Executive Incentive Plan
The spirit of the Intevac Executive Incentive Plan (“EIP”) is to motivate senior management to maximize
shareholder value by tying accomplishment of the Company’s financial objectives and each senior manager’s
individual objectives to cash incentive compensation.
Participation in the EIP is limited to the key members of the management team selected by the CEO. The
Compensation Committee reviews and approves the EIP each year.
The Bonus Pool is the amount of funds that are available to pay EIP bonuses each year.
The Bonus Pool is calculated by multiplying a percentage times Plan year pro-forma pretax earnings (excluding
any reduction in pretax earnings for EIP bonuses, employee profit sharing, and stock compensation expense). At
the beginning of each Plan year the CEO recommends, subject to Compensation Committee approval, the
percentage of pro-forma pretax earnings to be allocated to the Bonus Pool.
There is no Bonus Pool in years in which the Company does not report pro-forma pretax earnings. Since the
Bonus Pool is based upon pretax earnings it includes the effects of any interest income, or expense, or any
extraordinary gains, or losses, incurred by the Company during the Plan year.
The Compensation Committee reserves the right to exclude any extraordinary or unusual gains, or losses, from
pretax earnings for the purposes of calculating the Bonus Pool.
Each EIP participant is assigned a Target Bonus Percentage at the beginning of the calendar year, or when they
are hired. This Target Bonus Percentage may be changed during the year in the event that a promotion or
significant change in responsibility occurs. Each Participant’s Target Bonus will be calculated by multiplying their
Target Bonus Percentage times their Base Pay earned during the Plan year. For example, if a Participant’s Base
Pay earned during the Plan year was $100,000 and their Target Bonus Percentage was 20%, then t