AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                             CALLIDUS SOFTWARE INC.

 

                        (INCORPORATED SEPTEMBER 6, 1996)

 

The undersigned, Reed D. Taussig and Ron J. Fior, do hereby verify that:

 

      I.       They are the duly elected and acting President and Secretary of

Callidus Software Inc., a Delaware corporation (the "corporation").

 

      II.      The Certificate of Incorporation of the corporation,

originally filed with the Delaware Secretary of State on September 6, 1996 under

the name of Tally Up Software, Inc. and amended and restated to date, is hereby

amended and restated to read in its entirety as follows:

 

         ONE.     The name of this Corporation is:

 

                             Callidus Software Inc.

 

         TWO.     The address of the corporation's registered office in the

State of Delaware is 1209 Orange Street, in the City of Wilmington, County of

New Castle, Delaware 19801. The name of its registered agent at such address is

The Corporation Trust Company.

 

         THREE.   The purpose of the Corporation is to engage in any lawful act

or activity for which corporations may be organized under the General

Corporation Law of the State of Delaware as the same exists or may hereafter be

amended ("DELAWARE Law"). The Corporation shall have perpetual existence.

 

         FOUR.    The total number of shares of stock which the Corporation

shall have authority to issue is 105,000,000, consisting of 100,000,000 shares

of Common Stock, par value $0.001 per share (the "COMMON STOCK"), and 5,000,000

shares of Preferred Stock, par value $0.001 per share (the "PREFERRED STOCK").

 

         The Board of Directors is hereby empowered to authorize by resolution

or resolutions from time to time the issuance of one or more classes or series

of Preferred Stock and to fix the designations, powers, preferences and

relative, participating, optional or other rights, if any, and the

qualifications, limitations or restrictions thereof, if any, with respect to

each such class or series of Preferred Stock and the number of shares

constituting each such class or series, and to increase or decrease the number

of shares of any such class or series to the extent permitted by Delaware Law.

 

         FIVE.    Each holder of Common Stock, as such, shall be entitled to one

vote for each share of Common Stock held of record by such holder on all matters

on which stockholders generally are entitled to vote; provided, however, that,

except as otherwise required by law, holders of Common Stock, as such, shall not

be entitled to vote on any amendment to this Certificate of Incorporation

(including any Certificate of Designations relating to any series of Preferred

Stock) that relates solely to the terms of one or more outstanding series of

Preferred Stock if the holders of such affected series are entitled, either

separately or together with the holders of one or more other such series, to

vote thereon pursuant to this Certificate of Incorporation (including any

Certificate of Designations relating to any series of Preferred Stock) or

pursuant to Delaware Law.

 

         SIX.     (1) The business and affairs of the Corporation shall be

managed by or under the direction of a Board of Directors; the exact number of

directors to be determined from time to time solely by resolution adopted by the

affirmative vote of a majority of the entire Board of Directors.

 

<PAGE>

 

                  (2) The directors shall be divided into three classes,

designated Class I, Class II and Class III. Each class shall consist, as nearly

as may be possible, of one-third of the total number of directors constituting

the entire Board of Directors. Each director shall serve for a term ending on

the date of the third annual meeting of stockholders next following the annual

meeting at which such director was elected, provided that directors initially

designated as Class I directors shall serve for a term ending on the date of the

2004 annual meeting, directors initially designated as Class II directors shall

serve for a term ending on the 2005 annual meeting, and directors initially

designated as Class III directors shall serve for a term ending on the date of

the 2006 annual meeting. Notwithstanding the foregoing, each director shall hold

office until such director's successor shall have been duly elected and

qualified or until such director's earlier death, resignation or removal. In the

event of any change in the number of directors, the Board of Directors shall

apportion any newly created directorships among, or reduce the number of

directorships in, such class or classes as shall equalize, as nearly as

possible, the number of directors in each class. In no event will a decrease in

the number of directors shorten the term of any incumbent director.

 

                  (3) The names of the persons who are to serve initially as

directors of each Class are:

 

<TABLE>

<S>                      <C>

Class I                    George James and Reed D. Taussig

 

Class II                   David Spreng and Terry Opdendyk

 

Class III                  Michael Braun

</TABLE>

 

                  (4) There shall be no cumulative voting in the election of

directors.

 

                  (5) Vacancies on the Board of Directors resulting from death,

resignation, removal or otherwise and newly created directorships resulting from

any increase in the number of directors may be filled solely by a majority of

the directors then in office (although less than a quorum) or by the sole

remaining director, and each director so elected shall hold office for a term

that shall coincide with the term of the Class to which such director shall have

been elected.

 

                  (6) No director may be removed from office by the stockholders

except for cause with the affirmative vote of the holders of not less than a

majority of the total voting power of all outstanding securities of the

Corporation then entitled to vote generally in the election of directors, voting

together as a single class.

 

         SEVEN.   Any action required or permitted to be taken at any annual or

special meeting of stockholders may be taken only upon the vote of stockholders

at an annual or special meeting duly noticed and called in accordance with the

Delaware Law, as amended from time to time, and may not be taken by written

consent of stockholders without a meeting.

 

         EIGHT.   Special meetings of the stockholders may be called by the

Board of Directors, the Chairman of the Board of Directors, the President or the

Secretary of the Corporation and may not be called by any other person.

 

         NINE.    Election of directors need not be by written ballot unless the

bylaws of the Corporation so provide.

 

         TEN.     (1)A director of the Corporation shall not be liable to the

Corporation or its stockholders for monetary damages for breach of fiduciary

duty as a director to the fullest extent permitted by Delaware Law.

 

<PAGE>

 

                  (2)(a) Each person (and the heirs, executors or administrators

of such person) who was or is a party or is threatened to be made a party to, or

is involved in any threatened, pending or completed action, suit or proceeding,

whether civil, criminal, administrative or investigative, by reason of the fact

that such person is or was a director or officer of the Corporation or is or was

serving at the request of the Corporation as a director or officer of another

corporation, partnership, joint venture, trust or other enterprise, shall be

indemnified and held harmless by the Corporation to the fullest extent permitted

by Delaware Law. The right to indemnification conferred in this ARTICLE TEN

shall also include the right to be paid by the Corporation the expenses incurred

in connection with any such proceeding in advance of its final disposition to

the fullest extent authorized by Delaware Law. The right to indemnification

conferred in this ARTICLE TEN shall be a contract right.

 

                     (b) The Corporation may, by action of its Board of

Directors, provide indemnification to such of the employees and agents of the

Corporation to such extent and to such effect as the Board of Directors shall

determine to be appropriate and authorized by Delaware Law.

 

                  (3) The Corporation shall have power to purchase and maintain

insurance on behalf of any person who is or was a director, officer, employee or

agent of the Corporation, or is or was serving at the request of the Corporation

as a director, officer, employee or agent of another corporation, partnership,

joint venture, trust or other enterprise against any expense, liability or loss

incurred by such person in any such capacity or arising out of such person's

status as such, whether or not the Corporation would have the power to indemnify

such person against such liability under Delaware Law.

 

                  (4) The rights and authority conferred in this ARTICLE TEN

shall not be exclusive of any other right which any person may otherwise have or

hereafter acquire.

 

                  (5) Neither the amendment nor repeal of this ARTICLE TEN, nor

the adoption of any provision of this Certificate of Incorporation or the bylaws

of the Corporation, nor, to the fullest extent permitted by Delaware Law, any

modification of law, shall eliminate or reduce the effect of this ARTICLE TEN in

respect of any acts or omissions occurring prior to such amendment, repeal,

adoption or modification.

 

         ELEVEN.  The Board of Directors shall have the power to adopt, amend or

repeal the bylaws of the Corporation.

 

         The stockholders may adopt, amend or repeal the bylaws only with the

affirmative vote of the holders of not less than sixty-six and two-thirds

percent of the total voting power of all outstanding securities of the

Corporation then entitled to vote generally in the election of directors, voting

together as a single class.

 

         TWELVE.  The Corporation reserves the right to amend this Certificate

of Incorporation in any manner permitted by the Delaware Law and all rights and

powers conferred upon stockholders, directors and officers herein are granted

subject to this reservation. Notwithstanding the foregoing, the provisions set

forth in ARTICLES SIX, SEVEN, EIGHT, TEN, ELEVEN and this ARTICLE TWELVE may not

be repealed or amended in any respect, and no other provision may be adopted,

amended or repealed which would have the effect of modifying or permitting the

circumvention of the provisions set forth in ARTICLES SIX, SEVEN, EIGHT, TEN,

ELEVEN or this ARTICLE TWELVE unless such action is approved by the affirmative

vote of the holders of not less than sixty-six and two-thirds percent of the

total voting power of all outstanding securities of the Corporation then

entitled to vote generally in the election of directors, voting together as a

single class."

 

      III.     The foregoing amendment and restatement of the Certificate of

Incorporation has been duly approved by the Board of Directors of the

Corporation.

 

      IV.      The foregoing amendment and restatement of the Certificate of

Incorporation has been duly approved by the written consent of the stockholders

in accordance with Delaware Law. The number of shares held by stockholders

 

<PAGE>

 

who consented to this amendment in writing equaled or exceeded the required

percentage. Pursuant to Section 228 of the Delaware General Corporation Law,

prompt written notice of this amendment and restatement has been or shall be

given to all stockholders who did not consent to this amendment.

 

We further declare under penalty of perjury under the laws of the State of

Delaware that the matters set forth in this certificate are true, correct and of

our own knowledge.

 

Executed at San Jose, California, on _______________, 2003.

 

                                                      /s/ Reed D. Taussig

                                                      --------------------------

                                                      Reed D. Taussig

                                                      President

 

                                                      /s/ Ron J. Fior

                                                      --------------------------

                                                      Ron J. Fior

                                                      Secretary

 

[As Filed: 2003-09-23]