Sales Incentive Plan FY xx Presented date Company

Sales Incentive Plan FY <xx> Presented <date> <Company Name/Logo Here>

The basic components of the business strategy point to a key role for the sales team <Company>’s Strategic Imperatives n List the 3 -5 things the entire company must accomplish in the next few years to meet its objectives in the marketplace – examples are… n Develop xx product line to serve yy by zz n Expand sales presence into xx (geographic area) n …industry vertical focus? . . . n …value proposition? . . . Template courtesy of THE CYGNAL GROUP | www. cygnalgroup. com 1

The sales team is central to executing the strategy What Sales need to do to help maintain domestic market share n List specific objectives for the sales organization n … n … Template courtesy of THE CYGNAL GROUP | www. cygnalgroup. com 2

Key accountabilities of the sales and sales management roles are directly linked to the new incentive plan measures Roles Incentive Plan Measures Key Accountabilities <Role Name 1> p … <Role Name 2> p … Template courtesy of THE CYGNAL GROUP | www. cygnalgroup. com 3

Plan Overview: <Role Name> Details for each component are shown on the following pages Total Compensation = Base Salary + <highest weight component> + <2 nd highest weight component> + <etc. > Weighting <50%> <30%> <20%> Annual Incentive Target <$10, 000> <$6, 000> <$4, 000> Timing <Quarterly> Overview <Incentive based on overall percent goal attainment for Gross Margin vs. quarterly goal for all direct reports> <Incentive based on percent goal attainment for overall business unit performance vs. annual Gross Margin goal> <Bonus based on the percent of Account Managers reporting to the Sales Manager who are at or above goal on Individual Gross Margin for the quarter> Caps <Uncapped> <Capped at $9, 000 per year> <Capped at $2, 000 per quarter> Template courtesy of THE CYGNAL GROUP | www. cygnalgroup. com 4

Role: <Role Name> Component: <First Component> Total Compensation = Base Salary + <First Component> + <Second Component> + <Third Component> Rationale n <Why is this incentive offered? > Measurement and calculation n <Definitions and verbal description of the measure – may refer to payout table on following page> n… n… Template courtesy of THE CYGNAL GROUP | www. cygnalgroup. com 5

Show payout table and calculation steps – example provided (table pasted in from Excel) Role: <Role Name> Component: <First Component> Total Compensation = Base Salary + <First Component> Example Calculation + <Second Component> + <Third Component> Sales Manager Sales Team Gross Margin Bonus Payout Table Step 1: Determine Actual Quarterly Performance % Goal Consider a Sales Manager with a goal of $3, 000 in Sales Team Gross Margin for Q 1, and actual results of $3, 300, 000 Actual% Goal = $3, 300, 000/$3, 000 = 110% Step 2: Look up the Actual Quarterly Performance % Goal in the payout table For 110% goal performance, the quarterly payout is $3, 333 Template courtesy of THE CYGNAL GROUP | www. cygnalgroup. com 6

<Measure> goals will be determined using a consistent process Explain the goal setting process (timing, involvement, criteria) Template courtesy of THE CYGNAL GROUP | www. cygnalgroup. com 7

If applicable – simple plans may not need an earnings calculator An Earnings Estimation Calculator will be provided to speed your understanding of the new plan Screen shot here Template courtesy of THE CYGNAL GROUP | www. cygnalgroup. com 8

“Translate” the comp plan into a clear message about what the sales person needs to do to “win” – Example provided The greatest rewards will go to those who exceed their Gross Margin goals Focus on profitable accounts and opportunities n Maintain high service levels and ensure customers are satisfied with the entire experience of buying from <company> Kill bad business n If an account or opportunity cannot be serviced profitably, walk away Focus on premium products n n Represent the entire company product line to assigned accounts, including those outside your business unit Add value with customers by sharing market insights, offering premium products, and meeting needs for specialized capabilities Run it like you own it Template courtesy of THE CYGNAL GROUP | www. cygnalgroup. com 9