The 2010
base salaries for each of the Named Executive Officers are as follows: Dr Brown,
$361,500; Mr. Head, $242,500; Mr. Blough, $217,000; Ms. Hynes, $191,000; and Mr.
Staples, $227,000. For purposes of the 2010 compensation arrangements,
"non-GAAP" means excluding stock option expense.
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 $200,000 and $140,000, respectively, for 2010.
Mr.
Blough is eligible for bonuses earned and paid quarterly based on achieving
year-to-date sales and marketing non-GAAP operating profit targets, with a bonus
based on North American results and a bonus based on results for the rest of the
world. Mr. Blough is also eligible for a bonus earned and paid quarterly based
on achieving year-to-date order growth targets in specified countries. 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 non-GAAP operating profit and order growth
amounts equal the annual targeted amounts, Mr. Blough will earn an aggregate
bonus of $200,000 for 2010.
Ms. Hynes
is eligible for bonuses earned and paid quarterly based on achieving
year-to-date non-GAAP operating profit targets, with a bonus based on each of
(i) communications as a service (CaaS) and (ii) education services. Ms. Hynes is
also eligible for bonuses earned and paid quarterly based on achieving
year-to-date order volume targets, with a bonus based on orders from the
Company's CaaS initiative in North America and a bonus based on order volume
from the Company’s CaaS initiative in Europe, the Middle East and Africa. 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 non-GAAP operating
profit and order volume amounts equal the annual targeted amounts, Ms. Hynes
will earn an aggregate bonus of $75,000 for 2010.
Mr.
Staples is eligible for a bonus earned and paid quarterly based on achieving
year-to-date worldwide sales and marketing non-GAAP operating profit targets.
Mr. Staples is also eligible for bonuses earned and paid quarterly based on (i)
achieving year-to-date order growth in specified countries and (ii) based
on order growth for specified products. 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
non-GAAP operating profit and order growth amounts equal the annual targeted
amounts, Mr. Staples will earn an aggregate bonus of $100,000 for
2010.