Exhibit 10.6
VICOR CORPORATION
SALES INCENTIVE PLAN
REGIONAL SALES MANAGEMENT
I. OBJECTIVES:
A. To encourage participants to meet or exceed Vicor's sales goals
within established expense standards.
B. To compensate participants in proportion to their sales
accomplishments and margin contribution.
II. PRINCIPAL PROVISIONS:
A. Term
The term of this plan is usually from January 1 through December 31,
of each year.
B. Modification
This plan may be modified by the Senior Vice President of Sales as
business situations, events and, circumstances warrant.
C. Eligibility
All Sales management personnel who are directly responsible for the
management of Bookings from and Billings to customers of Vicor,
unless otherwise excluded.
a.) New or transferred members of this plan will participate on a
pro-rata basis starting the first full calendar quarter of
participation in the plan. Calendar quarters are defined in
the annual Vicor Fiscal Calendar.
b.) Participants who resign or are terminated for cause from Vicor
within a quarterly incentive period will terminate all
participation in the plan, retroactive to the beginning of
that period.
c.) Participants terminated by Vicor without cause, transferred or
retired, will be considered for incentive on a pro-rata basis
within an incentive period at the time determination of sales
incentive is made.
III. INCENTIVE:
A. Sales incentive will be granted at the rate of 2% of "Net Billings
Delta" times the Gross Margin as calculated, by sales territory at
the end of each incentive period.
a.) Each participant will be given a Quarterly Billings Plan
approved by the Senior Vice President of Sales. This will be
based on the previous year's net sales billed, less
exclusions.
1.) Assume 1995 Net Billings of $7,000K
2.) 1996 Quarterly Billings goal is $1,750K
3.) Q1 1996 Net Billings are $2,250K, Gross Margin is 45%
$2,250 - $1,750K = $500K x (.02 x .45) = $4,500 incentive
Q2 Billings are $1,500K
No commission would be paid, ($250K) would be carried
forward and added to Q3
Q3 1996 Billings, $3,000K, net, Gross Margin is 47%
$3,000K - $1,750K - $250K = $1,000K
$1,000K x (.02 x .47) = $9,400
IV. DEFINITIONS:
A. Billings Plan - the amount of Net Billings in a territory during the
plan year, normally similar to the previous year's Billings, divided
by four, will establish the base quarterly quota for the incentive
year.
B. Net Billings Delta - the difference between the year's actual net
Quarterly Billings and the Billings Plan.
C. Territory - a geographical area or major account(s) and designated
locations established by Vicor. Territories may only be revised by
the Senior Vice President of Sales.
D. Contingencies:
a.) Sales resulting from very little or no effort on the part of
the participant may be classified as a "windfall" and may be
excluded in whole, in part, or not at all, at the discretion
of the Senior Vice President of Sales.
b.) Consideration may be given to a participant whose goal is
unattainable due to unforeseen circumstances outside of the
participant's control. Requests for adjustments must be made
in writing to the Senior Vice President of Sales within five
days after the end of each incentive period.
c.) In general, no Billings Plan will be less than $1,000,000
annually.
V. MAXIMUM INCENTIVE:
A. In no case will a Quarterly incentive exceed 100% of a participant's
base quarterly salary.
VI. EXCLUSIONS:
A. Shipments to Vicor licensees and other customers as may be
designated, are excluded from this plan.
VICOR CORPORATION
SALES INCENTIVE PLAN
SALES AND MARKETING MANAGEMENT
I. OBJECTIVES:
A. To encourage participants who significantly contribute to Vicor's
sales growth to support Vicor's sales goals within established
expense standards.
II. PRINCIPAL PROVISION:
A. Term
The term of this plan is usually from January 1 through December 31,
of each year.
B. Modification
This plan may be modified by the President, as business situations,
events and circumstances warrant.
C. Eligibility
At the discretion of the President. Generally, managers who have
participants in the Sales Incentive Plan reporting to them.
III. INCENTIVE:
Incentive will be based on the formula outlined below:
Mgr./VP (incentive) = Mgr./VP (salary) x SIGMA RM incentive
------------------------------------
SIGMA RM (salary) + Mgr./VP (salary)
The incentive for the manager will be his/her salary divided by the sum of
the salaries of those sales persons reporting to said manager plus his/her
salary times the sum of all the aforesaid sales managers' incentive
compensation.
An example based on the foregoing could be:
Incentive = $80,000 x $60,000
-----------------------
(5 x $60,000) + $80,000
Incentive = $12,632
This assumes an $80K salary, five sales persons making $60K and an
incentive of $60K paid to the five sales managers.
IV. MAXIMUM PAYMENT:
A. In no case will a Quarterly payment exceed 100% of a participant's
base quarterly salary.