EXHIBIT 10.20
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS DOCUMENT
INTERWOVEN, INC.
2007 EXECUTIVE OFFICER INCENTIVE BONUS PLAN
          Interwoven, Inc. (the “Company”), a Delaware corporation, hereby
establishes this 2007 Executive Officer Incentive Bonus Plan (the “Plan”)
effective as of January 1, 2007, in order to advance the interests of the
Company and its stockholders by providing an incentive for designated executive
officers of the Company to achieve the Company’s total revenue and non-GAAP
operating income targets for the year ending December 31, 2007.
     1. DEFINITIONS AND CONSTRUCTION.
          1.1 Definitions. Whenever used herein, the following terms shall have
their respective meanings set forth below:
          1.1.1 “Actual Non-GAAP Operating Income” for any Bonus Period means
the Company’s operating income for such Bonus Period computed in accordance with
generally accepted accounting principles less the impact of amortization of
intangible assets; stock-based compensation charges; restructuring, excess
facilities and new headquarters related charges; costs associated with the
review of the Company’s historical stock option granting procedures and other
non-recurring items, net of the related tax impact. Actual Non-GAAP Operating
Income is after accruing for the Quarterly Bonus and Annual Bonus due
Participants under the Plan. Other non-recurring items to be excluded from
operating income for purposes of computing actual non-GAAP operating income are
subject to the review and approval of the Compensation Committee.
          1.1.2 “Plan Operating Income Target” means any one of the non-GAAP
operating income targets set forth in Exhibit A hereto.
          1.1.3 “Actual Revenues” for any Bonus Period means the Company’s total
license, support, service and training revenues for such Bonus Period as
reported in the Company’s Financial Statements.
          1.1.4 “Annual Bonus” means the cash bonus payable pursuant to
Section 4.2.
          1.1.5 “Bonus Period” means, with respect to the Annual Bonus, the year
ended December 31, 2007 and, with respect to any Quarterly Bonus, the calendar
quarter of 2007 with respect to which such Quarterly Bonus is to be calculated.
          1.1.6 “Committee” means the Compensation Committee of the Board of
Directors of the Company.
          1.1.7 “Financial Statements” means, with respect to the Annual Bonus,
the Company’s audited consolidated financial statements for the year ending
December 31,
***Confidential treatment has been requested with respect to the information
contained within the “[***]” markings. Such marked portions have been omitted
from this filing and have been filed separately with the Securities and Exchange
Commission.

 

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2007 as filed by the Company with the Securities and Exchange Commission on Form
10-K and, with respect to any Quarterly Bonus, the Company’s unaudited condensed
consolidated financial statements for the calendar quarter with respect to which
such Quarterly Bonus is to be calculated, as filed by the Company with the
Securities and Exchange Commission on Form 10-Q in the case of the calendar
quarters ending March 31, 2007, June 30, 2007 and September 30, 2007 and as
filed by the Company with the Securities and Exchange Commission on Form 10-K in
the case of the calendar quarter ending December 31, 2007.
          1.1.8 “MBO” means those quarterly or annual objectives established by
the Committee or the Company’s Chief Executive Officer for the participant.
          1.1.9 “Participant” means an executive officer of the Company who has
been designated by the Committee as a Participant in the Plan.
          1.1.10 “Plan Revenue Target” means the revenue targets set forth in
Exhibit B hereto.
          1.1.11 “Quarterly Bonus” means the bonus that is due pursuant to
Section 4.1.
          1.1.12 “Target Bonus” means the amounts set forth in Exhibit C hereto.
The Target Bonus may be divided into components. The Company Performance Target
Bonus refers to the amount of the Participant’s Target Bonus allocated to
computations defined in Section 4 of this Plan. The MBO Target Bonus refers to
the amount of the Participant’s Target Bonus allocated to the Participants’ MBO
Target Bonus as defined in Section 5 of the Plan.
     2. ADMINISTRATION.
          The Plan shall be administered by the Committee. Subject to the
general purposes, terms and conditions of the Plan, the Committee shall have
authority to implement and carry out the Plan including authority to construe
and interpret the Plan. All questions of interpretation or construction of the
Plan shall be determined by the Committee.
     3. ELIGIBILITY.
          A Participant shall be eligible for a Quarterly Bonus only if he or
she is actively employed by the Company throughout the entirety of the
corresponding Bonus Period. A Participant shall be eligible for a pro rated
Annual Bonus (based on the full quarters that such Participant was employed)
only if he or she is actively employed by the Company for at least two full
quarterly Bonus Periods during 2007 and such Participant is employed by the
Company on December 31, 2007.
     4. COMPANY PERFORMANCE BONUS AND PAYMENT.
          The portion of the Participant’s Target Bonus allocated to the Company
Performance Bonus is designated on Exhibit C to this Plan.
          4.1 Quarterly Bonus.

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          4.1.1 Subject to the provisions of Section 4.4 below, each Participant
who meets the bonus eligibility requirements of Section 3 above shall receive a
Quarterly Bonus for each calendar quarter in 2007 equal to twenty percent (20%)
of the Participant’s Company Performance Target Bonus multiplied by the
applicable bonus percentage determined under Section 4.3 below.
          4.1.2 Each Quarterly Bonus shall be paid on the basis of results shown
in the Company’s press release announcing its financial results for such
quarter, in cash, in a single lump sum, subject to all applicable employment and
income tax withholding, within thirty (30) days after both of the following
conditions have occurred: (a) the Company’s independent registered public
accounting firm has completed a review of the Company’s records for the Bonus
Period and have submitted a report thereon to the Audit Committee of the
Company’s Board of Directors, and (b) the Company has issued a press release
announcing its financial results for such quarter.
          4.1.3 In the event that the results set forth in the Financial
Statements for a quarterly Bonus Period are different than those that formed the
basis for the calculation of the Quarterly Bonus for such Bonus Period pursuant
to Section 4.1.2 above, the amount of the Quarterly Bonus for such Bonus Period
shall be adjusted using the results set forth in the Financial Statements for
such Bonus Period and (a) each Participant shall be required to return to the
Company, on term acceptable to the Committee, any amount that has become an
over-payment as a result of the adjustment, net of applicable taxes, and (b) the
Company shall pay within thirty (30) days of determining any such adjustment,
any amounts that ought to have been made to each Participant.
          4.1.4 The maximum Quarterly Bonus payment for any such quarterly Bonus
Period is limited to 150% of the quarterly allocation of the Company Performance
Target Bonus for each Participant. To the extent that the Quarterly Bonus earned
is greater than 150% (“Excess Quarterly Bonus”), the amount due in excess of
150% will be deferred pending the announcement of financial results for the full
year. If the Annual Bonus is equal to or greater than a 100% Annual Bonus
pay-out (computed based on actual results without regards to the 150% cap), the
Excess Quarterly Bonus will be added to the Annual Bonus and paid with the
Annual Bonus in accordance with the provisions of Section 4.2. If the Annual
Bonus is computed to be less than a 100% pay-out (computed based on actual
results without regards to the 150% cap), the Excess Quarterly Bonus will be
forfeited.
          4.2 Annual Bonus.
          4.2.1 Each Participant who meets the bonus eligibility requirements of
Section 3 above shall receive an Annual Bonus equal to twenty percent (20%) of
the Participant’s Company Performance Target Bonus multiplied by the applicable
bonus percentage determined under Section 4.3 below. The Annual Bonus will be
the sum of the (Q1 Applicable Bonus Percentage times 25%) plus (Q2 Applicable
Bonus Percentage times 25%) plus (Q3 Applicable Bonus Percentage times 25%) plus
(Q4 Applicable Bonus Percentage times 25%).
          4.2.2 Each Annual Bonus shall be paid upon the announcement in a press
release of the Company’s fourth quarter and annual financial results for the
year ending

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December 31, 2007, in cash, in a single lump sum, subject to all applicable
employment and income tax withholding, within thirty (30) days after both of the
following have occurred: (a) the Company’s independent registered public
accounting firm has completed an audit of the Company’s financial results for
the year ending December 31, 2007 and have submitted a report thereon to the
Audit Committee of the Company’s Board of Directors, and (b) the Company has
issued a press release announcing its financial results for such year.
          4.2.3 In the event that the results set forth in the Financial
Statements for the annual Bonus Period are different than those that formed the
basis for the calculation of an Annual Bonus pursuant to 4.2.2 above, the amount
of the Annual Bonus shall be adjusted using the results set forth in the
Financial Statements and (a) each Participant shall be required to return to the
Company, on term acceptable to the Committee, any amount that has become an
over-payment as a result of the adjustment, and (b) the Company shall pay within
thirty (30) days of determining any such adjustment, any amounts that ought to
have been made to each Participant.
          4.3 Applicable Bonus Percentage. The applicable bonus percentage shall
be calculated as follows:
50% (Revenue Achievement Percentage) + 50% (Operating Income Achievement
Percentage)
          4.3.1 The Revenue Achievement Percentage for any Bonus Period shall be
a function of the extent to which Actual Revenues for the period meet or exceed
the Plan Revenue Target for the period, determined as follows:

     
If Actual Revenues Are:
  The Applicable Bonus Percentage Is:
 
   
Less than 90% of the Plan Revenue Target
  0%
 
   
90% of the Plan Revenue Target
  60%
 
   
91% to 95% of the Plan Revenue Target
  60% plus 2% for each 1% by which Actual Revenues exceed 90% of the Plan
Revenue Target.
 
   
96% to 100% of the Plan Revenue Target
  70% plus 6% for each 1% by which Actual Revenues exceed 95% of the Plan
Revenue Target.
 
   
101% to 102% of the Plan Revenue Target
  100%
 
   
103% to 105% of the Plan Revenue Target
  100% plus 3% for each 1% by which Actual Revenues exceed 102% of the Plan
Revenue Target.
 
   
106% to 110% of the Plan Revenue Target
  110% plus 5% for each 1% by which Actual Revenues exceed 105% of the Plan
Revenue Target.
 
   
110% or greater of the Plan Revenue Target
  135% plus 7.5% for each 1% by which Actual Revenues exceed 110% of the Plan
Revenue Target, up to 300%. In no event will the Revenue Achievement Percentage
exceed 300%.

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          4.3.2 The Operating Income Achievement Percentage for any Bonus Period
shall be a function of the extent to which Actual Non-GAAP Operating Income for
the period meet or exceed the Plan Operating Income Target for the period,
determined as follows:

     
If Actual Non-GAAP Operating Income is:
  The Applicable Bonus Percentage Is:
 
   
Greater than $1 million below the Plan Operating Income Target.
  0%
 
   
At $1 million below the Plan Operating Income Target.
  60%
 
   
$1 million below to $500,000 below the Plan Operating Income Target.
  60% plus 3% for each full $100,000 increment by which Actual Non-GAAP
Operating Income exceed $1 million below the Plan Operating Income Target.
 
   
$500,000 below to the Plan Operating Income Target.
  75% plus 5% for each full $100,000 increment by which Actual Non-GAAP
Operating Income exceed $500,000 below the Plan Operating Income Target.
 
   
At Plan Operating Income Target plus each full increment of $100,000 in excess
of Plan Operating Income Target up to $500,000 above plan.
  100% plus 1% for each $100,000 full increment by which Actual Non-GAAP
Operating Income exceed 100% the Plan Operating Income Target.
 
   
At $500,000 above Plan Operating Income Target plus each full increment of
$100,000 in excess of Plan Operating Income Target up to $1 million above plan.
  105% plus 2% for each $100,000 full increment by which Actual Non-GAAP
Operating Income exceed $500,000 above the Plan Operating Income Target.
 
   
At $1 million or greater above Plan Operating Income Target plus each full
increment of $100,000 in excess of Plan Operating Income Target.
  115% plus 4% for each $100,000 full increment by which Actual Non-GAAP
Operating Income exceed $1 million above the Plan Operating Income Target, up to
300%. In no event will the Operating Income Achievement Percentage exceed 300%.

          4.3.3 Percentages used in the computation of the Revenue Achievement
Percentage and the Operating Income Achievement Percentage shall be rounded to
the nearest whole percentage.
          4.4 The Company’s Chief Executive Officer (“CEO”) may review each
Participant’s performance during the applicable Bonus Period and may recommend
to the Committee increasing or decreasing the Participant’s Quarterly Bonus or
Annual Bonus. The determination of whether to make any recommended adjustment
shall be in the sole discretion of the Committee.

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     5. MBO BONUS AND PAYMENT.
          The portion of the Participant’s Target Bonus allocated to the MBO
Target Bonus is designated on Exhibit C to this Plan. MBO’s may be established
on a quarterly or annual basis. Either the Company’s Chief Executive Officer or
Chief Financial Officer is responsible for monitoring MBO’s and reporting
completed MBO’s to the Committee. Bonus amounts associated with MBO’s will
generally be paid with any Quarterly Bonus or Annual Bonus due under Section 4.1
and Section 4.2 above. If no Quarterly or Annual Bonus is due, the bonus amount
due under this Section will be paid no later than 45 days following the end of
the quarterly period in which the MBO was successfully completed.
     6. AMENDMENT OF PLAN.
          The Plan may be modified or amended at any time by the Committee or
the Company’s Board of Directors; provided, however, that no amendment may
increase any Plan Revenue Target or increase any Plan Operating Income Target
without the consent of the Participants.
     7. MISCELLANEOUS.
          7.1 No Assignment. The right of any Participant or any other person to
the payment of any benefits under this Plan shall not be assigned, transferred,
pledged or encumbered.
          7.2 Successors. This Plan shall be binding upon and inure to the
benefit of the Company, its successors and assigns and the Participant and his
or her heirs, executors, administrators and legal representatives.
          7.3 No Employment Agreement. Nothing contained herein shall be
construed as conferring upon any Participant the right to continue in the employ
of the Company as an employee.
          7.4 Arbitration. Any dispute or claim relating to or arising out of
this Plan shall be fully and finally resolved by binding arbitration conducted
by the American Arbitration Association in Santa Clara County, California.
          7.5 Governing Law. This Plan shall be construed in accordance with and
governed by the laws of the State of California.
          7.6 Entire Agreement. This Agreement constitutes the entire agreement
between the parties regarding the subject matter hereto and supercedes any prior
or contemporaneous agreements, whether oral or written regarding such subject
matter.
Adopted by the Compensation Committee, effective as of January 1, 2007.

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Exhibit A
Non-GAAP Operating Income Targets for 2007

              Plan Operating   Period   Income Target  
Quarter ended March 31, 2007
  $ [***]  
Quarter ended June 30, 2007
    [***]  
Quarter ended September 30, 2007
    [***]  
Quarter ended December 31, 2007
    [***]  
 
     
Year ended December 31, 2007
  $ [***]  
 
     

Exhibit B
Plan Revenue Targets for 2007

          Period   Plan Revenue Target       (in millions)  
Quarter ended March 31, 2007
  $ [***]  
Quarter ended June 30, 2007
    [***]  
Quarter ended September 30, 2007
    [***]  
Quarter ended December 31, 2007
    [***]  
 
     
Year ended December 31, 2007
  $ [***]  
 
     

***Confidential treatment has been requested with respect to the information
contained within the “[***]” markings. Such marked portions have been omitted
from this filing and have been filed separately with the Securities and Exchange
Commission.

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Exhibit C
Target Bonuses for 2007

                                              Company                    
Performance   MBO         Target   Target   Target   Commission Participant  
Bonus   Bonus   Bonus   Plan
John Calonico
  $ 138,000     $ 100,000     $ 38,000     $ —  
Max Carnecchia (1)
  $ 275,000     $ —     $ —     $ 275,000  
Ben Kiker
  $ 110,000     $ 80,000     $ 30,000     $ —  
Steve Martello (2)
  $ 200,000     $ —     $ 40,000     $ 160,000  
Rafiq Mohammadi
  $ 116,000     $ 84,000     $ 32,000     $ —  
David Nelson-Gal
  $ 108,000     $ 76,000     $ 32,000     $ —  

 

(1)   Mr. Carnecchia’s Target Bonus is based on a separate Sales Compensation
Plan.   (2)   Of Mr. Martello’s Target Bonus, $40,000 based on specific MBO
objectives and $160,000 is based on a separate Sales Compensation Plan.

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