8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report: March 13, 2013

(Date of earliest event reported)

Callidus Software Inc.

(Exact name of Registrant as specified in its charter)

Delaware	000-50463	77-0438629
(State or other jurisdiction of incorporation)	(Commission file number)	(I.R.S. Employer Identification No.)

6200 Stoneridge Mall Road, Suite 500, Pleasanton, CA 94588

(Address of principal executive offices) (Zip Code)

(925) 251-2200

(Registrant's telephone number, including area code)

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2 below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01   Entry into a Material Definitive Agreement.

On March 12, 2013, the Board of Directors (the “Board”) of Callidus Software Inc. (the “Company”) approved an amendment of its Stockholders’ Rights Agreement, as amended (the “Rights Agreement”), dated as of September 2, 2004, between the Company and American Stock Transfer & Trust Company, as Rights Agent. On March 13, 2013, the Company and the Rights Agent entered into a Second Amendment to Rights Agreement (the “Second Amendment”), which amends the Rights Agreement by accelerating the final expiration date of the Rights to March 31, 2013. The Rights had been scheduled to expire on September 2, 2014. As a result of the Second Amendment, as of March 31, 2013, the Rights will no longer be outstanding and will not be exercisable, and the Rights Agreement will effectively terminate.

The foregoing description of the Second Amendment is qualified in its entirety by reference to the full text of the Second Amendment, a copy of which is attached hereto as Exhibit 4.1 and incorporated herein by reference.

Item 3.03   Material Modifications to Rights of Securities Holders.

The information provided in Item 1.01 of this Form 8-K is incorporated herein by reference.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The Company discloses that RSUs for executive officers and other senior employees for 2013 will be 100% performance-based RSU awards, with vesting contingent on successful attainment of SaaS revenue growth of 25%, recurring revenue gross margins exceeding 70%, and, for the CEO and CFO, the additional goal of DSO (days sales outstanding) of less than 80 days.

The Company has also committed to cap its average annual burn rate at 5.7% for fiscal years 2013, 2014, and 2015.  This is more stringent than the ISS recommended cap of 7.26%.  To the extent necessary for strategic purposes, such as hiring of new key executives, the Company’s Compensation Committee may approve additional awards, but in no event shall the average annual burn rate exceed 7.26%.

Item 9.01    Financial Statements and Exhibits.

(d)     Exhibits.

Exhibit No.	Exhibit Description
4.1	Second Amendment to Rights Agreement dated March 13, 2013

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		CALLIDUS SOFTWARE, INC.
Date: March 15, 2013	By:	/s/ Ronald J. Fior
		Ronald J. Fior
		Chief Financial Officer, Senior Vice President, Finance and Operations

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Item 9.01   Financial Statements and Exhibits

(d)     Exhibits.

Exhibit No.	Exhibit Description
4.1	Second Amendment to Rights Agreement dated March 13, 2013

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EX-4.1

SECOND AMENDMENT TO

RIGHTS AGREEMENT

This Second Amendment dated as of March 13, 2013 (the "Amendment"), to the Rights Agreement, as amended (the "Rights Agreement"), dated as of September 2, 2004, between Callidus Software Inc., a Delaware corporation (the "Company"), and American Stock Transfer & Trust Company, as Rights Agent (the "Rights Agent") is being executed at the direction of the Company, by and between the Company and the Rights Agent. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Rights Agreement.

W I T N E S S E T H:

WHEREAS, the Company wishes to supplement and amend the Rights Agreement, as permitted by Section 23 thereof;

NOW, THEREFORE, in consideration of the foregoing and the agreements, provisions and covenants contained in this Amendment, each of the Company and the Rights Agent agrees as follows:

1.           Amendment to Rights Agreement. The Rights Agreement is hereby amended as set forth below.

1.1.        Section 1 of the Rights Agreement (Definitions) is hereby amended by amending and restating the following definition as follows:

““Final Expiration Date” means the close of business on March 31, 2013.”

1.2.        Other references to “September 2, 2014” included in the exhibits to the Rights Agreement are hereby amended and replaced with “March 31, 2013”.

2.           Effective Date.   This Amendment shall become effective as of the day and year first written above. Except as modified by this Amendment, the Rights Agreement shall remain in full force and effect without any modification.

3.           Certification Pursuant to Section 23 of the Rights Agreement. The certificate referred to in Section 23 of the Rights Agreement stating that this Amendment is in compliance with the terms of the Rights Agreement has been executed by an appropriate officer or director of the Company and is attached as Annex A hereto.

4.           Inconsistencies. In the event of a conflict or inconsistency between this Amendment and the Rights Agreement and the exhibits thereto, the provisions of this Amendment shall govern.

5.           Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first written above.

CALLIDUS SOFTWARE INC.
By:	/s/ Ronald J. Fior
	Name:	Ronald J. Fior
	Title:	Chief Financial Officer, Senior Vice President, Finance and Operations
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:	/s/ Alexandra Albrecht
	Name:	Alexandra Albrecht
	Title:	Vice President

Annex A

CALLIDUS SOFTWARE INC.

CERTIFICATE PURSUANT TO SECTION 23 OF THE RIGHTS AGREEMENT

I, Ronald J. Fior, Chief Financial Officer, Senior Vice President, Finance and   Operations of Callidus Software Inc., a Delaware corporation (the "Company"), do hereby certify pursuant to Section 23 of the Rights Agreement, as amended (the "Rights Agreement"), dated as of September 2, 2004, between the Company and American Stock Transfer & Trust Company, as Rights Agent, that the proposed second amendment to the Rights Agreement dated March 13, 2013 is in compliance with the terms of the Rights Agreement.

     IN WITNESS WHEREOF, I have signed this certificate.

Dated: March 13, 2013

CALLIDUS SOFTWARE INC.
By:
	Name:
	Title: