Document:

exv10w3

 

Exhibit 10.3

	 	 	 	 	 
	 
	 	 	 	 
	FISCAL YEAR 2005 CORPORATE

INCENTIVE COMPENSATION PLAN

	 	

	 
	 	 	 	 
	 
	 
	 	 	 	 
	as
Created by Human Resources

	 	 	07.01.04	 
	 
	 	 	 	 
	 

Purpose

The Fiscal Year 2005 Corporate Incentive Compensation Plan (“Plan”), applicable to the period from
July 1, 2004 to June 30, 2005 (“Term”), is the result of a determined and continuing effort on the
part of Hyperion Solutions Corporation (“Hyperion”) to encourage the overall performance of certain
(as determined in Hyperion’s discretion) employees (“Participants”), thereby allowing Hyperion to
accomplish its growth and profit objectives. The Plan is designed to provide Participants with
value (“Incentive Compensation”) in exchange for the value provided to Hyperion through
Participants’ activities. The Plan is a performance-based incentive plan that rewards Participants
for their efforts in driving the growth and success of the business by providing variable
compensation (“Incentive Compensation) to Plan Participants based upon corporate business
performance, business unit performance, and individual performance.

Plan Objectives

The key objectives of the Plan are:

	   	Pay for Performance

The performance of the company and the Participant’s business unit against semi-annual goals
builds the available Incentive Compensation fund. The Participant’s performance on
semi-annual goals adjusts the actual Incentive Compensation payout. Over performance on
goals will drive a higher Incentive Compensation payout and under performance on goals will
lower the payout.
	 
	   	Participant Support of Business Unit Goals

Tying Incentive Compensation payouts to business unit goals makes the achievement of those
goals a priority for every Participant in Hyperion. This encourages Participants and teams
to look beyond their individual and team goals to assist with overall business unit goals.
	 
	   	Participant Awareness and Alignment with Corporate
Goals

Participants should understand Hyperion’s annual objectives, and how their business unit’s
and Participant’s goals align with corporate goals, and therefore a significant portion of
every Participant’s Incentive Compensation is based on Hyperion’s overall performance.
	 
	   	Program Alignment with Shareholder Interests

The company is fiscally responsible by linking Incentive Compensation payouts directly to
corporate and business unit performance.
	 
	   	Participant Retention

By requiring that Participants remain with the company during the term of the Plan,
Participant turnover is reduced.

Incentive Compensation Periods

Incentive Compensation is currently paid semi-annually after the close of the half. The
semi-annual Incentive Compensation periods are:

	 	 	 	 	 	 	 	 	 
	1st half FY05

	 	July 1, 2004
	 	to
	 	December 31, 2004
	 	Payout in February 2005
	2nd half FY05

	 	January 1, 2005
	 	to
	 	June 30, 2005
	 	Payout in August 2005

	 	 	 	 
	 	 	 	 
	Hyperion Confidential

	 	 	Page 1 of 5 

 

 

Target Incentive Compensation Amount

A Participant has a target Incentive Compensation amount, typically expressed as a percent of
eligible earnings. For example, a Participant with an annual base salary of $50,000 and a targeted
Incentive Compensation percent of 10% has an annual target Incentive Compensation amount of $5,000
(= $50,000 x 10%).

Eligible Earnings

For Participants whose Incentive Compensation target is expressed as a percent of eligible
earnings, eligible earnings include base salary, overtime, vacation, and sabbatical earnings made
during the period the participant is eligible under this plan, but do not include disability pay,
any sign-on bonus, commissions, and any other incentive compensation. For countries outside of the
United States, unless there is a mandatory requirement for eligible earning to be defined
otherwise, the same definition of eligible earning applies. For example, if a non-exempt
Participant earns $25,000 in base salary and $2,000 in overtime during the Incentive Compensation
period, then the Participant’ eligible earnings are $27,000 and his semi-annual target Incentive
Compensation amount is $2,700 (= $27,000 x 10%).

Performance Goals

Performance goals are determined as follows:

	   	Individual Goals

Individual performance level will be based on performance against semi-annual individual
goals established by Hyperion. Individual goals will be based on specific objectives and
metrics that support the business unit and company in reaching their goals. Goals must be
written and recorded within the first month of the Incentive Compensation period.
	 
	   	Business Unit Goals

Business unit performance level will be based on performance against semi-annual goals
established for each business unit management by Hyperion. These goals and measurements
will be based on specific objectives and metrics of business unit performance that support
Hyperion’s strategy and objectives. Goals may also be established at the sub-business unit
level (department, region, etc).
	 
	   	Corporate Goals

Corporate performance level will be based on performance against annual fiscal year
corporate goals, and will include specific financial metrics such as revenue growth,
operating margin and earnings per share, as well as strategic goals such as customer
satisfaction. The specific goals will be established by Hyperion at the beginning of the
fiscal year. Financial goals may be expressed as a percentage achievement of target figure.
For example, the goal for achieving operating income margin may be expressed as meeting
100% of target, while the actual figure will not be disclosed until after the quarterly
earnings call.

Business Unit and Corporate Performance Allocation

The allocation of business unit and corporate performance to Incentive Compensation payouts differs
by job level:

	 	 	 	 	 	 	 	 	 
	 	 	Business Unit Performance Allocation	 	Corporate Performance Allocation
	Management Committee Members

	 	 	25	%	 	 	75	%
	Vice Presidents and Directors

	 	 	60	%	 	 	40	%
	
Managers and Staff

	 	 	75	%	 	 	25	%

Performance Levels

At the end of the semiannual Incentive Compensation period, performance levels are determined as
follows:

	   	Participant Performance Level

Participant’s results will be assessed against Participant’s specific goals and job
expectations to determine Participant performance level.
	 
	   	Business Unit Performance Level

Participant’s business unit’s results will assessed against the business unit’s goals to
determine the business unit performance level that builds the business unit incentive
compensation fund that will be allocated within the business unit.

	 	 	 	 
	 	 	 	 
	Hyperion Confidential

	 	 	Page 2 of 5 

 

 

	   	Corporate Performance Level

The company’s results will be assessed against the corporate goals to determine the
corporate performance level that builds the corporate incentive compensation fund that will
be allocated throughout the company.

Incentive Compensation Payout

Participant’s individual performance level is multiplied against the sum of the business unit
performance allocation of the business unit performance level and the corporate performance
allocation of the corporate performance level to determine the Participant’s Incentive Compensation
level, which is multiplied by Participant’s target Incentive Compensation to determine
Participant’s payout:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Incentive

	 	 	 	Participant
	 	 	 	Business Unit
	 	 	 	Business Unit
	 	 	 	Corporate
	 	 	 	Corporate
	 	 	 	Target Incentive
	Compensation

	 	=
	 	Performance
	 	x ((
	 	Performance
	 	x
	 	Performance
	 	) + (
	 	Performance
	 	x
	 	Performance
	 	)) x
	 	Compensation
	Payout

	 	 	 	Level
	 	 	 	Allocation
	 	 	 	Level
	 	 	 	Allocation
	 	 	 	Level
	 	 	 	Amount

Plan Funding

The business unit and corporate performance levels measured against the business unit and
corporation semi-annual goals creates the available Plan funding. Following the close of the
semiannual Incentive Compensation period, the level of funding for each business unit fund and for
the corporate fund will be based on the actual performance against goals, as determined by
Hyperion. While certain business units may choose to allocate Incentive Compensation based on
sub-business unit department or regional performance, the business unit fund will still be built
from the overall business unit performance.

Eligibility

In order for a Participant to be eligible to receive a payout under the Hyperion Incentive
Compensation Plan, Participant must meet certain criteria:

	   	Active Regular Employee

An active regular employee who has begun employment with Hyperion prior to the last month of
the semiannual Incentive Compensation period, and is not on any other type of incentive
compensation plan, is eligible to participate in the Plan. Participants who participate in
any other type of incentive compensation plan, including the Fiscal Year 2005 Sales
Incentive Compensation Plan, Fiscal Year 2005 Services Incentive Compensation Plan, or any
other Hyperion incentive compensation plans, are not eligible for the Hyperion Incentive
Compensation Plan. If there is a position change between two different incentive
compensation plans, the payout under the Plan will be based on the eligible earning made by
the participant during the period eligible for the Plan.
	 
	   	Not Subject to Discipline or Performance Improvement Action

A Participant, who is subject to discipline or performance improvement action, will not be
eligible to participate in the Plan during the period of action. A Participant who
successfully completes a performance improvement action may be eligible, at Hyperion’s sole
discretion, to receive a reduced Incentive Compensation payout to reflect the period of time
the Participant was subject to the performance improvement action. Regardless,
Participant’s specific goals and job expectations will be used top determine Participant
performance level.
	 
	   	Voluntary Termination

Since one of the goals of the Plan is Participant retention, a Participant who voluntarily
terminates Participant’s employment with Hyperion prior to the Incentive Compensation payout
will not be eligible for Incentive Compensation for that period.
	 
	   	Involuntary Termination

A Participant who is involuntarily terminated by Hyperion prior to the end of a semiannual
Incentive Compensation payout period will not be eligible for Incentive Compensation for
that period. A Participant who is involuntarily terminated after the end of the semiannual
Incentive Compensation period, but prior to the Incentive Compensation payout, will receive
the amount of Incentive Compensation on the same schedule Participant would have received,
had Participant remained an employee of Hyperion. This provision in no way modifies the
provision relating to performance improvement actions, or any other provision of this Plan.
If the involuntarily terminated Participant is

	 	 	 	 
	 	 	 	 
	Hyperion Confidential

	 	 	Page 3 of 5 

 

 

	  	otherwise ineligible to receive compensation
under the terms of this Plan, this section shall not serve to make any such Participant
eligible to receive Incentive Compensation under the plan.
	 
	   	Leave of Absence

A Participant who is on an approved leave of absence during part of the Incentive
Compensation period will be eligible to participate in the Plan, however the Incentive
Compensation payout will be based on the eligible earnings, as defined in the Eligible
Earning section (above), during the semiannual Incentive Compensation period. Hyperion
shall use reasonable efforts to determine, in its sole discretion, Participant’s level of
performance, the business unit’s performance and the company performance prior to the
commencement of the Employee’s leave in determining the prorated Incentive Compensation. A
Participant who has been on a leave of absence during an entire semiannual Incentive
Compensation period is ineligible for participation in the Plan during that period.

Plan Administration and Modifications

The exclusive right and responsibility to administer the Plan lies with Hyperion’s management,
whose good faith interpretations and decisions will be final. While every effort has been made to
make this Plan equitable, there may arise situations where special interpretation is required, and
in such situations, Hyperion will, in good faith and in its sole discretion, use its best efforts
to determine the intent of the Plan and to render a judgment that is fair to all parties. This
Plan supersedes all prior compensation plans. Hyperion reserves the right to amend, terminate or
modify this Plan, in whole or in part, at any time, upon written notice (including email) to
Participant (if employed by Hyperion on the effective date of the notice).

Conflict
Resolution and Arbitration

The parties acknowledge that it is impossible to draft a plan such that it accounts for every
contingency. If and when conflicts arise as to any aspect of the administration of the Plan, a
Participant will have the right to seek an interpretation and/or variance from the Plan. For
proper resolution, all such requests must be presented, in accordance with applicable law to
Participant’s immediate manager. In the event of any dispute or claim relating to or arising out
of Participant’s participation in the Plan, Participant’s employment relationship with Hyperion, or
the termination of Participant’s employment with Hyperion, for any reason (including, but not
limited to, any claims of breach of contract, wrongful termination or age, sex, race, national
origin, disability or other discrimination or harassment), Participant and Hyperion agree that all
such disputes will be fully, finally and exclusively resolved by binding arbitration to the fullest
extent permitted by law. The arbitration will be conducted in accordance with the American
Arbitration Association’s “National Rules for the Resolution of Employment Disputes” then in
effect. PARTICIPANT AND HYPERION HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO HAVE ANY AND ALL DISPUTES
OR CLAIMS ADJUDICATED IN COURT OR BEFORE ANY ADMINISTRATIVE AGENCY, OR TRIED IN COURT OR BEFORE ANY
ADMINISTRATIVE AGENCY, JUDGE OR JURY.

No
Employment Contract and At-Will Employment

Nothing in this Plan shall be construed to imply the creation of an employment contract between
Hyperion and Participant, nor will the Plan, or an employee’s opportunity to participate in it,
constitute a guarantee of employment for any specific period of time. Either Hyperion or
Participant may terminate Participant’s employment at any time with or without cause, and with or
without prior notice. The Plan is only made available to Participants who agree to the terms
hereof, and Participant’s decision to participate in the Plan will constitute acceptance of the
terms and conditions of this Plan. This Plan is subject to the terms of Participant’s offer letter
and any other agreement Participant may have with Hyperion. Nothing in this Plan grants any third
party beneficiary rights under this Plan.

General

The validity, performance and construction of this Plan shall be governed by the laws of the State
of California, USA (excluding its conflict of laws provisions). Santa Clara County, California
shall be the appropriate venue and jurisdiction for the resolution of disputes hereunder. This
Plan is personal and non-transferable. Participant may not assign, pay, or encumber any portion of
any amounts due hereunder to any agent, customer, or other party as an inducement in obtaining a
sale or otherwise. This Plan sets forth the entire understanding between the parties with regard
to its subject matter, and supersedes any and all prior and contemporaneous conversations,
understandings and agreements between parties, including any previous compensation plan, and any
oral or written information or advice given by Hyperion, its employees, agents, or representatives,
all of which are of no further force and effect. Except as may be affirmed in writing by the
parties, the failure or delay of Hyperion to enforce its rights with respect to this Plan will not
constitute a waiver of its right to enforce its rights with respect to the same, or any other
breach or default. If any provision of the Plan will be held by an arbitrator or court of

	 	 	 	 
	 	 	 	 
	Hyperion Confidential

	 	 	Page 4 of 5 

 

 

competent jurisdiction to be contrary to law, that provision will be enforced to the maximum extent
permissible, and the remaining provisions of the Plan will remain in full force and effect.

	 	 	 	 
	 	 	 	 
	Hyperion Confidential

	 	 	Page 5 of 5exv10w20

 

EXHIBIT 10.20

Virage Logic Corporation

FY2005 Bonus Plan

 

 

1. Purpose

The Virage Logic Corporation FY 2005 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 2005 fiscal year beginning October 1, 2004,
through September 30, 2005 (the “Fiscal Year”). This Plan is limited in time and will
expire automatically on September 30, 2005 (“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) and communicate to each Participant his or her
Incentive Target Percentage (as defined in Section 5). The Company will provide
Participants in the plan quarterly updates on progress toward achievement of the
Company’s revenues and 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)  	has signed an Acknowledgement Form in the form attached hereto as Exhibit A;
	 
	 	(b)  	is employed by the Company as of the beginning of the fiscal quarter with
respect of which a payment may be made;
	 
	 	(c)  	is a full-time regular employee of the Company on the first and last day of
the fiscal quarter with respect of which a payment may be made;
	 
	 	(d)  	is not concurrently participating in a sales incentive or commission plan, or
in any other bonus plan operated by or bonus contract with the Company;

	 	 	 
	

	FY2005
Bonus Plan

	 	Page 2

 

 

	 	(e)  	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
	 
	 	(f)  	is not subject to a performance improvement plan or other disciplinary
actions.

5. Plan Metrics

	 	(a)  	Subject to Section 5(b), the Payout under this Plan for each Participant will
be calculated based upon the following formula:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Base

	 	 	 	Incentive Target
	 	 	 	Total Bonus Target
	 	 	 	Bonus
	 	 	 	Total
	

	 	X
	 	 	 	÷
	 	 	 	X
	 	 	 	=	 	 
	Salary

	 	 	 	Percentage
	 	 	 	Amount
	 	 	 	Pool
	 	 	 	Payout

The Base Salary is the base salary actually paid to the employee in the fiscal quarter for
which a Payout is calculated.

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 and set forth in the Acknowledgment Form attached hereto as Exhibit A.

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).

	 	(b)  	Payouts for the first three quarters of 2005 will be based on 66.6% of the
cumulative Bonus Pool, and Payouts for the fourth quarter of 2005 will be based on
100% of the cumulative Bonus Pool.

6. Timing and Form of Payment of Payouts

Subject to the terms and conditions of this Plan, Payouts shall be made on a quarterly
basis by the end of the month following the end of the fiscal quarter. No Payouts will be
made if Pre-Bonus Operating Income is below 50% of the quarterly budgeted target and/or the
annually budgeted target.

7. Plan Changes; No Entitlement

The Compensation Committee of the Board may at any time amend, suspend, or terminate this
Plan, including 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.

	 	 	 
	

	FY2005
Bonus Plan

	 	Page 3

 

 

	 	(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.

	 	 	 
	

	FY2005
Bonus Plan

	 	Page 4

 

 

EXHIBIT A

Acknowledgment Form

I understand that I have been designated a Participant in the Virage Logic Corporation FY2005 Bonus
Plan (the “Plan”). I have received a copy of the Plan document.

I understand that, notwithstanding any other agreements, arrangements or understandings that may
exist, my Incentive Target Percentage for the Fiscal Year (FY2005) is ___%.

I hereby agree to the terms and conditions set forth in the Plan. I understand that I have no
right to earn any amount under the Plan until all conditions described in the Plan have been met,
as determined by the Compensation Committee of the Virage Logic Corporation Board of Directors, in
its sole judgment.

	 	 	 	 	 
	
	 	

	PLAN PARTICIPANT	 	DATE
	 
	 	 	 	 
	VIRAGE LOGIC CORPORATION	 	 
	 
	 	 	 	 
	By:

	 	
	 	

	 
	 	 	 	DATE
	Name:

	 	
	 	 
	 
	 	 	 	 
	Title:

	 	
	 	 

	 	 	 
	

	FY2005
Bonus Plan

	 	Page 5

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