Compensation

1. Simple commission

   1. Maximum of 6% of purchase amount, non-inclusive of taxes & shipping, payable two months after customer receives order. Advances on commissions will be considered on a case by case basis, decided by the CEO, as the company has a duty to protect itself from paying commissions on items returned for refund.

   2. Involvement by others in the sale process reduces the commission by 1% per person. Exception: people needed to facilitate the demo/eval process. This will be waived for the first 3 new customer sales, as the company recognizes the necessity of having an experienced member of the team participate early on to help bring a sales person fully up to speed on the ins-and-outs of selling the products.

   3. The maximum commission can only be earned if there is no price reduction given to the customer compared to our web store price. This condition may be waived on a case by case basis, decided by the CEO, but will be unlikely. An example: customer is given a 10% discount. Maximum commission drops to 3%.

   4. Support. Sales person handles initial support calls/emails. Technical problems will be handed off to the appropriate person. Examples of technical problems might be: the system won't power up; a disk has died, and it needs to be replaced; errors during POST or memory/ECC errors are being reported by the software. Non-technical problems: what happened to my order; I'm not getting my email; someone stole our server; the web site is down; when will our order arrive.

   5. Repeat sales. Commission will be paid to the sales person on any subsequent order from a customer first closed by that sales person. This is known as “owning” a customer. Commission rate will be determined individually for separate order. Example: Sales person X and CEO participate together to close sale S1 to first time Customer Y. Sales person gets 5% commission on that order S1 (1% reverts back to the company. CEO does not receive commissions at the time of this writing.) Customer Y calls up sales person X a month later and places an additional order S2, but receives a 10% discount. Sales person X receives a 2% commission on that subsequent order S2. Y calls X again a month after that, and places new order S3, but X begs off on the discount, citing “you're killing me here” as an excuse. X receives 5% commission on order S3.

2. Equity proposal

   1. In lieu of some commissions, Lopoco is prepared to offer stock options. The exact nature of this is still TBD, but think in terms of $1k per share of stock.

   2. Commissions “traded” for stock option shares will be issued by the board at the end of the quarter in which the commissions were paid.

   3. Shares will vest in quarterly increments. For example, commissions earned during Q1 that are traded for stock options will result in stock option shares being issued at the end of that quarter. Those shares will vest at the end of the subsequent quarter.

   4. In the case of acquisition, all stock option shares that are unvested will immediately vest.

3. Bonus program

   1. I'm open to figuring out a bonus program.

   2. I'll throw out one idea: $1000.00 bonus paid on first $100k close. That would include all orders from a single customer in the same quarter. Regular commissions on that might be as high as $6k, so that would effectively make it $7k.

   3. $7,500.00 for first $500k close, same idea as above.

   4. $20k for first $1mm close.