of Certain Director and Executive Compensation
February 16, 2006, the Compensation Committee of the Board of Directors of
Interactive Intelligence, Inc. (the “Company”) approved compensation
arrangements for the Company’s executive officers beginning January 1, 2006.
Annual base salary for the Company’s executive officers are as follows: Donald
E. Brown, President and Chief Executive Officer, $300,000; Gary R. Blough,
Executive Vice President, Worldwide Sales, $200,000; Jeremiah J. Fleming,
President - Vonexus, $200,000; Stephen R. Head, Chief Financial Officer,
$200,000; Pamela J. Hynes, Vice President, Customer Services, $150,000; and
Joseph A. Staples, Senior Vice President, Marketing, $200,000.
Brown, Mr. Head, Ms. Hynes and Mr. Staples are also eligible for a Company
Performance Bonus, which is dependent on the Company achieving certain levels
financial operating results and, if met, will be payable in the amount of
$37,500, $10,000, $2,500 and $10,000 per quarter, respectively.
Blough, Fleming and Head, Ms. Hynes and Mr. Staples are eligible for bonuses
$10,000, $10,000, $5,000, $7,500 and $10,000 per quarter, respectively. Mr.
Blough’s bonus is based upon achieving quota targets in all regions. Mr.
Fleming’s bonus is dependent on Vonexus achieving certain gross profit targets.
Mr. Head’s bonus is based upon cash collection targets. Ms. Hynes’ bonus is
based upon the revenue and operating income from the services over which she
responsible. Mr. Staples’ bonus is based on the dollar amount of orders for
Interactive Intelligence and certain gross profit targets for
Blough and Fleming are also eligible for monthly, quarterly and/or annual
commission and/or quota bonuses that are tied to the areas over which they
responsible. Mr. Blough is eligible to earn a commission based upon worldwide
contracted licenses and services. Mr. Fleming is eligible to earn a commission
based on Vonexus performance.
executives are eligible for a Superior Achievement Bonus based on the Company
exceeding its operating income targets. This bonus would be awarded as a
percentage of the Company’s operating income achieved above the target. Dr.
Brown is eligible for 5%, Mr. Head 2.5%, Ms. Hynes 1% and Mr. Staples 1%. The
Company must reach certain annual revenue targets in addition to the operating
income targets in order for Mr. Staples to be eligible for his Superior
Achievement Bonus. Mr. Fleming is eligible for 4% of the gross profit of Vonexus
orders exceeding its annual targets.
Brown, Messrs. Blough, Fleming and Head, Ms. Hynes and Mr. Staples are eligible
to receive grants of incentive stock options on an annual basis of up to 45,000,
10,000, 15,000, 25,000, 15,000, and 25,000 shares, respectively. These option
grants are based on the Company’s performance, Vonexus performance and/or sales
quotas, depending on the individual executive’s role within the Company. Messrs.
Blough and Fleming are also eligible for quarterly stock options of 2,500 shares
each, based upon achievement of sales quotas and Vonexus gross profit,
respectively. They are also eligible for additional annual stock option grants
based on the percentage each goes over their targets. Messrs. Blough and Fleming
are eligible for total maximum options up to 30,000 and 35,000 each per year.
options discussed above may be granted in full or in partial amounts according
to the discretion of the Compensation Committee and the option exercise price
equal to the closing price of the Company’s stock as of the date they are
approved by the Compensation Committee.
serving as members of the Company’s Board of Directors receive an annual
retainer of $10,000, payable in quarterly installments, in connection with
membership on the Company’s Board of Directors. In addition, each member
receives $1,000 for attending in person and $500 for attending by telephone
meeting of the Board of Directors or any meeting of a committee of the Board
Directors that is not held in conjunction with a meeting of the full Board
Directors. An additional fee of $5,000 per year, payable in quarterly
installments, is paid to the Chairman of the Audit Committee of the Board of
Directors and $1,000 per year, payable in quarterly installments, is paid to
each other member of the Audit Committee. Directors are entitled to
reimbursement of expenses incurred in connection with attendance at Board and
serving as members of the Company’s Board of Directors are eligible to receive
stock option grants under the Company’s Outside Directors Stock Option
officers of the Company or its subsidiaries do not receive additional
compensation for serving as members of the Boards of Directors of the Company
its subsidiaries. No additional compensation is paid if a full-time officer
serves on any committee of such Boards of Directors.