ex1062.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
      10.62

    FY2008
      Compensation Plan

    


    


    October
      1, 2007

    


    


    PK,

    


    The
      letter is to clarify your variable compensation plan for Chordiant’s 2008 fiscal
      year which begins October 1st, 2007 and
      ends
      September 30th,
      2008.  Your variable compensation element, which has a target equal to
      60% of your annual base salary of $275,000, will be calculated and paid (if
      applicable) quarterly based on the following criteria:

    


    
      	
              ·  

            	
              50%
                based on the criteria and payment calculation formulas established
                in the
                Chordiant Fiscal Year 2008 Executive Incentive Bonus Plan (attachment
                A)

            


    

     

    
      	
              ·  

            	
              50%
                based on the actual worldwide cumulative Professional Services Direct
                Controllable Contribution Margin % (“PS DCCM %”) versus plan numbers
                (attachment B).  For FY 2008, PS DCCM% will include results for
                both Consulting Service and
                Training.

            


    

     

    
      	
              ·  

            	
              If
                the Company achieves greater than 100% of its PS DCCM% goal but less
                than
                120% of its PS DCCM% goal, then an additional 5% of an executive’s target
                will qualify for payment after year end for each 1% above 100% of
                PS
                Margin goal to 120% of PS Margin goal until the maximum payout of
                200% is
                reached.

            


    

     

    
      	
              ·  

            	
              From
                120% of DCCM% goal to 130% of DCCM% goal, then an additional
                10%  will qualify for payment after year end for each 1% above
                120% of DCCM% goal to 130% of DCCM% goal until the maximum payout
                of 300%
                is reached.

            


    

     

    For
      purposes of calculating worldwide professional services DCCM %, Chordiant will
      use the financial results in the Worldwide Professional Services full-stream
      (combining both consulting service and training) income statement published
      in
      the Great Plains financial system for the applicable period.  This
      full-stream income statement will then be adjusted by:

    


    
      	
              ·  

            	
              reversing
                all travel and expense reimbursement and related travel and expense
                reimbursement costs

            


    

    


    
      	
              ·  

            	
              Reversing
                all corporate allocation for centralized service
                charges.

            


    

    


    


    Additional
      adjustments to revenue for timing differences for Open Air billings versus
      recognized revenue may also be included in the calculation at the discretion
      of
      Chordiant’s Vice President of Worldwide Field Operations.  Such
      adjustments must be agreed to in writing by both Chordiant’s Vice President of
      Worldwide Field Operations and Chief Executive Officer before payment is
      processed.

    


    


    


    Total
      bonuses paid to you in the fiscal year under the plan shall not exceed 300%
      of
      your annual bonus opportunity of $165,000.  Payment and earnings in
      any one of the first three fiscal quarters will be limited to a maximum of
      100%
      of your targeted bonus for that quarter which equates to $41,250.

    


    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 the bonus opportunity 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, but not later than 60 days following the end of such
      quarter.  Notwithstanding the foregoing, bonuses will not be
      calculated or paid for a fiscal quarter until the public disclosure of final
      financial information for the applicable period.  Bonuses are then
      paid in the next regularly-scheduled paycheck.  Contingent upon the
      Company filing it’s Form 10K, payment for achievement of greater than 100% of
      plan goal and for the qualitative measure of the plan will be made not later
      than 60 days following the close of the Company’s fiscal year.

     

    No
      bonus is earned until it is paid under this plan.  Therefore, in the
      event your employment is terminated (either by the Company or by you, whether
      voluntarily or involuntarily) before a bonus is paid, then you 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.  If you do not wish to participate in the Plan, you must
      notify the Vice President, Human Resources in writing of his desire and
      intent.

     

    Nothing
      in this Plan is intended to alter the at-will nature of employment with the
      Company, that is, your right or the Company’s right to terminate the your
      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 you 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.

     

    


    


    Please
      acknowledge that you have read and understood the terms of this agreement by
      signing and dating below.

    


    


    Signed                                                                                                Date

    


    


     

    


    
      
        
                

                        
    

           

        

        
           

          
            

          

        

        
           

                

                    [
              * ] = 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.      

             
    

        

      

    

    


    Attachment
      A

    


    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.

    


    


    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%.