ex1061.htm


    

      [
        * ] = Certain confidential information contained in this
        document, marked by brackets, has been omitted and filed separately with
        the
        Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
        Exchange Act of 1934, as amended.      

       

       

      Exhibit
        10.61

       

      Chordiant
        Fiscal Year 2008 General Counsel Incentive Bonus Plan

       

      General
        Counsel Bonus Plan

      The
        General Counsel Bonus Plan applies to the Vice President and General Counsel
        and
        is comprised of 2 components—the quantitative portion and the qualitative
        portion.  The quantitative portion under this plan will be calculated
        and paid (if applicable) quarterly based on corporate results measured against
        four quantitative measures: Contract Value (Bookings), GAAP Revenue, Non
        Gaap
        Operating Profit and Cash Flow. Additionally there will be a CEO discretionary
        measure which may be either quantitative or qualitative. The qualitative
        portion
        of the bonus will be calculated and paid on an annual basis.  Total
        bonuses paid in the fiscal year under the plan shall not exceed 300% of the
        bonus opportunity    Payment in any one quarter will be
        limited to a maximum of 100% of the participant’s targeted quantitative bonus
        for that quarter .  At the end of the fiscal year, the Company will
        calculate performance in total for the plan year and evaluate attainment
        against
        full plan year goals.

      


      The
        qualitative portion of the bonus may be paid regardless of the performance
        of
        the Company against the quantitative measures.  Evaluation of and
        payment for performance under the qualitative portion of the bonus shall
        be the
        exclusive decision of the Board of Directors. Payment  of the
        qualitative portion of the bonus is limited to no greater than 100% when
        overall
        performance under the quantitative measures is less than 100% on a combined
        measure basis.  When the quantitative measure is greater than 100% for
        the year, the qualitative portion of the bonus may also exceed 100%
        proportionately.

      


      Plan
        Summary

      


      Quantitative
        Components:

      
        	
                ·  

              	
                Contract
                  Value (Bookings) in $US

              


      

      
        	
                ·  

              	
                GAAP
                  Revenue in $US

              


      

      
        	
                ·  

              	
                Non
                  GAAP Operating Profit in $US

              


      

      
        	
                ·  

              	
                Cash
                  flow Generation in $US

              


      

      Discretionary
        Component:

      
        	
                ·  

              	
                CEO
                  Discretionary

              


      

      


      Plan
        annual maximum payout to individuals – 300%

      


      Payments

      
        	
                ·  

              	
                Quarterly

              


      

      
        	
                ·  

              	
                Limited
                  to 100% maximum payment each
                  quarter

              


      

      
        	
                ·  

              	
                Overachievement
                  paid at end of fiscal year

              


      

      


      


      
 

      Component
        – Contract Value (Bookings)

      Weighting
        – 25%

      


      Total
        Bookings Goal (in $US)

      


      Q1                                  $[
        * ]

      Q2                                  $[
        * ]

      Q3                                  $[
        * ]

      Q4                                  $[
        * ]

      FY2008                                $[
        * ]

      


          Performance*                                       Payout*

      Thresholds                    
        80%                                           
50%

      100%                                           100%

      120%                                           200%

      130%                                           300%

      


      


      Component
        – Revenue

      Weighting
        – 25%

      


      Revenue
        Goal (Reported GAAP Revenue in $US)

      


      Q1                                  $[
        * ]

      Q2                                  $[
        * ]

      Q3                                  $[
        * ]

      Q4                                  $[
        * ]

      FY2008                                $[
        * ]

      


      


          Performance*                                      Payout*

      Thresholds                    
        80%                                           
25%

      100%                                           100%

      120%                                           200%

      130%                                           300%

      


      Component
        – Non GAAP Operating Profit

      Weighting
        – 25%

      


      (Reported
        Non-GAAP Operating Profit in $US)

      


      Q1                                    $[
        * ]

      Q2                                    $[
        * ]

      Q3                                    $[
        * ]

      Q4                                    $[
        * ]

      FY2008                                  $[
        * ]

      


                                           Performance*                 
                 Payout*

      Thresholds                      
        80%                                           
25%

      100%                                           100%

      120%                                           200%

      130%                                           300%

      


      


      


      


      Component
        – Cash Flow

      Weighting
        – 15%

      


      (Periodic
        Change in Reported Cash, Cash Equivalents, Marketable Securities and Restricted
        Cash in $US)

      


      Q1                                    $[
        * ]

      Q2                                    $[
        * ]

      Q3                                    $[
        * ]

      Q4                                    $[
        * ]

      FY2008                                  $[
        * ]

      


      


                                           Performance*                    
                Payout*

      Threshold                       
        80%                                           
25%

      100%                                           100%

      120%                                           200%

      130%                                           300%

      


      


      *Performance
        and payout interpolate between levels

      


      Component
        – CEO Discretionary

      Weighting
        – 10%

      


      This
        component is paid at the sole discretion of the CEO.  Should the
        quantitative metrics specified above justify a bonus payment above 100% for
        the
        quantitative portion of this bonus plan, then the payment under this opportunity
        increases proportionately.

      


      
 

      


      Quantitative
        Measures – 75% of total bonus opportunity

      


      


      Bookings

      


      Contract
        value (“Bookings”) is a basis for measurement under the Executive Bonus
        Plan.  Bookings under this plan will be defined as the booking amount
        measured and represented by the non-cancelable portion of revenue under a
        contract or contracts plus executed statements of work.  The
        cancelable portion of a contract will receive booking credit when the customer
        and/or Chordiant performs tasks specified in the contract or a time limitation
        contained in the contract expires such that the contract relating to that
        portion of Bookings is no longer cancelable by the customer.  For each
        fiscal quarter, total Bookings will be determined utilizing the Company’s
        internal financial statements measured against the Company’s 2008 Annual
        Financial Plan.

      The
        portion of an executive’s bonus opportunity related to Bookings (a “Bookings
        Portion”) is determined and (if applicable) distributed equally across the
        fiscal year, with 25% of the Bookings Portion eligible for payment each
        quarter.  Whether the Bookings Portion qualifies for payment, however,
        is determined entirely by actual Company performance against the Company’s
        Bookings goals according to the following schedule:

       

      ·  If
        the Company does not achieve at least 80% of its Bookings goal for the quarter,
        then none of the Bookings Portion will qualify for payment that
        quarter.

       

      ·  If
        the Company achieves at least 80% of its Bookings goal for the quarter, but
        less
        than 100% of its Bookings goal for the quarter, then 50% of an executive’s
        target for the Bookings Portion will qualify for payment, with an additional
        2.5% of an executive’s target for the Bookings Portion qualifying for payment
        for each 1% above 80% to 100% of the Bookings goal that was achieved for
        the
        quarter.

       

      ·  If
        the Company achieves greater than 100% of its Bookings goal but less than
        120%
        of its Bookings goal, then an additional 5% of an executive’s target will
        qualify for payment after year end for each 1% above 100% of Bookings goal
        to
        120% of Bookings goal. From 120% of Bookings goal to 130% of Bookings
        goal,  an additional 10% of an executive’s target will qualify for
        payment after year end for each 1% above 120% of Bookings goal to 130% of
        Bookings goal until the maximum payout of 300% is reached.

       

      


      Revenue

      Revenue
        is the second measure for the Executive Bonus Plan and is defined as revenue
        as
        recognized under GAAP on the Company’s quarterly consolidated statement of
        operations in $US.

      


      ·  If
        the Company does not achieve at least 80% of its revenue goal for the quarter,
        then none of the Revenue Portion will qualify for payment that
        quarter.

       

      ·  If
        the Company achieves at least 80% of its revenue goal for the quarter then
        25%
        of an executive’s target for the revenue portion will qualify for payment, with
        an additional 3.75% of an executive’s target for the revenue portion qualifying
        for payment for each 1% above 80% of revenue goal to 100% of the revenue
        goal
        that was achieved for the quarter.

       

      ·   If
        the Company achieves greater than 100% of its revenue goal, then an additional
        5% of an executive’s target will qualify for payment after year end for each 1%
        above 100% of revenue goal until the payment of 200% at 120% of goal is reached.
        From 120% of revenue goal to 130% of revenue goal, then an additional 10%
        of an
        executive’s target will qualify for payment after year end for each 1% above
        120% of Revenue goal to 130% of revenue goal until the maximum payout of
        300% is
        reached.

       

      Non
        GAAP Operating Profit

       

      Non-GAAP
        Operating Profit is the third measure for the Executive Bonus Plan and is
        defined as Non-GAAP Operating Profit reported on  the Company’s
        quarterly Non-GAAP consolidated statement of operations in
        $US.  Historically, these Non-GAAP results exclude amortization of
        intangible assets and capitalized software development, stock-based compensation
        and other non-recurring charges.

      


      ·  If
        the Company does not achieve at least 80% of its Non-GAAP Operating Profit
        goal
        for the quarter, then none of the Non-GAAP Operating Profit portion will
        qualify
        for payment that quarter.

       

      ·  If
        the Company achieves at least 80% of its Non-GAAP Operating
        Profit  goal for the quarter then 25% of an executive’s target for the
        Non-GAAP Operating profit portion will qualify for payment, with an additional
        3.75% of an executive’s target for the Non-GAAP operating profit portion
        qualifying for payment for each 1% above 80% of revenue goal to 100% of the
        Non-GAAP Operating Profit goal that was achieved for the quarter.

       

      ·   If
        the Company achieves greater than 100% of its Non-GAAP Operating Profit goal,
        then an additional 5% of an executive’s target will qualify for payment after
        year end for each 1% above 100% of Non-GAAP Operating Profit goal until the
        payment of 200% at 120% of goal is reached. From 120% of Non-GAAP Operating
        Profit goal to 130% of Non-GAAP Operating Profit goal, then an additional
        10% of
        an executive’s target will qualify for payment after year end for each 1% above
        120% of Non-GAAP Operating profit goal to 130% of Non-GAAP Operating Profit
        goal
        until the maximum payout of 300% is reached.

       

      Cash
        Flow

       

      Cash
        Flow is the fourth  measure for the Executive Bonus Plan and is
        defined as the periodic Change in Reported Cash, Cash Equivalents, Marketable
        Securities and Restricted Cash)  reported on  the Company’s
        quarterly consolidated statement of balance sheets in $US.

      


      ·  If
        the Company does not achieve at least 80% of its revenue goal for the quarter,
        then none of the Revenue Portion will qualify for payment that
        quarter.

       

      


       

      ·  If
        the Company achieves at least 80% of its Non-GAAP Operating Profit goal for
        the
        quarter then 25% of an executive’s target for the Non-GAAP Operating profit
        portion will qualify for payment, with an additional 3.75% of an executive’s
        target for the Non-GAAP operating profit portion qualifying for payment for
        each
        1% above 80% of revenue goal to 100% of the Non-GAAP Operating Profit goal
        that
        was achieved for the quarter.

       

      ·   If
        the Company achieves greater than 100% of its Cash Flow goal, then an additional
        5% of an executive’s target will qualify for payment after year end for each 1%
        above 100% of Cash Flow goal until the payment of 200% at 120% of goal is
        reached. From 120% of Cash Flow goal to 130% of  Cash Flow goal, then
        an additional 10% of an executive’s target will qualify for payment after year
        end for each 1% above 120% of Cash Flow goal to 130% of Cash Flow goal until
        the
        maximum payout of 300% is reached.

       

      Calculations

      


      Calculations
        of quarterly payouts will be done on a quarterly stand-alone basis. At the
        end
        of the fiscal year the calculation of any payment in excess of 100% will
        be
        based on the results for the full year.  Executives joining the Company
        mid-year will only be entitled to a pro-rata portion of the bonus amount
        that
        exceeds 100%.

      


      Qualitative
        Measures – 25% of Bonus Opportunity

       

      Corporate
        Governance

       

      By
        Board direction the General Counsel reports to the Board in his role as chief
        compliance officer.  Each quarter he shall submit a report to the
        compensation committee on his activities in this role for evaluation by the
        committee.  At year end, based on such performance evaluation, the
        compensation committee shall recommend a scoring of full, partial or no payout
        to the Board for its determination.  Should the
        quantitative  metrics justify a bonus payment above 100%, the payment
        under this opportunity shall be increased proportionately.

      


      Payment

       

      The
        final decision to pay a bonus will remain the decision of the Board of Directors
        or the Compensation Committee if so delegated by the Board.  The Board
        may in its own discretion, determine to pay or not pay a bonus based upon
        the
        factors listed above or other Company performance criteria it deems
        appropriate.  The factors listed above are guidelines to assist the
        Board, or the Committee, as the case may be, in its judgment but the final
        decision to pay or not pay is in the discretion the Board.  In its
        discretion, the Committee may recommend, and the Board has the authority
        to
        approve, a payment of up to 50% of an executive’s bonus opportunity to an
        individual(s) without regard to the performance criteria set forth in this
        plan.

      


      Bonuses
        are generally calculated within thirty (30) days after the end of any given
        quarter and are generally paid within forty-five (45) days after the end
        of a
        given quarter, and generally not later than 60 days following the end of
        such
        quarter.

       

      Bonuses
        are then paid in the next regularly-scheduled paycheck.  Payment for
        achievement of greater than 100% of plan goal generally will be made not
        later
        than 60 days following the close of the Company’s fiscal year.  These
        payment dates are contingent upon the Company filing its periodic forms 10-Q
        and
        10-K.

       

      No
        bonus is earned until it is paid under this plan.  Therefore, in the
        event the employment of an executive eligible under this plan  is
        terminated (either by the Company or by the eligible executive, whether
        voluntarily or involuntarily) before a bonus is paid, then the executive
        will
        not be deemed to have earned that bonus, and will not be entitled to any
        portion
        of that bonus.

       

      Questions
        regarding the Plan should be directed to the Chief Executive Officer or the
        Vice
        President of Human Resources.  Acceptance of payment(s) under the Plan
        constitutes full and complete acceptance of its terms and
        conditions.  Any eligible employee wishing to not participate in the
        Plan must notify the Vice President, Human Resources in writing of their
        desire
        and intent.

       

      Nothing
        in this Plan is intended to alter the at-will nature of employment with the
        Company, that is, the executive’s right or the Company’s right to terminate the
        executive’s employment at will, at any time with or without cause or advance
        notice.  In addition, acceptance of this Plan shall not be construed
        to imply a guarantee of employment for any specified period of
        time.

       

      This
        Plan contains the entire agreement between the Company and its executives
        on
        this subject, and supersedes all prior bonus compensation plans or programs
        of
        the Company and all other previous oral or written statements regarding any
        such
        bonus compensation programs or plans.

       

      The
        contents of this Plan are Company confidential.  This Plan shall be
        governed by and construed under the laws of the State of
        California.

       

      *   *   *

       

      I
        have read and understand the provisions of this 2008 Executive Bonus Plan
        and
        hereby accept its terms.

       

      


      Employee
        Name
        (Printed)                                                      Employee
        Signature                                                      Date