<PAGE>

                                                                   EXHIBIT 10.10

September [ ], 2003

[Name]
[Title]
Callidus Software Inc.
160 West Santa Clara Street, Suite 1400
San Jose, CA  95113

Dear [Name]:

This letter modifies any Stock Option Agreement ("Option Agreement") you may now
or hereafter have with respect to the common stock of Callidus Software, Inc.
(the "Company") and any prior agreement between you and the Company regarding
the Option Agreements. This letter provides for accelerated vesting of the
options subject to the Option Agreements (the "Options") under the conditions
described below.

In the event of any "Change of Control" of the Company you shall receive 100%
vesting of your Options as of the effective time of the Change of Control.

         For purposes of the above, "Change of Control" means:

         (i)      The acquisition by any "person" (as such term is used in
                  Sections 13(d) and 14(d) of the Exchange Act) of "beneficial
                  ownership" (as defined in Rule 13d-3 under said Act), directly
                  or indirectly, of securities of the Company representing fifty
                  percent (50%) or more of the total voting power represented by
                  the Company's then outstanding voting securities (it being
                  understood that securities owned by any person on the date
                  hereof shall not be counted against such limit with respect to
                  such person); or

         (ii)     A change in the composition of the Board of Directors of the
                  Company (the "Board") occurring within a rolling two-year
                  period, as a result of which fewer than a majority of the
                  directors are Incumbent Directors. "Incumbent Directors" shall
                  mean directors who either (A) are members of the Board as of
                  the date hereof, or (B) are elected, or nominated for
                  election, to the Board with the affirmative votes of at least
                  a majority of the Incumbent Directors at the time of such
                  election or nomination (but shall not include an individual
                  not otherwise an Incumbent Director whose election or
                  nomination is in connection with an actual or threatened proxy
                  contest relating to the election of directors to the Board);
                  or

<PAGE>

         (iii)    A merger or consolidation involving the Company other than a
                  merger or consolidation which would result in the voting
                  securities of the Company outstanding immediately prior
                  thereto continuing to represent (either by remaining
                  outstanding or by being converted into voting securities of
                  the Surviving Entity (including the parent corporation of such
                  Surviving Entity)) at least fifty percent (50%) of the total
                  voting power represented by the voting securities of the
                  Company or such Surviving Entity outstanding immediately after
                  such merger or consolidation, or a sale or disposition by the
                  Company of all or substantially all the Company's assets.

The term "Surviving Entity" shall refer to the entity surviving the merger,
consolidation or sale of substantially all of the assets and continuing with the
assets or business of the Company in the case of a Change of Control event
described in clause (iii) above.

The modification to the terms of the vesting schedule of your Options as
described in this letter has been approved by the Board and is effective
immediately.

Sincerely,

Reed D. Taussig
Chief Executive Officer
Callidus Software Inc.

                                       2