Item 1.01 Entry into a Material Definitive Agreement
On April 15, 2009, the Compensation Committee (the "Committee") of the Board of Directors of Navarre Corporation (the "Company") approved the Fiscal Year 2010 Annual Management Incentive Plan (the "Plan"), which is filed as Exhibit 10.1 to this report and incorporated into this Item 1.01 by reference. The Plan establishes criteria to be met in order for cash bonuses to be paid to the Company's executive officers and other management employees. Bonuses may be earned based on the achievement of certain Company financial objectives and individual goals during the fiscal year ending March 31, 2010. The Committee selected the following financial objectives for fiscal year 2010: target consolidated EBITDA and, for subsidiary participants, a subsidiary specific EBITDA target. Other than discretionary awards as discussed below, no bonuses are earned if funding any portion of the incentive pool will cause the Company to fail to achieve the consolidated EBITDA target. Additionally, in order for subsidiary participants to earn a bonus, the applicable subsidiary must attain 80% of the specific subsidiary EBITDA target. If consolidated EBITDA exceeds the target, the incentive pool will be increased by 25% of the excess amount, and participants will share in the enhanced incentive pool on a pro-rata basis. However, bonus payments under the Plan are capped at 150% of the participant's target bonus. The Committee believes the financial objectives are challenging but obtainable.
The Committee approved the following target bonus opportunities for our executive officers: Cary L. Deacon - 80% of base salary; J. Reid Porter - 55% of base salary; and each of Gen Fukunaga, Joyce Fleck and Calvin Morrell - 50% of base salary.
The Committee also approved a maximum discretionary pool of $500,000. The Committee may determine, in its discretion, to reward participants with exemplary performance during the fiscal year out of the discretionary pool whether or not financial objectives are achieved. Item 9.01 Financial Statements and Exhibits
(c) Exhibits. The following exhibit is filed with this document:

Exhibit
10.1 Fiscal Year 2010 Annual Management Incentive Plan

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