UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): March 16, 2007

CALLIDUS SOFTWARE INC.

(Exact Name of Registrant as Specified in Charter)

Delaware
(State or Other Jurisdiction of Incorporation) 000-50463
(Commission File Number) 77-0438629
(IRS Employer Identification No.)

160 W. Santa Clara Street, Suite 1500
San Jose, CA
(Address of Principal Executive Offices) 95113
(Zip Code)

(408) 808-6400
(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a -12(b))

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

TABLE OF CONTENTS

EXHIBIT 10.22

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

     On March 13, 2007, the Board of Directors (the “Board”) of Callidus Software Inc. (the "Company”) approved the performance criteria under the Company’s cash bonus plan for the six-month period from January through June 2007 for eligible employees (including all of the Company’s named executive officers and its principal executive officer and principal financial officer). Under the Company’s performance-based cash bonus plan, cash bonuses are based solely on Company financial performance over six-month periods and are paid on a semi-annual basis. Awards for the six-month period ending June 30, 2007, will be measured and paid after the close of the Company’s second fiscal quarter in 2007.

     For this period (and for future periods unless otherwise determined by the Board or the Compensation Committee), the Company’s financial performance goals consist of revenue and operating result targets. The target bonus for the named executive officers currently ranges from 55% to 100% of base salary for the performance period, although the actual amount of the bonus will vary depending on the level of the Company’s performance. In order for a participant to receive a cash bonus for this period, the Company must achieve certain minimum goals established by the Board. Participants will have the potential to receive increasing bonus amounts if the Company’s performance exceeds the targets.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits.

     10.22 Callidus Software Inc. Form of Executive Incentive Bonus Plan.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CALLIDUS SOFTWARE INC.
Date: March 16, 2007	By:	/s/ V. Holly Albert
		Name:	V. Holly Albert
		Title:	Senior Vice President, General
			Counsel and Secretary

EXHIBIT INDEX

     10.22 Callidus Software Inc. Form of Executive Incentive Bonus Plan.