exv10w3



 







Exhibit 10.3




	 	 	 	 	 
	 
	 	 	 	 
	FISCAL YEAR 2005 CORPORATE

INCENTIVE COMPENSATION PLAN

	 	

	 
	 	 	 	 
	 
	 
	 	 	 	 
	as
Created by Human Resources

	 	 	07.01.04	 
	 
	 	 	 	 
	 






Purpose


The Fiscal Year 2005 Corporate Incentive Compensation Plan (“Plan”), applicable to the period from
July 1, 2004 to June 30, 2005 (“Term”), is the result of a determined and continuing effort on the
part of Hyperion Solutions Corporation (“Hyperion”) to encourage the overall performance of certain
(as determined in Hyperion’s discretion) employees (“Participants”), thereby allowing Hyperion to
accomplish its growth and profit objectives. The Plan is designed to provide Participants with
value (“Incentive Compensation”) in exchange for the value provided to Hyperion through
Participants’ activities. The Plan is a performance-based incentive plan that rewards Participants
for their efforts in driving the growth and success of the business by providing variable
compensation (“Incentive Compensation) to Plan Participants based upon corporate business
performance, business unit performance, and individual performance.



Plan Objectives


The key objectives of the Plan are:




	   	Pay for Performance


The performance of the company and the Participant’s business unit against semi-annual goals
builds the available Incentive Compensation fund. The Participant’s performance on
semi-annual goals adjusts the actual Incentive Compensation payout. Over performance on
goals will drive a higher Incentive Compensation payout and under performance on goals will
lower the payout.
	 
	   	Participant Support of Business Unit Goals


Tying Incentive Compensation payouts to business unit goals makes the achievement of those
goals a priority for every Participant in Hyperion. This encourages Participants and teams
to look beyond their individual and team goals to assist with overall business unit goals.
	 
	   	Participant Awareness and Alignment with Corporate
Goals



Participants should understand Hyperion’s annual objectives, and how their business unit’s
and Participant’s goals align with corporate goals, and therefore a significant portion of
every Participant’s Incentive Compensation is based on Hyperion’s overall performance.
	 
	   	Program Alignment with Shareholder Interests


The company is fiscally responsible by linking Incentive Compensation payouts directly to
corporate and business unit performance.
	 
	   	Participant Retention


By requiring that Participants remain with the company during the term of the Plan,
Participant turnover is reduced.





Incentive Compensation Periods


Incentive Compensation is currently paid semi-annually after the close of the half. The
semi-annual Incentive Compensation periods are:



	 	 	 	 	 	 	 	 	 
	1st half FY05

	 	July 1, 2004
	 	to
	 	December 31, 2004
	 	Payout in February 2005
	2nd half FY05

	 	January 1, 2005
	 	to
	 	June 30, 2005
	 	Payout in August 2005






	 	 	 	 
	 	 	 	 
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Target Incentive Compensation Amount


A Participant has a target Incentive Compensation amount, typically expressed as a percent of
eligible earnings. For example, a Participant with an annual base salary of $50,000 and a targeted
Incentive Compensation percent of 10% has an annual target Incentive Compensation amount of $5,000
(= $50,000 x 10%).



Eligible Earnings


For Participants whose Incentive Compensation target is expressed as a percent of eligible
earnings, eligible earnings include base salary, overtime, vacation, and sabbatical earnings made
during the period the participant is eligible under this plan, but do not include disability pay,
any sign-on bonus, commissions, and any other incentive compensation. For countries outside of the
United States, unless there is a mandatory requirement for eligible earning to be defined
otherwise, the same definition of eligible earning applies. For example, if a non-exempt
Participant earns $25,000 in base salary and $2,000 in overtime during the Incentive Compensation
period, then the Participant’ eligible earnings are $27,000 and his semi-annual target Incentive
Compensation amount is $2,700 (= $27,000 x 10%).



Performance Goals


Performance goals are determined as follows:




	   	Individual Goals


Individual performance level will be based on performance against semi-annual individual
goals established by Hyperion. Individual goals will be based on specific objectives and
metrics that support the business unit and company in reaching their goals. Goals must be
written and recorded within the first month of the Incentive Compensation period.
	 
	   	Business Unit Goals


Business unit performance level will be based on performance against semi-annual goals
established for each business unit management by Hyperion. These goals and measurements
will be based on specific objectives and metrics of business unit performance that support
Hyperion’s strategy and objectives. Goals may also be established at the sub-business unit
level (department, region, etc).
	 
	   	Corporate Goals


Corporate performance level will be based on performance against annual fiscal year
corporate goals, and will include specific financial metrics such as revenue growth,
operating margin and earnings per share, as well as strategic goals such as customer
satisfaction. The specific goals will be established by Hyperion at the beginning of the
fiscal year. Financial goals may be expressed as a percentage achievement of target figure.
For example, the goal for achieving operating income margin may be expressed as meeting
100% of target, while the actual figure will not be disclosed until after the quarterly
earnings call.





Business Unit and Corporate Performance Allocation


The allocation of business unit and corporate performance to Incentive Compensation payouts differs
by job level:



	 	 	 	 	 	 	 	 	 
	 	 	Business Unit Performance Allocation	 	Corporate Performance Allocation
	Management Committee Members

	 	 	25	%	 	 	75	%
	Vice Presidents and Directors

	 	 	60	%	 	 	40	%
	
Managers and Staff

	 	 	75	%	 	 	25	%






Performance Levels


At the end of the semiannual Incentive Compensation period, performance levels are determined as
follows:




	   	Participant Performance Level


Participant’s results will be assessed against Participant’s specific goals and job
expectations to determine Participant performance level.
	 
	   	Business Unit Performance Level


Participant’s business unit’s results will assessed against the business unit’s goals to
determine the business unit performance level that builds the business unit incentive
compensation fund that will be allocated within the business unit.





	 	 	 	 
	 	 	 	 
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	   	Corporate Performance Level


The company’s results will be assessed against the corporate goals to determine the
corporate performance level that builds the corporate incentive compensation fund that will
be allocated throughout the company.





Incentive Compensation Payout


Participant’s individual performance level is multiplied against the sum of the business unit
performance allocation of the business unit performance level and the corporate performance
allocation of the corporate performance level to determine the Participant’s Incentive Compensation
level, which is multiplied by Participant’s target Incentive Compensation to determine
Participant’s payout:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Incentive

	 	 	 	Participant
	 	 	 	Business Unit
	 	 	 	Business Unit
	 	 	 	Corporate
	 	 	 	Corporate
	 	 	 	Target Incentive
	Compensation

	 	=
	 	Performance
	 	x ((
	 	Performance
	 	x
	 	Performance
	 	) + (
	 	Performance
	 	x
	 	Performance
	 	)) x
	 	Compensation
	Payout

	 	 	 	Level
	 	 	 	Allocation
	 	 	 	Level
	 	 	 	Allocation
	 	 	 	Level
	 	 	 	Amount






Plan Funding


The business unit and corporate performance levels measured against the business unit and
corporation semi-annual goals creates the available Plan funding. Following the close of the
semiannual Incentive Compensation period, the level of funding for each business unit fund and for
the corporate fund will be based on the actual performance against goals, as determined by
Hyperion. While certain business units may choose to allocate Incentive Compensation based on
sub-business unit department or regional performance, the business unit fund will still be built
from the overall business unit performance.



Eligibility


In order for a Participant to be eligible to receive a payout under the Hyperion Incentive
Compensation Plan, Participant must meet certain criteria:




	   	Active Regular Employee


An active regular employee who has begun employment with Hyperion prior to the last month of
the semiannual Incentive Compensation period, and is not on any other type of incentive
compensation plan, is eligible to participate in the Plan. Participants who participate in
any other type of incentive compensation plan, including the Fiscal Year 2005 Sales
Incentive Compensation Plan, Fiscal Year 2005 Services Incentive Compensation Plan, or any
other Hyperion incentive compensation plans, are not eligible for the Hyperion Incentive
Compensation Plan. If there is a position change between two different incentive
compensation plans, the payout under the Plan will be based on the eligible earning made by
the participant during the period eligible for the Plan.
	 
	   	Not Subject to Discipline or Performance Improvement Action


A Participant, who is subject to discipline or performance improvement action, will not be
eligible to participate in the Plan during the period of action. A Participant who
successfully completes a performance improvement action may be eligible, at Hyperion’s sole
discretion, to receive a reduced Incentive Compensation payout to reflect the period of time
the Participant was subject to the performance improvement action. Regardless,
Participant’s specific goals and job expectations will be used top determine Participant
performance level.
	 
	   	Voluntary Termination


Since one of the goals of the Plan is Participant retention, a Participant who voluntarily
terminates Participant’s employment with Hyperion prior to the Incentive Compensation payout
will not be eligible for Incentive Compensation for that period.
	 
	   	Involuntary Termination


A Participant who is involuntarily terminated by Hyperion prior to the end of a semiannual
Incentive Compensation payout period will not be eligible for Incentive Compensation for
that period. A Participant who is involuntarily terminated after the end of the semiannual
Incentive Compensation period, but prior to the Incentive Compensation payout, will receive
the amount of Incentive Compensation on the same schedule Participant would have received,
had Participant remained an employee of Hyperion. This provision in no way modifies the
provision relating to performance improvement actions, or any other provision of this Plan.
If the involuntarily terminated Participant is





	 	 	 	 
	 	 	 	 
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	  	otherwise ineligible to receive compensation
under the terms of this Plan, this section shall not serve to make any such Participant
eligible to receive Incentive Compensation under the plan.
	 
	   	Leave of Absence


A Participant who is on an approved leave of absence during part of the Incentive
Compensation period will be eligible to participate in the Plan, however the Incentive
Compensation payout will be based on the eligible earnings, as defined in the Eligible
Earning section (above), during the semiannual Incentive Compensation period. Hyperion
shall use reasonable efforts to determine, in its sole discretion, Participant’s level of
performance, the business unit’s performance and the company performance prior to the
commencement of the Employee’s leave in determining the prorated Incentive Compensation. A
Participant who has been on a leave of absence during an entire semiannual Incentive
Compensation period is ineligible for participation in the Plan during that period.





Plan Administration and Modifications


The exclusive right and responsibility to administer the Plan lies with Hyperion’s management,
whose good faith interpretations and decisions will be final. While every effort has been made to
make this Plan equitable, there may arise situations where special interpretation is required, and
in such situations, Hyperion will, in good faith and in its sole discretion, use its best efforts
to determine the intent of the Plan and to render a judgment that is fair to all parties. This
Plan supersedes all prior compensation plans. Hyperion reserves the right to amend, terminate or
modify this Plan, in whole or in part, at any time, upon written notice (including email) to
Participant (if employed by Hyperion on the effective date of the notice).



Conflict
Resolution and Arbitration


The parties acknowledge that it is impossible to draft a plan such that it accounts for every
contingency. If and when conflicts arise as to any aspect of the administration of the Plan, a
Participant will have the right to seek an interpretation and/or variance from the Plan. For
proper resolution, all such requests must be presented, in accordance with applicable law to
Participant’s immediate manager. In the event of any dispute or claim relating to or arising out
of Participant’s participation in the Plan, Participant’s employment relationship with Hyperion, or
the termination of Participant’s employment with Hyperion, for any reason (including, but not
limited to, any claims of breach of contract, wrongful termination or age, sex, race, national
origin, disability or other discrimination or harassment), Participant and Hyperion agree that all
such disputes will be fully, finally and exclusively resolved by binding arbitration to the fullest
extent permitted by law. The arbitration will be conducted in accordance with the American
Arbitration Association’s “National Rules for the Resolution of Employment Disputes” then in
effect. PARTICIPANT AND HYPERION HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO HAVE ANY AND ALL DISPUTES
OR CLAIMS ADJUDICATED IN COURT OR BEFORE ANY ADMINISTRATIVE AGENCY, OR TRIED IN COURT OR BEFORE ANY
ADMINISTRATIVE AGENCY, JUDGE OR JURY.



No
Employment Contract and At-Will Employment



Nothing in this Plan shall be construed to imply the creation of an employment contract between
Hyperion and Participant, nor will the Plan, or an employee’s opportunity to participate in it,
constitute a guarantee of employment for any specific period of time. Either Hyperion or
Participant may terminate Participant’s employment at any time with or without cause, and with or
without prior notice. The Plan is only made available to Participants who agree to the terms
hereof, and Participant’s decision to participate in the Plan will constitute acceptance of the
terms and conditions of this Plan. This Plan is subject to the terms of Participant’s offer letter
and any other agreement Participant may have with Hyperion. Nothing in this Plan grants any third
party beneficiary rights under this Plan.



General



The validity, performance and construction of this Plan shall be governed by the laws of the State
of California, USA (excluding its conflict of laws provisions). Santa Clara County, California
shall be the appropriate venue and jurisdiction for the resolution of disputes hereunder. This
Plan is personal and non-transferable. Participant may not assign, pay, or encumber any portion of
any amounts due hereunder to any agent, customer, or other party as an inducement in obtaining a
sale or otherwise. This Plan sets forth the entire understanding between the parties with regard
to its subject matter, and supersedes any and all prior and contemporaneous conversations,
understandings and agreements between parties, including any previous compensation plan, and any
oral or written information or advice given by Hyperion, its employees, agents, or representatives,
all of which are of no further force and effect. Except as may be affirmed in writing by the
parties, the failure or delay of Hyperion to enforce its rights with respect to this Plan will not
constitute a waiver of its right to enforce its rights with respect to the same, or any other
breach or default. If any provision of the Plan will be held by an arbitrator or court of



	 	 	 	 
	 	 	 	 
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competent jurisdiction to be contrary to law, that provision will be enforced to the maximum extent
permissible, and the remaining provisions of the Plan will remain in full force and effect.



	 	 	 	 
	 	 	 	 
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