exv10w25



 






Exhibit 10.25











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 four, quarterly performance periods, each
corresponding to the Company’s fiscal quarters, for measuring Company
performance. Payout is based on achievement of agreed upon quarterly targets
established two times each year, typically in January and July, and would
typically be paid in January, April, July, and October.




 









 














Exhibit 10.25











Executive Incentive Bonus Plan




Eligibility and Participation





	 	 	 	The Chief Executive Officer and Senior Vice Presidents who are employed at the
end of each 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 an applicable period are not eligible for a payout. Exceptions may be
made by the CEO with the approval of the Compensation Committee of the Board
of Directors (“Compensation Committee”).





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, operating income and On-Demand annual contract values
before stock based compensation and other income. Overall Company performance
for Callidus will be measured against the targets as established by the Board
of Directors. The Board of Directors will select and approve the financial
targets based on the business priorities for the fiscal year.





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 of Directors bases the pool on Callidus’ financial
performance for the applicable period 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.




 









 












Exhibit 10.25











Executive Incentive Bonus Plan




Award Payout by Position





	 	 	 	Bonus payout amounts are determined and approved at the beginning of the
calendar year and reviewed again at the half year by the Compensation
Committee. The bonus payouts range from 75% — 100% of base salary based on
position and market analysis.





Award Approval





	 	 	 	Upon the close of each applicable quarter, 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 applicable quarterly 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 maintains the discretion to determine any funding
of the plan if the Company’s performance does not meet the minimum threshold.





Administration





	 	 	 	Senior executives 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 after final
performance results are 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. Executives will be notified of any plan changes.




 









 











Exhibit 10.25











Executive Incentive Bonus Plan




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