exv10w19



 





Exhibit 10.19




FISCAL YEAR 2008 MANAGEMENT BONUS PLAN




A. CASH BONUS PLAN



All ArcSight, Inc. (the “Company”) executives who do not otherwise receive variable compensation
will be eligible to participate in this cash bonus plan. Each eligible executive’s actual
participation level will be determined by their individual performance.



Cash bonus available will be based on a percentage of an executive’s base salary upon the Company’s
achievement of both revenue targets and operating income targets1, as described below.
In the event that the Company meets only a revenue target but not an operating income
target1, or vice versa, then bonuses, if any, will be available only at the level at
which both the revenue target and operating income target1 have been met.




1. Chief Executive Officer, President, Chief Financial Officer and Chief Technology Officer:




	 	 	 	 	 
	Percentage of Base Salary	 	Performance Relative To Revenue Target
(in accordance with the Company’s adjusted internal operating plan)	 	Operating Income Target (in accordance with the Company’s adjusted internal operating plan)
	 
	 	 	 	 
	0%

	 	<100% of revenue target
	 	N/A
	 
	 	 	 	 
	45%

	 	100% of revenue target
	 	3operating income target for 100% of revenue target
	 
	 	 	 	 
	55%

	 	>100% of revenue
target and <105% of
revenue target
	 	3operating income target for >100% of revenue
target and <105% of revenue target
	 
	 	 	 	 
	65%

	 	3105% of revenue target
and <110% of revenue
target
	 	3operating income target for 3105% of revenue
target and <110% of revenue target
	 
	 	 	 	 
	75%

	 	3110% of revenue target
and <115% of revenue
target
	 	3operating income target for 3110% of revenue
target and <115% of revenue target
	 
	 	 	 	 
	85%

	 	3115% of revenue target
and <120% of revenue
target
	 	3operating income target for 3115% of revenue
target and <120% of revenue target
	 
	 	 	 	 
	100%

	 	3120% of revenue target
	 	3operating income target for 3120% of revenue target






2. Other Executives:




	 	 	 	 	 
	Percentage of Base Salary	 	Performance Relative To Revenue Target
(in accordance with the Company’s adjusted internal operating plan)	 	Operating Income Target (in accordance with the Company’s adjusted internal operating plan)
	 
	 	 	 	 
	0%

	 	<100% of revenue target
	 	N/A
	 
	 	 	 	 
	35%

	 	100% of revenue target
	 	3operating income target for 100% of revenue target
	 
	 	 	 	 
	40%

	 	>100% of revenue
target and <105% of
revenue target
	 	>100% of revenue target and <105% of revenue target
	 
	 	 	 	 
	50%

	 	3105% of revenue target
and <110% of revenue
target
	 	3operating income target for 3105% of revenue target and
<110% of revenue target
	 
	 	 	 	 
	65%

	 	3110% of revenue target
and <115% of revenue
target
	 	3operating income target for 3110% of revenue target and
<115% of revenue target
	 
	 	 	 	 
	80%

	 	3115% of revenue target
and <120% of revenue
target
	 	3operating income target for 3115% of revenue target and
<120% of revenue target
	 
	 	 	 	 
	100%

	 	3120% of revenue target
	 	3operating income target for 3120% of revenue target





 



			
	1	 	The operating income targets exclude stock compensation expenses and amortization of
intangibles, but include the impact of any bonuses determined under the cash bonus plan.





 









 





B. EQUITY BONUS PLAN



Company executives will be eligible to participate in an equity pool of 237,500 shares of common
stock (in the form of options) on achievement of 100% of the revenue target and operating income of
break even or better. The Compensation Committee will determine the number of shares allocated to
the Company’s Chief Executive Officer and then the Compensation Committee, with input from the
Company’s Chief Executive Officer, will determine the allocation of the remainder of the shares
among the rest of the executive team. Options will vest according to standard vesting terms over
four years.