Exhibit 10.9
Description of Salary and Bonus Arrangements for Certain Executive Officers
Following is a description of the salary and bonus arrangements for each of the named executive officers of webMethods, Inc. (the “Company”) as of June 21, 2006:
| Maximum | |||||||||
| Potential Annual | |||||||||
| Bonus as a | |||||||||
| Percentage of | |||||||||
| Name and Title | Base Salary | Base Salary | |||||||
| David Mitchell | |||||||||
| President and Chief Executive Officer | $ | 450,000 | 75 | %(1) | |||||
| Richard Chiarello | |||||||||
| Executive Vice President and Chief Operating Officer | $ | 385,000 | (2) | ||||||
| Mark Wabschall | |||||||||
| Executive Vice President, Chief Financial Officer and Treasurer | $ | 275,000 | 50 | %(1) | |||||
| Douglas McNitt | |||||||||
| Executive Vice President, General Counsel and Secretary | $ | 275,000 | 50 | %(1) | |||||
| Kristin Weller Muhlner | |||||||||
| Executive Vice President, Product Development | $ | 262,500 | 50 | %(1) | |||||
| (1) | The bonuses for David Mitchell, Mark Wabschall, Douglas McNitt and Kristin Weller Muhlner are determined quarterly by the Compensation Committee of the Company’s Board of Directors based primarily on the Company’s revenue and net income per share and based, to a lesser extent, on individual performance. Effective June 15, 2006, the Compensation Committee approved the payment of the following bonuses for the fourth quarter of the Company’s fiscal year ended March 31, 2006: Mr. Mitchell — $48,811; Mr. Wabschall — $19,885; Mr. McNitt — $19,886; and Ms. Muhlner — $18,000. |
| (2) | The bonus for Richard Chiarello is determined quarterly based on the Company’s achievement of established license revenue, total revenue and earnings per share goals for the Company. The target quarterly bonus amount for Mr. Chiarello, assuming attainment of 100% of performance goals, is $87,500. Achievement of the established license revenue, total revenue and earnings per share goals accounts for 50%, 25% and 25%, respectively, of Mr. Chiarello’s target quarterly bonus amount. The actual quarterly bonus amount may exceed the target quarterly bonus amount if the Company exceeds one or more of the performance objectives. Effective June 15, 2006, the Compensation Committee approved the payment of a bonus of $121,608 to Mr. Chiarello for the fourth quarter of the Company’s fiscal year ended March 31, 2006. Also effective June 15, 2006, the Compensation Committee approved a bonus plan and established license revenue, total revenue and earnings per share goals for quarterly bonus payments to Mr. Chiarello for the fiscal year ended March 31, 2007. |