exv10w22



 






Exhibit 10.22









Virage Logic Corporation

FY2006 Bonus Plan




 









 








1.
Purpose





	 	 	 	The Virage Logic Corporation FY 2006 Bonus Plan (the “Plan”) is intended to: (i) enhance
shareholder value by promoting strong linkages between employee contributions and company
performance; (ii) support achievement of the business objectives of Virage Logic Corporation
and its subsidiaries (the “Company”); and (iii) promote retention of employees.





2.
Effective Date





	 	 	 	This Plan is only effective for the Company’s 2006 fiscal year beginning October 1, 2005,
through September 30, 2006 (the “Fiscal Year”). This Plan is limited in time and will expire
automatically on September 30, 2006 (“Expiration Date”). This Plan also supersedes all prior
bonus or commission incentive plans, whether with the Company or any subsidiary or affiliate
thereof, or any written or verbal representations regarding the subject matter of this Plan.





3.
Administration





	 	(a)	 	The Plan shall be administered by the Compensation Committee of the Board of
Directors of the Company (the “Administrator”). The Administrator shall have all powers
and discretion necessary or appropriate to administer the Plan and to control its
operation, including, but not limited to, the power to (a) determine which employees are
eligible to participate in the plan, (b) prescribe the terms and conditions of Payouts
(as further defined in Section 5 below, the “Payouts”), (c) interpret the Plan and the
Payouts, (d) adopt rules for the administration, interpretation and application of the
Plan as are consistent therewith, and (e) interpret, amend or revoke any such rules.
The Chief Financial Officer, Vice President, Human Resources and the Controller will be
responsible for implementing the Plan.
	 
	 	(b)	 	All determinations and decisions made by the Administrator, the Board, and any
delegate of the Administrator pursuant to the provisions of the Plan shall be final,
conclusive, and binding on all persons, and shall be given the maximum deference
permitted by law.
	 
	 	(c)	 	The Administrator, in its sole discretion and on such terms and conditions as it
may provide, may delegate all or part of its authority and powers under the Plan to one
or more directors and/or officers of the Company.
	 
	 	(d)	 	The Company shall provide a summary description of the Plan to each Participant
(as defined in Section 4) The Company will provide Participants in the plan quarterly
updates through an employee communications meeting on progress toward achievement of the
Company’s operating profits targets.





4.
Eligibility





	 	 	 	Any full-time regular employee of the Company in the U.S. may be eligible to participate in
this Plan, provided he or she is designated by the Administrator as a participant and as to
whom the Administrator has not, in its sole discretion, withdrawn such designation (a
“Participant”) and he or she meets all the following conditions:






	 	a.	 	is employed by the Company as a full-time regular employee on the last
day of the fiscal year;
	 
	 	b.	 	is not concurrently participating in a sales incentive or commission
plan, or in any other MBO bonus plan provided by the Company with the exception of
special extraordinary project bonus programs ;
	 
	 	c.	 	employees who begin employment or otherwise become eligible for
participation will do so on a pro-rated basis based on complete weeks.
	 
	 	d.	 	has not transferred to a position with the Company that either (1) is not
eligible for participation in the Plan (as determined in the Administrator’s sole
discretion), or (2) is eligible for participation in another bonus program offered
by the Company; and




 









 






	 	e.	 	is not subject to a performance improvement plan or other disciplinary
actions
	 
	 	f.	 	If at any time during the fiscal year a participant does not provide
services to the Company due to a medical leave of absence, family leave or
disability, this time away will not be subtracted from their bonus calculation.
However, time away due to personal leave of absence will be subtracted from their
bonus calculation.





5.
Plan Metrics




The Payout under this Plan for each Participant will be calculated based upon the
following formula:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Base
	 	 	 	Incentive Target
	 	 	 	Total Bonus
	 	 	 	Bonus
	 	 	 	Total
	Salary
	 	X
	 	Percentage
	 	÷
	 	Target Amount
	 	X
	 	Pool
	 	=
	 	Payout







	 	 	 	The Base Salary is the base salary actually paid to the employee in the fiscal year for which
a Payout is calculated. Not including any payments for overtime or expenses.
	 
	 	 	 	Bonus Pool is a maximum of 10% of cumulative Pre-Bonus Operating Income.
	 
	 	 	 	Incentive Target Percentage is a percentage determined by the Administrator according to
employee grade level
	 
	 	 	 	Pre-Bonus Operating Income is US GAAP Operating Income excluding charges associated with
bonuses determined under this Plan, if any.
	 
	 	 	 	Total Bonus Target Amount is determined by aggregating each Participant’s total potential
bonus amount (each Participant’s Base Salary multiplied by such Participant’s Incentive
Target Percentage).





6.
Timing and Form of Payment of Payouts





	 	 	 	Subject to the terms and conditions of this Plan, Payouts shall be made on an annual basis in
the first paycheck after the public announcement of financial results for the Company’s
fiscal year. No Payouts will be made if Pre-Bonus Operating Income is below 50% of the
annually Operating Plan target.





7.
Plan Changes; No Entitlement





	 	 	 	The Compensation Committee of the Board may at any time amend, suspend, or terminate this
Plan, including it may amend the Plan so as to ensure that no amount paid or to be paid
hereunder shall be subject to the provision of Internal Revenue Code Section 409A(a)(1)(B).
Nothing in this Plan is intended to create an entitlement to any employee for any incentive
payment hereunder.





8.
General Provisions





	 	(a)	 	Tax Withholding. The Company shall withhold all applicable taxes from
any Payout, including any federal, state and local taxes.
	 
	 	(b)	 	No Effect on Employment or Service. Nothing in the Plan shall interfere
with or limit in any way the right of the Company to terminate any Participant’s
employment or service at any time, with or without cause. Employment with the Company
is on an at-will basis only. The Company expressly reserves the right, which may be
exercised at any time, to terminate any individual’s employment with or without cause
without regard to the effect it might have upon him or her as a Participant under this
Plan.
	 
	 	(c)	 	Nontransferability of Awards. No award granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than
by will or by the laws of descent and distribution. All rights with respect to an award
granted to a Participant shall be available during his or her lifetime only to the
Participant.




 









 






	 	(d)	 	Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if the
illegal or invalid provision had not been included.
	 
	 	(e)	 	Governing Law. The Plan and all awards shall be construed in accordance
with and governed by the laws of the State of California, but without regard to its
conflict of law provisions.
	 
	 	(f)	 	Entire Agreement. This Plan, and any resolutions of the Compensation
Committee of the Board amending the Plan, is the entire understanding between the
Company and the employee regarding the subject matter of this Plan and supersedes all
prior bonus or commission incentive plans, or employment contracts whether with any
subsidiary, or affiliate thereof (including Virage Logic Corporation) or any written or
verbal representations regarding the subject matter of this Plan. Participation in this
Plan during the Fiscal Year will not convey any entitlement to participate in this or
future plans or to the same or similar bonus benefits. Payments under this Plan are an
extraordinary item of compensation that is outside the normal or expected compensation
for the purpose of calculating any extra benefits, termination, severance, redundancy,
end-of-service premiums, bonuses, long-service awards, overtime premiums, pension or
retirement benefits or other similar payment.