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EXHIBIT (10)(cc)
C-COR.net Corp.
PROFIT INCENTIVE PLAN (PIP)
FISCAL YEAR 2001
1. Conceptual Basis of the Plan
The PIP plan is based upon the achievement of specific financial goals of the
Corporation as established on an annual basis by the Board of Directors. The PIP
plan provides the opportunity for employees to receive an incentive payment for
accomplishment of these specific financial goals. The plan initiates payments
based on the achievement of 85% or greater of total company operating income* or
earnings per share** dependent upon participant eligibility. The basic payment
formula is as follows:
Key Executives (as defined in Attachment A):
% of defined profit per key executive*** = PIP Payment
Employees (excluding key executives):
Employee's base wages X approved % = PIP Payment
* Total Operating income excludes one-time merger and acquisition related costs,
interest and other income expense, and operating income from new acquisitions
during the year.
**Earnings Per Share excludes one-time merger and acquisition related charges
but includes interest and other income/expense and operating income from new
acquisitions during the year.
***The President/CEO receives an amount equal to three times the key executive
PIP payment.
2. Participant Eligibility
Full-time, active employees and part-time, active employees (working a minimum
of 20 hours per week/1040 hours per year) of C-COR.net Corp., Convergence.com,
Silicon Valley Communications, Inc. and C-COR Canada are eligible for this
program.
The following wholly owned subsidiaries are not eligible:
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- Employees of C-COR Europe, B.V. (unless included as key executive)
- Employees of C-COR de Mexico, S.A. de C.V.
- Employees on Sales or Marketing Commission or Incentive Plans
- Employees of Worldbridge Broadband Services, Inc.
- Employees who are provided a specifically identified, alternative incentive
bonus
- Temporary Agency Employees, Independent Contractors, Co-op and Intern
(part-time) Employees
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New Hires within the Fiscal Year and / or Terminated Employees -
An employee is eligible for a quarterly PIP payment only if they have worked the
full fiscal quarter.
An employee is eligible to receive a year-end PIP payment if they worked at
least one full fiscal quarter during the 12-month period and were on the payroll
at the end of the fiscal year.
Note: The formula for calculating a PIP payment takes into account the
pro-rationing of the payment amount to reflect the amount of time the individual
was actively employed during the payment period.
Employees on Leave (Disability; Workers' Compensation; FMLA; Military Leave) -
An employee must be a full-time or part-time active employee in order to be
eligible for a payment. The individual would be eligible for a payment on a
pro-rata basis for the portion of FY 2001 in which he/she was a full-time or
part-time active employee.
3. Calculation of PIP Payment for Employees (excluding key executive list)
Total company operating income excluding one-time merger and acquisition related
costs, interest and other income expense, and operating income from new
acquisitions during the year is the metric for achievement of plan goals.
PIP Payment
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Less than 85% of Plan 0% payment
85% to *100% of Plan 7% of base wages during the measurement period
100% to 115% 9% of base wages during the measurement period
**115% 11% of base wages during the measurement period
* Denotes less than
** Denotes more than
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4. Key Executive PIP Payment
Fully diluted earnings per share from continuing operations excluding one-time
merger and acquisition related costs is the metric for this payment. It includes
interest and other income/expense, and operating income from new acquisitions
during the year. The Compensation Committee of the Board of Directors may adjust
earnings per share targets due to significant financial events during the year.
PIP Payment
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Less than 85% of Plan 0% payment
85% to *100% of Plan .20% of defined profit per key exec
100% to 115% .25% of defined profit per key exec
**115% .30% of defined profit per key exec
The defined profit is pre-tax, pre-PIP income from continuing operations
excluding one-time merger and acquisition related costs.
5. Frequency and Timing of Payments
After the completion of each fiscal quarter, a PIP payment will be calculated
based on the financial metrics as defined in section 1 above. Each quarter is
independent from the standpoint of the quarterly PIP payment calculation.
C-COR.net Corp.'s rolling financial forecast will be consulted with respect to
the projected total company operating income and earnings per share (as defined
above) for the entire fiscal year. If the rolling forecast reflects a lower PIP
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payment percentage for the year relative to the actual results for the quarter,
the lower percentage corresponding to the rolling forecast results will be used
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to calculate the PIP payments. If the rolling forecast reflects a higher PIP
payment percentage for the year relative to the actual results for the quarter,
the lower percentage dictated by the actual quarterly results will be used to
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calculate PIP payments.
If sufficient total operating income and/or earnings per share have been
generated to warrant a quarterly PIP payment, each eligible employee will be
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paid one-half of the PIP payment calculated for him/her for the fiscal quarter.
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The payment will be made as soon as practically possible, immediately after the
Company's Board of Directors reviews the quarterly financial results and agrees
to the payment. The Board generally reviews the financial results at mid-month
following the end of each fiscal quarter, except at fiscal year-end. Note that
the Board of Directors has complete discretion in administering and interpreting
the PIP Plan.
The remaining one-half payment from each of the first three fiscal quarters will
be accrued (held back) through the end of the fiscal year. After the financial
audit has been completed for the fiscal year and the Board of Directors has
reviewed the annual financial results (mid-August), a payment (assuming the
financial results support one) will be disbursed to all eligible employees as
soon as practically possible. The payment will consist of the following:
a) The remaining 1/2 payment "held back" from the first quarter of the fiscal
year
b) The remaining 1/2 payment "held back" from the second quarter of the fiscal
year
c) The remaining 1/2 payment "held back" from the third quarter of the fiscal
year
* Denotes less than
** Denotes more than
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d) The fourth quarter payment as well as the amounts "held back" over the first
three quarters.
Note that improvement or deterioration of financial results in subsequent
quarters can either positively or negatively impact the year-end payment with
respect to the amount(s) "held back" from earlier quarters.
6. Definition of base wages
Base wages are defined as the total base wages of an employee at the end of each
measurement period, not including any special compensation such as the
reimbursement of moving expenses, one-time bonuses, or the exercise of stock
options. Base wages do not include overtime, however shift differential will be
included in the calculation of base wages when applicable.
7. Administration
(a) The Compensation Committee of the Board of Directors oversees the Plan,
which shall be administered by the President and CEO and such other
employees of the Company as may be appointed by the President and CEO.
(b) Subject to the provisions of the Plan, the President and CEO shall have the
sole authority and discretion:
i) to construe and interpret the Plan;
ii) to determine and recommend to the Board of Directors for approval, the
amount of payments to be made under the Plan and the status and rights
of any participant or beneficiary to payments under the Plan;
iii) to decide all questions concerning the Plan and to make all other
determinations and to take all other steps necessary or advisable for
the administration of the Plan.
All decisions made by the President and CEO pursuant to the provisions of
the Plan shall be made in his or her sole discretion and shall be final,
conclusive, and binding upon all parties.
8. Right to Withhold Taxes
The Company shall have the right to withhold such amounts from any payment under
this Plan as it determines necessary to fulfill any federal, state, or local
wage or compensation withholding requirements.
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9. Non-Transferability of Rights
A participant's rights and interests under the Plan may not be assigned or
transferred in whole or in part either directly or by operation of law or
otherwise (except in an event of the participant's death), including, but not
limited to, by way of execution, levy, garnishment, attachment, pledge,
bankruptcy or in any other manner, and no such rights or interests of any
participant under the Plan shall be subject to any obligation or liability of
such participant other than any obligations or liabilities owed by the
Participant to the Company.
10. No Right to Continued Employment
Neither the Plan, nor any compensation payable under the Plan, shall confer upon
any participant any right to continuance of employment by the Company or any
affiliate of the Company nor shall they interfere in any way with the right of
the Company or any affiliate of the Company to terminate any participant's
employment at any time.
11. No Claim Against Assets
Nothing in this Plan shall be construed as giving any participant or his or her
legal representative, or designated beneficiary, any claim against any specific
assets of the Company or any affiliate or as imposing any trustee relationship
upon the Company or any affiliate in respect of the participant.
The Company shall not be required to segregate any assets in order to provide
for the satisfaction of the obligations hereunder. If and to the extent that the
participant or his or her legal representative or designated beneficiary
acquires a right to receive any payment pursuant to this Plan, such right shall
be no greater than the right of an unsecured general creditor of the Company or
any affiliate.
12. Company's Books and Records Conclusive
The Company's books and records, and internal accounting procedures, will be
conclusive for all purposes under the Plan.
13. Amendment or Termination
The Company may at any time, terminate or modify or amend the Plan in any
respect, at any time prior to payment for a fiscal quarter.
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14. No Other Agreements or Understandings
Except as expressly provided herein, this Plan represents the sole agreement
between the Company and participants concerning its subject matter and it
supersedes all prior agreements, arrangements, understandings, warranties,
representations, and statements between the parties concerning its subject
matter.
15. Governing Law
The Plan and all actions taken pursuant thereto shall be governed by, and
construed in accordance with, the laws of the State of Pennsylvania applied
without regard to conflict of law principles.
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Attachment A
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Mary G. Beahm*
David J. Eng*
Lawrence R. Fisher Jr.*
William T. Hanelly*
William J. Milliron
Gerhard B. Nederlof*
Carrie M. Packer
David A. Woodle*
Joseph E. Zavacky*
* denotes Officer of the company
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