EXECUTIVE INCENTIVE PLAN

EXHIBIT 10.14

FY'99 Executive Incentive Plan





Objective



The objective of the Executive Incentive Plan is to compensate Plan participants for their contribution toward achievement of the Company's 1999 business objectives.





Effective Date



This Plan is effective July 1, 1998 through July 1, 1999, and supersedes, replaces, and cancels all earlier incentive or bonus plans effective prior to the effective date of this Plan.





Eligibility and Plan Participation



This Plan is limited to Active Software's executive staff. For the purposes of the 1999 Plan year, eligible positions include:



Chief Financial Officer

Vice President, Professional Services

Vice President of Engineering

SR. Vice President, Sales

Vice President, Marketing



Eligibility will commence upon the outset of employment with Active Software for all eligible new hires within the Plan year, or upon a transfer or promotion of an existing employee to an eligible position.





Incentive Plan Elements



The Executive Incentive Plan includes the following elements of cash compensation:



Base Salary



Base salary is the amount of fixed pay earned by the Plan participant for the entire year in accordance with Active Software policies and procedures, excluding any general bonus or special awards. The annual base salary will be prorated and paid in accordance with Active Software's semi-monthly payroll schedule.





Target Incentive



The target bonus amount for performance to company performance measures is based on salaries, which are set at mid-year (around July/August) and are computed using quarterly objectives. If the Plan participant is hired during a quarter, this target amount will be prorated from the date of hire. The target bonus amount typically remains fixed for the plan year, unless there is a change that affects participation.



The company's financial performance must be at 75% of the Plan revenue goals before any bonus ...