Executive Officer, President, Vice President, Engineering and Chief Technical Officer. Mr. Nierenberg is currently a director for privately held companies AwarePoint Corporation, Aptana, Inc. ~~and Photoleap, Inc.~~, and is a member of the Board of Trustees for The Burnham Institute, a non-profit organization.

Peter I. Cittadini,~~52,~~53, has been a director of Actuate since February 1999. Mr. Cittadini has been Chief Executive Officer of Actuate since August 2000 and has been its President since October 1998. Mr. Cittadini was also Actuate’s Chief Operating Officer from October 1998 until August 2000 and served as Actuate’s Executive

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written charter adopted by the Board which can be viewed at www.actuate.com. Messrs. Beitzel, Marshall and Whiteman serve on the Audit Committee and the Board has determined that each of them is an independent director under the applicable listing standards of Nasdaq. The Board has determined that Mr. Whiteman is an audit committee financial expert as defined in the rules of the Securities and Exchange Commission.

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Compensation Committee — The Compensation Committee reviews and sets the compensation for Actuate’s Chief Executive Officer and certain of its other executive officers, evaluates the performance of the executive officers, and oversees the administration of Actuate’s equity compensation plans. The Compensation Committee reviews and recommends to the Board of Directors the compensation of the non-employee directors. The Compensation Committee met ~~four~~2 times during ~~2007.~~2008. The Compensation Committee acts pursuant to a written charter adopted by the Board that can be viewed at www.actuate.com. Messrs. Beitzel, Marshall and Whiteman serve on the Compensation Committee and the Board has determined that each of them is an independent director under the applicable listing standards of Nasdaq.

The Compensation Committee is authorized to use independent compensation consultants and other professionals to assist in the design, formulation, analysis and implementation of compensation programs for the Corporation’s executive officers and other key employees and non-employee directors. In ~~2007,~~2008, the Compensation Committee engaged the compensation consulting firm Compensia to identify Actuate’s peer group for compensatory purposes, to help it determine appropriate levels of compensation for its executive officers and to otherwise provide advice about executive compensation best practices.

In determining or recommending the amount or form of executive officer compensation each year, the Compensation Committee generally considers the recommendations of compensation consultants engaged by Actuateand/or the Compensation Committee, compensation surveys, such as Radford Group surveys and the High-Tech Executive TDC Survey and recommendations from Actuate’s Chief Executive Officer with respect to the compensation of other executive officers based on his annual review of their performance.

Corporate Governance/Nominating Committee — The Corporate Governance/Nominating Committee is responsible for overseeing Actuate’s corporate governance policies and processes and evaluating and recommending qualified candidates to election to the Board of Directors. The Corporate Governance/Nominating Committee met ~~twice~~2 times during ~~2007.~~2008. The Corporate Governance/Nominating Committee acts pursuant to a written charter adopted by the Board that can be viewed on our website at www.actuate.com. Messrs. Beitzel, Marshall and Whiteman serve on the Corporate Governance/Nominating Committee and the Board has determined that each of them is an independent director under the applicable listing standards of Nasdaq.

The Corporate Governance/Nominating Committee does not have a formal policy with regard to the process for identifying and evaluating director nominees. The Corporate Governance/Nominating Committee will give the same consideration to director candidates recommended by the Corporation’s stockholders as those candidates recommended by others. To recommend a candidate for the Corporate Governance/Nominating Committee’s consideration, a stockholder should follow the procedures set out in the Company’s Amended and Restated Bylaws dated January 30, 2009 and submit the required information and materials described in such bylaws, including the candidate’s name and qualifications to the Corporation’s corporate secretary in writing at the following address: 2207 Bridgepointe Parkway, Suite 500, San Mateo, CA 94404. To date, Actuate has not received director candidates recommended by its stockholders and the Board of Directors believes that it could appropriately address any such recommendations received without a formal policy.

Stockholders may communicate with the Board of Directors by sending a letter to the Corporation’s corporate secretary at the following address: 2207 Bridgepointe Parkway, Suite 500, San Mateo, California 94404. Stockholders who would like their submission directed to a particular member of the Board of Directors by the corporate secretary may so specify.

The Board of Directors has determined that, except as noted below, all members of the Board are “independent directors” within the meaning of the applicable listing standards of Nasdaq. Messrs. Cittadini and Nierenberg are not considered independent because they are executive officers of Actuate.

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Although Actuate does not have a formal policy regarding attendance by members of the Board of Directors at annual meetings of stockholders, directors are encouraged to attend annual meetings. No directors attended the ~~2007~~2008 annual meeting of stockholders.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE~~“FOR”~~ “FOR”THE NOMINEES LISTED HEREIN.

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~~2007~~2008 COMPENSATION OF NON-EMPLOYEE DIRECTORS

The following table sets forth certain information regarding the compensation of each non-employee director for the ~~2007~~2008 fiscal year. The Corporation does not sponsor any non-equity incentive plan, pension plan, or non-qualified deferred compensation plan for its non-employee directors. No stock or stock-based awards other than stock options were granted to the non-employee directors in ~~2007,~~2008, and no stock awards other than option grants were held by non-employee directors in ~~2007.~~2008.


	Fees Earned						Fees Earned
	or Paid in Cash		Option Awards		Total		or Paid in Cash		Option Awards
Name	($)(1)		($)(2)(3)		($)		(1)		(2)(3)		Total
~~(a)~~	(b)		(c)		(d)

George B. Beitzel		50,000		99,131		149,131	$	70,000	$	81,351	$	151,351
Kenneth E. Marshall		50,000		98,983		148,983	$	70,000	$	81,351	$	151,351
Arthur C. Patterson		50,000		98,393		148,393	$	50,000	$	81,351	$	131,351
Steven D. Whiteman		50,000		98,393		148,393	$	80,000	$	81,351	$	161,351


(1)		Consists of the annual cash retainer fees paid to non-employee directors for service as members of the Corporation’s Board of ~~Directors.~~Directors and additional cash compensation for service on a special committee. For further information concerning such fees, see the section below entitled“Director’s Annual Cash Retainer Fees.”

(2)		The amounts in the Option Awards column ~~(c)~~ reflect the compensation cost recognized for financial statement reporting purposes for the fiscal year ended December 31, ~~2007,~~2008, in accordance with Statement of Financial Accounting Standards No. 123 revised (“SFAS 123(R)”), with respect to the outstanding stock option awards made to non-employee directors for service on the Corporation’s Board of Directors, whether those awards were made in ~~2007~~2008 or any earlier fiscal year. The reported amounts are based on the grant date fair value of each of those options and have not been adjusted for the potential impact of estimated forfeitures. Assumptions used in the calculation of the SFAS 123(R) cost are included in Note 1 of the Notes to Consolidated Financial Statements in our ~~2007~~2008 Annual Report onForm 10-K filed with the Securities and Exchange Commission on March ~~14, 2007.~~12, 2009. The grant date fair value of each of the stock options granted to the non-employee directors during ~~2007,~~2008, computed in accordance with SFAS 123(R), was ~~$100,580.~~$64,942. For further information concerning such equity awards, see the section below ~~entitled~~“Equity Compensation.”

(3)		As of December 31, ~~2007,~~2008, the following non-employee directors held options to purchase the following number of shares of the Corporation’s common stock: George B. Beitzel ~~290,000~~315,000 shares; Kenneth E. Marshall ~~337,500~~362,500 shares; Arthur C. Patterson ~~270,000~~295,000 shares and Steven D. Whiteman ~~280,212~~295,000 shares. The options were granted under either the Corporation’s 1998 Plan or the Corporation’s 1998 Non-Employee Directors Plan (the “Directors’ Plan”). For further information concerning the grant of options to non-employee directors under such plans, see the section below ~~entitled~~“Equity Compensation”.

Directors’ Annual Cash Retainer Fees

In ~~2007,~~2008, Messrs. Beitzel, Marshall, Patterson and Whiteman each received a cash retainer of $50,000 for their service as non-employee directors. Messrs. Beitzel and Marshall received additional cash compensation of $20,000 for serving on a special committee of the Board of Directors and Mr. Whiteman received $30,000 for serving as Chairman of such committee. Directors were also reimbursed for reasonable expenses incurred in connection with their attendance at a board or committee meeting. The 2009 cash retainer for service as a non-employee director has been increased to $60,000.

Equity Compensation

~~2006 Grants and Grants in Prior Years Pursuant to the Directors’ Plan~~

~~In 2006 and in prior years, each~~An individual who first ~~joined~~joins the Board ~~of Directors~~ as a non-employee director ~~whether through election or appointment, automatically~~receives an option to purchase 40,000 shares of the Corporation’s Common Stock. Each continuing non-employee Board member receives an option to purchase 25,000 shares of the Corporation’s Common Stock at each subsequent annual stockholders’ meeting. At the 2008 annual stockholders’ meeting, each non-employee board member received an option ~~award~~to purchase 25,000 shares of the Corporation’s Common Stock, with an exercise price per share of $4.65, the fair market value of the Common Stock on the grant date. These stock option awards were made under the Directors’ Plan to purchase 80,000 shares of Common Stock. Such initial automatic option grant vested and became exercisable as to 25% of the shares after one year of Board service and the balance of the shares vested and became exercisable in a series of 36 equal monthly installments over the 36 month period measured from the first anniversary of the option grant date, provided the non-employee Board member continued his or her Board service throughout each such vesting date. In addition, at each annual stockholders’ meeting during that period, each continuing non-employeeCompany’s

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~~director was automatically granted at that meeting, whether or not standing for re-election at that particular meeting, a~~1998 Equity Incentive Plan (the “1998 Plan”). All stock option ~~under the Director’s Plan to purchase 10,000 shares of Common Stock, which became~~awards are fully vested and exercisable upon completion of one year of Board service measured from the date of grant. Each option ~~had~~has an exercise price ~~set~~per share equal to the fair market value of the Corporation’s Common Stock on the ~~automatic~~ grant date and a ~~maximum~~ term of ten years, subject to earlier termination following the optionee’s cessation of Board service. However, vesting automatically ~~accelerated~~accelerates in full upon (i) an approved acquisition of Actuate by merger or consolidation, (ii) a sale of all or substantially all of Actuate’s assets, (iii) the successful completion of a tender or exchange offer for securities possessing more than fifty percent (50%) of the total combined voting power of Actuate’s outstanding securities, or (iv) the death or disability of the optionee while serving as a Board member.

~~2007 Awards 2008 Awards and Future Awards Pursuant to the 1998 Plan~~

In March 2007, the Board of Directors amended the stock option award program for non-employee directors under the Directors’ Plan to change the number of options granted in the initial and annual awards to non-employee directors, beginning with the awards to be made at the 2007 Annual Meeting. The amendment reduced the number of options to be granted to each individual who first joins the Board as a non-employee director from 80,000 options to 40,000 options and increased the number of options to be automatically granted to each continuing non-employee Board member at each annual stockholders’ meeting from 10,000 options to 25,000 options. All other terms of the non-employee director program, including vesting schedules for the initial award and the automatic annual award remained unchanged.

~~All directors are eligible to receive option awards under Actuate’s Amended and Restated 1998 Equity Incentive Plan (the “1998 Plan”).~~

In January 2008, the Board of Directors resolved that starting with the awards to be made at the 2008 Annual Meeting all awards to the non-employee directors shall be made under the 1998 Plan rather than the Director’s Plan. All other terms of the non-employee director program, including vesting schedules for the initial award and the automatic annual award remain unchanged.

Additional Director ~~Grants~~Options

Nicolas C. Nierenberg, Chairman of the Board and Chief Architect, is an executive officer who does not receive additional compensation for services ~~provided~~he provides as Chairman of the Board. As of February ~~29, 2008,~~28, 2009, Mr. Nierenberg held options to purchase ~~178,522~~131,439 shares of the Corporation’s common stock under the 1998 Plan and ~~300,000~~254,722 options to purchase shares of the Corporation’s common stock under the 2001 Plan some of which would continue to vest if Mr. Nierenberg provided services to the Company solely in his capacity as a director.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information as of December 31, ~~2007~~2008 with respect to shares of our Common Stock that may be issued under our existing equity compensation plans. The table does not include information with respect to shares of our Common Stock subject to outstanding options granted under equity compensation plans or option agreements assumed by us in connection with our acquisitions of the companies that originally granted those options. However, footnote (1) to the table sets forth the total number of shares of our Common Stock issuable upon the exercise of those assumed options as of December 31, ~~2007,~~2008, and the weighted average exercise price of those options. No additional options may be granted under those assumed plans.


	Number of			Weighted Average					Number of
	Securities to be			Exercise Price of		Number of Available			Securities to be			Weighted Average		Number of Available
	Issued Upon			Outstanding Options		Securities Remaining for			Issued Upon			Exercise Price of		Securities Remaining for
Plan Category	Exercise of Options			($)		Future Issuance			Exercise of Options			Outstanding Options		Future Issuance

Equity Compensation plans approved by stockholders(2)		18,017,020	(3)		3.52		13,574,513	(4)		16,241,957	(3)	$	3.88		16,320,258	(4)
Equity Compensation plans not approved by stockholders(5)		719,439			1.87		714,288			627,256		$	1.94		714,600
Total		18,736,459			3.45		14,288,801			16,869,213		$	3.81		17,034,858

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(1)		As of December 31, ~~2007~~2008 a total of ~~12,687~~7,400 shares of Common Stock were issuable upon exercise of outstanding options assumed in connection with acquisitions. The weighted average exercise price of the outstanding options is ~~$2.94~~$1.99 per share. No additional options may be granted under any of those assumed plans.

(2)		Consists of three plans: the 1998 Plan, the Directors’ Plan and the Amended and Restated 1998 Employee Stock Purchase Plan (the “Purchase Plan”).

(3)		Excludes purchase rights accruing under the Purchase Plan. Under the Purchase Plan, each eligible employee may purchase shares of Actuate’s Common Stock, subject to a maximum number of shares per offering period (currently ~~500 or~~ 1000 ~~shares based on the start date of the offering period),~~shares) at each semi-annual purchase date within that offering period (the last business day of January and July each year) at a purchase price per share equal to eighty-five percent (85%) of the lower of (i) the closing selling price per share of Common Stock on the date immediately preceding the start date of the offering period in which that semi-annual purchase date occurs and (ii) the closing selling price per share of Common Stock on the semi-annual purchase date.

(4)		This number includes shares available for future issuance under the 1998 Plan, the Directors’ Plan and the Purchase Plan. As of December 31, ~~2007~~2008 an aggregate of ~~11,815,287~~14,383,895 shares of common stock under the 1998 Plan, 230,000 shares of common stock under the Directors’ Plan and ~~1,529,226~~1,706,363 shares of common stock under the Purchase Plan were available for issuance. The number of shares of common stock available for issuance under the Purchase Plan automatically increases on January 1st of each calendar year by an amount equal to the

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		lesser of (i) 2% of Actuate’s outstanding shares of common stock as of December 31st of the immediately preceding calendar year or (ii) 600,000 shares. The number of shares of common stock available for issuance under the 1998 Plan automatically increases on January 1st of each calendar year by an amount equal to the lesser of (i) 5% of Actuate’s outstanding shares of common stock as of December 31st of the immediately preceding calendar year orand (ii) 2,800,000 shares. Shares may be issued under the 1998 Plan in the form of stock options, stock appreciation rights, restricted stock, restricted stock units or performance shares, although all awards to date under such plan have been in the form of option grants.

(5)		Consists of our 2001 Supplemental Stock Plan. See Note 9 of the Notes to Consolidated Financial Statements in our ~~2007~~2008 Annual Report onForm 10-K filed with the Securities and Exchange Commission on March ~~14, 2008~~12, 2009 for a description of such plan.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of February ~~29, 2008,~~28, 2009, certain information with respect to shares beneficially owned by (i) each person who is known by Actuate to be the beneficial owner of more than five percent of Actuate’s outstanding shares of Common Stock, (ii) each of Actuate’s directors, (iii) each of Actuate’s executive officers named in the Summary Compensation Table and (iv) all current directors and executive officers as a group. Except for shares of Actuate common stock held in brokerage accounts which may from time to time, together with other securities held in those accounts, serve as collateral for margin loans made from such accounts, none of the shares reported as beneficially owned are pledged as security for any outstanding loan or indebtedness.


	Shares Beneficially Owned(1)				Shares Beneficially Owned(1)
	Number of		Percentage of		Number of		Percentage of
Name and Address of Beneficial Owner	Shares		Total		Shares		Total

Columbia Wanger Asset Management, L.P.(2) 227 West Monroe Street, Suite 3000 Chicago, IL 60606		5,000,000		8.3
Ashford Capital Management, Inc.(4) P.O. Box 4172 Wilmington, DE 19807		3,540,230		5.9
Barclays Global Investors(3) 45 Fremont Street San Francisco, CA 94105		3,529,730		5.9
Barclays Global Investors NA(2) 45 Fremont Street San Francisco, CA 94105						3,787,220		8.5
Renaissance Technologies LLC(3) 800 Third Ave. 33th Floor New York, NY 10022						3,212,700		7.2
Weintraub Capital Management GP, LLC(4) 44 Montgomery St. San Francisco, CA 94104						2,474,380		5.5
Peter I. Cittadini(5)		5,239,207		8.7		4,960,457		11.1
Nicolas C. Nierenberg(6)		1,129,541		1.9		989,263		2.2
Daniel A. Gaudreau(7)		1,539,546		2.6		1,272,577		2.8
Ilene M. Vogt(8)		1,194,082		2.0
N. Nobby Akiha(9)		605,024		1.0
Mark A. Coggins(10)		304,688		*
N. Nobby Akiha(8)						686,712		1.5
Mark A. Coggins(9)						398,438		*
Stephen Fluin(10)						110,184		*
George B. Beitzel(11)		275,000		*		300,000		*
Kenneth E. Marshall(12)		312,500		*		337,500		*
Arthur A. Patterson(13)		1,915,870		3.2		1,940,870		4.3
Steven D. Whiteman(14)		245,000		*		280,212		*
Ilene M. Vogt						0		*
All current directors and executive officers as a group (10 persons)(15)		12,760,458		21.2		11,276,213		25.2


*		Less than 1%

(1)		This table is based upon information supplied by executive officers, directors and principal stockholders and Schedules 13D and 13G filed with the Securities and Exchange Commission. Beneficial ownership has been determined in accordance with the rules of the Securities and Exchange Commission and includes voting or investment power with respect to securities. Except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power

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		with respect to all shares of Common Stock. Applicable percentages are based on ~~60,057,467~~44,695,350 shares outstanding on February ~~29, 2008,~~28, 2009, adjusted as required by rules promulgated by the Commission. Unless otherwise indicated, the business address of each beneficial owner listed is 2207 Bridgepointe Parkway, Suite 500, San Mateo, CA 94404.

(2)		Based on Schedule 13G/A filed with the Securities and Exchange Commission for the year ended December 31, ~~2007.~~2008. Together, Barclays Global Investors, NA. owns 2,356,179 shares of Common Stock and Barclays Global Fund Advisors owns 1,431,041 shares of Common Stock.

(3)		Based on Schedule 13G/A filed with the Securities and Exchange Commission for the year ended December 31, ~~2007. Together, Barclays Global Investors, NA. owns 2,645,443 shares of Common Stock and Barclays Global Fund Advisors owns 884,287 shares of Common Stock.~~2008.

(4)		Based on Schedule 13G/A filed with the Securities and Exchange Commission for the year ended December 31, ~~2007.~~2008.

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(5)		Includes options exercisable for ~~3,942,740~~3,663,990 shares of Common Stock within 60 days after February ~~29, 2008.~~28, 2009.

(6)		Includes options exercisable for ~~482,689~~342,411 shares of Common Stock within 60 days after February ~~29, 2008.~~28, 2009.

(7)		Includes options exercisable for ~~1,405,997~~1,267,109 shares of Common Stock within 60 days after February ~~29, 2008.~~28, 2009.

(8)		Includes options exercisable for ~~1,005,773~~670,313 shares of Common Stock within 60 days after February ~~29, 2008.~~28, 2009.

(9)		Includes options exercisable for ~~590,625~~398,438 shares of Common Stock within 60 days after February ~~29, 2008.~~28, 2009.

(10)		Includes options exercisable for ~~304,688~~106,563 shares of Common Stock within 60 days after February ~~29, 2008.~~28, 2009.

(11)		Includes options exercisable for ~~265,000~~290,000 shares of Common Stock within 60 days after February ~~29, 2008.~~28, 2009.

(12)		Represents options exercisable for ~~312,500~~337,500 shares of Common Stock within 60 days after February ~~29, 2008.~~28, 2009.

(13)		Includes 40,000 shares held by Patterson Family Foundation, 345,960 shares held by Ellmore C. Patterson Partners, and 549,940 shares held by ACP Family Partnership. Mr. Patterson, a director of Actuate, is the general partner of Ellmore C. Patterson Partners, the general partner of ACP Family Partnership and the trustee of Patterson Family Foundation. Mr. Patterson disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. Also includes options exercisable into ~~245,000~~270,000 shares of Common Stock within 60 days of February 28, ~~2007.~~2009.

(14)		Represents options exercisable into ~~245,000~~270,000 shares of Common Stock within 60 days after February ~~29, 2008.~~28, 2009.

(15)		Includes options exercisable for ~~8,800,012~~7,616,324 shares of Common Stock within 60 days after February ~~29, 2008.~~28, 2009.

EXECUTIVE COMPENSATION AND RELATED INFORMATION

Compensation Discussion and Analysis

IntroductionIt is our intent in this Compensation Discussion and Analysis to inform our stockholders of the policies and objectives underlying the compensation programs for our executive officers. Accordingly, we will address and analyze each element of the compensation provided to our chief executive officer (“CEO”) our senior vice president operations/chief financial officer (“SVPOPS/CFO”) and the other executive officers named in the Summary Compensation Table which follows this discussion. We will also discuss how each element of compensation relates to the other elements of compensation. We are engaged in a very competitive industry and our success depends upon our ability to attract and retain qualified executives through competitive compensation packages. The Compensation Committee administers the compensation programs for our executive officers with this competitive environment in mind. However, we believe that the compensation paid to our executive officers should also be substantially dependent on our financial performance and the value created for our stockholders. In furtherance of that objective, the Compensation Committee ~~utilizes~~uses our compensation programs to provide meaningful incentives for the attainment of our short-term and long-term strategic objectives and thereby reward those executive officers who make a substantial contribution to the attainment of those objectives.

Compensation Policy for Executive OfficersWe have designed the various elements comprising our executive officer compensation packages to achieve the following objectives:


	•	tie a substantial portion of ~~such~~ compensation to personal performance, the financial performance of Actuate and the executive’s contributions to Actuate’s performance;

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	•	attract, retain, motivate and engage highly skilled and experienced individuals who excel in their field; and

	•	~~help~~ align the interests of Actuate’s executive officers and stockholders.

Each executive officer’s total direct compensation package is comprised of three elements: (i) base salary and perquisites; (ii) a non-equity incentive plan ~~award at a stated percentage of the executive officer’s base salary;~~award; and (iii) long-term equity incentive awards in the form of stock option grants. In determining the appropriate level for each element of ~~such~~ compensation, the Compensation Committee has generally followed the practice of setting the level of total direct compensation for our executive officers at between the 50th and 75th percentiles based on relevant market data. The Compensation Committee reviews and evaluates the level of Actuate’s performance, each executive officer’s level of individual performance, tenure, past employment experience, potential to contribute to Actuate’s future growth and compensation history. Based on these factors, an executive officer’s actual

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compensation may be set closer to the 50th percentile or to the 75th ~~percentile (or in limited cases, such as for our CFO, above the 75th percentile).~~percentile. Consistent with our philosophy of emphasizing pay for performance, a cash performance bonus constitutes a significant percentage of an executive’s overall compensation such that the cash component is designed to pay above target when Actuate exceeds its goals and below target when Actuate does not achieve its goals. Each year, the Compensation Committee reviews tally sheets. The purpose of the tally sheets is to provide the Compensation Committee with a comprehensive snapshot of the elements of actual and potential future compensation that could result from 2008 compensation proposed for our executive officers. The tally sheets were prepared by Compensia and showed the dollar amount of each component of an executive officer’s compensation, including current and proposed cash salaries, bonus earned for the prior year and targeted for the 2008 year, current projected values for the proposed equity-based awards based on their net present value, historical compensation and amounts realized and realizable from prior equity awards as well as an estimate of post-termination employment agreement obligations. The review of the tally sheets prepared with respect to 2008 fiscal year compensation did not result in any adjustments to the executive officer compensation levels from what the committee determined based on survey data. From time to time the Compensation Committee will also attempt to validate its prior decisions by reviewing Actuate’s performance relative to Actuate’s peers.

Comparative FrameworkThe Compensation Committee ~~has~~ retained Compensia, an independent compensation consultant, to identify Actuate’s peer group, to help it determine compensation levels between the 50th percentile to ~~90th~~the 75th percentile at the peer group companies and to otherwise provide advice about executive compensation best practices.

Compensia and the Compensation Committee together determine Actuate’s peer group and an appropriate mix of forms of compensation intended to place Actuate’s CEO and SVPOPS/CFO between the 50th percentile and 75th percentile of that peer group. The Compensation Committee and Compensia gathered data for its comparisons for 2008 compensation from public filings of software and business intelligence companies of similar size and business as the Company. The companies selected had median revenues of approximately $152,000,000 and were also selected from the Radford ~~October 2006~~July 2007 High-Tech Executive Survey (Revenue $50,000,000-$200,000,000) ~~and Compensia’s proprietary high-tech industry executive compensation survey (Revenue less than $250,000,000)~~. For purposes of determining 2006 compensation, our peer group consisted of 22 software companies with revenues of $250,000,000 or less. In December 2006, 17 software companies with revenues of approximately $250,000,000 or less were selected as part of Actuate’s peer group for purposes of determining 2007 compensation. In addition, based on the Company’s current product line and advice from Compensia, the Compensation Committee determined that it was advisable to include 7 “business intelligence” companies with revenues of approximately $250,000,000 or less in the peer group. The 23 companies which comprised the peer group for 2007 were:


~~Software Peers~~		~~Business Intelligence Peers~~

~~Advent Software~~	~~Macrovision~~	~~Concurrent Computer Corporation~~
~~Agile Software~~	~~Napster~~	~~Echelon Corporation~~
~~Blackbaud~~	~~Opentv~~	~~Essex Corporation~~
~~Bottomline Technologies~~	~~Secure Computing~~	~~MapInfo Corporation~~
~~Embarcadero Technologies~~	~~Sonic Solutions~~	~~Pegasystems~~
~~Informatica~~	~~Vignette~~	~~Rentrak Corporation~~
~~InterVideo~~	~~Webmethods~~	~~SPSS~~
~~Interwoven~~	~~Websense~~

In October, 2007 the peer group selected by Compensia and the Compensation Committee was ~~again~~ updated from the peer group that was used to determine 2007 compensation (the “Updated Peer Group”). Six companies were deleted from the peer group due to acquisitions (Agile Software, Embarcadero Technologies, InterVideo, MapInfo, Essex and webMethods), two companies were deleted from the peer group due to an increase in their annual revenue (Informatica and Macrovision) and S1 was added to the peer group because it met the industry and revenue size criteria. The 19 companies which comprised the peer group for purposes of determining 2008 compensation were:


Peers

Advent Software	MicroStrategy	Secure Computing
Blackbaud	Napster	Sonic Solutions
Bottomline Technologies	Opentv	SPSS
Chordiant Software	Pegasystems	Vignette
Concurrent Computer Corporation	Phase Forward	Websense
Echelon Corporation	Rentrak Corporation
Interwoven	S1

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For other executive officers, Actuate’s Human Resources department surveyed compensation practices of United States high tech companies in the $50,000,000 to $199,000,000 revenue range using Radford’s Executive Survey results. For ~~2007,~~2008, Actuate’s Human Resources department reviewed each executive officer’s base salary and annual non-equity incentive award to determine where their cash compensation fell in a range from the 50^th50th percentile to just over the 75^th75th percentile of the levels in effect for comparable positions at Actuate’s ~~Radford~~ peer group. Based on this information, Actuate’s CEO recommended an appropriate ~~increase to the~~ base salary offor each executive officer other than the CEO and SVPOPS/CFO depending on the executive officer’s performance, tenure, and past employment experience. The Compensation Committee in consultation with Compensia then reviewed the CEO’s recommendations and either revised or approved them based on what the Compensation Committee believed was the appropriate level of total direct compensation and the appropriate mix of base salary and perquisites, a non-equity incentive plan award and a long-term stock-based incentive award.

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The net result for the ~~2007~~2008 fiscal year was to bring the total direct cash compensation of the executive officers to approximately the following percentiles of total direct cash compensation of the relevant survey ~~data:~~data (the ‘‘>” sign means the amount was slightly above the indicated level):


Executive Officer	Percentile

Peter I. Cittadini		~~75th~~>60th
Daniel A. Gaudreau		>~~75th~~60th
~~Ilene M. Vogt~~Stephen Fluin		~~75th~~25th
Mark A. Coggins		50th
N. Nobby Akiha		50th
Ilene Vogt		90th

Elements of Compensation Each of the three major elements comprising an executive officer’s compensation package (base salary and perquisites, non-equity incentive plan award and long-term equity incentive plan award) is designed to achieve one or more of our overall objectives in fashioning a competitive level of compensation, tying compensation to the attainment of one or more of our strategic business objectives and establishing a meaningful and substantial link between each executive officer’s compensation and our long-term financial success. We also strive to achieve an appropriate mix between cash payments and equity incentive awards in order to meet our objectives. We do not rigidly apply any apportionment goal between those two components, and no such goal controls our compensation decisions; however, we emphasize variable compensation elements that provide value to the executive officer in an amount commensurate with both the company’s and the individual’s performance. Our mix of compensation elements is designed to reward recent results and motivate long-term performance through a combination of cash and equity incentive awards. In deciding on the type and amount of compensation for each executive, we focus on both current pay and the opportunity for future compensation. We combine the compensation elements for each executive in a manner we believe optimizes the executive’s contribution to the company. Each year, the Compensation Committee reviews tally sheets to confirm that total executive compensation is set at appropriate levels. The review of the tally sheets prepared with respect to 2007 fiscal year compensation did not result in any adjustments to the executive officer compensation levels set for that year. From time to time the Compensation Committee will also attempt to validate its prior decisions by reviewing Actuate’s performance relative to Actuate’s peers.

The manner in which the Compensation Committee has structured each element of compensation may be explained as follows.

Base Salary and PerquisitesEach executive officer receives an appropriate level of salary commensurate with the duties and responsibilities required to manage a company of the same size and stage of development as ~~Actuate on a day to day basis.~~Actuate. Each executive officer’s base salary for 2008 was analyzed ~~in 2007~~ on the basis of (i) the executive officer’s salary history; (ii) the Compensation Committee’s evaluation of the executive officer’s personal performance in the prior year based on the performance reviews that the CEO presented with respect to executive officers other than himself, (iii) the company’s actual performance as compared with pre-set goals for the prior year; and (iv) the Compensation Committee’s perception of an amount sufficient to retain the executive officer in a competitive marketplace for individuals in comparable positions. The weight given to these factors differed from individual to individual, as the Compensation Committee deemed appropriate. Base salaries for executive officers for the ~~2006~~2007 fiscal year ranged approximately from the 50^th25th percentile to the 75^th90th percentile of the market-based salary levels in effect for comparable positions at Actuate’s peer group of companies. Based on this analysis, the Committee decided to implement base salary increases for all executive officers other than Ms. Vogt. The 2007 base salary level for the executive officers other than Ms. Vogt was increased by a low of approximately 4.35% to a high of approximately 6.6% from base salaries in effect for the 2006 fiscal year. Applying the same analytical framework as it did in 2007, the Committee implemented 2008 fiscal year base salary ~~level~~ increases for all executive officers ranging from a low of approximately ~~2.22%~~2.1% to a high of 11.1% from base salaries in effect for the 2007 fiscal year. As a result, base salaries for executive officers for the 2008 fiscal year ranged from approximately the 25th percentile to approximately the 90th percentile

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of the market-based salary levels in effect for comparable positions at Actuate’s peer group of companies. Based on this same analysis, and considering the deterioration of the economic environment related to the problems in the global financial services sector and the Company’s performance, the Committee decided not to implement base salary increases for any executive officer for the 2009 fiscal year. As a result, and considering Ms. Vogt’s departure, base salaries for executive officers for the 2009 fiscal year range from approximately the 25th percentile to approximately the 60th percentile of the market-based salary levels in effect for comparable positions at Actuate’s peer group of companies.

Each executive officer other than Mr. Fluin received the following perquisites in ~~2007:~~2008: (a) $1,500 per month car allowance; (b) $10,000 per year toward ~~otherwise un-reimbursed~~ medical ~~expenses;~~expenses that are not reimbursed under the Company’s group health plan; (c) $10,000 per year for tax and estate planning; (d) company-paid health care coverage under the company’s group health plan; and (e) $1,500 of premium payments on a policy providing up to $5,000,000 of umbrella insurance coverage. Mr. Fluin received the following perquisites in 2008: (a) $1,666 per month car allowance and (b) $10,000 per year for tax and estate planning. We believe these perquisites are consistent with those provided to executive officers of Actuate’s peer group and with compensation best practices generally and are an important factor in retaining Actuate’s executive officers.

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~~2007~~2008 Non-Equity Incentive Plan AwardActuate seeks to fairly compensate its executive officers for target-level performance and to provide an opportunity to be rewarded for outstanding performance. To this end, a significant portion of the total compensation for our executive officers is tied to achievement of financial goals that the Compensation Committee and executive management believe to be fundamental drivers of Actuate’s overall performance and that align executive management with the interests of Actuate’s stockholders. As part of this pay for performance approach, Actuate’s ~~2007~~2008 non-equity incentive plan ~~requires~~required executive officers to achieve pre-set, objective, quantitative goals in areas identified by the Compensation Committee (with respect to the CEO and SVPOPS/CFO) and the Compensation Committee in consultation with the CEO (with respect to other executive officers) as key drivers for Actuate’s ~~success and that align their efforts with the interests of Actuate’s stockholders.~~success. Each incentive award iswas set at a target level tied to a specified percentage of the executive officer’s base salary. The actual amount of the incentive award iswas dependent upon the level at which the performance objectives for the fiscal year ~~are~~were actually attained. No cash performance incentive award iswas paid unless Actuate ~~meets~~met a pre-established threshold amount of the applicable pre-set, objective ~~goal.~~goal, each of which is set forth below under the heading “Levels of Attainment/Targets and Goals.” Actuate ~~believes that having~~established different metrics for its CEO and SVPOPS/CFO versus its other executive ~~officers benefits Actuate and its stockholders:~~officers: Mr. Cittadini and Mr. Gaudreau are encouraged to increase license revenue, control costs, increase productivity, consistently drive earnings and ~~consistently grow earnings. The~~drive open source driven revenue. Actuate’s other executive officers are encouraged to increase license bookings and ~~first year maintenance bookings,~~open source driven revenue, which Actuate believes ~~to be a~~are key ~~driver~~drivers of stockholder value. By establishing these different metrics, Actuate believes that each executive officer’s compensation is more directly tied to areas under his or her control and based on measures aligned with the interests of Actuate’s stockholders. The Company’s CEO retained the ability to make discretionary bonus grants to executive officers other than the CEO and SVPOPS/CFO throughout 2008.

Percentages of Base Salary

For the ~~2007~~2008 fiscal year, the annual target incentive awards were set asat the following percentages of executive officer base salary:


	Percent of Base Salary (Annual									Percent of Base Salary (Annual
	Incentive Award)									Incentive Award)
Name	Threshold			Target			Max Above-Target¹			Threshold			Target			Max Above-Target

Peter I. Cittadini		41	%		70	%		209	%		37	%		73	%		220	%(1)
Daniel A. Gaudreau		41	%		70	%		210	%		36	%		71	%		214	%(1)
Stephen Fluin											85	%		100	%		100	%(2)
Ilene M. Vogt		84	%		100	%		fn²			85	%		100	%		100	%(3)
Mark A. Coggins		0	%		0	%		fn³
N. Nobby Akiha		0	%		0	%		fn³
Mark A. Coggins and N. Nobby Akiha											n/a			n/a				(4)

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For the ~~2007~~2008 fiscal year, ~~the~~ quarterly target incentive awards for Mr. Coggins and Mr. Akiha were set as the following percentages of base salary:


	Percent of Base Salary (Quarterly Incentive Award)								Percent of Base Salary (Quarterly Incentive Award)
Name	Threshold			Target			Above-Target		Threshold			Target			Above-Target

Mark A. Coggins and N. Nobby Akiha		7.43	%		8.75	%		fn⁴		8.5	%		10	%		(5	)


(1)		The Compensation Committee had discretion to review and modify the incentive targets for Mr. Cittadini and Mr. Gaudreau if the economic environment related to the problems in the global financial services section materially changed after June 1. The Compensation Committee had discretion to grant Mr. Cittadini and Mr. Gaudreau a special bonus if non-GAAP EPS was greater than or equal to $0.39, license revenue was equal to or greater than $54,800,000 or open source driven revenue was greater than $22,000,000.

(2)		Mr. Fluin could earn an annual commission payment based on performance management group license bookings. This commission was to be equal to 85% of his base salary from a threshold achievement level of 85% of target to 94% of target. Upon achievement of 95% of target, his commission would equal 95% of his base salary and continue on a straight-line basis until the target was reached.

(3)		Ms. Vogt could earn an annual commission payment based on annual enterprise group license and professional services bookings. This commission was to be equal to 85% of her base salary from a threshold achievement level of 85% of target through 94% of target. Upon achievement of 95% of target, her commission would equal 95% of her base salary and continue on a straight-line basis until the target was reached. In lieu of this commission and upon her termination, Ms. Vogt received a severance payment in an amount equal to 85% of 50% of her commission at the target level of achievement.

(4)		Mr. Coggins and Mr. Akiha could each earn a supplemental bonus equal to 0.2% of his base salary for each $100,000 by which the Company exceeded 100% of the worldwide annual goal for worldwide license bookings. For fiscal year 2008, this goal was $51,200,000.

(5)		The amount of the non-equity incentive award associated with quarterly license revenue continued to increase on a straight line basis to the extent the Company exceeded its target.

¹ The Compensation Committee had discretion to grant a special bonus to Mr .Cittadini and Mr. Gaudreau if non-GAAP EPS was greater than $0.35 or if license and first year maintenance revenue exceeded $55,500,000.

² Ms. Vogt received an annual kicker incentive award to the extent the Company exceeded her annual license and first year maintenance bookings target of $74,143,000. For each $1,000,000 of bookings greater than $74,143,000 but less than $76,143,001 Ms. Vogt earned a bonus of $30,000. For each $1,000,000 of total bookings greater than $76,143,000 but less than $78,143,001 Ms. Vogt earned a bonus of $40,000. For every additional $1,000,000 above $78,143,001 Ms. Vogt earned a bonus of $50,000.

³ Mr. Coggins and Mr. Akiha received an annual kicker bonus equal to 0.2% of their base salary for each $100,000 the Company exceeded 100% of their annual goal for license and first year maintenance bookings, which for fiscal year 2007 was $76,113,000.

⁴ ~~This incentive award continued to increase on a straight line basis to the extent the Company exceeded its target.~~

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Levels of Attainment/Targets and Goals

The goals set under the annual non-equity incentive plan for Mr. Cittadini and Mr. Gaudreau for the ~~2007~~2008 fiscal year were tied to pre-set levels of annual license revenue, Non-GAAP earnings per share and ~~first year maintenance revenue and non-GAAP earnings.~~open source driven revenue. The specific goals at threshold, target and above target levels were as follows:

Level of Attainment
Goal
Threshold Target Max Above-Target

License and first year
maintenance revenue $ 41,500,000 $ 49,500,000 $ 55,500,000
non-GAAP earnings $ 0.24 $ 0.29 $ 0.35


			Goals
Goal	Threshold		Target		Max Above-Target

License revenue	$	39,040,000	$	48,800,000	$	54,800,000
Non-GAAP earnings per share	$	0.26	$	0.33	$	0.39
Open source driven revenue	$	12,800,000	$	16,000,000	$	22,000,000

The goals set under the annual non-equity incentive plan for Mr. Fluin for the 2008 fiscal year were tied to pre-set levels of total annual performance management group license bookings as described above in footnote (2) as set forth in the following table:

Goals

Goal

Threshold

Target

Above-Target

Total annual performance management group license bookings

$

10,200,000

$

12,000,000

n/a

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The goals set under the annual non-equity incentive plan for Ms. Vogt for the ~~2007~~2008 fiscal year were tied to pre-set levels of total annual enterprise group license and professional services bookings as ~~detailed~~described above in fn².footnote (3) as set forth in the following table:

Level of Attainment
Goal
Threshold Target Above-Target

License and first year
maintenance bookings
and professional services bookings 64,215,500 76,143,000 fn²


			Goals
Goal	Threshold		Target		Above-Target

Total annual enterprise group license bookings	$	42,500,000	$	50,000,000		n/a
Annual professional services bookings	$	10,880,000	$	12,800,000		n/a

Ms. Vogt was entitled to an accelerator bonus as defined and detailed in footnote (2). Ms. Vogt was also entitled to a one time SPIFF bonus for the first quarter of fiscal year 2007. The SPIFF bonus was tied to pre-set levels of first year license and maintenance bookings in the first quarter of fiscal 2007 as follows: Ms. Vogt earned no SPIFF bonus if license and first year maintenance in the first quarter of fiscal 2007 was less than $9,800,000. Ms. Vogt earned a $10,000 SPIFF bonus if license and first year maintenance bookings in the first quarter of fiscal 2007 were more than $9,800,000 but less than $10,800,000. Ms. Vogt earned an additional $10,000 SPIFF bonus if license and first year maintenance bookings in the first quarter of fiscal 2007 were more $10,800,000.

The goals set under the quarterly non-equity incentive plan for Mr. Coggins and Mr. Akiha for the ~~2007~~2008 fiscal year ~~were tied to pre-set levels of~~were: (i) quarterly license bookings targets: Q1:$10,000,000; Q2:$11,900,000; Q3: $13,600,000; Q4:$15,700,000; (ii) quarterly open source driven revenue targets: Q1:$3,500,000; Q2:$4,500,000; Q3: $5,500,000; Q4:$6,500,000. Mr. Coggins and ~~first~~Mr. Akiha were each eligible to receive a supplemental bonus equal to 0.2% of their base salary for each $100,000 the Company exceeded 100% of the worldwide annual goal for license bookings, which for fiscal year ~~maintenance bookings as set forth in footnote (5).~~


	~~Level of Attainment~~
~~Goal~~	~~Threshold~~	~~Target~~⁵	~~Above-Target~~

~~License and first year~~
~~maintenance bookings~~	~~85% of~~	~~100% of~~	~~greater than 100%~~
	~~quarterly goal~~	~~quarterly goal~~	~~of quarterly goal~~

2008 was $51,200,000.

Actual ~~2007~~2008 Non-Equity Incentive Awards

The actual incentive awards paid to each executive officer for the ~~2007~~2008 fiscal year reflect the level at which these pre-set, objective, quantitative goals were attained. For performance that fell between designated levels, the incentive award amount for that goal was interpolated on a straight linear basis.

~~2008~~2009 Incentive Awards

In ~~December 2007,~~January 2009, the Compensation Committee approved the ~~2008~~2009 non-equity incentive plan targets for ~~all executive officers other than~~ Mr. ~~Cittadini~~Coggins and Mr. ~~Gaudreau.~~Akiha after consulting with Compensia and Mr. Cittadini. These are tied to non-GAAP operating income and open source driven revenue. For the ~~2008~~2009 fiscal year, the target incentive awards were set ~~after adjustment by the Company’s CEO as~~at the following percentages of executive officer base salary — ~~Ms. Vogt: 100%;~~ Mr. Coggins and Mr. Akiha: 40%. The Compensation Committee chose these goals to encourage Mr. Coggins and Mr. Akiha to focus on profitability and growing open source driven revenue which is the Company’s major strategic initiative for 2009. Mr. Fluin’s duties and responsibilities in 2009 did not qualify him as a Section 16 officer.

In March ~~2008,~~2009, after consulting with Compensia, the Compensation Committee approved the ~~2008~~2009 non-equity incentive plan targets for Mr. Cittadini and Mr. Gaudreau. The goals set for the ~~2008~~2009 fiscal year under the non-equity incentive plan for Mr. Cittadini and Mr. Gaudreau were tied to pre-set levels of ~~license and first year maintenance~~

⁵ ~~The 2007 quarterly license and first year maintenance bookings goals were: Q1:$13,724,000; Q2:$16,885,000; Q3: $18,142,000; Q4:$27,362,000.~~

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total revenue, non-GAAP ~~earnings~~EPS and open source driven revenue. The Compensation Committee ~~included a new target for 2008 related to open source driven revenue. This goal is meant~~chose these goals to encourage Mr. Cittadini and Mr. Gaudreau to ~~drive~~continue to focus on growing the ~~success~~total revenue of ~~Actuate’s BIRT initiative, which~~ the Company ~~believes~~as well as profitability and growing open source driven revenue, which is ~~important~~the Company’s major strategic initiative for ~~its future success.~~ 2009.

For ~~2008,~~2009, Mr. Cittadini’s and Mr. Gaudreau’s ~~2008~~ incentive awards are set at a target level tied to a specified percentage of their base salary. The actual amount of the incentive award is dependent upon the level at which the performance objectives for the fiscal year are actually attained. For the ~~2008~~2009 fiscal year, the target incentive awards for Mr. Cittadini and Mr. Gaudreau were set as the following percentages of ~~executive officer~~ base ~~salary for Mr. Cittadini and Mr. Gaudreau:~~salary:


	Percent of Base Salary									Percent of Base Salary
Name	Threshold			Target			Max Above-Target⁶			Threshold			Target			Max Above-Target

Peter I. Cittadini		47	%		73	%		251	%		36.5	%		73	%		220	%
Daniel A. Gaudreau		46	%		71	%		244	%		35.5	%		71	%		214	%

Long-Term Equity Incentive Awards Actuate has structured its long-term incentive program for executive officers in the form of stock option grants, primarily under the 1998 Plan. Actuate’s long-term equity compensation is designed to strengthen the mutuality of interests between Actuate’s executive officers and its stockholders by giving executive officers a significant stake in the future performance of Actuate’s stock. Option grants provide a return only if an executive officer remains employed by Actuate and then only if the market price of Actuate’s common stock appreciates over the option term.

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Generally, to immediately align an executive officer with the interests of Actuate’s stockholders, a significant option grant is made in the year that an executive officer commences employment. Thereafter, option grants may be made at varying times and in varying amounts to reward an executive officer for past performance, to provide a continuing incentive for future performance and to further align executive officer and stockholder interests. The guidelines for equity grants are structured in consideration of peer group practice with respect to the economic value (Black-Scholes/binomial value) of the equity compensation provided, the number of shares granted each year as a percent of total common shares outstanding, and actual number of shares granted. These different guidelines are taken into consideration due to the inherent limitations of any one methodology. Actuate tends to give the most weight to the number of shares granted each year as a percent of total common shares outstanding. Actuate recognizes that a common practice is to determine equity guidelines solely based on the economic value of the award at the time of grant. However, the number of shares that would be required to deliver a market competitive equity incentive grant based on this methodology would be extremely high, due to Actuate’s current stock price, and would result in a total annual equity grant level that the Company does not believe is in the best interests of stockholders. The third guideline, the actual number of shares granted, is given little weight because it does not account for the total number of outstanding shares and does not facilitate a comparison of annual grant levels from year to year as a percentage of the outstanding shares.

The Compensation Committee determines the actual number of shares to be subject to each option grant. Generally, the size of each grant is set at a level that the Compensation Committee deems appropriate to create a meaningful opportunity for stock ownership based upon the individual’s position with Actuate, the individual’s potential for future responsibility and promotion, the individual’s performance in the recent period and the number and value of vested and unvested options held by the individual at the time of the new grant. The relative weight given to each of these factors will vary from individual to individual at the Compensation Committee’s discretion.

Each option grant allows the executive officer to acquire shares of Actuate’s common stock at a fixed price per share (the closing selling price on the grant date) over a specified period of time. Options typically vest in installments over a four-year period, contingent upon the executive officer’s continued employment with Actuate. The vesting schedule and the number of option shares granted are established to ensure a meaningful incentive in each year following the year of grant until all shares are vested.

⁶ The Compensation Committee may grant a special bonus for Mr. Cittadini and Mr. Gaudreau if non-GAAP EPS, license and first year maintenance revenue, or open source driven revenue exceed certain pre-determined levels. The Committee has also reserved the right to review and modify plan numbers after six months of actual results, depending on the macro-environment for the Company’s business.

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In January ~~2007,~~2008, the ~~Board~~Company granted stock options to Mr. Cittadini (300,000 shares), Mr. Gaudreau (200,000 shares), Ms. Vogt (100,000 shares), Mr. Coggins (100,000 shares), Mr. Akiha (75,000 shares) and Mr. Fluin (50,000 shares). In January 2009, the Company granted stock options to Mr. Cittadini (250,000 shares), Mr. Gaudreau (175,000 shares), Mr. Coggins (90,000 shares) and Mr. Akiha ~~(100,000~~(90,000 shares). In February 2009, the Company granted stock options to Mr. Cittadini (400,000 shares) and Mr. Gaudreau (40,000 shares). The February 2009 options granted to Messrs. Cittadini and Mr. Gaudreau were awarded in replacement of approximately 80% of options that were previously granted to them but that expired unexercised in December 2008. The Compensation Committee believes that the February 2009 grants are appropriate “refresher” awards because Messrs. Cittadini and Gaudreau were precluded by the Company’s insider trading policies from selling any shares for most of 2008 and thus were unable to exercise their outstanding options through asame-day exercise and sale procedure prior to their expiration. The options that expired in 2008 covered 560,000 shares and 53,667 shares of the Company’s common stock for Mr. Cittadini and Mr. Gaudreau, respectively and were in the money at various times during 2008. Because the refresher options issued in replacement cover fewer shares than the option grants that they replace, these refresher grants did not result in any new or additional dilution. In addition, the refresher grants have a five year term, resulting in a lower expense for the awards under Statement of Financial Accounting Standards No. 123R,Share-Based Paymentthan if the awards had the ten year term typically awarded by the Company. Finally, the new grants serve as a important retention vehicle for Messrs. Cittadini and Gaudreau because the grants have a four-year vesting schedule measured from the February 2009 grant date and will only have value if Messrs. Cittadini and Gaudreau remain in the Company’s employ during the new vesting period, and then only if the market price of the Company’s common stock appreciates over the February 2009 fair market value of the common stock that serves as the exercise price of those options. All options are subject to the same vesting schedule (twenty-five percent of the option shares will vest on the one year anniversary of the option grant date and the remaining option shares will vest in thirty-six equal monthly installments over the thirty-six month period measured from the first anniversary of the option grant date, provided the optionee continues to provide services to the Corporation through each applicable

15

vesting date) and all have ten year terms other than the February 2009 grants to Mr. Cittadini and Mr. Gaudreau which have a term of five (5) years. Additional information regarding these awards is set forth in the Summary Compensation Table and the Grants of Plan-Based Awards Table contained in this proxy statement. In January 2008, the Board granted stock options to Mr. Cittadini (300,000 shares), Mr. Gaudreau (200,000 shares), Ms. Vogt (100,000 shares), Mr. Coggins (100,000 shares) and Mr. Akiha (75,000 shares).⁷

Severance AgreementsIn October 2005, Actuate entered into a change of control severance benefit agreement (the “Severance Agreements”) with each of the following executive officers named in the Summary Compensation Table: Messrs. Cittadini, Gaudreau, Coggins, Akiha and Ms. Vogt. These agreements were scheduled to expire on December 31, 2007. The Compensation Committee engaged Compensia to conduct a survey to analyze the competitiveness of the Severance Agreements by comparison to the Updated Peer Group. As a result of this survey, the Compensation Committee determined that the Severance Agreements were competitive and entered into new severance agreements that are substantially the same as the prior agreements. However, based on the market data collected by Compensia, the Compensation Committee determined that market practice is to enter into change in control severance agreements with an unlimited duration, and accordingly, the new agreements do not contain an expiration date. ~~Also based on market data, the Compensation Committee chose not to add significant additional features to the agreements, such as a taxgross-up.~~ A summary of the material terms of the new severance agreements, together with a quantification of the benefits available under the agreements, may be found in the section of the proxy statement entitled “Executive Compensation and Related Information — Termination of Employment and Change in Control Arrangements.” The severance agreements are intended to keep executive management neutral and aligned with the stockholders’ best interests when considering an acquisition of Actuate and also to provide a stable transition period following such an acquisition by imposing a double trigger on the benefits provided under such agreements. The severance benefits will only be payable if the executive’s employment terminates under certain specified circumstances in connection with a change in control of the company and will not be payable to an executive who leaves Actuate’s employ without good reason. Accordingly, the severance agreements provide protection against an involuntary termination or constructive termination following a change in control and will allow the executives to focus their attention on acquisition proposals that are in the best interests of the stockholders, without undue concern as to their own financial situation. For such reasons, we believe the terms of the severance agreements properly motivate the executive management team to evaluate potential change in control transactions in accord with Actuate’s stockholders’ best interests. We also believe, based on advice from Compensia, that the terms of the severance agreements are within the range of best practices for Actuate’s size and stage of development.

Ms. Vogt’s severance payment was determined by Mr. Cittadini based on pro rata achievement of her 2008 annual targets.

Stock Option PoliciesThere is no established practice of timing ~~of performance award~~ equity grants in advance of the release of favorable financial results or adjusting the award date in connection with the release of unfavorable financial developments affecting our business. Stock option grants to Section 16 officers are made only at duly convened meetings of the Compensation Committee or Board. Performance awards for existing executive officers and employees are typically made in connection with the annual review process which occurs in January each year. Options relating to these performance awards are then granted in the January meeting of the Compensation ~~Committee.~~Committee or Board. The date for the January meeting of the Compensation Committee is normally set approximately one year prior to that meeting. ~~However, the date for the January 2008 meeting of the Compensation Committee was adjusted in Fall 2007 in order to accommodate a scheduling conflict.~~ Equity awards for newly hired executives are typically made at the next scheduled Board or Compensation Committee meeting following the executive’s hire date. It is our intent that all stock option grants have an exercise price per share equal to the closing selling price per share on the grant date.

In July 2006, the Board of Directors established a policy pursuant to which option grants to Section 16 officers and directors (other than automatic grants to directors at the annual stockholder meeting) are to be made only at duly

⁷ Each reported option will vest in accordance with the following schedule: twenty-five percent of the option shares will vest on the one year anniversary of the option grant date and the remaining option shares will vest in thirty-six equal monthly installments over the thirty-six month period measured from the first anniversary of the option grant date, provided the optionee continues to provide services to the Corporation through each applicable vesting date.

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~~convened meetings of the Compensation Committee. Prior to July 2006, the Corporation also granted options to Section 16 officers and directors via unanimous written consent resolutions.~~

Actuate does not have a policy to require executive officers to hold options or other equity for any period of time.

Tax LimitationUnder federal tax laws, a publicly-held company such as Actuate is not allowed a federal income tax deduction for compensation paid to certain executive officers to the extent that compensation exceeds $1.0 million per covered officer in any year. The limitation applies only to compensation that is not performance based. Non-performance based compensation paid to Actuate’s covered executive officers for ~~2007~~2008 did not exceed the $1.0 million limit per officer and the Compensation Committee does not anticipate that the non-performance based compensation to be paid to the Corporation’s executive officers for the ~~2008~~2009 year will be in excess of the deductible limit. To qualify for an exemption from the $1.0 million deduction limitation, the stockholders approved a limitation under Actuate’s 1998 Plan on the maximum number of shares of Common Stock for which any one participant may be granted stock options per calendar year. As a result of that limitation, the compensation deemed

16

paid to an executive officer in connection with the exercise of outstanding options under the 1998 Plan with an exercise price equal to the fair market value of the option shares on the grant date should in most instances qualify as performance-based compensation that will not be subject to the $1.0 million limitation.

~~However, the~~The Compensation Committee believes that in establishing the cash and equity incentive compensation programs for the company’s executive officers, the potential deductibility of the compensation payable under those programs should be only one of a number of relevant factors taken into consideration, and not the sole governing factor. For that reason the Compensation Committee may deem it appropriate to provide one or more executive officers with the opportunity to earn incentive compensation, whether through cash incentive award programs tied to the company’s financial performance or equity incentive grants tied to the executive officer’s continued service, which may be in excess of the amount deductible by reason of Section 162(m) or other provisions of the Internal Revenue Code. The Compensation Committee believes it is important to maintain cash and equity incentive compensation at the requisite level to attract and retain the executive officers essential to the company’s financial success, even if all or part of that compensation may not be deductible by reason of the Section 162(m) limitation.

Conclusion

Actuate believes the total compensation packages for its executive officers are reasonable and appropriate considering Actuate’s size and stage of development, the competitive environment in which it operates, achievement of its annual goals and its overall performance.

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Summary Compensation Table

The following table provides certain summary information concerning the compensation earned for services rendered in all capacities to the Corporation and its subsidiaries for the years ended December 31, 2006, December 31, 2007 and December 31, ~~2007~~2008 by the Corporation’s CEO, SVPOPS/CFO and each of the Corporation’s three other most highly compensated executive officers whose total compensation for the ~~2007~~2008 fiscal year was in excess of $100,000 and who were serving as executive officers at the end of that year. Summary information for Ms. Vogt, who left the Company in August 2008, is also listed. These individuals are referred to herein as the “Named Executive Officers.” No ~~other~~ executive officers who would have otherwise been includable in such table on the basis of total compensation for the ~~2007~~2008 fiscal year have been excluded by reason of their termination of employment or change in executive status during that year. The Corporation does not sponsor a pension plan or a non-qualified deferred compensation plan and has not granted stock or stock-based awards other than stock options to its executive officers.


							Non-Equity													Non-Equity
					Option		Incentive Plan		All Other									Option		Incentive Plan		All Other
			Salary		Awards		Compensation		Compensation		Total				Salary			Awards		Compensation		Compensation		Total
Name and Principal Position	Year		($)(1)		($)(2)		($)(3)		($)(4)		($)		Year		($)(1)			($)(2)		($)(3)		($)(4)		($)
(a)	(b)		(c)		(d)		(e)		(f)		(g)		(b)		(c)			(d)		(e)		(f)		(g)

Peter I. Cittadini,		2006		415,000		621,596		380,677		41,300		1,458,573		2008		450,000			1,029,145		196,820		41,300		1,717,265
Chief Executive Officer and President		2007		430,000		885,769		633,050		41,300		1,990,119
Chief Executive Officer and														2007		430,000			885,769		633,050		41,300		1,990,119
President														2006		415,000			621,596		380,677		41,300		1,458,573
Daniel A. Gaudreau,		2006		280,000		406,971		305,182		41,300		1,033,454		2008		315,000			685,408		134,195		44,750		1,179,353
Senior Vice President Operations and Chief Financial Officer		2007		300,000		586,935		443,135		44,675		1,374,745
Senior Vice President														2007		300,000			586,935		443,135		44,675		1,374,745
Operations and Chief Financial Officer														2006		280,000			406,971		305,182		41,300		1,033,454
Ilene M. Vogt,		2006		225,000		250,693		170,000		40,820		686,513		2008		186,218	(5)		341,744		0		130,812		658,774
SVP Global Field Operations		2007		225,000		314,334		191,250		44,195		774,779		2007		225,000	(5)		314,334		191,250		44,195		774,779
														2006		225,000			250,693		170,000		40,820		686,513
Mark A. Coggins,		2006		220,000		289,454		54,309		40,820		604,583		2008		235,000			337,541		46,354		44,270		663,165
SVP Engineering		2007		230,000		321,709		51,600		44,195		647,504		2007		230,000			321,709		51,600		44,195		647,504
														2006		220,000			289,454		54,309		40,820		604,583
N. Nobby Akiha,		2006		215,000		117,031		53,075		20,650		405,756		2008		230,000			279,455		45,368		44,750		599,572
SVP Marketing		2007		225,000		249,939		50,478		44,675		570,092		2007		225,000			249,939		50,478		44,675		570,092
														2006		215,000			117,031		53,075		20,650		405,756
Stephen Fluin														2008		292,000			192,712		0		30,000		514,712
SVP & GM Performance														2007		273,000			176,031		37,600		29,250		515,881
Management														2006		222,720			74,230		57,385		0		354,335


(1)		Includes amounts deferred at the executive officer’s election under the Actuate Corporation 401(k) Retirement Savings Plan, a qualified deferred compensation plan under section 401(k) of the Internal Revenue Code.

(2)		The amounts in column (d) reflect the compensation cost recognized for financial statement reporting purposes for the fiscal years ended December 31, 2006, December 31, 2007 and December 31, ~~2007,~~2008, in accordance with SFAS 123(R), with respect to outstanding stock options granted to the named executives, whether granted in the ~~2006 or 2007~~reported fiscal year or any earlier fiscal year. The reported amounts are based on the grant date fair value of each of those options and have not been adjusted for the potential impact of estimated forfeitures. Assumptions used in the calculation of the grant date fair value of each option under SFAS 123(R) are included in Note 9 of the Notes to Consolidated Financial Statements in our ~~2007~~2008 Annual Report onForm10-K filed with the Securities and Exchange Commission on March ~~14, 2008.~~12, 2009.

(3)		The amounts in column (e) reflect the cash awards to the named executive under the Corporation’s non-equity incentive plan which is described in detail under the heading “Non Equity Incentive Plan Award” herein.

(4)		The amounts in column (f) reflect the summary cash value of certain payments and perquisites received by the named executive as described in the table below, Itemization of All Other Compensation

(5)		Amount includes $147,757 in regular salary and $38,461 in vacation payout.

18

Itemization of All Other Compensation

The following table provides an itemization of all other compensation ~~(see column~~(column f above) earned for services rendered in all capacities to the Corporation and its subsidiaries for the ~~years~~year ended December 31, ~~2006 and December 31, 2007~~2008 by the Corporation’s CEO, CFO and each of the Corporation’s three other most highly compensated executive officers whose total compensation for the 2007 fiscal year was in excess of $100,000 and who were serving as executive officers at the end of that year. No other executive officers who would have otherwise been includable in such table on the basis of total compensation for the 2007 fiscal year have been excluded by reason of their termination of employment or change in executive status during that year.Named Executive Officers.

Tax and

Car
Un-reimbursed
Estate
Health Ins.
Umbrella
401k

Allowance
Medical Exps.
Planning
Premiums
Ins Cov
Match
Total

Name and Principal Position
($) ($) ($) ($) ($) ($) ($)

Peter I. Cittadini, 18,000 10,000 10,000 1,800 1,500 — 41,300
Daniel A. Gaudreau, 18,000 10,000 10,000 1,800 1,500 3,375 44,675
Ilene M. Vogt, 18,000 10,000 10,000 1,320 1,500 3,375 44,195
Mark A. Coggins, 18,000 10,000 10,000 1,320 1,500 3,375 44,195
N. Nobby Akiha, 18,000 10,000 10,000 1,800 1,500 3,375 44,675


					Tax and		Health		Umbrella
	Car		Un-reimbursed		Estate		Insurance		Insurance		401k
	Allowance		Medical Expenses		Planning		Premiums		Coverage		Match		Severance		Total
Name	($)		($)		($)		($)		($)		($)		Payments		($)

Peter I. Cittadini		18,000		10,000		10,000		1,800		1,500		—		—		41,300
Daniel A. Gaudreau		18,000		10,000		10,000		1,800		1,500		3,450		—		44,750
Ilene M. Vogt		11,250		5,833		5,833		770		875		0		106,250		130,812
Mark A. Coggins		18,000		10,000		10,000		1,320		1,500		3,450		—		44,270
N. Nobby Akiha		18,000		10,000		10,000		1,800		1,500		3,450		—		44,750
Stephen Fluin		20,000		0		10,000		0		0		0		—		30,000

Grants of Plan-Based Awards

The following table provides summary information concerning each grant of an award made to ~~an executive officer~~a Named Executive Officer in ~~2007~~2008 under a compensation plan.


										All Other															All Other
										Option Awards:															Option Awards
										Number of		Exercise or													Number of		Exercise
										Securities		Base Price of		Grant Date											Securities		Base Price		Grant Date
			Potential Payouts Under Non-Equity Incentive Plan Awards(1)							Underlying		Option		FAS123R											Underlying		Option		FAS 123R
			Threshold		Target		Maximum			Options		Awards		Value				Threshold		Target		Maximum(1)			Options		Awards		Value
Name	Grant Date		($)		($)		($)			(#)(4)		($/Sh)		($)		Grant Date		($)		($)		($)			(#)(3)		($/Sh)		($)

Peter I. Cittadini		01/24/07		176,250		300,000		900,000			300,000		5.11		1,046,204		01/29/08		165,000		330,000		990,000			300,000		6.10		1,141,295
Daniel A. Gaudreau		01/24/07		123,375		210,000		630,000			200,000		5.11		697,469		01/29/08		112,500		225,000		674,100			200,000		6.10		760,863
Ilene M. Vogt		01/24/07		191,250		225,000		(2	)		100,000		5.11		348,735		01/29/08		212,500		250,000		250,000			100,000		6.10		380,432
Mark A. Coggins		01/24/07		68,425		80,500		(3	)		100,000		5.11		348,735		01/29/08		79,900		94,000		(2	)		100,000		6.10		380,432
N. Nobby Akiha		01/24/07		66,938		78,750		(3	)		100,000		5.11		348,735		01/29/08		78,200		92,000		(2	)		75,000		6.10		285,324
Stephen Fluin																	01/29/08		—		188,000		188,000			50,000		6.10		190,216


(1)		Reflects the potential payouts under the Corporation’s non-equity incentive plan based on the Corporation’s performance for the ~~2007~~2008 fiscal year. ~~The actual amounts earned under such plan for the 2007 fiscal year are disclosed in the Summary Compensation Table in the column “Non-Equity Incentive Plan Compensation.”~~ For further information concerning the performance goals applicable to these awards and the methodology for determining the actual amount of such awards, see the “Compensation Discussion and Analysis” section above. The actual amounts earned under such plan for the 2008 fiscal year are disclosed in the Summary Compensation Table in the column “Non-Equity Incentive Plan Compensation.”

(2)		~~Ms. Vogt received an annual kicker incentive award~~Mr. Coggins and Mr. Akiha were to ~~the extent~~receive a supplemental bonus equal to 0.2% of their base salary for each $100,000 the Company exceeded ~~her~~100% of the worldwide annual goal for worldwide license ~~and first~~bookings, which for fiscal year maintenance bookings target of $74,143,000. For each $1,000,000 of bookings greater than $74,143,000 but less than $76,143,001 Ms. Vogt earned a bonus of $30,000. For each $1,000,000 of total bookings greater than $76,143,000 but less than $78,143,001 Ms. Vogt earned a bonus of $40,000. For every additional $1,000,000 above $78,143,001 Ms. Vogt earned a bonus of $50,000.2008 was $51,200,000.

(3)		Messrs. Coggins’ and Akiha’s non-equity incentive plan awards were structured so as to provide an additional payment of 0.2% of their salary for every $100,000 that Actuate’s license and first year maintenance bookings exceed one hundred percent of Actuate’s annual goal.

~~(4)~~		Each reported option will vest in accordance with the following schedule: ~~twenty-five percent~~25% of the option shares will vest on the one year anniversary of the option grant date and the remaining option shares will vest in thirty-six equal monthly installments over the thirty-six month period measured from the first anniversary of the option grant date, provided the optionee continues to provide services to the Corporation through each applicable vesting date.

19

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth the outstanding equity awards for each of Actuate’s executive officers as of December 31, ~~2007.~~2008. As of December 31, ~~2007,~~2008, none of the executive officers held unvested stock or stock-based awards other than the unexercisable stock options reported below.(1)


	Option Awards(1)
					Equity
					Incentive Plan
					Awards:
			Number of		Number of									Number of
	Number of		Securities		Securities							Number of		Securities
	Securities		Underlying		Underlying							Securities		Underlying
	Underlying		Unexercised		Unexercised							Underlying		Unexercised
	Options		Options		Unearned		Option		Option			Options		Options		Option		Option
	(#)		(#)		Options		Exercise Price		Expiration			(#)		(#)		Exercise Price		Expiration
Name	Exercisable		Unexercisable		(#)		($)		Date			Exercisable		Unexercisable		($)		Date

Peter I. Cittadini		101,168				0	$	3.53		12/11/08(3	)		500,000		0	$	3.75		10/29/11(2	)
		458,832				0	$	3.53		12/11/08(3	)		164,063		60,937	$	3.59		01/24/16(2	)
		500,000				0	$	3.75		10/29/11(2	)		0		300,000	$	6.10		01/29/18(2	)
		600,000				0	$	1.49		03/03/13(2	)		143,750		156,250	$	5.11		01/24/17(2	)
		79,118				0	$	1.49		03/03/13(5	)		293,750		6,250	$	2.48		01/28/15(2	)
		300,000				0	$	1.49		03/03/13(2	)		79,118		0	$	1.49		03/03/13(4	)
		1,000,000				0	$	1.49		03/03/13(4	)		1,000,000		0	$	1.49		03/03/13(3	)
		39,559				0	$	1.49		03/03/13(6	)		39,559		0	$	1.49		03/03/13(5	)
		366,667		33,333		0	$	2.99		04/02/14(2	)		400,000		0	$	2.99		04/02/14(2	)
		218,750		81,250		0	$	2.48		01/28/15(2	)		300,000		0	$	1.49		03/03/13(2	)
		107,813		117,187		0	$	3.59		01/24/16(2	)		600,000		0	$	1.49		03/03/13(2	)
				300,000			$	5.11		01/24/17(2	)
Daniel A. Gaudreau		11,334				0	$	2.06		05/27/08(3	)		109,375		40,625	$	3.59		01/24/16(2	)
		47,675				0	$	3.53		12/11/08(3	)		160,000		0	$	1.49		03/03/13(2	)
		5,992				0	$	3.53		12/11/08(3	)		300,000		0	$	3.75		10/29/11(2	)
		300,000				0	$	3.75		10/29/11(2	)		95,833		104,167	$	5.11		01/24/17(2	)
		160,000				0	$	1.49		03/03/13(2	)		0		200,000	$	6.10		01/29/18(2	)
		40,156				0	$	1.49		03/03/13(5	)		40,156		0	$	1.49		03/03/13(4	)
		200,000				0	$	1.49		03/03/13(2	)		195,833		4,167	$	2.48		01/28/15(2	)
		61,387				0	$	1.49		03/03/13(5	)		250,000		0	$	2.99		04/02/14(2	)
		20,078				0	$	1.49		03/03/13(6	)		20,078		0	$	1.49		03/03/13(5	)
		229,167		20,833		0	$	2.99		04/02/14(2	)		200,000		0	$	1.49		03/03/13(2	)
Ilene M. Vogt													0		0		n/a		n/a
Mark A. Coggins													218,750		0	$	3.56		10/08/13(2	)
		145,833		54,167		0	$	2.48		01/28/15(2	)		47,917		52,083	$	5.11		01/24/17(2	)
		71,875		78,125		0	$	3.59		01/24/16(2	)
				200,000			$	5.11		01/24/17(2	)
Ilene M. Vogt		64,000				0	$	3.53		12/11/08(3	)
		300,000				0	$	3.75		10/29/11(2	)
		150,000				0	$	1.49		03/03/13(2	)
		72,585				0	$	1.49		03/03/13(2	)
		6,688				0	$	1.49		03/03/13(2	)
		275,000		25,000		0	$	2.99		04/02/14(2	)
		72,917		27,083		0	$	2.48		01/28/15(2	)
		23,958		26,042		0	$	3.59		01/24/16(2	)
				100,000			$	5.11		01/24/17(2	)
Mark A. Coggins		218,750				0	$	3.56		10/08/13(2	)
		4,167		27,083		0	$	2.48		01/28/15(2	)		0		100,000	$	6.10		01/29/18(2	)
		35,938		39,062		0	$	3.59		01/24/16(2	)		29,167		2,083	$	2.48		01/28/15(2	)
				100,000			$	5.11		01/24/17(2	)		54,688		20,312	$	3.59		01/24/16(2	)
N. Nobby Akiha		100,000				0	$	3.75		10/29/11(2	)		100,000		0	$	3.75		10/29/11(2	)
		37,976				0	$	1.49		03/03/13(2	)		37,976		0	$	1.49		03/03/13(2	)
		312,024				0	$	1.49		03/03/13(2	)		312,024		0	$	1.49		03/03/13(2	)
		72,917		27,083		0	$	2.48		01/28/15(2	)		97,917		2,083	$	2.48		01/28/15(2	)
		23,958		26,042		0	$	3.59		01/24/16(2	)		0		75,000	$	6.10		01/29/18(2	)
				100,000			$	5.11		01/24/17(2	)		47,917		52,083	$	5.11		01/24/17(2	)
													36,458		13,542	$	3.59		01/24/16(2	)
Stephen Fluin													14,583		5,417	$	3.68		01/19/16(2	)
													29,167		10,833	$	3.36		01/05/16(2	)
													35,938		39,062	$	5.11		01/24/17(2	)
													0		50,000	$	6.10		01/29/18(2	)

20


(1)		Each option will vest in full on an accelerated basis upon certain changes in control or upon the optionee’s termination of employment under certain circumstances in connection with such change in control, as described in more detail under the heading “Termination of Employment and Change in Control Agreements” herein.

(2)		Each of these reported options vests in accordance with the following schedule: twenty-five percent of the option shares vest on the one year anniversary of the option grant date and the remaining option shares vest in thirty-six equal monthly installments over the thirty-six month period measured from the first anniversary of the option grant date, provided the optionee continues to provide services to the Corporation through each applicable vesting date. The options held by the executive officers that vest in accordance with this schedule are as follows:


					Number of Shares						Number of Shares
	Option		Total Number of		Exercised Before		Option		Total Number of		Exercised Before
Name	Grant Date		Shares Granted		January 1, 2008		Grant Date		Shares Granted		January 1, 2009

Peter I. Cittadini		10/29/01		500,000		0		10/29/01		500,000		0
								03/03/03		600,000		0
		03/03/03		600,000		0		03/03/03		300,000		0
		03/03/03		300,000		0		04/02/04		400,000		0
		04/02/04		400,000		0		01/28/05		300,000		0
		01/28/05		300,000		0		01/24/06		225,000		0
		01/24/06		225,000		0		01/24/07		300,000		0
		01/24/07		300,000		0		01/29/08		300,000		0
Daniel A. Gaudreau		10/29/01		300,000		0		10/29/01		300,000		0
		03/03/03		160,000		0		03/03/03		160,000		0
		03/03/03		200,000		0		03/03/03		200,000		0
		04/02/04		250,000		0		04/02/04		250,000		0
		01/28/05		200,000		0		01/28/05		200,000		0
		01/24/06		150,000		0		01/24/06		150,000		0
		01/24/07		200,000		0		01/24/07		200,000		0
Ilene M. Vogt		10/29/01		300,000		0
		03/03/03		200,000		50,000
		03/03/03		72,585		0
		03/03/03		6,688		0
		04/02/04		300,000		0
		01/28/05		100,000		0
		01/24/06		50,000		0
		01/24/07		100,000		0		01/29/08		200,000		0
Mark A. Coggins		10/08/03		400,000		181,250		10/08/03		400,000		181,250
								01/28/05		100,000		68,750
		01/28/05		100,000		68,750		01/24/06		75,000		0
		01/24/06		75,000		0		01/24/07		100,000		0
		01/24/07		100,000		0		01/29/08		100,000		0
N. Nobby Akiha		10/29/01		100,000		0		10/29/01		100,000		0
		03/03/03		37,976		0		03/03/03		37,976		0
		03/03/03		312,024		0		03/03/03		312,024		0
		01/28/05		100,000		0		01/28/05		100,000		0
		01/24/06		50,000		0		01/24/06		50,000		0
		01/24/07		100,000		0		01/24/07		100,000		0
								01/29/08		75,000		0
Stephen Fluin								01/05/06		40,000		0
								01/19/06		20,000		0
								01/24/07		75,000		0
								01/29/08		50,000		0


(3)		Each of these reported options vested in accordance with the following schedule: twenty percent of the option shares vested on the one year anniversary of the option grant date and the remaining option shares vested in forty-eight equal monthly installments over the forty-eight month period measured from the first anniversary of the option grant date, provided the optionee continued to provide services to the Corporation through each applicable vesting date. The options held by the executive officers that vested in accordance with this schedule are as follows:

Number of Shares
Option
Total Number of
Exercised Before
Name
Grant Date Shares Granted January 1, 2007

Peter I. Cittadini 12/11/98 101,168 0
12/11/98 458,832 0
Daniel A. Gaudreau 05/27/98 40,000 28,666
12/11/98 110,596 62,921
12/11/98 29,404 23,412
Ilene M. Vogt 12/11/98 120,000 56,000

21


~~(4)~~		The reported option vested in accordance with the following schedule: thirty-three percent of the option shares vested on the one year anniversary of the option grant date and the remaining option shares vested in twenty-four equal monthly installments over the twenty-four month period measured from the first anniversary of the option grant date, provided the optionee continued to provide services to the Corporation through each applicable vesting date. The option that vested in accordance with this schedule is as follows:

Number of Shares

Option

Total Number of

Exercised Before

Option

Total Number of

Exercised Before

Name

Grant Date

Shares Granted

January 1, 2007

Grant Date

Shares Granted

January 1, 2009

Peter I. Cittadini

03/03/03

1,000,000

0

03/03/03

1,000,000

0

21


~~(5)~~(4)		Each of these reported options vested in accordance with the following schedule: one hundred percent of the option shares vested on the one year anniversary of the option grant date, provided the optionee continued to provide services to the Corporation through such date. The options held by the executive officers that vested in accordance with this schedule are as follows:

Number of Shares

Option

Total Number of

Exercised Before

Option

Total Number of

Exercised Before

Name

Grant Date

Shares Granted

January 1, 2007

Grant Date

Shares Granted

January 1, 2009

Peter I. Cittadini

03/03/03

79,118

0

03/03/03

79,118

0

Daniel A. Gaudreau

03/03/03

40,156

0

03/03/03

40,156

0

03/03/03

61,387

0


~~(6)~~(5)		Each of these reported options vested in accordance with the following schedule: one hundred percent of the option shares vested on the six-month anniversary of the option grant date, provided the optionee continued to provide services to the Corporation through such date. The options held by the executive officers that vested in accordance with this schedule are as follows:

Number of Shares

Option

Total Number of

Exercised Before

Option

Total Number of

Exercised Before

Name

Grant Date

Shares Granted

January 1, 2007

Grant Date

Shares Granted

January 1, 2009

Peter I. Cittadini

03/03/03

39,559

0

03/03/03

39,559

0

Daniel A. Gaudreau

03/03/03

20,078

0

03/03/03

20,078

0

Option Exercises and Stock Vested

The following ~~directors and executive officers~~Named Executive Officers exercised stock options in ~~2007:~~2008:

Number of Shares
Value Realized

Acquired on
on Exercise

Name
Exercise (#) ($)

Kenneth E. Marshall 22,500 114,450
Nicolas C. Nierenberg 840,000 3,536,156
Steven D. Whiteman 81,788 419,858
George B. Beitzel 100,000 559,500
Ilene Vogt 50,000 356,500
Mark A. Coggins 250,000 1,211,750


	Number of Shares		Value Realized
	Acquired on		on Exercise
Name	Exercise (#)		($)

Daniel A. Gaudreau		72,721		82,718
Ilene Vogt		616,773		249,284


(1)		Value realized is determined by multiplying (i) the amount by which the market price of the common stock on the date of exercise exceeded the exercise price by (ii) the number of shares for which the options were exercised.

No restricted stock or restricted stock unit awards were granted or vested during ~~2007~~2008 and no officers held restricted stock awards or restricted stock unit awards in ~~2007.~~2008. No stock appreciation rights were exercised by the executive officers during the ~~2007~~2008 fiscal year, and none of those executive officers held any stock appreciation rights in ~~2007.~~2008.

Pension Benefits

Actuate does not sponsor a tax-qualified defined benefit retirement plan or a supplemental executive retirement plan.

22

value of that award. In the event of an involuntary termination of the optionee’s employment within 12 months following a Change in Control in which the award is assumed or replaced, the vesting of each award held by such individual will accelerate in full.

Under the 1998 Plan a Change in Control is defined as (i) a merger or consolidation after which Actuate’s then current stockholders own less than 50% of the surviving corporation, (ii) a sale of all or substantially all of the assets of Actuate, (ii) a proxy contest that results in replacement of more than one-third of the directors over a24-month period or (iv) an acquisition of 50% or more of Actuate’s outstanding stock by a person other than a trustee of any of Actuate’s employee benefit plans or a corporation owned by the stockholders of Actuate in substantially the same proportions as their stock ownership in Actuate.

In December 2007, Actuate amended the change of control severance benefit agreements (the “Severance Agreements”) with each of the following executive officers: Messrs. Cittadini, Gaudreau, Coggins, Fluin and Akiha and Ms. Vogt in order to conform certain provisions in those agreements to recent changes in the federal tax laws. The Severance Agreements were originally entered into in October 2005. Pursuant to the terms of the Severance Agreements (as amended) in the event the executive officer’s employment with Actuate terminates pursuant to an involuntary termination, or his or her resignation for good reason, within 12 months following a change in control of Actuate, or should such executive officer’s employment be terminated by Actuate for any reason other than for cause during the period commencing with Actuate’s execution of a definitive agreement to effect a change in control of Actuate and ending on the earliest to occur of (i) the closing of the change in control contemplated by such definitive agreement or (ii) the termination of such definitive agreement without the consummation of the contemplated change in control (the “Pre-Closing Period”), then the executive officer’s will become entitled to receive the following change in control severance benefits, provided the executive officer executes a general release of all claims against Actuate: (i) each outstanding option held by the executive officer will become fully vested and exercisable, (ii) a lump-sum cash severance payment in an amount equal to 1.5 times (1 times for Mr. Akiha, Mr. Coggins and ~~Ms. Vogt)~~Mr. Fluin) the sum of (a) the executive’s annual rate of base salary and (b) the executive’s average bonus (measured over the 3 years prior to the year of termination), and (iii) continued health care coverage at Actuate’s expense for a period of up to 18 months (up to 12 months for Mr. Akiha, Mr. Coggins and ~~Ms. Vogt)~~Mr. Fluin). However, the executive’s right to ~~certain of those benefits~~the lump-sum cash severance payment will be dependent upon the consummation of an actual change in ~~control.~~control and the continued health case coverage at Actuate’s expense shall cease in the event the change in control is not consummated. Any severance benefits which are treated as parachute payments under Section 280G of the Internal Revenue Code will be subject to reduction, to the extent such reduction would provide the executive officer with the greatest after-tax amount of benefits after taking into account any excise tax to which he or she might be subject under Section 4999 of the Internal Revenue Code. In connection with her termination of employment, Ms. Vogt’s Severance Agreement terminated without Ms. Vogt receiving any payments under that agreement.

Quantification of Benefits

The charts below indicate the potential payments each of our executive officers would receive under their Severance Agreements based upon the following assumptions:

(i) the executive’s employment terminated on December 31, ~~2007~~2008 under circumstances entitling the executive to severance benefits under the executive’s Severance Agreement,

(ii) as to any benefits tied to the executive’s rate of base salary, the rate of base salary is assumed to be the executive’s rate of base salary as of December 31, ~~2007,~~2008, and

23

~~COMPLIANCE WITH~~ SECTION 16(a) ~~OF THE EXCHANGE ACT~~BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The members of the Board of Directors, the executive officers of Actuate and persons who hold more than 10% of Actuate’s outstanding Common Stock are subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended, which require them to file reports with respect to their ownership of Actuate’s Common Stock and their transactions in such Common Stock. Based upon (i) the copies of Section 16(a) reports that Actuate received from such persons during ~~2007~~2008 for their transactions in the Common Stock and their Common Stock holdings and (ii) the written representations received from one or more of such persons that no annual Form 5 reports were required to be filed by them for ~~2007,~~2008, Actuate believes that other than Form 4s related to option grants issued to all executive officers in January 2008, which were filed two days late, all reporting requirements under Section 16(a) for such fiscal year were met in a timely manner by its executive officers, directors and greater than 10% stockholders.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee currently consists of Messrs. Beitzel, Marshall and Whiteman. None of these individuals was at any time during ~~2007,~~2008, or at any other time, an officer or employee of Actuate. No executive officer of Actuate serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of Actuate’s Board of Directors or Compensation Committee.

REPORT OF THE COMPENSATION COMMITTEE

Based on its review and discussion of the Compensation Discussion and Analysis with Actuate’s management and, based on that review and discussion, the Compensation Committee recommends to the Board of Directors that the Compensation Discussion and Analysis be included in Actuate’s Proxy Statement and ~~2007~~2008 Annual Report onForm 10-K filed with the Securities and Exchange Commission on March ~~14, 2008.~~12, 2009.

COMPENSATION COMMITTEE

Kenneth E. Marshall, Chairman

George B. Beitzel

Steven D. Whiteman

25

REPORT OF THE AUDIT COMMITTEE

The following is the report of the Audit Committee with respect to Actuate’s audited financial statements for the fiscal year ended December 31, ~~2007.~~2008.

The purpose of the Audit Committee is to assist the Board of Directors in its oversight of Actuate’s financial reporting, internal controls and audit functions. The Audit Committee Charter describes in greater detail the full duties and responsibilities of the Audit Committee.

The Audit Committee has reviewed and discussed the consolidated audited financial statements with management and KPMG LLP, Actuate’s Independent Registered Public Accountants. Actuate management is responsible for financial reporting processes, the preparation of financial statements in accordance with generally accepted accounting principles and a system of internal controls and processes designed to help ensure compliance with applicable accounting standards. KPMG LLP is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with generally accepted accounting principles.

During ~~2007,~~2008, the Audit Committee held 45 meetings. The meetings were conducted to permit open communication among the members of the Audit Committee, KPMG LLP and Actuate management. Among other things, the Audit Committee discussed with KPMG LLP the plans and scope of their audit. The Audit Committee met with KPMG LLP with and without management present to discuss the results of their work and their opinions and recommendations with respect to Actuate’s internal controls and processes. The Audit Committee has also reviewed and approved the fees paid to KPMG LLP for audit and non-audit services.

The Audit Committee has discussed with KPMG LLP the matters required to be discussed by Statement of Auditing Standards No. ~~114~~61~~The Auditor’s~~ Communication with ~~those Charged with Governance~~Audit Committees, ~~which includes, among other items, a review of KPMG’s findings during its examination of Actuate’s financial statements.~~as amended as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T. The Audit Committee has also reviewed the written disclosures and a letter from KPMG LLP required by Independence Standards Board Standard No. 1 which relates to the accountant’s independence from Actuate, and has discussed with KPMG LLP their independence from Actuate.

Based on the review and discussions referred to above, the Audit Committee recommended to Actuate’s Board of Directors that the audited consolidated financial statements be included in Actuate’s Annual Report onForm 10-K for the fiscal year ended December 31, ~~2007.~~2008.

AUDIT COMMITTEE

Steven D. Whiteman, Chairman

George B. Beitzel

Kenneth E. Marshall

26

STOCKHOLDER PROPOSALS FOR ~~2009~~2010 ANNUAL MEETING

Stockholder proposals that are intended to be presented at the annual meeting of stockholders to be held in calendar year ~~2009~~2010 must be received by December ~~25, 2008~~10, 2009 in order to be included in the proxy statement and proxy relating to that meeting. All nominations for directors and stockholder proposals are subject to the advance notice provisions of the Company’s Amended and Restated Bylaws which were adopted on January 30, 2009 and filed as an exhibit to aForm 8-K filed by the Company on February 3, 2009. Stockholder proposals should be addressed to Corporate Secretary, Actuate Corporation, 2207 Bridgepointe Parkway, Suite 500, San Mateo, California 94404.

In addition, the proxy solicited by the Board of Directors for the ~~2009~~2010 annual meeting of stockholders will confer discretionary authority to vote on any stockholder proposal presented at that meeting, ~~unless~~if Actuate ~~is provided with~~does not receive notice of such proposal ~~no later than March 10, 2009.~~prior to February 20, 2010.

OTHER MATTERS

The Board knows of no other matters to be presented for stockholder action at the Annual Meeting. However, if other matters do properly come before the Annual Meeting or any adjournments or postponements thereof, the Board intends that the persons named in the proxies will vote upon such matters in accordance with their best judgment.

Actuate will mail without charge, upon written request, a copy of Actuate’s Annual Report onForm 10-K for the fiscal year ended December 31, ~~2007,~~2008, excluding exhibits. Requests should be sent to Actuate Corporation, 2207 Bridgepointe Parkway, Suite 500, San Mateo, California 94404, Attn: ~~Investor Relations.~~General Counsel. The Annual Report can also be viewed on our website atwww.actuate.com.

By Order of the Board of Directors,

Nicolas C. Nierenberg

Chairman of the Board

and Chief Architect

San Mateo, California

April ~~16, 2008~~

WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING. IF YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY VOTE, YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING. THANK YOU FOR YOUR ATTENTION TO THIS MATTER. YOUR PROMPT RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING.9, 2009

27

o		Preliminary Proxy Statement
o		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material Pursuant to §240.14a-12

~~(1)~~
	(1	)	Title of each class of securities to which transaction applies:




~~(2)~~
	(2	)	Aggregate number of securities to which transaction applies:




~~(3)~~
	(3	)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):




~~(4)~~
	(4	)	Proposed maximum aggregate value of transaction:




~~(5)~~
	(5	)	Total fee paid:

~~(1)~~	~~Amount Previously Paid:~~



	(1	)	Amount Previously Paid:
~~(2)~~


	(2	)	Form, Schedule or Registration Statement No.:




~~(3)~~	~~Filing Party:~~




~~(4)~~	~~Date Filed:~~

	(3	)	Filing Party:



	(4	)	Date Filed:


Fee Category	2007		2006		2008		2007		2006

Audit Fees	$	1,412,951	$	1,853,121	$	1,432,571	$	1,412,951	$	1,853,121
Audit-Related Fees		—		47,500		50,700		—		47,500
Tax Fees		—		—
All Other Fees		—		—

Total	$	1,412,951	$	1,900,621	$	1,483,271	$	1,412,951	$	1,900,621


	Cash		Value of Health		Value of Unvested				Cash		Value of Health		Value of Unvested
	Severance		Coverage		Options		Combined		Severance		Coverage		Options		Combined
Executive Officer	($)(2)		($)		($)(3)		Total Value		($)(2)		($)		($)(3)		Total Value

Peter I. Cittadini		1,332,364		23,908		1,876,986		3,233,257		1,280,274		24,386		0		1,304,660
Daniel A. Gaudreau		980,784		23,908		1,244,688		2,249,379		913,756		24,386		0		938,142
Ilene M. Vogt		389,167		9,269		637,625		1,036,060
Mark A. Coggins		143,362		5,644		572,548		721,554		285,754		11,514		0		297,268
N. Nobby Akiha		280,939		15,939		518,125		815,002		279,640		16,257		0		295,897
Stephen Fluin										161,674		3,110		0		164,784

þ		No fee required.
o		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

oþ		Fee paid previously with preliminary materials.

o		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.


NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS To Be Held May 21, 2009
PURPOSE OF MEETING
VOTING RIGHTS AND SOLICITATION OF PROXIES
PROPOSAL 1 ELECTION OF DIRECTORS
PROPOSAL 2 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
~~2007~~2008 COMPENSATION OF NON-EMPLOYEE DIRECTORS
EQUITY COMPENSATION PLAN INFORMATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
EXECUTIVE COMPENSATION AND RELATED INFORMATION
Compensation Discussion and Analysis
Summary Compensation Table
Itemization of All Other Compensation
Grants of Plan-Based Awards
Outstanding Equity Awards at Fiscal Year-End
Option Exercises and Stock Vested
Pension Benefits
Nonqualified Deferred Compensation
Termination of Employment and Change in Control Agreements
Change in Control Severance Benefits (1)
CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
~~COMPLIANCE WITH~~ SECTION 16(a) ~~OF THE EXCHANGE ACT~~BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
REPORT OF THE COMPENSATION COMMITTEE
REPORT OF THE AUDIT COMMITTEE
STOCKHOLDER PROPOSALS FOR ~~2009~~2010 ANNUAL MEETING
OTHER MATTERS


Nominees		Positions and Offices Held with Actuate

Nicolas C. Nierenberg		Chairman of the Board and Chief Architect
Peter I. Cittadini		Director, President and Chief Executive Officer
George B. Beitzel		Director
Kenneth E. Marshall		Director
Arthur C. Patterson		Director
Steven D. Whiteman		Director


	Level of Attainment
Goal	Threshold		Target		Max Above-Target

License and first year
maintenance revenue	$	41,500,000	$	49,500,000	$	55,500,000
non-GAAP earnings	$	0.24	$	0.29	$	0.35


(1)		Any benefits payable under the Severance Agreement which are treated as parachute payments under Section 280G of the Internal Revenue Code will be subject to reduction, to the extent such reduction would provide the executive officer with the greatest after-tax amount of benefits after taking into account any excise tax to which he or she might be subject under Section 4999 of the Internal Revenue Code.

(2)		As of December 31, ~~2007,~~2008, the three year average bonus, upon which a portion of the cash severance amount is calculated, for each executive officer was as follows: Mr. Cittadini, ~~$458,242;~~$403,516; Mr. Gaudreau, ~~$353,856; Ms. Vogt, $164,167;~~$294,171; Mr. Coggins, ~~$56,724~~$50,754, Mr. Akiha, $49,640 and Mr. ~~Akiha, $55,939.~~Fluin $31,348.

(3)		Represents the intrinsic value of each stock option which vests on an accelerated basis in connection with the change in control or termination of employment and is calculated by multiplying (i) the aggregate number of equity awards which vest on such an accelerated basis by (ii) the amount by which the ~~$7.77~~$2.96 closing selling price of our common stock on December 31, ~~2007~~2008 exceeds any exercise price payable per vested share.


Using ablack ink pen, mark your votes with anX as shown in		x
this example. Please do not write outside the designated areas.		x


~~Annual Meeting Proxy Card~~		~~C0123456789~~	~~12345~~


AProposals — The Board of Directors recommends a voteFORall the nominees listed andFORA~~Proposals — The Board of Directors recommends a vote~~ ~~FOR~~ ~~all the nominees listed and~~ ~~FOR~~Proposal 2.


B ~~Non-Voting Items~~
~~Change of Address —~~ ~~Please print new address below.~~