exv10w05



 








Exhibit 10.05




	 	 	 
	CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED FOR CERTAIN PORTIONS OF
THIS
DOCUMENT

	 	***Confidential treatment has been
requested with respect to the
information contained within the
"[***]” markings. Such marked portions
have been omitted from this filing and
have been filed separately with the
Securities and Exchange Commission






2006 Compensation Plan




	 	 	 
	To:

	 	Scipio M. Carnecchia,
	 

	 	Senior Vice President of Worldwide Sales
	 
	 	 
	Effective dates:

	 	January 1, 2006 to December 31, 2006





This document outlines your individual compensation package (“Compensation Plan”) for
calendar year 2006 including the at-risk components (“Incentive Pay”) determined under
the Sales Compensation Plan. All other terms and conditions of your employment are
governed by your offer letter.



In your role, you are responsible for the Interwoven’s worldwide sales organization.
Interwoven reserves the right to change your responsibilities from time to time and
modify your Compensation Plan to take into account its business needs.




COMPENSATION PACKAGE



Your Compensation Plan is comprised of a Base Salary and Incentive Pay, which is
an at-risk component of your overall compensation package. The 2006 Sales
Compensation Plan outlines the guidelines under which you will be paid your Incentive
Pay component.



Your on-target earnings for calendar year 2006 are $475,000.00. Your on-target
earnings are composed of the following:





	 	•	 	Annual Base Salary of $200,000.00.
	 
	 	•	 	On-target Incentive Pay of $275,000.00:






	 	•	 	$250,000.00 related to Software License bookings.
	 
	 	•	 	$25,000.00 related to Professional Services revenue.
	 
	 	•	 	A Direct Margin Percentage factor will be applied in computing your
commissions earned for Software License bookings and Professional
Services revenue.




From your actual earnings, we will subtract payroll deductions, all required
withholdings and other voluntary deductions you authorize Interwoven to make on your
behalf.




BASE SALARY



Your annual base salary will be paid to you ratably over the year in accordance with
Interwoven’s standard payroll practices.




INCENTIVE PAY



Your Incentive Pay will be calculated under the following process. Please be aware,
this Incentive Pay
process does not guarantee you a level of income.




 









 




Commissions on Software License Bookings and Professional Services
Revenue



Of your on-target Incentive Pay, $250,000.00 will be related to commissions for
Software License bookings and $25,000.00 will be related to commissions for
Professional Services revenue. Commissions on Software License bookings relate
to achieving the Company’s business plan objectives for Software License
bookings. Customer support and maintenance is not included in the measurement
of Software License bookings. Commissions on Professional Services relate to
assisting the Professional Services Organization in achieving the Company’s
business plan objectives for revenue from consulting and education services
(collectively “Professional Services”).



Commissions will be earned upon recognition of bookings for Software License and
revenue for Professional Services by Interwoven in accordance with the following
rates:




	 	 	 	 	 
	Quarterly	 	License Bookings	 	Professional Services
	Quota Attainment	 	Commission Rates	 	Commission Rates
	0% to 100%

	 	[***]%
	 	[***]%
	101% to 102%

	 	[***]%
	 	[***]%
	103% to 104%

	 	[***]%
	 	[***]%
	105% to 106%

	 	[***]%
	 	[***]%
	Greater than 107%

	 	[***]%
	 	[***]%





All Quarterly Quota Attainment percentages will be rounded to the next whole
number (ie: greater than or equal to 0.5 will be rounded up and less than 0.5
will be rounded down).



Additionally, the commission earned above will be multiplied by the following
adjustment factor based on the Direct Margin Percentage achieved by the Sales
organization on Software License bookings and Professional Services revenue for
each quarter:




	 	 	 
	Direct	 	Adjustment
	Margin Percentage	 	Factor
	>3% below target

	 	[***]%
	2% below target

	 	[***]%
	At target

	 	[***]%
	2% above target

	 	[***]%
	3% above target

	 	[***]%
	4% above target

	 	[***]%
	>4% above target

	 	[***]%





Direct Margin Percentage is defined as Software License bookings and
Professional
Services revenue less the cost of license revenues and the direct expenses
incurred by the worldwide sales organization to acquire that revenue.



Your quota for the period January 1, 2006 to December 31, 2006 is $[***] for
Software License booking and $[***] for Professional Services revenue as
follows:






 




			
	***	 	Confidential treatment has been requested with respect to the information contained within the “[***]” markings.
Such marked portions have been omitted from this filing and have been filed separately with the Securities and
Exchange Commission.




 









 










	 	 	 
	Software	 	Professional
	License Bookings	 	Services Revenues
	$[***] for Q1 2006
	 	$[***] for Q1 2006
	$[***] for Q2 2006
	 	$[***] for Q2 2006
	$[***] for Q3 2006
	 	$[***] for Q3 2006
	$[***] for Q4 2006
	 	$[***] for Q4 2006





As outlined in the 2006 Sales Compensation Plan, Software License bookings and
Professional Services revenue are computed in accordance with generally accepted
accounting principles (as determined by the Company’s Finance Department and the
Audit Committee of the Board of Directors). For Software License bookings,
credit will be received for the amount of revenue that can be recognized in
accordance with Interwoven’s revenue recognition policy. If the recognition of
revenue extends beyond the end of the then current quarter, bookings credit will
be received in the quarter when the revenue is recognized. Such amounts are
subject to reduction for carve-outs, any returns, or uncollectible accounts as
outlined in the Interwoven 2006 Sales Compensation Plan.



Your Direct Margin Percentage targets for the period January 1, 2006 to December
31, 2006 are as follows:





	 	o	 	[***]% for first quarter of 2006
	 
	 	o	 	[***]% for the second quarter of 2006
	 
	 	o	 	[***]% for the third quarter of 2006
	 
	 	o	 	[***]% for the fourth quarter of 2006




By way of example, if Software License bookings for the first quarter of 2006
was $[***] and Professional Services revenue for the first quarter was $[***]
(achievement of 101% of quota for both Software License and Professional
Services revenue) and the direct gross margin was [***]%, your commission due
would be computed as follows:





Software License bookings – ((($[***] times [***]%) + ($[***] times [***]%))
times [***]%) equals $[***].




Professional Services revenues – ((($[***] times [***]%) + ($[***] times
[***]%)) times [***]%) equals $[***].




Total earned equals $[***].


Please acknowledge your acceptance with this Compensation Plan by signing below. Have a
great 2006!




	 	 	 	 	 	 
	Read and accepted:

	 	 	 	Signed:
	 
	 	 	 	 
	  /s/ Scipio M. Carnecchia	 	 	 	  /s/ John E. Calonico, Jr.
	Scipio M. Carnecchia

	 	 	 	John E. Calonico, Jr.
	Senior Vice President of Worldwide Sales

	 	 	 	Chief Financial Officer
	Interwoven, Inc.

	 	 	 	Interwoven, Inc.








 




			
	***	 	Confidential treatment has been requested with respect to the information contained within the “[***]” markings.
Such marked portions have been omitted from this filing and have been filed separately with the Securities and
Exchange Commission.