**Exhibit 10.36**

 

**WitnessSystems Stock OptionInducement Grant for Contractors who will become employees of Witness SystemsSoftware India Pvt. Ltd.**

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**Option Award**

 

**Note:  Except as otherwise provided in this OptionAward document, the Option referred to herein shall be subject to the terms andconditions of the Amended and Restated Stock Incentive Plan of Witness Systems,Inc. (the “Plan”), as if it had been granted thereunder, although it is notgranted under the Plan.**

 

**1.**             **Exercise Period of Option.**Subject to the terms andconditions of this Option Award document and the Plan, and unless otherwisemodified by a written modification signed by the Company and Optionee, thisOption may be exercised with respect to all of the Shares, but only accordingto the vesting schedule, prior to the date which is five (5) years (the “Term”)following the date of grant (hereinafter “Expiration Date”).

 

The Company hereby grants tothe Optionee, named in the Notice of Grant attached herewith as **Schedule 1**to this Option Award document, an option topurchase the number of Shares set forth in the Notice of Grant, at the exerciseprice per Share set forth in the ‘Notice of Grant’ and subject to the terms andconditions of the Plan. In the event of a conflict between the terms andconditions of the Plan and this Option Grant, the terms and conditions of thisOption Grant shall prevail.

 

In the event of Common Stocksplit by the Company, the Option Award will also be adjusted accordingly.

 

**2.**             **Restrictions on Exercise. **ThisOption may not be exercised, unless such exercise is in compliance with theSecurities Act of 1933, as well as Central Board of Direct Taxes Guidelines andSecurities and Exchange Board of India Guidelines prescribed with regard toEmployee Stock Option Plans and any other applicable securities laws, as theyare in effect on the date of exercise, and the requirements of any stockexchange or national market system on which the Company’s Common Stock may belisted or traded at the time of exercise. Optionee understands that the Companyis under no obligation to register, qualify or list the Shares with theSecurities and Exchange Board of India (“SEBI”), any state securitiescommission or any stock exchange to effect such compliance.

 

## ***2.1         ****3. Termination of Option.**Inaddition to the above restriction on transferability of Shares, the Company maydetermine such other restrictions on transfer of Shares by the Optioneeprovided that such restrictions are not more than the restrictions on the otherShares of the Company.*

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**4.Termination of Option.**Except as provided belowin this Section, this Option may not be exercised after the date which isthirty (30) days after Optionee ceases to perform services for the Company, orany Parent or Subsidiary. Optionee shall be considered to perform services forthe Company, or any Parent or Subsidiary, for all purposes under this Section,if Optionee is an officer or full-time employee of the Company, or any Parentor Subsidiary, or if the Board determines that Optionee is rendering substantialservices as a part-time employee, consultant, contractor or advisor to theCompany, or any Parent or Subsidiary. The Board shall have discretion todetermine whether Optionee has ceased to perform services for the Company, orany Parent or Subsidiary, and the effective date on which such services cease(the “Termination Date”). Notwithstanding anything contained herein to thecontrary, if the corporate position of Optionee is, at any time, altered orrevised such that Optionee’s responsibilities are materially reduced ordecreased for any reason, as determined by the Board in its sole discretion,the vesting of Shares shall cease, effective as of the date of such reductionin Optionee’s employment responsibilities; provided, however, except as otherwiseprovided in this Option and the Plan, Optionee shall have the right to exercisethis Option with respect to Shares which have been vested as of the date ofsuch reduction of Optionee’s responsibilities.

 

## **2.2         ***a)           *Termination Generally*. If Optionee ceases to perform services for theCompany, or any Parent or Subsidiary, for*

 

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## ***any reason,except death or disability this Option shall immediately be forfeited, alongwith any and all rights or subsequent rights attached thereto, thirty (30) daysfollowing the Termination Date, but in no event later than the Expiration Date.If, on the date of termination, the Optionee is not vested as to suchOptionee’s entire Option, the unvested portion of the Option shall expire. If,after termination, the Optionee does not exercise the vested portion of theOption within the time specified herein, the Option shall expire.***

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## **2.3         ***(b)*          Death or Disability*.              IfOptionee ceases to perform services for the Company, or any Parent orSubsidiary, as a result of the death or disability of Optionee (as determinedby the Board in its sole discretion), this Option, to the extent (and only tothe extent) that it would have been exercisable by Optionee on the TerminationDate, may be exercised by Optionee (or, in the event of Optionee’s death, byOptionee’s legal representative) within ninety (90) days after the TerminationDate, but in no event later than the Expiration Date. If, on the date oftermination, the Optionee is not vested as to such Optionee’s entire Option,the Shares covered by the unvested portion of the Option shall expire. If,after termination, the Optionee does not exercise the vested portion of theOption within the time specified herein, the Option shall expire.*

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## ***2.4          (c)          ***Retirement of Optionee*.**In the event of retirementof an Optionee from the Company at the instance of or with consent of theCompany, the Optionee will continue to hold all vested Options and can**exercise****them**withinthe exercise period. The above is applicable provided the Optionee does notenter into competition or is not employed by a competitor of the Company.*

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## ***2.5          (d)***          Unvested Options*. All unvested options shall lapse in case the Optionee resigns orretires, or otherwise either severs his/her relationship with the Company or isdismissed whether for a Cause or otherwise or dies or is discharged due topermanent disability, either voluntarily or by law.*

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## ***2.6          (e)          ***No Right to Employment*.Nothing in the Plan or this Option Award document shall confer on Optionee anyright to continue in the employment of, or other relationship with, theCompany, or any Parent or Subsidiary, or limit in any way the right of theCompany, or any Parent or Subsidiary, to terminate Optionee’s employment orother relationship at any time, with or without cause.*

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**5.**             **Manner of Exercise.**

 

## ***2.7          (a)         ***Exercise Agreement. *This Option shall beexercisable by delivery to the Company of such form of exercise agreement,notice, or other form as may be approved or accepted by the Company from timeto time, which shall set forth Optionee’s election to exercise this Option, thenumber of Shares being purchased, any restrictions imposed on the Shares, andsuch other representations and agreements as may be required by the Company tocomply with applicable securities laws.*

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## ***2.8          (b)         ***Exercise Price. *Such notice shall beaccompanied by full payment of the Exercise Price for the Shares beingpurchased. Payment for the Shares may be made in  cash, by cheque or, where permitted by lawand approved in advance and in writing by the Committee of the Board in itssole discretion:  (i) by surrender ofshares of Common Stock of the Company that have been owned by Optionee for morethan six (6) months and that were paid for with cash; (ii) by instructing theCompany to withhold Shares otherwise issuable pursuant to the exercise of theOption having a Fair Market Value equal to the Exercise Price of the Sharesbeing purchased (including the withheld Shares); (iii) by waiver ofcompensation accrued by Optionee for services rendered; or (iv) a combinationof the foregoing.*

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## ***2.9          (c)          ***Taxes. *Prior to the issuance ofShares upon exercise of this Option, Optionee must pay, or make adequateprovision for, any applicable central or state tax obligations of the Company.Where approved by the Compensation Committee of the Board of Directors,Optionee may provide for payment of taxes upon exercise of the Option byrequesting that the Company retain Shares with a Fair Market Value equal to theminimum amount of taxes required to be withheld. In such case, the Companyshall issue the net*

 

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## ***numberof Shares to Optionee by deducting the Shares retained from the Sharesotherwise issuable upon exercise.***

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## ***2.10        (d)         ***Issuance of Shares. *Provided that such noticeand payment are in form and substance satisfactory to counsel for the Company,the Company shall cause the Shares to be issued in the name of Optionee orOptionee’s legal representative.*

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**6.**             **Non transferability of Option.**This Option may not betransferred in any manner, other than by will or by the laws of descent anddistribution, and may be exercised during Optionee’s lifetime only by Optionee.The terms of this Option shall be binding upon the executor, , successors andassigns of Optionee.

 

**7.             Tax Consequences.**OPTIONEEUNDERSTANDS THAT THE GRANT AND EXERCISE OF THIS OPTION, AND THE SALE OF SHARESOBTAINED THROUGH THE EXERCISE OF THIS OPTION, MAY HAVE ADVERSE TAX CONSEQUENCESTO OPTIONEE. OPTIONEE SHOULD CONSULT WITH HIS OR HER TAX ADVISOR AND MAY NOTRELY ON THE COMPANY FOR ANY FINANCIAL, TAX OR OTHER ADVICE.

 

**8.**             **Interpretation.**Any dispute regarding the interpretationof this Option Award document shall be submitted by Optionee or the Company toa Committee of the Board, which shall review such dispute at its next regularmeeting. The resolution of such a dispute by a Committee of the Board shall befinal and binding on the Company and Optionee.

 

**9.**             **Entire Agreement and Governing Law.**The Plan isincorporated herein by this reference. The granting of this Option constitutesa full accord, satisfaction and release of all obligations or commitments madeto Optionee by the Company or any of its officers, directors, shareholders oraffiliates with respect to the issuance of any securities, or rights to acquiresecurities, of the Company or any of its affiliates. This Option Award documentand the Plan constitute the entire agreement of the parties hereto, andsupersede all prior undertakings and agreements with respect to the subjectmatter hereof. Any reference(s) to any ‘term’ or ‘terms’ not expressly definedin this Option Award document shall have the meaning prescribed to it under thesaid Plan.

 

This Option Award documentshall be governed by applicable laws of India.

 

**10.          Exercisability of Option.**Subjectto the terms of the Plan and this Option Award document, the issuance of Sharespursuant to the exercise of this Option shall be subject to the limitations setforth herein and defined below. For purposes of this Section, “ContinuousService” means a period of continuous performance of services by Optionee forthe Company, a Parent, or a Subsidiary, as determined by the Board.

 

*Four Year Vesting:** *Optioneemay exercise this Option with respect to the percentage of Shares set forthbelow only after Optionee has completed the following periods of ContinuousService following the date of grant:

 

(b)         After twelve (12) monthsof Continuous Service, up to twenty-five percent (25%) of the Shares;

 

(c)          After thirteen (13)months of Continuous Service, and for each additional month of ContinuousService thereafter through the end of the forty-eighth (48th) monthof Continuous Service, an additional amount of Shares per month; such amountbeing equal to the quotient of 75% of the Shares divided by 36, such that afterforty-eight (48) months of Continuous Service, one hundred percent (100%) ofthe Shares shall have vested.

 

If Optionee’s employmentwith the Company is terminated by the Company other than for Cause (as definedbelow) or by Optionee for Good Reason (as defined below) at any time (i) duringthe 90-day period before a Change of Control (as defined below) and (ii) forone hundred eighty (180) days after a Change of Control, then (A) the Optiongranted hereby, if less than fully vested as of the

 

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Termination Date , shallbe deemed fully vested and exercisable; and (B) Section 7 (other than thesecond sentence thereof) shall be deleted and replaced with the following:“This Option may not be exercised more than one hundred eighty (180) days fromthe later of: Optionee’s Termination Date or the date Optionee ceases toperform services for the Company, or any Parent or Subsidiary (which date shallbe determined by the Board in its reasonable discretion).”

 

Definitions. For purposes of this Option, the followingdefinitions shall apply:

 

1.             Change of Control. A “Changeof Control” shall be conclusively deemed to have occurred if (and only if) anyof the following shall have taken place: (i) a Change of Control is reported bythe Company in accordance with US law; (ii) any person  is or becomes the beneficial owner  directly or indirectly, of securities of theCompany representing fifty percent (50%) or more of the combined voting powerof the Company’s then outstanding securities; or (iii) following the electionor removal of directors, a majority of the Board consists of individuals whowere not members of the Board two (2) years before such election or removal,unless the election of each director who was not a director at the beginning ofsuch 2-year period has been approved in advance by directors representing atleast a majority of the directors then in office who were directors at thebeginning of the 2-year period.

 

2.             “Good Reason” means Optionee’stermination of employment for any of the following events, unless such eventoccurs with Optionee’s express prior written consent:

 

(a)           The assignment to Optionee of anyduties materially inconsistent with, or a material diminution of, his dutieswith the Company as in effect immediately prior to the Change of Control of theCompany, except in connection with the termination of Optionee’s employment fordisability, retirement, or Cause or as a result of Optionee’s death ortermination of employment other than for Good Reason;

 

(b)           A reduction of fifteen percent (15%)or more in Optionee’s base salary as in effect on the date hereof or as thesame may be increased from time to time;

 

(c)           Any material breach by the Company ofany provision of this Option; or

 

(d)           Any failure by the Company to obtainthe assumption of this Option by any successor or assign of the Company.

 

3.             Cause. “Cause” meanstermination of Optionee’s employment under any one or more of the followingevents:

 

(a)           Optionee’s knowing and willfulmisconduct with respect to the business and affairs of the Company;

 

(b)           Any material violation by Optionee ofany policy of the Company relating to ethical conduct or practices or fiduciaryduties of a similarly situated executive;

 

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(c)           Knowing and willful material breachof any provision of this Agreement which is not remedied within thirty (30)days after Optionee’s receipt of notice thereof;

 

(d)           Optionee’s commission of a felony orany illegal act involving moral turpitude or fraud or Optionee’s dishonestywhich may reasonably be expected to have a material adverse effect on theCompany; and/or

 

(e)           Failure to comply with reasonabledirectives of the Board which are consistent with Optionee’s duties, if notremedied within thirty (30) days after Optionee’s receipt of notice thereof.

 

**11.Acknowledgements**** **Optionee acknowledges receipt of acopy of the Plan and represents that he or she is familiar with the terms andprovisions thereof, and hereby accepts this Option subject to all of the termsand provisions thereof. Optionee has reviewed the Plan (including anyapplicable appendixes or sub-plans thereunder) and this Option Award documentin its entirety has had an opportunity to obtain the advice of counsel prior toexecuting this Option and fully understands all provisions of the Option.Optionee hereby agrees to accept as binding, conclusive and final all decisionsor interpretations of the Company upon any questions arising under the Plan orthis Option. Optionee further agrees to notify the Company upon any change inthe residence address indicated below.

 

The Company (and not theOptionee’s employer) is granting the Option. The Company will administer thePlan from outside Optionee’s country of residence and that United States ofAmerica law along with FEMA and other applicable Indian laws will govern allOptions granted under the Plan.

 

That benefits and rightsprovided under the Plan are wholly discretionary and, although provided by theCompany, do not constitute regular or periodic payments. The benefits andrights provided under the Plan are not to be considered part of Optionee’ssalary or compensation for purposes of calculating any severance, resignation,redundancy or other end of service payments, vacation, bonuses, long-termservice awards, indemnification, pension or retirement benefits, or any otherpayments, benefits or rights of any kind. Optionee waives any and all rights tocompensation or damages as a result of the termination of employment with theCompany for any reason whatsoever insofar as those rights result or may resultfrom:

 

(i)                                     theloss or diminution in value of such rights under the Plan, or

 

(ii)                                  Optioneeceases to have any rights under, or ceases to be entitled to any rights underthe Plan as a result of such termination.

 

The grant of the Option, andany future grant of Options under the Plan is entirely voluntary, and at thecomplete discretion of the Company. Neither the grant of the Option nor anyfuture grant of an Option by the Company will be deemed to create anyobligation to grant any further Options, whether or not such a reservation isexplicitly stated at the time of such a grant. The Company has the right, atany time to amend, suspend or terminate the Plan.

 

The Plan will not be deemed toconstitute, and will not be construed by Optionee to constitute, part of theterms and conditions of employment, and that the Company will not incur any liabilityof any kind to Optionee as a result of any change or amendment, or anycancellation, of the Plan at any time.

 

By entering into this OptionAward document, and as a condition of the grant of the Option, Optioneeconsents to the collection, use,

 

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and transfer of personal dataas described in this subsection to the full extent permitted by and in fullcompliance with applicable laws of India.

 

Optionee understands that theCompany and its Subsidiaries hold certain personal information about the Optionee,including, but not limited to, name, home address and telephone number, date ofbirth, permanent account number, salary, nationality, job title, any Shares ordirectorships held in the Company, details of all Options or other entitlementto Shares awarded, canceled, exercised, vested, unvested, or outstanding inOptionee’s favor, for the purpose of managing and administering the Plan(“Data”).

 

Optionee further understandsthat the Company and/or its Subsidiaries will transfer Data among themselves asnecessary for the purposes of implementation, administration, and management ofOptionee’s participation in the Plan, and that the Company and/or itsSubsidiary may each further transfer Data to any third parties assisting theCompany in the implementation, administration, and management of the Plan(“Data Recipients”).

 

Optionee understands that theseData Recipients may be located in Optionee’s country of residence or elsewhere,such as the United States. Optionee authorizes the Data Recipients to receive,possess, use, retain, and transfer Data in electronic or other form, for thepurposes of implementing, administering, and managing Optionee’s participationin the Plan, including any transfer of such Data, as may be required for theadministration of the Plan and/or the subsequent holding of Shares onOptionee’s behalf, to a broker or third party with whom the Shares acquired onexercise may be deposited. Optionee understands that Optionee may, at any time,review the Data, request that any necessary amendments be made to it, orwithdraw Optionee’s consent herein in writing by contacting the Company.Optionee further understands that withdrawing consent may affect Optionee’sability to participate in the Plan.

 

Optionee has received the termsand conditions of this Option Award document and any other relatedcommunications, and Optionee consents to having received and understood thesedocuments and the terms and conditions of the Plan.

 
| Company |   | Optionee |   |   |
|---------|--------|----------|--------|--------|
|    |   |     |   |   |
| By      |   | By       |   |   |
|    |   |     |   |   |
| Name    |   | Name     |   |   |
|    |   |     |   |   |
| Title   |   | Title    |   |   |
|    |   |     |   |   |
| Witness |   | Witness  |   |   |
|         |        |          |        |        |  |  |  |

 

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