Document:

exv10w13

Exhibit 10.13

FISCAL YEAR 2011 MANAGEMENT BONUS PLAN

A. CASH BONUS PLAN

All ArcSight, Inc. (the “Company”) executives who do not otherwise receive variable compensation
will be eligible to participate in this cash bonus plan. Each eligible executive’s actual
participation level will be determined by their individual performance.

The cash bonus available will be calculated quarterly based on a percentage of an executive’s base
salary upon the Company’s achievement of both revenue targets and operating income
targets1, as described below. At the end of each fiscal quarter, both the revenue
target and operating income target1 will be compared to actual quarterly performance.
The amount of the bonus payable, in the aggregate, with respect to each quarter is 50% of the bonus
amount payable based on the executive’s base salary at the performance level achieved (but the
maximum amount of such quarterly bonus payable in each quarter is 50% of the bonus amount payable
based on the percentage of the executive’s base salary at the target objective listed
below2), prorated for the period covered and for the participant’s tenure at the Company
during such period.3 It is anticipated that each quarterly bonus, if any, will be paid
to executives promptly following determination of actual quarterly performance relative to the
revenue target and operating income target for such quarter.

At the end of the fiscal year, the annual cash bonus available is calculated based upon the
Company’s annual performance relative to both annual revenue targets and operating income
targets.1 The annual cash bonus available, less the amounts paid in the first three
quarters or payable with respect to the fourth quarter, is then distributed to participants based
on individual achievements against objectives. For all cash bonuses awarded under this cash bonus
plan, in the event that the Company meets only a revenue target but not an operating income
target1, or vice versa, then bonuses, if any, will be available only at the level at
which both the revenue target and operating income target1 have been met. It is
anticipated that the annual cash bonus (and fourth quarter bonus), if any, will be paid to
executives promptly following the Compensation Committee’s review of actual quarterly performance
relative to the revenue target and operating income target for the year. On the recommendation of
the Company’s Chief Executive Officer and approval by the Compensation Committee, all or a portion
of the annual cash bonus may be paid in the form of a “Stock Bonus Award” under the Company’s 2007
Equity Incentive Plan (as such term is defined therein) in lieu of payment in cash.

Notwithstanding the foregoing, in the event of a Corporate Transaction (as defined in the Company’s
2007 Equity Incentive Plan), each eligible executive shall receive a “true up” bonus payment
determined as if the maximum amount of the bonus available in any previously completed quarter of
the fiscal year was based on 100% of the maximum bonus amount payable based on such executive’s
percentage of base salary at the performance objective listed below that was actually achieved,
prorated for the period covered and for the participant’s tenure at the Company during such period,
payable immediately prior to the closing of such Corporate Transaction (i.e., each participant will
receive a bonus equal to the maximum percentage of base salary adjusted for such individual’s
actual achievements against his/her objectives as determined in connection with the distribution(s)
in prior quarters, if applicable, less the amount previously paid to such executive in such prior
quarters).4

 

			
	1	 	The operating income targets exclude
stock compensation expenses and amortization of intangibles, but include the
impact of any bonuses determined under the bonus plan.
	 
	2	 	I.e., at 100% of the revenue and operating
income target.
	 
	3	 	For example, if the Company achieves its
revenues and operating income at 100% or greater of target in the first
quarter, the Company’s CEO will receive a bonus for that quarter equal to 50% x
(70% x (CEO Annual Salary ÷ 4)).
	 
	4	 	For purposes of clarity, such “true up”
will include payment at levels above 100% of the revenue and operating income
targets, irrespective of the fact that the initial quarterly bonus payments
were limited to the bonus level at the target objective (i.e., at 100% of the
revenue and operating income target), subject to the same adjustment made for
each such executive’s performance relative to his or her individual objectives
as determined in connection with the original quarterly bonus payment.

 

1. Chief Executive Officer and President:

	 	 	 	 	 
	 	 	 	 	Performance Relative To Revenue Target and
	Percentage	 	Operating Income Target at that Level of Revenue
	of Base	 	(in accordance with the Company’s internal
	Salary	 	operating plan)
	 	 	 	 	 

	 	0.00	%	 	< 95%

	 	52.50	%	 	≥ 95% and < 98%

	 	59.50	%	 	≥ 98% and < 100%

	 	70.00	%	 	≥ 100% and < 101%5

	 	80.00	%	 	≥ 101% and < 103%

	 	85.00	%	 	≥ 103% and < 105%

	 	90.00	%	 	≥ 105% and < 107%

	 	95.00	%	 	≥ 107% and < 110%

	 	100.00	%	 	≥ 110%

2. Chief Financial Officer, Chief Technology Officer and Senior Vice Presidents:

	 	 	 	 	 
	 	 	 	 	Performance Relative To Revenue Target and
	Percentage	 	Operating Income Target at that Level of Revenue
	of Base	 	(in accordance with the Company’s internal
	Salary	 	operating plan)
	 	 	 	 	 

	 	0.00	%	 	< 95%

	 	33.75	%	 	≥ 95% and < 98%

	 	38.25	%	 	≥ 98% and < 100%

	 	45.00	%	 	≥ 100% and < 101%5

	 	55.00	%	 	≥ 101% and < 103%

	 	65.00	%	 	≥ 103% and < 105%

	 	75.00	%	 	≥ 105% and < 107%

	 	85.00	%	 	≥ 107% and < 110%

	 	100.00	%	 	≥ 110%

 

			
	5	 	The target objective (i.e., at 100% of
the revenue and operating income target).

 

3. Other Executives:

	 	 	 	 	 
	 	 	 	 	Performance Relative To Revenue Target and
	Percentage	 	Operating Income Target at that Level of Revenue
	of Base	 	(in accordance with the Company’s internal
	Salary	 	operating plan)
	 	 	 	 	 

	 	0.00	%	 	< 95%

	 	26.25	%	 	≥ 95% and < 98%

	 	29.75	%	 	≥ 98% and < 100%

	 	35.00	%	 	≥ 100% and < 101%5

	 	45.00	%	 	≥ 101% and < 103%

	 	55.00	%	 	≥ 103% and < 105%

	 	65.00	%	 	≥ 105% and < 107%

	 	75.00	%	 	≥ 107% and < 110%

	 	100.00	%	 	≥ 110%

B. EQUITY BONUS PLAN

Company executives will be eligible to participate in an equity pool of shares of common stock (in
the form of options). The size of the equity pool will be determined by the Compensation Committee
in connection with the fiscal year-end review, based on the number of executives participating, the
cumulative achievement of quarterly revenue and operating margin targets within the fiscal year and
other factors. The Compensation Committee will determine the maximum number of shares to be
allocated to the Company’s Chief Executive Officer and then the Compensation Committee, with input
from the Company’s Chief Executive Officer, will determine the allocation of the remainder of the
shares among the rest of the executive team. Options will vest according to standard vesting terms
over four years.

 

			
	5	 	The target objective (i.e., at 100% of the revenue and operating income target).exv10w14

Exhibit 10.14

FY11 Sales Compensation Plan

	 	 	 	 	 	 	 

	Name:

	 	Kevin Mosher
	 	On Quota Date:
	 	5/1/2010
	 
	 	 	 	 	 	 
	Title:

	 	Senior Vice President, Worldwide Field Operations
	 	Manager:
	 	Tom Reilly

Revenue Target                    As provided in the ArcSight FY 2011 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	 	 	FY11	 
	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	 	 	FY11	 
	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	 

 

ArcSight FY11 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 2011 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 2011 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 2011 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.

IV. Stock in Lieu of Cash: On the recommendation of the Company’s Chief Executive Officer
and approval by the Compensation Committee, all or a portion of the Revenue commissions under
Section I or the margin contribution bonus under Section III, in each case that are payable at the
greater than 100% level, may be paid in the form of a “Stock Bonus Award” under the Company’s 2007
Equity Incentive Plan (as such term is defined therein) in lieu of payment in cash.

 

ArcSight FY11 Sales Compensation Plan

EXHIBIT B — General Terms and Conditions

OBJECTIVES

This ArcSight FY11 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 Revenues recognized by
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) or a flow-down agreement between the reseller and 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.
	 
	 	d.	 	Revenues — Software License and/or Appliance Revenues, Services
Revenues and Maintenance Revenues.

	 	3.	 	Plan Year — FY11 (May 1, 2010 — April 30, 2011)

	 	A.	 	COMMISSION VESTING AND PAYMENTS

Plan participants are eligible to earn Commissions in addition to base salary. All compensation
(including Commissions) described herein are subject to withholding and other applicable taxes.

 

ADDITIONAL TERMS

	 	1.	 	Payout. Commissions are payable at the end of each month for all Revenues from the
prior month.
	 
	 	2.	 	Termination of Employment. Upon termination of employment, a Plan participant will be
paid only Commissions earned (as described above under “Commission Vesting and Payments”)
for Revenues recognized by the Company through the date of termination. No Commissions
will be paid for Revenues recognized by the Company 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.	 	Dispute Resolution. Disagreements or disputes between ArcSight and any Plan
participant arising out of or relating to interpretation or implementation of this Plan,
calculation of Commissions 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.
	 
	 	4.	 	Modifications. The Company can modify Exhibit A and Exhibit B of this Plan upon 20
days’ written notice to applicable sales team members.
	 
	 	5.	 	Reconciliation of Negative Commission Balances. If a payment by the Company results in
a negative Commission balance, 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, (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.
	 
	 	6.	 	Ethical and Legal Standards.

	 	1.	 	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.
	 
	 	2.	 	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.

 

	 	3.	 	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.
	 
	 	4.	 	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.
	 
	 	5.	 	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.

	 	7.	 	No Effect on Employment. This Plan is not intended to and does not in any way alter
the at-will nature of U.S. salespersons’ employment with ArcSight or the employment
agreements in effect outside the U.S., nor does it constitute a guarantee of employment
for a specified period. Employment with ArcSight in the U.S. 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.
	 
	 	8.	 	Confidentiality. This Plan is deemed confidential information of the Company to the
fullest extent allowed by law.
	 
	 	9.	 	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, 2010 or a
Plan participant’s start date and will apply only to Commissions relating to Revenues that
occur during the Plan Year. ArcSight will have no obligation to pay any Commissions for
Revenues that are not earned by April 30, 2011.

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