Exhibit 10.1


 


AMENDMENT
N0. 1 TO


EMPLOYMENT
AGREEMENT


 


This Amendment is made and entered into this 1st day
of March, 2006 between SoftBrands, Inc. (the “Company”) and David G.
Latzke (“Executive”).


 


WHEREAS, Executive and the Company are parties to that
certain Employment Agreement dated as of January 1, 2002 (the “Employment
Agreement”);


 


WHEREAS, Executive has been Senior Vice President,
Chief Financial Officer, and Secretary of the Company since its formation and
has been instrumental in the success of separating the Company from its
predecessor corporation and its problems, establishing financing for the
Company in a manner adequate to support its operations and its growth, and
establishing controls and financial reporting systems at the Company that allowed
it to regain public reporting and listing status;


 


WHEREAS, Executive served as Chief Financial Officer
of Fourth Shift Corporation, a company whose operations constitute
approximately 80% of the Company’s current operations, from 1994 until its acquisition
by the Company’s predecessor;


 


WHEREAS, Executive is an extremely valued and integral
member of the Company’s senior management team;


 


WHEREAS, Executive has indicated his desire to pursue
other ventures that maximize his abilities, but has indicated his willingness
to assist the Company in transition to a new financial executive;


 


WHEREAS, the Company wishes to secure Executive’s
continued assistance and to provide Executive with the severance benefits to
which he is entitled.


 


NOW, THEREFORE, 
in consideration of the foregoing recitals, and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged. the parties agree as follows:


 


1.  Continued
Assistance.  Executive agrees to
continue to serve as Senior Vice President, Chief Financial Officer and
Secretary of the Company until the earlier to occur of (1) June 30,
2006, (2) thirty days after notice from Executive that he is terminating
such position to pursue an alternative position, or (3) thirty days after
the Company has notified Executive that it has found a replacement financial
officer (the earlier of such three dates being hereafter referred to as the “Termination
Date”).  In addition to his regular
duties, Executive agrees to work with the Company through the Termination Date
to find a suitable replacement to Executive, and to provide assistance to the
Company and to such replacement in transitioning his duties.  The Company acknowledges and agrees that
Executive shall nevertheless be allowed, after the date of this Amendment and
through the Termination Date, to pursue engagement in an alternative 


 


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position or positions,
including devoting such time during regular working hours as does not
materially detract from the continued performance of his duties.


 


2.   Resignation
as of Termination Date.  Executive
agrees that he shall have resigned all positions as an officer of the Company,
and as an officer or director or both of any direct or indirect subsidiary of
the Company, as of the Termination Date.


 


3.  Effect
on, and Amendment to, Employment Agreement. 
In consideration of Executive’s commitment pursuant to paragraph 1, for
all purposes of the Employment Agreement, Executive shall be deemed to have
been terminated without cause by the Company as of the Termination Date, and
shall be entitled to the benefits set forth in Section 4.5 of the
Employment Agreement commencing on and as of the Termination Date; provided,
however, that any such benefits that relate to periods after March 15,
2007 shall be paid in lump sum prior to March 15, 2007.  For purposes of clarification, in addition to
Options, all stock based benefits, including stock appreciation rights and
restricted stock units, shall vest on the Termination Date, but restricted
stock units shall be paid out immediately, and stock appreciation rights shall
remain exercisable until five years from the date of grant of the same.


 


4. 
Effect of Pending Change
of Control.  In
the event that prior to the Termination Date the Company executes an agreement,
or a letter of intent, that relates to a transaction that, if consummated would
constitute a change of control (as defined in Section 4.6 of the
Employment Agreement), and actually consummates such a change of control within
one hundred and twenty days (120) of the Termination Date, then Executive’s
termination on the Termination Date shall, notwithstanding paragraph 3 above,
be deemed a Change of Control Termination (as defined in the Employment
Agreement) and Executive shall be entitled to an additional payment, as of the
date of consummation of such change of control, equal to the difference between
any payments actually made pursuant to Section 4.5 of the Employment
Agreement and any payments that would have been due under Section 4.6 of
the Employment Agreement.  The Company
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise), as a result of any such change of control, by
agreement in form and substance satisfactory to Executive, to expressly assume
and agree to perform the obligations under this paragraph 4 and under Section 4.6
of the Employment Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken
place.  Failure of the Company to obtain
such agreement prior to the effectiveness of any such succession shall be a
breach of this Amendment and shall entitle Executive to compensation from the Company
in the same amount and on the same terms as Executive would be entitled
hereunder.  As used in herein, “Company”
shall mean the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid which executes and delivers the agreement
provided for in this paragraph 4 or which otherwise becomes bound by all the
terms and provisions of this Amendment by operation of law.


 


5.  Continuation.  Except as set forth herein, the Employment
Agreement shall continue in effect without alteration or amendment.


 


	
  SOFTBRANDS, INC.

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
  By: 

  	
  /s/ RANDAL TOFTELAND

  	
   

  	
     /s/ DAVID G. LATZKE

  	
   

  
	
  Randal Tofteland, Chief Executive Officer

  	
  David G.
  Latzke

  	
   

  
					



 


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