ADDENDUM
TO
STOCK ISSUANCE AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Issuance Agreement (the "Issuance
Agreement") by and between SoftNet Systems, Inc. (the "Corporation") and
("Participant") evidencing the stock issuance made this day to Participant 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
such terms in the Issuance Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CORPORATE TRANSACTION/CHANGE IN CONTROL
1. To the extent the Repurchase Right is assigned to the
successor corporation (or parent thereof) in connection with a Corporate
Transaction, no accelerated vesting of the Purchased Shares shall occur upon
such Corporate Transaction, and the Repurchase Right shall continue to remain in
full force and effect in accordance with the provisions of the Issuance
Agreement. The Participant shall, over Participant's period of Service following
the Corporate Transaction, continue to vest in the Purchased Shares in one or
more installments in accordance with the provisions of the Issuance Agreement.
2. No accelerated vesting of the Purchased Shares shall occur
upon a Change in Control, and the Repurchase Right shall continue to remain in
full force and effect in accordance with the provisions of the Issuance
Agreement. The Participant shall, over Participant's period of Service following
the Change in Control, continue to vest in the Purchased Shares in one or more
installments in accordance with the provisions of the Issuance Agreement.
3. Immediately upon an Involuntary Termination of
Participant's Service within eighteen (18) months following the Corporate
Transaction or Change in Control, the Repurchase Right shall terminate
automatically, and all the Purchased Shares shall vest in full at that time.
4. For purposes of this Addendum, the following definitions
shall be in effect:
An Involuntary Termination shall mean the termination of Participant's
Service by reason of:
(i) Participant's involuntary dismissal or discharge by
the Corporation for reasons other than Misconduct, or
(ii) Participant's voluntary resignation following (A) a
change in Participant's position with the Corporation
(or Parent or Subsidiary employing Participant) which
materially reduces Participant's duties and
responsibilities or the level of management to which
Participant reports, (B) a reduction in Participant'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 Participant'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 Participant's consent.
A Change in Control shall be deemed to occur in the event of a change
in ownership orcontrol of the Corporation effected through either of the
following transactions:
(i) 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
(ii) 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
(A) have been Board members continuously since the
beginning of such period or (B) 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 (A) who were still in office at
the time the Board approved such election or
nomination.
Misconduct shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Participant, any unauthorized use or
disclosure by the Participant of confidential information or trade secrets of
the Corporation (or any Parent or Subsidiary), or any other intentional
misconduct by the Participant adversely affecting the business or affairs of the
Corporation (or any Parent or Subsidiary) in a material manner. The foregoing
definition shall not be deemed to be inclusive of all the acts or omissions
which the Corporation (or any Parent or Subsidiary) may consider as grounds for
the dismissal or discharge of the Participant or other person in the Service of
the Corporation (or any Parent or Subsidiary).
IN WITNESS WHEREOF, SoftNet Systems, Inc. has caused this
Addendum to be executed by its duly-authorized officer, effective as of the
Effective Date specified below.
SOFTNET SYSTEMS, INC.
By:_______________________________________
Title: _____________________________________
EFFECTIVE DATE:_____________________________________
