Document:

Exhibit 10.49

 

	
  Title:

  Effective
  Date:

  	
  Executive
  Incentive Plan (2008)

  November 4,
  2007

  
	
   

  	
   

  
	
  Document
  Owner:

  	
  Human
  Resources Compensation

  
	
   

  	
   

  
	
  Approvals:

  	
  Bruce
  Chizen

  
	
   

  	
  Chair,
  Compensation Committee

  

 

 

	
  Date

  	
   

  	
  Author

  	
   

  	
  Revision History

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  March 15, 2005

  	
   

  	
  J. Cleveland

  	
   

  	
  2005 Initial Plan

  
	
  March 20, 2006

  	
   

  	
  J. Collinson

  	
   

  	
  2006 Plan Updates

  
	
  October 30, 2006

  	
   

  	
  S. Watanabe

  	
   

  	
  2007 Plan Updates

  
	
  April 27, 2007

  	
   

  	
  J. Liedtke

  	
   

  	
  Amendment to eligibility rules

  
	
  January 28, 2008

  	
   

  	
  S. Watanabe

  	
   

  	
  2008 Plan Updates

  

 

 

1

 

PLAN
OBJECTIVES:

 

This Synopsys Executive Incentive Plan (“EIP”
or the “Plan”) provides members of the Company’s senior management the
potential to earn variable compensation linked directly to individual
contribution toward:

 

1.               Driving the strategic direction of the
Company.

2.               Driving attainment of revenue and
operating margin targets.

3.               Reinforcing a culture of accountability
and performance excellence.

4.               Ensuring that the payment of all incentive
bonuses under the Plan qualify as “performance-based compensation” within the
meaning of Section 162(m) of the Internal Revenue Code (“Section 162(m)”),
and therefore not subject to the annual $1 million limitation on the income tax
deductibility of compensation paid per certain covered executive officers
imposed under Section 162(m). 
Accordingly, all payments under the Plan shall be made pursuant to the
terms and conditions of the Company’s 2006 Employee Equity Incentive Plan (2006
Equity Plan) approved by the Company’s stockholders, whether as “Performance
Cash Awards” or “Performance Stock Units Awards” thereunder.

 

ELIGIBILITY:

Subject to achievement as described below,
an employee is eligible to receive an EIP award if he or she is:

·                  a Corporate Staff Member and Section 16(b) officer

·                  a regular employee scheduled to work at least
20 hours per week

·                  employed by Synopsys as of the first working work day of the
fourth quarter of the fiscal year

·                  actively employed through the day the
incentive checks are distributed (or on an approved leave of absence)

and

·                  does not participate in a commission or other
incentive plan (including, but not limited to Sales, Applications
Consultants, or incentive plans relating to 
acquisitions)

·                  prepares and delivers performance reviews
for all direct reports eligible to receive reviews by August 1, 2008
unless an exception to this requirement is recommended by the SVP, Human Resources and
Facilities and approved by the Chairman of the Compensation Committee.

 

ADMINISTRATION:

The
Plan shall be administered by the Compensation Committee of the Board of
Directors (the “Committee”) that has been designated to administer programs
intended to qualify as “performance-based compensation” within the meaning of Section 162(m).  The Committee shall have authority to make rules and
adopt administrative procedures in connection with the Plan and shall have
discretion to provide for situations or conditions not specifically provided
for herein consistent with the purposes of the Plan.  The Committee shall determine the beginning
and ending dates for each performance period. 
Unless otherwise determined by the Committee, the performance period
shall correspond to the Company’s fiscal year. 
Notwithstanding any other provision of the Plan to the contrary, the
Plan shall be administered and its provisions interpreted so that payments
pursuant to the Plan qualify as “performance-based compensation” within the
meaning of Section 162(m). 
Determinations by the Committee shall be final and binding on the Company
and all participants.

 

INCENTIVE TARGET AWARDS:

The
individual’s incentive target award is based upon a percentage of annual base
salary as determined by the Committee (“Target Award”).  Stock-based and other variable compensation
are not included in the target calculation.

 

 

2

 

PERFORMANCE
CRITERIA:

Payment
of the Target Award is determined by the Committee based on the Company’s
achievement of Corporate Financial Performance Goals which include current year
targeted revenue and operating margin goals as well as Revenue Backlog targets
(committed revenue for applicable future years), reinforcing the Company’s
ratable business model.  The specific Corporate Financial Performance
Goals and their relative weighting are as follows:

 

CORPORATE
FINANCIAL PERFORMANCE GOALS:

 

	
  FY2008 Revenue Target — 33.33%

  
	
  FY2008 Non-GAAP Operating Margin Target — 33.33%

  
	
  FY2009 Revenue Backlog Target — 33.34%

  

 

 

REVENUE
PREDICTABILITY FACTOR:

 

	
  FY2010 Revenue Backlog Target 

  

 

 

PAYOUT
FORMULA FOR
ACTUAL
AWARDS:

The Company must achieve a threshold of a
weighted average of 90% of the Corporate Financial Performance Goals before
payment of any portion of the Target Award is permitted. Achievement of 90% or
more of the Corporate Financial Performance Goals results in the applicable
Corporate Financial Payout Factor, as illustrated in Exhibit A.  For illustration purposes, Exhibit A,
the Corporate Financial Payout Factor Schedule, sets forth achievement
percentages at increments of one percentage. 
The actual Payout Factor will be calculated based upon one-quarter
percentage point increments of achievement to plan.  Achievement of 90% or more of target FY2010
Revenue Backlog Goal results in the applicable Revenue Predictability Payout
Factor set forth in Exhibit B.  The
Revenue Predictability Payout Factor will be calculated based upon whole
percent increments of achievement to plan, as reflected in Exhibit B, the
Revenue Predictability Payout Factor Schedule. 
Notwithstanding the foregoing,
the maximum Preliminary Award for any individual is 200% of the Target Award
and the Company has the option to fund achievement in excess of the Target
Award with cash and Restricted Stock Units (RSUs).

 

Payouts
of actual awards are determined by the Compensation Committee following a
recommendation by executive management.  Subject to the Committee’s discretion as
set forth under “Final Awards” below, the
payout formula for each Preliminary Award is as follows:

 

Preliminary Award =

Target Award x Corporate Financial Payout Factor x
Revenue Predictability Payout Factor (if any)

 

In addition and in accordance with the
2006 Equity Plan, the maximum Actual Award for any individual is $2,000,000 in
cash and 1,000,000 shares of RSUs in any calendar year.

 

 

3

 

FINAL
AWARDS:

No later than thirty (30) days after the
receipt by the Committee of the financial statements for a performance period
the Committee shall determine whether the established performance criteria were
achieved. Executive management
will make recommendations to the Committee regarding individual payouts based
upon the individual’s relative performance against the Corporate Financial
Performance Goals and the Revenue Predictability Goal.  The Committee shall have full discretion to
reduce individual Preliminary Awards based on individual performance, EPS
considerations, or as it otherwise considers appropriate in the circumstances
in order to determine final actual awards (“Actual Awards”).  The Committee shall not have discretion to
increase Preliminary Awards for a performance period.

 

PAYMENT
SCHEDULE:

Payment of Actual Awards will occur within thirty
(30) days following the certification by the Committee that the performance and
other criteria for payment have been satisfied (the “Certification Date”) and
final determination of the Actual Award.

 

In the event the Committee does not specify the form
of the payment at the time the Committee establishes the Target Award, the form
of payment of the Actual Award shall be: (a) cash in an amount not to
exceed the amount of the Target Award, and (b) Restricted Stock Units,
100% of which will vest on the one-year anniversary of the effective grant date
provided the recipient is providing continuous services on such date, the value
of which would equal no more than the amount by which the Actual Award exceeds
the Target Award increased by an reasonable rate of interest to account for the
time value of money.  The Committee may
determine (a “Retroactive Determination”) on or before the Certification Date
that the form of the entire Actual Award payment will only be cash.  In the event the Committee makes a
Retroactive Determination, the total value of the cash payment shall not exceed
the amount of the Actual Award.

 

Cash, RSUs or Restricted Stock issued hereunder
shall be deemed issued pursuant to the 2006 Employee Equity Incentive Plan
unless otherwise determined by the Committee.

 

 

4

 

IMPORTANT NOTES ABOUT THE PLAN:

This Plan supersedes and replaces all
prior executive incentive plans.  The
Committee reserves the right to terminate and or make changes to the Plan at
any time, with or without notice.  The
Committee may likewise terminate an individual’s participation in the Plan at
any time, with or without notice. 
Nothing in this Plan shall be construed to be a guarantee that any
participant will receive all or part of an incentive award or to imply a
contract between the Company and any participant.  The Committee may reduce the incentive payout
based on achievement of publicly announced targets, product milestones,
strategic goals, cross-functional teamwork and collaboration, and unforeseen
changes in the economy and/or geopolitical climate.

 

 

Notwithstanding the foregoing, the
performance criteria may be modified by the Committee to take into
consideration one or more of the following: (1) changes in accounting
principles that become effective during the performance period in accordance
with US GAAP, (2) extraordinary, unusual or infrequently occurring events,
(3) the disposition of a business or significant assets, (4) gains or
losses from all or certain claims and/or litigation and insurance recoveries, (5) the
impact of impairment of intangible assets, (6) restructuring activities, (7) the
impact of investments or acquisitions, and/or (8) changes in corporate
capitalization such as stock splits and certain reorganizations; provided,
however, that any such modifications are consistent with Section 162(m) and
the regulations issued thereunder.  Notwithstanding the foregoing, the
Committee must select criteria that collectively satisfy the requirements of
performance-based compensation for the purposes of Section 162(m),
including by establishing the targets at a time when the performance relative
to such targets is substantially uncertain.

 

 

 

Approvals:

 

 

Compensation Committee,

 

 

	
  By:

  	
  /s/ Bruce Chizen

  	
   

  	
  January 29, 2008

  
	
   

  	
  Bruce Chizen

  	
  Date

  
	
   

  	
  Chair, Compensation Committee

  	
   

  
					

 

 

5

 

Executive Incentive Plan
(2008)

Exhibit A
— Corporate Financial Payout Factor Schedule

 

	
  %
  Achievement of Plan

  	
   

  	
  Payout Factor*

  
	
  <= 90%

  	
   

  	
  50.0%

  
	
  91%

  	
   

  	
  55.0%

  
	
  92%

  	
   

  	
  60.0%

  
	
  93%

  	
   

  	
  65.0%

  
	
  94%

  	
   

  	
  70.0%

  
	
  95%

  	
   

  	
  75.0%

  
	
  96%

  	
   

  	
  80.0%

  
	
  97%

  	
   

  	
  85.0%

  
	
  98%

  	
   

  	
  90.0%

  
	
  99%

  	
   

  	
  95.0%

  
	
  100%

  	
   

  	
  100.0%

  
	
  101%

  	
   

  	
  107.0%

  
	
  102%

  	
   

  	
  114.0%

  
	
  103%

  	
   

  	
  121.0%

  
	
  104%

  	
   

  	
  127.5%

  
	
  105%

  	
   

  	
  134.0%

  
	
  106%

  	
   

  	
  140.0%

  
	
  107%

  	
   

  	
  146.0%

  
	
  108%

  	
   

  	
  150.0%

  
	
  109%

  	
   

  	
  154.0%

  
	
  110%

  	
   

  	
  156.8%

  
	
  111%

  	
   

  	
  159.5%

  
	
  112%

  	
   

  	
  161.5%

  
	
  113%

  	
   

  	
  163.5%

  
	
  114%

  	
   

  	
  165.5%

  
	
  115%

  	
   

  	
  167.5%

  
	
  116%

  	
   

  	
  169.5%

  
	
  117%

  	
   

  	
  171.5%

  
	
  118%

  	
   

  	
  173.5%

  
	
  119%

  	
   

  	
  175.5%

  
	
  >=120%

  	
   

  	
  177.5%

  

*The Payout Factor column represents
payout factors based upon whole percentage increments of achievement to
plan.  The actual Payout Factor will be
interpolated based upon one-quarter percent increments of achievement.  For example, if percent achievement to plan
is 101.5%, the Actual Payout Factor would be 110.5%.

 

 

6

 

Executive
Incentive Plan (2008)

Exhibit B
— Revenue Predictability Payout Factor Schedule

 

	
  Revenue Predictability Factor

  
	
  Percent of FY2010 Revenue Backlog Achieved

  	
   

  	
  Payout Factor

  
	
  <= 95%

  	
   

  	
  100.0%

  
	
  96%

  	
   

  	
  102.0%

  
	
  97%

  	
   

  	
  104.0%

  
	
  98%

  	
   

  	
  106.0%

  
	
  99%

  	
   

  	
  108.0%

  
	
  100%

  	
   

  	
  110.0%

  
	
  101%

  	
   

  	
  112.0%

  
	
  102%

  	
   

  	
  114.0%

  
	
  103%

  	
   

  	
  116.0%

  
	
  104%

  	
   

  	
  118.0%

  
	
  105%

  	
   

  	
  120.0%

  
	
  106%

  	
   

  	
  122.0%

  
	
  107%

  	
   

  	
  124.0%

  
	
  108%

  	
   

  	
  126.0%

  
	
  109%

  	
   

  	
  128.0%

  
	
  >= 110%

  	
   

  	
  130.0%

  

 

 

7Exhibit
10.1

 

CEPHALON,
INC.

2008
MANAGEMENT INCENTIVE COMPENSATION PLAN

 

SECTION 1. PURPOSE. The purpose of the
Cephalon, Inc. Management Incentive Compensation Plan (the “Plan”) is to
provide Participants (as defined) employed by Cephalon, Inc. (the “Company”)
and its affiliates with incentive compensation based upon the level of
achievement of financial and other performance criteria. The Plan will enhance
the ability of the Company and its affiliates to attract and retain individuals
of exceptional managerial talent upon whom, in large measure, the sustained
progress, growth and profitability of the Company depends.

 

SECTION 2. DEFINITIONS. As used in the
Plan, the following terms shall have the meanings set forth below:

 

(a) “AWARD” means a
cash payment.

 

(b)  “BOARD” means the
Board of Directors of the Company.

 

(c) “COMMITTEE” means
the Stock Option and Compensation Committee of the Board (or any successor
committee).

 

(d)  “EXECUTIVE OFFICER”
means an executive officer of the Company as appointed by the Board of
Directors or other key employee.

 

(e) “MEASUREMENT PERIOD”
means a period of time selected by the Committee for which performance will be
measured for purposes of Section 4.

 

(f)  “MAXIMUM AWARD”
means the limitation on awards payable under this Plan in any year, which for
the Chairman/Chief Executive Officer is 300% of his annual base salary and for
any other Participant is 110% of the Participant’s annual base salary.

 

(g) “PARTICIPANT” means
any Executive Officer selected by the Committee to participate in the Plan.

 

(h) “PERFORMANCE PERIOD”
means a period of time selected by the Committee to which an Award relates.

 

(i) “TARGET AWARD”
means an Award level that may be paid if certain performance criteria are
achieved.

 

(j)  “THRESHOLD
PERFORMANCE” means a level of performance that supports a minimum payout; the
threshold performance level is established each year reflecting 

 

 

business dynamics of the Company and the
industry and historical performance levels of the Company and industry.

 

SECTION 3. ELIGIBILITY. Persons employed
by the Company or any of its affiliates during a Performance Period in active
service in a managerial or professional role for all or any part of the
Performance Period are eligible to be Participants under the Plan for such
Performance Period (whether or not so employed or living at the date an Award
is made) and may be considered by the Committee for an Award. An employee is
not rendered ineligible to be a Participant by reason of being a member of the
Board.

 

SECTION 4.
AWARDS-GENERAL.

 

(a) Target Awards.  The Committee will establish the Target
Awards for Participants at the beginning of each Performance Period. For the
Chairman/Chief Executive Officer, the Target Award shall be 100% of annual base
salary; for Participants other than the Chairman/Chief Executive Officer, the
Target Award shall be 50% of annual base salary.

 

(b) Performance
Criteria; Award Levels.  The
performance criteria utilized by the Committee for the Chairman/Chief Executive
Officer may be based on individual performance, revenue, earnings per share,
other Company and business unit financial objectives, operational efficiency
measures, and other measurable objectives tied to the Company’s success or such
other criteria as the Committee shall determine in its discretion. The
Committee shall each year also determine specific levels of achievement of the
established performance criteria that correspond to Threshold Performance,
Target Award and Maximum Award.  Performance
criteria for Participants (other than Chairman/Chief Executive Officer) will be
established by management.  For the
Performance Period fiscal year 2008, the performance criteria for the
Chairman/Chief Executive Officer and the other Participants, and the
relationship between achievement of such performance criteria and respective
Award levels, are set out in the Schedules 1 and 2, respectively, to the Plan.

 

(c) Awards.  Awards will be made by the Committee
following the end of each Performance Period. Awards shall be paid after the end
of the Performance Period, except to the extent that a Participant has made an
election to defer the receipt of such Award pursuant to the Company’s deferred
compensation plan. The Award amount determined in accordance with Schedule 2
may be increased or decreased by the Committee, provided, however, than any
Award may not exceed the applicable Maximum Award amount.

 

SECTION 5.
OTHER CONDITIONS.

 

(a) No person shall
have any claim to an Award under the Plan and there is no obligation for
uniformity of treatment of Participants under the Plan. Awards under the Plan
may not be assigned or alienated.

 

(b) Neither the Plan
nor any action taken hereunder shall be construed as giving to any Participant
the right to be retained in the employ of the Company or any affiliate.

 

 

(c) The Company or any
affiliate shall have the right to deduct from any Award to be paid under the
Plan any federal, state or local taxes required by law to be withheld with
respect to such payment.

 

(d) Awards under the
Plan will not be included in base compensation or covered compensation under
the retirement programs of the company for purposes of determining pensions,
retirement and death related benefits.

 

SECTION 6.
DESIGNATION OF BENEFICIARIES. A Participant may, if the Committee permits,
designate a beneficiary or beneficiaries to receive all or part of the Award
which may be made to the Participant, or may be payable, after such Participant’s
death. A designation of beneficiary shall be made in accordance with procedures
specified by the Company and may be replaced by a new designation or may be
revoked by the Participant at any time. In case of the Participant’s death, an
Award with respect to which a designation of beneficiary has been made (to the
extent it is valid and enforceable under applicable law) shall be paid to the
designated beneficiary or beneficiaries. Any Award granted or payable to a
Participant who is deceased and not subject to such a designation shall be
distributed to the Participant’s estate. If there shall be any question as to
the legal right of any beneficiary to receive an Award under the Plan, the
amount in question may be paid to the estate of the Participant, in which event
the Company or its affiliates shall have no further liability to anyone with
respect to such amount.

 

SECTION 7.
PLAN ADMINISTRATION.

 

(a) The Committee shall
have full discretionary power to administer and interpret the Plan and to
establish rules for its administration (including the power to delegate
authority to others to act for and on behalf of the Committee) subject to such
resolutions, not inconsistent with the Plan, as may be adopted by the Board. In
making any determinations under or referred to in the Plan, the Committee (and
its delegates, if any) shall be entitled to rely on opinions, reports, analysis
or statements of employees of the Company and its affiliates and of counsel,
public accountants and other professional or expert persons.

 

(b) The Plan shall be
governed by the laws of the State of Delaware and applicable Federal law.

 

SECTION 8.
MODIFICATION OR TERMINATION OF PLAN. The Board may modify or terminate the Plan
at any time, effective at such date as the Board may determine.

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