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DISCRETIONARY BONUS PLAN

Employee Bonus Plan Agreement

DISCRETIONARY BONUS PLAN | Document Parties: KOMAG, INCORPORATED You are currently viewing:
This Employee Bonus Plan Agreement involves

KOMAG, INCORPORATED

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Title: DISCRETIONARY BONUS PLAN
Date: 3/17/2005
Industry: Computer Storage Devices     Sector: Technology

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                                                                    EXHIBIT 10.7

 

                               KOMAG, INCORPORATED

 

                            DISCRETIONARY BONUS PLAN

 

                             I. PURPOSES OF THE PLAN

 

1.01 Komag, Incorporated (the "Company") hereby establishes this Discretionary

Bonus Plan ("Plan") as an incentive program pursuant to which discretionary or

other retention-based bonuses may be awarded for one or more fiscal years in

order to retain the services of those employees critical to the Company's

financial success.

 

1.02 The Company's compensation programs are designed to retain and motivate

staff through the delivery of competitive cash compensation each year.

Accordingly, the Compensation Committee of the Company's Board of Directors as

plan administrator shall, with the assistance of the Company's management and

such outside compensation specialists as the Compensation Committee may deem

appropriate, undertake a competitive analysis for each fiscal year the Plan

remains in effect. If the analysis for any fiscal year suggests that the level

of cash compensation for that year does not adequately reflect the achievements

of the participants during the plan year, the Company's Board of Directors,

through the Compensation Committee of the Board, may establish a separate bonus

pool to reward those who contributed to the Company's performance. The bonus

distribution will be targeted to those employees considered essential to the

Company's continued financial success who would otherwise be vulnerable to

competitor recruiting by offers of more attractive compensation.

 

                         II. ADMINISTRATION OF THE PLAN

 

2.01 The Plan is hereby adopted by the Company's Board of Directors (the

"Board"), effective January 31, 2005, and shall be administered by the

Compensation Committee ("Committee") of the Board.

 

2.02 The interpretation and construction of the Plan and the adoption of rules

and regulations for administering the Plan shall be made by the Committee.

Decisions of the Committee shall be final and binding on all parties who have an

interest in the Plan.

 

                          III. DISCRETIONARY BONUS POOL

 

3.01 The Committee shall make an annual assessment of the industry, including

such factors as the financial performance of the Company's competitors, the

expansion plans of those competitors, and a competitive analysis of the

Company's annual cash compensation. Should such analysis suggest that the level

of annual cash compensation for the Company's key employees is not competitive,

resulting in their vulnerability to recruitment by other firms, or should

industry trends reveal that recruiting activity will in the upcoming year be

significant, the Committee shall have full power and authority to create a bonus

pool under the Plan for that fiscal year. The bonus pool shall be in


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