FISCAL YEAR 2010 MANAGEMENT BONUS
PLAN
All ArcSight,
Inc. (the “Company”) executives who do not otherwise
receive variable compensation will be eligible to participate in
this cash bonus plan. Each eligible executive’s actual
participation level will be determined by their individual
performance.
The cash bonus
available will be calculated quarterly based on a percentage of an
executive’s base salary upon the Company’s achievement
of both revenue targets and operating income targets
1 , as described below. At the end of each fiscal
quarter, both the revenue target and operating income target
1 will be compared to actual quarterly
performance. The amount of the bonus payable, in the aggregate,
with respect to each quarter is 50% of the bonus amount payable
based on the executive’s base salary at the performance level
achieved (but the maximum amount of such quarterly bonus payable in
each quarter is 50% of the bonus amount payable based on the
percentage of the executive’s base salary at the target
objective listed below 2 ),
prorated for the period covered and for the participant’s
tenure at the Company during such period. 3 It
is anticipated that each quarterly bonus, if any, will be paid to
executives promptly following determination of actual quarterly
performance relative to the revenue target and operating income
target for such quarter.
At the end of
the fiscal year, the annual cash bonus available is calculated
based upon the Company’s annual performance relative to both
annual revenue targets and operating income targets.
1 The annual cash bonus available, less the
amounts paid in the first three quarters or payable with respect to
the fourth quarter, is then distributed to participants based on
individual achievements against objectives. For all cash bonuses
award