**Exhibit 10.2**

 

**FIRST AMENDMENT TO**

**CHANGE OF CONTROL AGREEMENT**

 

This *FIRST AMENDMENT TO CHANGE OF CONTROLAGREEMENT* is made and entered into as of the date noted on the lastpage 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 Companyand the Executive previously entered into a “Change of Control Agreement” dated**[INSERT]** (the “COC Agreement”); and

 

*WHEREAS*, inaccordance with provisions of Notice 2005-1 issued by the Internal RevenueService and extensions and modifications thereto contained in the preamble toproposed regulations (70 F.R. 57930) issued by the Internal Revenue Service,the Company and the Executive wish to amend certain provisions of the COCAgreement either (1) to conform to the provisions of Section 409A of theInternal Revenue Code of 1986, as amended (the “Code”) with respect to amountssubject to Code §409A, or (2) to provide a compensation arrangement that doesnot provide for a deferral of compensation for purposes of Code §409A;

 

*WHEREAS,* the Companyand the Executive wish to amend certain provisions of the COC Agreement toaddress recent changes in Georgia case law;

 

*NOW, THEREFORE*, theCompany and the Executive do hereby agree to amend the COC Agreement as followseffective as of the “Effective Date” (which shall, for all purposes of thisFirst Amendment, be defined as noted in the COC Agreement):

 

I.

 

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

 

**Section 1.7**            *CONFIDENTIAL INFORMATION* shall mean (a) information of the Company, to the extent notconsidered a Trade Secret under applicable law, that (i) relates to thebusiness of the Company, (ii) possesses an element of value to the Company,(iii) is not generally known to the Company’s competitors, and (iv) woulddamage the Company if disclosed, and (b) information of any third partyprovided to the Company which the Company is obligated to treat asconfidential, including, but not limited to, information provided to theCompany by its licensors, suppliers, or customers. Confidential Informationincludes, but is not limited to, (i) future business plans, (ii) thecomposition, description, schematic or design of products, future products orequipment of the Company or any third party, (iii) communication systems, audiosystems, system designs and related documentation, (iv) advertising ormarketing 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 bythe Company, and (vi) information concerning the Company’s or a third party’sfinancial structure and methods and procedures of operation. ConfidentialInformation shall not include any information that (i) is or becomes generallyavailable to the public other than as a result of an unauthorized disclosure,(ii) has been independently developed and disclosed by others without violatingthis Agreement or the legal rights of any party, or (iii) otherwise enters thepublic domain through lawful means.

 

II.

 

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

 

**Section 1.9**            *CUSTOMER* shall meanany 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 followseffective as of the Effective Date:

 

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

 

IV.

 

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

 

**Section 1.19****        ***TRADE SECRETS* shallmean information of the Company, and its licensors, suppliers, clients, andcustomers, without regard to form, including, but not limited to, technical ornontechnical data, a formula, a pattern, a compilation, a program, a device, amethod, a technique, a drawing, a process, financial data, financial plans,product plans, a list of actual customers, clients, licensors, or suppliers, ora list of potential customers, clients, licensors, or suppliers which is notcommonly known by or available to the public and which information (i) deriveseconomic value, actual or potential, from not being generally known to, and notbeing readily ascertainable by proper means by, other persons who can obtaineconomic value from its disclosure or use, and (ii) is the subject of effortsthat 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 followseffective as of the Effective Date:

 

**Section 1.20**         *WORK PRODUCT* shallmean (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, imagesof the Executive, and artistic works, and (b) any subject matter protectedunder patent, copyright, proprietary database, trademark, trade secret, rightsof publicity, confidential information, or other property rights, including allworldwide rights therein, that is or was conceived, created or developed inwhole 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 basedon, results from, or is suggested by any work performed within the scope of theExecutive’s employment and is directly or indirectly related to the Business ofthe Company or a line of business that the Company may reasonably be interestedin pursuing, (iii) has been or will be paid for by the Company, or (iv) wascreated 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 followingSection effective as of the Effective Date:

 

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

 

VII.

 

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

 

isemployed by the Company as of the date of the first Change of Control occurringafter 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 Controloccurring after the Effective Date or (B) was employed by the within theshorter of (1) the ninety (90) day period immediately preceding such Change ofControl, or (2) the period from January 1 of the calendar year during whichsuch 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 followseffective as of the Effective Date:

 

Section 2.3             *COBRA Premium Payments.*Upon the Executive’s termination of employmentas of the date of, or following, such Change of Control, the Company shall paythe following:

 

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

 

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

 

IX.

 

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

 

Section 2.4             *LTD & Life InsurancePremium Payments.*Upon theExecutive’s termination of employment as of the date of, or following, suchChange of Control, the Company shall pay an amount each month equal to the sumof (1) the monthly premium amount (whether paid previously by the Companyand/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 theExecutive) for the Executive’s life insurance coverage, each as available underthe Company’s applicable employee welfare benefit plan providing such coverageimmediately prior to the Executive’s date of termination, with such premiumsamounts determined as of the Executive’s date of termination of employment (butnot less than such premiums amounts determined as of the date of such Change ofControl). Such monthly amounts shall be paid as of the first day of eachcalendar month for **[eighteen (18)][twenty-four (24)]** consecutive months beginning with the monthimmediately following the month during which the Executive’s termination ofemployment occurs.

 

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X.

 

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

 

**Article3**        GoldenParachute Gross Up Payments

 

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

 

**Section 3.2****           ***SELECTION OF INDEPENDENT TAX CONSULTANT.*AnIndependent Tax Consultant shall be selected and engaged by the Company for thepurposes of making the calculations and determinations required by this Article3. All fees, expenses and disbursements of the Independent Tax Consultant shallbe paid by the Company.

 

**Section 3.3****           ***DETERMINATIONS & CALCULATIONS OF INDEPENDENT TAX CONSULTANT.*TheIndependent Tax Counsel shall, upon being engaged by the Company to do so, makea determination as to whether the amounts paid to the Executive by the Companywhich constitute Parachute Payments resulting from such Change of Control wouldbe subject to the Code §4999 excise tax for the calendar year during which suchChange of Control occurs and for each calendar year thereafter. If theIndependent Tax Counsel determines that the Parachute Payments to the Executivewould be subject to the Code §4999 excise tax, then the Executive shall receivea single additional lump sum cash payment (the “Gross-Up Payment”) from theCompany in an amount such that, based upon the aforementioned assumptions,after payment by the Executive of all federal and state income taxes and anyCode §4999 excise taxes imposed upon the Gross-Up Payment, the Executive shall retainfrom the Gross-Up Payment an amount equal to the Code §4999 excise taxesimposed upon, or which will be imposed upon, the Parachute Payments. If theIndependent Tax Counsel shall determine that no Code §4999 excise tax is orwill be payable by the Executive, the Independent Tax Consultant shall furnishthe Executive with a written letter that the Executive has substantialauthority 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 bepaid to the Executive shall be paid in a single lump sum cash payment whichshall be made as of the later of (1) December 31 of the calendar year duringwhich the Change of Control occurs, or (2) the date which is five (5) daysafter the date on which the Independent Tax Counsel completes his calculationsand determinations with

 

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

 

XI.

 

Section 4.3(b) of theCOC 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 orindirectly, solicit any Customer of the Company for the purpose of selling orproviding any products or services competitive with the Business. Therestrictions set forth in this Section 4.3(b) apply only to Customers with whomthe Executive had Contact. Nothing in this Section 4.3(b) shall be construed toprohibit the Executive from soliciting any Customer of the Company for thepurpose of selling or providing any products or services competitive with theBusiness: (i) which the Executive never sold or provided while employed by theCompany; (ii) to a Customer that explicitly severed its business relationshipwith the Company; or (iii) which product line or service line the Company nolonger offers.

 

XII.

 

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

 

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

 

XIII.

 

All other provisions of the COC Agreement are hereby ratified andconfirmed.

 

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

 
| COMPANY:                   | EXECUTIVE: |
|----------------------------|------------|
|                       |       |
| **WITNESS  SYSTEMS, INC.** |       |   |
| ** **                 |       |
| By:                        |       |   | **[INSERT]** |
|                       |       |   | ** ** |
| Its:                       |       |   |   |

 

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