ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement (the "Option
Agreement") by and between SoftNet Systems, Inc. (the "Corporation") and
("Optionee") evidencing the stock option (the "Option") granted this day to
Optionee under the terms of the Corporation's 1999 Supplemental Stock Incentive
Plan, and such provisions are effective immediately. All capitalized terms in
this Addendum, to the extent not otherwise defined herein, shall have the
meanings assigned to them in the Option Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CORPORATE TRANSACTION/CHANGE IN CONTROL
1. To the extent the Option is, in connection with a Corporate
Transaction, to be assumed in accordance with Paragraph 6 of the Option
Agreement, the Option shall not accelerate upon the occurrence of that Corporate
Transaction, and the Option shall accordingly continue, over Optionee's period
of Service after the Corporate Transaction, to become exercisable for the Option
Shares in one or more installments in accordance with the provisions of the
Option Agreement. However, immediately upon an Involuntary Termination of
Optionee's Service within eighteen (18) months following such Corporate
Transaction, the assumed Option, to the extent outstanding at the time but not
otherwise fully exercisable, shall automatically accelerate so that the Option
shall become immediately exercisable for all the Option Shares at the time
subject to the Option and may be exercised for any or all of those Option Shares
as fully vested shares.
2. The Option shall not accelerate upon the occurrence of a
Change in Control, and the Option shall, over Optionee's period of Service
following such Change in Control, continue to become exercisable for the Option
Shares in one or more installments in accordance with the provisions of the
Option Agreement. However, immediately upon an Involuntary Termination of
Optionee's Service within eighteen (18) months following the Change in Control,
the Option, to the extent outstanding at the time but not otherwise fully
exercisable, shall automatically accelerate so that the Option shall become
immediately exercisable for all the Option Shares at the time subject to the
Option and may be exercised for any or all of those Option Shares as fully
vested shares.
3. The Option as accelerated pursuant to this Addendum shall
remain so exercisable until the earlier of (i) the Expiration Date or (ii) the
expiration of the one (1)-year period measured from the date of the Optionee's
Involuntary Termination.
4. For purposes of this Addendum the following definitions
shall be in effect:
(i) An Involuntary Termination shall mean the
termination of Optionee's Service by reason of:
(A) Optionee's involuntary dismissal or
discharge by the Corporation for reasons other than
Misconduct, or
(B) Optionee's voluntary resignation
following (A) a change in Optionee's position with
the Corporation (or Parent or Subsidiary employing
Optionee) which materially reduces Optionee's duties
and responsibilities or the level of management to
which Optionee reports, (B) a reduction in Optionee's
level of compensation (including base salary, fringe
benefits and target bonus under any corporate
performance based bonus or incentive programs) by
more than fifteen percent (15%) or (C) a relocation
of Optionee's place of employment by more than fifty
(50) miles, provided and only if such change,
reduction or relocation is effected by the
Corporation without Optionee's consent.
(ii) A Change in Control shall be deemed to occur in
the event of a change in ownership or control of the Corporation
effected through either of the following transactions:
(A) the acquisition, directly or indirectly,
by any person or related group of persons (other than
the Corporation or a person that directly or
indirectly controls, is controlled by, or is under
common control with, the Corporation) of beneficial
ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of
securities possessing more than fifty percent (50%)
of the total combined voting power of the
Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the
Corporation's stockholders, or
(B) a change in the composition of the Board
over a period of thirty-six (36) consecutive months
or less such that a majority of the Board members
ceases, by reason of one or more contested elections
for Board membership, to be comprised of individuals
who either (i) have been Board members continuously
since the beginning of such period or (ii) have been
elected or nominated for election as Board members
during such period by at least a majority of the
Board members described in clause (i) who were still
in office at the time the Board approved such
election or nomination.
5. The provisions of Paragraph 1 of this Addendum shall govern
the period for which the Option is to remain exercisable following the
Involuntary Termination of Optionee's Service within eighteen (18) months after
the Corporate Transaction or Change in Control and shall supersede any
provisions to the contrary in Paragraph 5 of the Option Agreement.
IN WITNESS WHEREOF, SoftNet Systems, Inc. has caused this
Addendum to be executed by its duly-authorized officer as of the Effective Date
specified below.
SOFTNET SYSTEMS, INC.
By: ______________________________________
Title: ____________________________________
EFFECTIVE DATE:
