EX-10.01






Exhibit 10.01




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Employee Info
	Last Name	 	First Name		Title	 	On Quota Date	 	Manager	 	Variable	 	Salary	 	Currency
	Mosher
	 	Kevin
	 	Senior Vice
President,
Worldwide Field
Operations
	 	5/1/2009
	 	Tom Reilly
	 	$200,000
	 	$300,000
	 	USD






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Targets	 
	 	 	Q1’09	 	 	Q2’09	 	 	Q3’09	 	 	Q4’09	 	 	FY09	 
	Revenue Target
	 	 	36,147,727	 	 	 	40,510,933	 	 	 	44,809,973	 	 	 	49,039,649	 	 	 	170,508,282	 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Comp Plan Structure
	 	 	 	 	 	 	Target Variable	 	 	 	 	 	 	 	 
	Revenue
	 	 	 	 	 	$	120,000	 	 	 	60	%	 	 	 	 
	Quarterly Revenue Bonus
	 	 	 	 	 	$	40,000	 	 	 	20	%	 	 	 	 
	Margin Contribution
	 	 	 	 	 	$	40,000	 	 	 	20	%	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Variable
	 	 	 	 	 	$	200,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	
payout for each %	 	 	 	 	 	 	 	 
	Revenue Commission Payout
	 	 	0-90%		 	$	0.00	 	 	 	 	 	 	 	 	 
	 
	 	 	90-95%		 	$	250.00	 	 	target payout @ 90%:	 	 	75	%
	 
	 	 	95-100%		 	$	1,250.00	 	 	 	 	 	 	 	 	 
	 
	 	 	100-105%		 	$	3,000.00	 	 	100-105% multiplier:	 	 	10	 
	 
	 	 	105-110%		 	$	6,000.00	 	 	105-110% multiplier:	 	 	20	 
	 
	 	 	>110%		 	$	6,000.00	 	 	>110% multiplier:	 	 	20	 
	 
	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 		 	
payout for each % above Quota	 	 	 	 	 	 	 	 
	Quota Bonus
	 	 	100-105%		 	$	1,000.00	 	 	100-105% multiplier:	 	 	10	 
	 
	 	 	>105		 	$	2,000.00	 	 	>105% multiplier:	 	 	20	 
	 
	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 
	Margin Contribution Bonus Multipliers
	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	>100 -£105%		 	 	2.30	 	 	 	 	 	 	 	 	 
	 
	 	 	>105 - <115%		 	 	3.50	 	 	 	 	 	 	 	 	 
	 
	 	 	3115%		 	 	4.00	 	 	 	 	 	 	 	 	 






	 	 	 	 	 
	Exchange Rates	 
	USD
	 	 	1.000	 
	CAD
	 	 	1.0135	 
	GBP
	 	 	0.5046	 
	EUR
	 	 	0.6407	 
	SGD
	 	 	1.361	 
	HKD
	 	 	7.7919	 
	CNY
	 	 	6.9958	 
	JPY
	 	 	104.053	 






 









 





	 	 	 	 	 	 	 
	
	FY10 Sales Compensation Plan


	Name: 

Title:

	 	Kevin Mosher

Senior Vice President, Worldwide Field Operations
	 	On Quota Date:

Manager:
	 	5/1/2009

Tom Reilly







			
	Revenue Target	 	As provided in the ArcSight FY 2010 internal operating plan.





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenue Commissions	 	 	 	 	 	Q1	 	 	Q2	 	 	Q3	 	 	Q4	 	 	 	 	 
	 
	 	 	0 - £90%		 	$	0	 	 	$	0	 	 	$	0	 	 	$	0	 
	 
	 	 	>90 - £95%		 	$	250	 	 	$	250	 	 	$	250	 	 	$	250	 
	 
	 	 	>95 -
£100%	 	 	$	1,250	 	 	$	1,250	 	 	$	1,250	 	 	$	1,250	 
	 
	 	 	>100 - £105%	 	 	$	3,000	 	 	$	3,000	 	 	$	3,000	 	 	$	3,000	 
	 
	 	 	>105%	 	 	$	6,000	 	 	$	6,000	 	 	$	6,000	 	 	$	6,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Q1	 	 	Q2	 	 	Q3	 	 	Q4	 	 	FY09	 
	Quarterly Revenue Bonus
	 	 	 	 	 	$	10,000	 	 	$	10,000	 	 	$	10,000	 	 	$	10,000	 	 	$	40,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Margin Contribution Bonus	 	 	Q1	 	 	Q2	 	 	Q3	 	 	Q4	 	 	 	 	 
	 
	 	 	100%		 	$	10,000	 	 	$	10,000	 	 	$	10,000	 	 	$	10,000	 
	 
	 	 	>100 - £105%	 	 	$	23,000	 	 	$	23,000	 	 	$	23,000	 	 	$	23,000	 
	 
	 	 	>105 - £115%	 	 	$	35,000	 	 	$	35,000	 	 	$	35,000	 	 	$	35,000	 
	 
	 	 	>115%		 	$	40,000	 	 	$	40,000	 	 	$	40,000	 	 	$	40,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Target Earnings	 	 	 	 	 	Q1	 	 	Q2	 	 	Q3	 	 	Q4	 	 	FY09	 
	Salary
	 	 	 	 	 	$	75,000	 	 	$	75,000	 	 	$	75,000	 	 	$	75,000	 	 	$	300,000	 
	Revenue Commission
	 	 	 	 	 	$	30,000	 	 	$	30,000	 	 	$	30,000	 	 	$	30,000	 	 	$	120,000	 
	Quarterly Revenue Bonus
	 	 	 	 	 	$	10,000	 	 	$	10,000	 	 	$	10,000	 	 	$	10,000	 	 	$	40,000	 
	Margin Contribution Bonus
	 	 	 	 	 	$	10,000	 	 	$	10,000	 	 	$	10,000	 	 	$	10,000	 	 	$	40,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Compensation
	 	 	 	 	 	$	125,000	 	 	$	125,000	 	 	$	125,000	 	 	$	125,000	 	 	$	500,000	 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	% of Target	 
	Earnings Above Quota	 	100%	 	 	105%	 	 	110%	 	 	115%	 
	Salary
	 	$	300,000	 	 	$	300,000	 	 	$	300,000	 	 	$	300,000	 
	Revenue Commission
	 	$	120,000	 	 	$	180,000	 	 	$	300,000	 	 	$	420,000	 
	Quarterly Revenue Bonus
	 	$	40,000	 	 	$	40,000	 	 	$	40,000	 	 	$	40,000	 
	Margin Contribution Bonus
	 	$	40,000	 	 	$	92,000	 	 	$	140,000	 	 	$	140,000	 
	 	 	 
	Total Compensation
	 	$	500,000	 	 	$	612,000	 	 	$	780,000	 	 	$	900,000	 






 









 





FY09 Earnings:




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Quarterly	 	Annual
	 	 	% of quota	 	Commissions	 	Quarterly Rev Bonus	 	Margin Bonus	 	Total Variable	 	Salary	 	Variable	 	Total
	 
	 	 	90	%	 	$	0	 	 	$	0	 	 	$	0	 	 	$	0	 	 	$	300,000	 	 	$	0	 	 	$	300,000	 
	 
	 	 	91	%	 	$	22,750	 	 	$	0	 	 	$	0	 	 	$	22,750	 	 	$	300,000	 	 	$	91,000	 	 	$	391,000	 
	 
	 	 	92	%	 	$	23,000	 	 	$	0	 	 	$	0	 	 	$	23,000	 	 	$	300,000	 	 	$	92,000	 	 	$	392,000	 
	 
	 	 	93	%	 	$	23,250	 	 	$	0	 	 	$	0	 	 	$	23,250	 	 	$	300,000	 	 	$	93,000	 	 	$	393,000	 
	 
	 	 	94	%	 	$	23,500	 	 	$	0	 	 	$	0	 	 	$	23,500	 	 	$	300,000	 	 	$	94,000	 	 	$	394,000	 
	 
	 	 	95	%	 	$	23,750	 	 	$	0	 	 	$	0	 	 	$	23,750	 	 	$	300,000	 	 	$	95,000	 	 	$	395,000	 
	 
	 	 	96	%	 	$	25,000	 	 	$	0	 	 	$	0	 	 	$	25,000	 	 	$	300,000	 	 	$	100,000	 	 	$	400,000	 
	 
	 	 	97	%	 	$	26,250	 	 	$	0	 	 	$	0	 	 	$	26,250	 	 	$	300,000	 	 	$	105,000	 	 	$	405,000	 
	 
	 	 	98	%	 	$	27,500	 	 	$	0	 	 	$	0	 	 	$	27,500	 	 	$	300,000	 	 	$	110,000	 	 	$	410,000	 
	 
	 	 	99	%	 	$	28,750	 	 	$	0	 	 	$	0	 	 	$	28,750	 	 	$	300,000	 	 	$	115,000	 	 	$	415,000	 
	 
	 	 	100	%	 	$	30,000	 	 	$	10,000	 	 	$	10,000	 	 	$	50,000	 	 	$	300,000	 	 	$	200,000	 	 	$	500,000	 
	 
	 	 	101	%	 	$	33,000	 	 	$	10,000	 	 	$	23,000	 	 	$	66,000	 	 	$	300,000	 	 	$	264,000	 	 	$	564,000	 
	 
	 	 	102	%	 	$	36,000	 	 	$	10,000	 	 	$	23,000	 	 	$	69,000	 	 	$	300,000	 	 	$	276,000	 	 	$	576,000	 
	 
	 	 	103	%	 	$	39,000	 	 	$	10,000	 	 	$	23,000	 	 	$	72,000	 	 	$	300,000	 	 	$	288,000	 	 	$	588,000	 
	 
	 	 	104	%	 	$	42,000	 	 	$	10,000	 	 	$	23,000	 	 	$	75,000	 	 	$	300,000	 	 	$	300,000	 	 	$	600,000	 
	 
	 	 	105	%	 	$	45,000	 	 	$	10,000	 	 	$	23,000	 	 	$	78,000	 	 	$	300,000	 	 	$	312,000	 	 	$	612,000	 
	 
	 	 	106	%	 	$	51,000	 	 	$	10,000	 	 	$	35,000	 	 	$	96,000	 	 	$	300,000	 	 	$	384,000	 	 	$	684,000	 
	 
	 	 	107	%	 	$	57,000	 	 	$	10,000	 	 	$	35,000	 	 	$	102,000	 	 	$	300,000	 	 	$	408,000	 	 	$	708,000	 
	 
	 	 	108	%	 	$	63,000	 	 	$	10,000	 	 	$	35,000	 	 	$	108,000	 	 	$	300,000	 	 	$	432,000	 	 	$	732,000	 
	 
	 	 	109	%	 	$	69,000	 	 	$	10,000	 	 	$	35,000	 	 	$	114,000	 	 	$	300,000	 	 	$	456,000	 	 	$	756,000	 
	 
	 	 	110	%	 	$	75,000	 	 	$	10,000	 	 	$	35,000	 	 	$	120,000	 	 	$	300,000	 	 	$	480,000	 	 	$	780,000	 
	 
	 	 	111	%	 	$	81,000	 	 	$	10,000	 	 	$	35,000	 	 	$	126,000	 	 	$	300,000	 	 	$	504,000	 	 	$	804,000	 
	 
	 	 	112	%	 	$	87,000	 	 	$	10,000	 	 	$	35,000	 	 	$	132,000	 	 	$	300,000	 	 	$	528,000	 	 	$	828,000	 
	 
	 	 	113	%	 	$	93,000	 	 	$	10,000	 	 	$	35,000	 	 	$	138,000	 	 	$	300,000	 	 	$	552,000	 	 	$	852,000	 
	 
	 	 	114	%	 	$	99,000	 	 	$	10,000	 	 	$	35,000	 	 	$	144,000	 	 	$	300,000	 	 	$	576,000	 	 	$	876,000	 
	 
	 	 	115	%	 	$	105,000	 	 	$	10,000	 	 	$	35,000	 	 	$	150,000	 	 	$	300,000	 	 	$	600,000	 	 	$	900,000	 
	 
	 	 	116	%	 	$	111,000	 	 	$	10,000	 	 	$	40,000	 	 	$	161,000	 	 	$	300,000	 	 	$	644,000	 	 	$	944,000	 
	 
	 	 	117	%	 	$	117,000	 	 	$	10,000	 	 	$	40,000	 	 	$	167,000	 	 	$	300,000	 	 	$	668,000	 	 	$	968,000	 
	 
	 	 	118	%	 	$	123,000	 	 	$	10,000	 	 	$	40,000	 	 	$	173,000	 	 	$	300,000	 	 	$	692,000	 	 	$	992,000	 
	 
	 	 	119	%	 	$	129,000	 	 	$	10,000	 	 	$	40,000	 	 	$	179,000	 	 	$	300,000	 	 	$	716,000	 	 	$	1,016,000	 
	 
	 	 	120	%	 	$	135,000	 	 	$	10,000	 	 	$	40,000	 	 	$	185,000	 	 	$	300,000	 	 	$	740,000	 	 	$	1,040,000	 
	 
	 	 	121	%	 	$	141,000	 	 	$	10,000	 	 	$	40,000	 	 	$	191,000	 	 	$	300,000	 	 	$	764,000	 	 	$	1,064,000	 
	 
	 	 	122	%	 	$	147,000	 	 	$	10,000	 	 	$	40,000	 	 	$	197,000	 	 	$	300,000	 	 	$	788,000	 	 	$	1,088,000	 
	 
	 	 	123	%	 	$	153,000	 	 	$	10,000	 	 	$	40,000	 	 	$	203,000	 	 	$	300,000	 	 	$	812,000	 	 	$	1,112,000	 
	 
	 	 	124	%	 	$	159,000	 	 	$	10,000	 	 	$	40,000	 	 	$	209,000	 	 	$	300,000	 	 	$	836,000	 	 	$	1,136,000	 
	 
	 	 	125	%	 	$	165,000	 	 	$	10,000	 	 	$	40,000	 	 	$	215,000	 	 	$	300,000	 	 	$	860,000	 	 	$	1,160,000	 






 












 





	 	 	 
	






ArcSight FY10 Sales Compensation Plan




EXHIBIT A – Specific Terms and Conditions



Senior Vice President, Field Operations



 




CALCULATION OF COMMISSIONS1




	I.	 	Revenue Commissions: Revenue Commissions are calculated based on achievement by the
Company of the quarterly Revenue target specified in the Company’s fiscal 2010 internal
operating plan (“Revenue Target”). The Commissions for each percentage of achievement of the
Revenue Target are calculated as follows:






	 	•	 	provided that actual Revenues exceed 90% of the Revenue Target for the quarter, $250
multiplied by the percentage of Revenue Target achieved up to 95%; plus
	 
	 	•	 	$1,250 multiplied by the percentage of Revenue Target achieved in excess of 95% up to
100%; plus
	 
	 	•	 	$3,000 multiplied by the percentage of Revenue Target achieved in excess of 100% up to
105%; plus
	 
	 	•	 	$6,000 multiplied by the percentage of Revenue Target achieved in excess of 105%,





in each case, where the percentage of Revenue Target achieved and the percentages defining each
range of performance above are rounded down to the nearest tenth of a percent and multiplied by
100.




II. Quarterly Revenue Bonus: Quarterly Revenue Bonuses will be paid for achieving Revenue
at least equal to Q1 Revenue Target, Q2 Revenue Target, Q3 Revenue Target, and Q4 Revenue Target.
A Plan participant will be eligible for a Quarterly Revenue Bonus only if the Plan participant was
employed by ArcSight on the last day of the applicable fiscal quarter.






 




			
	1	 	The calculation of Commissions described in
this Exhibit A is qualified in its entirety by the terms and conditions of
Exhibit B.




 









 















III. Margin Contribution Bonus: Each quarter the Commission amount attributable to
operating expense/contribution margin will be determined by either incurring actual sales operating
expenses less than or equal to the sales operating expense target specified for such quarter in the
Company’s fiscal 2010 internal operating plan or achieving actual sales contribution margins equal
to or greater than the sales contribution margin target specified for such quarter in the Company’s
fiscal 2010 internal operating plan. The quarterly bonus will vary depending on the level of
Revenue achieved relative to the year-to-date Revenue Target. For example, in Q1 if the Revenue
achieved equaled 102% of the year-to-date Revenue Target and either the actual operating costs were
less than target or the actual contribution margin was greater than target, then the bonus earned
would be equal to the “>100 - <105%” amount described on the cover page of this Plan.










 









 













ArcSight FY10 Sales Compensation Plan – Senior VP Field Operations




EXHIBIT B – General Terms and Conditions



 




OBJECTIVES



This ArcSight FY10 Sales Compensation Plan (this “Plan”) describes the terms of your sales
compensation at ArcSight, Inc. (“ArcSight” or the “Company”) for the Plan Year, which is intended
to achieve the following objectives:





	 	•	 	Increase sales for the Company’s services and products.
	 
	 	•	 	Reward consistent achievement and over plan performance on a quarterly basis.
	 
	 	•	 	Reward sales personnel for their contribution to the achievement of Company objectives.
	 
	 	•	 	Attract and retain an effective sales team.





DEFINITIONS





	 	1.	 	Commissions – Opportunity for compensation in addition to the base salary.
Commissions for software and appliances (“Products”), maintenance and support
(“Maintenance”) and professional services (“Services”) are based on the Booking Value of
proceeds from Bookings of the Company for such Products, Maintenance and Services.
	 
	 	2.	 	Sales Contract – Comprehensive set of legally binding documents and required approvals
and signatures associated with each Booking, generally an end user license agreement signed
by ArcSight and the customer (or, in the case of shrinkwrap agreements, agreed to by the
customer). Sales Contracts typically include the following items:






	 	a.	 	Software License and/or Appliance Revenues – Revenues associated with
licensing of software products and/or sale of appliance products.
	 
	 	b.	 	Service Revenues – Revenues associated with sale of consulting and
installation projects that are normally billed as time and materials. Expenses
incurred in the performance of Services are billed to the customer. These expenses
are not counted towards Booking Value for the purpose of calculating Commissions.
	 
	 	c.	 	Maintenance Revenues – Revenues associated with Maintenance.






	 	3.	 	Booking Value – Net amount upon which Commissions are calculated. Booking Value is
net of any refunds, referral fees, penalties, free services and other given allowances
directly associated with the applicable Sales Contract. Taxes collected by ArcSight are
not included as Booking Value for the purpose of calculating Commissions.




 









 

















	 	4.	 	Booking – Sales transaction with a customer that, at a minimum, has the following
characteristics:






	 	a.	 	Sales Contract;
	 
	 	b.	 	Binding purchase order received from the customer;
	 
	 	c.	 	No acceptance provisions that delay license revenue recognition beyond
date of delivery of software or appliances;
	 
	 	d.	 	Payment terms of net 45 days or less with credit worthy customer;
	 
	 	e.	 	No promise of future deliverables, including in the form of upgrades or
future software products. This includes both explicit and implicit future
deliverables;
	 
	 	f.	 	No milestone performance provisions;
	 
	 	g.	 	No provisions relating to right of return, refund or rescission
provided to customer after delivery of the Products, Maintenance or Services that
impact revenue recognition;
	 
	 	h.	 	Standard warranty provisions that impact revenue recognition; and
	 
	 	i.	 	With respect to sales transactions involving appliances, standard
delivery and risk of loss provisions (i.e., Ex Works) and with respect to sales
transactions involving appliances using the “license in the box” approach, such
transactions will not be deemed to be a Booking until the Company has received
payment for such transactions.






In the event that any provision described in Items (c) – (i) above is included in a Sales
Contract, such sales transaction will not be deemed to be a Booking until ArcSight
determines that such Booking constitutes Revenue.




	 	5.	 	Plan Year – FY09 (May 1, 2009 – April 30, 2010)
	 
	 	6.	 	Cash Collection – Receipt of payment from a customer in a recognized form including a
bank draft, bank deposit or approved promissory note.
	 
	 	7.	 	All decisions, interpretations and other actions of the CFO and CEO (acting together)
relating to this Plan, including the calculation of Commissions and whether a sales
transaction constitutes a Booking, shall be final and binding on all Plan participants.
All compensation (including Commissions) described herein are subject to withholding and
other applicable taxes.





COMMISSION VESTING AND PAYMENTS




Plan participants are eligible to earn Commissions in addition to base salary. Commissions are
deemed earned upon the Company’s receipt of both (1) a Booking achieved in compliance with this
Plan and (2) the full payment to ArcSight agreed to in the applicable Sales Contract.
Notwithstanding the foregoing, ArcSight will advance Commissions for current employees.





 









 













ADDITIONAL TERMS





	 	1.	 	Payout. Commissions are payable at the end of each month for all Bookings from the
prior month, provided that Commissions for Bookings for Services that involve 100 days or
more of Services are payable quarterly over the period that the Services are delivered. A
payout will be treated as an advance unless the Commission on which the payout is based has
been earned, as described above under “Commission Vesting and Payments.”
	 
	 	2.	 	Upon termination of employment, a Plan participant will be paid only Commissions earned
(as described above under “Commission Vesting and Payments”) for Bookings that have
occurred prior to the date of termination. Any Commissions that have not been earned for
Bookings that have occurred prior to the date of termination will be payable only if they
are earned within three months of the date of termination (including receipt by ArcSight of
the full payment agreed to in the applicable Sales Contract). No Commissions will be paid
for Bookings that occur on or after the date of termination. Commissions will not be
advanced and the Booking Value will not accrue to employees after the date of termination.
Commissions that are earned at the time of termination will be paid no later than the last
day of the month following the month in which the termination becomes effective.
	 
	 	3.	 	Indirect Sales. Commissions for Bookings achieved through an ArcSight channel partner
will be calculated based on the Booking Value to ArcSight.
	 
	 	4.	 	Dispute Resolution. Disagreements or disputes between ArcSight and any Plan
participant arising out of or relating to interpretation or implementation of this Plan
shall be submitted to ArcSight’s CFO and CEO, acting together, for resolution. The CFO and
CEO, acting together, shall decide the issue in their sole discretion. Such decision will
be final and binding.
	 
	 	5.	 	Extended Absences. To earn Commissions, the Plan participant must be actively managing
the account. If the Plan participant is not actively managing the account, the CFO and
CEO, at their sole discretion and acting together, may impose a Commission split and/or transition an account and the
eligibility for a Commission thereon to another salesperson who will be able to actively
manage those accounts.
	 
	 	6.	 	Modifications. The Company can modify this Plan upon 20 days’ written notice to
applicable sales team members. Modifications will apply only to future Sales Contracts.
Sales Contracts that have been completed or are substantially near completion (i.e., at or
above level 6 in salesforce.com) will not be impacted.
	 
	 	7.	 	Reconciliation of Negative Commission Balances. If charge-backs or recoupments result in
a negative Commission balance, the Plan participant acknowledges and agrees that the
negative balance will carry forward and will be offset against future earned Commissions
until the negative balance is eliminated.




 









 

















In the event that a negative balance exists upon termination, the Plan participant
acknowledges and agrees that: (i) such a balance constitutes a debt to ArcSight for which
the Plan participant remains fully responsible to repay; (ii) ArcSight will deduct the
balance from the Plan participant’s final paycheck to the extent allowed by law; and (iii)
if the deduction from the final paycheck is insufficient to cover the balance, the Plan
participant will be responsible to pay back any remaining balance to ArcSight.




	 	8.	 	Ethical and Legal Standards.






	 	a.	 	No employee may pay, offer to pay or give any of their incentive compensation
or anything else of value to any reseller, agent, customer or representative of the
customer or any other person as an inducement or reward for assistance in obtaining a
sale or retaining a customer relationship.
	 
	 	b.	 	Gifts and entertainment above a nominal amount shall not be given to customers,
agents or representatives except in accordance with ArcSight’s Travel, Entertainment
and General Expense Policy, the Code of Business Conduct and Ethics, the Legal
Compliance Policy, the Policy Regarding Improper Influence of Foreign Officials and the
Policy and Rules of Conduct for Doing Business with the Government.
	 
	 	c.	 	No ArcSight employee shall enter into any understanding, agreement, plan or
scheme, express or implied, formal or informal, with any competitor in regard to
prices, terms, or conditions of sales, distribution, territories or customers, nor
engage in any other conduct which may violate any of the antitrust and/or trade
regulation and/or practices.
	 
	 	d.	 	Sales personnel are bound by and must comply at all times with ArcSight’s
policies and procedures for entering into business arrangements with customers,
vendors, and other third parties. ArcSight contracts with customers and other parties
through formal, written agreements. No ArcSight employee shall enter into a side
agreement with any third parties, including customers and vendors.
	 
	 	e.	 	Eligibility for Commissions is conditioned upon full adherence by Plan
participants with ArcSight’s policies and procedures regarding conflicts of interest
and ethical and legal standards. Any failure to comply with such policies and laws
will result in the denial or recovery of a Commission, and will subject the salesperson
to further disciplinary action, up to and including termination. Any failure to comply
with ArcSight’s policies relating to the quote approval process in salesforce.com will
subject the salesperson to a 50% reduction of the Commissions that he or she would
otherwise be entitled to for the related Booking.






	 	9.	 	No Effect on Employment. This Plan is not intended to and does not in any way alter
the at-will nature of salespersons’ employment with ArcSight, nor does it constitute a
guarantee of employment for a specified period. Employment with ArcSight is at will, which
means that either the salesperson or ArcSight may terminate the employment relationship at
any time, with or without cause or prior notice.




 









 

















	 	10.	 	Confidentiality. This Plan is deemed confidential information of the Company to the
fullest extent allowed by law.






	 	11.	 	Entire Agreement; Effective Date. This Plan constitutes the entire agreement between
ArcSight and the Plan participant identified herein with respect to the subject matter
hereof, and it supersedes all prior negotiations and agreements, whether written or oral,
relating to such subject matter. This Plan is effective from the later of May 1, 2009 or a
Plan participant’s start date and will apply only to Commissions relating to Bookings that
occur during the Plan Year. ArcSight will have no obligation to pay any Commissions for
Bookings that are not earned (as described above under “Commission Vesting and Payments”)
by October 31, 2010; provided, however, that with respect to any Booking that is deferred
pursuant to Section 1 above (Payout), ArcSight’s payment obligation to pay Commissions will
continue until April 30, 2011.