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Exhibit 10.2
PROJECT SOFTWARE & DEVELOPMENT, INC. & SUBSIDIARIES
YEAR ENDED SEPTEMBER 30, 1998
EXECUTIVE BONUS PLAN
September 1997
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PROJECT SOFTWARE & DEVELOPMENT, INC. & SUBSIDIARIES
YEAR ENDED SEPTEMBER 30, 1998
EXECUTIVE BONUS PLAN
1. PURPOSE
The purpose of the FY98 Executive Bonus Plan ("Plan") is to provide key
management employees of Project Software & Development, Inc. and its
subsidiaries ("Company"), with an incentive to make significant and
extraordinary contributions to the long-term performance and growth of the
Company, to join the common interest of the Company and key executives,
and to attract and retain executives of exceptional ability.
2. ADMINISTRATION
2.1 The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company (the "Committee"). The Committee
will base all decisions and awards on quarterly and annual financial
statements filed with the Securities and Exchange Commission.
2.2 By adoption of this Plan the Board has deemed eligible those
individuals named in Appendix I. The Board shall have full and
complete authority and discretion to make binding decisions on the
administration of the Plan and shall adopt such rules and
regulations and make all other determinations deemed by it necessary
or desirable for the administration of the Plan.
2.3 The Compensation Committee and Board of Directors of the Company
shall have the authority to amend or terminate the Plan, provided,
however, that if the Plan is amended or terminated, the Company
shall be required to complete payment to each Participant of the
amount which that Participant otherwise would have received based on
the provisions set forth in paragraph 7.2.
3. DEFINITIONS
3.1 PLAN YEAR means the fiscal year ended September 30, 1998.
3.2 PLAN QUARTER means each of the three-month periods ended December
31, 1997, March 31, 1998, June 30, 1998, and September 30, 1998.
3.3 PARTICIPANT means any executive of the Company who is designated in
Appendix I.
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3.4 PERMANENT DISABILITY, means a Participant's inability, as a result
of illness, incapacity, disease or calamity to perform a substantial
part of his primary job responsibilities as set forth in his
employment contract or job description for any concurrent six month
period.
3.5 PLAN means this FY98 Executive Bonus Plan.
3.6 Except as otherwise indicated by the context, any masculine term
used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
3.7 COMPANY means Project Software & Development, Inc. and its
subsidiaries included in the consolidated financial statements.
3.8 PLAN NET INCOME means net income as disclosed in the consolidated
quarterly financial statements of the Company, before deductions and
additions of:
(i) Taxes calculated by net income.
(ii) Extraordinary items as defined under US generally accepted
accounting principles.
(iii) One time expense adjustments arising out of any acquisition
accounted for as either a pooling or purchase.
4. ELIGIBILITY AND PARTICIPATION
Executives eligible for bonuses under the Plan shall be those individuals
specified in Appendix I.
5. BONUS FUNDING MECHANISM
5.1 The on-target bonus Fund will be determined as follows:
(a) Each Participant will be eligible to receive an on-target
funded earnings bonus if the Company achieves quarterly and
annual Plan Net Income as stated in Appendix II.
(b) The percentage of the on-target bonus described in Appendix I
earned by each Participant on achievement of the amounts
stated in Appendix II in respect of cumulative quarterly and
year end is:
(i) Q1 0%
(ii) Q2 15%
(iii) Q3 25%
(iv) Q4 30%
(v) Year end 30%
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(c) As a result, the full on-target bonus stated in Appendix I for
each Participant can only be achieved if all three quarters
and annual Plan Net Income equal or exceed all of the target
amounts stated in Appendix II.
5.2 An incremental funded bonus is available on corporate achievement
above the on-target earnings specified in Appendix II and will be
calculated as follows:
(a) The aggregate incremental bonus amount to be distributed to
all Plan Participants in each Plan Quarter will be 2% of the
difference between Plan Net Income and the amounts stated in
Appendix II for the quarter.
(b) The aggregate incremental bonus amount to be distributed to
all Plan Participants in respect of year end will be 3% of the
difference between Plan Net Income and the amount stated in
Appendix II for the year.
(c) The amount of bonus calculated in Section 5.2 (a) and (b)
shall be distributed as follows:
David Sample 45%
Paul Birch 25%
Operations Executive 15%
Jack Young 15%
6. PAYMENT OF BONUSES
Funded bonus under the provisions of 5.1 and 5.2 will be payable sixty
days after the end of the period in which the bonus was earned provided
that:
6.1 Each executive's goals for the quarter must be met for funded bonus
to be paid;
6.2 The results for the period have been issued to the public.
7. TERMINATION OF EMPLOYEE
7.1 If a Participant's employment is terminated prior to the conclusion
of any Plan Quarter or, following the conclusion of a Plan Year, or
prior to any payment being made:
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(a) By reason of (i) any deliberate material breach by the
Participant of his employment obligations with the Company,
which, if curable, is not cured within ten (10) days after the
Company shall have notified the Participant in writing
describing to Participant all material facts concerning such
breach,
(ii) any deliberate material breach by the Participant of his
employment obligations with the Company, which is not
curable according to notice from the Company, or (iii)
the conviction of a felony or the commission of a
material, fraudulent act by the Participant against the
Company;
(b) Voluntarily by Participant other than for a "Reason
Constituting Good Cause." Reasons Constituting Good Cause are
limited to: (i) a significant change in the nature and scope
of Participant's duties combined with a change in the
Participant's title resulting in a position of materially
lesser authority, or (ii) a reduction in the Participant's
base compensation.
Then, Participant shall cease to have any rights to any amounts
unpaid on the date of termination of employment.
7.2 If a Participant's employment is terminated:
(a) By reason of Death, Permanent Disability; or
(b) By the Company for a reason other than one described at
subparagraph 7.1(a);
If such a termination occurs prior to the conclusion of any Plan
Quarter or Year, the Participant shall receive the amount which the
Participant otherwise would have been entitled to receive had he
remained in the employ of the Company through the end of the Plan
Year, but pro-rated based on the number of complete months of
employment with the Company during such Plan Year. The amount earned
shall be paid according to the Plan rules.
8. BENEFICIARY DESIGNATIONS
8.1 If a Participant's employment with the Company is terminated by his
death or if he dies after termination of his employment but prior to
the distribution to him of all amounts payable to him under the
Plan, any amounts otherwise payable to him hereunder shall be
distributed to his designated beneficiary or beneficiaries. For the
purposes of this plan a
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Participant's beneficiary will be the beneficiary designated under
Company provided life insurance coverage. However, a Participant may
from time to time revoke or change any beneficiary designation on
file with the Company.
If there is no effective beneficiary designation on file with the
Company at the time of a Participant's death, distribution of
amounts otherwise payable to the deceased Participant under this
Plan shall be made to the Participant's estate. If a beneficiary
designated by the Participant to receive his benefits shall survive
the Participant but die before receiving all distributions
hereunder, the balance thereof shall be paid to such deceased
beneficiary's estate, unless the deceased beneficiary designation
provides otherwise.
8.2 The Company shall deduct from the distributions to be made to a
Participant or his designated beneficiary or beneficiaries under
this Plan any federal, state or local withholding or other taxes or
charges which the Company is from time to time required to deduct
under applicable law and all amounts distributable under this Plan
are stated herein before any such deductions. The Company may rely
on a written opinion from its legal counsel regarding any questions
which may arise in connection with any such deductions.
9. RIGHTS, PRIVILEGES AND DUTIES OF PARTICIPATION
9.1 No participant or other person shall have any interest in any fund
or in any specific asset or assets of the Company and its
Subsidiaries by reason of being a Participant under this Plan nor
any right to receive any distributions under the Plan except as and
to the extent expressly provided in the Plan.
9.2 The Company shall have the right, but shall be under no obligation,
to segregate cash to fund bonuses payable under the Plan. However,
any such segregated amounts shall at all times remain Company
assets, subject to the claims of its creditors.
9.3 Each Participant shall be entitled to receive a current copy of the
Plan upon his designation as a Participant if a written request for
a copy of the Plan is provided to the Chief Financial Officer.
Thereafter, as long as he remains a Participant, he shall be
entitled to receive copies of any amendments to the Plan within
sixty (60) days after their adoption.
9.4 The designation of any employee as a Participant under this Plan
shall not be construed as conferring upon such employee any right to
remain in the employ of the Company and each such Participant shall
remain an
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employee at will. The right of the Company to discipline or
discharge an employee shall not be affected in any manner by reason
of such employee's designation as a Participant under this Plan.
9.5 To the extent permitted by law, the right of any Participant or any
beneficiary to receive any payment hereunder shall not be subject to
alienation, transfer, sale, assignment, pledge, attachment,
garnishment or encumbrance of any kind. Any attempt to alienate,
transfer, sell, assign, pledge or otherwise encumber any such
payment whether presently or thereafter payable, shall be void. Any
payment due hereunder shall not in any manner be subject to any
debts or liabilities of any Participant or his beneficiary.
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APPENDIX I
PROJECT SOFTWARE & DEVELOPMENT, INC.
EXECUTIVE BONUS PLAN
ELIGIBLE PARTICIPANTS
On-target Bonus
as a % of On-target
Base Salary Base Salary Bonus
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David Sample $290,000 100% $290,000
Paul Birch 180,000 75% 135,000
Operations
Executive 175,000 75% 87,500
Jack Young 155,000 50% 77,500
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APPENDIX II
PROJECT SOFTWARE & DEVELOPMENT, INC.
EXECUTIVE BONUS PLAN
ON-TARGET CUMULATIVE EARNINGS
Q1 FY1998 Year to Date Not Applicable
Q2 FY1998 Year to Date $12,750,000
Q3 FY1998 Year to Date $19,000,000
Q4 FY1998 Year to Date $28,000,000
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FY1998 Total Year to Date $28,000,000
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The on-target earnings established for each plan quarter and
the year for any year will not be less than 125% of the actual
earnings in the corresponding period of the prior year.