
belonging to any former employer or other person to whom Executive has an
obligation of confidentiality, approved for such use in writing by such former
employer or person.

3.             Noncompetition and
Nonsolicitation.  Executive
acknowledges that in the course of her employment with Employer she will become
familiar with Employer’s and its affiliates’ trade secrets and with other
confidential information concerning Employer and its affiliates and that her
services will be of special, unique and extraordinary value to Employer and its
affiliates.  Therefore, Executive agrees
that:

(a)           Noncompetition.  During the Employment Period and (i) in the
case of termination by Employer without Cause or resignation by Executive for
Good Reason, for a period of one year thereafter or (ii) in the case of
termination or resignation for any other reason, for a period of six months
thereafter (as applicable, the “Noncompete Period”), Executive shall
not, directly or indirectly, either alone or in association with others, own,
manage, operate, sell, 

 3
 

 

control or participate in
the ownership, management, operation, sales or control of, be involved with the
development efforts of, serve as a technical advisor to, license intellectual
property to, provide services to or in any manner engage in any business that
competes with any business in which Employer or any of its affiliates is
engaged as of the date of Executive’s termination or resignation; provided,
however, that Executive may own as a passive investor up to 2.5%
of any class of an issuer’s publicly traded securities.

(b)           Nonsolicitation. During the
Noncompete Period, Executive shall not, directly or indirectly, alone or in
association with others, (i) induce or attempt to induce any employee of
Employer or any of its affiliates to leave the employ of Employer or such
affiliate, or in any way interfere with the relationship between Employer and
any of its affiliates and any employee thereof, (ii) hire any person who
was an employee of Employer or any of its affiliates within one year prior to
the time such employee was hired by Executive, (iii) induce or attempt to
induce any customer, supplier, licensee or other business relation of Employer
or any of its affiliates to cease doing business with Employer or such
affiliate or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and Employer or any of its
affiliates or (iv) acquire or attempt to acquire an interest in any
business which relates to any business of Employer or any of its affiliates and
with which Employer and any of its affiliates has entered into substantive
negotiations or has requested and received confidential information relating to
the acquisition of such business by Employer or any of its affiliates in the
two-year period immediately preceding Separation.

(c)           Business Scope and Geographical
Limitation. Executive acknowledges (i) that the business of Employer and
its affiliates is, and is expected to remain, international in scope and
without geographical limitation, (ii) notwithstanding the state of
incorporation or principal office of Employer or any of its affiliates, or any
of their respective executives or employees (including Executive), it is
expected that Employer will have business activities and have valuable business
relationships within its industry throughout the world, and (iii) as part of
her responsibilities, Executive will travel around the world in furtherance of
Employer’s business and its relationships. 
Accordingly, the restrictions set forth in this Section 3 shall
be effective in all cities, counties and states of the United States and all
countries in which the Employer or any of its affiliates has an office or is
engaged in business as of the date of Executive’s termination or resignation.

(c)           Enforcement.  If, at the time of enforcement of Section 2
or this Section 3, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum duration, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area and
that the court shall be allowed to revise the restrictions contained herein to
cover the maximum duration, scope and area permitted by law.

(d)           Additional
Acknowledgments.  Executive
acknowledges that the provisions of this Section 3 are
in consideration of employment with Employer and the additional good
and valuable consideration as set forth in this Agreement.  Executive acknowledges that she has carefully
read this Agreement and has given careful consideration to the restraints
imposed upon Executive by this Agreement, and is in full accord as to their
necessity for the reasonable and proper protection of confidential and
proprietary information of 

 4
 

 

Employer now existing or to be developed in the future.  Executive expressly acknowledges and agrees
that each and every restraint imposed by this Agreement was discussed in good
faith between the parties hereto and is reasonable with respect to subject
matter, time period and geographical area. 
During the Employment Period and the Noncompete Period, Executive agrees
to provide Employer (upon Employer’s reasonable request) with such information
as may be necessary to demonstrate Executive’s compliance with the terms and
provisions of this Agreement.

(e)           Cause.  For the purposes of this Agreement, “Cause”
means (i) the commission of a felony or a crime involving moral turpitude
or the commission of any other act or omission involving dishonesty or fraud
with respect to Employer or any of its affiliates or any of their customers or
suppliers, (ii) substantial failure on the part of Executive in her
performance of the duties of the office held by her as reasonably directed by
the CEO or the COO (other than any such failure resulting from Executive’s
incapacity due to physical or mental illness), after notice to Executive and a
reasonable opportunity to cure, (iii) gross negligence or willful
misconduct by Executive with respect to Employer or any of its affiliates
(including, without limitation, disparagement that adversely affects the
reputation of Employer or any of its affiliates) or (iv) any material
breach by Executive of Sections 1(a)(ii), 2 or 3 of
this Agreement.

(f)            Good Reason.  For the purposes of this Agreement, “Good
Reason” means (i) Executive is assigned any duties substantially
inconsistent with her responsibilities as described by Section 1(a)
hereof or a substantial adverse alteration is made to the nature or status of
such responsibilities; (ii) Employer reduces the Annual Base Salary as in
effect on the date hereof or as the same may be increased from time to time; or
(iii) any material reduction of benefits provided to Executive pursuant to Section
1(b) hereof, other than in connection with a reduction in benefits
generally applicable to senior executives of Employer; provided, that
the occurrences described above shall not constitute Good Reason if Employer
cures the respective occurrence within thirty days of Employer’s receipt of
written notice thereof. 

4.             Notices.  Any notice provided for in this Agreement
must be in writing and must be either personally delivered, mailed by first
class mail (postage prepaid and return receipt requested) or sent by reputable
overnight courier service (charges prepaid) to the recipient at the address
below indicated:

	
   

  	
  If to Employer, to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Transaction
  Network Services, Inc.

  
	
   

  	
   

  	
  11480 Commerce
  Park Drive, Suite 600

  
	
   

  	
   

  	
  Reston, VA 20191

  
	
   

  	
   

  	
  Attention: Chief
  Operating Officer

  

 5
 

 

 

	
   

  	
  If to Executive,
  to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Heidi Goff

  
	
   

  	
   

  	
  100 Central,
  #713

  
	
   

  	
   

  	
  Sarasota, FL
  34236

  

 

or such other address or
to the attention of such other person as the recipient party shall have specified
by prior written notice to the sending party. 
Any notice under this Agreement will be deemed to have been given when
so delivered or sent or, if mailed, five days after deposit in the U.S. mail.

5.             General Provisions.

(a)           Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

(b)           Complete Agreement.  This Agreement embodies the complete
agreement and understanding among the parties and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any
way.

(c)           Counterparts.  This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.

(d)           Successors and Assigns.  Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by
Executive and Employer and their respective successors and assigns; provided,
that the obligations of Executive under this Agreement shall not be assignable
without the prior written consent of Employer.

(e)           Choice of Law.  All questions concerning the construction,
validity and interpretation of this Agreement will be governed by and construed
in accordance with the internal laws of the Commonwealth of Virginia, without
giving effect to any choice of law or conflict of law provision or rule
(whether of the Commonwealth of Virginia or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the
Commonwealth of Virginia.

(f)            Equitable Remedies.  Executive hereby acknowledges that the
restrictions contained in this Agreement are necessary for the protection of
the business and goodwill of Employer and its affiliates and are reasonable for
such purpose. Because Executive’s services are 

 6
 

 

unique and because
Executive has access to confidential information, the parties hereto agree that
money damages would be an inadequate remedy for any breach of this Agreement by
Executive.  Therefore, in the event a
breach or threatened breach of this Agreement by Executive, Employer, its
affiliates or their successors or assigns may, in addition to other rights and
remedies existing in their favor, apply to any court of competent jurisdiction
for specific performance and/or injunctive or other relief in order to enforce,
or prevent any violations of, the provisions hereof (without posting a bond or
other security).

(g)           Amendment and Waiver.  The provisions of this Agreement may be
amended and waived only with the prior written consent of Employer and
Executive.

(h)           Business Days.  If any time period for giving notice or
taking action hereunder expires on a day which is a Saturday, Sunday or holiday
in the state in which Employer’s chief executive office is located, the time
period shall be automatically extended to the business day immediately
following such Saturday, Sunday or holiday.

(i)            Aiding and Abetting.  The parties to this Agreement hereby agree
that no party hereto may accomplish indirectly, whether through aiding and
abetting of some other person, participation in some other entity, or any other
conduct, that which the party is prohibited from doing directly under this
Agreement, and that any such attempt shall be considered a breach of this
Agreement as if such party had taken such action itself.

(j)            Indemnification and Reimbursement
of Payments on Behalf of Executive.

Employer shall be
entitled to deduct or withhold from any amounts owing from Employer to Executive
any federal, state, local or foreign withholding taxes, excise taxes, or
employment taxes (“Taxes”) imposed with respect to Executive’s
compensation or other payments from Employer, including, without limitation,
wages, bonuses, dividends, the receipt or exercise of equity options and/or the
receipt or vesting of restricted equity. 
In the event Employer does not make such deductions or withholdings,
Executive shall indemnify Employer for any amounts paid with respect to any
such Taxes, together with any interest, penalties and related expenses thereto.

(k)           Termination.  This Agreement (except for the provisions of Sections
1(a) and (b)) shall survive a Separation and shall remain in full
force and effect after such Separation.

(l)            Limitations of Agreement.  This Agreement does not constitute a contract
of employment for a definite period of time. 
Either party may terminate the employment relationship with or without
Cause at any time for any lawful reason.

 7
 

 

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement on the date first
written above.

	
  

  	
  TRANSACTION NETWORK SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian Bates

  
	
   

  	
  Name:

  	
  Brian Bates

  
	
   

  	
  Its:

  	
  President and COO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Heidi Goff

  
	
   

  	
   

  	
  Heidi Goff, an
  individual

  

 

 8Exhibit
10.2

2006
ANNUAL INCENTIVE PLAN

A.            Participating Employees

This 2006 annual
incentive plan (the “2006 AIP”) shall apply for all employees (each, a “Participating
Employee”) of TNS, Inc. (the “Corporation”) and its subsidiaries other than
Excluded Employees.

For purposes of this 2006
AIP, an “Excluded Employee” means an employee of TNS, Inc. or any of its
subsidiaries with an annual bonus level less than or equal to 17.5%.

For purposes of
this 2006 AIP, an “Executive” means each of the following individuals:

	
  1. John J.
  McDonnell, Jr.

  	
   

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  2. Brian J.
  Bates

  	
   

  	
  President and Chief Operating Officer

  
	
   

  	
   

  	
   

  
	
  3. Henry H.
  Graham, Jr.

  	
   

  	
  Executive Vice President, Chief Financial Officer
  and Treasurer

  
	
   

  	
   

  	
   

  
	
  4. Raymond Low

  	
   

  	
  President, International Services Division
  (Transaction Network Services (UK) Limited)

  
	
   

  	
   

  	
   

  
	
  5. John J.
  McDonnell III

  	
   

  	
  Executive Vice President and Chief Strategy Officer

  
	
   

  	
   

  	
   

  
	
  6. Matthew M.
  Mudd

  	
   

  	
  Executive Vice President and Chief Development
  Officer

  
	
   

  	
   

  	
   

  
	
  7. Michael Q.
  Keegan

  	
   

  	
  Executive Vice President, General Counsel and
  Secretary

  
	
   

  	
   

  	
   

  
	
  8. Edward C.
  O’Brien

  	
   

  	
  Executive Vice President and Controller

  

 

 1
 

 

 

B.            2006 AIP Award Determination

The 2006 annual
incentive cash bonus payable to a Participating Employee (the “2006 AIP Award”)
shall be determined based upon the attainment of gross revenue and EBITDA(1)
targets, as set forth below, by the Corporation during fiscal year 2006 (“Target
2006 Gross Revenue” and “Target 2006 EBITDA,” respectively), with the amount
calibrated based on over- or under-achievement of these targets to between 0%
and 100% for all Participating Employees (other than the Executives) and to
between 0% and 200% for all Executives.

1.                                      2006
Revenue and EBITDA Targets

With respect to John J. McDonnell, Jr., Henry H. Graham, Jr., John J.
McDonnell III, Matthew M. Mudd, Michael Q. Keegan, Edward C. O’Brien and any
other Participating Employees determined by the Corporation’s Chairman and the
Corporation’s Chief Financial Officer to contribute to the consolidated
operations of TNS, Inc. and its subsidiaries, the Target 2006 Gross Revenue and
Target 2006 EBITDA shall be set by the Board of Directors in accordance with
the Corporation’s 2006 fiscal year budget approved by the Board of
Directors.  Attainment of these targets
shall be determined based on the consolidated 2006 operating results of TNS,
Inc. and its subsidiaries.

With respect to Brian Bates (the Corporation’s Chief Operating Officer)
and any other Participating Employees determined by the Corporation’s Chief
Executive Officer and the Corporation’s Chief Financial Officer to contribute
primarily to the operations of TNS, Inc. and its subsidiaries (“Domestic
Subsidiaries”) domiciled in the United States and Canada (with Mr. Bates, the “Domestic
Participating Employees”), the Target 2006 Gross Revenue and Target 2006 EBITDA
shall be as set by the Board of Directors in accordance with the Corporation’s
2006 fiscal year budget approved by the Board of Directors.  Attainment of these targets shall be determined
based on the 2006 operating results of TNS, Inc. and its Domestic Subsidiaries.

With respect to Mr. Low (President of the Corporation’s International
Services Division) and any other Participating Employees determined by the
Corporation’s Chief Executive Officer and the Corporation’s Chief Financial
Officer to contribute primarily to the operations of all subsidiaries (the
“International Subsidiaries”) of TNS, Inc. other than the Domestic
Subsidiaries, the Target 2006 Gross Revenue and Target 2006 EBITDA shall be as
set by the Board of Directors in accordance with the Corporation’s 2006 fiscal
year budget approved by the Board of Directors. 
Attainment of these targets shall be determined based on the 2006 operating
performance of the International Subsidiaries.

(1)             EBITDA
shall be determined by taking income from operations and adding back certain
non-cash items, including amortization of intangible assets, depreciation and
amortization of property and equipment and stock compensation expense.

 2
 

 

With respect to any Participating Employees determined by the
Corporation’s Chief Executive Officer and the Corporation’s Chief Financial
Officer to primarily contribute to the operations of a particular international
subsidiary or a group of international subsidiaries, the Target 2006 Gross
Revenue and Target 2006 EBITDA shall be as set by the Board of Directors for
the particular country or region in accordance with the Corporation’s 2006
fiscal year budget approved by the Board of Directors.  Attainment of these targets shall be
determined based on the 2006 operating performance of the respective
international country or region.

The 2006 Gross Revenue and 2006 EBITDA Targets shall be adjusted by the
Compensation Committee of the Board of Directors to reflect acquisitions and
dispositions of businesses and assets by the Corporation to the extent not
reflected in the Corporation’s 2006 fiscal year budget approved by the Board of
Directors.

2.             Determination
of 2006 AIP Awards

For each Participating Employee, the “Target 2006 AIP Award” shall be
(i) the Participating Employee’s annual base salary in effect on December 31,
2006 multiplied by (ii) the “annual bonus percentage” in effect on such
date for the employee.  The “annual bonus
percentage” for an employee shall be either (i) the annual bonus percentage set
forth in the employee’s employment agreement or (ii) to the extent an
employment agreement is not in effect for the employee, the annual bonus
percentage then in effect for employees having the same title as the respective
employee.

For each Participating
Employee (other than the Executives), subject to Section C of this AIP, the
amount of the 2006 AIP Award shall be:

(i)                                     50%
of the respective Target 2006 AIP Award multiplied by the appropriate
percentage set forth in the table contained in Section B(3) below that
represents the percentage of the Target 2006 Gross Revenue attained during the
Corporation’s 2006 fiscal year, plus

(ii)                                  50%
of the respective Target 2006 AIP Award multiplied by the appropriate
percentage set forth in the table contained in Section B(3) below that
represents the percentage of the Target 2006 EBITDA attained during the
Corporation’s 2006 fiscal year.

 3
 

 

For each Executive, subject to Section C of this AIP, the amount of the
2006 AIP Award shall be:

(x)                                   50%
of the respective Target 2006 AIP Award multiplied by the appropriate
percentage set forth in the table contained in Section B(4) below that
represents the percentage of the Target 2006 Gross Revenue attained during the
Corporation’s 2006 fiscal year, plus

(y)                                 50%
of the respective Target 2006 AIP Award multiplied by the appropriate
percentage set forth in the table contained in Section B(4) below that
represents the percentage of the Target 2006 EBITDA attained during the
Corporation’s 2006 fiscal year.

3.    Vesting Percentages for Participating
Employees (Other than Executives)

 

	
  Percentage of Target
  Attained

  	
   

  	
  Percentage of Target Award Earned

  	
   

  
	
  100% [TARGET AND MAXIMUM]

  	
   

  	
  100%

  	
   

  
	
  99%

  	
   

  	
  90%

  	
   

  
	
  98%

  	
   

  	
  80%

  	
   

  
	
  97%

  	
   

  	
  70%

  	
   

  
	
  96%

  	
   

  	
  60%

  	
   

  
	
  95%

  	
   

  	
  50%

  	
   

  
	
  94%

  	
   

  	
  40%

  	
   

  
	
  93%

  	
   

  	
  30%

  	
   

  
	
  92%

  	
   

  	
  20%

  	
   

  
	
  91% [THRESHOLD]

  	
   

  	
  10%

  	
   

  
	
  90% and below

  	
   

  	
  0%

  	
   

  

 

4.    Vesting
Percentages for Executives

 

	
  Percentage of Target
  Attained

  	
   

  	
  Percentage of Target Award Earned

  
	
  110% and above[MAXIMUM]

  	
   

  	
  200%

  
	
  109%

  	
   

  	
  190%

  
	
  108%

  	
   

  	
  180%

  
	
  107%

  	
   

  	
  170%

  
	
  106%

  	
   

  	
  160%

  
	
  105%

  	
   

  	
  150%

  
	
  104%

  	
   

  	
  140%

  
	
  103%

  	
   

  	
  130%

  
	
  102%

  	
   

  	
  120%

  
	
  101%

  	
   

  	
  110%

  
	
  100% [TARGET]

  	
   

  	
  100%

  
	
  99%

  	
   

  	
  90%

  
	
  98%

  	
   

  	
  80%

  

 4
 

 

 

	
  97%

  	
   

  	
  70%

  
	
  96%

  	
   

  	
  60%

  
	
  95%

  	
   

  	
  50%

  
	
  94%

  	
   

  	
  40%

  
	
  93%

  	
   

  	
  30%

  
	
  92%

  	
   

  	
  20%

  
	
  91% [THRESHOLD]

  	
   

  	
  10%

  
	
  90% and below

  	
   

  	
  0%

  

 

C.            Conditions

With respect to employees
of certain of the Corporation’s International Subsidiaries, the Board of
Directors acknowledges that the 2006 AIP may contradict contractual provisions
currently in place with certain international employees.  To the extent this is determined to be the
case, the terms of the respective contract shall govern (not the terms of the
2006 AIP).

For all Participating
Employees (other than the Executives), it has been the Corporation’s practice
that a certain portion of the employee’s annual incentive plan award be tied
directly to the employee’s performance. 
To the extent it is determined that a 2006 AIP Award is due to a
Participating Employee based on the criteria set forth herein, the employee’s
manager shall continue to have the ability to determine whether the employee’s
2006 AIP Award shall be reduced for failure on the part of the employee to meet
personal objectives set for the employee during the year; provided, however,
that the portion of the employee’s 2006 AIP Award attributable solely to the
Corporation’s performance in 2006 may not be reduced by the manager without
approval of the Compensation Committee of the Board of Directors.  For purposes of example only, under the
Corporation’s current annual incentive plan guidelines, 50% of any performance
award due to a Director of Transaction Network Services, Inc. is tied to
personal performance and 50% of the award is tied to corporate
performance.  Accordingly, if such Director
is due a $10,000 2006 AIP Award hereunder, the payment of $5,000 of such award
shall be subject to the discretion of the Director’s manager based on the
achievement by the Employee of personal objectives for 2006.

To the extent that no
2006 AIP Award is due hereunder for a Participating Employee, the Corporation
shall not pay an annual incentive bonus or other similar payment to the
employee without the approval of the Compensation Committee of the Board of
Directors.

No 2006 AIP Award shall
be paid to a Participating Employee to the extent that payment of the award
would result in the Corporation failing to attain the respective Target 2006
EBITDA.  For purposes of example only,
assuming that (x) the Target 2006 Gross Revenue and the Target 2006 EBITDA for
Domestic Participating Employees are $40 million and $15 million, respectively,
(y) the actual 2006 gross revenues and EBITDA (exclusive of any bonus accrual)
for the Corporation and the Domestic Subsidiaries are 

 5
 

 

$42 million and $16
million, respectively, and (z) the aggregate bonus pool due and payable
hereunder to Domestic Participating Employees in respect of such operating
results is $1.5 million, then the bonus pool shall be reduced by $500,000 (from
$1.5 million to $1 million) as payment of the entire $1.5 million bonus would
cause actual 2006 EBITDA to be less than Target 2006 EBITDA by $500,000.

For Executives, when
calculating any amount due for performance above the Target 2006 Gross Revenue
and EBITDA levels, the calculation shall be made after giving effect to the
payment of annual incentive bonuses to all Participating Employees in respect
of performance up to such Target levels. 
For purposes of example only, if (i) Target 2006 Gross Revenue and
Target 2006 EBITDA for Domestic Participating Employees are $40 million and $15
million, respectively, (y) actual 2006 Gross Revenue and EBITDA (exclusive of
any bonus accrual) for the Corporation and the Domestic Subsidiaries are $45
million and $19 million, respectively, and (z) the aggregate bonus pool due and
payable hereunder to Domestic Participating Employees in respect of such
operating results (i.e., for attaining Target 2006 Gross Revenue and EBITDA) is
$3.0 million (the “2006 Target Level Bonus Pool), then the bonus pool available
for achievement in excess of the 2006 Target Levels shall be $1 million (i.e.,
the amount actual 2006 EBITDA ($19 million - $3 million) exceeds 2006 Target
EBITDA ($15 million)).  After giving
effect to the payment of the 2006 Target Level Bonus Pool, the bonus due and
payable to an Executive (who is being measured on the operating results of the
Corporation and its Domestic Subsidiaries) for performance in excess of Target
2006 EBITDA and Target 2006 Gross Revenue levels would be:

(i)                                     in
respect of actual 2006 Gross Revenue for the Corporation and its Domestic
Subsidiaries, (1) 50% of the respective Target 2006 AIP Award for the Executive
multiplied by 200% (as actual 2006 Gross Revenue was 112.5% of Target
2006 Gross Revenue (i.e., $45 million/$40 million)) less (2) 50% of the
respective Target 2006 AIP Award for the Executive multiplied by 100%
(representing the portion of the 2006 Target Level Bonus Pool due to the
Executive in respect of attainment of Target 2006 Gross Revenue); plus

(ii)                                  in
respect of 2006 EBITDA for the Corporation and its Domestic Subsidiaries, (1)
50% of the respective Target 2006 AIP Award for the Executive multiplied by
160% (as actual 2006 EBITDA (after payment of the 2006 Target Level Bonus Pool)
was 106% of Target 2006 EBITDA (i.e., $16 million/$15 million)) less (2) 50% of
the respective Target 2006 AIP Award for the Executive multiplied by
100% (representing the portion of the 2006 Target Level Bonus Pool due to the
Executive for attainment of Target 2006 EBITDA).

To be eligible for a 2006
AIP Award, the individual must be an employee of the Corporation or one of its
subsidiaries on the date the 2006 AIP Award is paid to Participating Employees.

 6
 

 

D.            Timing and Payment

The Compensation
Committee of the Board of Directors shall make a determination as to the 2006
AIP Award, if any, payable to each Participating Employee within the 60-day
period immediately following December 31, 2006, and the Corporation shall pay
any 2006 AIP Award within 75 days following December 31, 2006.

 

 7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}]]