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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
      þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the year ended December 31,
    2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission File Number:
    000-27389
  INTERWOVEN, INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

77-0523543(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   160 East
    Tasman Drive, San Jose, California 95134 (Address
    of principal executive offices and zip code)
  (408) 774-2000 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class:

Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per share

The NASDAQ Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
    None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





INTERWOVEN,
    INC.
  TABLE OF
    CONTENTS
  
  Page No.PART IItem 1.

Business


4Item 1A.

Risk Factors


12Item 1B.

Unresolved Staff Comments


26Item 2.

Properties


26Item 3.

Legal Proceedings


26Item 4.

Submission of Matters to a Vote of Security
    Holders


28PART IIItem 5.

Market for the Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


28Item 6.

Selected Financial Data


30Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


31Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


47Item 8.

Financial Statements and Supplementary Data


49Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


51Item 9A.

Controls and Procedures


51Item 9B.

Other Information


52PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


52Item 11.

Executive Compensation


52Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


52Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


52Item 14.

Principal Accountant Fees and Services


52PART IVItem 15.

Exhibits, Financial Statement Schedules


53Signatures


92EX-21.01EX-23.01EX-31.01EX-31.02EX-32.01EX-32.02




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CAUTION
    REGARDING FORWARD-LOOKING STATEMENTS
  Form 10-K Form 10-K
   3




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##### Table of Contents



PART I  ITEM 1.
    BUSINESS  Overview
    (408) 774-2000. Form 10-K, Form 10-Q, Form 8-K
  Recent
    Developments
        Interwoven
    Solutions and Products
  Solution
    Areas
    Interwoven
    Solutions for the Enterprise
    
    Interwoven Web Content Management enables organizations to
    transform their online presence, protect their brand online,
    comply with corporate governance standards and improve
    operational efficiency across Web-based initiatives. 4




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
    Interwoven Composite Application Provisioning standardizes the
    method by which changes to code, content and configuration are
    aggregated, synchronized and deployed. This solution increases
    efficiency and reduces provisioning costs, accelerates
    application
    time-to-market
    and eliminates error-prone manual processes.
    Interwoven Digital Asset Management centralizes the management
    of logos, copy, video, images, presentations and other rich
    media and digital assets and makes them accessible in a secure
    manner to geographically dispersed teams. This solution is
    designed to promote consistent communication across
    organizations, advances global brand control and consistency and
    accelerate time to market for products and campaigns.
    Interwoven Targeting and Engagement enables marketing
    organizations to deliver more compelling and relevant online
    experiences, target content and offers to high value segments,
    and optimize the return on customer interactions based on
    analyzed behavior, resulting in increased conversions, greater
    competitive differentiation and more interactive dialogues with
    customers.
    Interwoven Website Optimization optimizes a wide range of online
    marketing elements  such as landing pages,
    registration pages, shopping carts, credit card pages, banner
    ads, email creatives and Web applications  to
    encourage online visitors to take a specific action. As a
    result, this solution helps marketers address one of their
    biggest challenges: maximizing the return on marketing
    investments (e.g. search marketing) that drive visitors to
    websites.  Interwoven
    Solutions for Professional Services Firms
  e-mail
  
    Interwoven Electronic Client File enables firms to protect
    intellectual capital in a secure, centralized repository,
    improve productivity, accelerate user adoption with little or no
    training and provide convenient access.
    Interwoven Records Management enables organizations to implement
    effective unified physical and electronic records retention
    policies and is designed to improve control over storage costs
    and reduce risk of loss or unauthorized access.
    Interwoven Enterprise Search and Knowledge Management for
    Professional Services Firms delivers a highly tailored and
    comprehensive search solution that spans firm-wide repositories
    and provides a simple Web interface with rich tools to refine
    search results for end-users.
    Interwoven eDiscovery significantly streamlines and simplifies
    eDiscovery with an on-demand hosted service architected for ease
    of use, predictable costs and scalability for high volumes of
    electronically stored information. This service uses an advanced
    feature set and automated processes to quickly handle high
    volumes of electronically stored information, present that
    information in a way that makes it easy to review and assess,
    and easily produce information in a format that can be exported
    to litigation support systems or other third parties.  Interwoven
    Solutions for Global Capital Markets
  over-the-counter
 5




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
    Interwoven P2P
    (peer-to-peer)
    is a standardized communication platform that enables
    streamlined messaging and workflow for automated OTC derivatives
    confirmations. Interwoven P2P also provides a solution that
    enables
    peer-to-peer
    messaging for secure, bilateral messaging between transaction
    counterparties.
    Interwoven MessageConnect enables mitigation of trade
    confirmation and settlement risks by enabling seamless
    connectivity with market utilities such as DTCC.
    Interwoven Trade Lifecycle solution enables financial services
    customers to automate the entire realm of trade-related
    documentation and workflow.  Products
    
    Document Management Interwoven WorkSiteprovides collaboration and document management capabilities
    that enable organizations to capture, develop, manage, share,
    review, approve and archive multiple forms of electronic media.
    WorkSite is designed to provide quick and intuitive document
    storing, location and retrieval within an environment that
    provides rich collaboration and project based context to capture
    the highest level of organizational knowledge and facilitate
    team information exchange. With WorkSite, documents,
    e-mails,
    voicemail, images, schedules, tasks and calendars are combined
    within a single project environment that provides a
    comprehensive set of document handling features, including
    check-in/check-out, version control, full-text and metadata
    search and document-level security and permissions.
    Web Content Management Interwoven Web
    Content Management Suiteprovides the capabilities needed to
    build, deploy and integrate content management for the
    enterprise. With Interwoven Web content management, companies
    can easily and cost effectively create and manage up to hundreds
    of thousands of Websites. Companies can centralize the control
    of site architecture, navigation and presentation, distribute
    site development, deployment and ongoing management to
    individual business units, and improve the ability of content
    contributors and editors to add, modify and approve content
    within the context of individual Web initiatives. Interwoven Web
    content management provides the foundation and tools for
    effectively using the Web and all of its complex permutations to
    increase business value, improve productivity and reduce
    information technology expenses. The suite is made up of the
    following products:  
    Interwoven TeamSiteprovides a content management
    platform to manage authoring, site design and layout, workflow
    and approval, archiving and content tagging.
    Interwoven LiveSitepowers dynamic, online content
    delivery and Web 2.0 capabilities such as blogs, Really Simple
    Syndication and other social computing functionality.
    Interwoven MetaTaggerautomates the tagging of content to
    increase accessibility and relevance for customers.
    Interwoven OpenDeployprovides multi-tiered, multi-stage,
    transaction based deployment and provisioning of content, code
    and configurations. 6




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
    Interwoven Targetingprovides user segmentation,
    rules creation and management and dynamic, targeted content
    delivery. These capabilities enable businesses to dynamically
    deliver content, offers and an overall Web experience targeted
    to specific visitor segments, whether those segments include
    anonymous site visitors or known customers.  
    Multivariable Optimization Interwoven
    Optimostprovides a multivariable testing and Website
    optimization solution through a software-as-a-service delivery
    model. By exposing different combinations of content to
    different visitors and then measuring visitors actions,
    Interwoven Optimost can identify the most compelling combination
    of content and layout to drive increased online conversions.
    Interwoven Optimost utilizes advanced multivariable testing and
    optimization methodologies to simulate thousands of combinations.
    Digital Asset Management Interwoven
    MediaBinhelps organizations effectively manage, distribute
    and publish the thousands of customer-facing digital assets our
    customers typically use to promote products and brands. MediaBin
    enables marketing teams to provide their global sales force and
    business partners with instant, self-service access to current
    and approved marketing content  including
    photographs, logos, presentations, audio, video and more. When
    used in conjunction with Interwoven TeamSite, MediaBin
    streamlines the usage of rich media content across global Web
    properties and other channels.
    Records Management Interwoven
    RecordsManagerprovides for the application and management
    of retention policy for paper, electronic documents and
    e-mail in a
    single solution. Enabling the management of all forms of
    records, Interwoven RecordsManager aids organizations in
    controlling records consistently and effectively across offices,
    media types and systems, reducing the cost of managing records
    and the risk from inconsistent application of records policies.
    Interwoven RecordsManager is integrated with WorkSite.
    eDiscovery Interwoven Discovery Miningprovides an eDiscovery solution on a software-as-a-service
    model. The service automates critical points of the eDiscovery
    process including processing, storing, categorizing and
    production. Advanced features  including concept
    searching, clustering,
    e-mail
    filtering, reporting and analytics  improve
    productivity and help drive effective case assessment.
    Enterprise Search and Knowledge Management Interwoven Universal Searchunifies content across
    multiple internal and external content sources within a single
    search environment and presents easy to navigate results quickly
    in a user-friendly Web interface, with enhanced filtering
    capabilities. Interwoven Universal Search 
    Professional Services Edition is powered by Vivisimo Velocity, a
    third party software vendor.
    E-Mail
    Management Interwoven
    E-Mail
    Managementprovides organizations a multiple-path solution
    to assist in the capture and storage of
    e-mail
    within the unified context of a project, engagement or matter
    file  reducing the burden on
    e-mail
    servers and transforming
    e-mail from
    an isolated knowledge source into an asset that can be shared
    across all locations, easily and securely.
    Content Integration The Interwoven Content
    Integration Moduleprovides an integration framework for
    connecting content-centric business processes and systems. For
    example, this module enables integration between our products
    such as Interwoven MetaTagger, Interwoven WorkSite MP and
    Interwoven TeamSite.  Support
    and Service
  Customer Support. e-mail
  Consulting.
 7




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e-discovery
  Training.
  Customers
  time-to-value and/or
  Sales and
    Marketing
        Research
    and Development
   8




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Acquisitions
    Competition
    
    companies addressing needs of the market in which we compete
    such as EMC Corporation, IBM, Microsoft Corporation, Open Text
    Corporation, Oracle Corporation and Vignette Corporation;
    intranet and groupware companies, such as IBM, Microsoft
    Corporation and Novell, Inc.;
    open source vendors, such as RedHat, Inc., OpenCms and
    Mambo; and
    in-house development efforts by our customers and partners.        
    breadth of the enterprise content management solution;
    product functionality and features; 9




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
    coverage of sales force and distribution channel;
    availability of global support;
    quality and depth of integration of the individual software
    modules across the full content management suite;
    ease and speed of product implementation;
    hardware implications and the total cost of ownership required
    to deploy content management solutions;
    financial condition of vendors;
    vendor and product reputation;
    ability of products to support large numbers of concurrent users;
    price;
    security;
    interoperability with established software;
    scalability; and
    ease of access and use.    Seasonality
    Intellectual
    Property and Other Proprietary Rights
       10




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Employees
   11




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ITEM 1A.
    RISK
    FACTORS  Form 10-K
  The
    announcement of our proposed transaction with Autonomy may
    impact our revenues and results of operations.
      The
    stock prices and business of Interwoven may be adversely
    affected if our proposed transaction with Autonomy is not
    completed.
  day-to-day
  The
    effects of the current global economic crisis may impact our
    business, operating results or financial
    condition.
   12




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Sales
    cycles for our products are generally long, complex and
    unpredictable, so it is difficult to forecast our future
    results.
    
    Licensing of our software products is often an enterprise-wide
    decision by our customers that involves many customer-specific
    factors, so our ability to make a sale may be affected by
    changes in the strategic importance of a particular project to a
    customer, budgetary constraints of the customer or changes in
    customer personnel.
    Customer approval and expenditure authorization processes can be
    difficult and time consuming, and delays in the process could
    impact the timing and amount of revenues recognized in a quarter.
    Changes in our sales incentive plans may have unexpected effects
    on our sales cycle and contracting activities.
    The significance and timing of our software enhancements, and
    the introduction of new software by our competitors, may affect
    customer purchases.     13




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Many
    factors can cause our operating results to fluctuate and if we
    fail to satisfy the expectations of investors or securities
    analysts, our stock price may decline.
    
    the discretionary nature of our customers purchases and
    their budget cycles;
    the inherent complexity, length and associated unpredictability
    of our sales cycle;
    seasonal fluctuations in information technology purchasing;
    the success or failure of any of our product offerings to meet
    with customer acceptance;
    delays in recognizing revenue from license transactions;
    timing of new product releases;
    timing of receipt and recognition of large customer orders;
    changes in competitors product offerings;
    sales force capacity and the influence of resellers and systems
    integrator partners;
    our ability to integrate newly acquired products or technologies
    with our existing products and effectively sell newly acquired
    or enhanced products;
    the level of our sales incentive and commission-related expenses;
    risks that our proposed transaction with Autonomy disrupts
    current plans and operations, and the potential difficulties in
    employee retention as a result of the announcement or pendency
    of the proposed transaction;
    the possibility that our proposed transaction with Autonomy will
    not be completed for any reason;
    the effect of the announcement or pendency of the proposed
    transaction with Autonomy on our customer relationships,
    operating results and business generally, including any
    deterioration of our relationships with resellers and strategic
    partners; and
    the amount of the costs, fees and expenses and charges related
    to our proposed transaction with Autonomy and associated legal
    proceedings, including the possibility that the definitive
    agreement for our transaction with Autonomy may be terminated
    under circumstances that require us to pay Autonomy a
    termination fee of up to $25 million.    We may
    not be able to sustain profitability.
   14




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Support
    and service revenues have represented a large percentage of our
    total revenues. Our support and service revenues are vulnerable
    to reduced demand and increased competition.
        Our
    stock price may be volatile, and your investment in our common
    stock could suffer a decline in value.
    
    actual or anticipated variations in quarterly operating results,
    or key balance sheet metrics such as days sales outstanding;
    changes in financial estimates by us or in financial estimates
    or recommendations by any securities analysts who cover our
    stock;
    operating performance and stock market price and volume
    fluctuations of other publicly traded companies and, in
    particular, those that are deemed comparable to us;
    announcements by us or our competitors of new products or
    services, technological innovations, significant acquisitions,
    strategic relationships or divestitures;
    our failure to realize the expected benefits of acquisitions;
    announcements of investigations or regulatory scrutiny of our
    operations or lawsuits filed against us;
    announcements of negative conclusions about our internal
    controls;
    articles in periodicals covering us, our competitors or our
    markets;
    reports issued by market research and financial analysts;
    capital outlays or commitments; 15




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
    additions or departures of key personnel;
    sector factors including conditions or trends in our industry
    and the technology arena;
    overall stock market factors, such as the price of oil futures,
    value of financial assets, interest rates and the performance of
    the economy;
    the occurrence of any event, change or circumstance that could
    give rise to the ability on the part of Autonomy to terminate
    the definitive agreement for our proposed transaction with
    Autonomy;
    the timing of the closing of our proposed transaction with
    Autonomy, including any delay caused by our failure to have a
    specified minimum amount of cash, marketable securities and
    other eligible investments that would allow us to complete the
    transaction on or before April 22, 2009;
    the possibility that our proposed transaction with Autonomy will
    not be completed for any reason;
    the effect of the announcement or pendency of our proposed
    transaction with Autonomy on our customer relationships,
    operating results and business generally, including any
    deterioration of our relationships with resellers and strategic
    partners; and
    the amount of the costs, fees and expenses and charges related
    to our proposed transaction with Autonomy and associated legal
    proceedings.    The
    timing of large customer orders may have a significant impact on
    our consolidated financial results from period to
    period.
    Fluctuations
    in the exchange rates of foreign currency, particularly in Euro,
    British Pound and Australian Dollar and the various other local
    currencies of Europe and Asia, may harm our
    business.
   16




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Our
    international operations have a significant impact on our
    overall operating results.
    
    foreign currency fluctuations;
    difficulties in attracting and retaining staff (particularly
    sales personnel) and managing foreign operations;
    the expense of foreign operations and compliance with applicable
    laws;
    political and economic instability;
    the expense of localizing our products for sale in various
    international markets and providing support and services in the
    local language;
    reduced protection for our intellectual property rights in some
    countries;
    protectionist laws and business practices that favor local
    competitors;
    difficulties in the handling of transactions denominated in
    foreign currency and the risks associated with foreign currency
    fluctuations;
    regulation by United States federal and state laws, including
    the Foreign Corrupt Practices Act, and foreign laws, regulations
    and policies;
    changes in multiple tax and regulatory requirements;
    the effect of longer sales cycles and collection periods or
    seasonal reductions in business activity; and
    economic conditions in international markets.    Contractual
    terms or issues that arise during the negotiation process may
    delay anticipated transactions and revenues.
     17




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Increasing
    competition could cause us to reduce our prices and result in
    lower gross margins or loss of market share.
    
    companies addressing needs of the market in which we compete
    such as EMC Corporation, IBM, Microsoft Corporation, Open Text
    Corporation, Oracle Corporation and Vignette Corporation;
    intranet and groupware companies, such as IBM, Microsoft
    Corporation and Novell, Inc.;
    open source vendors, such as OpenCms, Mambo and RedHat,
    Inc.; and
    in-house development efforts by our customers and partners.        Impairment
    charges related to our goodwill or long-lived assets could
    adversely affect our future operating results.
   18




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We may
    not realize the anticipated benefits of past or future
    acquisitions, and integration of these acquisitions may disrupt
    our business and management.
    
    difficulty in assimilating the operations and personnel of the
    acquired company;
    difficulty in effectively integrating the acquired technologies
    or products, and related business models, with our current
    products, technologies and business model;
    difficulty in maintaining controls, procedures and policies
    during the transition and integration; 19




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
    disruption of our ongoing business and distraction of our
    management and employees from other opportunities and challenges
    due to integration issues;
    difficulty integrating the acquired companys accounting,
    management information, human resources and other administrative
    systems;
    inability to retain key technical and managerial personnel of
    the acquired business;
    inability to retain key customers, distributors, vendors and
    other business partners of the acquired business;
    inability to achieve the financial and strategic goals for the
    acquired and combined businesses;
    incurring acquisition-related costs or amortization costs for
    acquired intangible assets that could impact our operating
    results;
    issuing common stock that would dilute our current
    stockholders percentage ownership;
    using a substantial portion of our cash resources or incur debt;
    potential impairment of our relationships with employees,
    customers, partners, distributors or third-party providers of
    technology or products;
    potential failure of the due diligence processes to identify
    significant issues with product quality, architecture and
    development, integration obstacles or legal and financial
    contingencies, among other things;
    incurring significant exit charges if products acquired in
    business combinations are unsuccessful;
    incurring additional expenses if disputes arise in connection
    with any acquisition;
    potential inability to assert that internal controls over
    financial reporting are effective;
    potential inability to obtain, or obtain in a timely manner,
    approvals from governmental authorities, which could delay or
    prevent such acquisitions; and
    potential delay in customer and distributor purchasing decisions
    due to uncertainty about the direction of our product offerings.    and/or
  Our
    cash and investments are subject to risks which may cause losses
    and affect the liquidity of these investments.
   20




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Our
    revenues depend on a small number of products and markets, so
    our results are vulnerable to shifts in demand.
        Our
    future revenues depend in part on our installed customer base
    continuing to license additional products, renew customer
    support agreements and purchase additional
    services.
    Our
    future revenues may depend in part on how successful we are at
    addressing the needs of the markets we enter.
   21




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Because
    a significant portion of our revenues are influenced by
    referrals from strategic partners and, in some cases, sold
    through resellers, our future success depends in part on those
    partners, but their interests may differ from
    ours.
       22




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We
    must attract and retain qualified personnel to be successful and
    competition for qualified personnel is increasing in our
    market.
      Our
    failure to deliver defect-free software could result in losses
    and harmful publicity.
       23




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If our
    products cannot scale to meet the demands of thousands of
    concurrent users, our targeted customers may not license our
    software, which will cause our revenues to
    decline.
      If our
    products do not operate with a wide variety of hardware,
    software and operating systems used by our customers, our
    revenues would be harmed.
      Our
    products may lack essential functionality if we are unable to
    obtain and maintain licenses to third-party software and
    applications.
     24




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Our
    ability to use net operating losses to offset future taxable
    income may be subject to certain limitations.
  2008-2009
  Difficulties
    in introducing new products and product upgrades and integrating
    new products with our existing products in a timely manner will
    make market acceptance of our products less
    likely.
    We
    might not be able to protect and enforce our intellectual
    property rights, a loss of which could harm our
    business.
     25




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ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES      ITEM 3.
    LEGAL
    PROCEEDINGS  Legal
    proceedings related to public offerings.
  Simmonds v. Bank of America Corp. No. 07-1585,
 26




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Legal
    proceedings related to the proposed merger
  City of Roseville
    Employees Retirement System, on behalf of itself and all
    others similarly situated v. Interwoven, Inc. et al No. 4312- Newman,
    individually and on behalf of all others similarly
    situated v. Corey, et al No. 4337- Stefanache, on behalf of himself
    and all others similarly situated v. Interwoven, Inc. et
    al. No. 4347- Police and Fire Retirement System
    of the City of Detroit, individually and behalf of all others
    similarly situated v. Interwoven, Inc. et al. No. 4362-
  In re Interwoven, Inc. Shareholders Litigation No. 4362-VCL)
   27




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##### Table of Contents



ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Price
    Range of Common Stock
      High


LowYear ended December 31, 2008:Fourth quarter

$
14.07


$
9.67Third quarter

$
16.01


$
11.57Second quarter

$
13.78


$
10.40First quarter

$
14.67


$
10.63Year ended December 31, 2007:Fourth quarter

$
14.96


$
12.05Third quarter

$
15.66


$
11.63Second quarter

$
16.93


$
13.07First quarter

$
17.30


$
14.15  28




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Holders
    of Record
    Dividend
    Policy
    Unregistered
    Sales of Equity Securities
    Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers
   29




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ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K
  Years Ended December 31,2008


2007


2006


2005


2004(In thousands, except per share amounts)Selected Consolidated Statements of Operations Data:Total revenues

$
260,288


$
225,668


$
200,319


$
175,037


$
160,220Gross profit

$
188,258


$
162,568


$
133,696


$
117,518


$
108,122Income (loss) from operations

$
31,437


$
13,923


$
2,316


$
(1,860
)

$
(24,307
)Net income (loss)*

$
32,047


$
23,678


$
6,437


$
626


$
(23,568
)Basic net income (loss) per common share

$
0.70


$
0.53


$
0.15


$
0.01


$
(0.58
)Shares used in computing basic net income (loss) per common share


45,805



45,068



42,979



41,751



40,494Diluted net income (loss) per common share

$
0.69


$
0.51


$
0.15


$
0.01


$
(0.58
)Shares used in computing diluted net income (loss) per common
    share


46,783



46,524



43,995



42,390



40,494     *
    
    For the years ended December 31, 2008 and 2007, net income
    includes the reduction of valuation allowance recorded in prior
    years for deferred tax assets by $1.5 million and
    $4.8 million, respectively, based on our assessment of
    these deferred tax assets are more likely than not to be
    realized.  December 31,2008


2007


2006


2005


2004(In thousands)Selected Consolidated Balance Sheet Data:Cash and cash equivalents and short-term investments

$
185,227


$
157,349


$
176,461


$
137,199


$
133,757Working capital

$
132,490


$
106,941


$
120,294


$
86,009


$
85,975Total assets

$
525,848


$
468,358


$
426,287


$
398,606


$
393,776Bank borrowings

$



$



$



$



$
Total stockholders equity

$
407,526


$
359,846


$
323,960


$
298,700


$
289,123  30




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Overview
            time-and-materials
   31




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##### Table of Contents



Recent
    Developments
     32




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##### Table of Contents



Results
    of Operations
  Revenues
  Years Ended December 31,


Percentage Change2008


2007


2006


2007 to 2008


2006 to 2007(In thousands, except percentages)License

$
96,027


$
86,788


$
75,678



11
%


15
%Percentage of total revenues


37
%


38
%


38
%Support and service


164,261



138,880



124,641



18
%


11
%Percentage of total revenues


63
%


62
%


62
%$
260,288


$
225,668


$
200,319



15
%


13
%   Revenues
    License.
  Support and Service.
   33




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##### Table of Contents



Cost of
    Revenues
  Years Ended December 31,


Percentage Change2008


2007


2006


2007 to 2008


2006 to 2007(In thousands, except percentages)Cost of license revenues

$
7,415


$
7,886


$
16,367



(6
)%


(52
)%Percentage of license revenues


8
%


9
%


22
%Percentage of total revenues


3
%


3
%


8
%Cost of support and service revenues


64,615



55,214



50,256



17
%


10
%Percentage of support and service revenues


39
%


40
%


40
%Percentage of total revenues


25
%


24
%


25
%$
72,030


$
63,100


$
66,623



14
%


(5
)%   License.
    Support and Service.
 34




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##### Table of Contents



Operating
    Expenses
  Sales
    and Marketing
  Years Ended December 31,


Percentage Change2008


2007


2006


2007 to 2008


2006 to 2007(In thousands, except percentages)Sales and marketing

$
89,943


$
83,201


$
77,114



8
%


8
%Percentage of total revenues


35
%


37
%


39
%      35




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##### Table of Contents



Research
    and Development
  Years Ended December 31,


Percentage Change2008


2007


2006


2007 to 2008


2006 to 2007(In thousands, except percentages)Research and development

$
40,378


$
37,447


$
35,069



8
%


7
%Percentage of total revenues


16
%


17
%


18
%     General
    and Administrative
  Years Ended December 31,


Percentage Change2008


2007


2006


2007 to 2008


2006 to 2007(In thousands, except percentages)General and administrative

$
23,656


$
24,620


$
16,787



(4
)%


47
%Percentage of total revenues


9
%


11
%


8
%     Amortization
    of Intangible Assets
  Years Ended December 31,


Percentage Change2008


2007


2006


2007 to 2008


2006 to 2007(In thousands, except percentages)Amortization of intangible assets

$
2,806


$
3,229


$
3,312



(13
)%


(3
)%Percentage of total revenues


1
%


1
%


2
%  36




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##### Table of Contents



Restructuring
    and Excess Facilities Charges (Recoveries)
  Years Ended December 31,


Percentage Change2008


2007


2006


2007 to 2008


2006 to 2007(In thousands, except percentages)Restructuring and excess facilities charges (recoveries)

$
38


$
148


$
(902
)



*%



*%Percentage of total revenues



*%



*%



*%     *
    
    Percentage is not meaningful          Interest
    Income and Other, Net
  Years Ended December 31,


Percentage Change2008


2007


2006


2007 to 2008


2006 to 2007(In thousands, except percentages)Interest income and other, net

$
4,013


$
9,270


$
6,324



(57
)%


47
%Percentage of total revenues


2
%


4
%


3
%    37




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##### Table of Contents



Provision
    (Benefit) for Income Taxes
  Years Ended December 31,


Percentage Change2008


2007


2006


2007 to 2008


2006 to 2007(In thousands, except percentages)Provision (benefit) for income taxes

$
3,403


$
(485
)

$
2,203




*%



*%Percentage of total revenues


1
%



*%


1
%     *
    
    Percentage is not meaningful    Accounting for Income Taxes
  Share-Based
    Payment Accounting for
    Stock-Based Compensation,
   38




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##### Table of Contents



Liquidity
    and Capital Resources
  December 31,


Percentage Change2008


2007


2006


2007 to 2008


2006 to 2007(In thousands, except percentages)Cash and cash equivalents and short-term investments

$
185,227


$
157,349


$
176,461



18
%


(11
)%Working capital

$
132,490


$
106,941


$
120,294



24
%


(12
)%Stockholders equity

$
407,526


$
359,846


$
323,960



13
%


11
%                39




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##### Table of Contents



40




---



##### Table of Contents



Bank Borrowings.
  Facilities.
  Contractual Obligations and Commitments.
  Payment due by PeriodLess than


1 to 3


3 to 5


More thanTotal


1 Year


Years


Years


5 YearsLong-term debt obligations

$



$



$



$



$
Capital lease obligations


















Operating lease obligations


30,965



7,790



11,496



7,799



3,880Purchase obligations


















Other long-term liabilities


















Total

$
30,965


$
7,790


$
11,496


$
7,799


$
3,880          41




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##### Table of Contents



StandbyLetters ofDecember 31,

Credit2009

$
3,0412010

$
3,0412011

$
1,5412012

$
1,5412013

$
1,541After 2013

$
1,541     Financial
    Risk Management
  non-United
  Accounting for Derivative Instruments and Hedging
    Activities
    Off-Balance
    Sheet Arrangements
  Regulation S-K.
     42




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##### Table of Contents



Critical
    Accounting Policies and Estimates
    
    revenue recognition;
    estimating the allowance for doubtful accounts and sales returns;
    accounting for stock-based compensation;
    accounting for income taxes; and
    valuation of long-lived assets, intangible assets and goodwill.  Revenue Recognition.
  No. 97-2, Software Revenue Recognition, SOP No. 98-9, Modification of
    SOP 97-2,
    Software Revenue Recognition with Respect to Certain
    Transactions. SOP No. 97-2
  SOP No. 97-2,
 43




---



##### Table of Contents



case-by-case
  time-and-materials
  Revenue
    Recognition
      Allowance for Doubtful Accounts.
  Allowance for Sales Returns. Revenue Recognition When Right of
    Return Exists
 44




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##### Table of Contents



Accounting for Stock-Based
    Compensation. Share-Based
    Payment.
    Accounting for Income Taxes. Accounting for Income Taxes
    Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109.
     45




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##### Table of Contents



Impairment of Goodwill and Long-Lived
    Assets. Goodwill and Other Intangible
    Assets
  
    Step 1  We compare the fair value of our single
    reporting unit to its carrying value, including goodwill. If the
    reporting units carrying value, including goodwill,
    exceeds the units fair value, we move on to Step 2. If the
    units fair value exceeds the carrying value, no further
    work is performed and no impairment charge is necessary.
    Step 2  We perform an allocation of the fair value of
    the reporting unit to its identifiable tangible and non-goodwill
    intangible assets and liabilities. This allocation derives an
    implied fair value for the reporting units goodwill. We
    then compare the implied fair value of the reporting units
    goodwill with the carrying amount of the reporting units
    goodwill. If the carrying amount of the reporting units
    goodwill is greater than the implied fair value of its goodwill,
    an impairment charge would be recognized for the excess.      Accounting for the
    Impairment or Disposal of Long-Lived Assets.
    Recent
    Accounting Pronouncements
   46




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##### Table of Contents



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    Interest
    Rate Risk
        AverageCarrying


InterestValue


RateCash equivalents

$
84,306



2.24
%Short-term investments


46,770



3.72
%$
131,076



3.23
%     AverageCarrying


InterestValue


RateCash equivalents

$
31,239



4.27
%Short-term investments


88,896



5.48
%$
120,135



5.05
%       Foreign
    Currency Risk
   47




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##### Table of Contents



ContractNotional


ExchangePrincipal


RateAustralian Dollars

$
2,211



0.70Euros


5,574



1.39British Pounds


3,223



1.46Japanese Yen


1,022



0.01$
12,030Estimated fair value of net liability

$
77     ContractNotional


ExchangePrincipal


RateAustralian Dollars

$
1,213



0.87Euros


3,280



1.46British Pounds


3,551



1.98Japanese Yen


700



0.01$
8,744Estimated fair value of asset

$
28       Commodity
    Price Risk
   48




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##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Quarterly
    Financial Information (Unaudited)
    Three Months EndedDecember 31,


September 30,


June 30,


March 31,2008


2008


2008


2008Revenues:License

$
26,517


$
24,160


$
23,378


$
21,972Support and service


43,287



41,705



39,777



39,492Total revenues


69,804



65,865



63,155



61,464Cost of revenues:License


1,884



1,587



2,165



1,779Support and service


16,360



16,743



15,562



15,950Total cost of revenues


18,244



18,330



17,727



17,729Gross profit


51,560



47,535



45,428



43,735Operating expenses:Sales and marketing


22,925



22,311



22,670



22,037Research and development


10,233



10,513



9,679



9,953General and administrative


6,324



6,251



5,349



5,732Amortization of intangible assets


736



734



668



668Restructuring and excess facilities charges (recoveries)


24



18



44



(48
)Total operating expenses


40,242



39,827



38,410



38,342Income from operations


11,318



7,708



7,018



5,393Interest income and other, net


708



878



1,249



1,178Income before provision for income taxes


12,026



8,586



8,267



6,571Provision for income taxes*


1,317



849



787



450Net income

$
10,709


$
7,737


$
7,480


$
6,121Basic net income per common share

$
0.23


$
0.17


$
0.16


$
0.13Shares used in computing basic
    net income per common share


46,236



45,951



45,599



45,434Diluted net income per common share

$
0.23


$
0.16


$
0.16


$
0.13Shares used in computing diluted
    net income per common share


47,004



47,133



46,476



46,717   49




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##### Table of Contents



Three Months EndedDecember 31,


September 30,


June 30,


March 31,2007


2007


2007


2007Revenues:License

$
24,932


$
21,225


$
21,017


$
19,614Support and service


37,953



34,228



33,597



33,102Total revenues


62,885



55,453



54,614



52,716Cost of revenues:License


1,981



1,859



2,086



1,960Support and service


14,666



13,915



13,441



13,192Total cost of revenues


16,647



15,774



15,527



15,152Gross profit


46,238



39,679



39,087



37,564Operating expenses:Sales and marketing


24,193



19,000



20,204



19,804Research and development


9,519



9,552



9,315



9,061General and administrative


6,878



6,812



5,971



4,959Amortization of intangible assets


759



814



828



828Restructuring and excess facilities charges


83



1



61



3Total operating expenses


41,432



36,179



36,379



34,655Income from operations


4,806



3,500



2,708



2,909Interest income and other, net


2,297



2,199



2,282



2,492Income before provision for income taxes


7,103



5,699



4,990



5,401Provision (benefit) for income taxes*


(3,581
)


1,638



785



673Net income

$
10,684


$
4,061


$
4,205


$
4,728Basic net income per common share

$
0.24


$
0.09


$
0.09


$
0.11Shares used in computing basic
    net income per common share


45,287



45,293



45,057



44,636Diluted net income per common share

$
0.23


$
0.09


$
0.09


$
0.10Shares used in computing diluted
    net income per common share


46,477



46,538



46,575



46,460     *
    
    Provision (benefit) for income taxes for the quarter ended
    December 31, 2008 and 2007 includes the reduction of
    valuation allowance recorded in prior years for deferred tax
    assets by $1.5 million and $4.8 million, respectively,
    based on our assessment that recognition of these deferred tax
    assets are more likely than not to be realized.    Form 10-K.
 50




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##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Rule 13a-15(e) 15d-15(e) Rule 13a-15 Rules 13a-15(e) 15d-15(e)
  Form 10-K.
  Form 10-K.
  Managements
    Report on Internal Control over Financial Reporting
  Rule 13a-15(f) Form 10-K
   51




---



##### Table of Contents



Changes
    in Internal Control over Financial Reporting
    Form 10-K Rule 13a-14 Form 10-K
  ITEM 9B.
    OTHER
    INFORMATION   PART III  Form 10-K
  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE      ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT AND RELATED
    STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   52




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##### Table of Contents



PART IV  ITEM 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES      Report of Independent Registered Public
    Accounting Firm


56Consolidated Financial Statements:Consolidated Balance Sheets at December 31,
    2008 and 2007


58Consolidated Statements of Income for the years
    ended December 31, 2008, 2007 and 2006


59Consolidated Statements of Stockholders
    Equity for the years ended December 31, 2008, 2007 and
    2006


60Consolidated Statements of Cash Flows for the
    years ended December 31, 2008, 2007 and 2006


61Notes to Consolidated Financial Statements


62      Schedule II 
    Valuation and Qualifying Accounts
  Balance











Balanceat Beginning





Charged to





at Endof Period


Write-offs


Expenses


Adjustments


of Period(In thousands)Allowance for doubtful accounts:Year ended December 31, 2008

$
599


$
(199
)

$
235


$



$
635Year ended December 31, 2007

$
449


$
(46
)

$
196


$



$
599Year ended December 31, 2006

$
779


$
(330
)

$



$



$
449Allowance for sales returns:Year ended December 31, 2008

$
325


$
(728
)

$
1,330


$



$
927Year ended December 31, 2007

$
342


$
(561
)

$
544


$



$
325Year ended December 31, 2006

$
321


$
(342
)

$
363


$



$
342  53




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##### Table of Contents



Incorporated by Reference

FiledNumber

Exhibit Title

Form

Date

Number

Herewith2
.01

Agreement and Plan of Merger, dated October 17, 2007, by
    and among Registrant, Broadway Merger LLC, Optimost LLC and Mark
    Wachen, as representative

8-K

10/22/07


2
.012
.02

Agreement and Plan of Merger dated as of January 22, 2009
    by and among Autonomy Corporation plc, Milan Acquisition Corp.
    and Interwoven, Inc.

8-K

1/22/09


2
.012
.03

Agreement and Plan of Merger, dated as of July 23, 2008, by
    and among Registrant, Presidio Acquisition Corp., Discovery
    Mining, Inc. and Charles R. Work, as Representative

8-K

7/25/08


2
.013
.01

Registrants Fourth Amended and Restated Certificate of
    Incorporation

S-8

11/19/03


4
.083
.02

Registrants Amended and Restated Bylaws

8-K

4/25/07


3
.014
.01

Form of Certificate for Registrants common stock

S-1

9/23/99


4
.0110
.01*

Form of Indemnity Agreement between Registrant and each of its
    directors and executive officers

10-K

12/14/07


10
.0110
.02*

1996 Stock Option Plan and related agreements

S-1

7/27/99


10
.0210
.03*

1998 Stock Option Plan and related agreements

S-1

7/27/99


10
.0310
.04*

1999 Equity Incentive Plan

10-Q

8/8/06


10
.0110
.05*

Forms of Option Agreements and Stock Option Exercise Agreements
    related to the 1999 Equity Incentive Plan

10-Q

8/8/06


10
.0210
.06*

1999 Employee Stock Purchase Plan, as amended and restated

8-K

5/6/08


10
.0310
.07*

Forms of Enrollment Form, Subscription Agreement, Notice of
    Withdrawal and Notice of Suspension related to the 1999 Employee
    Stock Purchase Plan

S-1/(A)

10/4/99


10
.0510
.08*

2000 Stock Incentive Plan

10-Q

8/8/06


10
.0310
.09*

Forms of Stock Option Agreement and Stock Option Exercise
    Agreements related to the 2000 Stock Incentive Plan

10-Q

8/8/06


10
.0410
.10*

Forms of Incentive Stock Option Agreement and Nonstatutory Stock
    Option Agreement under iManage, Inc. 1997 Stock Option Plan

S-8

11/19/03


4
.0210
.11*

iManage, Inc. 2000 Non-Officer Stock Option Plan and related
    forms of stock option and option exercise agreements

S-8

11/19/03


4
.0310
.12*

2003 Acquisition Plan

S-8

11/19/03


4
.0710
.13*

Forms of Stock Option Agreement and Stock Option Exercise
    Agreements related to the 2003 Acquisition Plan

10-K

3/13/06


10
.1310
.14*

Form of Notice of Stock Option Acceleration and Share
    Restrictions

10-K

3/13/06


10
.1410
.15*

2008 Equity Incentive Plan

8-K

5/6/08


10
.0110
.16*

Forms of Equity Agreements Under the 2008 Equity Incentive Plan10
.17*

Regional Prototype Profit Sharing Plan and Trust/Account
    Standard Plan Adoption Agreement AA #001

S-1

07/27/99


10
.0610
.18*

Employment Agreement between Registrant and Scipio M. Carnecchia

10-K

12/14/07


10
.1610
.19*

Employment Agreement between Registrant and John E. Calonico,
    Jr.

10-K

12/14/07


10
.17 54




---



##### Table of Contents



Incorporated by Reference

FiledNumber

Exhibit Title

Form

Date

Number

Herewith10
.20*

Offer Letter, dated March 16, 2007, between Registrant and
    Joseph L. Cowan

8-K

04/02/07


10
.0110
.21*

Resignation Agreement and General Release of Claims, dated
    August 20, 2008, between Registrant and David Nelson-Gal

10-Q

11/07/08


10
.0110
.22*

2008 Executive Officer Incentive Bonus Plan

10-Q

5/9/08


10
.0110
.23*

Steven J. Martello 2008 Compensation Plan

10-Q

5/9/08


10
.0210
.24

Lease, dated December 20, 2006, by and between Registrant
    and Silicon Valley CA-I, LLC.

8-K

12/22/06


10
.110
.25

First Amendment to Lease, dated January 12, 2007, by and
    between Registrant and Silicon Valley CA-I, LLC

10-K

12/14/07


10
.2410
.26

Office Lease for 303 East Wacker, Chicago, Illinois between 303
    Wacker Realty LLC and iManage, Inc. dated March, 17, 2003

(1)

(1)


(1)10
.27

First Amendment to Lease dated November 12, 2003 between
    iManage, Inc. and 303 Wacker Realty LLC

10-K

03/15/05


10
.2710
.28

Sublease between Hyperion Solutions Corporation and iManage,
    Inc. dated January 17, 2002

(2)

(2)


(2)21
.01

Subsidiaries of the Registrant









X23
.01

Consent of Independent Registered Public Accounting Firm









X31
.01

Rule 13a-14(a)/15d-15(a)
    certification of the Chief Executive Officer









X31
.02

Rule 13a-14(a)/15d-15(a)
    certification of the Chief Financial Officer









X32
.01

Section 1350 certification of Chief Executive Officer









X32
.02

Section 1350 certification of the Chief Financial Officer









X     (1)
    
    Incorporated by reference to Exhibit 10.18 of the iManage,
    Inc. Annual Report
    Form 10-K
    filed with the Commission on March 26, 2003.(2)
    
    Incorporated by reference to Exhibit 10.13 of the iManage,
    Inc. Annual Report
    Form 10-K
    filed with the Commission on March 29, 2002.*
    
    Management contract, compensatory plan or arrangement.
    
    Portions of this exhibit have been omitted pursuant to an order
    granting confidential treatment.. 55




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM               /s/ ERNST &
    YOUNG LLP
    56




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                 /s/ ERNST &
    YOUNG LLP
    57




---



##### Table of Contents



INTERWOVEN,
    INC.
  CONSOLIDATED
    BALANCE SHEETS  December 31,2008


2007(In thousands)AssetsCurrent assets:Cash and cash equivalents

$
138,457


$
68,453Short-term investments


46,770



88,896Accounts receivable, net of allowances of $1,562 and $924 in
    2008 and 2007, respectively


41,592



39,000Prepaid expenses and other current assets


13,405



8,252Total current assets


240,224



204,601Property and equipment, net


15,538



16,247Goodwill


236,476



217,777Other intangible assets, net


28,122



20,960Deferred tax assets


2,621



5,895Other assets


2,867



2,878Total assets

$
525,848


$
468,358Liabilities and Stockholders EquityCurrent liabilities:Accounts payable

$
1,993


$
4,378Accrued liabilities


31,030



30,707Restructuring and excess facilities accrual


1,080



1,618Deferred revenues


73,631



60,957Total current liabilities


107,734



97,660Accrued liabilities  non current


8,600



7,816Restructuring and excess facilities accrual


936



2,016Deferred revenues  non current


1,052



1,020Total liabilities


118,322



108,512Commitments and contingenciesStockholders equity:Preferred stock, $0.001 par value, 5,000 shares
    authorized at December 31, 2008 and 2007






Common stock, $0.001 par value, 125,000 shares
    authorized at December 31, 2008 and 2007;
    46,397 shares and 45,304 shares issued and outstanding
    at December 31, 2008 and 2007, respectively


46



45Additional paid-in capital


783,377



766,660Accumulated other comprehensive income (loss)


(670
)


415Accumulated deficit


(375,227
)


(407,274
)Total stockholders equity


407,526



359,846Total liabilities and stockholders equity

$
525,848


$
468,358    58




---



##### Table of Contents



INTERWOVEN,
    INC.
  CONSOLIDATED
    STATEMENTS OF INCOME  Years Ended December 31,2008


2007


2006(In thousands, except per share amounts)Revenues:License

$
96,027


$
86,788


$
75,678Support and service


164,261



138,880



124,641Total revenues


260,288



225,668



200,319Cost of revenues:License


7,415



7,886



16,367Support and service


64,615



55,214



50,256Total cost of revenues


72,030



63,100



66,623Gross profit


188,258



162,568



133,696Operating expenses:Sales and marketing


89,943



83,201



77,114Research and development


40,378



37,447



35,069General and administrative


23,656



24,620



16,787Amortization of intangible assets


2,806



3,229



3,312Restructuring and excess facilities charges (recoveries)


38



148



(902
)Total operating expenses


156,821



148,645



131,380Income from operations


31,437



13,923



2,316Interest income and other, net


4,013



9,270



6,324Income before provision for income taxes


35,450



23,193



8,640Provision (benefit) for income taxes


3,403



(485
)


2,203Net income

$
32,047


$
23,678


$
6,437Basic net income per common share

$
0.70


$
0.53


$
0.15Shares used in computing basic net income per common share


45,805



45,068



42,979Diluted net income per common share

$
0.69


$
0.51


$
0.15Shares used in computing diluted net income per common share


46,783



46,524



43,995    59




---



##### Table of Contents



INTERWOVEN,
    INC.
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY



For the
    Three Years Ended December 31, 2008  AccumulatedAdditional


Deferred


Other





TotalCommon Stock


Paid-in


Stock-based


Comprehensive


Accumulated


StockholdersShares


Amount


Capital


Compensation


Income (Loss)


Deficit


Equity(In thousands)Balances, January 1, 2006


42,386


$
42


$
737,408


$
(1,002
)

$
(359
)

$
(437,389
)

$
298,700Components of comprehensive income:Net income






















6,437



6,437Unrealized gain on investments


















282







282Cumulative translation adjustment


















41







41Comprehensive income


























6,760Issuance of common stock under stock plans


2,031



2



15,029















15,031Tax benefit related to exercise of common stock options










18















18Reclassification of deferred compensation upon adoption of
    SFAS No. 123R










(1,002
)


1,002











Stock-based compensation










3,451















3,451Balances, December 31, 2006


44,417



44



754,904







(36
)


(430,952
)


323,960Components of comprehensive income:Net income






















23,678



23,678Unrealized gain on investments


















197







197Cumulative translation adjustment


















254







254Comprehensive income


























24,129Issuance of common stock under stock plans


887



1



6,279















6,280Tax benefit related to exercise of common stock options










402















402Stock-based compensation










5,075















5,075Balances, December 31, 2007


45,304



45



766,660







415



(407,274
)


359,846Components of comprehensive income:Net income






















32,047



32,047Unrealized gain on investments


















221







221Cumulative translation adjustment


















(1,306
)






(1,306
)Comprehensive income


























30,962Issuance of common stock under stock plans


1,093



1



5,670















5,671Tax benefit related to exercise of common stock options










941















941Stock-based compensation










10,106















10,106Balances, December 31, 2008


46,397


$
46


$
783,377


$



$
(670
)

$
(375,227
)

$
407,526    60




---



##### Table of Contents



INTERWOVEN,
    INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Years Ended December 31,2008


2007


2006(In thousands)Cash flows from operating activities:Net income

$
32,047


$
23,678


$
6,437Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation


5,762



4,113



3,809Stock-based compensation expense


10,106



5,075



3,451Deferred income taxes


3,274







Amortization of intangible assets and purchased technology


7,108



7,594



16,495Excess tax benefits from stock option plans


(941
)


(402
)


(18
)Allowance for doubtful accounts and sales returns


638



133



(309
)Changes in operating assets and liabilities:Accounts receivable


(586
)


(2,913
)


(2,653
)Prepaid expenses and other assets


(4,479
)


(9,136
)


(1,833
)Accounts payable and accrued liabilities


(4,899
)


10,843



7,521Restructuring and excess facilities accrual


(1,614
)


(5,098
)


(8,251
)Deferred revenues


12,706



4,473



3,808Net cash provided by operating activities


59,122



38,360



28,457Cash flows from investing activities:Purchases of property and equipment


(4,191
)


(15,415
)


(3,580
)Purchases of investments


(75,156
)


(101,767
)


(189,420
)Maturities of investments


117,283



116,677



151,544Acquisition of businesses and technology, net of cash acquired


(33,746
)


(51,307
)


(1,590
)Net cash provided by (used in) investing activities


4,190



(51,812
)


(43,046
)Cash flows from financing activities:Excess tax benefits from stock option plans


941



402



18Net proceeds from issuance of common stock


7,057



7,130



15,031Net cash provided by financing activities


7,998



7,532



15,049Effect of exchange rates


(1,306
)


254



41Net increase (decrease) in cash and cash equivalents


70,004



(5,666
)


501Cash and cash equivalents at beginning of year


68,453



74,119



73,618Cash and cash equivalents at end of year

$
138,457


$
68,453


$
74,119Supplemental disclosures of cash flow information:Cash paid for income taxes

$
2,191


$
1,590


$
868Supplemental disclosures of non-cash investing and financing
    activities:Unrealized gain on investments

$
221


$
197


$
282Net operating loss utilized from acquired entities recorded
    against goodwill

$
516


$
5,587


$
660    61




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES
    TO CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Organization
    and Business    2.
    Summary
    of Significant Accounting Policies  Basis
    of Presentation
      Foreign Currency
    Translation
  Use of
    Estimates
    Revenue
    Recognition
  No. 97-2, Software Revenue Recognition SOP No. 98-9, Modification of
    SOP 97-2 Software Revenue Recognition with Respect to Certain
    Transactions
 62




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  SOP No. 97-2 SOP No. 98-9,
  SOP No. 97-2,
  Persuasive evidence of an arrangement
    exists.
  Delivery has occurred.
  The fee is fixed or determinable.
  Collectibility is probable. case-by-case
     63




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  time-and-materials
    Revenue Recognition
        Cash
    and Cash Equivalents and Short-Term Investments
      Allowance
    for Doubtful Accounts
   64




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Allowance
    for Sales Returns
    Risks
    and Concentrations
        Derivative
    Financial Instruments
  Accounting for Derivative Instruments and Hedging
    Activities
   65




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Property
    and Equipment
      Goodwill
  Goodwill and
    Other Intangible Assets
  
    Step 1  The Company has determined that it has one
    reporting unit and compares the fair value of its reporting unit
    to its carrying value, including goodwill. If the reporting
    units carrying value, including goodwill, exceeds the
    units fair value, the Company moves on to Step 2. If the
    units fair value exceeds the carrying value, no further
    work is performed and no impairment charge is necessary.
    Step 2  The Company performs an allocation of the
    fair value of the reporting unit to its identifiable tangible
    and non-goodwill intangible assets and liabilities. This
    allocation derives an implied fair value for the reporting
    units goodwill. The Company then compares the implied fair
    value of the reporting units goodwill with the carrying
    amount of the reporting units goodwill. If the carrying
    amount of the reporting units goodwill is greater than the
    implied fair value of its goodwill, an impairment charge shall
    be recognized for the excess.    Impairment
    of Long-Lived Assets
  Accounting for the Impairment or Disposal of Long-Lived
    Assets
 66




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Software
    Development Costs
  Accounting for the Costs of Computer
    Software to be Sold, Leased, or Otherwise Marketed
  Restructuring
    and Related Expenses
  Accounting for Costs Associated with
    Exit or Disposal Activities,
  No. 88-10, Cost Associated with Lease Modification or Termination No. 94-3, Liability Recognition for Certain Employee Termination
    Benefits and Other Costs to Exit an Activity (including Certain
    Costs Incurred in a Restructuring)
  Income
    Taxes
  Accounting for Income Taxes
  Share-Based Payment Accounting
    for Stock-Based Compensation
   67




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting for Uncertainty in Income Taxes
     an interpretation of FAS Statement
    No. 109
  Advertisement
    and Sales Promotion Expenses
    Business
    Segment and Major Customer Information
  Disclosures about Segments of an
    Enterprise and Related Information
      Comprehensive
    Income (Loss)
    December 31,2008


2007Unrealized gain on available-for-sale investments*

$
332


$
111Cumulative translation adjustment*


(1,002
)


304$
(670
)

$
415     *
    
    The tax effect on translation adjustments and unrealized gain
    (loss) was not significant.  Net
    Income per Common Share
   68




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Years Ended December 31,2008


2007


2006Net income

$
32,047


$
23,678


$
6,437Weighted-average shares used in computing basic net income per
    common share


45,805



45,068



42,979Dilutive common equivalent shares from share-based compensation
    plans


978



1,456



1,016Weighed-average shares used in computing diluted net income per
    common share


46,783



46,524



43,995Basic net income per common share

$
0.70


$
0.53


$
0.15Diluted net income per common share

$
0.69


$
0.51


$
0.15     Stock-based
    Compensation
    Recent
    Accounting Pronouncements
  No. 08-6, Equity Method Investment Accounting Considerations,
  No. 133-1 FIN No. 45-4, Disclosures about Credit Derivatives and Certain Guarantees:
    An Amendment of FASB Statement No. 133 and FASB
    Interpretation No. 45; and Clarification of the Effective
    Date of FASB Statement No. 161 Accounting for Derivative Instruments
    and Hedging Activities No. 133-1 FIN 45-4 Guarantors Accounting
    and Disclosure Requirements for Guarantees, Including Indirect
    Guarantees of Indebtedness to Others No. 133-1 FAS 133-1 FIN No. 45-4 Disclosures about
 69




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Derivative Instruments and Hedging Activities FAS No. 133-1 FIN No. 45-4
  The
    Hierarchy of Generally Accepted Accounting Principles The Meaning of Present Fairly in
    Conformity With Generally Accepted Accounting Principles
  SFAS 142-3, Determination of the Useful Life of Intangible Assets, SFAS 142-3 Goodwill and Other Intangible Asset SFAS 142-3 SFAS 142-3
  Disclosures about Derivative Instruments and Hedging
    Activities Accounting for Derivative Instruments
    and Hedging Activities
  Business Combinations
 70




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    The
    Fair Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115 available-for-sale held-to-maturity instrument-by-instrument
  Fair Value Measurements No. 157-2, Effective Date of FASB Statement No. 157 No. FAS 157-3, Determining the Fair Value of a Financial Asset When the
    Market for That Asset Is Not Active No. FAS 157-3 No. FAS 157-3 No. FAS 157-3
  3.
    Mergers
    and Acquisitions   71




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      4.
    Cash and
    Cash Equivalents and Short-term Investments    December 31, 2008Gross


Gross


EstimatedUnrealized


Unrealized


FairCost


Gains


Losses


ValueCash

$
54,151


$



$



$
54,151Cash equivalents:Money market funds


84,306











84,306Total cash equivalents


84,306











84,306Total cash and cash equivalents


138,457











138,457Short-term investments:Government agencies


20,163



149



(2
)


20,310Corporate obligations


7,713



30



(12
)


7,731Government-sponsored enterprises


16,209



167







16,376Certificates of deposit


2,353











2,353Total short-term investments


46,438



346



(14
)


46,770Total cash and cash equivalents and short-term investments

$
184,895


$
346


$
(14
)

$
185,227   72




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31, 2007Gross


Gross


EstimatedUnrealized


Unrealized


FairCost


Gains


Losses


ValueCash

$
37,214


$



$



$
37,214Cash equivalents:Commercial paper


1,596











1,596Money market funds


29,643











29,643Total cash equivalents


31,239











31,239Total cash and cash equivalents


68,453











68,453Short-term investments:Government agencies


33,559



44



(3
)


33,600Corporate obligations


29,211



53



(13
)


29,251Government-sponsored enterprises


18,930



27







18,957Commercial paper


5,487



4



(1
)


5,490Certificates of deposit


1,598











1,598Total short-term investments


88,785



128



(17
)


88,896Total cash and cash equivalents and short-term investments

$
157,238


$
128


$
(17
)

$
157,349   115-1, The Meaning of
    Other-Than-Temporary
    Impairment and Its Application to Certain Investments, available-for-sale
  Less than12 Months


More than 12 Months


TotalGross





Gross





GrossFair


Unrealized


Fair


Unrealized


Fair


UnrealizedValue


Losses


Value


Losses


Value


LossesGovernment agencies

$
8,041


$
(2
)

$



$



$
8,041


$
(2
)Corporate obligations


3,057



(12
)










3,057



(12
)$
11,098


$
(14
)

$



$



$
11,098


$
(14
)   other-than-temporarily
    FairCost


ValueDue within one year

$
120,015


$
120,316Due one year to five years


10,729



10,760$
130,744


$
131,076  73




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    Fair
    Value Measurements  157-1, 157-2 157-3) available-for-sale
  Cash equivalents and short term
    investments.
    Forward foreign exchange contracts. over-the-counter
    Fair Value Measurements at Reporting Date UsingQuoted Pricesin Active


SignificantMarkets for


Other


SignificantIdentical


Observable


UnobservableAssets


Inputs


InputsTotal


(Level 1)


(Level 2)


(Level 3)Assets:Money market funds

$
84,306


$
84,306


$



$
Government agencies


20,311



20,311







Corporate obligations


7,731



7,731







Government-sponsored enterprises


16,376



16,376







Certificates of deposit


2,352



2,352







$
131,076


$
131,076


$



$
Forward foreign exchange contracts

$
1


$



$
1


$
Liabilities:Forward foreign exchange contracts

$
78


$



$
78


$
  74




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  6.
    Property
    and Equipment    December 31,2008


2007Computer software and equipment

$
23,474


$
27,050Furniture and office equipment


4,425



4,508Leasehold improvements


13,010



12,79440,909



44,352Less: accumulated depreciation and amortization


25,371



28,105$
15,538


$
16,247     7.
    Goodwill
    and Other Intangible Assets    December 31,2008


2007Gross Carrying


Accumulated


Net


Gross Carrying


Accumulated


NetAmount


Amortization


Amount


Amount


Amortization


AmountPurchased technology

$
61,476


$
(43,202
)

$
18,274


$
52,155


$
(39,420
)

$
12,735Patents and patent applications


6,616



(4,863
)


1,753



5,376



(4,542
)


834Customer list


18,670



(14,227
)


4,443



16,510



(12,659
)


3,851Non-compete agreements


6,441



(2,789
)


3,652



4,892



(1,352
)


3,540Other intangible assets

$
93,203


$
(65,081
)


28,122


$
78,933


$
(57,973
)


20,960Goodwill










236,476











217,777$
264,598










$
238,737    75




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2008


2007Beginning balance

$
217,777


$
190,935Goodwill recorded in acquisitions


18,907



32,429Subsequent goodwill adjustments


(208
)


(5,587
)Ending balance

$
236,476


$
217,777     8.
    Accrued
    Liabilities    December 31,2008


2007Accrued compensation

$
18,457


$
18,192Professional services


6,971



2,768Deferred rent


6,314



6,687Sales and income taxes


5,083



1,473Other


2,805



9,403$
39,630


$
38,523   9.
    Restructuring
    and Excess Facilities    Excess
    Facilities
     76




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        ExcessYears Ending December 31,

Facilities2009

$
1,0802010


936$
2,016     Non-CancelableLeaseCommitmentsand OtherBalance at December 31, 2006

$
8,696Restructuring and excess facilities charges


148Cash payments and other


(5,210
)Balance at December 31, 2007


3,634Restructuring and excess facilities charges


38Cash payments and other


(1,656
)Balance at December 31, 2008

$
2,016   10.
    Bank
    Borrowings    11.
    Guarantees   77




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or
      12.
    Commitments
    and Contingencies  Contractual
    Obligations
      FutureYears Ending

Occupied


Excess


LeaseDecember 31,

Facilities


Facilities


Payments2009

$
6,480


$
1,310


$
7,7902010


5,518



1,049



6,5672011


4,929







4,9292012


3,848







3,8482013


3,951







3,951After 2013


3,880







3,880$
28,606


$
2,359


$
30,965  78




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Litigation
  Simmonds v. Bank of
    America Corp. No. 07-1585,
 79




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    13.
    Stockholders
    Equity  Preferred
    Stock
  time-to-time
  Common
    Stock
    14.
    Employee
    Benefit Plans and Stock-Based Compensation    Employee
    Stock Purchase Plan
   80




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Prior
    Stock Option Plans
    1999
    Equity Incentive Plan
       81




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2000
    Stock Incentive Plan
      2003
    Acquisition Plan
    2008
    Equity Incentive Plan
   82




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock-based
    compensation expense
    Years Ended December 31,2008


2007


2006Cost of revenues

$
1,346


$
683


$
672Sales and marketing


3,616



1,933



1,327Research and development


1,853



982



968General and administrative


3,291



1,477



484$
10,106


$
5,075


$
3,451     Valuation and Amortization
    Method.
  Expected Life.
  Expected Volatility.
  Risk-Free Interest Rate.
  Dividends.
  Forfeitures.
 83




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ended December 31,2008

2007

2006Expected life from grant date of option (in years)

1.63 - 3.25

3.25

3.25Risk-free interest rate

1.1% - 3.3%

3.4% - 5.0%

4.4% - 5.1%Expected dividend yield

0.0%

0.0%

0.0%Expected volatility

33.5% - 44.3%

34.3% - 37.2%

39.7% - 59.5%Weighted average expected volatility

36.3%

36.4%

46.0%     Years Ended December 31,2008

2007

2006Expected life from grant date of ESPP (in years)

0.5

0.5

0.5Risk-free interest rate

0.3% - 1.2%

5.1%

4.9% - 5.1%Expected dividend yield

0.0%

0.0%

0.0%Expected volatility

46.9% - 61.3%

29.4% - 33.5%

29.8% - 33.9%Weighted average expected volatility

54.9%

31.4%

31.4%   Stock
    Option and Restricted Stock Units Activities
    Weighted-Weighted-


AverageAverage


Remaining


AggregateNumber of


Exercise


Contractual-


IntrinsicShares


Price


Term


ValueOutstanding at January 1, 2008


6,585


$
15.81Granted


1,166



10.32Exercised


(796
)


7.81Forfeited


(220
)


11.40Expired


(138
)


45.25Outstanding at December 31, 2008


6,597


$
15.36



5.65


$
15,267Exercisable at December 31, 2008


4,659


$
17.00



5.02


$
11,314Vested and expected to vest at December 31, 2008


6,371


$
15.49



5.59


$
14,825    84




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Weighted-


WeightedAverage


AverageGrant Date


Remaining


AggregateFair Value/


Contractual-


IntrinsicShares


Share


Term (Years)


ValueOutstanding at January 1, 2008


1,081


$
11.88Granted


250



12.99Vested


(315
)


13.02Forfeited


(32
)


11.37Outstanding at December 31, 2008


984


$
12.57



1.21


$
12,392Vested and expected to vest at December 31, 2008


873


$
12.60



1.14


$
10,998         Tax
    Elections upon Adoption of Statement of Financial Accounting
    Standard No. 123R
     85




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    401(k)
    Plan
    15.
    Interest
    Income and Other, Net    Years Ended December 31,2008


2007


2006Interest income

$
5,042


$
8,718


$
6,358Interest expense










Foreign currency gain (loss)


(806
)


147



132Other


(223
)


405



(166
)$
4,013


$
9,270


$
6,324   16.
    Income
    Taxes    Years Ended December 31,2008


2007


2006United States

$
32,060


$
20,426


$
6,612Foreign


3,390



2,767



2,028$
35,450


$
23,193


$
8,640     Years Ended December 31,2008


2007


2006Current:Federal

$
963


$
2,564


$
917State


1,853



594



152Foreign


2,099



1,180



1,1344,915



4,338



2,203Deferred:Federal


(1,878
)


(3,870
)


State


359



(812
)


Foreign


7



(141
)


(1,512
)


(4,823
)


$
3,403


$
(485
)

$
2,203  86




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years Ended December 31,2008


2007


2006Income tax provision at federal statutory rate

$
12,408


$
8,117


$
2,938State taxes, net of federal tax benefits


1,856



594



163Amortization of stock-based compensation


428



181



360Goodwill


284



1,498



690Net operating losses utilized


(12,092
)


(8,885
)


(2,379
)Alternative minimum tax


691



508



Changes in valuation allowance


(1,514
)


(3,280
)


104Other


1,342



782



327$
3,403


$
(485
)

$
2,203   non-United
  December 31,2008


2007Deferred tax assets:Net operating loss carryforwards

$
14,277


$
26,242Restructuring and excess facilities charges


795



1,422Accrued liabilities and allowances


5,489



4,421Tax credit carryforwards


9,924



7,668Depreciation and amortization


12,521



13,327Stock-based compensation


3,710



2,736Valuation allowance


(29,970
)


(46,031
)16,746



9,785Deferred tax liabilities:Non-deductible intangible assets


(5,632
)


(1,036
)Deductible Goodwill


(993
)


(141
)$
10,121


$
8,608    87




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          2008-2009
       88




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2008


2007Beginning balance

$
2,925


$
2,608Tax positions related to current year:Additions


2,331



Reductions






(38
)Tax positions related to prior years:Additions


5,167



355Reductions






Settlements






Lapses in statutes of limitations


(135
)


Ending balance

$
10,288


$
2,925   17.
    Significant
    Customer Information and Segment Reporting      Years Ended December 31,2008


2007


2006Revenues:United States

$
156,834


$
141,988


$
128,171United Kingdom


45,905



31,606



30,057Other geographies


57,549



52,074



42,091$
260,288


$
225,668


$
200,319   December 31,2008


2007


2006Long-lived assets (excluding goodwill):United States

$
14,075


$
14,761


$
3,083International


1,463



1,486



1,732$
15,538


$
16,247


$
4,815    89




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ended December 31,2008


2007


2006License

$
96,027


$
86,788


$
75,678Customer support


110,138



95,925



86,568Consulting


49,521



37,905



33,382Training


4,602



5,050



4,691$
260,288


$
225,668


$
200,319   18.
    Subsequent
    Events      City of
    Roseville Employees Retirement System, on behalf of itself
    and all others similarly situated v. Interwoven, Inc. et
    al No. 4312- Newman, individually and on behalf of all others
    similarly situated v. Corey, et al No. 4337- Stefanache, on behalf
    of himself and all others similarly situated v. Interwoven,
    Inc. et al. No. 4347- Police and Fire Retirement System of the City of Detroit,
    individually and behalf of all others similarly situated v.
    Interwoven, Inc. et al. No. 4362-
 90




---



##### Table of Contents



INTERWOVEN,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    In re Interwoven, Inc. Shareholders Litigation No. 4362-VCL)
   91




---



##### Table of Contents



SIGNATURES    INTERWOVEN, INC.
  By:
    /s/  Joseph
    L. Cowan   Chief Executive Officer
    POWER OF
    ATTORNEY
  Form 10-K,
  Form 10-K
  Signature

Title

Date/s/  Joseph
    L. CowanJoseph
    L. Cowan

Chief Executive Officer

March 13, 2009/s/  John
    E. Calonico, Jr.John
    E. Calonico, Jr.

Senior Vice President and Chief Financial Officer (Principal
    Financial and Accounting Officer)

March 13, 2009/s/  Bob
    L. CoreyBob
    L. Corey

Chairman of the Board of Directors

March 13, 2009/s/  Charles
    M. BoesenbergCharles
    M. Boesenberg

Director

March 13, 2009/s/  Ronald
    E.F. CoddRonald
    E.F. Codd

Director

March 13, 2009/s/  Frank
    J. Fanzilli, Jr.Frank
    J. Fanzilli, Jr.

Director

March 13, 2009/s/  Roger
    J. SipplRoger
    J. Sippl

Director

March 13, 2009/s/  Thomas
    L. ThomasThomas
    L. Thomas

Director

March 13, 2009  92




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##### Table of Contents



EXHIBITS TO
    FORM 10-K
    ANNUAL REPORT
    For the year ended December 31, 2008
  Incorporated by Reference

FiledNumber

Exhibit Title

Form

Date

Number

Herewith2
.01

Agreement and Plan of Merger, dated October 17, 2007, by
    and among Registrant, Broadway Merger LLC, Optimost LLC and Mark
    Wachen, as representative


8-K



10/22/07



2
.012
.02

Agreement and Plan of Merger dated as of January 22, 2009
    by and among Autonomy Corporation plc, Milan Acquisition Corp.
    and Interwoven, Inc.


8-K



1/22/09



2
.012
.03

Agreement and Plan of Merger, dated as of July 23, 2008, by
    and among Registrant, Presidio Acquisition Corp., Discovery
    Mining, Inc. and Charles R. Work, as Representative


8-K



7/25/08



2
.013
.01

Registrants Fourth Amended and Restated Certificate of
    Incorporation


S-8



11/19/03



4
.083
.02

Registrants Amended and Restated Bylaws


8-K



4/25/07



3
.014
.01

Form of Certificate for Registrants common stock


S-1



9/23/99



4
.0110
.01*

Form of Indemnity Agreement between Registrant and each of its
    directors and executive officers


10-K



12/14/07



10
.0110
.02*

1996 Stock Option Plan and related agreements


S-1



7/27/99



10
.0210
.03*

1998 Stock Option Plan and related agreements


S-1



7/27/99



10
.0310
.04*

1999 Equity Incentive Plan


10-Q



8/8/06



10
.0110
.05*

Forms of Option Agreements and Stock Option Exercise Agreements
    related to the 1999 Equity Incentive Plan


10-Q



8/8/06



10
.0210
.06*

1999 Employee Stock Purchase Plan, as amended and restated


8-K



5/6/08



10
.0310
.07*

Forms of Enrollment Form, Subscription Agreement, Notice of
    Withdrawal and Notice of Suspension related to the 1999 Employee
    Stock Purchase Plan


S-1/(A)



10/4/99



10
.0510
.08*

2000 Stock Incentive Plan


10-Q



8/8/06



10
.0310
.09*

Forms of Stock Option Agreement and Stock Option Exercise
    Agreements related to the 2000 Stock Incentive Plan


10-Q



8/8/06



10
.0410
.10*

Forms of Incentive Stock Option Agreement and Nonstatutory Stock
    Option Agreement under iManage, Inc. 1997 Stock Option Plan


S-8



11/19/03



4
.0210
.11*

iManage, Inc. 2000 Non-Officer Stock Option Plan and related
    forms of stock option and option exercise agreements


S-8



11/19/03



4
.0310
.12*

2003 Acquisition Plan


S-8



11/19/03



4
.0710
.13*

Forms of Stock Option Agreement and Stock Option Exercise
    Agreements related to the 2003 Acquisition Plan


10-K



3/13/06



10
.1310
.14*

Form of Notice of Stock Option Acceleration and Share
    Restrictions


10-K



3/13/06



10
.1410
.15*

2008 Equity Incentive Plan


8-K



5/6/08



10
.0110
.16*

Forms of Equity Agreements Under the 2008 Equity Incentive Plan10
.17*

Regional Prototype Profit Sharing Plan and Trust/Account
    Standard Plan Adoption Agreement AA #001


S-1



07/27/99



10
.06 93




---



##### Table of Contents



Incorporated by Reference

FiledNumber

Exhibit Title

Form

Date

Number

Herewith10
.18*

Employment Agreement between Registrant and Scipio M. Carnecchia


10-K



12/14/07



10
.1610
.19*

Employment Agreement between Registrant and John E. Calonico,
    Jr.


10-K



12/14/07



10
.1710
.20*

Offer Letter, dated March 16, 2007, between Registrant and
    Joseph L. Cowan


8-K



04/02/07



10
.0110
.21*

Resignation Agreement and General Release of Claims, dated
    August 20, 2008, between Registrant and David Nelson-Gal


10-Q



11/07/08



10
.0110
.22*

2008 Executive Officer Incentive Bonus Plan


10-Q



5/9/08



10
.0110
.23*

Steven J. Martello 2008 Compensation Plan


10-Q



5/9/08



10
.0210
.24

Lease, dated December 20, 2006, by and between Registrant
    and Silicon Valley CA-I, LLC


8-K



12/22/06



10
.110
.25

First Amendment to Lease, dated January 12, 2007, by and
    between Registrant and Silicon Valley CA-I, LLC


10-K



12/14/07



10
.2410
.26

Office Lease for 303 East Wacker, Chicago, Illinois between 303
    Wacker Realty LLC and iManage, Inc. dated March, 17, 2003


(1)



(1)



(1)10
.27

First Amendment to Lease dated November 12, 2003 between
    iManage, Inc. and 303 Wacker Realty LLC


10-K



03/15/05



10
.2710
.28

Sublease between Hyperion Solutions Corporation and iManage,
    Inc. dated January 17, 2002


(2)



(2)



(2)21
.01

Subsidiaries of the Registrant













X23
.01

Consent of Independent Registered Public Accounting Firm













X31
.01

Rule 13a-14(a)/15d-15(a)
    certification of the Chief Executive Officer













X31
.02

Rule 13a-14(a)/15d-15(a)
    certification of the Chief Financial Officer













X32
.01

Section 1350 certification of Chief Executive Officer













X32
.02

Section 1350 certification of the Chief Financial Officer













X     (1)
    
    Incorporated by reference to Exhibit 10.18 of the iManage,
    Inc. Annual Report
    Form 10-K
    filed with the Commission on March 26, 2003.(2)
    
    Incorporated by reference to Exhibit 10.13 of the iManage,
    Inc. Annual Report
    Form 10-K
    filed with the Commission on March 29, 2002.*
    
    Management contract, compensatory plan or arrangement.
    
    Confidential treatment has been requested with regard to certain
    portions of this document. Such portions were filed separately
    with the Commission. 94