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): August 8,
2006
CHORDIANT SOFTWARE, INC.

(Exact name of Registrant as specified in its
charter)




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


Commission file number:
000-29357
20400 Stevens Creek Boulevard, Suite 400
Cupertino,
CA    95014
(Address of principal
executive offices and zip code)

Registrant's telephone number, including area code: (408)
517-6100
(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 Material Definitive Agreement.
On August 8, 2006, Robert Mullen entered into a separation
agreement with the Company. The terms of the separation agreement are:



1. Mr. Mullen will continue as an employee of the Company, but not as an officer
of the Company or as an officer or director of any of the Company's
subsidiaries, until the earlier of December 31, 2006 or such other date as he
becomes employed by another employer or elects to leave the Company (the
"Separation Date"). During the period from and after August 8, 2006 and the
Separation Date, Mr. Mullen will work in a full-time role to transition to his
responsibilities to such individuals as the Company shall designate.
Notwithstanding the foregoing, after September 30, 2006, Mr. Mullen may seek
other employment opportunities.

2. The Company will pay Mr. Mullen severance payments equal to Mr. Mullen's base
salary of $29,167 per month for a period of sixty (60) days from the Separation
Date, subject to the standard payroll deductions and withholdings, if Mr. Mullen
commences employment with another employer before December 31, 2006. If Mr.
Mullen terminates his employment with the Company on December 31, 2006, then the
Company will pay Mr. Mullen severance payments equal to Mr. Mullen's base salary
of $29,167 per month until the earlier of June 30, 2007 or the date Mr. Mullen
commences employment with another company.

3. Mr. Mullen will be entitled to his target bonus of $125,000 per quarter for
the June, September and December quarters of calendar 2006, if earned, under the
2006 Executive Bonus Plan and under the Chordiant Fiscal Year 2006 Special
Profitability Bonus for President, Worldwide Field Operations. The bonus for the
December quarter will be determined under the same terms and conditions as the
2006 Executive Bonus Plan provided that there will be a 200% cap on the amount
that can be paid. If Mr. Mullen terminates his employment with the Company prior
to December 31, 2006, the bonus payable to him for the December quarter will be
pro-rated based on the number of days during the quarter that he was employed by
the Company.

4. Following termination of his employment with the Company until June 30, 2007,
Mr. Mullen will not work for certain competitors of the Company. 

5. As part of the separation agreement, Mr. Mullen has executed a general
release in favor of the Company, its employees, officers and directors.



A copy of the separation agreement dated August 8, 2006 between Mr. Mullen and
the Company is filed herewith as Exhibit 10.1.


Item 9.01 Financial Statements and Exhibits.

(c)
Exhibits


10.1 Separation Agreement dated August 8, 2006 between Robert U. Mullen and
Chordiant Software, Inc.
 

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Chordiant Software, Inc.


  
    Date:  August 11, 2006
     
    By: /s/ 
    Peter S. Norman
      
Peter S. Norman
Chief Financial
    Officer