Rally FY2016 Metric-Based Employee Bonus Plan (Effective Feb 1, 2015 – Jan 31, 2016)
This agreement outlines Rally's FY2016 bonus plan for all non-commissioned regular employees, effective from February 1, 2015 to January 31, 2016. The plan provides quarterly bonuses based on company performance in new product bookings, services bookings, and renewal rates, with specific targets and payout percentages. Employees must be employed at the start and end of each quarter to qualify. Bonus amounts are calculated using a set formula based on actual earnings and achievement of corporate metrics. Management may change or cancel the plan at its discretion.
Exhibit 10.2+
FY2016 Metric Based Bonus - Employee Plan
Effective February 1, 2015 - January 31, 2016
Objectives
· Promotes team based goals/results linked to corporate goals/results.
· Provide incentives to employees to meet and exceed new product and services bookings and renewal rates, thereby increasing the value of Rally (increase shareholder value).
· All employees share in the success of Rally.
· Align employees with the primary goals of Rally.
· Aligns Rally pay with other High Tech companies.
Eligibility
· All non-commissioned regular employees are eligible.
· Employees must be employed on the first and last business day of the quarter to be eligible to receive a payout for that respective quarter.
Bonus Plan Period
FY2016:
· Q1: February 1, 2015 through April 30, 2015
· Q2: May 1, 2015 through July 31, 2015
· Q3: August 1, 2015 through October 31, 2015
· Q4: November 1, 2015 through January 31, 2016
Target Bonus
All non-commissioned employees are assigned a grade level with an associated target bonus percentage. The bonus will be calculated based on actual employee earnings for the time respective period.
* Actual earnings include actual base salary earnings only and exclude all other compensation such as bonus payments.
Bonus Plan Metrics
· MBB will be measured against three separate categories for each discrete quarter: (1) New Product Bookings, (2) Services Bookings, and (3) a Renewal Rate.
· Metric targets for New Products Bookings, Services Bookings and Renewal Rate are aligned with the Board-approved operating plan.
· Quarterly MBB payment will be paid to participants based on a preset schedule defining MBB % payment against metrics (See Below).
· Threshold payment will be set at 85% achievement against New Product and Services Bookings with a payment equal to 55% of target bonus. Threshold payment will be set at 75% achievement against the Renewal Rate with a payment equal to 55% of target bonus. MBB payment is made for a particular category if that category hits its threshold percentage (i.e. payment in one category is not dependent on a minimum threshold being met in all three categories).
· Maximum payment will be set at 110% achievement against New Product and Services Bookings with a payment equal to 150% of target bonus. Maximum payment will be set at 95% achievement against the Renewal Rate with a payment equal to 150% of target bonus.
Metrics Weighting
The metrics will be weighted in the following manner.
1
New Product Booking equals 35% of total achievement, Services Bookings equals 35% of total achievement and the Renewal Rate equals 30% of total achievement.
Payout Schedule
· The New Product and Services Bookings achievement ranges are 85% to 110%. The Renewal Rate range is 75% to 95%.
| NPB Bookings |
| Employee NPB |
|
| 85% |
| 55% |
|
| 86% |
| 58% |
|
| 87% |
| 61% |
|
| 88% |
| 64% |
|
| 89% |
| 67% |
|
| 90% |
| 70% |
|
| 91% |
| 73% |
|
| 92% |
| 76% |
|
| 93% |
| 79% |
|
| 94% |
| 82% |
|
| 95% |
| 85% |
|
| 96% |
| 88% |
|
| 97% |
| 91% |
|
| 98% |
| 94% |
|
| 99% |
| 97% |
|
| 100% |
| 100% |
|
| 101% |
| 105% |
|
| 102% |
| 110% |
|
| 103% |
| 115% |
|
| 104% |
| 120% |
|
| 105% |
| 125% |
|
| 106% |
| 130% |
|
| 107% |
| 135% |
|
| 108% |
| 140% |
|
| 109% |
| 145% |
|
| 110% |
| 150% |
|
| Services Bookings |
| Employee NPB |
|
| 85% |
| 55% |
|
| 86% |
| 58% |
|
| 87% |
| 61% |
|
| 88% |
| 64% |
|
| 89% |
| 67% |
|
| 90% |
| 70% |
|
| 91% |
| 73% |
|
| 92% |
| 76% |
|
| 93% |
| 79% |
|
| 94% |
| 82% |
|
| 95% |
| 85% |
|
| 96% |
| 88% |
|
| 97% |
| 91% |
|
| 98% |
| 94% |
|
| 99% |
| 97% |
|
| 100% |
| 100% |
|
| 101% |
| 105% |
|
| 102% |
| 110% |
|
| 103% |
| 115% |
|
| 104% |
| 120% |
|
| 105% |
| 125% |
|
| 106% |
| 130% |
|
| 107% |
| 135% |
|
| 108% |
| 140% |
|
| 109% |
| 145% |
|
| 110% |
| 150% |
|
| Renewal Rate % |
| Employee Ren |
|
| 75% |
| 55.0% |
|
| 76% |
| 59.5% |
|
| 77% |
| 64.0% |
|
| 78% |
| 68.5% |
|
| 79% |
| 73.0% |
|
| 80% |
| 77.5% |
|
| 81% |
| 82.0% |
|
| 82% |
| 86.5% |
|
| 83% |
| 91.0% |
|
| 84% |
| 95.5% |
|
| 85% |
| 100.0% |
|
| 86% |
| 105.0% |
|
| 87% |
| 110.0% |
|
| 88% |
| 115.0% |
|
| 89% |
| 120.0% |
|
| 90% |
| 125.0% |
|
| 91% |
| 130.0% |
|
| 92% |
| 135.0% |
|
| 93% |
| 140.0% |
|
| 94% |
| 145.0% |
|
| 95% |
| 150.0% |
|
MBB Bonus Calculation
The bonus payment is equal to the target bonus % for the respective grade multiplied by the New Product Bookings achievement weighted at 35% + Services Booking achievement weighted at 35% + Renewal Rate weighted at 30% multiplied by actual employee earnings:
(Target Bonus %) * ((New Product Bookings % * 35%) + (Services Bookings % * 35%) + (Renewal Rate % * 30%)) x (Actual Earnings )
2
Example:
New Product Bookings Achievement (weighted at 35%) = 95%
Services Bookings Achievement (weighted at 35%) = 105%
Renewal Rate (weighted at 30%) = 82%
MBB payout percent:
New Product Bookings = 85%
Services Bookings = 125%
Renewal Rate = 86.5%
(85% * 35%) + (125% * 35%)+ (86.5% * 30%) = 99.45%
Earnings = $22,000 (assuming an annual salary of $88,000)
Target Bonus = 5%
5% * 99.45% * 22,000 = $1,093.95
Other Provisions
· Metric achievements that fall between percentages will be prorated based on the distance between those percentages. For example, if NPB achievement were 87.5%, then payout would equal 62.5%. The difference between 87% and 87.5% equals .5%. There is a 3% payout increment for every 1% increase in achievement up to 100%. The NPB metric payout would be calculated by multiplying .5% (difference between 87% and 87.5%) with 3% (step increase in NPB achievement between 87% and 88%). The result is 1.5%, which is then added to 61% payout for a total NPB payout of 62.5%.
· Part-time employees will be paid out in accordance with their reduced schedule based on their actual earnings.
· Employees on sabbatical are entitled to full MBB allocation.
· Employees on qualified FMLA leave are entitled to full MBB allocation, regardless of duration.
· Employees on personal non-medical leave will not receive a payout for the period of unpaid leave.
· Management reserves the right to interpret, change or cancel this plan at any time at its discretion.
3
