Exhibit 10.35
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Akamai Technologies, Inc. Form of 2007 Executive Bonus Plan
NAME: _______________________________ PERFORMANCE PERIOD: FY 2007
TITLE: ______________________________
This 2007 Executive Bonus Plan sets forth your annual compensation for 2007
based on the achievement of certain corporate and individual performance
objectives. In order to receive your annual cash incentive bonus, you must be an
employee and a member of the Office of the CEO throughout all of 2007 and the
corporate and individual objectives must be met, as described more thoroughly
below. The Compensation Committee will resolve all questions arising in the
administration, interpretation and application of this plan, and the
Compensation Committee's determination will be final and binding on all
concerned. Where permitted by applicable law, the Compensation Committee
reserves the right to modify, at its discretion and at any time, the terms of
this plan, including, but not limited to, the performance objectives, targets,
and payouts.
ANNUAL COMPENSATION LEVELS AT TARGET PERFORMANCE
Base salary: $__________
Annual cash incentive bonus at target: $__________
Total Cash Compensation at target: $__________
PERFORMANCE OBJECTIVES/TARGETS
The following are the corporate and individual performance objectives for your
2007 cash incentive bonus:
CRITERIA WEIGHT THRESHOLD TARGET MAXIMUM
- -------- ------ ------------- -------------- -------------------------
Corporate Financial Performance
(FY 2007) 80% 96.1% 100% 106.2%
Bonus Payout Amount 50% of Target 100% of Target 200% of Target
Individual FY 2007 Goals(1) 20% Partially Achieves Objectives Fully Achieves Objectives
Bonus Payout Amount 25% of Target 50% of Target 100% of Target
---
TOTAL 100%
===
The method for calculating Corporate Financial Performance is described in
Schedule 1, which is attached hereto. In the event of any question as to whether
the components of the Corporate Financial Performance have been satisfied, the
Compensation Committee of the Board of Directors shall make such determination.
The Chief Executive Officer shall make the determination as to whether the
individual objectives have been met by you and shall report such determination
to the Compensation Committee. The Compensation Committee shall retain the
right, exercisable in its discretion, to overrule the determination of the Chief
Executive Officer and make an independent and binding determination as to
whether you have achieved your individual objectives. Subject to the foregoing,
the Chief Executive Officer's determination will be final and binding on all
concerned.(2) No incentive will be paid under a specific incentive criterion for
performance below the associated threshold listed for that criterion.
Performance above the maximum may result in higher reward at the sole discretion
of the Compensation Committee.
- ----------
(1) As established by the Chief Executive Officer or, in the case of the CEO,
the Compensation Committee.
(2) In the case of the Chief Executive Officer, the Board of Directors shall
make the determination as to whether his individual performance objectives
have been met. The determination of the Board of Directors will be final
and binding on all concerned.
Akamai Technologies, Inc. Form of 2007 Executive Bonus Plan
The payment of any annual incentive bonus will be made within thirty (30) days
following the filing of Akamai's SEC 10-K filing for FY 2007.
Acceptance: --------------------------------
--------------------------------- Date
Approved by: --------------------------------
-------------------------------- Date
Akamai Technologies, Inc. Form of 2007 Executive Bonus Plan
SCHEDULE 1
CORPORATE FINANCIAL PERFORMANCE MEASUREMENT METHODOLOGY
A. Overview; Definitions
The executive shall only be eligible for the corporate performance-based
bonus of the salary upon the Company's achievement of certain financial metrics
based on target 2007 Revenue of $[**] and target 2007 Normalized EPS of $[**]
per share. The Company's performance measured against each metric shall be
equally weighted to enable comparison as a percentage of a combined target. For
purposes of this Agreement, such metrics shall have the following meanings:
"Revenue" shall mean the Company's revenue for fiscal year 2007 calculated
in accordance with generally accepted accounting principles in the United States
of America as reported in the 2007 Financial Statements.
"Normalized EPS" shall mean the Company's annual earnings per diluted share
for fiscal year 2007 excluding amortization of intangible assets, equity-related
compensation, restructuring charges and benefits, certain gains and losses on
equity investments, loss on early extinguishment of debt, utilitzation of tax
NOLs/credits, release of deferred tax assets and similar items excluded by the
Company in determining normalized earnings per share in issuing its earnings
announcement for fiscal year 2007.
If, on December 31, 2007, the Company is required to make periodic reports
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Company's consolidated financial statements filed with the Securities and
Exchange Commission on Form 10-K shall constitute its "Public Company Financial
Statements" and shall apply. If, on December 31, 2007, the Company is not
required to make periodic reports under the Exchange Act, the Company's
regularly prepared annual audited financial statements prepared by management
shall be its "Private Company Financial Statements" and shall apply. The
applicable financial statements may be referred to herein as the "2007 Financial
Statements."
B. Calculation of Percentages
The Company's Revenue shall be calculated as a percentage of the Company's
target revenue for fiscal year 2007 of $[**] and multiplied by 0.5 (the "Revenue
Percentage Component"). The Company's Normalized EPS shall be calculated as a
percentage of the Company's target normalized earnings per share for fiscal year
2007 of $[**] and multiplied by 0.5 (the "Normalized EPS Component"). The sum of
the Revenue Percentage Component and the Normalized EPS Component shall be the
"Actual Percentage of Targets."
C. Bonus Amounts
1. If the Actual Percentage of Targets equals 96.1%, then the executive
shall receive the Minimum Bonus for Financial Performance (the "Minimum Bonus");
provided, however, that in the event that the Company has not achieved both
Revenue of $[**] and Normalized EPS of $[**] per share, then the executive shall
not be entitled to any bonus hereunder.
2. If the Actual Percentage of Targets equals 100%, then the executive
shall receive the Target Bonus for Financial Performance (the "Target Bonus").
3. If the Actual Percentage of Targets equals 106.2% or more, then the
executive shall receive the Maximum Bonus for Financial Performance (the
"Maximum Bonus").
4. If the Actual Percentage of Targets is between 96.1% and 100%, then the
executive shall receive a bonus equal to the sum of (i) the Minimum Bonus plus
(ii) an amount equal to the product of the Minimum Bonus multiplied by a
fraction the numerator of which is the Actual Percentage of Targets Revenue
minus 96.1% and the denominator is 3.9%.
Akamai Technologies, Inc. Form of 2007 Executive Bonus Plan
5. If the Actual Percentage of Targets is between 100% and 106.2%, then the
executive shall receive a bonus equal to the sum of the (i) the Target Bonus
plus (ii) an amount equal to the product of the Target Bonus multiplied by a
fraction the numerator of which is the Actual Percentage of Targets Revenue
minus 100% and the denominator is 6.2%.
D. Effect of an Acquisition by Akamai
In the event that Akamai enters into an Acquisition Transaction during
2007, then Revenue and Normalized EPS shall be adjusted to give effect to such
Acquisition Transaction. An "Acquisition Transaction" means (i) the purchase of
more than 50% of the voting power of an entity, (ii) any merger, reorganization,
consolidation, recapitalization, business combination, liquidation, dissolution
or share exchange involving Akamai and an entity not previously owned by Akamai,
or (iii) the purchase or other acquisition (including, without limitation, via
license outside of the ordinary course of business or joint venture) of assets
that constitute more than 50% of another entity's total assets or assets that
account for more than 50% of the consolidated net revenues or net income of such
entity.
As soon as practicable following the closing of an Acquisition Transaction,
the Compensation Committee shall make a determination of the estimated impact of
the Acquisition Transaction on the Company's 2007 Revenue and Normalized EPS. If
the Acquisition Transaction is estimated to be accretive, then:
(i) in calculating Revenue for purposes of determining the Revenue
Percentage Component, reported Revenue shall be reduced by the amount of
estimated revenue contribution from the Acquisition Transaction; and
(ii) in calculating Normalized EPS for purposes of determining the
Normalized EPS Percentage Component, Normalized EPS, as calculated based on the
2007 Financial Statements, shall be reduced by the amount of the estimated
Normalized EPS contribution from the Acquisition Transaction.
If the Acquisition is estimated to be non-accretive, then:
(iii) in calculating Normalized EPS for purposes of determining the
Normalized EPS Percentage Component, Normalized EPS, as calculated based on the
2007 Financial Statements, shall be increased by the amount of the estimated
negative Normalized EPS impact from the Acquisition Transaction.
All determinations of the Compensation Committee regarding the estimated impact
of an Acquisition Transaction shall be final, binding and non-appealable. The
cumulative impact of all Acquisition Transactions shall be set forth in a
statement delivered upon payment, if any, of the bonus contemplated by this
plan. This plan shall be deemed to be automatically amended, without further
action by the Company or the executive, to give effect to any adjustments
required by this Section D.