exv10w20



 





EXHIBIT 10.20




CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS DOCUMENT




INTERWOVEN, INC.

2007 EXECUTIVE OFFICER INCENTIVE BONUS PLAN




          Interwoven, Inc. (the “Company”), a Delaware corporation, hereby establishes this 2007
Executive Officer Incentive Bonus Plan (the “Plan”) effective as of January 1, 2007, in order to
advance the interests of the Company and its stockholders by providing an incentive for designated
executive officers of the Company to achieve the Company’s total revenue and non-GAAP operating
income targets for the year ending December 31, 2007.




     1. DEFINITIONS AND CONSTRUCTION.



          1.1 Definitions. Whenever used herein, the following terms shall have their respective
meanings set forth below:





          1.1.1 “Actual Non-GAAP Operating Income” for any Bonus Period means the Company’s
operating income for such Bonus Period computed in accordance with generally accepted
accounting principles less the impact of amortization of intangible assets; stock-based
compensation charges; restructuring, excess facilities and new headquarters related charges;
costs associated with the review of the Company’s historical stock option granting
procedures and other non-recurring items, net of the related tax impact. Actual Non-GAAP
Operating Income is after accruing for the Quarterly Bonus and Annual Bonus due Participants
under the Plan. Other non-recurring items to be excluded from operating income for purposes
of computing actual non-GAAP operating income are subject to the review and approval of the
Compensation Committee.




          1.1.2 “Plan Operating Income Target” means any one of the non-GAAP operating income
targets set forth in Exhibit A hereto.




          1.1.3 “Actual Revenues” for any Bonus Period means the Company’s total license,
support, service and training revenues for such Bonus Period as reported in the Company’s
Financial Statements.




          1.1.4 “Annual Bonus” means the cash bonus payable pursuant to Section 4.2.




          1.1.5 “Bonus Period” means, with respect to the Annual Bonus, the year ended December
31, 2007 and, with respect to any Quarterly Bonus, the calendar quarter of 2007 with respect
to which such Quarterly Bonus is to be calculated.




          1.1.6 “Committee” means the Compensation Committee of the Board of Directors of the
Company.




          1.1.7 “Financial Statements” means, with respect to the Annual Bonus, the Company’s
audited consolidated financial statements for the year ending December 31,


***Confidential treatment has been requested with respect to the information contained within the
“[***]” markings. Such marked portions have been omitted from this filing and have been filed
separately with the Securities and Exchange Commission.




 









 









2007 as filed by the Company with the Securities and Exchange Commission on Form 10-K and,
with respect to any Quarterly Bonus, the Company’s unaudited condensed consolidated
financial statements for the calendar quarter with respect to which such Quarterly Bonus is
to be calculated, as filed by the Company with the Securities and Exchange Commission on
Form 10-Q in the case of the calendar quarters ending March 31, 2007, June 30, 2007 and
September 30, 2007 and as filed by the Company with the Securities and Exchange Commission
on Form 10-K in the case of the calendar quarter ending December 31, 2007.




          1.1.8 “MBO” means those quarterly or annual objectives established by the Committee or
the Company’s Chief Executive Officer for the participant.




          1.1.9 “Participant” means an executive officer of the Company who has been designated
by the Committee as a Participant in the Plan.




          1.1.10 “Plan Revenue Target” means the revenue targets set forth in Exhibit B hereto.




          1.1.11 “Quarterly Bonus” means the bonus that is due pursuant to Section 4.1.




          1.1.12 “Target Bonus” means the amounts set forth in Exhibit C hereto. The Target
Bonus may be divided into components. The Company Performance Target Bonus refers to the
amount of the Participant’s Target Bonus allocated to computations defined in Section 4 of
this Plan. The MBO Target Bonus refers to the amount of the Participant’s Target Bonus
allocated to the Participants’ MBO Target Bonus as defined in Section 5 of the Plan.



     2. ADMINISTRATION.



          The Plan shall be administered by the Committee. Subject to the general purposes, terms and
conditions of the Plan, the Committee shall have authority to implement and carry out the Plan
including authority to construe and interpret the Plan. All questions of interpretation or
construction of the Plan shall be determined by the Committee.




     3. ELIGIBILITY.



          A Participant shall be eligible for a Quarterly Bonus only if he or she is actively employed
by the Company throughout the entirety of the corresponding Bonus Period. A Participant shall be
eligible for a pro rated Annual Bonus (based on the full quarters that such Participant was
employed) only if he or she is actively employed by the Company for at least two full quarterly
Bonus Periods during 2007 and such Participant is employed by the Company on December 31, 2007.




     4. COMPANY PERFORMANCE BONUS AND PAYMENT.



          The portion of the Participant’s Target Bonus allocated to the Company Performance Bonus is
designated on Exhibit C to this Plan.




          4.1 Quarterly Bonus.




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          4.1.1 Subject to the provisions of Section 4.4 below, each Participant who meets the
bonus eligibility requirements of Section 3 above shall receive a Quarterly Bonus for each
calendar quarter in 2007 equal to twenty percent (20%) of the Participant’s Company
Performance Target Bonus multiplied by the applicable bonus percentage determined under
Section 4.3 below.




          4.1.2 Each Quarterly Bonus shall be paid on the basis of results shown in the Company’s
press release announcing its financial results for such quarter, in cash, in a single lump
sum, subject to all applicable employment and income tax withholding, within thirty (30) days
after both of the following conditions have occurred: (a) the Company’s independent
registered public accounting firm has completed a review of the Company’s records for the
Bonus Period and have submitted a report thereon to the Audit Committee of the Company’s
Board of Directors, and (b) the Company has issued a press release announcing its financial
results for such quarter.




          4.1.3 In the event that the results set forth in the Financial Statements for a
quarterly Bonus Period are different than those that formed the basis for the calculation of
the Quarterly Bonus for such Bonus Period pursuant to Section 4.1.2 above, the amount of the
Quarterly Bonus for such Bonus Period shall be adjusted using the results set forth in the
Financial Statements for such Bonus Period and (a) each Participant shall be required to
return to the Company, on term acceptable to the Committee, any amount that has become an
over-payment as a result of the adjustment, net of applicable taxes, and (b) the Company
shall pay within thirty (30) days of determining any such adjustment, any amounts that ought
to have been made to each Participant.




          4.1.4 The maximum Quarterly Bonus payment for any such quarterly Bonus Period is limited
to 150% of the quarterly allocation of the Company Performance Target Bonus for each
Participant. To the extent that the Quarterly Bonus earned is greater than 150% (“Excess
Quarterly Bonus”), the amount due in excess of 150% will be deferred pending the announcement
of financial results for the full year. If the Annual Bonus is equal to or greater than a
100% Annual Bonus pay-out (computed based on actual results without regards to the 150% cap),
the Excess Quarterly Bonus will be added to the Annual Bonus and paid with the Annual Bonus
in accordance with the provisions of Section 4.2. If the Annual Bonus is computed to be less
than a 100% pay-out (computed based on actual results without regards to the 150% cap), the
Excess Quarterly Bonus will be forfeited.



          4.2 Annual Bonus.





          4.2.1 Each Participant who meets the bonus eligibility requirements of Section 3 above
shall receive an Annual Bonus equal to twenty percent (20%) of the Participant’s Company
Performance Target Bonus multiplied by the applicable bonus percentage determined under
Section 4.3 below. The Annual Bonus will be the sum of the (Q1 Applicable Bonus Percentage
times 25%) plus (Q2 Applicable Bonus Percentage times 25%) plus (Q3 Applicable Bonus
Percentage times 25%) plus (Q4 Applicable Bonus Percentage times 25%).




          4.2.2 Each Annual Bonus shall be paid upon the announcement in a press release of the
Company’s fourth quarter and annual financial results for the year ending



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December 31, 2007, in cash, in a single lump sum, subject to all applicable employment and
income tax withholding, within thirty (30) days after both of the following have occurred:
(a) the Company’s independent registered public accounting firm has completed an audit of
the Company’s financial results for the year ending December 31, 2007 and have submitted a
report thereon to the Audit Committee of the Company’s Board of Directors, and (b) the
Company has issued a press release announcing its financial results for such year.




          4.2.3 In the event that the results set forth in the Financial Statements for the
annual Bonus Period are different than those that formed the basis for the calculation of an
Annual Bonus pursuant to 4.2.2 above, the amount of the Annual Bonus shall be adjusted using
the results set forth in the Financial Statements and (a) each Participant shall be required
to return to the Company, on term acceptable to the Committee, any amount that has become an
over-payment as a result of the adjustment, and (b) the Company shall pay within thirty (30)
days of determining any such adjustment, any amounts that ought to have been made to each
Participant.



          4.3 Applicable Bonus Percentage. The applicable bonus percentage shall be calculated as
follows:





50% (Revenue Achievement Percentage) + 50% (Operating Income Achievement Percentage)




          4.3.1 The Revenue Achievement Percentage for any Bonus Period shall be a function of
the extent to which Actual Revenues for the period meet or exceed the Plan Revenue Target
for the period, determined as follows:



	 	 	 
	If Actual Revenues Are:

	 	The Applicable Bonus Percentage Is:
	 
	 	 
	Less than 90% of the Plan Revenue
Target

	 	0%
	 
	 	 
	90% of the Plan Revenue Target

	 	60%
	 
	 	 
	91% to 95% of the Plan Revenue
Target

	 	60% plus 2% for each 1% by which
Actual Revenues exceed 90% of the Plan
Revenue Target.
	 
	 	 
	96% to 100% of the Plan Revenue
Target

	 	70% plus 6% for each 1% by which
Actual Revenues exceed 95% of the Plan
Revenue Target.
	 
	 	 
	101% to 102% of the Plan Revenue
Target

	 	100%
	 
	 	 
	103% to 105% of the Plan Revenue
Target

	 	100% plus 3% for each 1% by which
Actual Revenues exceed 102% of the Plan
Revenue Target.
	 
	 	 
	106% to 110% of the Plan Revenue
Target

	 	110% plus 5% for each 1% by which
Actual Revenues exceed 105% of the Plan
Revenue Target.
	 
	 	 
	110% or greater of the Plan
Revenue Target

	 	135% plus 7.5% for each 1% by which
Actual Revenues exceed 110% of the Plan
Revenue Target, up to 300%. In no event
will the Revenue Achievement Percentage
exceed 300%.






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          4.3.2 The Operating Income Achievement Percentage for any Bonus Period shall be a
function of the extent to which Actual Non-GAAP Operating Income for the period meet or
exceed the Plan Operating Income Target for the period, determined as follows:



	 	 	 
	If
Actual Non-GAAP Operating Income is:

	 	The Applicable Bonus Percentage Is:
	 
	 	 
	Greater than $1 million below the Plan
Operating Income Target.

	 	0%
	 
	 	 
	At $1 million below the Plan Operating
Income Target.

	 	60%
	 
	 	 
	$1 million below to $500,000 below the
Plan Operating Income Target.

	 	60% plus 3% for each full $100,000
increment by which Actual Non-GAAP
Operating Income exceed $1 million
below the
Plan Operating Income Target.
	 
	 	 
	$500,000 below to the Plan Operating
Income Target.

	 	75% plus 5% for each full $100,000
increment by which Actual Non-GAAP
Operating Income exceed $500,000
below the
Plan Operating Income Target.
	 
	 	 
	At Plan Operating Income Target plus
each full increment of $100,000 in
excess of Plan Operating Income Target
up to $500,000
above plan.

	 	100% plus 1% for each $100,000 full
increment by which Actual Non-GAAP
Operating Income exceed 100% the Plan
Operating Income Target.
	 
	 	 
	At $500,000 above Plan Operating
Income Target plus each full increment of
$100,000 in excess of Plan Operating
Income
Target up to $1 million above plan.

	 	105% plus 2% for each $100,000 full
increment by which Actual Non-GAAP
Operating Income exceed $500,000
above the
Plan Operating Income Target.
	 
	 	 
	At $1 million or greater above Plan
Operating Income Target plus each full
increment of $100,000 in excess of
Plan Operating Income Target.

	 	115% plus 4% for each $100,000 full
increment by which Actual Non-GAAP
Operating Income exceed $1 million
above the Plan  Operating Income Target,
 up to 300%. In
no event will the Operating Income
Achievement Percentage exceed 300%.







          4.3.3 Percentages used in the computation of the Revenue Achievement Percentage and the
Operating Income Achievement Percentage shall be rounded to the nearest whole percentage.



          4.4 The Company’s Chief Executive Officer (“CEO”) may review each Participant’s performance
during the applicable Bonus Period and may recommend to the Committee increasing or decreasing the
Participant’s Quarterly Bonus or Annual Bonus. The determination of whether to make any recommended
adjustment shall be in the sole discretion of the Committee.




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     5. MBO BONUS AND PAYMENT.



          The portion of the Participant’s Target Bonus allocated to the MBO Target Bonus is designated
on Exhibit C to this Plan. MBO’s may be established on a quarterly or annual basis. Either the
Company’s Chief Executive Officer or Chief Financial Officer is responsible for monitoring MBO’s
and reporting completed MBO’s to the Committee. Bonus amounts associated with MBO’s will generally
be paid with any Quarterly Bonus or Annual Bonus due under Section 4.1 and Section 4.2 above. If no
Quarterly or Annual Bonus is due, the bonus amount due under this Section will be paid no later
than 45 days following the end of the quarterly period in which the MBO was successfully completed.




     6. AMENDMENT OF PLAN.



          The Plan may be modified or amended at any time by the Committee or the Company’s Board of
Directors; provided, however, that no amendment may increase any Plan Revenue Target or increase
any Plan Operating Income Target without the consent of the Participants.




     7. MISCELLANEOUS.



          7.1 No Assignment. The right of any Participant or any other person to the payment of any
benefits under this Plan shall not be assigned, transferred, pledged or encumbered.




          7.2 Successors. This Plan shall be binding upon and inure to the benefit of the Company, its
successors and assigns and the Participant and his or her heirs, executors, administrators and
legal representatives.




          7.3 No Employment Agreement. Nothing contained herein shall be construed as conferring upon
any Participant the right to continue in the employ of the Company as an employee.




          7.4 Arbitration. Any dispute or claim relating to or arising out of this Plan shall be fully
and finally resolved by binding arbitration conducted by the American Arbitration Association in
Santa Clara County, California.




          7.5 Governing Law. This Plan shall be construed in accordance with and governed by the laws of
the State of California.




          7.6 Entire Agreement. This Agreement constitutes the entire agreement between the parties
regarding the subject matter hereto and supercedes any prior or contemporaneous agreements, whether
oral or written regarding such subject matter.




Adopted by the Compensation Committee, effective as of January 1, 2007.




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Exhibit A




Non-GAAP Operating Income Targets for 2007




	 	 	 	 	 
	 	 	Plan Operating	 
	Period	 	Income Target	 
	Quarter ended March 31, 2007
	 	$	[***]	 
	Quarter ended June 30, 2007
	 	 	[***]	 
	Quarter ended September 30, 2007
	 	 	[***]	 
	Quarter ended December 31, 2007
	 	 	[***]	 
	 
	 	 	 
	Year ended December 31, 2007
	 	$	[***]	 
	 
	 	 	 






Exhibit B




Plan Revenue Targets for 2007




	 	 	 	 	 
	Period	 	Plan Revenue Target	 
	 	 	(in millions)	 
	Quarter ended March 31, 2007
	 	$	[***]	 
	Quarter ended June 30, 2007
	 	 	[***]	 
	Quarter ended September 30, 2007
	 	 	[***]	 
	Quarter ended December 31, 2007
	 	 	[***]	 
	 
	 	 	 
	Year ended December 31, 2007
	 	$	[***]	 
	 
	 	 	 





***Confidential treatment has been requested with respect to the information contained within the
“[***]” markings. Such marked portions have been omitted from this filing and have been filed
separately with the Securities and Exchange Commission.




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Exhibit C




Target Bonuses for 2007




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Company	 	 	 	 
	 	 	 	 	 	 	Performance	 	MBO	 	 
	 	 	Target	 	Target	 	Target	 	Commission
	Participant	 	Bonus	 	Bonus	 	Bonus	 	Plan
	John Calonico
	 	$	138,000	 	 	$	100,000	 	 	$	38,000	 	 	$	—	 
	Max Carnecchia (1)
	 	$	275,000	 	 	$	—	 	 	$	—	 	 	$	275,000	 
	Ben Kiker
	 	$	110,000	 	 	$	80,000	 	 	$	30,000	 	 	$	—	 
	Steve Martello (2)
	 	$	200,000	 	 	$	—	 	 	$	40,000	 	 	$	160,000	 
	Rafiq Mohammadi
	 	$	116,000	 	 	$	84,000	 	 	$	32,000	 	 	$	—	 
	David Nelson-Gal
	 	$	108,000	 	 	$	76,000	 	 	$	32,000	 	 	$	—	 








 




			
	(1)	 	Mr. Carnecchia’s Target Bonus is based on a separate Sales Compensation Plan.
	 
	(2)	 	Of Mr. Martello’s Target Bonus, $40,000 based on specific MBO objectives and $160,000 is
based on a separate Sales Compensation Plan.






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