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8-K - FORM 8-K - LOCAL Corp | d563704d8k.htm |
Exhibit 10.1
DESCRIPTION OF THE MATERIAL TERMS OF
LOCAL CORPORATION BONUS PROGRAM
AS OF JULY 2, 2013
The Local Corporation Bonus Program (the Bonus Program) provides for the payment of bonuses, in cash, to employees of Local Corporation (the Company) and its subsidiaries, including the Companys currently employed named executive officers (the NEOs, as named in the Companys most recently filed Form 10-K). On July 2, 2013, the Compensation Committee of the Companys Board of Directors (the Board) amended the Bonus Program, including with respect to its NEOs, as outlined below, applicable for the second half bonus period.
The Bonus Program is based on meeting or exceeding certain Financial Performance Goals (the FPGs) and certain Personal Performance Goals (the PPGs). Each employee has been assigned a bonus target equal to a percentage of their base salary (for NEOs, as outlined in their respective employment agreements with the Company) (the Threshold Target Bonus) and a Maximum Target Bonus of up to 150% of the Threshold Target Bonus (the Maximum Target Bonus) based upon over-achievement of FPGs and PPGs. The FPGs will be subject to a minimum performance threshold; under which no bonuses related to the FPG is paid (the Minimum Target Bonus). In calculating the Maximum Target Bonus and Minimum Target Bonus with respect to an FPG, any overachievement or underachievement of an FPG shall result in an increase or decrease in the bonus payable with respect to such individual FPG, as follows:
For the FPG related to achievement of certain Revenue targets, as set by the Compensation Committee:
FPG Achievement Percentage | % of Bonus Payable with Respect to Such FPG | |||
Under 85% | 0% | |||
85% to 100% | 100% less 1.667 percentage points for each percentage point under 100% of the FPG Target | |||
Over 100% to 110% | 100% plus 1 percentage point for each percentage point above 100% of the FPG Target. | |||
Over 110% to 125% | 100% plus 2 percentage points for each percentage point above 100% of the FPG Target. | |||
Over 125% | 150% |
For the FPG related to achievement of certain Adjusted EBITDA targets, as set by the Compensation Committee:
FPG Achievement Percentage | % of Bonus Payable with Respect to Such FPG | |||
Under 70% | 0% | |||
70% to 100% | 100% less 1.667 percentage points for each percentage point under 100% of the FPG Target | |||
Over 100% to 110% | 100% plus 1 percentage point for each percentage point above 100% of the FPG Target. | |||
Over 110% to 125% | 100% plus 2 percentage points for each percentage |
point above 100% of the FPG Target. | ||||
Over 125% | 150% |
The amount represented by the Threshold Target Bonus, the Maximum Target Bonus and the Minimum Target Bonus is referred to as the Bonus.
For the Chief Executive Officer (CEO), the Bonus is measured based upon achievement of the following:
FPGs
40% of the Threshold Target Bonus is based upon achieving the Revenue targets for the Company as a whole, as set by the Board in its approved budget for the applicable period;
60% of the Threshold Target Bonus is based upon achieving the Adjusted EBITDA targets for the Company as a whole as set by the Board in its approved budget for the applicable period.
PPGs
The CEO has no PPGs.
For all other NEOs, the Bonus is measured based upon achievement of the following:
FPGs
30% of the Threshold Target Bonus is based upon achieving the Revenue targets for the Company as a whole, as set by the Board in its approved budget for the applicable period;
45% of the Threshold Target Bonus is based upon achieving the Adjusted EBITDA targets for the Company as a whole as set by the Board in its approved budget for the applicable period; and
PPGs
25% of the Threshold Target Bonus is based upon achieving the PPGs set by the CEO for the individual NEO.
For all other employees, the Bonus is measured based upon achievement of a combination of FPGs and PPGs, as determined by the Companys management team on an individual employee basis.
Additional Modifications
Notwithstanding the foregoing Bonus Plan features, the Bonus Plan shall be subject to the following modifications:
1. 2H 2013 Bonus pool shall be capped at 45% of the total of Adjusted EBITDA earned by the Company, excluding certain exceptions, including bonus expense, any reserve adjustments, and Board fees/expenses in excess of budget plus one meeting (the Adjusted EBITDA Cap) and shall be reduced on a pro rata basis amongst eligible employees based on the amounts that would otherwise have been earned by such eligible employees in the absence of such Adjusted EBITDA Cap.
2. 2H 2013 Bonus pool shall be paid in all cash.
Definitions:
Revenue means the GAAP Gross Revenue of the Company less Traffic Acquisition Costs allocable to the Companys Network Business Unit.
Adjusted EBITDA is defined by the Company as earnings before interest and other income (expense), income taxes, depreciation and amortization excluding: stock based compensation charges, gain or loss on warrant revaluation and non-recurring items.