CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Exhibit 10.5
1997 Worldwide Employee Bonus Plan
Plan Purpose
At Shiva, we work hard to provide our customers with high quality products
and services each and every day. As a growing company, we can see the
tangible results of this dedication and loyalty. We know these results
depend on you. We are committed to sharing the company's financial success
with our employees. In the true spirit of a bonus, this plan is designed
to payout only after Shiva has achieved its goals. If the company comes
within **% its plan, we will all share in the rewards of a job well done
This year's plan has been revised to take into account our business goals
for 1997.
It is our hope that the 1997 Employee Bonus Plan will continue to motivate
all plan participants to strive for company prosperity. By working together,
we can all share financially in the company's growth.
Our 1997 Goal
There are numerous ways to measure the success of a company, our investors
consider growth in our operating income to be a key measure of our
performance. And operating income is a measurement that we can all
influence through revenue generation and/or expense control. Therefore, the
bonus pool will be driven by this measure. If our 1997 operating income
does not meet or exceed [*********************], no bonuses will be paid.
If our 1997 operating income equals or is greater than [************], 100%
of the bonus pool will be available for bonuses. This is an aggressive, but
reachable objective.
If we exceed our plan by *%, an additional pool will be made available for
bonuses. These bonuses will be awarded at management's discretion.
Eligibility
You are eligible for the Employee Bonus Plan if you are a full-time Shiva
employee, hired before or within 1997 and not participating in Sales
Commission Plans or eligible for quarterly bonuses (unless compensation plan
specifically states otherwise). Your bonus will be pro-rated based upon your
full months of consecutive employment through the year end. Employees who
have salary and/or level changes in 1997 will receive a pro-rated bonus
based on the number of months at each salary level.
Your Bonus Opportunity
Your bonus will be based on a fixed percentage of your base salary. This
percentage is determined by your salary level. (Your direct manager can tell
you the specific bonus potential for your salary level.)
Grade Target Bonus
I-V **%
VI-VIII **%
IX **%
X **%
Exec. **% (or per compensation plan)
Sr. V.P. **% (or per compensation plan)
CEO **%
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
There are two parts to your bonus. Your potential bonus is based on our
achievement of the operating income goal and your individual performance as
determined at year-end. This award will be made at management's discretion
and is intended to recognize and reward employees for their overall
contribution to the company throughout the year.
If Shiva achieves [*****************] or more, a special bonus pool will be
established. As mentioned, this pool will be available to provide additional
bonuses to those employees who have made significant contributions to our
success.
The Bonus Pool
The bonus pool will depend on our operating income. If our operating income
meets or exceeds [************], bonuses will be paid according to the
following table:
Operating Income Bonus Award Percentage
Below [************] *************
[************] to [*************] ***% to ***%
[************] to [*************] ***%
[************] and above *********************
The actual amount you receive will be based on the bonus potential for your
position. So, for example, if the company's operating income is exactly
[**********] and your performance meets your manager's expectations, you
could receive 100% of your bonus.
The Additional Bonus Pool Trigger - ***%
Operating income Additional Pool
***-***% **%
***-***% **%
***-***% **%
above ***% *******************
Example
A person earns $50,000 and is eligible for a **% bonus or $*******. Shiva
meets our operating income target (100%).
Company Operating Income (objective)
The employee automatically is eligible to receive $****** (100% of
the bonus amount)
Employee Performance (subjective)
The manager determines what percentage of the $******* the employee
will receive based on the individual performance based upon the
following guidelines:
If person "exceeds expectations" **%-***%
"fully meets expectations" **%-***%
"meets most expectation" **%-***%
"meets some expectations" **%-***%
"does not meet expectations" ***********
A forced curve will be used. No more than **% of eligible employees may
receive ***%.
Bonus Payments
Bonuses will be paid as soon as possible following completion of the annual
audit and release of earings. Bonuses will be paid by check and applicable
taxes will be deducted from your payment.
If You Leave Shiva
You must be on the payroll the day that bonuses are distributed to be
eligible for a bonus. If you are on an approved leave, your bonus will be
pro-rated, based on your continuous full months of employment during the
year.
No Guarantees
The Employee Bonus Plan will be updated each year. The plan does not
guarantee that you will be offered a bonus and does not guarantee your
continued employment with the company. The program is based on company and
individual performance and management reserves the exclusive right to modify
or terminate the plan at its discretion at any time.
In Summary
At Shiva, we want to recognize everyone's contributions in helping to make
the company successful. We believe that the Employee Bonus Plan will assist
us in ensuring that individual employees can be recognized for their
achievements. We look forward to us all sharing in our company's success.