Document:

Employee Retention Agreement

 Exhibit 10.1 
  
 AMENDMENT 
  
 This amendment is made effective February 8, 2006 to that certain Salary Continuation Agreement effective January 1, 1997 (the “Original Agreement”)
between National Interstate Insurance Agency, Inc. (“NIIA”) and David W. Michelson (“Executive”), a key employee and executive of National Interstate Corporation and certain of its subsidiaries (the “Corporation”).

  
 WHEREAS, NIIA and Executive entered into the Original
Agreement in 1997 and Executive subsequently left the employment of NIIA; and 
  
 WHEREAS, Executive returned to the employment of the Corporation in June, 1999 at which time Executive and the Corporation agreed to continue the Original Agreement according to its terms except for a change in
the vesting schedule; and 
  
 WHEREAS, the parties desire
to now amend the Original Agreement to officially change the vesting schedule and make certain other non-substantive revisions; 
  
 NOW THEREFORE, the parties hereby agree to amend the Original Agreement as follows: 
  
 1. The title of the Agreement shall be changed to “Employee Retention Agreement.” 
  
 2. The vesting schedule set forth in Section 3.2.3 of the Original
Agreement shall be deleted and replaced with the following schedule: 
  

					
	 January 1, 2000
	  	$	15,000	 
	 January 1, 2001
	  	$	31,000	 
	 January 1, 2002
	  	$	48,000	 
	 January 1, 2003
	  	$	66,000	 
	 January 1, 2004
	  	$	85,000	 
	 January 1, 2005
	  	$	105,000	 
	 January 1, 2006
	  	 	20	%
	 January 1, 2007
	  	 	30	%
	 January 1, 2008
	  	 	40	%
	 January 1, 2009
	  	 	50	%
	 January 1, 2010
	  	 	60	%
	 January 1, 2011
	  	 	70	%
	 January 1, 2012
	  	 	80	%
	 January 1, 2013
	  	 	100	%

  
 3. Except as amended
hereby, the parties agree that the Original Agreement remains in full force and effect. 
  
 IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written. 
  
 National Interstate Corporation 
 National Interstate Insurance Agency, Inc. 
  

					
	By:	 	 /s/ Alan R. Spachman

	 	 /s/ David W. Michelson

	 	 	Alan R. Spachman, President	 	David W. Michelson

 SALARY CONTINUATION AGREEMENT 
  
 This Agreement is between National Interstate Insurance Agency, Inc. (“Corporation”) and David W. Michelson, a key
employee and executive of the Corporation, (“Executive”). 
  
 The Executive has been in the employ of the Corporation for four years and has served it faithfully. The Board believes that Executive’s experience, knowledge of corporate affairs, reputation and industry contacts are of such value
that it wishes to encourage his continued services to Corporation. 
  
 Accordingly, it is the desire of the Corporation and the Executive to enter into this Agreement, under which the Corporation will agree to make certain payments to Executive upon his retirement or disability and, alternatively, to his
beneficiaries in the event of his premature death while employed by Corporation. 
  
 In consideration of Executive’s services to be performed in the future and based on the mutual promises and covenants contained in this Agreement, the Corporation and the Executive agree: 
  
 ARTICLE ONE 
  
 DEFINITIONS 
  
 1.1. Effective Date. The effective date of this Agreement is January 1, 1997. 
  
 1.2. Corporation. “Corporation” means National Interstate Insurance Agency, Inc. and all other entities
under the control of National Interstate Corporation. 
  
 1.3.
Disability. “Disability” means either “total disability” or “partial disability.” “Total disability” means the Executive cannot, due to sickness or injury, perform the duties of his occupation, as
certified by a physician selected by Corporation. 
  
 “Partial disability” means any sickness or injury that does not render Executive unable to perform the main duties of his occupation. The Executive agrees to submit to any examination(s), test(s) or other procedure(s) requested by
the Corporation in its determination of disability. 
  
 1.4.
Normal Retirement Date. “Normal Retirement Date” means retirement from service with the Corporation which becomes effective on the first day of the calendar month following the month in which the Executive reaches his 55th birthday.
The Normal Retirement Date shall be extended for a period of time equal to the period of time, if any, between the Effective Date (January 1, 1997) and January 1, 2013 that the Executive is unable to perform his duties for the Corporation
due to temporary disability. Such extended Normal Retirement Date shall be referred to as the “Extended Retirement Date.” The extension of the Normal Retirement Date shall not exceed five (5) years, provided the Executive has not
been disabled during the three (3) year period of time preceding the Extended Retirement Date. If the Executive has been disabled during such three (3) year period, the five (5) year limit on the extension of the Normal
Retirement Date shall not apply, and the Extended Retirement Date shall be the date the Executive has not been disabled while employed by the Corporation for three (3) consecutive years. In any event, nothing in this Agreement requires or
is intended to encourage the Executive’s retirement from service with the Corporation at the Normal Retirement Date. 
  

 -2- 

 1.5. Severance Benefits. “Severance Benefits” means those benefits to which the
Executive is entitled in the event he is discharged by the Corporation without due cause. Any dispute as to determination of “due cause” shall be subject to the terms of Paragraph 6.2., “Claims Procedure and Arbitration.”

  
 1.6. Termination of Service. “Termination of
Service” means the voluntary resignation of service by the Executive (exclusive of disability) or the Corporation’s discharge of the Executive for due cause prior to the Normal or Extended Retirement Date. Termination for “due
cause” means the Corporation’s discharge of Executive for failure of the Executive to perform or malfeasance in the performance of his duties as assigned from time to time or the Executive’s breach of the Corporation’s published
policies. 
  
 ARTICLE TWO 
  
 EMPLOYMENT 
  
 2.1. Employment. Corporation agrees to employ Executive on an at-will
basis in such capacity as the Corporation may from time to time determine, with such duties, responsibilities and compensation as are determined by the Board of Directors. 
  
 Executive agrees to remain in the Corporation’s employment on an at-will basis, to devote his full time and attention
exclusively to the business of the Corporation and to use his best efforts to provide faithful and satisfactory service to Corporation. 
  
 Employment services shall include temporary disability not to exceed six (6) months “leave of absences” specifically granted Executive in
writing by the Board of Directors and periods of military reserve duty. 
  
 2.2. No Employment Agreement Created. No provision of this Agreement shall be deemed to restrict or limit any existing employment Agreement between the Corporation and the Executive. No conditions in this Agreement shall create
specific employment rights to the Executive or limit the right of the Employer to discharge the Executive with or without due cause. No provision shall limit the Executive’s right to voluntarily sever his employment at any time. 
  
 ARTICLE THREE 
  
 BENEFITS 
  
 The following benefits provided by the Corporation to the Executive are in the nature of a fringe benefit and shall not be construed to effect or limit
the Executive’s current or prospective salary, cash bonuses or profit-sharing distributions or credits. 
  
 3.1. Retirement Benefits. If Executive remains in the employment of the Corporation until the “Normal Retirement Date” or, if applicable,
the “Extended Retirement Date,” then he shall be entitled to receive from the Corporation a one time lump sum payment of one million 
  

 -3- 

 dollars ($1,000,000) within thirty (30) days after such Normal or Extended Retirement Date. In the alternative,
The Executive may elect to receive, commencing on the last day of the year following such Normal or Extended Retirement Date and continuing for a period of ten (10) years total, the annual sum of $150,000. If the Executive should die following
retirement but before the expiration of ten (10) years thereafter, the unpaid balance of such annual payments shall be paid annually for the remainder of such period to the beneficiary selected by Executive in the Beneficiary Designation Form
provided by the Corporation. In the absence of or failure of the Executive to designate a beneficiary, the unpaid balance shall be commuted at 8% and paid in a lump sum to the personal representative of Executive’s estate. 
  
 3.2. Voluntary Resignation or Termination of Service. 
  
 3.2.1. Should Executive voluntarily resign from his
employment or should he be discharged for due cause (exclusive of total disability) prior to the Normal or Extended Retirement Date, all Executive’s benefits under this Agreement shall be forfeited and this Agreement shall be of no effect. If a
dispute arises as to discharge “for cause,” such dispute shall be resolved by arbitration as set forth in Paragraph 6.2. 
  
 3.2.2. Should Executive resign from his employment due to total disability prior to the Normal or Extended Retirement Date, Executive (or,
should Executive die before January 1, 2023, his beneficiary) shall be entitled to receive the amounts specified in Paragraph 3.1., commencing on January 1, 2023. 
  
 3.2.3. Should Executive be discharged for reasons other than due cause before five (5) completed
years of service, commencing with the Effective Date (excluding any periods of temporary disability), all Executive’s benefits under this Agreement shall be forfeited and this Agreement shall be of no effect. However, if Executive is so
discharged after such period of time, but before the Normal or Extended Retirement Date, then on the originally projected Normal or Extended (if applicable) Retirement Date, Executive shall be entitled to receive the percentage specified below of
the lump sum amount specified in Paragraph 3.1. corresponding to the number of completed years of service, commencing with the Effective Date (excluding any periods of temporary disability), in which such discharge without due cause occurs:

  

				
	 6th year
	  	5	%
	 7th year
	  	10	%
	 8th year
	  	15	%
	 9th year
	  	20	%
	 10th year
	  	30	%
	 11th year
	  	40	%
	 12th year
	  	50	%
	 13th year
	  	60	%
	 14th year
	  	70	%
	 15th year
	  	80	%
	 16th year
	  	100	%

  
 Should
Executive die prior to receiving benefits under this Paragraph 3.2.3, all Executive’s benefits under this Paragraph (and Corporation’s obligations under Paragraph 3.3.) shall cease immediately and this Agreement shall thereafter
be of no effect. 
  

 -4- 

 3.3. Death Benefit Prior to Retirement. Should the Executive die prior to the Normal or Extended
Retirement Date, Corporation agrees to pay to the Executive’s designated beneficiary, commencing on the first day of the month following the Executive’s death and on each annual anniversary thereafter for a total of ten (10) years,
the annual sum of $150,000. If the designated beneficiary should die prior to the expiration of the ten (10) years, the remaining, unpaid installments shall be commuted at 8% annually and paid in a lump sum to the personal representative of the
designated beneficiary. 
  
 Executive shall declare his designated
beneficiary in writing on a form provided by the Corporation. In the absence of or a failure to designate a beneficiary, or in the event the designated beneficiary shall have predeceased the Executive, the unpaid balance shall be commuted at 8% and
paid in a lump sum to the personal representative of the Executive’s estate. 
  
 In the event the Executive’s death shall be the result of suicide before January 2, 1999, then no death benefits shall be payable. 
  
 ARTICLE FOUR 
  
 RESTRICTIONS UPON FUNDING 
  
 4.1. Corporation shall have no obligation to set aside, earmark or entrust any fund or money with which to pay its obligations under this Agreement. The
Executive, his beneficiaries or any successor in interest to him shall be and remains a general creditor of the Corporation in the same manner as any other creditor having a general claim for matured and unpaid compensation. 
  
 4.2. Corporation reserves the absolute right at its sole discretion to either
fund or refrain from funding the obligations undertaken by this Agreement and to determine the extent, nature and method of such funding. Should Corporation elect to fund this Agreement, in whole or in part, through the purchase of life insurance,
mutual funds, disability policies or annuities, the Corporation reserves the absolute right, in its sole discretion, to terminate such funding at any time, in whole or in part. At no time shall Executive be deemed to have any lien, right, title or
interest in or to any specific funding investment or to any assets of the Corporation. 
  
 4.3. If Corporation elects to invest in a life insurance, disability or annuity policy upon the life of Executive, then Executive shall assist the Corporation by freely submitting to a physical examination and
supplying such additional information necessary to obtain such insurance or annuities. 
  
 ARTICLE FIVE 
  
 MISCELLANEOUS 
  
 5.1. Alienability and
Assignment Prohibition. Neither Executive, his widow nor any other beneficiary under this Agreement shall have any power or right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify or otherwise encumber in advance any of

  

 -5- 

 the benefits payable hereunder nor shall any of such benefits be subject to seizure for the payment of any debts,
judgments, alimony or separate maintenance owed by the Executive or his beneficiary, nor be transferable by operation of law in the event of bankruptcy, insolvency or otherwise. In the event Executive or any beneficiary attempt assignment,
commutation, hypothecation, transfer or disposal of the benefits hereunder, the Corporation’s liabilities shall forthwith cease and terminate. 
  
 5.2. Binding Obligation of Corporation and any Successor in Interest. Corporation expressly agrees that it shall not merge or consolidate into or
with another Corporation or sell substantially all of its assets to another Corporation, firm or person until such Corporation, firm or person expressly agrees, in writing, to assume and discharge the duties and obligations of the Corporation under
this Agreement. This Agreement shall be binding on its parties, their successors, beneficiaries, heirs and personal representatives. 
  
 5.3. Revocation. During the lifetime of the Executive, this Agreement may be amended or revoked at any time, in whole or in part, by the mutual
written consent of the Executive and the Corporation. 
  
 5.4.
Effect on other Corporation Benefit Plans. This Agreement does not and shall not impose on Corporation an obligation to grant the Executive, nor shall it affect Executive’s right to participate in, the same or similar rights to any
qualified or non-qualified pension, profit sharing, group, bonus or other supplemental compensation or fringe benefit plan granted to other executives or employees of the Corporation. 
  
 5.5. Headings. Headings and Subheadings in this Agreement are inserted for reference and convenience only and shall
not be deemed a part of this Agreement. 
  
 5.6. Applicable
Law. The validity and interpretation of this Agreement shall be governed by the laws of the State of Ohio. 
  
 ARTICLE SIX 
  
 ERISA PROVISIONS 
  
 6.1. Named Fiduciary and
Plan Administrator. The “Named Fiduciary and Plan Administrator” of this plan shall be Alan R. Spachman until his resignation or removal by the Board of Directors. As Named Fiduciary and Administrator, Alan R. Spachman shall be
responsible for the management, control and administration of the Salary Continuation Agreement as established herein. He may delegate to others certain aspects of the management and operation responsibilities of the plan including the employment of
advisors and the delegation of ministerial duties to qualified individuals. 
  
 6.2. Claims Procedure and Arbitration. In the event that benefits under this Plan Agreement are not paid to the Executive (or to his beneficiary in the case of the Executive’s death) and such claimants
feel they are entitled to receive such benefits, then a written claim must be made to the Named Fiduciary and Administrator named above within sixty (60) days from the date payments are refused. The Plan Fiduciary and Administrator and the
Corporation shall review the written claim and if the claim is denied, in whole or in part, they shall provide in writing within ninety (90) days of receipt of such claim their specific reasons for such denial, 
  

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 reference to the provision of this Agreement upon which the denial is based and any additional material or information
necessary to perfect the claim. Such written notice shall further indicate the additional steps to be taken by claimants if a further review of the claim denial is desired. A claim shall be deemed denied if the Plan Fiduciary and Administrator fails
to take any action within such ninety (90)-day period. 
  
 If
claimants desire a second review, they shall notify the Plan Fiduciary and Administrator in writing within sixty (60) days of the first claim denial. Claimants may review the Plan Agreement or any documents relating thereto and submit any
written issues and comments they deem appropriate. In its sole discretion, the Plan Fiduciary and Administrator shall then review the second claim and provide a written decision within sixty (60) days of receipt of such claim. This decision
shall likewise state the specific reasons for the decision and shall include reference to specific provisions of the Plan Agreement upon which the decision is based. 
  
 If claimants continue to dispute the benefit denial based upon completed performance of the Agreement or the meaning and
effect of the terms and conditions thereof, then claimants may submit the dispute to a Board of Arbitration for final arbitration. Such Board shall consist of one member selected by the claimant, one member selected by the Corporation and the third
member (the “Umpire”) selected by the first two members. The Board shall operate under arbitration rules of the American Arbitration Association. Each party shall bear its own expenses of arbitration, including all charges and expenses of
the member of the Board of Arbitration selected by it. The charges and expenses of the Umpire shall be shared equally by the parties. The parties agree that they and their heirs, personal representatives, successors and assigns shall be bound by the
decision of such Board with respect to any controversy properly submitted to it for determination. 
  
 Where a dispute arises as to the Corporation’s discharge of Executive “for cause”, such dispute shall likewise be submitted to arbitration
as above described and the parties agree to be bound by the decision thereunder. 
  
 The parties acknowledge that each has carefully read this Agreement and execute the original thereof on the 30th day of December, 1996 and that, upon execution, each has received a conforming copy. 
  

					
	 /s/ Diane R. Michelson

	 	 /s/ David W. Michelson

	Witness	 	David W. Michelson
		
	 	 	National Interstate Insurance Agency, Inc.
			
	 /s/ James Nowak

	 	By:	 	 /s/ Alan Spachman

	Witness	 	Title:	 	President

  

 -7-2006 Executive and Management Cash Bonus Plan

 Exhibit 10.1 
  
 SUMTOTAL SYSTEMS 
 EXECUTIVE AND MANAGEMENT BONUS PLAN 
 2006 
  
 SECTION 1 - INTRODUCTION 
  
 Plan Objectives 
  
 The goal of SumTotal Systems’ Executive and Management Bonus Plan (the “Plan”) is to enhance and reinforce the goals of SumTotal Systems (the “Company”) by providing Participants with
additional financial incentives and rewards for attainment of such goals. Final approval of the payment of any awards made under the Plan is subject to the sole discretion of, for Section 16 officers, the Compensation Committee of the Board of
Directors (“Compensation Committee”) and for all other participants, the Chief Executive Officer. 
  
 Effective Date 
  
 The Plan is effective for the year beginning January 1, 2006 and ending December 31, 2006. 
  
 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(s)” means an employee, or employees, as the case may be, 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 non-cash and exceptional charges such as: stock based compensation, all amortization and depreciation, certain merger related expenses and
restructuring charges. It also excludes any accruals made in connection with this Plan. 

  

	•	 	Gender. 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.

  
 SECTION 3 - PLAN ADMINISTRATION 
  
 Administration 
  
 The Plan shall be administered by the Chief Executive Officer, and, in the case of Section 16 Officers, by the Compensation Committee
of the Board of Directors (“Compensation Committee”). 
  

			
	 	  	Page 1 of 5

 Participation 
  
 Participation in the Plan shall be limited to regular employees of the Company. In selecting participants, the Chief Executive Officer and/or the Compensation Committee
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 sixty days following the end of the Plan period. If termination of employment occurs for any reason other than
death, 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),
either during the quarter or the year in which a payment is made, or on the date of a Plan payment, 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 actively working for 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. If the Participant is on an approved Leave of Absence on the date of a Plan payment, the Participant shall receive the same payment as if the
Participant was working actively for the Company on the date of such Plan payment. 
  
 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 effective as of the last day of employment. If
participant is not employed on the date of the Plan payout, the payout for that Plan period will not have been earned and the participant will be entitled to no payout. 
  
 If termination of employment occurs on account of death or 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. 

  

			
	 	  	Page 2 of 5

 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 this section. 
  
 Plan Changes 
  
 The Company reserves the right to amend, revoke, or terminate 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 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 the Company 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, and the Participant consents,
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. 
  
 SECTION 4 - OPERATING RULES 
  
 Plan Design 
  
 The Plan is based 80% on Business Financials and 20% on achievement of a Participant’s Annual MITs. For the Business Financials component, the targets and the payouts are cumulative on a quarter-by-quarter basis.
For instance, the payout for the second quarter is based on the cumulative results for the first and second quarters, less any amount paid for the first quarter results. There will be no payouts in excess of 100% of year-to-date targets. 

 
 The Chief Executive Officer or in the case of Section 16 Officers, 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 Business Financials. In the event of the failure to achieve the thresholds set forth in
the Plan, the Chief Executive Officer or in the case of Section 16 Officers, the Compensation Committee, may in its sole discretion, approve payment of bonuses. 
  

			
	 	  	Page 3 of 5

 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 Section 16 Officers, by the Compensation Committee. 
  
 The MITs bonus of up to 20% of the Participant’s targeted bonus is an annual bonus, and is typically paid within sixty days after year-end. The Chief Executive Officer or the Compensation Committee may
decide not to pay the MIT bonus component, based on the Company’s overall performance for the current year. 
  

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

  
 The business financials will be paid 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) 

  
 Plan Payout based on Corporate Financial Performance for Bookings and Revenue: 
  

	 	•	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. Achievement of 95% of bookings goal equals a for a 75% of target bonus payout) 
  
 Plan Payout based on Corporate Financial Performance for Operating Profit: 
  

	 	•	Achieve less than 50% of
plan                                    0% payout

  

	 	•	Achieve 50% of
plan                                        
           50% payout 

  

	 	•	Achieve 100% or more of
plan                                 100% payout 

  

	 	•	Straight-line payout between 50-100% of plan 

  
 (E.g. Achievement of 50% of operating profit goal equals a 50% payout of target bonus, achievement of 75% of operating profit goal equals a 75% payout of
target bonus) 
  
 Each business financial indicator stands on its
own for purposes of assessing quarterly results. 
  

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

  
 MITs are agreed upon at the beginning of the year and updated each quarter. This portion of the Plan is paid annually. 
  

			
	 	  	Page 4 of 5

 EXAMPLE AT 100% OF TARGET 
  

	•	Business Financials – 80% of total bonus target 

  

							
	 Potential Business Financials Bonus Under the Plan (80%)

	 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	  	$	6,000
	 Total Business Financials Bonus Target
	  	$	5,000	  	$	20,000

  

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

  

						
	 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
 Maximum

	  	 Annual
 Maximum

	 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 5

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