**EXHIBIT 10.2**

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**STOCKAPPRECIATION RIGHTS AGREEMENT**(STOCK SETTLED)

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This Stock AppreciationRights Agreement (this “*Agreement*”),dated as of **DATE** (the “*Effective Date*”), is between SoftBrands,Inc., a Delaware corporation (the “*Company*”)and **EMPLOYEE NAME**, (“*Participant*”).  This Agreement is granted under theSoftBrands, Inc. 2001 Stock Incentive Plan (the “*Plan*”) and is subject to the terms of that Plan.  Capitalized terms used in this Agreement andnot defined in this Agreement have the meanings assigned to them in thePlan.  This Agreement represents theCompany’s unfunded and unsecured promise to issue Common Stock of the Company,$.01 par value (“*Shares*”) at afuture date based on appreciation in the market value of such Shares from thedate of this Agreement, subject to the terms of this Agreement and the Plan.

 

1.       Award.    The Company hereby grants Participant stockappreciation rights (the “*SAR*”)with respect to **# OF SHARES**shares of Common Stock (the “*Award*”).  The initial value of the SAR is **PRICE** per share (the “*Grant Price*”).  The Award represents the right to receive theShares only when, and with respect to the number of Shares to which, the Awardhas vested (the “*Vested Shares*”).TheAward is subject to the terms and conditions set forth in this Agreement and inthe Plan.  A copy of the Plan will befurnished upon request of Participant.

 

2.       Vesting.    Subject to the terms and conditions of thisAgreement and the Plan, the SAR awarded to Participant pursuant to thisAgreement shall vest and may be exercised by Participant with respect to thenumber of Vested Shares set forth in the following schedule:

 
| **On or after Each of the  Following Dates** | ** ** | **Percentage of Shares with Respect to  Which the SAR Is Exercisable** | ** ** |
|----------------------------------------------|------------|------------------------------------------------------------------------|------------|
|                                         |       |                                                                   |       |
| First Anniversary of  the Effective Date     |       | 25                                                                     | %          |
| Second Anniversary of  the Effective Date    |       | 25                                                                     | %          |
| Third Anniversary of  the Effective Date     |       | 25                                                                     | %          |
| Fourth Anniversary of  the Effective Date    |       | 25                                                                     | %          |

 

3.       Exerciseof SAR after Death or Termination of Employment.    The SAR shall terminate and may no longerbe exercised if Participant ceases to be employed by the Company or itsaffiliates, except that:

 

### (a)           IfParticipant’s employment shall be terminated for any reason, voluntary orinvoluntary, other than for “*Cause*”(as defined in Section 3(d)) or Participant’s death or disability (withinthe meaning of Code Section 22(e)(3)), Participant may at any time withina period of ninety days after such termination exercise the SAR to the extentthe SAR was exercisable by Participant on the date of the termination ofParticipant’s employment.

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### (b)           IfParticipant’s employment is terminated for Cause, the SAR shall be terminatedas of the date of the act giving rise to such termination.

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### (c)           IfParticipant shall die while the SAR is still exercisable according to itsterms, or if employment is terminated because Participant has become disabled(within the meaning of Code Section 22(e)(3)) while in the employ of theCompany and Participant shall not have fully exercised the SAR, such SAR may beexercised at any time within 12 months after Participant’s death or date oftermination of employment for such disability by Participant, personalrepresentatives, administrators or guardians of Participant, as applicable, orby any person or persons to whom the SAR is transferred by will or theapplicable laws of descent and distribution, to the extent of the full numberof Vested Shares Participant was entitled to purchase under the SAR on(i) the earlier of the date of death or termination of employment or (ii) thedate of termination for such disability, as applicable.

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### (d)           Notwithstandingthe above, in no case may the SAR be exercised to any extent by anyone afterthe termination date of the SAR.

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### (e)           “*Cause*” means (i) Participant’s breachof any contractual obligation to the Company under the terms of the Plan, astock option agreement or any other agreement between Participant and theCompany, or of any fiduciary duty to the Company (ii) Participant’sconviction or plea bargain of any crime involving moral turpitude or any felony(iii) Participant’s failure to carry out any reasonable directive of theCompany, (iv) Participant’s embezzlement of funds of the Company,(v) any conduct by Participant which is detrimental to the Company,(vi) any failure by Participant to comply with the policies or performancestandards of the Company, or (vii) a demonstrated lack of commitment ofParticipant to the Company.

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4.       Methodof Exercise of SAR.

 

## (a)           SARsmay be exercised with respect to Vested Shares by delivery to the Company of awritten notice which shall state that Participant**elects to exercise the SAR as to the number of VestedShares specified in the notice as of the date specified in the notice.

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## (b)           Subject todeduction as described in Section 4(c) for withholding, upon exercise of theSAR, the Participant shall be entitled to receive a number of Shares (“IssuedShares”) for each Vested Share with respect to which the SAR is exercised thatis equal to (i) the excess of the Fair Market Value of one Share on the date ofexercise, over the Grant Price, divided by (ii) the Fair Market Value of oneShare on the date of exercise.  Thedistribution to the Participant, or in the case of the Participant’s death, tothe Participant’s legal representative, of Issued Shares shall be evidenced bya stock certificate, appropriate entry on the books of the Company or of a dulyauthorized transfer agent of the Company, or other appropriate means asdetermined by the Company.  In the eventownership or issuance of Issued Shares is not feasible due to applicableexchange controls, securities regulations, tax laws or other provisions ofapplicable law, as determined by the Company in its sole discretion,Participant, or in the event of Participant’s death, the Participant’s legalrepresentative, shall receive cash

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## proceeds in an amount equal to the value of the IssuedShares otherwise distributable to Participant.

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## (c)           Bysigning this Agreement, Participant agrees that the Company may withhold fromthe Participant’s wages or other cash compensation, or at the sole election ofthe Company from Issued Shares due upon exercise of the SAR, all income tax(including federal, state and local taxes), social insurance, payroll tax orother tax-related withholding (“Tax Related Items”) due from the Company or thesubsidiary that is the Participant’s actual employer. In this regard,Participant authorizes the Company or the Participant’s actual employer towithhold all applicable Tax Related Items legally payable by Participant fromParticipant’s wages or other cash compensation payable to Participant by theCompany or the Participant’s actual employer. To the extent that the Company determines that it is not feasible towithhold from wages, or not permissible under applicable law to withhold inShares, then prior to the issuance of Issued Shares or the receipt of anequivalent cash payment as provided in Section 4(b) above, Participant shallpay, or make adequate arrangements satisfactory to the Company or to theParticipant’s actual employer (in their sole discretion) to satisfy allwithholding obligations of the Company and/or the Participant’s actualemployer. Participant shall pay to the Company or to the Participant’s actualemployer any amount of Tax Related Items that the Company or the Participant’sactual employer may be required to withhold as a result of Participant’sreceipt of the Award, the vesting of the Award, or exercise of the Award thatcannot be satisfied by the means previously described. The Company may refuseto deliver Issued Shares to Participant if Participant fails to comply withParticipant’s obligation in connection with the Tax Related Items as describedherein.

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Regardlessof any action the Company or the subsidiary of the Company that is Participant’sactual employer takes with respect to any or all Tax Related Items, Participantacknowledges that the ultimate liability for all Tax Related Items legally dueby Participant is and remains Participant’s responsibility and that the Companyand/or the Participant’s actual employer (i) make no representations orundertakings regarding the treatment of any Tax Related Items in connectionwith any aspect of the Award, including the grant of the Award, the vesting ofAward, the exercise of the Award or the receipt of the above cash payment; and(ii) do not commit to structure the terms of the grant or any aspect of theAward to reduce or eliminate the Participant’s liability for Tax Related Items.

 

5.       AdditionalRestrictions on Transfer of SAR.    Duringthe lifetime of Participant, the SAR shall be exercisable only by Participantand shall not be sold, assigned, transferred, gifted, pledged, hypothecated, orin any manner encumbered or disposed of at any time prior to delivery of the IssuedShares in accordance with Section 4, other than by will or the laws ofdescent and distribution.

 

6.       Termination.    The SAR shall terminate at the close ofbusiness five years from the date of this Agreement.

 

7.       Miscellaneous.    Plan Provisions Control.  In the event that any provision of thisAgreement conflicts with or is inconsistent in any respect with the terms ofthe Plan, the terms of the Plan shall control.

 

## (a)           NoRights of Stockholders.  Prior to theexercise of the SAR and prior to receipt by the Participant, Participant’slegal representative or a permissible assignee of

 

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## Issue Shares as provided in this Agreement, neitherParticipant, Participant’s legal representative nor a permissible assignee ofthe SAR shall be or have any of the rights and privileges of a stockholder ofthe Company with respect to this Agreement or the Shares referenced in thisAgreement.

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## (b)           Distributionand Adjustment.  In accordance withSection 4(c) of the Plan, the Award is subject to adjustment in the eventthat any distribution, recapitalization, reorganization, merger or other eventcovered by Section 4(c) of the Plan shall occur.

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## (c)           NoRight to Employment.  The grant ofthe SAR shall not be construed as giving Participant the right to be retainedin the employ of the Company or any Affiliate, or as giving a director of theCompany or an Affiliate the right to continue as a director of the Company oran Affiliate with, the Company or an Affiliate, nor will it affect in any waythe right of the Company or an Affiliate to terminate such employment orposition at any time, with or without cause. In addition, the Company or an Affiliate may at any time dismissParticipant from employment, or terminate the term of a director of the Companyor an Affiliate, free from any liability or any claim under the Plan or thisAgreement.  Nothing in this Agreement shall confer on any personany legal or equitable right against the Company or any Affiliate, directly orindirectly, or give rise to any cause of action at law or in equity against theCompany or an Affiliate.  The SAR grantedunder this Agreement shall not form any part of the wages or salary ofParticipant for purposes of severance pay or termination indemnities,irrespective of the reason for termination of employment.  Under no circumstances shall any personceasing to be an employee of the Company or any Affiliate be entitled to anycompensation for any loss of any right or benefit under this Agreement or the Planwhich such employee might otherwise have enjoyed but for termination ofemployment, whether such compensation is claimed by way of damages for wrongfulor unfair dismissal, breach of contract or otherwise.  By participating in the Plan, Participant shallbe deemed to have accepted all the terms and conditions of the Plan and thisAgreement and the terms and conditions of any rules and regulations adopted bythe Committee and shall be fully bound thereby.

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## (d)           GoverningLaw.  The validity, construction andeffect of the Plan and this Agreement, and any rules and regulations relatingto the Plan and this Agreement, shall be determined in accordance with theinternal laws, and not the law of conflicts, of the State of Minnesota.

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## (e)           Severability.  If any provision of this Agreement is orbecomes or is deemed to be invalid, illegal or unenforceable in anyjurisdiction or would disqualify the Plan or any Award under any law deemedapplicable by the Committee, such provision shall be construed or deemed amendedto conform to applicable laws, or if it cannot be so construed or deemedamended without, in the determination of the Committee, materially altering thepurpose or intent of the Plan or the Award, such provision shall be stricken asto such jurisdiction or Award, and the remainder of this Agreement shall remainin full force and effect.

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## (f)            NoTrust or Fund Created.  Neither thePlan nor this Agreement shall create or be construed to create a trust orseparate fund of any kind or a fiduciary relationship between the Company orany Affiliate and Participant or any other person.  To the extent that any Person acquires aright to receive payments from the Company or

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## any Affiliate pursuant to an Award, such right shallbe no greater than the right of any unsecured creditor of the Company or anyAffiliate.

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## (g)           OtherBenefits.  No compensation or benefitawarded to or realized by Participant under the Plan or this Agreement shall beincluded for the purpose of computing Participant’s compensation under anycompensation-based retirement, disability or similar plan of the Company unlessrequired by law or otherwise provided by such other plan.

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## (h)           NoFractional Shares.  No fractionalShares shall be issued or delivered pursuant to the Plan or this Agreement, andthe Committee shall determine whether cash shall be paid in lieu of anyfractional Shares or whether such fractional Shares or any rights thereto shallbe canceled, terminated or otherwise eliminated.

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## (i)            Headings.  Headings are given to the Sections andsubsections of this Agreement solely as a convenience to facilitatereference.  Such headings shall not bedeemed in any way material or relevant to the construction or interpretation ofthis Agreement or any provision thereof.

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## (j)            Confidentiality.  Participant shall not disclose either thecontents or any of the terms and conditions of this Agreement to any otherperson and agrees that such disclosure may result in both immediate terminationof the SAR without the right to exercise any part thereof and termination ofemployment with the Company.

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## (k)           Notices.  All notices, claims, certificates, requests,demands and other communications hereunder shall be in writing and shall bedeemed to have been duly given and delivered if personally delivered or if sentby nationally recognized overnight courier, by facsimile or by registered orcertified mail, return receipt requested and postage prepaid, addressed asfollows:

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| (i)    |   | If to the Company, to it at:                |
|--------|--------|---------------------------------------------|
|   |   |                                        |
|   |   | SoftBrands, Inc.                            |
|   |   | Two Meridian Crossings, Suite 800           |
|   |   | Minneapolis, MN 55423                       |
|   |   | Attn: Vice President – Human Resources |

 

#### (ii)           Ifto Participant, to such address as most recently supplied to the Company byParticipant and set forth in the Company’s records; or

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#### (iii)          tosuch other address as the party to whom notice is to be given may havefurnished to the other party in writing in accordance with thisSection 7(l).

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Any such notice or communication shall be deemed tohave been received (i) in the case of personal delivery, on the date ofsuch delivery (or if such date is not a business day, on the next businessday), (ii) in the case of nationally-recognized overnight courier, on thenext business day after the date sent, (iii) in the case of facsimile transmission,when received (or if not sent on a business day, on the next business day afterthe date sent) and (iv) in the case of mailing, on the

 

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third business day following the date on which the piece of mailcontaining such communication is posted.

 

## (l)            Waiverof Breach. The waiver by either party of a breach of any provision of thisAgreement must be in writing and shall not operate or be construed as a waiverof any other or subsequent breach.

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## (m)          Undertaking.  Both parties hereby agree to take whateveradditional actions and execute whatever additional documents either party mayin their reasonable judgment deem necessary or advisable in order to carry outor effect one or more of the obligations or restrictions imposed on the otherparty under the provisions of this Agreement.

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## (n)           Counterparts.  This Agreement may be executed in one or morecounterparts, and each such counterpart shall be deemed to be an original, butall such counterparts together shall constitute but one agreement.

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## (o)           EntireAgreement.  This Agreement (and theother writings incorporated by reference herein, including the Plan)constitutes the entire agreement between the parties with respect to thesubject matter hereof and supersedes all prior or contemporaneous written ororal negotiations, commitments, representations and agreements with respectthereto.

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**IN WITNESSWHEREOF**, the Company and Participant have executedthis Agreement on the date set forth in the first paragraph.

 

 
|       | **SOFTBRANDS,  INC.** |
|------------|-----------------------|
|       | ** **            |
|       | ** **            |
|       | By:                   | ** ** | ** ** |
| ** ** | Name:                 | David G. Latzke | ** ** |
| ** ** | Title:                | SVP & CFO | ** ** |
| ** ** | ** **            | ** ** |
| ** ** | ** **            | ** ** |
| ** ** | **PARTICIPANT**       |
| ** ** | ** **            | ** ** |
| ** ** | ** **            | ** ** |
| ** ** | By:                   | ** ** | ** ** | ** ** |
| ** ** | Name:                 | **EMPLOYEE NAME** | ** ** |
|            |                       |  |  |  |  |  |  |

 

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