Description
In this particular brief description relating to sample sales rep compensation plan.
Sample Sales Rep Compensation Plan
Created with
Sample Company, Inc.
2009 COMPENSATION PLAN DOCUMENT
Sales Representative
Effective Jan 1, 2009 to Dec 31
st
, 2009
Brilliant Plans Now
With Motivator, it’s easy to create great sales compensation plans, model your costs,
generate compelling plan documents. Start calculating payments on your plans at any
time by upgrading to Motivator Pro.
www.makanasolutions.com
[email protected]
1-877-881-0001
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 2 of 12
Sales Representative
Incentive Plan
FY 2009
TABLE OF CONTENTS
Plan Summary ........................................................................................................................................... 3
Goals ....................................................................................................................................................... 3
Earnings Curve, Mix, Strategy .......................................................................................................... 3
Incentive Elements .............................................................................................................................. 3
Plan Details ................................................................................................................................................ 5
Measures & Payout .............................................................................................................................. 5
Compensation Calculations .............................................................................................................. 6
Plan Definitions ........................................................................................................................................ 8
Policies and Procedures ...................................................................................................................... 10
Transition Policies ............................................................................................................................. 10
Administration .................................................................................................................................... 11
Arbitration ............................................................................................................................................ 12
Purpose
The Sample Co, Inc. 2009 Compensation Plan (the "Plan") is established to direct the Participant to achieve goals
assigned by the company. The base salary and incentive outlined in this plan is intended to reward the Participant
with total cash compensation that is equal to or above what is paid for similar positions by similar companies
upon achievement of the expected level of performance. The plan is also designed to provide exceptional earnings
opportunities for outstanding performance. In addition, the goal of this plan is to reward you for meeting and
exceeding your assigned quotas, goals and objectives.
Eligibility
Only those employees who are classified as a participant in a Plan and who have signed this Plan form are eligible
to participate in the Plan. All participants must comply with all terms and conditions outlined in the plan and with
general employment practices and policies of the company. They are also responsible for selling or supporting only
authorized products and services in their assigned territory.
Effective Date
This plan is effective and applies to all contracts entered into between 01/01/2009 and 12/31/2009 and supersedes all
plans and terms previously in effect.
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 3 of 12
Sales Representative
FY 2009
Name: Sample Sales Rep
Manager: Sample Manager
Territory: Sample Territory
Plan Summary
Product and service sales to new customers
Goals
Earnings Curve, Mix, Strategy
Incentive Elements
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 4 of 12
Presidents Club
The participant may be asked to be a member of the "President's Club" when he or she achieves 110% of their
targets. Members of the President's Club are eligible to participate in special recognition events.
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 5 of 12
Plan Details
Commission
Commission is variable pay tied to sales revenue, unit sales, profit or some other volume-based metric.
Bonus
A bonus is an opportunity to earn money for achieving specific results. Bonus opportunities are defined in the plan
documentation.
Measures & Payout
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 6 of 12
Compensation Calculations
Commissions
Commission is variable pay tied to sales revenue, unit sales, profit or some other volume-based metric.
Bookings Commission
Bookings Credit
Bookings credit for product orders includes the net amount (list less any discount) on orders that have been
accepted by the finance department following their guidelines, and is credited as of the date of acceptance of the
order.
Bookings Commission Rate
The commission rate for Bookings commission is determined based on annual attainment. The following table is
used to determine the rate. The commission earned will be calculated by multiplying the rate times the attainment
dollars at the time of credit.
Formula: % Rate * Credit
Service commission
Service Credit
Credit for services orders includes the net amount of service on an SOW within 90 days of the associated product
sale.
Service commission Rate
Sales Representatives earn a flat commission on Services credit.
Formula: % Rate * Credit
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 7 of 12
Bonuses
A bonus is an opportunity to earn money for achieving specific results. Bonus opportunities are defined in the plan
documentation.
The following table describes the bonuses available in this Plan.
YTD Achievement
A quarterly bonus paid for attainment of the YTD bookings goal at the end of each quarter (a cumulative measure).
The maximum earnings potential is reached by exceeding the cumulative YTD goal at the end of all four quarters.
ACKNOWLEDGMENT
I hereby acknowledge that I have read and accept all goals, terms and conditions of this plan and agree to abide by
its terms. I will not commit the Company to any terms or conditions, whether by oral agreement or in an email or
side letter or any other form, except those that are expressly contained in the Company's written agreement with the
customer. There are no additional terms or conditions, written or verbal, unless denoted below.
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 8 of 12
Plan Definitions
Accelerator
An accelerator increases payment for attainment over 100%. Commission rates and quota rates move to an
accelerated rate when the Participant achieves the annual quota. Sometimes people use this term like ramped rates
and would qualify the idea of the rate to be paid over quota in another way such as: "Over-quota accelerator".
Account aka Customer or Partner
An entity that buys from or may buy from the company.
Base Salary
The participant's base salary is a fixed amount that is determined by guidelines provided by the Human Resources
department, and according to factors such as the competitive market, qualifications for the position, and past
performance. The base salary is paid in semi-monthly installments on the 15th and the last day of every month.
Base salaries are intended to compensate a participant for their responsibilities which may include depending
on your position, but are not limited to, servicing accounts, information management, monthly reporting, order
administration, training, attendance at conferences and other required meetings.
Bonus
A bonus is an opportunity to earn money for achieving specific results. Bonus opportunities are defined in the plan
documentation.
Cancellations
Orders that are cancelled are considered not earned and any commission or bonus payments made will be recovered.
See Overpayment and Recovery. Cancellations are posted in the period in which they occur and processed as
negative transactions.
Commission
Commission is variable pay tied to sales revenue, unit sales, profit or some other volume-based metric.
Discounting
All discounting must be approved by the VP of Sales.
Eligibility
Only those employees who are classified as a participant in a Plan and who have signed this Plan form are eligible
to participate in the Plan. All participants must comply with all terms and conditions outlined in the plan and with
general employment practices and policies of the company. They are also responsible for selling or supporting only
authorized products and services in their assigned territory.
Minimum Hours Per Week
Regular employees scheduled to work 40 or more hours per week are eligible for this Plan.
Mix
The relationship of the elements in the compensation plan expressed as a percent. It may be salary and incentive
relative to Target Total Compensation or commission and bonus relative to Target Incentive Compensation.
New Customer
A customer is considered to be new when the customer has not done business in the past with the Company and
there are no contingencies or contract terms to prevent the company from being able to recognize revenue in
conjunction with company policies and related accounting standards.
Presidents Club
The participant may be asked to be a member of the "President's Club" when he or she achieves 110% of their
targets. Members of the President's Club are eligible to participate in special recognition events.
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 9 of 12
Quota
Quota is the expected level of attainment assigned to a participant for the year. Occasionally it is necessary to
change quota. Quota changes are effective from the point of change forward. Quota changes are effective for the full
month. There will be no partial month quota changes. All future commission and bonuses earned will be calculated
based on the new revised quota. Changes to quotas will be made in writing to the Participant.
Recognizable Contract
A signed software license contract is considered recognizable when no contingencies or contract terms prevent
the company from being able to recognize revenue in conjunction with company policies and related accounting
standards.
Split Claim Process
If responsibility is shared between two or more Participants on a specific sale, sales booking credit splits will be
determined by the VP of Sales. Split claim information needs to include the customer name and amount to be split.
Splits must be identified on the opportunity in the CRM system to be counted.
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 10 of 12
Policies and Procedures
Transition Policies
Account or Territory Changes
A Participant who is given a revised quota due to a change in accounts or territory during the fiscal quarter or annual
measurement period will retain all commission payments earned through the effective date of the change, subject to
all other terms and conditions in this Plan. Future calculations will be based on the new account/territory.
Account and territory changes are effective for the entire month. There are no mid-month changes.
Changes to quota, accounts or territories will be made in writing to the Participant.
Authorized Leave of Absence
The Participant will not earn commissions for deals closed while out on an authorized leave of absence. Any
commission payable during the leave will be paid out upon return to work per the terms of the compensation plan.
Upon returning from an authorized leave of absence, the participant is eligible to receive commissions and bonuses
based on their plan. Quota or rates will not be prorated.
Should a participant not return to work after the approved leave, the participant will be paid for commission
payments earned prior to the end of the paid portion of the approved leave, provided that the payments are received
by the company within 30 days from the last day of the paid portion of the leave.
Employment at Will
Eligibility and participation in the Plan in no way implies or reflects any guarantee or contract of employment
since the company operates on an employment-at-will basis. Participation in this Plan does not confer any right to
continue in the company's employ or limit the right of the company to terminate the Participant at any time, with or
without cause.
New Hires
Participants who are hired mid-year from outside the company into an eligible position covered by this Plan will be
assigned goals for the remainder of the fiscal year and will be eligible to earn commissions according to the standard
rates. The new hire sales person should receive prorated quota, account assignment responsibility and credits as soon
as practical after the start date.
Performance Improvement Plan
Bonus eligibility is based on a Participant performing the main functions of their job at an expected performance
level. Therefore, any Participant that is on a Performance Improvement Plan or similar remedial performance plan
during a given period will not be eligible to receive a bonus for that period.
Quota Change
Occasionally it is necessary to change quota. Quotas are effective for the full month of the point of change. There
will be no partial month quota changes. All future commission and bonuses earned will be calculated based on the
new revised quota. Changes to quotas will be made in writing to the Participant.
Rate Change
Rate changes are effective for the full month of the point of change. There will be no partial month rate changes.
There is no retroactive change for commissions and bonuses earned. All future commission and bonuses earned will
be calculated based on the new revised rates. Changes to rates will be made in writing to the Participant.
Termination
Participants who voluntarily or involuntarily terminate employment with the company whether or not for cause
will be paid their base salary through the agreed upon termination date. In addition, the Participant will be eligible
only for commission payments earned prior to their last date of employment. The Participant must also return all
company documents and property and settle any financial obligations owed to the company.
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 11 of 12
Transfers to a New Plan
Participants who transfer to a new plan will continue to earn any incentives for all the business credited through the
effective date of the change, subject to all standard terms and conditions of this Plan. Future commission payments
will be according to the terms and conditions of the new plan. All changes will be effective for the full month at the
point of change. Changes to plans will be made in writing to the Participant.
Administration
Active at time of Payment
A Participant must be an active employee at the time the applicable cash bonus payment is made in order to receive
the bonus award which he/she may have earned for that previous quarter.
Ambiguities and Inconsistencies
Should there be any questions of interpretation regarding payments or earned amounts, the final authority for
interpretation will reside with the VP of Sales and the Chief Financial Officer.
Calculation of Taxes and 401K Deductions
Bonus payments will be taxed as a bonus, which is different than the withholding tax on regular wages. Participants
will have their regular 401(k) deduction withheld from their bonus payment according to each employee’s
401(k) election and subject to the applicable annual maximum contribution limit. Employees must complete and
submit to HR a special election form in advance of each bonus payment if they prefer not to have 401(k) deductions
taken from their bonus. The election form can be obtained from HR.
Changes to the Plan
The company reserves the right to amend, modify, or terminate this Plan at any time, but such change will be made
in writing by the VP of Sales to all Participants as far in advance as possible of the effective date of such change.
Conformance with State and Federal Law
If any term or condition of this Plan is found to be in non-conformance with a given state or federal law that term or
condition will be non-enforceable but will not negate other terms and conditions of the Plan. However, the company
will review and modify the overall plan to conform to such law.
Draw
Draw is a cash advance for a participant when specified in an offer letter and may either be recoverable or
non-recoverable. It is paid monthly. Draw is paid net of earnings so the total draw plus the earnings will never
exceed the draw amount. If the earned incentives for that period are above the draw amount, no draw is paid.
Effective Date
This plan is effective and applies to all contracts entered into between January 1, 2008 and December 31, 2008 and
supersedes all plans and terms previously in effect.
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 12 of 12
Overpayment
When a Participant is overpaid incentive earnings, the Participant is obligated to repay the Company. Overpayments
can result from a cancellation, processing or crediting errors, and other related causes. The Participant is responsible
for identifying to their manager when an error has occurred. Managers are accountable to monitor the performance
and payments to their employees to minimize the occurrence of errors and to resolve problems quickly. The
overpayment is a liability of the Participant to the Company until it is fully repaid.
Prior to an incentive payment in the current period, all liabilities will be taken into account and the current incentive
payment will be reduced by the liability amount until all the liability had been refunded to the Company. If the
liability exceeds the current period incentive earnings, then the payment will be $0.
All types of earnings and bonuses are used to pay off liabilities. After all incentive earnings and bonuses have
been applied and there is still a liability balance, then that liability balance is carried forward into the next payment
period.
Upon termination, any liability will be paid in full from final incentives due the employee. If there is a remaining
liability after all the final incentives are considered, the employee wages, accrued vacation, bonuses, and any other
sources will be applied to the liability balance prior to final payment, when applicable under the law.
Payment
The Company will make reasonable efforts to pay commissions and bonuses within 30 days after the end of each
period.
Recovery
Overpayments may result from cancelled orders, splits, etc. and are recoverable against all incentive earnings. That
is, 100% of the earned incentives are applied to repayment until the overpayment has been paid in full.
If there is not enough earned incentives to pay off the overpayment in the current month a liability is created. This
liability will be carried forward until the overpayment balance is zero. Upon termination, any remaining liability will
be deducted from any amount due to the employee for wages, accrued vacation, bonuses, etc.
Arbitration
Disputes - Massachusetts
All disputes which involve claims for $3000 or more, and which arise out of the participant's employment or
termination thereof, whether or not such claims are based exclusively on the terms of this Plan, shall be submitted to
binding arbitration in Boston, Massachusetts if the parties are unable to resolve their dispute within thirty (30) days
after exercising good faith efforts. The Commercial Arbitration Rules of the American Arbitration Association shall
apply to all aspects of the arbitration between the parties. The parties agree that after arbitration has been initiated;
all other civil actions between the parties shall be stayed until after the arbitration proceeding is concluded.
This Plan shall be governed in all respects by the law of the Commonwealth of Massachusetts. The arbitrators
shall honor the terms and conditions of the Plan and construe it in accordance with the laws of Massachusetts. The
arbitration shall be binding on the parties and be honored by them without resort to any further court proceedings.
Neither party may demand arbitration or institute any lawsuit in any form arising out this Plan, or arising in any way
out of the employment relationship between the parties, more than two (2) years after the claim or cause of action
has arisen.
The company is an Equal Opportunity Employer committed to a diverse workforce. The Company will not
discriminate on the basis of race, color, religion, age, sexual orientation, national origin, physical or mental
disability, or veteran status.
doc_144676219.pdf
In this particular brief description relating to sample sales rep compensation plan.
Sample Sales Rep Compensation Plan
Created with
Sample Company, Inc.
2009 COMPENSATION PLAN DOCUMENT
Sales Representative
Effective Jan 1, 2009 to Dec 31
st
, 2009
Brilliant Plans Now
With Motivator, it’s easy to create great sales compensation plans, model your costs,
generate compelling plan documents. Start calculating payments on your plans at any
time by upgrading to Motivator Pro.
www.makanasolutions.com
[email protected]
1-877-881-0001
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 2 of 12
Sales Representative
Incentive Plan
FY 2009
TABLE OF CONTENTS
Plan Summary ........................................................................................................................................... 3
Goals ....................................................................................................................................................... 3
Earnings Curve, Mix, Strategy .......................................................................................................... 3
Incentive Elements .............................................................................................................................. 3
Plan Details ................................................................................................................................................ 5
Measures & Payout .............................................................................................................................. 5
Compensation Calculations .............................................................................................................. 6
Plan Definitions ........................................................................................................................................ 8
Policies and Procedures ...................................................................................................................... 10
Transition Policies ............................................................................................................................. 10
Administration .................................................................................................................................... 11
Arbitration ............................................................................................................................................ 12
Purpose
The Sample Co, Inc. 2009 Compensation Plan (the "Plan") is established to direct the Participant to achieve goals
assigned by the company. The base salary and incentive outlined in this plan is intended to reward the Participant
with total cash compensation that is equal to or above what is paid for similar positions by similar companies
upon achievement of the expected level of performance. The plan is also designed to provide exceptional earnings
opportunities for outstanding performance. In addition, the goal of this plan is to reward you for meeting and
exceeding your assigned quotas, goals and objectives.
Eligibility
Only those employees who are classified as a participant in a Plan and who have signed this Plan form are eligible
to participate in the Plan. All participants must comply with all terms and conditions outlined in the plan and with
general employment practices and policies of the company. They are also responsible for selling or supporting only
authorized products and services in their assigned territory.
Effective Date
This plan is effective and applies to all contracts entered into between 01/01/2009 and 12/31/2009 and supersedes all
plans and terms previously in effect.
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 3 of 12
Sales Representative
FY 2009
Name: Sample Sales Rep
Manager: Sample Manager
Territory: Sample Territory
Plan Summary
Product and service sales to new customers
Goals
Earnings Curve, Mix, Strategy
Incentive Elements
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 4 of 12
Presidents Club
The participant may be asked to be a member of the "President's Club" when he or she achieves 110% of their
targets. Members of the President's Club are eligible to participate in special recognition events.
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 5 of 12
Plan Details
Commission
Commission is variable pay tied to sales revenue, unit sales, profit or some other volume-based metric.
Bonus
A bonus is an opportunity to earn money for achieving specific results. Bonus opportunities are defined in the plan
documentation.
Measures & Payout
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 6 of 12
Compensation Calculations
Commissions
Commission is variable pay tied to sales revenue, unit sales, profit or some other volume-based metric.
Bookings Commission
Bookings Credit
Bookings credit for product orders includes the net amount (list less any discount) on orders that have been
accepted by the finance department following their guidelines, and is credited as of the date of acceptance of the
order.
Bookings Commission Rate
The commission rate for Bookings commission is determined based on annual attainment. The following table is
used to determine the rate. The commission earned will be calculated by multiplying the rate times the attainment
dollars at the time of credit.
Formula: % Rate * Credit
Service commission
Service Credit
Credit for services orders includes the net amount of service on an SOW within 90 days of the associated product
sale.
Service commission Rate
Sales Representatives earn a flat commission on Services credit.
Formula: % Rate * Credit
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 7 of 12
Bonuses
A bonus is an opportunity to earn money for achieving specific results. Bonus opportunities are defined in the plan
documentation.
The following table describes the bonuses available in this Plan.
YTD Achievement
A quarterly bonus paid for attainment of the YTD bookings goal at the end of each quarter (a cumulative measure).
The maximum earnings potential is reached by exceeding the cumulative YTD goal at the end of all four quarters.
ACKNOWLEDGMENT
I hereby acknowledge that I have read and accept all goals, terms and conditions of this plan and agree to abide by
its terms. I will not commit the Company to any terms or conditions, whether by oral agreement or in an email or
side letter or any other form, except those that are expressly contained in the Company's written agreement with the
customer. There are no additional terms or conditions, written or verbal, unless denoted below.
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 8 of 12
Plan Definitions
Accelerator
An accelerator increases payment for attainment over 100%. Commission rates and quota rates move to an
accelerated rate when the Participant achieves the annual quota. Sometimes people use this term like ramped rates
and would qualify the idea of the rate to be paid over quota in another way such as: "Over-quota accelerator".
Account aka Customer or Partner
An entity that buys from or may buy from the company.
Base Salary
The participant's base salary is a fixed amount that is determined by guidelines provided by the Human Resources
department, and according to factors such as the competitive market, qualifications for the position, and past
performance. The base salary is paid in semi-monthly installments on the 15th and the last day of every month.
Base salaries are intended to compensate a participant for their responsibilities which may include depending
on your position, but are not limited to, servicing accounts, information management, monthly reporting, order
administration, training, attendance at conferences and other required meetings.
Bonus
A bonus is an opportunity to earn money for achieving specific results. Bonus opportunities are defined in the plan
documentation.
Cancellations
Orders that are cancelled are considered not earned and any commission or bonus payments made will be recovered.
See Overpayment and Recovery. Cancellations are posted in the period in which they occur and processed as
negative transactions.
Commission
Commission is variable pay tied to sales revenue, unit sales, profit or some other volume-based metric.
Discounting
All discounting must be approved by the VP of Sales.
Eligibility
Only those employees who are classified as a participant in a Plan and who have signed this Plan form are eligible
to participate in the Plan. All participants must comply with all terms and conditions outlined in the plan and with
general employment practices and policies of the company. They are also responsible for selling or supporting only
authorized products and services in their assigned territory.
Minimum Hours Per Week
Regular employees scheduled to work 40 or more hours per week are eligible for this Plan.
Mix
The relationship of the elements in the compensation plan expressed as a percent. It may be salary and incentive
relative to Target Total Compensation or commission and bonus relative to Target Incentive Compensation.
New Customer
A customer is considered to be new when the customer has not done business in the past with the Company and
there are no contingencies or contract terms to prevent the company from being able to recognize revenue in
conjunction with company policies and related accounting standards.
Presidents Club
The participant may be asked to be a member of the "President's Club" when he or she achieves 110% of their
targets. Members of the President's Club are eligible to participate in special recognition events.
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 9 of 12
Quota
Quota is the expected level of attainment assigned to a participant for the year. Occasionally it is necessary to
change quota. Quota changes are effective from the point of change forward. Quota changes are effective for the full
month. There will be no partial month quota changes. All future commission and bonuses earned will be calculated
based on the new revised quota. Changes to quotas will be made in writing to the Participant.
Recognizable Contract
A signed software license contract is considered recognizable when no contingencies or contract terms prevent
the company from being able to recognize revenue in conjunction with company policies and related accounting
standards.
Split Claim Process
If responsibility is shared between two or more Participants on a specific sale, sales booking credit splits will be
determined by the VP of Sales. Split claim information needs to include the customer name and amount to be split.
Splits must be identified on the opportunity in the CRM system to be counted.
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 10 of 12
Policies and Procedures
Transition Policies
Account or Territory Changes
A Participant who is given a revised quota due to a change in accounts or territory during the fiscal quarter or annual
measurement period will retain all commission payments earned through the effective date of the change, subject to
all other terms and conditions in this Plan. Future calculations will be based on the new account/territory.
Account and territory changes are effective for the entire month. There are no mid-month changes.
Changes to quota, accounts or territories will be made in writing to the Participant.
Authorized Leave of Absence
The Participant will not earn commissions for deals closed while out on an authorized leave of absence. Any
commission payable during the leave will be paid out upon return to work per the terms of the compensation plan.
Upon returning from an authorized leave of absence, the participant is eligible to receive commissions and bonuses
based on their plan. Quota or rates will not be prorated.
Should a participant not return to work after the approved leave, the participant will be paid for commission
payments earned prior to the end of the paid portion of the approved leave, provided that the payments are received
by the company within 30 days from the last day of the paid portion of the leave.
Employment at Will
Eligibility and participation in the Plan in no way implies or reflects any guarantee or contract of employment
since the company operates on an employment-at-will basis. Participation in this Plan does not confer any right to
continue in the company's employ or limit the right of the company to terminate the Participant at any time, with or
without cause.
New Hires
Participants who are hired mid-year from outside the company into an eligible position covered by this Plan will be
assigned goals for the remainder of the fiscal year and will be eligible to earn commissions according to the standard
rates. The new hire sales person should receive prorated quota, account assignment responsibility and credits as soon
as practical after the start date.
Performance Improvement Plan
Bonus eligibility is based on a Participant performing the main functions of their job at an expected performance
level. Therefore, any Participant that is on a Performance Improvement Plan or similar remedial performance plan
during a given period will not be eligible to receive a bonus for that period.
Quota Change
Occasionally it is necessary to change quota. Quotas are effective for the full month of the point of change. There
will be no partial month quota changes. All future commission and bonuses earned will be calculated based on the
new revised quota. Changes to quotas will be made in writing to the Participant.
Rate Change
Rate changes are effective for the full month of the point of change. There will be no partial month rate changes.
There is no retroactive change for commissions and bonuses earned. All future commission and bonuses earned will
be calculated based on the new revised rates. Changes to rates will be made in writing to the Participant.
Termination
Participants who voluntarily or involuntarily terminate employment with the company whether or not for cause
will be paid their base salary through the agreed upon termination date. In addition, the Participant will be eligible
only for commission payments earned prior to their last date of employment. The Participant must also return all
company documents and property and settle any financial obligations owed to the company.
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 11 of 12
Transfers to a New Plan
Participants who transfer to a new plan will continue to earn any incentives for all the business credited through the
effective date of the change, subject to all standard terms and conditions of this Plan. Future commission payments
will be according to the terms and conditions of the new plan. All changes will be effective for the full month at the
point of change. Changes to plans will be made in writing to the Participant.
Administration
Active at time of Payment
A Participant must be an active employee at the time the applicable cash bonus payment is made in order to receive
the bonus award which he/she may have earned for that previous quarter.
Ambiguities and Inconsistencies
Should there be any questions of interpretation regarding payments or earned amounts, the final authority for
interpretation will reside with the VP of Sales and the Chief Financial Officer.
Calculation of Taxes and 401K Deductions
Bonus payments will be taxed as a bonus, which is different than the withholding tax on regular wages. Participants
will have their regular 401(k) deduction withheld from their bonus payment according to each employee’s
401(k) election and subject to the applicable annual maximum contribution limit. Employees must complete and
submit to HR a special election form in advance of each bonus payment if they prefer not to have 401(k) deductions
taken from their bonus. The election form can be obtained from HR.
Changes to the Plan
The company reserves the right to amend, modify, or terminate this Plan at any time, but such change will be made
in writing by the VP of Sales to all Participants as far in advance as possible of the effective date of such change.
Conformance with State and Federal Law
If any term or condition of this Plan is found to be in non-conformance with a given state or federal law that term or
condition will be non-enforceable but will not negate other terms and conditions of the Plan. However, the company
will review and modify the overall plan to conform to such law.
Draw
Draw is a cash advance for a participant when specified in an offer letter and may either be recoverable or
non-recoverable. It is paid monthly. Draw is paid net of earnings so the total draw plus the earnings will never
exceed the draw amount. If the earned incentives for that period are above the draw amount, no draw is paid.
Effective Date
This plan is effective and applies to all contracts entered into between January 1, 2008 and December 31, 2008 and
supersedes all plans and terms previously in effect.
Sample Company, Inc.
2009 Compensation Plan – Sales Representative
Sample Company, Inc. Sales Rep. Compensation Plan 2009 CONFIDENTIAL Page 12 of 12
Overpayment
When a Participant is overpaid incentive earnings, the Participant is obligated to repay the Company. Overpayments
can result from a cancellation, processing or crediting errors, and other related causes. The Participant is responsible
for identifying to their manager when an error has occurred. Managers are accountable to monitor the performance
and payments to their employees to minimize the occurrence of errors and to resolve problems quickly. The
overpayment is a liability of the Participant to the Company until it is fully repaid.
Prior to an incentive payment in the current period, all liabilities will be taken into account and the current incentive
payment will be reduced by the liability amount until all the liability had been refunded to the Company. If the
liability exceeds the current period incentive earnings, then the payment will be $0.
All types of earnings and bonuses are used to pay off liabilities. After all incentive earnings and bonuses have
been applied and there is still a liability balance, then that liability balance is carried forward into the next payment
period.
Upon termination, any liability will be paid in full from final incentives due the employee. If there is a remaining
liability after all the final incentives are considered, the employee wages, accrued vacation, bonuses, and any other
sources will be applied to the liability balance prior to final payment, when applicable under the law.
Payment
The Company will make reasonable efforts to pay commissions and bonuses within 30 days after the end of each
period.
Recovery
Overpayments may result from cancelled orders, splits, etc. and are recoverable against all incentive earnings. That
is, 100% of the earned incentives are applied to repayment until the overpayment has been paid in full.
If there is not enough earned incentives to pay off the overpayment in the current month a liability is created. This
liability will be carried forward until the overpayment balance is zero. Upon termination, any remaining liability will
be deducted from any amount due to the employee for wages, accrued vacation, bonuses, etc.
Arbitration
Disputes - Massachusetts
All disputes which involve claims for $3000 or more, and which arise out of the participant's employment or
termination thereof, whether or not such claims are based exclusively on the terms of this Plan, shall be submitted to
binding arbitration in Boston, Massachusetts if the parties are unable to resolve their dispute within thirty (30) days
after exercising good faith efforts. The Commercial Arbitration Rules of the American Arbitration Association shall
apply to all aspects of the arbitration between the parties. The parties agree that after arbitration has been initiated;
all other civil actions between the parties shall be stayed until after the arbitration proceeding is concluded.
This Plan shall be governed in all respects by the law of the Commonwealth of Massachusetts. The arbitrators
shall honor the terms and conditions of the Plan and construe it in accordance with the laws of Massachusetts. The
arbitration shall be binding on the parties and be honored by them without resort to any further court proceedings.
Neither party may demand arbitration or institute any lawsuit in any form arising out this Plan, or arising in any way
out of the employment relationship between the parties, more than two (2) years after the claim or cause of action
has arisen.
The company is an Equal Opportunity Employer committed to a diverse workforce. The Company will not
discriminate on the basis of race, color, religion, age, sexual orientation, national origin, physical or mental
disability, or veteran status.
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