UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 28, 2006
KEYNOTE SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
000-27241 94-3226488
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(Commission (IRS Employer
File Number) Identification No.)
777 Mariners Island Boulevard, San Mateo, California 94404
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(Address of principal executive offices) (Zip Code)
(650) 403-2400
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On April 28, 2006, the compensation committee of the Board of Directors
of Keynote Systems, Inc. ("Keynote") approved for the fiscal year ending 2006,
the following Management By Objectives (MBO) bonuses for certain of its
executive officers:
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Name Personal MBO Corporate MBO
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% of Annual % of Annual
Amount Base Salary Amount Base Salary
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Drew Hamer
Chief Financial Officer $17,500 10% $17,500 10%
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Don Aoki
Vice-President of Corporate Development $20,000 10% $30,000 15%
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Vikram Chaudhary
Vice-President of Marketing $16,000 10% $24,000 15%
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Eric Stokesberry
Vice-President of Operations $18,000 10% $18,000 10%
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Krishna Khadloya
Vice-President of Engineering $18,000 10% $18,000 10%
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Each Personal MBO bonus is based on qualitative and quantitative goals
established at the beginning of each fiscal quarter, subjectively determined by
Keynote's Chief Executive Officer, Umang Gumpta, for each executive officer at
the end of each fiscal quarter. Each Corporate MBO bonus is based on certain
revenue and EBITA goals established by Keynote's Board of Directors. Each
executive officer is eligible to receive 50% of his respective Corporate MBO
bonus upon the achievement of a revenue target, and 50% of his respective
Corporate MBO bonus upon the achievement of an EBITA target. The specific
revenue and EBITA targets are not public information. While each Corporate MBO
bonus is designed on the basis of targets established for fiscal 2006, a portion
of each respective Corporate MBO bonus will be paid out each quarter based on a
year-to-date calculation at the end of each fiscal quarter.
On April 28, 2006, the Board of Directors of Keynote approved
adjustments to non-employee director cash compensation. Each non-employee
director will now earn his or her cash retainer on a quarterly basis such that
he or she will be entitled to:
o a quarterly retainer of $6,250 per fiscal quarter (an annual
retainer of $25,000) for his or her services as director
(provided that such non-employee director must have attended at
least 75% of the total number of board meetings held during their
period of service during the fiscal year);
o a quarterly retainer of $1,250 per fiscal quarter (an annual
retainer of $5,000) his or her service on either of the Board's
compensation committee or nominating and governance committee;
and
o a quarterly retainer of $2,500 per fiscal quarter (an annual
retainer of $10,000) for his or her service on the Board's audit
committee.
Such cash payments will continue to be made to each non-employee
director following the completion of the fiscal year to which they relate.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KEYNOTE SYSTEMS, INC.
Date: May 4, 2006 By: /s/ Andrew Hamer
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Andrew Hamer
Vice President and Chief Financial Officer