Exhibit 10.16
FTP SOFTWARE, INC.
1995 EXECUTIVE COMPENSATION PLAN
1995 EXECUTIVE COMPENSATION PLAN
The Board of Directors of FTP Software, Inc. believe that the company has grown
and matured to the point where a formal Executive Compensation Plan is necessary
to attract and maintain the executive talent required to allow the company to
achieve its current and future objectives. Executives covered by the Plan are
those who have executed a 1995 Officer's Agreement.
The components of this plan will be as follows:
Base Salary: Will be competitive and in the middle range.
Performance Bonuses: Will be a percentage of base salary and will be
earned based upon predetermined criteria tied to key performance objectives
of the business.
Stock Options: Will be granted from time to time based on performance.
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1995 EXECUTIVE BONUS PLAN
1995 Bonus Plan:
For the applicable percentage of base salary, as determined by the Company's
Board of Directors and set forth in each Executive Officer's Agreement, the
Company must achieve the following performance:
Target: Value:
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100% of Revenue Plan 33 1/3% of [applicable percentage] of base salary
100% of Profit Plan 33 1/3% of [applicable percentage] of base salary
100% of Cash Plan 33 1/3% of [applicable percentage] of base salary
The entry level for minimum achievement will be 100% and maximum achievement
will be 120% of plan.
The performance curve will be from 100% to 120% of plan with the minimum and
maximum applicable percentage of base salary to be determined by the Company's
Board of Directors and set forth in each Executive Officer's Agreement.
The performance curve is interpolated between the criteria defined above. For
example, if the applicable percentage is 30% of base salary, for achievement at
105%, a bonus of 35% of base salary is payable.
The Company's Board of Directors has currently set the minimum applicable
percentage at 25% to 35% and the maximum applicable percentage at 50%.
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REVENUE PLAN
Entry Point: No Annual Bonus will be paid for performance which is less than
100% of budget.
Additional Payments: The bonus will increase from 33 1/3% of the minimum
applicable percentage, as determined by the Company's Board of Directors, of
base salary at 100% performance against budget. From 100% performance against
budget, the bonus will increase to 33 1/3% of the maximum applicable percentage,
as determined by the Company's Board of Directors, of base salary at 120%
performance against budget.
The maximum bonus payable is that percent of base salary indicated at the 120%
of performance against budget level.
PROFIT PLAN
Entry Point: No Annual Bonus will be paid for performance which is less than
100% of budget.
Additional Payments: The bonus will increase from 33 1/3% of the minimum
applicable percentage, as determined by the Company's Board of Directors, of
base salary at 100% performance against budget. From 100% performance against
budget, the bonus will increase to 33 1/3% of the maximum applicable percentage,
as determined by the Company's Board of Directors, of base salary at 120%
performance against budget.
The maximum bonus payable is that percent of base salary indicated at the 120%
of performance against budget level.
CASH PLAN
Entry Point: No Annual Bonus will be paid for performance which is less than
100% of budget.
Additional Payments: The bonus will increase from 33 1/3% of the minimum
applicable percentage, as determined by the Company's Board of Directors, of
base salary at 100% performance against budget. From 100% performance against
budget, the bonus will increase to 33 1/3% of the maximum applicable percentage,
as determined by the Company's Board of Directors, of base salary at 120%
performance against budget.
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The maximum bonus payable is that percent of base salary indicated at the 120%
of performance against budget level.
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1995 BONUS PLAN PAYMENT TERMS
Payments: The Annual Bonus will be paid within ninety (90) days following the
close of FTP's books.
General Terms:
Adjustments: Equitable adjustments to the Program caused by FTP
directives, external events, acquisitions, etc., may be made from time to
time and will be confirmed by an exchange of letters between FTP and the
participant. Adjustments must be approved by the Compensation Committee of
the Board of Directors.
Termination of Employment: In the event of termination of a Participant,
the payment of all credited but unpaid monies under the Program will depend
upon the circumstances of termination, as follows:
1. If the Participant leaves of his/her own free will,
credited but unpaid monies are forfeited.
2. If FTP causes the termination, unilaterally or through
negotiation, for other than cause, credited monies, including a
pro-rata share of the then current year, will be paid at
termination, or in accordance with the "Payments" paragraph above,
at the option of FTP.
3. In the case of death, all monies will be paid in
accordance with the beneficiary named in the group insurance plan.
Employment: Neither the action of FTP in establishing this Program nor any
action taken by it under any provisions of this Program shall be construed
as giving to any Participant the right to be retained in FTP's employ or
any right to Program benefits or payments whatsoever, except to the extent
of the benefits provided for by this Program. FTP expressly reserves the
right at any time to dismiss any Participant without incurring any
liability for any claim against itself for any payment whatsoever, except
to the extent provided for in this Program.
Felony Conviction: Notwithstanding any other provision of this Program, if
a Participant is convicted of a felony involving fraud, misappropriation of
funds, or other criminal activity of a similar nature involving FTP or its
assets, illegal use of trade secrets or proprietary information gained
while in the employ of FTP, such Participant's rights to any benefits under
this Program shall be permanently and immediately forfeited.
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FTP SOFTWARE, INC.
1995 TARGETS FOR EXECUTIVE BONUS PLAN
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REVENUE PLAN: $140,000,000
PROFIT PLAN
(NET INCOME FROM
OPERATIONS): $56,459,000
CASH PLAN: $117,000,000
The above targets are based upon the attached 1995 Budget and 1995 Cash Flow
Analysis.
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