Sales Executive Compensation Plan and Bonus Structure for Fiscal Year 2005
This document outlines the compensation plan for sales executives, detailing how base salary and target incentives are combined to form on-target earnings. Bonuses are paid quarterly based on achieving specific revenue and margin goals, with higher payouts if both targets are exceeded. The plan also includes special bonuses for strategic initiatives in certain quarters. All payments are calculated according to predefined schedules, and performance is measured and rounded according to standard rules. The plan is subject to approval by company finance and legal departments.
EXHIBIT 10.6
Description of Sales Executive Compensation Plan
And Summary Forms of Notice
[Name]
| Annual Target Compensation Mix |
Base Salary:
Target Incentive (TI): % of Base Salary
On Target Earnings (OTE):
| OTE Quarterly Plan Components |
I. Quarterly Geographic (Products & Service) Revenue Bonus:
• Quarterly Revenue Bonus equals % of TI ( % of TI each quarter).
• Paid quarterly based on performance against quarterly revenue plan.
• Quarterly bonus payment per Table I, Schedule A
• If both the Quarterly Revenue and the Quarterly Geographic Contribution Margin (dollar) plans are met or exceeded (i.e. achievement on both is >100%) in the same quarter, payment for the revenue bonus will be paid on a higher schedule. (Table I, Schedule B).
II. Quarterly Geographic Contribution Margin:
• The Quarterly Geographic Contribution Margin represents % of TI ( % TI each quarter).
• Paid quarterly based on performance against Quarterly Geographic Contribution Margin Plan.
• Quarterly bonus payment per Table II.
• Measurement is based on Geographic Contribution Margin dollars.
Approved by: Date:
Definitions:
Base Salary: The non-variable portion of total on-target earnings (OTE).
Target Incentive (TI): Total variable amount an Executive would receive by meeting his/her targets.
On-Target-Earnings (OTE): Total cash paid to an Executive for meeting specified individual targets.
| TABLE I: |
| TABLE II: | ||||||
| % Achieved |
| Schedule A |
| Schedule B |
| % Achieved |
| % of Quarterly |
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Payment Calculations: For purposes of bonus payment calculations, actual achievement will be rounded to a whole number using conventional rounding (i.e. .01 - .49 will be rounded DOWN .5 - .99 will be rounded UP)
FY ‘05 Executive Compensation Plan
[Name]
| Annual Target Compensation Mix |
Base Salary:
Target Incentive (TI): % of Base Salary
On Target Earnings (OTE):
| OTE Quarterly Plan Components |
I. Quarterly Product Group Revenue Bonus:
• Quarterly Revenue Bonus equals % of TI( % of TI each quarter).
• Paid quarterly based on performance against quarterly Product Group revenue plan.
• Quarterly bonus payment per Table I
II. Quarterly Product Group Gross Margin:
• The Quarterly Product Group Gross Margin represents % of TI ( %TI each quarter).
• Paid quarterly based on performance against Quarterly Product Group Gross Margin Plan.
• Quarterly bonus payment per Table II.
Approved by: Date:
Definitions:
Base Salary: The non-variable portion of total on-target earnings (OTE).
Target Incentive (TI): Total variable amount an Executive would receive by meeting his/her targets.
On-Target-Earnings (OTE): Total cash paid to an Executive for meeting specified individual targets.
| TABLE I: |
| TABLE II: | ||||||
| % Achieved |
| % of Quarterly Product Revenue |
| % Achieved |
| % of Quarterly Gross | ||
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Payment Calculations: For purposes of bonus payment calculations, actual achievement will be rounded to a whole number using conventional rounding (i.e. .01 - .49 will be rounded DOWN .5 - .99 will be rounded UP)
FY ‘05 Executive Compensation Plan
[Name]
Annual Target Compensation Mix
Base Salary:
| Target Incentive (TI): | % of Base Salary |
On Target Earnings (OTE):
OTE Quarterly Plan Components
I. Quarterly Strategic Technology Initiative Contract Bonus (Q1 & Q2 only):
• Quarterly Contract Bonus equals % of TI.
• A one-time payment based on the successful completion of the contract. Determination of the successful completion will be made by Finance and Legal.
• The maximum payout for this opportunity is % of TI.
II. Quarterly Strategic Technology Initiative Revenue Bonus (Q3 & Q4 only):
• Quarterly Revenue Bonus equals of TI ( % of TI each quarter).
• Paid quarterly based on performance against quarterly Strategic Technology Initiative revenue plan.
• Quarterly bonus payment per Table I
III. Quarterly Strategic Technology Initiative Gross Margin (Q3 & Q4 only):
• The Quarterly Product Group Gross Margin Bonus represents % of TI ( %TI each quarter).
• Paid quarterly based on performance against Quarterly Strategic Technology Initiative Gross Margin Plan.
• Quarterly bonus payment per Table II.
| Approved by: | Date: |
Definitions:
Base Salary: The non-variable portion of total on-target earnings (OTE).
Target Incentive (TI): Total variable amount an Executive would receive by meeting his/her targets.
On-Target-Earnings (OTE): Total cash paid to an Executive for meeting specified individual targets.
| TABLE I: |
| TABLE II: | ||||||
| % Achieved |
| % of Quarterly |
| % Achieved |
| % of Quarterly | ||
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Payment Calculations: For purposes of bonus payment calculations, actual achievement will be rounded to a whole number using conventional rounding (i.e. .01 - .49 will be rounded DOWN .5 - .99 will be rounded UP)
