DENNISMCKENNA BONUS AGREEMENT
Exhibit 10.41
NOTE: Portions of this Exhibit are the subject of a Confidential Treatment Request by the Registrant to the Securities and Exchange Commission (the Commission). Such portions have been redacted and are marked with a [***] in place of the redacted language. The redacted information has been filed separately with the Commission.
DENNIS MCKENNA BONUS AGREEMENT
1. | EBITDAR Based Bonus. |
(a) In the event Silicon Graphics, Inc. (the Company) has combined Earnings Before Interest, Taxes, Depreciation, Amortization and Restructuring Costs (EBITDAR), for the first and second quarters of the Companys Fiscal Year 2007 that meet or exceed the corporate plan, then the Company shall pay Dennis McKenna (McKenna) a bonus in the amount of $250,000.00, which shall be payable to McKenna by the earlier of 30 days after the determination of such EBITDAR by the Companys certified public accountants and March 15, 2007.
(b) For purposes of this Agreement, EBITDAR is defined as operating income plus (a) without duplication and to the extent deducted in determining net income, the sum of (i) depreciation and amortization expense for the period, (ii) restructuring expenses and bankruptcy expenses in the period, (iii) stock option and restricted stock expense in the period, minus (b) without duplication and to the extent included in net income, any extraordinary non-cash gains (or plus losses) included in net income for the period, minus (c) without duplication and to the extent deducted in determining net income, any extraordinary non-cash gains (or plus losses) realized in connection with any asset sale, plus or minus (d) any pro-forma adjustments required to exclude the effect of SOP 97-2 and fresh start accounting.
2. | Revenue Based Bonus |
(a) In the event that the Companys combined Revenue for the first and second quarters of the Companys Fiscal Year 2007 meets or exceeds $[***] then the Company shall pay McKenna a bonus in the amount of $250,000.00. If the Companys combined Revenue is below $[***], but above $[***], McKenna shall receive a portion of the bonus based on the following formula:
Bonus = [***]
If the Companys combined Revenue is below $[***], McKenna shall not be entitled to the bonus set forth in this paragraph 2(a). If McKenna is entitled to a bonus under this paragraph 2(a), it shall be payable to McKenna by the earlier of 30 days after the determination of Revenue by the Companys certified public accountants and March 15, 2007
(b) For purposes of this Agreement, Revenue is defined as the revenue reported by SGI under SEC and GAAP regulations, taking into account pro-forma calculations excluding 97-2 and fresh start accounting.
3. | Tax Treatment |
Any payment to which McKenna becomes entitled under this Agreement shall be subject to the Companys collection of all applicable, federal, state and local income and employment withholding taxes, and McKenna shall only receive the amount of such payment remaining after such withholding taxes have been collected.
*** CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.