Incentive Bonus Plan - CreditCards.com Inc.
Incentive Bonus PlanFY07
The Creditcards.com, Inc. Incentive Bonus (IB) Plan incentivizes participants to assist the company in achieving its financial goals.
January 1, 2007, to December 31, 2007. Each plan year stands alone.
Positions nominated for participation and their corresponding financial targets require the approval of the Chief Executive Officer.
Any participant who has a percentage change in their plan target (including a reduction or removal from the Plan) with an effective date after the beginning of a fiscal quarter will have that change impact their IB calculation at the beginning of the next fiscal quarter.
Employee has a plan target increase of $100 with an effective date of 4/30/07. Plan calculations will not be affected until the quarter that begins 7/1/07.
Company and Individual Performance Targets:
A 40% weighting each will apply to adjusted EBITDA and revenue performance (80% total) and 20% will apply to individual performance goals (beginning with the second quarter)
QUARTERLY ACHIEVEMENT AND PAYOUTS
A quarterly bonus payout may occur for the first 3 quarters, at the company's discretion, when the variance to target for revenue is -10.0% or better, when the variance to target for adjusted EBITDA is -10.0% or better and if an individual meets their performance goals. Each target achievement will be judged separately (i.e. all, none, or any combination of the three targets could be achieved). In addition, Q2 and Q3 IB calculations are subject to a year-to-date review. If year-to-date performance is less than 90% of year-to-date revenue or adjusted EBITDA plan, actual IB payments for those quarters may be adjusted downward to appropriately reflect the year-to-date performance.
Potential quarterly payments will be calculated using Table 1: Plan Payment Calculation Matrix Fiscal Quarters 1 through 3. The maximum amount for a quarterly payment is capped at 25% of the participant's annual target. Quarterly bonus payments, if any, are generally made within 60 days after the end of the quarter.
QUARTERLY ACHIEVEMENT CALCULATION (example)
The quarterly equivalent of a $2,000 annualized target is $500 ($2,000 x 25%). If Q1 company performance was -3.0% for revenue and -5.0% for adjusted EBITDA and the individual met their smart goals, the Q1 IB calculation would be as follows:
Revenue: $500*40%*85% = $170
Adjusted EBITDA: $500*40%*75% = $150
Smart Goal: $500*20%*100% = $100
Total Paid Q1 = $420
FINAL PLAN PAYMENT
Once the company's annual financial results have been audited after the end of the fiscal year, the total expected bonus payout for the entire fiscal year is calculated (including any overachievement) based on fiscal year performance against the annual revenue target and the annual adjusted EBITDA target. This expected payout amount is compared to the actual cumulative IB payouts throughout the first three quarters of the fiscal year. If the actual year-to-date IB payout is less than the expected full year payout, plan participants will receive the difference as their final plan payment. If the actual year-to-date IB payout is greater than or equal to the expected full year plan payout, no more payments are made. The final calculation is based on the numbers in Table 1: Plan Payment Calculation Matrix, Fiscal Year 2007.
Participant has a $2,000 annualized IB target. Annual company performance resulted in attainment of revenue and adjusted EBITDA growth of 102% each and the individual met their smart goals all year long. In addition, the plan paid 100% of target in Q1 ($500), 100% of target in Q2 ($500), and 100% of target in Q3 ($500) for a total year-to-date payout of $1,500. The final plan payment calculation would be as follows:
Revenue: ($2,000*40%*110%)-(40%*$1500) = $280
Adjusted EBITDA: ($2,000*40%*110%)-(40%*$1500) = $280
Smart Goal: ($2,000*20%*110%)-(20%*$1500) = $140
Total Final Plan Payment = $700
Total Paid Fiscal Year 2007 = $1,500+$700= $2,200 or 110% of the $2,000 annual IB target
Examples are included only for the purpose of illustrating quarterly and annual payments. Actual quarterly and annual performance to revenue and adjusted EBITDA Plan will vary and cannot be predicted or guaranteed. The IB plan is "at risk" compensation and the IB Plan includes the possibility that the IB Plan will pay zero.
OTHER PLAN PROVISIONS