Fiscal 2010 Executive Officer
Incentive Bonus Plan
1.
Purpose . The purpose of this Fiscal 2010 Executive Officer
Incentive Bonus Plan of Netezza Corporation (the
“Company”) is to enhance the Company’s ability to
attract, retain and motivate executive officers of the Company and
to tie a significant portion of the compensation of executive
officers to the attainment of corporate success, thus aligning the
incentives of the executive officers with the creation of value for
the stockholders of the Company.
2.
Eligibility . All of the Company’s executive officers,
within the meaning of Rule 3b-7 under the Securities Exchange Act
of 1934 (the “Participants”), are eligible to receive
bonus payments under this Plan. As of the date of adoption of this
Plan, Jim Baum, Pat Scannell, Trish Cotter and Ray Tacoma are
Participants in this Plan. If additional persons become executive
officers of the Company during the fiscal year ending
January 31, 2010 (“Fiscal 2010”), they may be
added as Participants in this Plan, at the discretion of the
Compensation Committee. Except as is otherwise determined by the
Compensation Committee, in order to be eligible to receive a bonus
payment under this Plan, the Participant must be employed by the
Company as of the time the Company first publicly reports its
financial results for the fiscal year or fiscal quarter, as
applicable, based upon which the bonus payment is
determined.
3. Period
Covered by Plan . This Plan covers Fiscal 2010. Bonus payments
for each Participant other than Mr. Tacoma will be based on
Revenue and Adjusted Operating Income (each as defined below) for
Fiscal 2010. Bonus payments for Mr. Tacoma will be based on
Revenue and Bookings (as defined below) in Fiscal 2010 on a
quarterly and year-to-date basis.
4.
Administration . This Plan will be administered by the
Compensation Committee of the Company’s Board of Directors.
The Compensation Committee shall have authority to adopt, amend and
repeal such administrative rules, guidelines and practices relating
to this Plan as it deems advisable. The Compensation Committee
shall have broad discretion to construe and interpret the terms of
this Plan, to make adjustments or amendments to this Plan, and to
make determinations as to whether the criteria for bonus payments
have been satisfied. All decisions by the Compensation Committee
shall be made in the Compensation Committee’s sole discretion
and shall be final and binding on all Participants and all persons
having or claiming any interest in this Plan. No member of the
Compensation Committee shall be liable for any action or
determination relating to or under this Plan.
5. Bonus
Payments — Participants Generally . This Section 5
covers the bonuses payable to each Participant other than
Mr. Tacoma. All references in this Section 5 to
“Participants” means each Participant other than
Mr. Tacoma.
(a)
Target Bonuses . Each Participant has a target bonus for
Fiscal 2010 under this Plan (the “Target Bonus”), which
is set forth below. In addition, each Participant’s Target
Bonus is allocated between, and determined based upon, the
following two criteria:
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Revenue — for purposes of this
Plan, “Revenue” means the Company’s revenue as
determined in accordance with generally accepted accounting
principles (“GAAP”) and reported in a filing by the
Company with the SEC; and
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Adjusted Operating Income —
for purposes of this Plan, “Adjusted Operating Income”
means the Company’s operating income, as determined in
accordance with GAAP and reported in a filing by the Company with
the SEC, plus the amount of operating expenses attributable to
(i) outstanding equity awards computed in accordance with FASB
Statement of Financial Accounting Standards No. 123R, and
(ii) amortization of acquired intangible assets.
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The portion of
a Participant’s Target Bonus that is allocated to Revenue is
referred to in this Plan as the “Revenue Target Bonus”;
and the portion of a Participant’s Target Bonus that is
allocated to Adjusted Operating Income is referred to in this Plan
as the “Adjusted Operating Income Target
Bonus”.
The Target Bonus,
and allocation of that Target Bonus between the Revenue Target
Bonus and the Adjusted Operating Income Target Bonus, for each
Participant is as follows:
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Target Bonus
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Revenue Target
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Adjusted Operating
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Name
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% of Base Salary
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Dollars
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Bonus
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Income Target Bonus
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80
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%
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$
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300,000
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$
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150,000
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$
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150,000
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69
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%
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$
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190,000
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$
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95,000
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$
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95,000
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50
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%
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$
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100,000
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$
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50,000
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$
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50,000
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(b)
Revenue Targets and Adjusted Operating Income Targets . For
purposes of this Plan, (i) the Company’s Revenue target
for Fiscal 2010 is as set forth in the Fiscal 2010 operating plan
approved by the Board of Directors at its December 16, 2008
meeting and attached to the minutes of such meeting (the
“Fiscal 2010 Plan”) and (ii) the Company’s
Adjusted Operating Income target for Fiscal 2010 is as set forth in
the Fiscal 2010 Plan (in the line item “Operating
Profit”). The Compensation Committee may adjust for purposes
of this Plan the Revenue target and the Adjusted Operating Income
target for Fiscal 2010 in such manner as it shall determine in its
discretion in the event the Company acquires another company or
business during Fiscal 2010 and/or to reflect other unusual events
that occur during the year.
(c)
Calculation of Revenue Bonuses . The Company will pay to
each Participant an annual bonus based on Revenue during Fiscal
2010, calculated as follows:
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no
Revenue bonus will be paid unless the Company attains 80% of its
Revenue target for Fiscal 2010;
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if
the Company attains from 80% up to and including 90% of its Revenue
target for Fiscal 2010, the Company will pay each Participant a
Revenue bonus of between 20% and 50% of each Participant’s
Revenue Target Bonus, with the applicable percentage equal to
(i) 20% plus (ii) (a) 30% (representing the spread
between 20% and 50%) multiplied by (b) (1) actual Revenue for
Fiscal 2010 as a percentage of the Revenue target less 80%, divided
by (2) the 10% spread between 80% and 90% (for example,
attainment of 87% of the Revenue target for Fiscal 2010 would
result in the payment of (i) 20% plus (ii) (a) 30% x (b)
(1)
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-2-
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87%
less 80% (or 7%) /(2) 10%, or 41%, of each Participant’s
Revenue Target Bonus);
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if
the Company attains from 90% up to and including 100% of its
Revenue target for Fiscal 2010, the Company will pay each
Participant a Revenue bonus of between 50% and 100% of each
Participant’s Revenue Target Bonus, with the applicable
percentage equal to (i) 50% plus (ii) (a) 50%
(representing the spread between 50% and 100%) multiplied by (b)
(1) actual Revenue for Fiscal 2010 as a percentage of the
Revenue target less 90%, divided by (2) the 10% spread between
90% and 100% (for example, attainment of 94% of the Revenue target
for Fiscal 2010 would result in the payment of (i) 50% plus
(ii) (a) 50% x (b) (1) 94% less 90% (or 4%) /(2) 10%, or
70%, of each Participant’s Revenue Target Bonus);
and
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if
the Company attains more than 100% of its Revenue target for Fiscal
2010, the Company will pay each Participant a Revenue bonus equal
to such percentage of the Participant’s Revenue Target Bonus
as is equal to actual Revenue for Fiscal 2010 as a percentage of
the Revenue target (for example, attainment of 116% of the Revenue
target for Fiscal 2010 would result in the payment of 116% of each
Participant’s Revenue Target Bonus), subject to a maximum
payment of 150% of the Participant’s Revenue Target
Bonus.
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The Company will
pay the bonuses payable under this Section 5(c) as promptly as
practicable following the meeting of the Compensation Committee at
which the Company’s operating results for Fiscal 2010 and the
bonuses due pursuant to this Section 5(c) are presented to the
Compensation Committee.
(d)
Calculation of Adjusted Operating Income Bonuses . The
Company will pay to each Participant an annual bonus based on
Adjusted Operating Income during Fiscal 2010, calculated as
follows:
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no
Adjusted Operating Income bonus will be paid unless the Company
attains 80% of its Adjusted Operating Income target for Fiscal
2010;
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if
the Company attains from 80% up to and including 90% of its
Adjusted Operating Income target for Fiscal 2010, the Company will
pay each Participant an Adjusted Operating Income bonus of between
20% and 50% of each Participant’s Adjusted Operating Income
Target Bonus, with the applicable percentage equal to (i) 20% plus
(ii) (a) 30% (representing the spread between 20% and 50%)
multiplied by (b) (1) actual Adjusted Operating Income for
Fiscal 2010 as a percentage of the Adjusted Operating Income target
less 80%, divided by
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