exv10w33



 






Exhibit 10.33





Executive Incentive Plan




Overview and Purpose





Callidus’s incentive plan was created as a means to recognize and reward the link between
the achievement of Callidus’s corporate objectives and the executive’s contribution to this
success. The plan is designed to motivate executives to achieve performance goals by placing
compensation “at risk” based on performance. The specific purpose of the plan is to:




	 	•  	Align the risks/rewards for the senior management team to achieve
Callidus’ top business priorities, and
	 
	 	•  	Motivate and retain executives by providing above market
compensation opportunities for achieving stretch goals.






The plan aligns Callidus’ business strategy and human resources strategies to motivate,
develop, retain and competitively compensate executives based on performance.



Objectives





Our incentive plan supports our compensation philosophy and guiding principles by meeting
four primary objectives:




	 	•  	Provide competitive total pay opportunities that help attract,
reward and retain executives.
	 
	 	•  	Establish a direct link between operational performance that creates
shareholder value and individual performance and rewards.
	 
	 	•  	Create a sense of focus and accountability through the development
of specific objectives.
	 
	 	•  	Align interests and objectives of shareholders and executives to
drive Company growth and stock appreciation.





Performance Period





The fiscal year is divided into two, six-month performance periods, January to June and
July to December.



Eligibility and Participation





Executives who are employed at the end of the performance period are considered eligible
to participate and receive an award under the plan. An executive must be in good performance
standing to be eligible for any award under the plan.



Performance Measures





The Plan rewards performance as measured against Callidus’ financial performance and
individual performance as measured against a pre-defined set of objectives (MBOs) (e.g., financial
contribution, product/ project deliverables/ improvement, etc.). Overall company



 









 





Executive Incentive Plan





performance for Callidus will be measured versus plan as approved by the Board of
Directors. The Compensation Committee of the Board will select and approve the financial measures
based on the business priorities for the fiscal year. Measures may include revenue, revenue
growth, operating income, net income, return on investment, cash from operations, or any financial
metric deemed appropriate for the business year. In the first year of the Plan, the metrics will
be revenue and operating income for measuring company performance. Exhibit A attached to the Plan
provides the performance levels for the first operating period under the plan. Individual
performance measures will be determined by the Callidus CEO in conjunction with each executive. The
Callidus CEO will determine the level of attainment at the end of the period and submit his (her)
findings to the Compensation committee for their review and final approval.



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 metrics approved in the business plan.




The company must meet a minimum level of performance, referred to as the threshold, to
initiate funding in the pool. Threshold performance is met when the company has achieved
approximately 75 to 85% of plan based on the specific financial metrics. Company performance
represents 75% of the funding pool for the plan.




The remaining portion of the pool is based on individual performance that is weighted 25% of
the target incentive opportunity for each eligible position. (See Individual Awards below)




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 assuming 100% achievement of individual performance levels.



Determining Individual Awards





Once the award pool is funded, the CEO completes the semi-annual performance review
process for each executive and reviews with the Compensation Committee to determine the executive’s
performance versus his or her MBO’s. Individual performance award payouts may range from 0% to 25%
of the target incentive opportunity based on the executive’s performance as assessed in the review
process. Seventy-five percent of the individual’s award is based on the company’s performance
against the pre-approved financial metrics identified in Exhibit “A”.




This approach is consistent with Callidus’ commitment to a pay-for-performance philosophy and
culture. Callidus’ Board of Directors maintains the discretion to determine any funding of the
plan if the company’s performance does not meet threshold levels or if the company significantly
exceeds plan.



 









 





Executive Incentive Plan




Administration





An executive must be with the company 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.




Awards will be paid as soon as possible following the close of the performance period and once
final performance is know for the company and approved by the Board of Directors. 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