Exhibit 10.11

 

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Executive Incentive Plan

Purpose

The purpose of the Intevac Executive Incentive Plan (“EIP”) is to motivate
participants to maximize stockholder value by aligning their short-term
compensation with achievement of Company financial performance goals and
strategic business objectives that are based on the Company Annual Operating
Plan (“AOP”). The EIP measures annual performance against both Corporate
financial objectives and individual objectives, and is subject to Compensation
Committee approval.

Measurement Period

The performance measurement period is January 1st through December 31st of the
fiscal year.

Eligibility & Target Incentive Opportunity

All employees designated by the Compensation Committee of the Board of Directors
(“BOD”) and the CEO will be eligible to participate in the EIP. Annually, the
Compensation Committee reviews and approves the CEO, CFO and other employee
participants in the EIP and their corresponding target incentive opportunities.
BOD approval is required for the CEO.

Each EIP participant is assigned a target incentive opportunity, expressed as a
percentage of their base salary at the beginning of the calendar year (or when
they are approved for participation in the EIP). Target incentive percentages
may be adjusted during the year in the event of a promotion or significant
change in responsibility (resulting in a pro-rata calculation of any potential
award at the end of the year).

The Employee Groups identified in the table on the following page are designated
participants under the EIP:

 

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Eligibility & Target Incentive Opportunity (Cont’d)

 

Employee Group

   Number of
Employees      Individual
Performance
Based Bonus
Target
(% of Base Salary)     Financial
Performance
Based Bonus
Target
(% of Base Salary)  

CEO

     1         50 %      50 % 

CFO

     1         32.5 %      32.5 % 

EVP

     3         25-30 %      25-30 % 

VP

     6         25 %      25 % 

Key Employee

     30-40         10-22.5 %      10-22.5 % 

Performance Measures

There will be two EIP performance measures:

 

  •   Objectives for Each Individual

 

  •   Corporate Operating income

The EIP will have two parts: the “Individual Performance Bonus” which will be
completely based on each individual’s performance against goals and objectives
set at the beginning of the year by the company; and the “Financial Performance
Based Bonus” which will be completely based on company profitability. The
employee’s “target bonus” will be half based on individual performance and half
based on financial performance.

Mechanics for “Individual Performance Bonus”

 

  •   Supervisor sets meaningful goals at the beginning of the year. In some
cases the parameters will be financial or defined with numbers; in other cases,
goals will be non-numerical and somewhat subjective.

 

  •   At year end the supervisor of each participant measures performance. In
consultation with senior management “a performance Score” from 0% to 100% is
decided.

 

  •   The employee is paid (in cash or RSU’s at the discretion of the
Compensation Committee) an amount = “Score” X Individual’s Performance Based
Bonus Target. The Individual Performance Bonus is “capped” at 1 times target.

 

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Mechanics for “Financial Performance Bonus”

 

  •   Each year the CEO will propose performance measures and payout levels
based upon the AOP. Compensation Committee approval is required for each
performance measuring period.

 

  •   Funding of the EIP Financial Performance Based Bonus pool will be based on
performance against pre-established profit and / or revenue based goals approved
by the Compensation Committee at the beginning of the year.

 

  •   If the Corporate operating profit falls below levels established by the
Compensation Committee there will be no Financial Performance Based Bonus pool
funding. In no circumstance, if the company operating profit is less than zero
will Financial Performance Bonuses be paid.

 

  •   The Financial Performance Based Bonus pool will be distributed “pro-rata”
to the participants “pro-rata” based on their Financial Performance Based target
bonuses (in cash or RSU’s at the discretion of the Compensation Committee).

 

  •   The Financial Performance Based Bonus pool will be “capped” at 2 times
target.

Example for Individual Performance Based Bonus:

Employee Salary $100k

Individual Performance Based Target Bonus = 10% = $10K

Individual Meets Objectives 100%

Individual Performance Based Bonus = 100% x $10k = $10K

Example for Financial Based Bonus:

Employee Salary $100k

Financial Based Target Bonus = 10% = $10K

Corporate Profit = 1.5 x AOP

Corporate Financial Based Bonus Pool = 1.5 X Target

Financial Performance Based Bonus = 1.5 X Target = 1.5X $10k = $15K

Total bonus paid to Employee = $25k.

 

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Employment Status Requirement for Eligibility

Participants must be employed on or before October 1 during the Measurement
Period to be eligible to participate in the EIP. Once this requirement has been
met, a pro-rated award (assuming award funding) will be calculated for the year
in which the service requirement is met.

Timing and Form of Payment of Awards

Employee must be on active status on the award payment date to receive an award.
Awards will be determined within 75 days following the fiscal year end. Awards
will be settled in cash or equity, subject to Board discretion.

Fraudulent Misrepresentation

If it is determined after the payment of an award that individual and corporate
performance upon which the award was based was fraudulently represented; the
Company reserves the right to require the return of that award.

Board of Directors Discretion

Intevac’s Board of Directors has full discretion to modify the EIP and determine
awards (both positive and negative) as well as the authority to terminate the
EIP at any time.

 

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