(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:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Solicitation material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 241.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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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 June15, 2006, the Compensation Committee of the Board of Directors of Mercury
Interactive Corporation (the “Company”)
approved Amendment No. 1 to Employment Agreement (the “Amendment
No. 1 to the Employment Agreement”) with David Murphy, the Company’s
chief financial officer.
Amendment
No. 1 to the Employment Agreement provides that Mr. Murphy is eligible to
receive a retention bonus in the aggregate amount of $1,500,000 (the “Retention
Bonus”) on the following terms and conditions: (a) the Retention Bonus
is payable in two installments as follows, subject to Mr. Murphy’s continued
employment on each such date: (i) $500,000 payable on January 15, 2007;
and (ii) $1,000,000 payable on January 15, 2008; (b) Mr. Murphy will
receive promptly any unpaid portion of the Retention Bonus in the event that:
(i) his employment is terminated by the Company without “cause” or
by Mr. Murphy for “good reason” (as those terms are defined in
Mr. Murphy’s Employment Agreement), or (ii) Mr. Murphy’s employment
is terminated for any reason after a “change of control” (as that
term is defined in Mr. Murphy’s Change of Control Agreement); (c) if
prior to August 1, 2009, Mr. Murphy’s employment is terminated by Mr.
Murphy without “good reason” or by the Company for “cause”,
Mr. Murphy agrees to repay to the Company the full amount of the Retention
Bonus previously paid to him; and (d) if Mr. Murphy’s employment terminates
by reason of death or “disability” (as defined in Mr. Murphy’s
Change of Control Agreement), (i) no portion of the Retention Bonus previously
paid will be required to be repaid, and (ii) no unpaid portion of the Retention
Bonus will be payable to Mr. Murphy or his estate, as applicable.
The foregoing
description of this Amendment No. 1 to the Employment Agreement does not
purport to be complete and is qualified in its entirety by reference to such
agreement, a copy of which is filed as Exhibit 10.58 hereto and is incorporated
by reference herein. The other terms of Mr. Murphy’s Employment Agreement
are contained in Exhibit 10.53 attached to the Form 8-K filed by the Company
on March 16, 2006.
On June 15, 2006, the Compensation Committee also approved the following adjustments
in connection with the annual compensation review for Brian Stein, Senior
Vice President and Chief Accounting Officer: a merit increase in his annual
base salary to $315,000 and his bonus target percentage to 50%, to be effective
July 1, 2006, and a cash retention bonus in an amount of $100,000 to be awarded
in three equal installments on July 31, 2006, October 31, 2006, and January31, 2007.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
