OBJECTIVES
The specific aim of the 2008 Executive Incentive Plan is to focus Immersion’s executive
management on Immersion’s revenue, operating profit, gross margin goals and business objectives,
and to reward achievement of those goals.
ELIGIBILITY
In addition to your base salary, you are eligible to earn an incentive payment under Immersion’s
2008 Executive Incentive Plan as set out in this Plan and the attached document titled
Attachment A. In order to be eligible to receive any payment under this Plan, you must sign and
date a copy of the Plan on the space provided below and return it to Human Resources. An
executive’s eligibility to participate in this Plan will be subject to the review and approval
of the CEO and CFO of the Company, and any payments under this Plan will be subject to the
review and approval of the Company’s CEO, which approval may be withheld in his/her sole
discretion. This Plan supersedes all prior executive bonus, incentive, and/or variable
compensation plans of the Company, which are of no further force or effect.
Employees hired after January 1, and during the Plan Period who are permitted to participate in
the Plan shall be eligible to participate on a pro-rata basis, based upon their start date and
contingent upon continued active employment through the date when the Bonus Plan payout occurs.
The proration will be based on the number of work days during the plan year.
PLAN ADMINISTRATION
This Plan is effective for the Company’s 2008 fiscal year. The Company may cancel, suspend,
amend, or revise all or any part of the Plan for any reason at any time.
To the extent earned, payments hereunder will be wages and will be subject to withholding of
federal and state income and employment taxes. Earned payments under this Plan will be paid on
the next regular payroll date following the later of (a) 45 days after the end of the fiscal
year, (b) the date on which the Company’s Income Statement for the year has been finalized, or
(c) the date on which the Company’s earnings for the year have been publicly disclosed (the
“Payment Date”).
Nothing in this Plan shall in any way alter the at-will employment relationship between the
Company and its executives. All employees of the company are employed on an “at-will” basis,
which means that either the employee or the Company may terminate the relationship at any time,
with or without cause or notice.
For purposes of this Plan, a participant’s employment with Immersion terminates on the last day
on which work duties are actually performed by the participant. Periods of pay in lieu of
notice, severance, or any other post-termination benefits or compensation period shall not be
deemed periods of employment for purposes of this Plan. In order to earn any payment under the
Plan, a participant must have been continuously employed by Immersion from January 1, 2008
through the Payment Date. A participant who resigns from his employment with Immersion prior to
the Payment Date, or whose employment is terminated prior to the Payment Date, will not earn any
payment under this Plan.
Provided they meet the other eligibility requirements described in this Plan, participants who
are on an approved leave of absence at any time during the 2008 fiscal year will earn a pro
rated payment under this Plan based upon the portion of the year that they are actively employed
and not on leave status. To the extent that a participant is on an approved leave of absence on
the Payment Date, he/she will not earn any payment under this Plan unless he/she returns to
active employment with Immersion, at which time he/she will receive his/her Plan payment.
PLAN DEFINITIONS
Revenue is revenue that is recognized by Immersion for the applicable period in accordance with
generally accepted accounting principles and as reported in the Company’s audited financial
statements.
Cost of Goods Sold is the direct and allocated indirect production costs of producing goods and
services.
Gross Margin (GM) is determined by subtracting the Cost of Goods Sold (COGS) from the actual
sale price of the product. The net result is the GM. GM excludes non cash stock compensation
expense for the purposes of this Executive Incentive Plan.
Operating Profit (Loss) is Business Unit Operating Profit (Loss) less corporate support costs,
litigation expenses, and intangible amortization. Operating Profit (Loss) excludes non cash
stock compensation expense for the purposes of this Executive Incentive Plan.
Business Unit Operating Profit (Loss) is the revenue less departmental cost of goods sold and
direct operating expenses for a business unit. Direct operating expenses are the expenses
directly charged to a business unit including all variable compensation accruals and all
allocated departmental expenses. Business Unit Operating Profit (Loss) excludes non cash stock
compensation expense for the purposes of this Executive Incentive Plan.
Target Incentive is a percentage determined by management of the participant’s annual base
salary as of February 4, 2008. The actual bonus amount will vary depending on the extent to
which Company performance targets, Business Unit targets, and milestones are met as determined
by the Company at its sole discretion.
MBO’s are specific business milestones which must be completed, in strict accordance with the
stated terms and conditions associated with each MBO, to the satisfaction of the CFO and CEO.
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/s/ Richard Vogel
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May 21, 2008 |
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Executive
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/s/ J Passarello
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May 23, 2008 |
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VP of Human Resources
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/s/ S M Ambler
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May 23, 2008 |
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CFO
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/s/ Clent Richardson
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May 23, 2008 |
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CEO
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Attachment A
EXECUTIVE INCENTIVE PLAN STATEMENT OF GOALS FOR YEAR 2008
Richard Vogel
Percent of Base Salary Payment at Plan: 60%
The following is a statement of financial, strategic and tactical objectives for 2008 that will
serve as a basis for overall performance evaluation and determination of year-end executive
incentive award.
CEO Discretionary Multiplier: The CEO will determine a performance “weighting” to be applied to the
Executive’s initial incentive payment calculation (as determined based on the goals and objectives
below),which weighting will be based on the Executive’s overall annual performance as determined
solely by the CEO. The weighting factor will typically range from 0.80 to 1.20, which factor is
then multiplied by the executive’s initial incentive payment calculation to determine the
executive’s incentive payment.
Plan Components: The Plan has two independent Company financial performance components: Corporate
Metrics and Business Unit Metrics. Within each financial component you will be measured against
specific goals.
| A. |
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30% of your target bonus will be based on Corporate performance as follows. |
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(50%) Achieve GAAP Revenue of $42.900M. Achieve GAAP Operating Profit (Loss) of
($16.100)M. Operating Profit (Loss) includes non cash stock compensation expense.
Operating Profit (Loss) amounts are stated prior to taking account of Executive
Incentive Plan payment amounts. Payment amounts are not pro-rated between matrix
levels. |
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| Revenue / |
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| Operating |
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| Profit (Loss) |
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| Targets |
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$38.600M |
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$40.750M |
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$42.900M |
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$45.900M |
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$48.900M |
$(12.900)M |
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100 |
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110 |
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120 |
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150 |
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200 |
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$(14.000)M |
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90 |
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100 |
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110 |
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120 |
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150 |
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$(16.100)M |
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50 |
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80 |
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100 |
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110 |
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120 |
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$(16.900)M |
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0 |
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50 |
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80 |
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90 |
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90 |
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$(17.700)M |
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50 |
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80 |
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80 |
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(50%) Corporate Initiatives |
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M&A Activity: During FY2008 identify, conduct due diligence,
close, and assimilate at least one acquisition for the corporation that is
greater than $10M in Revenue or greater than $5M in Operating Income. |
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Oracle Implementation: Implement a company-wide ERP system by
upgrading to Oracle 11i in FY2008 from current version. A company-wide system
will help to integrate the majority of the data and processes of the
organization into a unified system and aid in the company attaining an
overarching goal of integrating the businesses more completely for operational
and strategic efficiencies. |
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Increase International presence across all businesses: FY2008
International Revenue is equal to or greater than 45% or $19M of total revenue. |
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4. |
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During 2008 generate at least 20 non financial or administrative
press releases. |
| B. |
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70% of your target bonus will be based on Business Unit performance as follows. |
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(75%) Achieve GAAP Revenue of $20.100M. Achieve GAAP Operating Profit (Loss) of
($6.700)M. Operating Profit (Loss) includes non cash stock compensation expense.
Operating |
