8-K

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 7, 2006

CHORDIANT SOFTWARE, INC.

(Exact name of Registrant as specified in its charter)

Delaware	93-1051328
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

Commission file number:

000-29357

20400 Stevens Creek Boulevard, Suite 400
Cupertino, CA    95014
(Address of principal executive offices and zip code)

Registrant's telephone number, including area code: (408) 517-6100

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):

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

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

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

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

Item 1.01   Entry into Material Definitive Agreement

Board Member Agreement for Mr. Stevens

On March 7, 2006, the Board of Directors (the "Board") of Chordiant Software, Inc. (the "Company") entered into a Board Member Agreement and a Non-Employee Director Stock Option Agreement with a newly elected non-executive director, Richard G. Stevens, that established his compensation for service as a member of the Board as follows: (i) an annual fee of $30,000, payable quarterly in installments of $7,500 provided he attends 3 or 4 regularly scheduled meetings; (ii) a one-time grant of a nonqualified option for 25,000 shares of the Company's common stock, at the closing market price of the Company's common stock on March 7, 2006 ; (iii) an annual option grant to purchase 7,500 shares to be granted immediately following the annual meeting of shareholders (pro-rated); (iv) $3,000 per quarter ($12,000 annually) to serve as the Chair of the Audit Committee and $1,500 per meeting of the Audit Committee not to exceed $6,000 per quarter and (v) an annual option grant immediately following the annual meeting of shareholders to purchase 5,000 shares of the Company's common stock (pro-rated) for Mr. Steven's service on the Audit Committee. Pursuant to the Non-Employee Director Stock Option Agreement, the option has a 10-year term and the shares of the Company's common stock subject to option will vest over three years (1-year cliff and monthly thereafter). Pursuant to the Board Member Agreement the Company will reimburse all expenses incurred by Mr. Stevens in the course of the performance of his duties as a director. In addition, pursuant to the Indemnification Agreement, Mr. Stevens will be indemnified, in certain circumstances, by the Company for any actions taken by Mr. Stevens as a Board member.
 

The description of each of the Board Member Agreement, the Form of Non-Employee Director Stock Option Agreement and the Indemnification Agreement set forth in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to the copy of the Board Member Agreement filed as Exhibit 10.1 and copies of the Non-Employee Director Stock Option Agreement and the Indemnification Agreement filed as Exhibits 10.4, and 10.13, respectively, to Chordiant's Annual Report on Form 10-K filed on December 9, 2005.

Separation terms relating to Mr. de Urioste
 

As disclosed in Item 5.02(b) below, Mr. George de Urioste resigned, effective March 8, 2006, as the Company's Chief Financial Officer and Chief Operating Officer. The terms of Mr. George de Urioste's separation with the Company (which are contingent on the execution of a written agreement) are:

1. Mr. de Urioste will continue as an employee of the Company but not as an officer of the Company, until March 31 (the "Date of Termination").

2. The Company will pay Mr. de Urioste severance payments equal to Mr. de Urioste base salary of $350,000 for five months following the Date of Termination, subject to the standard payroll deductions and withholdings.

3. The Company will, for five (5) months after the Separation Date, reimburse Mr. de Urioste's for premium payments sufficient to continue his group health insurance coverage at the level in effect as of the Date of Termination (including dependent coverage, if any); provided, however, that his right to such payments shall cease on the date that he becomes eligible for group health insurance benefits through a new employer.

4. Mr. de Urioste will sign a release in a form acceptable to the Company on the Date of Termination (the "Release Execution Date").

Additional Terms of Employment for Peter Norman
 

As disclosed in Item 5.02(c) below, the Board of Directors appointed Mr. Peter Norman the Company's Chief Financial Officer and Principal Accounting Officer. The Board of Directors also increased Mr. Norman's annual base salary to $230,000 and increased his bonus target to 60% of his base salary. Additionally, the Board approved the grant of an option to purchase fifty-five thousand (55,000) shares of the Company's common stock.

Item 5.02 Departure of Directors or Principal Officers: Election of Directors; Appointment of Principal Officers.

(b) Effective March 8, 2006, George de Urioste resigned as the Company's Chief Financial Officer and Chief Operating Officer. Subsequent to his resignation, Mr. de Urioste will continue to be employed by the Company for until March 31, 2006 to ensure a smooth transition.
 

(c) Effective March 8, 2006, the Board of Directors appointed Peter S. Norman to Vice President, Chief Financial Officer and Principal Accounting Officer. Mr. Norman will be responsible for Chordiant's accounting, finance and reporting functions. Mr. Norman joined Chordiant in August 2004 as Director of Finance and was named Vice President and Corporate Controller in March 2005. Prior to his employment at Chordiant, he spent 12 years as a senior manager in the audit practice of KPMG Peat Marwick LLP. He also served in senior financial and operational positions with several private companies. Mr. Norman holds a Bachelor of Science Degree, cum laude, from Humboldt State University with a major in accounting. He is a Certified Public Accountant (CPA), a member of the American Institute of Certified Public Accountants, and a member of the California State Society of Certified Public Accountants.
 

(d) On March 7, 2006, the Board of Directors of Chordiant Software, Inc., by unanimous written consent, expanded its Board of Directors to 8 members and elected Richard G. Stevens, founder and managing director of Hunter Stevens, a professional services firm, as a Class I Director effective March 7, 2006 to serve until the 2008 Annual Meeting of Stockholders, or until his successor is elected and qualified.
 

Additionally, the Board of Directors appointed Mr. Stevens to serve on the Audit Committee and designated him the Chairman. The Board of Directors also designated Mr. Stevens as the Company's financial expert. David Weymouth and David Springett remain as members of the Audit Committee.
 

Prior to forming Hunter Stevens in 1995, Mr. Stevens served as a partner with Ernst & Young and Coopers & Lybrand, and held executive positions at other business organizations. Mr. Stevens had served as the chairman of the audit committee at Verity, Inc., a software firm based in Sunnyvale, CA, and at Pain Therapeutics, Inc., a bio-science company in South San Francisco. He currently provides consultation to a number of early-stage, pre-IPO and mature public companies. Mr. Stevens received his undergraduate BS degree with honors from the University of San Francisco. Mr. Stevens is a licensed CPA in the state of California and a Certified Fraud Examiner.

A copy of the press release issued in connection with Mr. Norman's appointment as Chief Financial Officer is attached to this Report as Exhibit 99.1.

A copy of the press release issued in connection with Mr. Stevens' appointment to the Board is attached to this Report as Exhibit 99.2.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Number Description 

10.1            Board Member Agreement with Mr. Richard G. Stevens dated March 7, 2006.*

99.1            Press Release of Chordiant Software, Inc. dated March 8, 2006.

99.2            Press Release of Chordiant Software, Inc. dated March 9, 2006.

*Compensatory plan, contract or arrangement.
 

SIGNATURE

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.

Chordiant Software, Inc.

Date: March 9, 2006 By: /s/ Steven R. Springsteel     Steven R. Srpingsteel President and Chief Executive Officer

EX-10.1

March 7, 2006

Mr. Richard Stevens
Hunter Stevens
One Maritime Plaza
Suite 1600
San Francisco, CA 94111

Re: Board Member Agreement

Dear Mr. Stevens,

On behalf of Chordiant Software, Inc. ("Company"), I am pleased to have you join the Company's Board of Directors. This letter sets forth the terms of the Director Agreement (the "Agreement") that the Company is offering to you.

1.  APPOINTMENT TO THE BOARD OF DIRECTORS.

1.1    Title, Term and Responsibilities.  Subject to terms set forth herein, the Company agrees to appoint you to serve as a Director on the Company's Board of Directors (the "Board"), and you hereby accept such appointment effective as of March 7, 2006 (the "Effective Date"). You will serve as a Director of the Board from the Effective Date until you voluntarily resign, are removed from the Board or are not reelected (the "Term"). Your rights, duties and obligations as a Director shall be governed by the Certificate of Incorporation and By-Laws of the Company, each as amended from time to time (collectively, the "Governing Documents"), except that where the Governing Documents conflict with this Agreement, this Agreement shall control.

1.2    Mandatory Board Meeting Attendance.  As a Director, you agree to apply all reasonable efforts to attend each regular meeting of the Board and no fewer than seventy-five percent (75%) of these meetings of the Board in person, and no more than twenty-five percent (25%) of such meetings by telephone or teleconference.
 

1.3    Independent Contractor.  Under this Agreement, your relationship with the Company will be that of an independent contractor as you will not be an employee of the Company nor eligible to participate in regular employee benefit and compensation plans of the Company.

2. COMPENSATION AND BENEFITS.
 

2.1    Retainer.  The Company will pay you a quarterly retainer for each quarter you serve on the Board (the "Retainer") to be paid in quarterly installments of Seven Thousand Five Hundred Dollars ($7,500), payable after the regular Board meeting in each calendar quarter (i.e., January, April, July and October). The Company's obligation to pay the Retainer will cease upon the termination of the Term. You agree to attend at least 3 out of the 4 regularly scheduled Board meetings for the Retainer. The Company will also pay you $1,500 for each meeting of the Audit Committee that you attend, not to exceed $6,000 per quarter and will pay you $3,000 per quarter ($12,000 annually) to act as the Chair of the Audit Committee. The Company's obligation to pay these Committee fees will cease when you no longer serve on the Committee.
 

2.2    Options.  Upon the Effective Date, the Company will grant you an initial option to purchase twenty-five thousand (25,000) shares of the common stock of the Company under the Non-Employee Director's Stock Option Plan. Under the terms of this plan, you may be granted an additional option for seven thousand five hundred (7,500) shares of common stock for each year of participation as a Director, and an additional option for five thousand (5,000) shares of common stock for each year of participation as a member of a committee of the Board provided however that the first such grants will be pro-rated based on the length of your service to the Board at such time. The options shall have an exercise price equal to the fair market value of the shares as of the date of the grant.
 

2.3    Business Expense Reimbursement.  The Company will reimburse you for all reasonable travel, entertainment or other expenses incurred by you in connection with your services hereunder, in accordance with the Company's expense reimbursement policy as in effect from time to time.
 

2.4    Indemnification.  You shall receive indemnification as a Director of the Company to the maximum extent extended to directors and certain executives of the Company generally, as provided by the Governing Documents.
 

2.5    Tax Indemnification.  You acknowledge that the Company will not be responsible for the payment of any federal or state taxes that might be assessed with respect to the Retainer and the options and you agree to be responsible for all such taxes.
 

3. PROPRIETARY INFORMATION OBLIGATIONS.
 

3.1    Proprietary Information.  You agree that during the Term and thereafter that you will take all steps reasonably necessary to hold all information of the Company, which a reasonable person would believe to be confidential or proprietary information, in trust and confidence, and not disclose any such confidential or proprietary information to any third party without first obtaining the Company's express written consent on a case-by-case basis.
 

3.2    Third Party Information.  The Company has received and will in the future receive from third parties confidential or proprietary information ("Third Party Information") subject to a duty on the Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes. You agree to hold such Third Party Information in confidence and not to disclose to anyone (other than Company personnel who need to know such information in connection with their work for Company) or to use, except in connection with your services for Company under this Agreement, Third Party Information unless expressly authorized in writing by the Company.
 

3.3    Return of Company Property.  Upon the end of the Term or upon the Company's earlier request, you agree to deliver to the Company any and all notes, materials and documents, together with any copies thereof, which contain or disclose any confidential or proprietary information or Third Party Information.
 

4. OUTSIDE ACTIVITIES.
 

4.1    Investments and Interests.  Except as permitted by Sections 4.2, you agree not to participate in, directly or indirectly, any position or investment known by you to be materially adverse to the Company.
 

4.2    Activities.  Except with the prior written consent of the Board, you will not during your tenure as a member of the Company's Board undertake or engage in any other directorship, employment or business enterprise in direct competition with the Company, other than ones in which you are a passive investor or other activities in which you were a participant prior to your appointment to the Board as disclosed to the Company.
 

4.3    Other Agreements.  You agree that you will not disclose to the Company or use on behalf of the Company any confidential information governed by any agreement between you and any third party except in accordance with such agreement.
 

5. TERMINATION Of DIRECTORSHIP.
 

Voluntary Resignation, Removal Pursuant to Bylaws and Stockholder Action. You may resign from the Board at any time with or without advance notice, with or without reason. You may be removed from the Board at any time, for any reason, in any manner provided by the Governing Documents and applicable law. You also may be removed from the Board at any time, by an affirmative vote of a majority of the stockholders of the Company.
 

6. GENERAL PROVISIONS.
 

6.1    Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. If any provision of this Agreement is held to be invalid, illegal or unenforceable such provision will be reformed, construed and enforced to render it valid, legal, and enforceable consistent with the intent of the parties insofar as possible.
 

6.2    Entire Agreement.  This Agreement constitutes the entire agreement between you and the Company with respect to your service as a Director and supersedes any prior agreement, promise, representation or statement written between you and the Company with regard to this subject matter. It is entered into without reliance on any promise, representation, statement or agreement other than those expressly contained or incorporated herein, and it cannot be modified or amended except in a writing signed by the party or parties affected by such modification or amendment.
 

6.3    Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of and be enforceable by you and the Company and our respective successors, assigns, heirs, executors and administrators, except that you may not assign any of your rights or duties hereunder without the written consent of the Company.
 

6.4    Governing Law.  This Agreement will be governed by the law of the State of Delaware as applied to contracts made and performed entirely within Delaware.
 

We are all delighted to be able to extend you this offer and look forward to working with you. To indicate your acceptance of the Company's offer, please sign and date this Agreement below.
 

Sincerely,
__________________________

ACCEPTED AND AGREED:
 

__________________________________
Signature
__________________________________
Date
 

EX-99.1

CHORDIANT SOFTWARE PROMOTES PETER NORMAN
TO CHIEF FINANCIAL OFFICER

Has Over 25-Years of Leadership Experience and Deep Expertise in Finance,
Accounting and Audit Functions

CUPERTINO, CA -- MARCH 8, 2006 - Chordiant Software, Inc. (Nasdaq: CHRD), the leading provider of Customer Experience (Cx^TM) software and services, today announced the promotion of Peter S. Norman to Vice President and Chief Financial Officer, replacing George de Urioste, who is leaving to pursue other opportunities.

"We are promoting Peter Norman because of his strong leadership experience and deep expertise in finance, accounting and audit functions," Steven R. Springsteel, Chordiant President and CEO, said. "Pete has been a key member of the finance organization since August 2004, and has made significant contributions to building a solid finance organization and overseeing the management of internal and external audit functions." In his new role as Chief Financial Officer, Mr. Norman will be responsible for Chordiant's accounting, finance and reporting functions.

In making the announcement, Mr. Springsteel said "We wish George well in his future endeavors and thank him for his efforts in guiding Chordiant's finance team during 2005, which was a difficult time in the Company's history."

"I appreciate having the opportunity to guide Chordiant to improvements in corporate governance," said George de Urioste. "My decision to depart is in consideration of new opportunities outside of Chordiant. I wish all team members the best," he added.

Mr. Norman holds a Bachelor of Science Degree, cum laude, from Humboldt State University with a major in accounting. He is a Certified Public Accountant (CPA), a member of the American Institute of Certified Public Accountants, and a member of the California State Society of Certified Public Accountants.

Mr. Norman joined Chordiant in August 2004 as Director of Finance and was named Vice President and Corporate Controller in March 2005. He played a key role in guiding the Company through a challenging period in 2005. Prior to Chordiant, he spent 12 years as a senior manager in the audit practice of KPMG Peat Marwick LLP. He also served in senior financial and operational positions with several private companies.
 

About Chordiant Software, Inc.
Chordiant solutions and services help major enterprises around the world deliver the best possible customer experience. Unlike traditional business applications, Chordiant Customer Experience (Cx) solutions blend insight with agile business strategies and decisions to uniquely understand the customer's behavior. This deeper understanding develops a lasting, one-to-one relationship that aligns the most appropriate value proposition to each consumer. With Chordiant Cx solutions, customer loyalty, operational productivity and profitability reach unprecedented levels of return. For more information, visit Chordiant at www.chordiant.com

Chordiant and the Chordiant logo are registered trademarks of Chordiant Software, Inc. The Customer Experience Company and Cx are trademarks of Chordiant Software, Inc. All other trademarks and registered trademarks are the properties of their respective owners.

Chordiant Investor Relations Contact:
Steve Polcyn
Chordiant Software, Inc.
(408) 517-6282
steve.polcyn@chordiant.com

EX-99.2

CHORDIANT SOFTWARE ELECTS RICHARD STEVENS
TO ITS BOARD OF DIRECTORS,
AND IS NAMED CHAIR OF THE AUDIT COMMITTEE

Brings Strong Finance, Accounting and Auditing Background to the Company

CUPERTINO, CA -- MARCH 9, 2006 - Chordiant Software, Inc. (Nasdaq: CHRD), the leading provider of Customer Experience (Cx^TM) software and services, today announced the election of Richard G. Stevens to its Board of Directors. Mr. Stevens was also named chair of the Audit Committee, effective immediately.

"We are delighted to welcome Rick to the Board of Directors and as Chair of the Audit Committee at Chordiant," said Sam Spadafora, Chairman. "His distinguished career and strength in financial management make him an outstanding addition to our Board. We are pleased he has accepted the position and look forward to his contribution to the strategic development of the Company."

Mr. Stevens is the founder and managing director of Hunter Stevens, a professional services firm comprised of financial experts, industry specialists and technical staff, including former big-four partners, corporate executives and regulatory officials. Prior to forming Hunter Stevens in 1995, he served as a partner with Ernst & Young and Coopers & Lybrand and held executive positions at other business organizations. During his tenure with Coopers & Lybrand in New York, Mr. Stevens provide advice and technical support to the firm's approximate 100 domestic practice offices concerning accounting, auditing and SEC matters. He was also a contributing author of Montgomery's Auditing 10th Edition, one of the principal reference books used in the accounting profession.

Mr. Stevens served as the chairman of the Audit Committee of Verity, Inc., a leading provider of business search and process management software, which was recently acquired by Autonomy Corporation. He has also served as chairman of the Audit Committee of Pain Therapeutics, Inc., a bio-science company in South San Francisco. He received his Bachelor of Science Degree with honors from the University of San Francisco and has attended post-graduate studies at the Stanford Law School and Stanford's Graduate School of Business. Mr. Stevens is a licensed Certified Public Accountant (CPA) in the State of California and a Certified Fraud Examiner.

About Chordiant Software, Inc.
Chordiant solutions and services help major enterprises around the world deliver the best possible customer experience. Unlike traditional business applications, Chordiant Customer Experience (Cx) solutions blend insight with agile business strategies and decisions to uniquely understand the customer's behavior. This deeper understanding develops a lasting, one-to-one relationship that aligns the most appropriate value proposition to each consumer. With Chordiant Cx solutions, customer loyalty, operational productivity and profitability reach unprecedented levels of return. For more information, visit Chordiant at www.chordiant.com

Chordiant and the Chordiant logo are registered trademarks of Chordiant Software, Inc. The Customer Experience Company and Cx are trademarks of Chordiant Software, Inc. All other trademarks and registered trademarks are the properties of their respective owners.


Chordiant Investor Relations Contact:
Steve Polcyn
Chordiant Software, Inc.
(408) 517-6282
steve.polcyn@chordiant.com