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):

February 21, 2007

Serena Software, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	000-25285	94-2669809
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

2755 Campus Drive, 3rd Floor San Mateo, California	94403-2538
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (650) 522-6600

N/A

(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):

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

On February 21, 2007, the Board of Directors of Serena Software, Inc. (“Serena”) approved Serena’s FY 2008 Executive Annual Incentive Plans for its executive officers. Under the terms of these plans, the executive officers will be eligible to receive performance-based cash incentive bonuses with target payouts ranging from 50% to 100% of a participant’s annual base salary. Target annual incentive bonuses are equal to 100% of a participant’s annual base salary for our Senior Vice President, Chief Financial Officer and Senior Vice President, Worldwide Field Operations, and 50% of a participant’s annual base salary for our Senior Vice President, General Counsel, Senior Vice President, Research and Development, and Senior Vice President, Worldwide Marketing. The actual bonus amounts are subject to achievement of one or more of the following performance metrics: (a) with regard to all of our executive officers, achievement of our annual EBITA (earnings before interest, taxes and amortization) target; (b) with regard to our Senior Vice President, General Counsel, Senior Vice President, Research and Development, and Senior Vice President, Worldwide Marketing, achievement of management objectives applicable to the executive officer; and (c) with regard to our Senior Vice President, Research and Development and Senior Vice President, Worldwide Marketing, achievement of expense targets applicable to the executive officer’s functional area. For annual incentive plans with multiple performance metrics, the performance metrics are generally weighted on an equal basis. With regard to the annual EBITA performance metric, achievement of less than 85% of the EBITA target results in no payout, achievement of 100% of the EBITA target results in a 100% payout, and achievement of 115% of the EBITA target results in a 200% payout of the target bonus or weighted portion thereof. Payouts based on the EBITA metric are not capped. The incentive bonuses will be calculated and paid out on an annual basis for our Senior Vice President, Chief Financial Officer, and on a semi-annual basis for our Senior Vice President, Worldwide Field Operations, Senior Vice President, General Counsel, Senior Vice President, Research and Development, and Senior Vice President, Worldwide Marketing. The annual incentive bonus for our Senior Vice President, Worldwide Field Operations is guaranteed at 100% of his target bonus for fiscal year 2008. The form of the FY 2008 Executive Annual Incentive Plan is filed as Exhibit 10.1 to this Current Report and is incorporated herein by reference.

On February 21, 2007, Serena’s Board or Directors approved the vesting of 10% of all Time/Performance Stock Options that had been granted by Serena to its executive officers and employees during calendar year 2006.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits:

Exhibit 10.1* Form of Serena’s FY08 Executive Annual Incentive Plan

* Indicates a management contract or compensatory plan 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.

SERENA SOFTWARE, INC.
By:	/s/ Edward F. Malysz
Name:	Edward F. Malysz
Title:	Senior Vice President,
	General Counsel

Date: February 23, 2007

EXHIBIT INDEX

Exhibit 10.1* Form of Serena’s FY08 Executive Annual Incentive Plan

* Indicates a management contract or compensatory plan or arrangement

EX-10.1

Exhibit 10.1

FY 2008 Executive Annual Incentive Plan

Job Category:	(“Participant”)
Purpose:	Provide critical focus on specific, measurable corporate goals and provide performance-based compensation based upon the level of attainment of such goals.
Bonus Target:	The target incentive bonus for this executive position is [50%/100%] of the Participant’s annual base salary. The incentive bonus will be paid on a [semi-annual/annual] basis based on the Participant’s actual base salary from time of eligibility under the Plan through the applicable fiscal period. Payments will be subject to applicable payroll taxes and withholdings.
Bonus Payments:	The incentive bonus will be paid on a [semi-annual/annual] basis. Payment will be made within two and one-half months of the financial close of the applicable fiscal period.
Components:	The following performance metric(s) will be used to determine the amount of the incentive bonus:

Metric Weighting

Achievement Schedule:	The achievement schedule for each metric and associated bonus associated with the achievement of such metric is set forth in Schedule 1 attached hereto.
Pro-ration:	The calculation of the incentive bonus will be based on eligible actual base salary earnings for the applicable fiscal period and, subject to the eligibility requirements below, will be pro-rated based on the number of days the Participant is employed as a regular, full-time employee of Serena during such fiscal period.
Eligibility:	The Participant must be a regular, full-time employee of Serena at the end of the applicable fiscal period and remain actively employed through the date of the bonus payout in order to be eligible to receive the incentive bonus. Similarly, the Participant must be a regular, full-time employee of Serena at the end of the fiscal year and remain actively employed through the date of the bonus payout in order to be eligible to receive any bonus payment measured on an annual basis and/or payments for annual over-achievement or other annual adjustment. A Participant who leaves before the end of the applicable fiscal period or prior to the payment of the incentive bonus for such period will not be eligible to receive the incentive bonus or any pro-ration thereof.
Acquisition:	In the event of an acquisition or purchase of products or technology, the Administrator may adjust the applicable financial performance metrics to reflect the potential impact upon the Serena’s financial performance.

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Plan Provisions:	This Plan supersedes the FY07 Executive Annual Incentive Plan, which is null and void as of the adoption of this Plan.
	Participation in the Plan does not guarantee participation in other or future incentive plans. Plan structure and participation will be determined on an annual basis.
	The Plan will be administered by the Compensation Committee of the Board of Directors (the “Administrator”). The Administrator will have all powers and discretion necessary or appropriate to administer and interpret the Plan, except to the extent that the Board reserves the right to approve matters related to the compensation of the Chief Executive Officer. The Administrator reserves the right to alter or cancel all or any portion of the Plan for any reason at any time, and to exercise its own judgment with regard to company performance in light of events outside the control of management and/or the Participant.
	The Serena FY2008 Compensation Plan General Terms and Conditions are incorporated herein, except to the extent inconsistent with the terms hereof.

* See Schedule 1 attached hereto

SCHEDULE 1

SERENA SOFTWARE, INC.

FY08 EXECUTIVE ANNUAL INCENTIVE PLAN

Effective February 1, 2007

Target annual cash incentive bonuses are equal to 100% of a participant’s annual base salary for our Senior Vice President, Chief Financial Officer and Senior Vice President, Worldwide Field Operations, and 50% of a participant’s annual base salary for our Senior Vice President, General Counsel, Senior Vice President, Research and Development, and Senior Vice President, Worldwide Marketing. The actual bonus amounts are subject to achievement of one or more of the following performance metrics: (a) with regard to all of our executive officers, achievement of our annual EBITA (earnings before interest, taxes and amortization) target; (b) with regard to our Senior Vice President, General Counsel, Senior Vice President, Research and Development, and Senior Vice President, Worldwide Marketing, achievement of management objectives applicable to the executive officer; and (c) with regard to our Senior Vice President, Research and Development and Senior Vice President, Worldwide Marketing, achievement of expense targets applicable to the executive officer’s functional area. For annual incentive plans with multiple performance metrics, the performance metrics are generally weighted on an equal basis. With regard to the annual EBITA performance metric, achievement of less than 85% of the EBITA target results in no payout, achievement of 100% of the EBITA target results in a 100% payout, and achievement of 115% of the EBITA target results in a 200% payout of the target bonus or weighted portion thereof. Payouts based on the EBITA metric are not capped. The incentive bonuses will be calculated and paid out on an annual basis for our Senior Vice President, Chief Financial Officer, and on a semi-annual basis for our Senior Vice President, Worldwide Field Operations, Senior Vice President, General Counsel, Senior Vice President, Research and Development, and Senior Vice President, Worldwide Marketing. The annual incentive bonus for our Senior Vice President, Worldwide Field Operations is guaranteed at 100% of his target bonus for fiscal year 2008.

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