Internet Security Systems, Inc. Executive Incentive Plan [YEAR]
This agreement outlines the Executive Incentive Plan for Internet Security Systems, Inc. executives, effective from April 1 to March 31 of the specified year. It details how eligible executives can earn quarterly and annual incentive payments based on company and individual performance metrics, such as revenue and earnings per share. To qualify, participants must remain employed through the end of each performance period. The plan may be modified or terminated by the company at any time, and all payments are subject to approval by the Compensation Committee.
EXHIBIT 10.1
Internet Security Systems, Inc.
[YEAR] ISS Executive
Incentive Plan
[Effective Date]
I. PURPOSE
This Executive Incentive Plan (the "Plan") sets forth the Company's policies governing incentive compensation effective April 1, [YEAR] through March 31, [YEAR] or until such time as the Plan is amended in writing. Your individual base salary, quarterly and annual incentive targets are provided on the attached Individual Compensation Opportunity Statement.
In order to receive incentive compensation payments under this Plan, you must sign and return a copy of this Plan to the VP, Human Resources. Further, you must be employed through the end of a performance period to qualify for an incentive payment for that period (quarterly or annual).
II. OBJECTIVES
The objectives of the Executive Incentive Plan are to reward you for:
- Executing our plan in accordance with corporate revenue, profitability and operational goals
- Representing ISS' best interests in all business relationships
- Contributing to the successful development and achievement of ISS' strategic goals and objectives, [Insert special programs]
- Working with other members of the management team in clarifying and communicating a winning market and product strategy, and translating this strategy into clear market plans
- Developing a corporate culture based upon performance, integrity, compassion and ISS core values
III. RESPONSIBILITIES
Your responsibilities in keeping with the objectives stated above are to:
- Represent yourself and ISS at all times in the most ethical and professional manner
- Lead your individual unit with integrity and in accordance with ISS core values
- Take full responsibility to execute company plans and meet performance objectives established in accordance with our strategic imperatives
- Meet or exceed performance targets as set forth in this Plan
- Manage expenses wisely, prudently, and in accordance with the company's expense policies
- Ensure that your behavior and leadership continually perpetuate the GO ISS! culture
IV. INCENTIVE COMPENSATION PLAN
Your variable compensation opportunity will be made up of quarterly and annual incentive opportunities as outlined on your Individual Compensation Opportunity Statement.
V. PAYMENTS
Incentive Payments will be made quarterly within 30 days from ISS announced earnings and performance. All payments will be made for achievement against the [YEARS] ISS measures and approved by the Compensation Committee of the Board of Directors.
VI. QUARTERLY INCENTIVE PLAN MEASURES
The quarterly incentive plan measures for Corporate Executives are:
- ISS consolidated quarterly revenue
- Quarterly earnings per share (non-GAAP, as adjusted)
- Days Sales Outstanding at end of quarter
The quarterly incentive plan measures for Theatre Heads are:
- Theatre product quarterly revenue
- Theatre total quarterly revenue
- Theatre quarterly contribution margin
- Theatre Days Sales Outstanding at end of quarter
The relative weighting among the incentive plan measures is provided in the Individual Compensation Opportunity Statement furnished to you.
VII. ANNUAL INCENTIVE MEASURES
The annual incentive plan measures for Corporate Executives are:
- ISS consolidated annual revenue
- Annual earnings per share (non-GAAP, as adjusted)
The annual incentive plan measures for Theatre Heads are:
- Theatre total annual revenue
- Theatre annual contribution margin
The relative weighting among the quarterly and annual incentive plan measures is provided on your Individual Compensation Opportunity Statement.
VIII. ANNUAL PRODUCT LINE PERFORMANCE (PLP) BONUS FOR THEATRE HEADS
In [YEAR], if the Company reports an EPS of at least [TARGET], Theatre Heads are also eligible for an annual Product Line Performance (PLP) opportunity based on the attainment of selected Product Line or Service (PLS) revenue achievements. Payments under the PLP opportunity are not prorated for an achievement of less than an EPS of [TARGET]. The incentive opportunity is stated in the Individual Compensation Opportunity Statement furnished to you.
IX. PLP PLAN MEASUREMENTS:
The annual Product Line Performance Bonus will be determined by the Product Line/Service (PL/S) revenue schedule. The incentive opportunity for each PL/S is independent from each other in that participants could earn a payout under one, all, or any combination, based on each revenue achievement. Payments under a PL/S opportunity are not prorated for partial achievement of a PL/S revenue target.
Results against PL/S revenue measures will be determined by the Chief Executive Officer and the Chief Financial Officer and may incorporate any adjustments deemed appropriate to correctly reflect the PL/S revenue results. Final approval of payouts will be made by the Compensation Committee of the Board of Directors.
The annual Product Line Performance opportunity will be based on the following schedule:
Product Line or Service (PL/S) 2006 Revenue Target
X. GENERAL PROVISIONS
Modification of the Plan
ISS reserves the right to modify this Plan as deemed necessary by the Compensation Committee of the Board of Directors.
Final Authority on Disputes
Final authority for issues not specifically addressed in this Plan, and for all matters of administration of the Plan shall be decided by the Compensation Committee of the Board of Directors.
Right to Terminate
Nothing in this Plan shall be construed to imply a contract of employment between ISS and you. ISS reserves the right to terminate your employment or participation in this Plan at any time with or without cause. Should you terminate employment, either voluntarily or involuntarily, then all incentive payments/commissions under this Plan not yet earned, as defined in the Plan, shall be forfeited.
Governing Law
This Plan shall be governed by and construed in accordance with the laws of the [State of Georgia or local jurisdiction].
IX. FORM OF -
[YEAR] INDIVIDUAL COMPENSATION OPPORTUNITY STATEMENT
Participant:
Title:
- Quarterly and Annual Metrics for Corporate Executives and Theatre Heads.
- The total incentive opportunity will be split between quarterly and annual components as follows:
- The quarterly incentive plan measures for Corporate Executives are allocated among the following performance metrics:
- The quarterly incentive plan measures for Theatre Heads are allocated among the following performance metrics:
- The annual incentive plan measures for Corporate Executives are allocated among the following performance metrics:
- The annual incentive plan measures for Theatre Heads are allocated among the following performance metrics:
- The annual Product Line or Service incentive plan measures for Theatre Heads are allocated among the following performance metrics:
- Incentive weights and [YEAR] annual targets for the metrics were approved by the Compensation Committee. Specific quarterly targets, any changes to the annual targets, and calculations for payment of quarterly and annual incentive compensation are subject to approval of the Compensation Committee of the Board of Directors. Its decisions are final.
| Participant | Quarterly | Annual |
| Corporate Executives | ||
| Theatre Heads |
Measure Description Weight Quarterly Revenue ISS Revenue Profitability Earnings Per Share DSO Days Sales Outstanding
| Measure | Description | Weight |
| Theatre Product Revenue | Total quarterly revenues from software licenses and products | |
| Theatre Total Revenue | Total quarterly revenues from products, subscriptions and services | |
| Contribution Margin | Measured as the percentage of (theatre operating revenues minus theatre operating expenses) to theatre operating revenues | |
| Theatre DSO | Days Sales Outstanding |
Measure Description Weight Annual Revenue ISS Revenue Annual Profitability Earnings per Share
Measure Description Weight Annual Revenue Theatre Revenue Annual Profitability Contribution Margin
Product Line or Service (PL/S) [YEAR] Revenue Target
Participant:
Title:
Annual Base Salary As of April 1, [YEAR]: Quarterly Incentive Opportunity for [YEAR]: Q2 Q3 Q4 Q1 [YEAR] Total Quarterly Opportunity [YEAR] Annual Incentive Plan Opportunity [YEAR] Total Cash Compensation Opportunity [Product Line Performance Bonus Opportunity] [Additional Bonus Opportunity (Contingent upon achieving stated ISS [YEAR] Consolidated Revenues)] Long-Term Incentives:
In order to receive incentive compensation payments under this Plan, you must sign and return the original to the VP Human Resources. Please retain a copy for your records.
ACCEPTED:
Participant's Name:
Signature:
Date:
