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                                                                    EXHIBIT 10.8

                             CALLIDUS SOFTWARE INC.
                          EMPLOYEE STOCK PURCHASE PLAN

         SECTION 1. Purpose of the Plan.

         The purpose of this Employee Stock Purchase Plan (the "PLAN") is to
give eligible employees of Callidus Software Inc. (the "COMPANY") and its
subsidiaries the ability to share in the Company's future success. The Company
expects that it and its stockholders will benefit from the added interest which
such eligible employees will have in the welfare of the Company as a result of
their increased equity interest in the Company's success. The Plan is intended
to qualify under Section 423 of the Code (as defined below).

         SECTION 2. Definitions.

         The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:

         (a)      "BOARD" means the board of directors of the Company.

         (b)      "CODE" means the Internal Revenue Code of 1986, as amended
from time to time.

         (c)      "COMMITTEE" means a committee of the Board designated by the
Board to administer the Plan. If no committee is so designated by the Board, the
full Board shall be the Committee hereunder.

         (d)      "COMMON STOCK" means the common stock, par value $0.001, of
the Company.

         (e)      "COMPENSATION" means base salary and commissions prior to any
reductions for pre-tax contributions made to a plan or salary reduction
contributions to a plan excludable from income under Sections 125, 132 or 402(g)
of the Code. Notwithstanding the foregoing, "Compensation" shall exclude
severance pay, bonuses, retirement income, change in control payments,
contingent payments, income derived from stock options, stock appreciation
rights and other equity-based compensation and other forms of special
remuneration.

         (f)      "CORPORATE TRANSACTION" means (i) a merger of the Company with
or into another corporation (other than a merger whose sole purpose is to change
the state of the Company's incorporation or a merger as a result of which the
direct or indirect stockholders of the Company immediately prior to such merger
or consolidation hold, directly or indirectly, less than 50% of the voting power
of the surviving entity); (ii) the sale of substantially all of the assets or
stock of the Company, or (iii) the complete liquidation or dissolution of the
Company.

         (g)      "ENROLLMENT DATE" means the first date of an Offering Period.

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         (h)      "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any successor thereto.

         (i)      "FAIR MARKET VALUE" means, as of any date, the value of Common
Stock determined as follows:

                           (i)      If the Common Stock is listed on any
                  established stock exchange or traded on the Nasdaq National
                  Market or the Nasdaq SmallCap Market, the Fair Market Value of
                  a share of Common Stock shall be the closing sales price for
                  such stock (or the closing bid, if no sales were reported) as
                  quoted on such exchange or system on the date of determination
                  (or if such date is not a trading date, on the previous
                  trading date), as reported in The Wall Street Journal or such
                  other source as the Committee deems reliable;

                           (ii)     In the absence of such markets for the
                  Common Stock, the Fair Market Value shall be determined in
                  good faith by the Committee.

         (j)      "IPO" means the initial public offering of the Common Stock
pursuant to an effective registration statement filed by the Company with the
Securities and Exchange Commission.

         (k)      "MAXIMUM SHARE AMOUNT" means subject to applicable law, the
maximum number of Shares that a Participant may purchase on any given Purchase
Date.

         (l)      "NEW PURCHASE DATE" means the purchase date established
pursuant to Section 12 of the Plan.

         (m)      "OFFERING PERIOD" means a period of approximately 12 months
consisting of two consecutive Purchase Periods, as set forth in Section 7, or
such other period as the Committee may determine in its sole discretion.

         (n)      "OPTION" means an option granted pursuant to Section 7 of the
Plan.

         (o)      "PARTICIPANT" means an eligible employee of the Company or a
Participating Subsidiary who participates in the Plan.

         (p)      "PARTICIPATING SUBSIDIARY" means a Subsidiary that is selected
to participate in the Plan by the Committee in its sole discretion.

         (q)      "PAYROLL DEDUCTION ACCOUNT" means an account to which payroll
deductions of a Participant are credited under Section 8(c) of the Plan.

         (r)      "PERSON" means an individual, corporation, partnership,
limited partnership, syndicate, person (including, without limitation, a
"person" as defined in Section 13(d)(3) of the Exchange Act), trust, association
or entity or government, political subdivision, agency or instrumentality of a
government, but excluding any of the Company, any

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Subsidiary or any employee benefit plan sponsored or maintained by the Company
or any Subsidiary.

         (s)      "PURCHASE DATE" means the last trading day of a Purchase
Period.

         (t)      "PURCHASE PERIOD" means the approximately six-month period, or
such other period as the Committee may determine in its sole discretion,
commencing on February 16 and August 16 of each year and ending with the next
Purchase Date. The first Purchase Period shall be lengthened by commencing on
the first trading day on or after the date of the IPO and ending on the last
trading day before August 16, 2004, unless otherwise determined by the
Committee.

         (u)      "PURCHASE PRICE" means, with respect to each Share, 85% of the
lesser of (i) the Fair Market Value of a Share on the Enrollment Date and (ii)
the Fair Market Value of a Share on the Purchase Date.

         (v)      "SHARE" means a share of Common Stock.

         (w)      "SUBSIDIARY" means any corporation, partnership, joint venture
or other legal entity of which the Company owns directly or indirectly, more
than 50% of the total combined voting power of all classes of stock or other
equity interests of such entity.

         SECTION 3. Shares Subject To The Plan.

         The total number of shares of Common Stock subject to the Plan is
1,200,000, plus an annual increase to be added on July 1 of each year during the
term of the Plan beginning July 1, 2004, in an amount equal to the lesser of (i)
1,200,000 shares, (ii) 2.0% of the outstanding shares of Common Stock on the
last day immediately preceding such date or (iii) a lesser amount determined by
the Board. The Shares will consist in whole or in part of authorized but
unissued Shares or treasury Shares, including Shares purchased on the open
market or otherwise.

         SECTION 4. Administration.

         (a)      The Plan shall be administered by the Committee. Subject to
the terms of the Plan and applicable law, the Committee shall have full power
and authority to: (i) designate Participants; (ii) interpret and administer the
Plan; (iii) establish, amend, suspend or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; (iv) correct any defect or supply any omission or reconcile any
inconsistency in the Plan in the manner and to the extent the Committee deems
necessary or desirable; and (v) make any other determination and take any other
action that the Committee deems necessary or desirable for the administration of
the Plan.

         (b)      All decisions of the Committee shall be final, conclusive and
binding upon all persons.

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         SECTION 5. Eligibility.

         Any individual who is employed by the Company or a Participating
Subsidiary on a given Enrollment Date is eligible to participate in the Plan,
subject to limitations imposed by Section 423 of the Code. Notwithstanding the
foregoing, no Employee shall be granted an option under the Plan if, immediately
after the grant, such Employee (or any other person whose stock would be
attributed to such Employee pursuant to Section 424(d) of the Code) would own
stock possessing 5% or more of the total combined voting power or value of all
classes of stock of the Company or its Subsidiaries.

         SECTION 6. Election to Participate.

         Pursuant to procedures set forth by the Committee, Participants may
elect to participate in a given Offering Period under the Plan prior to the
Enrollment Date for such Offering Period. Enrollments shall remain in effect for
subsequent Offering Periods, except as provided herein. A Participant shall not
be enrolled in more than one Offering Period at any time.

         SECTION 7. Offering Periods; Grant of Option on Enrollment; Purchase of
Shares.

         (a)      The Plan shall be implemented by consecutive, overlapping
Offering Periods with a new Offering Period commencing on each February 16 and
August 16, or as otherwise determined by the Committee, except that the first
Offering Period shall be lengthened by commencing on the first trading day on or
after the IPO and ending on the last trading day before February 16, 2005,
unless otherwise determined by the Committee.

         (b)      With respect to an Offering Period, each Participant enrolled
in such Offering Period shall be granted as of the Enrollment Date an Option to
purchase on each Purchase Date during the Offering Period a number of Shares
equal to the lesser of (i) the Maximum Share Amount or (ii) the number
determined by dividing (A) the amount expected to be accumulated in such
Participant's Payroll Deduction Account as of a Purchase Date, pursuant to the
election made under Section 8, by (B) the Fair Market Value of a Share on the
Enrollment Date.

         (c)      In the event that the Committee determines that the number of
Shares that may be purchased on a Purchase Date may exceed the number of Shares
available under Section 3, the Committee may in its discretion provide for a pro
rata purchase on the Purchase Date, and may continue or terminate any Offering
Periods then in effect.

         SECTION 8. Payment of Purchase Price; Changes in Payroll Deductions;
Issuance of Shares.

         (a)      Payroll deductions shall be made on each day that a
Participant is paid during an Offering Period in respect of a payroll period
commencing after the Enrollment Date. The deductions shall be made as a
percentage of the Participant's Compensation in 1% increments, from 1% to 15% of
such Participant's Compensation, as elected by the

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Participant; provided that, in accordance with Section 423(b)(8) of the Code and
the regulations thereunder, no Participant shall be permitted to accrue rights
to purchase Shares under this Plan (and any other employee stock purchase plan
of the Company or any of its Subsidiaries) with an aggregate Fair Market Value
(as determined as of the date the applicable option is granted) in excess of
$25,000 for each calendar year in which such option is outstanding at any time.

         (b)      A Participant may discontinue his or her participation in the
Plan as provided in Section 9, or may change the rate of his or her payroll
deductions during an Offering Period by completing and filing with the Company a
new authorization for payroll deduction, subject to clause (a) above. The
Committee may, in its discretion, limit the number of participation rate changes
in any Offering Period. The change in rate shall be effective as soon as
administratively feasible following the Company's receipt of the new
authorization.

         (c)      All payroll deductions made with respect to a Participant
shall be credited to the Participant's Payroll Deduction Account under the Plan
and shall be deposited with the general funds of the Company, and no interest
shall accrue on the amounts credited to such Payroll Deduction Account. All
payroll deductions received or held by the Company may be used by the Company
for any corporate purpose, and the Company shall not be obligated to segregate
such payroll deductions. Except to the extent provided by the Committee, a
Participant may not make any separate cash payments into such Participant's
Payroll Deduction Account, and payment for Shares purchased under the Plan may
not be made in any form other than by payroll deduction.

         (d)      On each Purchase Date, all funds then in the Participant's
Payroll Deduction Account shall be applied to purchase Shares (or fractions
thereof) pursuant to the automatic exercise of the Option granted on the
Enrollment Date. The Committee may determine with respect to all Participants
that any fractional shares shall be rounded down to the next lower whole share,
in which event the resulting unused amount in any Participant's Payroll
Deduction Account may be carried over into the next Purchase Period.

         (e)      Certificates representing the Shares purchased by a
Participant under the Plan shall be issued to the Participant as soon as
practicable following the end of each Purchase Period, except that the Committee
may determine that such Shares shall be held for each Participant's benefit by a
broker designated by the Committee.

         (f)      The Participant shall have no interest or voting right in the
Shares covered by the Participant's Option until such Option is exercised and
the covered Shares are registered in the name of the Participant.

         SECTION 9. Withdrawal.

         Each Participant may withdraw from participation prior to the end of an
Offering Period or from the Plan in accordance with procedures set forth by the
Committee. Upon a Participant's withdrawal from participation in respect of any
Offering Period or from

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the Plan, all accumulated payroll deductions in the Payroll Deduction Account
shall be returned, without interest, to such Participant, and such Participant
shall not be entitled to any Shares on the Purchase Date or thereafter with
respect to the Offering Period in effect at the time of such withdrawal. If a
Participant withdraws from an Offering Period, payroll deductions will not
resume at the beginning of the succeeding Offering Period unless the Participant
re-enrolls in the Plan prior to the applicable Enrollment Date in accordance
with the procedures set forth by the Committee.

         SECTION 10. Termination of Employment.

         A Participant shall cease to participate in the Plan upon the
Participant's termination of employment for any reason (including death) and all
accumulated payroll deductions in the Participant's Payroll Deduction Account
shall be returned, without interest to such Participant (or Participant's
estate, as applicable). For purposes of the Plan, transfers from the Company or
a Participating Subsidiary to another Participating Subsidiary or to the
Company, as the case may be, shall not be a termination of employment.
Employment shall not be deemed to terminate when the Participant goes on a leave
of absence approved by the Company in writing, unless otherwise required by the
Code and the applicable regulations.

         SECTION 11. Automatic Transfer to Low Price Offering Period.

         To the extent permitted by any applicable laws and regulations, if the
Fair Market Value of the Shares on any Purchase Date in an Offering Period is
lower than the Fair Market Value of the Shares on the Enrollment Date of such
Offering Period, then all Participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the purchase
of their Shares on such Purchase Date and automatically re-enrolled in a new
Offering Period as of the first business day after such Purchase Date.

         SECTION 12. Adjustments Upon Certain Events.

         Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Options granted under the Plan:

         (a)      In the event of any stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company, the Committee shall, in such
manner as it may deem equitable, adjust any or all of (i) the number or type of
Shares or other securities issued or reserved for issuance pursuant to the Plan,
(ii) the Purchase Price and/or (iii) any other affected terms hereunder.

         (b)      In the event of a Corporate Transaction, unless each
outstanding Option shall be continued or assumed or an equivalent option
substituted by the Company or the successor corporation or a parent or
Subsidiary of the successor corporation, the Committee shall shorten any
Offering Period then in progress by setting a New Purchase Date, which shall be
before the date of the consummation of the Corporate Transaction.

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The Committee shall notify each Participant not less than 10 days prior to the
New Purchase Date that (i) a New Purchase Date has been set and (ii) the
Participant's Option will be exercised automatically on the New Purchase Date
unless prior to such date the Participant has withdrawn from the Offering Period
as provided in Section 9. Each Offering Period then in effect shall terminate on
such New Purchase Date.

         SECTION 13. Nontransferability.

         Unless otherwise determined by the Committee, Options granted under the
Plan shall not be transferable or assignable by the Participant other than by
will or by the laws of descent and distribution.

         SECTION 14. Legal Compliance.

         Shares shall not be issued hereunder unless the issuance and delivery
of such Shares shall comply with all applicable laws and regulations, including
the federal and state securities laws and the regulations of any stock exchange
or other securities market on which the Company's securities are traded.

         SECTION 15. No Right to Employment.

       The granting of an Option under the Plan shall impose no obligation on
the Company or any Subsidiary to continue the employment of a Participant and
shall not lessen or affect the Company's or Subsidiary's right to terminate the
employment of such Participant.

         SECTION 16. Amendment or Termination of the Plan.

         (a)      The Plan shall continue until the earliest to occur of the
following: (i) termination of the Plan by the Board, (ii) issuance of all of the
Shares reserved for issuance under the Plan or (iii) the tenth anniversary of
the effective date of the Plan.

         (b)      The Committee may amend, alter or discontinue the Plan or any
portion thereof at any time, provided that no amendment, alteration or
discontinuation shall be made (x) without the approval of the stockholders of
the Company if such amendment, alteration or discontinuation would (except as is
provided in Section 12) increase the total number of Shares reserved for
purposes of the Plan or as otherwise required by applicable laws or regulations,
or (y) without the consent of a Participant, such amendment, alteration or
discontinuation would materially diminish any of the rights or obligations under
any Option theretofore granted to such Participant under the Plan.

         (c)      Notwithstanding clause (y) of Section 16(b), the Committee may
amend or terminate the Plan, including with respect to any Offering Periods then
in effect, without consent of the Participants in such manner as it deems
necessary to permit the granting of Options meeting the requirements of the Code
or other applicable laws or in the event the Board determines that the ongoing
operation of the Plan may result in unfavorable financial accounting
consequences for the Company.

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         (d)      Notwithstanding clause (y) of Section 16(b), the Committee
shall have the power to change the duration and timing of Offering Periods (both
before and after any Offering Period has commenced) and Purchase Periods. In no
event, however, will any such Offering Period be longer than 27 months.

         SECTION 17. Taxes.

         At the time the Shares are purchased, or at the time some or all of the
Shares issued under the Plan are disposed of, the Participant must make adequate
provision for the Company's federal, state or other tax withholding obligations,
if any, which arise. At any time, the Company, may, but shall not be obligated
to, withhold from the Participant's compensation the amount necessary for the
Company to meet applicable withholding obligations, including any withholding
required to make available to the Company any tax deductions or benefits
attributable to sale or early disposition of Shares by the Participant.

         SECTION 18. Governing Law.

         The Plan shall be governed by and construed in accordance with the laws
of the State of California, without regard to conflicts of laws.

         SECTION 19. Effectiveness of the Plan.

         The Plan shall become effective as determined by the Board, subject to
stockholder approval.

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