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EXHIBIT 10.5
ADDENDUM TO THE
STOCK OPTION GRANT CERTIFICATE
OF
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DATED ___________ _____, 19___
THIS ADDENDUM is made effective as of the ____ day of ____________,
19___, by and between WITNESS SYSTEMS, INC., a Delaware corporation (the
"Company"), and __________________ (the "Executive").
A. Purpose. The Executive is now employed by the Company and the
Company desires to provide an incentive to the Executive to
continue to devote his disinterested attention and
undistracted dedication to the performance of his duties in
the potentially disturbing circumstances of a Change of
Control of the Company.
▇. ▇▇▇▇▇▇▇▇▇ Benefits and Limitation on Payment. If the
Executive's employment with the Company is terminated by the
Company other than for Cause or by the Executive for Good
Reason at any time (i) during the ninety (90) day period
before a Change of Control and (ii) after a Change of Control
and prior to December 31, 2001, that certain stock option
awarded to the Executive on the date hereof to acquire _______
shares of the Company's common stock, if less that fully
vested as of the Date of Termination, shall be deemed fully
vested and exercisable; provided, that acceleration in vesting
does not adversely impact the availability of pooling of
interests accounting treatment, as such determination is made
by the Board in its reasonable discretion.
C. Definitions. For purposes of this Amendment, the following
definitions shall apply:
1. Change of Control. A "Change of Control" shall be
conclusively deemed to have occurred if (and only if)
any of the following shall have taken place: (i) a
Change of Control is reported by the Company in
response to either Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended ("Exchange Act"), or
Item 1 of Form 8-K promulgated under the Exchange
Act; (ii) any person (as such term is used in Section
13(d) and 14(d)(2) of the Exchange Act) is or becomes
the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act) directly or indirectly, of
securities of the Company representing forty percent
(40%) or more of the combined voting power of the
Company's then outstanding securities; or (iii)
following the election or removal of directors, a
majority of the Board consists of individuals who
were not members of the Board two years before such
election or removal, unless the election of each
director who was not a director at the beginning of
such two-year period has been approved in advance by
directors
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representing at least a majority of the directors
then in office who were directors at the beginning of
the two-year period.
2. Date of Termination. "Date of Termination" means the
date on which a notice of termination is given either
by the Company or by the Executive.
3. Good Reason. "Good Reason" means the Executive's
termination of employment for any of the following
events, unless such event occurs with the Executive's
express prior written consent:
(a) The assignment to the Executive of any
duties materially inconsistent with, or a
diminution of, his position, duties, titles,
offices, responsibilities and status with
the Company as in effect immediately prior
to the Change of Control of the Company,
except in connection with the termination of
the Executive's employment for disability,
retirement, or Cause or as a result of the
Executive's death or termination of
employment other than for Good Reason;
(b) A reduction of fifteen percent (15%) or more
in the Executive's base salary as in effect
on the date of this Amendment or as the same
may be increased from time to time;
(c) A change in the location of the Executive's
principal place of employment by more than
one hundred (100) miles from the location
where he was principally employed
immediately prior to the Change of Control;
(d) Any material breach by the Company of any
provision of this Amendment or the
Agreement; or
(e) Any failure by the Company to obtain the
assumption of the Agreement by any successor
or assign of the Company.
4. Cause. "Cause" means termination of the Executive's
employment under any one or more of the following
events:
(a) Executive's knowing and willful misconduct
with respect to the business and affairs of
the Company;
(b) Any material violation by Executive of any
policy of the Company relating to ethical
conduct or practices or fiduciary duties of
a similarly situated executive;
(c) Knowing and willful material breach of any
provision of this Agreement which is not
remedied within thirty (30) days after
Executive's receipt of notice thereof;
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(d) Executive's commission of a felony or any
illegal act involving moral turpitude or
fraud or Executive's dishonesty which may
reasonably be expected to have a material
adverse effect on the Company; and/or
(e) Failure to comply with reasonable directives
of the Board which are consistent with the
Executive's duties, if not remedied within
thirty (30) days after the Executive's
receipt of notice thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as
of the date first above written.
WITNESS SYSTEMS, INC.
By:
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Its:
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Executive
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