Heeling Sports Limited 2006 Bonus Plan Agreement
Heeling Sports Limited established a 2006 bonus plan for its management team, with payouts based on company financial performance, inventory and cash management, legal expense control, and individual objectives. Bonuses are determined by actual EBITDA versus plan, operational targets, and personal performance, with a maximum payout of twice the target bonus. To qualify, managers must be employed on December 31, 2006, with pro-rated eligibility for those joining during the year. Bonuses will be paid by March 1, 2007. The plan applies only to fiscal year 2006 and may be revised for 2007.
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Exhibit 10.17
HEELING SPORTS LIMITED 2006 BONUS PLAN
Period of Employment ending 12/31/06
Annual bonus payouts are in place to provide appropriate incentives for the management team of Heeling Sports Limited ("HSL"). The following attempts to set forth the parameters of the 2006 plan.
- 1.
- 50% of the bonus opportunity is based on HSL 2006 actual EBITDA versus the planned EBITDA as approved by the Board of Directors of Heeling, Inc. (the "Board") (see details below).
- 2.
- 25% of the bonus opportunity is based on 3 components:
- a.
- Inventory: HSL management will manage inventory to a maximum of 20% of the year's unit sales volume. For example: If unit sales are 500,000 for 2006 the maximum target inventory position would be 100,000 pair as of December 31, 2006.
- b.
- Cash: HSL management will manage cash within the current established line of credit.
- c.
- Legal Expenses: HSL management will mange legal expenses within the budgeted amounts.
- 3.
- 25% of the bonus opportunity is based on individual performance versus annual individual objectives. The individual performance portion of the bonus is subject to the manager and the Board approval.
- 4.
- The maximum bonus is capped at 2x a manager's target bonus opportunity (i.e. $5,000 bonus opportunity can pay a maximum of $10,000).
- 5.
- The bonus will be paid by March 1, 2007.
- 6.
- A manager must be employed with HSL on December 31, 2006 to qualify for a bonus. Managers leaving HSL prior to December 31, 2006 will not be eligible for a bonus.
- 7.
- Managers joining HSL during the year and employed on December 31, 2006 may be eligible for a pro-rated bonus.
- 8.
- This bonus plan is in effect for HSL fiscal year 2006. The plan will be revisited and possibly revised for 2007.
EBITDA component (50% of Bonus Opportunity): The target EBITDA for 2006 is $9,025,078
The attached chart shows the payout for the EBITDA component of the bonus based on company performance:
- 1.
- Legal defense fees will NOT be added back into the EBITDA unless approved in advance by the HSL Board of Directors
- 2.
- Investment Banker fees WILL be added back into the EBITDA number since these expenses would be considered "non-operating" expenses and largely outside the control of the management team.
HEELING SPORTS LTD 2006 BONUS PLAN
| 2006 Bonus Payout Plan | 2006 Bonus Payout Plan | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Actual EBITDA | % of EBITDA v Plan | Bonus Payout | Actual EBITDA | % of EBITDA v Plan | Bonus Payout | ||||||||
| $ | 6,768,809 | 75 | % | 0 | % | $ | 10,830,094 | 120 | % | 140 | % | ||
| $ | 6,859,059 | 76 | % | 4 | % | $ | 10,920,344 | 121 | % | 142 | % | ||
| $ | 6,949,310 | 77 | % | 8 | % | $ | 11,010,595 | 122 | % | 144 | % | ||
| $ | 7,039,561 | 78 | % | 12 | % | $ | 11,100,846 | 123 | % | 146 | % | ||
| $ | 7,129,812 | 79 | % | 16 | % | $ | 11,191,097 | 124 | % | 148 | % | ||
| $ | 7,220,062 | 80 | % | 20 | % | $ | 11,281,348 | 125 | % | 150 | % | ||
| $ | 7,310,313 | 81 | % | 24 | % | $ | 11,371,598 | 126 | % | 152 | % | ||
| $ | 7,400,564 | 82 | % | 28 | % | $ | 11,461,849 | 127 | % | 154 | % | ||
| $ | 7,490,815 | 83 | % | 32 | % | $ | 11,552,100 | 128 | % | 156 | % | ||
| $ | 7,581,066 | 84 | % | 36 | % | $ | 11,642,351 | 129 | % | 158 | % | ||
| $ | 7,671,316 | 85 | % | 40 | % | $ | 11,732,601 | 130 | % | 160 | % | ||
| $ | 7,761,567 | 86 | % | 44 | % | $ | 11,822,852 | 131 | % | 162 | % | ||
| $ | 7,851,818 | 87 | % | 48 | % | $ | 11,913,103 | 132 | % | 164 | % | ||
| $ | 7,942,069 | 88 | % | 52 | % | $ | 12,003,354 | 133 | % | 166 | % | ||
| $ | 8,032,319 | 89 | % | 56 | % | $ | 12,093,605 | 134 | % | 168 | % | ||
| $ | 8,122,570 | 90 | % | 60 | % | $ | 12,183,855 | 135 | % | 170 | % | ||
| $ | 8,212,821 | 91 | % | 64 | % | $ | 12,274,106 | 136 | % | 172 | % | ||
| $ | 8,303,072 | 92 | % | 68 | % | $ | 12,364,357 | 137 | % | 174 | % | ||
| $ | 8,393,323 | 93 | % | 72 | % | $ | 12,454,608 | 138 | % | 176 | % | ||
| $ | 8,483,573 | 94 | % | 76 | % | $ | 12,544,858 | 139 | % | 178 | % | ||
| $ | 8,573,824 | 95 | % | 80 | % | $ | 12,635,109 | 140 | % | 180 | % | ||
| $ | 8,664,075 | 96 | % | 84 | % | $ | 12,725,360 | 141 | % | 182 | % | ||
| $ | 8,754,326 | 97 | % | 88 | % | $ | 12,815,611 | 142 | % | 184 | % | ||
| $ | 8,844,576 | 98 | % | 92 | % | $ | 12,905,862 | 143 | % | 186 | % | ||
| $ | 8,934,827 | 99 | % | 96 | % | $ | 12,996,112 | 144 | % | 188 | % | ||
| $ | 9,025,078 | 100 | % | 100 | % | $ | 13,086,363 | 145 | % | 190 | % | ||
| $ | 9,115,329 | 101 | % | 102 | % | $ | 13,176,614 | 146 | % | 192 | % | ||
| $ | 9,205,580 | 102 | % | 104 | % | $ | 13,266,865 | 147 | % | 194 | % | ||
| $ | 9,295,830 | 103 | % | 106 | % | $ | 13,357,115 | 148 | % | 196 | % | ||
| $ | 9,386,081 | 104 | % | 108 | % | $ | 13,447,366 | 149 | % | 198 | % | ||
| $ | 9,476,332 | 105 | % | 110 | % | $ | 13,537,617 | 150 | % | 200 | % | ||
| $ | 9,566,583 | 106 | % | 112 | % | ||||||||
| $ | 9,656,833 | 107 | % | 114 | % | ||||||||
| $ | 9,747,084 | 108 | % | 116 | % | ||||||||
| $ | 9,837,335 | 109 | % | 118 | % | ||||||||
| $ | 9,927,586 | 110 | % | 120 | % | ||||||||
| $ | 10,017,837 | 111 | % | 122 | % | ||||||||
| $ | 10,108,087 | 112 | % | 124 | % | ||||||||
| $ | 10,198,338 | 113 | % | 126 | % | ||||||||
| $ | 10,288,589 | 114 | % | 128 | % | ||||||||
| $ | 10,378,840 | 115 | % | 130 | % | ||||||||
| $ | 10,469,090 | 116 | % | 132 | % | ||||||||
| $ | 10,559,341 | 117 | % | 134 | % | ||||||||
| $ | 10,649,592 | 118 | % | 136 | % | ||||||||
| $ | 10,739,843 | 119 | % | 138 | % | ||||||||
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HEELING SPORTS LTD 2006 BONUS PLAN
