exv10w22



 





Exhibit 10.22









Executive Incentive Bonus Plan




Overview and Purpose





Callidus’ Executive Incentive Bonus Plan was created as a means to recognize and reward the
link between the achievement of Callidus’ corporate objectives and the senior executive’s
contribution to its success. The plan is designed to motivate the senior executive team to achieve
business targets by placing compensation “at risk” based on determined target achievement. The
specific purpose of the plan is to:




	 	•	 	Align the risks/rewards for the Executive team to achieve
Callidus’ top business priorities, and
	 
	 	•	 	Motivate and retain senior executive staff by providing a
bonus structure appropriate for their level in the market and to
promote achievement of stretch goals. The plan incorporates
Callidus’ annual business strategy and a desire to motivate,
retain and competitively compensate the senior executive staff
based on achievement and/or overachievement of the annual
approved Company Business Plan.





Objective





The Executive Incentive Bonus Plan supports the Callidus compensation philosophy and guiding
principles by meeting several key objectives:




	 	•	 	Provide competitive total cash opportunities that help
attract, reward and retain top executives. Target total cash
with above market opportunities for above – plan performance.
	 
	 	•	 	Create shareholder value by establishing a direct link between
achievement of the business plan and executive rewards.
	 
	 	•	 	Create a sense of focus and accountability through the
development of specific and critical targets.
	 
	 	•	 	Align interests and objectives of shareholders and the
Executive Team to drive Callidus growth and stock appreciation.





Performance Period





The fiscal year is divided into two, six-month performance periods, January to June and July
to December, for measuring Company performance. Payout is based on achievement of agreed upon
targets established two times each year, typically January and July.



 









 





Eligibility and Participation





Chief Executive Officer and Senior Vice Presidents who are employed at the end of the
performance period are considered eligible to participate and receive an award under this plan. An
executive must be in good performance standing to be eligible for any award under this plan.
Executives who leave during the period are not eligible for a payout. Exceptions may be made by
the CEO with Compensation Committee’s approval.



Performance Measures





The Plan rewards performance as measured against Callidus’ financial performance as measured
against a pre-defined set of objectives (i.e. Targets) based on revenue generation and operating
income before stock based compensation and other income. Overall Company performance for Callidus
will be measured against the targets as approved by the Compensation Committee of the Board of
Directors. The Compensation Committee of the Board will select and approve the financial targets
based on the business priorities for the fiscal year. Exhibit A attached to the Plan provides the
approved performance targets for the first operating period under the plan.



Award Pool Funding





The first step in the process is for the Company to build a funding pool following the
measurement of the company’s performance. This pool is the amount of total dollars that are
available for incentive awards for the executive team. The Board bases the pool on Callidus’
financial performance for the year against the key targets approved in the business plan.




The Company must meet a minimum level of performance, referred to as the threshold, to initiate
funding of the financial related pool . Threshold performance is met when the Company has achieved
approximately 85 to 95% of plan based on the specific financial metrics. Company performance
represents 100% of the funding pool for the plan. For clarification targets must be met after
funding the incentives.




For purposes of illustration, assume that there are 10 executives with identical earned salaries of
$200,000 for the fiscal year. Also assume that the target award opportunity is 50% of base salary
for each position, or $100,000. Therefore, the executive bonus pool would be $1,000,000 at target
Company performance — i.e. 100% achievement of financial metrics.




	 	•	 	Funding and therefore payout is reduced on a pro-rated basis
if less than 100% of target is achieved.
	 
	 	•	 	Funding and payout accelerates based on overachievement of target.
	 
	 	•	 	No funding or payout of bonus if less than 85% of target is
achieved.
	 
	 	•	 	No cap on overachievement.





 









 










Award Payout by Position





Bonus payout targets are determined and approved at the beginning of the calendar year by the
Compensation Committee of the Board of Directors. The bonus payouts generally range from 55% -
100% based on position and market analysis.



Award Approval





Upon the close of the second and fourth quarters, the CFO reviews the financial results
against established targets with the CEO and then the Compensation Committee. Once the financial
performance has been
reviewed and approved for the period and if the Company met the window of established target
performance for the period (85%-100%), awards for the 6 month period are distributed. Each
eligible executive has a specific target incentive opportunity that is used to calculate individual
awards as noted above. Calculation is applied to base salary earned during the period.




Callidus’ Board of Directors maintain the discretion to determine any
funding of the plan if the Company’s performance does not meet the minimum
threshold



Administration





Senior Executive must be with Callidus for the entire performance period, and be in good
performance standing during the entire performance period, to be eligible for an award under the
plan. New Hire bonuses would be pro-rated with Compensation Committee and CEO approval.




Awards will be paid based on standard Payroll deadlines following when final performance is known
for the Company and the Compensation Committee has approved a payout. Incentive awards are subject
to all applicable payroll taxes.



Callidus reserves the right to modify the plan, and individual awards, at any time. You will be
notified of any plan changes.



 









 





Acknowledgement





My signature below indicates that I have received a copy of the plan and that my target
incentive opportunity has been communicated to me.



	 	 	 	 	 
	 	 	 
	 

	 	Employee Signature
	 	Date
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 

	 	Manager Signature
	 	Date