Phase 2 Engagement Agreement
Your Digital Team (YDT) — to embed Corrina McGowan as Flip 360's full-time CMO from Phase 1 completion (1 Sep 2026) through to Founder Exit or IPO event (target FY30–FY31). Cash-only compensation: $60k/year base + lifetime cash bonus cap of $1.25M payable only against KPI achievement.
1 · About the Principal
Corrina McGowan
Corrina McGowan is Principal of Your Digital Team and embedded CMO of Flip 360 from Phase 2 commencement. YDT delivers Australian-market PR, brand, content and paid-channel programmes end-to-end — strategy, production and distribution under one roof. The Phase 2 seat is full-time embedded — accountable for member acquisition trajectory (1k → 175k members across FY27–FY31), brand category-leadership in the Australian referral-economy, and earned-media positioning through to IPO event.
2 · The Phase 2 lifecycle — Hypercare → Growth → Exit
Phase 2 spans 1 September 2026 to 30 June 2031 (5 Australian Financial Years). The seat changes shape across three lifecycle stages — same person, same accountability, different operating posture. The at-a-glance overview is below; §3 expands each stage into a practitioner-grade scope of work.
FY27 — 1 Sep 2026 → 30 Jun 2027
Continue the Vol 4 + Vol 5 operating cadence past Phase 1 acceptance. Hit FY27 member-acquisition target (≥ 1,000 active members). CAC ≤ $120 sustained. Brand awareness baseline established via Kantar/Nielsen panel. Editorial calendar in production rhythm. 38-outlet pitch list operating.
FY28 → FY29 — Scale phase
Member acquisition to 8k (FY28) → 30k (FY29). LTV/CAC ≥ 3× (FY28) → 4× (FY29). Organic-vs-paid acquisition ratio shifting toward organic. Tier-1 placements quarterly. Content engine producing weekly. Brand awareness compounding measured by third-party panels.
FY30 → FY31 — Cap-year window
Members to 75k (FY30) → 175k (FY31). Retention rate as cap-unlock KPI. Brand category-leadership measured by independent panels — the Kantar/Nielsen verdict, not internal dashboards. Exit-readiness brand positioning: acquirer-ready or listed-company-ready depending on path. Seat closes at exit event with zero overhang.
3 · Scope of services by lifecycle stage
For each of the three lifecycle stages, the table below specifies what Corrina will do — broken into operating cadence (daily / weekly / monthly / quarterly rhythm), named deliverables (the artefacts and outputs with acceptance criteria), stakeholder interfaces (the parties Corrina sits with), and the stage-exit gate (the conditions that must be true for the stage to be declared complete). Practice grounding: AICD director-handbook expectations, ADMA marketing function maturity model, Spencer Stuart pre-IPO CMO role scopes, and IAB Australia / Mi3 ANZ measurement standards.
4 · Commercial structure
4.0 · How Corrina is paid — the four-link chain
Mathew's question — "how do I know I'm not getting ripped off?" — is answered by the chain below. Every dollar of bonus that can ever be paid traces back through four steps to the same upstream object: ASSUMPTIONS.trajectory in the Investor Pack financial model. Change one number in the model and every cell below recomputes. The numbers are not invented; they are engineered.
1,000 → 175,000 members. $0.7M → $94M revenue. FY27 → FY31.
Mathew owns these numbers. They live in ASSUMPTIONS.trajectory[] — the 5-year Q × F × P projection in the Investor Pack. Corrina does not write these numbers; Corrina delivers against them.
The same trajectory drives Mathew's valuation AND Corrina's bonus.
The Investor Pack computes annual revenue, EBITDA, and net-new-members from the assumption block. If revenue ships, Mathew's valuation goes up and the bonus pool gets larger. If revenue misses, both go down — together. Corrina cannot win unless Mathew wins.
pool[FY] = (new members × $5) + (Revenue × 0.30%)
A CMO's leverage is on new-member acquisition and revenue. The formula pays $5 per net-new member (the audience Corrina builds) plus 30 bps of revenue (the conversion Corrina drives). The formula is written in code in deriveBonusCurve() — see §5 for the line-by-line derivation.
Lifetime bonus is hard-clamped at $1.25M per seat. Total across both seats: $2.50M.
If the formula in Step 3 generates more than $1.25M cumulative over five years, the excess is not paid. The cap is benchmarked at-or-below pre-IPO CMO compensation ranges from Robert Half ANZ, Heidrick & Struggles, KPMG ANZ, Spencer Stuart and AICD — see §6 for the five-source benchmark grid.
4.1 · The two-component contract structure
Two components, one philosophy. Base covers value-of-time ($5k/month, indexed only to CPI). Bonus pool is FORMULA-DERIVED from the Investor Pack financial trajectory — capped at $1.25M cumulative. There is no third lever, no discretionary uplift, no equity, no kickback, no related-party referral. The structure is mathematical and auditable.
| Component | Amount | Mechanism | Documentation |
|---|---|---|---|
| Base retainer | $5k/mo | Fixed cash. Monthly in advance. CPI-indexed annually. | Standard tax invoice. RCTI/GST treatment per ATO TR 2019/3. |
| Bonus pool | Up to $1.25M (lifetime cap) | New members × $5 + revenue × 30 bps annually. Floor of $10k FY27, $60k FY28. Cap-shaped FY30/FY31. | Payable in arrears after Steerco scorecard sign-off. Independent audit gate. Reconciled to investor model. |
| Acceleration | Reading A — early KPI hit = cash paid sooner, not more cash. Cap stays at $1.25M. There is no scenario in which more than $1.55M total leaves the company to Corrina McGowan. | Documented in this clause. | |
5 · How the $1.25M cap is derived
The cap is not a negotiated number — it is the OUTPUT of a formula applied to the Investor Pack trajectory. Below is the live derivation, year by year. If the trajectory changes in the financial model, this table recomputes automatically.
| FY | Window | Trajectory anchor | Raw pool (formula) | Pool at target | Cumulative | KPI gate |
|---|---|---|---|---|---|---|
| FY27 | 1 Sep 2026 → 30 Jun 2027 · 10-month stub | Members 1,000 · Rev $240k | $5,720 floor | $10,000 | $10,000 | Member acquisition target (≥ 1,000) + CAC ≤ $120 + brand awareness baseline |
| FY28 | 1 Jul 2027 → 30 Jun 2028 · full year | Members 8,000 · Rev $1.92M | $40,760 floor | $60,000 | $70,000 | Active members ≥ 8,000 + LTV/CAC ≥ 3× + content pipeline KPIs |
| FY29 | 1 Jul 2028 → 30 Jun 2029 · full year | Members 30,000 · Rev $7.20M | $131,600 | $131,600 | $201,600 | Active members ≥ 30,000 + LTV/CAC ≥ 4× + organic-vs-paid ratio |
| FY30 | 1 Jul 2029 → 30 Jun 2030 · full year | Members 75,000 · Rev $18M | $279,000 | $279,000 | $480,600 | Active members ≥ 75,000 + retention rate + referral-driven acquisition |
| FY31 | 1 Jul 2030 → 30 Jun 2031 · cap year | Members 175,000 · Rev $42M | $626,000 | $769,400 | $1,250,000 | Active members ≥ 175,000 + brand category-leadership + market share |
| 5-year cumulative bonus pool | $1,250,000 | Hard cap: $1.25M | ||||
Audit trail in 5 lines
- Investor pack publishes 5-year revenue + members trajectory (single source of truth:
ASSUMPTIONS.trajectory). - Bonus formula applies: new-members × $5 + revenue × 30bps per year.
- Build-year floors ensure minimum value-of-time recognition ($10k FY27, $60k FY28).
- Cap-shape distributes any over-formula amount: 40% of remaining cap in FY30, balance in FY31.
- Cumulative is hard-clamped at $1.25M. No exceptions, ever.
6 · Why this is an ethical deal — industry benchmark grounding
The $1.25M cap is not invented. It is at or below published ANZ industry compensation benchmarks for pre-IPO CMOs in subscription/membership categories. Five independent sources, all primary publications:
7 · The nine-stakeholder protection grid
Every executive compensation structure has potential failure modes. This contract is engineered to protect every stakeholder group that holds risk — not just the contracting parties. Each row maps a stakeholder to a known risk, the specific protection mechanism in this contract, and the historical case study from /the-deal that anchors why the protection exists.
| Stakeholder | Risk if structure is wrong | Protection in this contract | Anchored to case study |
|---|---|---|---|
| Founder (Mathew Punter) | Provider extracts disproportionate value from a successful exit; or stays beyond useful contribution. | Hard cash cap ($1.25M lifetime bonus). No equity — no cap-table dilution. Termination-for-convenience clause closes pool with no overhang. | WeWork: Adam Neumann's $5.9M trademark sale + $1.7B exit package destroyed shareholder confidence ahead of IPO. |
| Outgoing investors (pre-exit) | Acquirer discounts the deal because of misaligned executive incentives bleeding value at the boundary. | Bonus pool is FORMULA-DRIVEN (revenue × bps + member-acq × $) from the same trajectory in the investor pack. No discretionary uplift. Cap visible to acquirer due-diligence. | Uber: Holder Report-driven valuation re-rate cost $24B between Series and IPO ($70B → $45.7B). |
| Incoming investors (Series A, B, IPO subscribers) | Hidden executive contracts inflate cap-table cost or create founder/CEO conflict that destroys value post-listing. | Contract is published on a public engagement framework. Cap derivation is mathematical and auditable. No off-ledger arrangements. | WeWork S-1 (14 Aug 2019): hidden related-party transactions and side letters collapsed the listing in 33 days. |
| Employees | Executive bonus pool consumes ESOP headroom; perceived unfairness undermines retention. | Bonus is CASH only, drawn from operating cash. ESOP pool (10% standard) is unaffected. Bonus is gated on revenue/member KPIs that EMPLOYEE delivery produces — they are direct beneficiaries via team-level performance share. | Theranos: lack of independent CFO + opaque executive compensation prevented honest signalling to staff; 800 jobs lost on collapse. |
| Provider (Corrina McGowan) | Below-market cash compensation if Flip 360 succeeds modestly; opportunity cost of full-time embedded role. | Bonus floor in build years ($10k FY27, $60k FY28) covers minimum value-of-time. Upside cap ($1.25M) sits BELOW equity-equivalent at low-case exit — explicit trade of upside for cash certainty. Termination-for-convenience clause protects both directions. | Canva: Cliff Obrecht's long-tenured marketing leadership is cited as a brand category-leadership predictor by Spencer Stuart APAC research. |
| Community Managers (Flip 360 ecosystem) | Executive pay structure incentivises growth-at-all-costs that breaks the member-community trust contract. | KPI mix INCLUDES retention rate (FY30) and brand category-leadership (FY31). Pure growth without retention = no cap unlock. Member harm = direct KPI failure. | WeWork: pure-growth incentives ignored building-level economics; tenant trust never recovered. |
| Public / Regulators (ASIC, ATO, AUSTRAC) | Material related-party transactions undisclosed at IPO; regulator scrutiny; class action exposure. | Contract is published in full. IP assignment, no kickbacks, no related-party referrals. RCTI/GST treatment standard. PI insurance carried. Conflict-of-interest restraint in place. | Theranos: SEC fraud case + Elizabeth Holmes 11-year sentence stemmed from inadequate financial-officer governance. |
| Vertical Partners (corporate referral partners) | Partner relationships sacrificed for short-term revenue to hit executive KPIs. | Revenue-share basis-point structure ties executive upside to recurring revenue quality (not one-time deals). Partnership KPIs are weighted into the FY29–FY31 mix. | Afterpay: BNPL revenue quality was the central question in the $39B Block acquisition due diligence. |
| Board (Steerco / Independent Directors) | Compensation structure misaligned with governance accountability creates personal director liability. | Steerco approves each year's KPI scorecard before payment. Independent audit-clean delivery is a hard gate. Cap-clamp ensures no surprise cash demands. AICD-aligned director protections. | Theranos board: high stature, no finance expertise — directors named personally in the SEC fraud action. |
8 · The counterfactual — cash cap vs. equity grant
The standard alternative to a cash-bonus structure is an equity grant (industry norm: 0.5%–2.0% for an embedded pre-IPO CMO). Below is the explicit comparison at each exit scenario in the investor pack. The cash cap costs Flip 360 shareholders less in every scenario than the equity alternative — and provides cash-flow certainty to the operating company.
| Scenario | Exit valuation | Equity equivalent (1.0% fully-diluted) | This deal (cash cap) | Delta to provider | Delta to shareholders |
|---|---|---|---|---|---|
| Low-case exit | $250M | $2.50M | $1.25M | −$1.25M | +$1.25M |
| Base-case exit | $335M | $3.35M | $1.25M | −$2.10M | +$2.10M |
| High-case exit | $420M | $4.20M | $1.25M | −$2.95M | +$2.95M |
| Reading: at every exit scenario, the cash cap delivers more to shareholders than a 1% equity grant would, AND provides cash-flow certainty to operating company. Provider gives up exit-multiplier upside in exchange for guaranteed cash via KPI achievement. | |||||
The trade. Corrina McGowan gives up the unbounded upside of equity in exchange for guaranteed cash on KPI achievement, build-year floors, and termination-for-convenience protection. Flip 360 gives up the "alignment of equity" in exchange for cap-table simplicity, predictable cash outflows, and surgical termination optionality. Both parties trade something real; neither party can extract beyond the negotiated band.
9 · Termination-clean economics
A clean termination clause is what makes the rest of the structure honest. Below are the four ways this engagement can end, and the economic outcome of each. There is no scenario in which Corrina McGowan carries an entitlement off the books, or in which Flip 360 carries an unvested obligation through an exit transaction.
| Termination scenario | When triggered | Provider receives | Client retains |
|---|---|---|---|
| For convenience by Client | Client gives 30 days written notice, any time | Base fees to termination date · Pro-rated bonus pool earned to date · Pool ceases accruing | 100% IP · No cap-table impact · No overhang · Clean break |
| For convenience by Provider | Provider gives 60 days written notice, any time | Base fees to termination date · Pro-rated bonus pool earned to date · Pool ceases accruing | 100% IP · No cap-table impact · No restrictive covenant remaining on Provider |
| For cause by Client | Material breach by Provider, 14 days to remedy | Base fees to termination date only · Bonus pool forfeited | 100% IP · Recovery of any prepaid amounts · No further liability |
| Change of control of Client (acquisition / IPO) | Defined "Liquidity Event" per investor docs | Vested bonus pool to date · 6-month transition retainer to acquirer or new ownership · No cap acceleration | Clean cap-table at exit · No earn-out demands · No unvested obligation transferred |
10 · KPI category & measurement
Marketing performance
Member acquisition · CAC · LTV/CAC · retention rate · brand category-leadership metrics
11 · Standard terms (mirror of Phase 1 framework)
All standard provisions from the Phase 1 instrument (/engage-corrina) carry through unchanged: independent contractor; confidentiality (5 years); Australian Privacy Act 1988; warranties; limitation of liability; insurance ($2M PI minimum); conflict of interest restraint (6 months post-termination); force majeure; dispute resolution via Resolution Institute; NSW governing law; entire agreement; written-amendment requirement; electronic signature via the on-page pad. The full text is reproduced in Schedule 1 of the executed counterpart.
12 · Signature gate
PROPOSED · awaiting Phase 1 baseline lock
This Phase 2 instrument is not yet signable. Per Framework §10 governance, signature capture opens only after Phase 1 evidence-of-delivery acceptance at Steerco #6 on 17 August 2026. Until then, this document is published for review by Corrina, Mathew, and incoming investors so the cap derivation, ethics argument, KPI structure, and stakeholder protections are visible BEFORE Phase 1 execution begins.