Virage Logic Corporation FY2008 Profit Sharing Bonus Plan
Exhibit 10.19
Virage Logic Corporation
FY2008 Profit Sharing Bonus Plan
1. Purpose
The Virage Logic Corporation FY 2008 Profit Sharing 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 2008 fiscal year beginning October 1, 2007, through September 30, 2008 (the “Fiscal Year”). This Plan is limited in time and will expire automatically on September 30, 2008 (“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, Director of Human Resources and the Worldwide Corporate 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) The Company will provide Participants in the plan quarterly updates through an employee communications meeting on progress toward achievement of the Company’s 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. | is employed by the Company as a full-time regular employee on the last day of each fiscal year; |
| b. | is not concurrently participating in a sales incentive or commission plan, or in any other MBO bonus plan provided by the Company with the exception of special extraordinary project bonus programs ; |
| c. | employees who begin employment or otherwise become eligible for participation will do so on a pro-rated basis based on complete weeks. |
| d. | has not transferred to a position with the Company that is not eligible for participation in the Plan (as determined in the Administrator’s sole discretion) is not subject to a performance improvement plan or other disciplinary actions. |
| e. | If at any time during the fiscal year a participant does not provide services to the Company due to a medical leave of absence, family leave or disability, this time away will not be subtracted from their bonus calculation. However, time away due to personal leave of absence will be subtracted from their bonus calculation. |
5. Plan Metrics
The Payout under this Plan for each Participant will be calculated based upon the following formula:
| Base Salary | X | Incentive Target Percentage | ÷ | Total Bonus Target Amount | X | Bonus Pool | = | Total Payout |
The Base Salary is the base salary actually paid to the employee in the fiscal year for which a Payout is calculated. Not including any payments for overtime or expenses.
Bonus Pool is a maximum of 7% of cumulative Pre-Bonus Operating Income.
Incentive Target Percentage is a percentage determined by the Administrator according to employee grade level
Pre-Bonus Operating Income is US Non-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).
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 within 30 days after the public announcement of the Company’s quarterly financial results.
7. Plan Changes; No Entitlement
The Compensation Committee of the Board may at any time amend, suspend, or terminate this Plan, including it 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. |
| (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. |
