BEA SYSTEMS, INC.
Exhibit 10.6
April 12, 2007
BEA SYSTEMS, INC.
2008 EXECUTIVE STAFF BONUS PLAN
Set forth below is the 2008 Executive Staff Bonus Plan (the Plan) for BEA Systems, Inc. (the Company). This Plan, under the BEA Systems, Inc. Senior Executive Bonus Plan, is applicable to certain executives who serve on the Companys Executive Leadership Team (ELT), links compensation directly to the Companys performance, and encourages those executives to make significant contributions towards the success of the Company. A basic premise of the Plan is that the higher one is in the organization, the more their total compensation is at risk.
A. | TARGET AWARD |
Each eligible executives Target Award is determined as a percentage of their base salary (as established for fiscal year 2008) as follows:
CEO: | 100% of base salary. | |
Other Executives: | 75% of base salary, except eligible executives who are also on a commission plan (EVP of BID, EVP of Services and EVP of Sales), each of whose Target Award under this Plan is 37.5% of their base salary. |
B. | PERFORMANCE GOALS |
The Performance Goals metrics are based on Bookings and Operating Margin, as defined below. Fifty percent (50%) of an eligible executives Target Award is based on the Bookings metric and the other fifty percent (50%) is based on the Operating Margin metric. The specific Bookings target (the Bookings Target) and Operating Margin target (Operating Margin Target) were determined by the Compensation Committee of the Board of Directors (the Compensation Committee) at its meeting held on March 14, 2007 (collectively, the Targets).
C. | AWARD THRESHOLD |
In order for eligible executives to receive any award under this Plan, the Companys Bookings and Operating Margin achieved in fiscal year 2008 must each meet or exceed 90% of their respective Targets.
D. | PARTICIPANTS |
The Compensation Committee shall determine eligibility to participate in this Plan. For fiscal year 2008, the Compensation Committee has determined that the following ELT positions shall be participants in this Plan: CEO, CFO, General Counsel, EVP of Products, EVP of HR, EVP of BID, EVP of Services, and EVP of Sales.
CONFIDENTIAL
E. | PAYOUT FORMULA |
Bookings means the Companys GAAP total license revenue, plus change in off-balance sheet license backlog, less revenue from significant acquisitions, in fiscal year 2008.
Operating Income means the Companys non-GAAP operating income, plus change in off-balance sheet license backlog, less base commission impact due to the inclusion of the change in backlog (using an average base rate cost of commission), less the impact from significant acquisitions, in fiscal year 2008.
Operating Margin means Operating Income divided by (Bookings plus the Companys Services revenue in fiscal year 2008).
Significant acquisitions are acquisitions which have more than a 2% impact on either Bookings or Operating Margin.
Achievement of the Bookings and Operating Margin metrics will be calculated as provided below:
Bookings or Operating Margin Achieved | ||||||
= | % Achievement | |||||
Bookings Target or Operating Margin Target |
For each of the Bookings and Operating Margin metrics, awards will be paid out as follows:
% Achievement | Award | |||
< 90% | 0 | |||
90% to 100% | 1.0X (i.e., the % of the award to be paid will equal the % Achievement); plus | |||
>100% to 150% | 1.5X (i.e., 1.5% for every 1% Achievement above 100%) |
Notwithstanding anything herein to the contrary, no executive shall receive an award under this Plan in excess of 150% of their Target Award.
F. | PAYMENT OF AWARDS |
Awards (if any) will be paid out under this Plan within sixty (60) days after the end of fiscal year 2008.
G. | MISCELLANEOUS |
1 | Notwithstanding anything herein to the contrary, the Compensation Committee, in its sole discretion, may eliminate or reduce awards payable to any executive which would otherwise be payable under this Plan, subject to applicable law. |
2. | Participation in this Plan does not create a contract of employment, does not change an executives at-will employment status, and does not guarantee the payment of any award. |
3. | This Plan, and each award under this Plan, is subject to the provisions of the BEA Systems, Inc. Senior Executive Bonus Plan. |
CONFIDENTIAL