The 2011 base salaries for each of the Named Executive Officers are as follows: Dr Brown, $370,000; Mr. Head, $247,500; Mr. Blough, $221,500; Ms. Hynes, $195,000; and Mr. Staples, $232,000. For purposes of the 2011 compensation arrangements, "non-GAAP" means excluding stock option expense and purchase accounting adjustments.
Dr. Brown and Mr. Head are eligible for a Company Performance Bonus. The bonus is earned and paid quarterly based on the percentage of actual year-to-date non-GAAP operating income margin compared to a target margin of 10%. For the first three quarters of the year, payments are limited to a margin of 10%. Payments for the second, third and fourth quarters are calculated based on amounts earned less payments made in prior quarters. No bonus will be paid if the Company’s year-to-date non-GAAP operating income margin as of the end of the applicable quarter is less than 5%. If the actual annual non-GAAP operating income margin equals the 10% target margin, Dr. Brown and Mr. Head will earn an aggregate bonus of $220,000 and $154,000, respectively, for 2011.
Mr. Blough is eligible for bonuses earned and paid quarterly based on achieving year-to-date sales and marketing operating profit targets, with a bonus based on North American results and a bonus based on results for the rest of the world. For the first three quarters of the year, payments are limited to the targeted amounts. Payments for the second, third and fourth quarters are calculated based on amounts earned less payments made in prior quarters. No bonus will be paid if the Company does not report non-GAAP operating income for the applicable quarter. If the actual annual operating profit amounts equal the annual targeted amounts, Mr. Blough will earn an aggregate bonus of $220,000 for 2011.
Ms. Hynes is eligible for a bonus earned and paid quarterly based on achieving year-to-date communications as a service (CaaS) operating profit targets. Ms. Hynes is also eligible for a bonus earned and paid quarterly based on the dollar amount of year-to-date Interactive Intelligence Inc. CaaS orders. For the first three quarters of the year, payments are limited to the targeted amounts. Payments for the second, third and fourth quarters are calculated based on amounts earned less payments made in prior quarters. No bonus will be paid if the Company does not report non-GAAP operating income for the applicable quarter. If the actual annual operating profit and order amounts equal the annual targeted amounts, Ms. Hynes will earn an aggregate bonus of $83,000 for 2011.
Mr. Staples is eligible for a bonus earned and paid quarterly based on achieving year-to-date worldwide sales and marketing operating profit targets. Mr. Staples is also eligible for a bonus earned and paid quarterly based on the dollar amount of year-to-date consolidated company hosted orders. For the first three quarters of the year, payments are limited to the targeted amounts. Payments for the second, third and fourth quarters are calculated based on amounts earned less payments made in prior quarters. No bonus will be paid if the Company does not report non-GAAP operating income for the applicable quarter. If the actual annual operating profit and order amounts equal the annual targeted amounts, Mr. Staples will earn an aggregate bonus of $110,000 for 2011.
