Exhibit 10.2

 

FIRST AMENDMENT TO

CHANGE OF CONTROL AGREEMENT

 

This FIRST AMENDMENT TO CHANGE OF CONTROL AGREEMENT is made and entered into as
of the date noted on the last page hereof to be effective as set forth below by
and between Witness Systems, Inc. (the “Company”), and [INSERT] (the
“Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the Company and the Executive previously entered into a “Change of
Control Agreement” dated [INSERT] (the “COC Agreement”); and

 

WHEREAS, in accordance with provisions of Notice 2005-1 issued by the Internal
Revenue Service and extensions and modifications thereto contained in the
preamble to proposed regulations (70 F.R. 57930) issued by the Internal Revenue
Service, the Company and the Executive wish to amend certain provisions of the
COC Agreement either (1) to conform to the provisions of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) with respect to amounts
subject to Code §409A, or (2) to provide a compensation arrangement that does
not provide for a deferral of compensation for purposes of Code §409A;

 

WHEREAS, the Company and the Executive wish to amend certain provisions of the
COC Agreement to address recent changes in Georgia case law;

 

NOW, THEREFORE, the Company and the Executive do hereby agree to amend the COC
Agreement as follows effective as of the “Effective Date” (which shall, for all
purposes of this First Amendment, be defined as noted in the COC Agreement):

 

I.

 

Section 1.7 of the COC Agreement is amended to read as follows effective as of
the Effective Date:

 

Section 1.7            CONFIDENTIAL INFORMATION shall mean (a) information of
the Company, to the extent not considered a Trade Secret under applicable law,
that (i) relates to the business of the Company, (ii) possesses an element of
value to the Company, (iii) is not generally known to the Company’s competitors,
and (iv) would damage the Company if disclosed, and (b) information of any third
party provided to the Company which the Company is obligated to treat as
confidential, including, but not limited to, information provided to the Company
by its licensors, suppliers, or customers. Confidential Information includes,
but is not limited to, (i) future business plans, (ii) the composition,
description, schematic or design of products, future products or equipment of
the Company or any third party, (iii) communication systems, audio systems,
system designs and related documentation, (iv) advertising or marketing plans,
(v) information regarding independent contractors, employees, clients,
licensors, suppliers, customers, or any

 

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third party, including, but not limited to, customer lists compiled by the
Company, and customer information compiled by the Company, and (vi) information
concerning the Company’s or a third party’s financial structure and methods and
procedures of operation. Confidential Information shall not include any
information that (i) is or becomes generally available to the public other than
as a result of an unauthorized disclosure, (ii) has been independently developed
and disclosed by others without violating this Agreement or the legal rights of
any party, or (iii) otherwise enters the public domain through lawful means.

 

II.

 

Section 1.9 of the COC Agreement is amended to read as follows effective as of
the Effective Date:

 

Section 1.9            CUSTOMER shall mean any person or entity to whom the
Company has (i) sold its products or services, or (ii) solicited to sell its
products or services.

 

III.

 

Section 1.11 of the COC Agreement is amended to read as follows effective as of
the Effective Date:

 

Section 1.11         EMPLOYEE shall mean any person who (i) is employed by the
Company at the time the Executive’s employment with the Company ends, or (ii)
was employed by the Company during the last year of the Executive’s employment
with the Company (or during the Executive’s employment if employed less than a
year).

 

IV.

 

Section 1.19 of the COC Agreement is amended to read as follows effective as of
the Effective Date:

 

Section 1.19         TRADE SECRETS shall mean information of the Company, and
its licensors, suppliers, clients, and customers, without regard to form,
including, but not limited to, technical or nontechnical data, a formula, a
pattern, a compilation, a program, a device, a method, a technique, a drawing, a
process, financial data, financial plans, product plans, a list of actual
customers, clients, licensors, or suppliers, or a list of potential customers,
clients, licensors, or suppliers which is not commonly known by or available to
the public and which information (i) derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.

 

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V.

 

Section 1.20 of the COC Agreement is amended to read as follows effective as of
the Effective Date:

 

Section 1.20         WORK PRODUCT shall mean (a) any data, databases, materials,
documentation, computer programs, inventions (whether or not patentable),
designs, and/or works of authorship, including but not limited to, discoveries,
ideas, concepts, properties, formulas, compositions, methods, programs,
procedures, systems, techniques, products, improvements, innovations, writings,
pictures, audio, video, images of the Executive, and artistic works, and (b) any
subject matter protected under patent, copyright, proprietary database,
trademark, trade secret, rights of publicity, confidential information, or other
property rights, including all worldwide rights therein, that is or was
conceived, created or developed in whole or in part by the Executive while
employed by the Company and that either (i) is created within the scope of the
Executive’s employment, (ii) is based on, results from, or is suggested by any
work performed within the scope of the Executive’s employment and is directly or
indirectly related to the Business of the Company or a line of business that the
Company may reasonably be interested in pursuing, (iii) has been or will be paid
for by the Company, or (iv) was created or improved in whole or in part by using
the Company’s time, resources, data, facilities, or equipment.

 

VI.

 

Article 1 of the COC Agreement is amended by adding the following Section
effective as of the Effective Date:

 

Section 1.21         MATERIAL INTERACTION shall mean any interaction between the
Executive and an Employee which relates or related, directly or indirectly, to
the performance of the Executive’s duties for the Company.

 

VII.

 

The first paragraph of Article 2 of the COC Agreement is amended by striking the
phrase:

 

is employed by the Company as of the date of the first Change of Control
occurring after the Effective Date or was employed by the Company within the
ninety (90) day period immediately preceding such Change of Control

 

and inserting in lieu thereof the following phrase:

 

(A) is employed by the Company as of the date of the first Change of Control
occurring after the Effective Date or (B) was employed by the within the shorter
of (1) the ninety (90) day period immediately preceding such Change of Control,
or (2) the period from January 1 of the calendar year during which such Change
of Control occurs to the date of such Change of Control

 

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VIII.

 

Section 2.3 of the COC Agreement is amended to read as follows effective as of
the Effective Date:

 

Section 2.3             COBRA Premium Payments. Upon the Executive’s termination
of employment as of the date of, or following, such Change of Control, the
Company shall pay the following:

 

(a)           The Company shall pay an amount each month equal to the COBRA
Monthly Premiums to provide the Executive with COBRA Continuation Coverage for
the first eighteen (18) months following the Executive’s becoming entitled to
COBRA Continuation Coverage.

 

(b)           The Company shall pay a monthly amount equal to (1) the monthly
premium amount determined as of the Executive’s date of termination of
employment that would be necessary to provide the Executive and any and all
dependents of the Executive who are qualified beneficiaries with COBRA
Continuation Coverage for such month reduced by (2) the monthly premium amount
determined as of the Executive’s date of termination of employment that would be
necessary to provide the Executive alone with COBRA Continuation Coverage for
such month. Such monthly amount shall be paid as of the first day of each
calendar month for eighteen (18) consecutive months beginning with the month
immediately following the month during which the Executive’s termination of
employment occurs.

 

IX.

 

Section 2.4 of the COC Agreement is amended to read as follows effective as of
the Effective Date:

 

Section 2.4             LTD & Life Insurance Premium Payments. Upon the
Executive’s termination of employment as of the date of, or following, such
Change of Control, the Company shall pay an amount each month equal to the sum
of (1) the monthly premium amount (whether paid previously by the Company and/or
the Executive) for the Executive’s long term disability coverage and (2) the
monthly premium amount (whether paid previously by the Company and/or the
Executive) for the Executive’s life insurance coverage, each as available under
the Company’s applicable employee welfare benefit plan providing such coverage
immediately prior to the Executive’s date of termination, with such premiums
amounts determined as of the Executive’s date of termination of employment (but
not less than such premiums amounts determined as of the date of such Change of
Control). Such monthly amounts shall be paid as of the first day of each
calendar month for [eighteen (18)] [twenty-four (24)] consecutive months
beginning with the month immediately following the month during which the
Executive’s termination of employment occurs.

 

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X.

 

Article 3 of the COC Agreement is amended to read as follows effective as of the
Effective Date:

 

Article 3        Golden Parachute Gross Up Payments

 

Section 3.1            REQUEST FOR CALCULATION & DETERMINATION. If the Executive
(A) is employed by the Company as of the date of the first Change of Control
occurring after the Effective Date or (B) was employed by the Company within the
shorter of (1) the ninety (90) day period immediately preceding such Change of
Control, or (2) the period from January 1 of the calendar year during which such
Change of Control occurs to the date of such Change of Control, then, as of the
calendar year during which such Change of Control occurs, the Company shall
cause to be performed a calculation of any Code §4999 excise tax for such
calendar year and for each calendar year thereafter with respect to the
Executive based on any Parachute Payments made or to be made to the Executive by
the Company resulting from such Change of Control and based on the assumption
that all amounts taxable to the Executive will be taxed at the highest marginal
federal and state tax rates, and shall notify the Executive of the result of any
such calculation. If such tax is or will be due, the Company shall pay to the
Executive a Gross-Up Payment (as defined in Section 3.3 below); provided,
however, that (1) the Executive must provide the Independent Tax Counsel with
all information necessary for the Independent Tax Counsel to determine the
proper amount of excise tax which should be paid by the Executive, (2) the
Executive must agree to the release of pertinent payment information by the
Company to the Independent Tax Counsel, and (3) the Executive must comply with
the terms of Section 6.1 below.

 

Section 3.2            SELECTION OF INDEPENDENT TAX CONSULTANT. An Independent
Tax Consultant shall be selected and engaged by the Company for the purposes of
making the calculations and determinations required by this Article 3. All fees,
expenses and disbursements of the Independent Tax Consultant shall be paid by
the Company.

 

Section 3.3            DETERMINATIONS & CALCULATIONS OF INDEPENDENT TAX
CONSULTANT. The Independent Tax Counsel shall, upon being engaged by the Company
to do so, make a determination as to whether the amounts paid to the Executive
by the Company which constitute Parachute Payments resulting from such Change of
Control would be subject to the Code §4999 excise tax for the calendar year
during which such Change of Control occurs and for each calendar year
thereafter. If the Independent Tax Counsel determines that the Parachute
Payments to the Executive would be subject to the Code §4999 excise tax, then
the Executive shall receive a single additional lump sum cash payment (the
“Gross-Up Payment”) from the Company in an amount such that, based upon the
aforementioned assumptions, after payment by the Executive of all federal and
state income taxes and any Code §4999 excise taxes imposed upon the Gross-Up
Payment, the Executive shall retain from the Gross-Up Payment an amount equal to
the Code §4999 excise taxes imposed upon, or which will be imposed upon, the
Parachute Payments. If the Independent Tax Counsel shall determine that no Code
§4999 excise tax is or will be payable by the Executive, the Independent Tax
Consultant shall furnish the Executive with a written letter that the Executive
has substantial authority not to report any Code § 4999 excise tax due.

 

Section 3.4            TIMING OF GROSS-UP PAYMENT. The Gross Up Payment which is
due to be paid to the Executive shall be paid in a single lump sum cash payment
which shall be made as of the later of (1) December 31 of the calendar year
during which the Change of Control occurs, or (2) the date which is five (5)
days after the date on which the Independent Tax Counsel completes his
calculations and determinations with

 

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respect to such Gross-Up Payment, but in no event later than March 15th of the
calendar year following the calendar year during which the Change of Control
occurs.

 

XI.

 

Section 4.3(b) of the COC Agreement is amended to read as follows effective as
of the Effective Date:

 

(b)           Non-Solicitation of Customers. During the Restricted Period, the
Executive will not, directly or indirectly, solicit any Customer of the Company
for the purpose of selling or providing any products or services competitive
with the Business. The restrictions set forth in this Section 4.3(b) apply only
to Customers with whom the Executive had Contact. Nothing in this Section 4.3(b)
shall be construed to prohibit the Executive from soliciting any Customer of the
Company for the purpose of selling or providing any products or services
competitive with the Business: (i) which the Executive never sold or provided
while employed by the Company; (ii) to a Customer that explicitly severed its
business relationship with the Company; or (iii) which product line or service
line the Company no longer offers.

 

XII.

 

Section 4.3(c) of the COC Agreement is amended to read as follows effective as
of the Effective Date:

 

(c)           Non-Recruit of Employees. During the Restricted Period, the
Executive will not, directly or indirectly, solicit, recruit, or induce any
Employee to (i) terminate his or her employment relationship with the Company,
or (ii) work for any other person or entity engaged in the Business. The
restrictions set forth in this Section 4.3(c) shall apply only to Employees (a)
with whom the Executive had Material Interaction, or (b) the Executive, directly
or indirectly, supervised.

 

XIII.

 

All other provisions of the COC Agreement are hereby ratified and confirmed.

 

IN WITNESS WHEREOF, the undersigned Company and the Executive have hereunto set
forth their hands and seals as of this            day of
                         , 2005.

 

COMPANY:

EXECUTIVE:

 

 

WITNESS SYSTEMS, INC.

 

 

 

 

By:

 

 

[INSERT]

 

 

 

 

Its:

 

 

 

 

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