Document:

EXHIBIT 10.1

January 31, 2006

Mr. Steven R. Springsteel 

20400 Steven Creek Boulevard, Suite 400

Cupertino, CA 95014

Dear Steve:

This letter sets forth the terms and conditions of your employment with
Chordiant Software, Inc. (the "Company" or "Chordiant") as its President and
Chief Executive Officer reporting directly to the Board of Directors (the
"Board"). Upon execution by the parties, this letter agreement shall be deemed
effective February 1, 2006. 

  

  1. As President and Chief Executive Officer of Chordiant, you will perform the
  duties customarily associated with this position and such duties commensurate
  with your position as may be assigned to you by the Board.

  2. Your annual base salary will be $495,000, less standard payroll deductions
  and withholdings, paid on the Company's regular payroll dates. The
  Compensation Committee of the Board will review your base salary in the last
  calendar quarter of 2006, however the Board is not obligated to increase your
  base salary at that time.

  3. You will be eligible for bonuses under Chordiant's 2006 Executive Bonus
  Plan (prorated for the second quarter of 2006. Your target bonus for the 2006
  fiscal year is 80% of your prorated base salary. Except as otherwise set forth
  in this paragraph concerning your eligibility for participation, bonuses will
  be earned, calculated and paid under the terms and conditions set forth in the
  2006 Executive Bonus Plan.

  4. Subject to approval by the Board, upon acceptance of this offer, you will
  be granted an option ("Initial Option") for one million shares (1,000,000) of
  common stock of the Company under the Company's 2005 Equity Incentive Plan.
  The Initial Option will be subject to a four year vesting schedule (1/48 per
  month), and shall be governed in all respects by the terms and conditions
  specified in the applicable plan documents and option agreement between you
  and the Company. Notwithstanding the foregoing, the terms of this offer letter
  relating to vesting in the event of a Change of Control (as defined below), a
  resignation for Good Reason (as defined below), or termination without Cause
  (as defined below) shall govern in the event of a conflict between this offer
  letter and any applicable plan documents, option agreements or restricted
  share agreements. 

  5. You will be eligible for all standard Company benefits, including four
  weeks' paid vacation and medical and dental coverage as well as the following
  non-standard benefit: a term life insurance policy in the amount of $1,000,000
  (with premiums paid by the Company.) For purposes of Company benefits, you
  will be given service credit for your prior tenure with the Company. The
  Company reserves the right to modify your compensation and benefits from time
  to time, as it deems necessary.

  6. As a condition of your employment, you will be expected to abide by the
  Company's written policies and procedures, and to sign and comply with the
  Company's standard form of Proprietary Information and Inventions Agreement.
  The Company is committed to maintaining a high standard of business conduct
  and ethics. As a condition of your employment, you will be expected to: (i)
  fully comply with the Company's Code of Business Conduct and Ethics, (ii)
  perform your duties in compliance with law, (iii) report to the Board of
  Directors in candor and absolute truthfulness, and (iv) assist in the
  development and implementation of effective internal control over financial
  reporting.

  7. In the event of the consummation of a Change in Control (as defined
  herein), the Company will accelerate the vesting of any equity compensation
  that you have been granted (other than the Initial Option) as of the effective
  date of the Change in Control such that the equity compensation shall be fully
  vested for such additional twelve (12) month period as of the effective date
  of the Change in Control. In the case of the Initial Option, the Initial
  Option shall become fully vested as of the effective date of the Change of
  Control. As a condition to receiving such additional vesting, you agree that
  you shall provide the Company with a full and effective release and waiver of
  any claims or rights against the Company or related parties in the form
  attached as Exhibit A. Following such Change in Control, you shall continue to
  vest in the remaining award in accordance with the original vesting schedule
  (after giving effect to the foregoing acceleration) at the same rate as
  immediately prior to the Change in Control provided that you continue to
  remain employed with the Company as of each vesting date.

  For purposes of this offer letter, a Change in Control shall mean: (i) a
  dissolution, liquidation or sale of all or substantially all of the assets of
  the Company; (ii) a merger or consolidation in which the Company is not the
  surviving corporation; (iii) a reverse merger in which the Company is the
  surviving corporation but the shares of the Company's common stock outstanding
  immediately preceding the merger are converted by virtue of the merger into
  other property, whether in the form of securities, cash or otherwise; or (iv)
  the acquisition by any person, entity or group within the meaning of Section
  13(d) or 14(d) of the Exchange Act, or any comparable successor provisions
  (excluding any employee benefit plan, or related trust, sponsored or
  maintained by the Company or any affiliate of the Company) of the beneficial
  ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
  Act, or comparable successor rule) of securities of the Company representing
  at least fifty percent (50%) of the combined voting power entitled to vote in
  the election of directors.

  8. Either you or the Company may terminate your employment relationship at any
  time with or without Cause. If the Company terminates your employment without
  Cause (as defined herein) at any time, or you resign your employment for Good
  Reason (as defined herein) at any time, then: (i) the Company will make
  severance payments to you in the form of monthly payments in the amount of one
  hundred thousand dollars ($100,000) for ten (10) months following the
  termination date, payable on the Company's ordinary payroll dates, subject to
  standard payroll deductions and withholdings; provided, however, that the
  Company shall defer or accelerate such payments as required to avoid the
  imposition of additional taxes under Internal Revenue Code Section 409A; and
  (ii) the vesting of any equity compensation that you have been granted through
  the last day of your employment will automatically accelerate such that the
  shares subject to each grant that would have vested had you remained employed
  for one year beyond the termination date will be fully vested for such
  additional one year period as of the termination date. Such acceleration shall
  be in addition to any accelerated vesting you previously received upon the
  consummation of a Change of Control but in no event the amount of equity
  compensation in which you shall vest shall exceed the amount of the original
  grant. As a condition to receiving any of these severance benefits, you agree
  that you shall provide the Company with a full and effective release and
  waiver of any claims or rights against the Company or related parties in the
  form attached as Exhibit A.

  If you resign without Good Reason or your employment is terminated for Cause,
  all compensation and benefits will cease immediately, and you will receive no
  further compensation or benefits from the Company, including (without
  limitation) the items listed in the preceding paragraph.

  For purposes of this offer letter, "Cause" shall mean: (i) conviction of, or
  plea of nolo contendere to, a felony; (ii) participation in a fraud against
  the Company; (iii) participation in an act of dishonesty against the Company
  intended to result in your substantial personal enrichment; (iv) willful
  material breach of the Company's written policies; (v) intentional significant
  damage to the Company's property; (vi) material breach of this offer letter or
  your Proprietary Information and Inventions Agreement; or (vii) conduct by you
  that, in the good faith and reasonable determination of the Board,
  demonstrates gross unfitness to serve provided that in such event, the Company
  shall provide notice to you describing the nature of the gross unfitness and
  you shall thereafter have ten (10) days to cure such gross unfitness if such
  gross unfitness is capable of being cured. The Company may not terminate your
  employment for Cause unless and until you receive a copy of a resolution duly
  adopted by the affirmative vote of at least a majority of the Board of
  Directors of the Company ("Board") finding that in the good faith opinion of
  the Board, you were guilty of the conduct constituting "Cause" and specifying
  the particulars thereof in detail. The Company shall provide you with
  reasonable notice of the Board vote and an opportunity for you, together with
  your counsel, to be heard before the Board vote. Physical disability will not
  constitute Cause.

  For purposes of this letter offer letter, "Good Reason" shall mean that any
  one of the following events occurs during your employment with the Company
  without your consent: (i) any reduction in your annual base salary and bonus
  opportunity, except to the extent that the annual base salaries and bonus
  opportunities of all other executive officers of the Company are similarly
  reduced; (ii) any material reduction in your benefits and incentives, or any
  action by the Company that would materially and adversely affect your
  participation in, or reduce your benefits under any such plans, except to the
  extent that such benefits and incentives of all other executive officers of
  the Company are similarly reduced; (iii) any material change in your position
  or responsibilities (including a change in your title without your consent or
  your ceasing to report to the Board) that represents an adverse change from
  your position or responsibilities, excluding for this purpose an isolated,
  insubstantial and inadvertent action not taken in bad faith that is remedied
  by the Company promptly after you give notice thereof; (iv) the Company's
  requiring you to relocate to any place outside of a twenty-five (25) mile
  driving distance of your current work site, except for reasonably required
  travel on the business of the Company or its affiliates or unless you accept
  such relocation opportunity; (v) any failure to pay you any compensation or
  benefits to which you are entitled within fifteen (15) days of the date due;
  or (vi) the Board's failure to re-nominate you as a member of the Board of
  Directors upon the expiration of your Board term. You may terminate your
  employment for Good Reason so long as you tender your resignation to the
  Company within thirty (30) days after the occurrence of the event that forms
  the basis for the resignation for Good Reason; provided, however, that first
  you shall provide written notice to the Company describing the nature of the
  event that you believe forms the basis for your resignation for Good Reason,
  and the Company shall thereafter have ten (10) days to cure such event.

  9. The Company agrees to directly pay your legal fees associated with entering
  into this offer letter, up to $15,000, upon receiving invoices for such
  services.

  10. In the event that the payments and benefits provided for in this offer
  letter (such payments and benefits hereinafter referred to as "Payments")
  constitute "parachute payments" within the meaning of Section 280G of the
  Internal Revenue Code of 1986, as amended (the "Code"), would be subject to
  the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), and the
  aggregate value of such Payments, as determined in accordance with Section
  280G of the Code and the Treasury Regulations thereunder is less than the
  product obtained by multiplying 3.59 by your "base amount" within the meaning
  of Code Section 280G(b)(3), then such Payments shall be reduced to the extent
  necessary (but only to that extent) so that no portion of such Payments will
  be subject to the Excise Tax. Alternatively, in the event that the Payments
  constitute "parachute payments" within the meaning of Section 280G of the
  Code, the Payments would be subject to the Excise Tax, and the aggregate value
  of the Payments, as determined in accordance with Section 280G of the Code and
  the Treasury Regulations thereunder is equal to or greater than the product
  obtained by multiplying 3.59 by your "base amount" within the meaning of Code
  Section 280G(b)(3), then you shall receive (i) a payment from the Company
  sufficient to pay such excise tax plus any interest or penalties incurred by
  you with respect to such excise tax, plus (ii) an additional payment from the
  Company sufficient to pay the excise tax and federal and state income and
  employment taxes arising from the payments made by the Company to you pursuant
  to this sentence (together, the "Excise Tax Gross-Up Payment").
  Notwithstanding anything to the contrary set forth herein, the maximum amount
  of the Excise Tax Gross - Up Payment which the Company shall be obligated to
  pay shall be $1,500,000.

  For purposes of determining whether any of the Payments will be subject to the
  Excise Tax and the amount of such Excise Tax: (i) any other payments or
  benefits received or to be received by you in connection with transactions
  contemplated by a Change in Control, including your termination of employment
  (whether pursuant to the terms of this offer letter or any other plan,
  arrangement or agreement with the Company), shall be treated as "parachute
  payments" within the meaning of Section 280G of the Code or any similar or
  successor provision, and all "excess parachute payments" within the meaning of
  Section 280G or any similar or successor provision shall be treated as subject
  to the Excise Tax, unless in the opinion of tax counsel selected by the
  Company such other payments or benefits (in whole or in part) do not
  constitute parachute payments, or such parachute payments (in whole or in
  part) represent reasonable compensation for services actually rendered within
  the meaning of Section 280G (or any similar or successor provision of the
  Code) in excess of the base amount within the meaning of Section 280G (or any
  similar or successor provision of the Code), or such Payments are otherwise
  not subject to the Excise Tax; (ii) the amount of the Payments which shall be
  treated as subject to the Excise Tax shall be equal to the lesser of (a) the
  total amount of the Payments or (b) the amount of the excess parachute
  payments within the meaning of Section 280G; (iii) the value of any non-cash
  benefits or any deferred payment or benefit and any related determinations
  shall be made by the accounting firm that is the Company's outside tax
  accountants at the time of such determination, which firm must be reasonably
  acceptable to you (the "Accounting Firm") in accordance with the principles of
  Section 280G of the Code.

  For purposes of determining the amount of the Excise Tax Gross-Up Payment, you
  shall be deemed to pay federal income taxes at the highest marginal rate of
  federal income taxation in the calendar year in which the Excise Tax Gross-Up
  Payment is to be made and state and local income taxes at the highest marginal
  rate of taxation in the state and locality of your residence on the date the
  Excise Tax Gross-Up Payment is to be made, net of the permissible reduction in
  federal income taxes which could be obtained from deduction of such state and
  local taxes.

  In the event that the Excise Tax is subsequently determined to be less than
  the amount taken into account under this paragraph 10, you shall repay to the
  Company (promptly following the time at which the amount of such reduction in
  Excise Tax is finally determined the portion of the Excise Tax Gross-Up
  Payment attributable to such reduction (plus the portion of the Excise Tax
  Gross-Up Payment attributable to the Excise Tax and federal, state and local
  income tax imposed on the Excise Tax Gross-Up Payment being repaid by you if
  such repayment results in a reduction in Excise Tax and/or a federal, state or
  local income tax deduction) plus interest on the amount of such repayment at
  the rate provided in Section 1274(b)(2)(B) of the Code.

  In the event that the Excise Tax is subsequently determined to exceed the
  amount taken into account under this paragraph 10 (including by reason of any
  payment the existence or amount of which cannot be determined at the time of
  the Excise Tax Gross-Up Payment), the Company shall make an additional Excise
  Tax Gross-Up Payment in respect of such excess (plus any interest payable with
  respect to such excess at the rate provided in Section 1274(b)(2)(B) of the
  Code) promptly following the time at which the amount of such excess is
  finally determined in accordance with the principles set forth in this
  paragraph 10.

  All determinations required to be made under this paragraph 10 shall be made
  by the Accounting Firm. The Company shall cause the Accounting Firm to provide
  detailed supporting calculations of its determinations to the Company and you.
  All fees and expenses of the Accounting Firm shall be borne solely by the
  Company. The Accounting Firm's determinations must be made with substantial
  authority (within the meaning of Section 6662 of the Code).

  11. This offer letter, together with any applicable restricted share and other
  equity compensation agreements, and your Proprietary Information and
  Inventions Agreement, constitute the complete, final and exclusive embodiment
  of the entire agreement between you and Chordiant with respect to the terms
  and conditions of your employment. In entering into this offer letter, neither
  party is relying upon any promise or representation, written or oral, other
  than those expressly contained herein, and this offer letter supersedes any
  other such promises, representations or agreements. It may not be amended or
  modified except in a written agreement signed by you and a duly authorized
  Company officer. As required by law, this offer of employment is subject to
  proof of your right to work in the United States.

  

  

  If you agree to the terms as described above, please sign below and return
  this letter to me. 

  Very truly yours,

  

  /s/ Sam Spadafora

  Sam Spadafora

  Chairman of the Board of Directors

  Chordiant Software, Inc.

  

  

  

  Agreed and Accepted:

  By: /s/ Steven R. Springsteel____________________ 

  Steven R. Springsteel

  

  Date: _January 31, 2006________________________

  Exhibit A

RELEASE AGREEMENT FOR EMPLOYEES 40
YEARS OF AGE OR OLDER

 

In exchange for the severance or change in control
benefits I am receiving to which I would not otherwise be entitled, I hereby
release, acquit and forever discharge the Company, and its officers, directors,
agents, servants, employees, attorneys, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys' fees, damages, indemnities and obligations
of every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed, arising out of or in any
way related to agreements, events, acts or conduct at any time prior to and
including the execution date of this Release Agreement, including but not
limited to: all such claims and demands directly or indirectly arising out of or
in any way connected with my employment with the Company or the termination of
that employment; claims or demands related to salary, bonuses, commissions,
stock, stock options, or any other ownership interests in the Company, vacation
pay, fringe benefits, expense reimbursements, severance pay, or any other form
of compensation; claims pursuant to any federal, state or local law, statute, or
cause of action including, but not limited to, the federal Civil Rights Act of
1964, as amended; the federal Americans with Disabilities Act of 1990; the
federal Age Discrimination in Employment Act of 1967, as amended ("ADEA"); the
California Fair Employment and Housing Act, as amended; tort law; contract law;
wrongful discharge; discrimination; harassment; fraud; defamation; emotional
distress; and breach of the implied covenant of good faith and fair dealing.
Notwithstanding the previous sentence, the parties agree that I will continue to
be covered by the terms and conditions of the Indemnity Agreement entered into
between me and the Company (the "Indemnity Agreement"), if any, and the terms of
the Company's D&O insurance policy for claims against me that arise out of
matters or events that occurred prior to my termination (or, if applicable, a
Change of Control). This release does not extend to any severance benefits due
me under the offer letter to which this is attached as Exhibit A or any rights
to indemnification I may have under the Indemnity Agreement or the Company's D&O
insurance policy.

I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the ADEA, as amended. I also acknowledge that the
consideration given for the waiver and release in the preceding paragraph hereof
is in addition to anything of value to which I was already entitled. I further
acknowledge that I have been advised by this writing, as required by the ADEA,
that: (a) my waiver and release do not apply to any rights or claims that may
arise after the execution date of this Release; (b) I have been advised hereby
that I have the right to consult with an attorney prior to executing this
Release; (c) I have twenty-one (21) days to consider this Release (although I
may choose to voluntarily execute this release earlier); (d) I have seven (7)
days following my execution of this Release to revoke my agreement to it; and
(e) this Release will not be effective until the date upon which the revocation
period has expired, which will be the eighth day after this Release is executed
by me. 

I UNDERSTAND THAT THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS. In giving this release, which includes claims which may be unknown to me
at present, I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A general release does not extend
to claims which the creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must have materially
affected his settlement with the debtor." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to my release of any unknown or
unsuspected claims I may have against the Company.

DATED: AGREED: 

[Employee's Name]

 

	
    Dated:_________________

    	
    
     	

    Agreed:__________________________
                                 
    [Employee's Name]EXHIBIT 10.2

FORM OF STOCK OPTION AGREEMENT

CHORDIANT SOFTWARE, INC.

2005 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

Pursuant to your Stock Option Grant Notice ("Grant Notice") and this Stock
Option Agreement, Chordiant Software, Inc. (the "Company") has granted you an
option under its 2005 Equity Incentive Plan (the "Plan") to purchase the number
of shares of the Company's Common Stock indicated in your Grant Notice at the
exercise price indicated in your Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the
same definitions as in the Plan.

The details of your option are as follows:

12. VESTING. Subject to the limitations contained herein, your option will vest
as provided in your Grant Notice, provided that vesting will cease upon the
termination of your Continuous Service.

13. NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of Common Stock
subject to your option and your exercise price per share referenced in your
Grant Notice may be adjusted from time to time for Capitalization Adjustments.

14. METHOD OF PAYMENT. Payment of the exercise price is due in full upon
exercise of all or any part of your option. You may elect to make payment of the
exercise price in cash or by check or in any other manner permitted by your
Grant Notice, which may include one or more of the following:

(a) In the Company's sole discretion at the time your option is exercised and
provided that at the time of exercise the Common Stock is publicly traded and
quoted regularly in The Wall Street Journal, pursuant to a program developed
under Regulation T as promulgated by the Federal Reserve Board that, prior to
the issuance of Common Stock, results in either the receipt of cash (or check)
by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds.

(b) Provided that at the time of exercise the Common Stock is publicly traded
and quoted regularly in The Wall Street Journal, by delivery of already-owned
shares of Common Stock either that you have held for the period required to
avoid a charge to the Company's reported earnings (generally six (6) months) or
that you did not acquire, directly or indirectly from the Company, that are
owned free and clear of any liens, claims, encumbrances or security interests,
and that are valued at Fair Market Value on the date of exercise. "Delivery" for
these purposes, in the sole discretion of the Company at the time you exercise
your option, shall include delivery to the Company of your attestation of
ownership of such shares of Common Stock in a form approved by the Company.
Notwithstanding the foregoing, you may not exercise your option by tender to the
Company of Common Stock to the extent such tender would violate the provisions
of any law, regulation or agreement restricting the redemption of the Company's
stock.

(c) Provided that at the time of exercise the Company has adopted FAS 123, as
revised, and has established a procedure for such exercise, by a "net exercise"
arrangement pursuant to which the Company will reduce the number of shares of
Common Stock issued upon exercise of your option by the largest whole number of
shares with a Fair Market Value that does not exceed the aggregate exercise
price; provided, however, the Company shall accept a cash or other payment from
you to the extent of any remaining balance of the aggregate exercise price not
satisfied by such holding back of whole shares; provided, however, shares of
Common Stock will no longer be outstanding under your option and will not be
exercisable thereafter to the extent that (1) shares are used to pay the
exercise price pursuant to the "net exercise," (2) shares are delivered to you
as a result of such exercise, and (3) shares are withheld by the Company to
satisfy tax withholding obligations.

15. WHOLE SHARES. You may exercise your option only for whole shares of Common
Stock.

16. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, you may not exercise your option unless the shares of Common
Stock issuable upon such exercise are then registered under the Securities Act
or, if such shares of Common Stock are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the registration
requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may
not exercise your option if the Company determines that such exercise would not
be in material compliance with such laws and regulations.

17. TERM. You may not exercise your option before the commencement of its term
or after its term expires. The term of your option commences on the Date of
Grant and expires upon the earliest of the following:

immediately upon the termination of your Continuous Service for Cause;

(a) three (3) months after the termination of your Continuous Service for any
reason other than Cause, Disability or death, provided that if during any part
of such three- (3-) month period you may not exercise your option solely because
of the condition set forth in the preceding paragraph relating to "Securities
Law Compliance," your option shall not expire until the earlier of the
Expiration Date or until it shall have been exercisable for an aggregate period
of three (3) months after the termination of your Continuous Service;

(b) twelve (12) months after the termination of your Continuous Service due to
your Disability;

(c) eighteen (18) months after your death if you die either during your
Continuous Service or within three (3) months after your Continuous Service
terminates for any reason other than Cause;

(d) the Expiration Date indicated in your Grant Notice; or

(e) the day before the tenth (10th) anniversary of the Date of Grant.

If your option is an Incentive Stock Option, note that, to obtain the federal
income tax advantages associated with an Incentive Stock Option, the Code
requires that at all times beginning on the date of grant of your option and
ending on the day three (3) months before the date of your option's exercise,
you must be an employee of the Company or an Affiliate, except in the event of
your death or Disability. The Company has provided for extended exercisability
of your option under certain circumstances for your benefit but cannot guarantee
that your option will necessarily be treated as an Incentive Stock Option if you
continue to provide services to the Company or an Affiliate as a Consultant or
Director after your employment terminates or if you otherwise exercise your
option more than three (3) months after the date your employment terminates.

18. EXERCISE.

(a) You may exercise the vested portion of your option (and the unvested portion
of your option if your Grant Notice so permits) during its term by delivering a
Notice of Exercise (in a form designated by the Company) together with the
exercise price to the Secretary of the Company, or to such other person as the
Company may designate, during regular business hours, together with such
additional documents as the Company may then require.

(b) By exercising your option you agree that, as a condition to any exercise of
your option, the Company may require you to enter into an arrangement providing
for the payment by you to the Company of any tax withholding obligation of the
Company arising by reason of (1) the exercise of your option, (2) the lapse of
any substantial risk of forfeiture to which the shares of Common Stock are
subject at the time of exercise, or (3) the disposition of shares of Common
Stock acquired upon such exercise.

(c) If your option is an Incentive Stock Option, by exercising your option you
agree that you will notify the Company in writing within fifteen (15) days after
the date of any disposition of any of the shares of the Common Stock issued upon
exercise of your option that occurs within two (2) years after the date of your
option grant or within one (1) year after such shares of Common Stock are
transferred upon exercise of your option.

19. TRANSFERABILITY. Your option is not transferable, except by will or by the
laws of descent and distribution, and is exercisable during your life only by
you. Notwithstanding the foregoing, by delivering written notice to the Company,
in a form satisfactory to the Company, you may designate a third party who, in
the event of your death, shall thereafter be entitled to exercise your option.

20. OPTION NOT A SERVICE CONTRACT. Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company
or an Affiliate, or of the Company or an Affiliate to continue your employment.
In addition, nothing in your option shall obligate the Company or an Affiliate,
their respective stockholders, Boards of Directors, Officers or Employees to
continue any relationship that you might have as a Director or Consultant for
the Company or an Affiliate.

21. WITHHOLDING OBLIGATIONS.

(a) At the time you exercise your option, in whole or in part, or at any time
thereafter as requested by the Company, you hereby authorize withholding from
payroll and any other amounts payable to you, and otherwise agree to make
adequate provision for (including by means of a "cashless exercise" pursuant to
a program developed under Regulation T as promulgated by the Federal Reserve
Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or
an Affiliate, if any, which arise in connection with the exercise of your
option.

(b) Upon your request and subject to approval by the Company, in its sole
discretion, and compliance with any applicable legal conditions or restrictions,
the Company may withhold from fully vested shares of Common Stock otherwise
issuable to you upon the exercise of your option a number of whole shares of
Common Stock having a Fair Market Value, determined by the Company as of the
date of exercise, not in excess of the minimum amount of tax required to be
withheld by law (or such lower amount as may be necessary to avoid variable
award accounting). If the date of determination of any tax withholding
obligation is deferred to a date later than the date of exercise of your option,
share withholding pursuant to the preceding sentence shall not be permitted
unless you make a proper and timely election under Section 83(b) of the Code,
covering the aggregate number of shares of Common Stock acquired upon such
exercise with respect to which such determination is otherwise deferred, to
accelerate the determination of such tax withholding obligation to the date of
exercise of your option. Notwithstanding the filing of such election, shares of
Common Stock shall be withheld solely from fully vested shares of Common Stock
determined as of the date of exercise of your option that are otherwise issuable
to you upon such exercise. Any adverse consequences to you arising in connection
with such share withholding procedure shall be your sole responsibility.

(c) You may not exercise your option unless the tax withholding obligations of
the Company and/or any Affiliate are satisfied. Accordingly, you may not be able
to exercise your option when desired even though your option is vested, and the
Company shall have no obligation to issue a certificate for such shares of
Common Stock or release such shares of Common Stock from any escrow provided for
herein unless such obligations are satisfied.

22. NOTICES. Any notices provided for in your option or the Plan shall be given
in writing and shall be deemed effectively given upon receipt or, in the case of
notices delivered by mail by the Company to you, five (5) days after deposit in
the United States mail, postage prepaid, addressed to you at the last address
you provided to the Company.

23. GOVERNING PLAN DOCUMENT. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is
further subject to all interpretations, amendments, rules and regulations, which
may from time to time be promulgated and adopted pursuant to the Plan. In the
event of any conflict between the provisions of your option and those of the
Plan, the provisions of the Plan shall control.

* * [NOTE: THIS IS THE END OF THE DOCUMENT] * *

NOTICE OF EXERCISE

 

    	
    CHORDIANT SOFTWARE, INC.

20400 Stevens Creek Boulevard Suite 400

Cupertino, California 95014	
    
     	
    Date of Exercise: _______________

 

Ladies and Gentlemen:

This constitutes notice under my stock option that I elect to purchase the
number of shares for the price set forth below.

	
    Type of option (check one):	
    Incentive
[ ]	
    Nonstatutory
[ ]
	
    Stock option dated:	
    _____________________	
     
	
    Number of shares as to which option is exercised:	
    _____________________	
     
	
    Certificates to be issued in name of:	
    _____________________	
     
	
    Total exercise price:	
    $____________________	
     
	
    Cash payment delivered herewith:	
    $____________________	
     
	
    Value of _____ shares of Chordiant Software, Inc. common stock delivered
    herewith1:	
     $____________________
	
     

By this exercise, I agree (i) to provide such additional documents as you may
require pursuant to the terms of the 2005 Equity Incentive Plan, (ii) to provide
for the payment by me to you (in the manner designated by you) of your
withholding obligation, if any, relating to the exercise of this option, and
(iii) if this exercise relates to an incentive stock option, to notify you in
writing within fifteen (15) days after the date of any disposition of any of the
shares of Common Stock issued upon exercise of this option that occurs within
two (2) years after the date of grant of this option or within one (1) year
after such shares of Common Stock are issued upon exercise of this option.

Very truly yours,

 

1    Shares must meet the public
trading requirements set forth in the option.  Shares must be valued in
accordance with the terms of the option being exercised, must have been owned
for the minimum period required in the option, and must be owned free and clear
of any liens, claims, encumbrances or security interests.  Certificates
must be endorsed or accompanied by an executed assignment separate from
certificate.

CHORDIANT SOFTWARE, INC.

STOCK OPTION GRANT NOTICE

(2005 EQUITY INCENTIVE PLAN)

Chordiant Software, Inc. (the "Company"), pursuant to its 2005 Equity
Incentive Plan (the "Plan"), hereby grants to Optionholder an option to
purchase the number of shares of the Company's Common Stock set forth below.
This option is subject to all of the terms and conditions as set forth herein
and in the Stock Option Agreement, the Plan and the Notice of Exercise, all of
which are attached hereto and incorporated herein in their entirety.

	
    Optionholder:	
     	
    _____________________________________________
	
    Date of Grant:	
     	
    _____________________________________________
	
    Vesting Commencement Date:	
    	
    _____________________________________________
	
    Number of Shares Subject to Option:	
     	
    _____________________________________________
	
    Exercise Price (Per Share):	
     	
    _____________________________________________
	
    Total Exercise Price:	
     	
    _____________________________________________
	
    Expiration Date:	
     	
    _____________________________________________

 

    	
    Type of Grant:	
     Incentive Stock Option2	
    Nonstatutory Stock Option

[DRAFTING NOTE: Options that are exercisable by non-exempt employees (those
subject to wage overtime rules) within six months after the date of grant may
affect the calculations of overtime wages. Therefore, options granted to
non-exempt employees should not be exercisable for at least six months from the
grant date; provided, that the employees may exercise if their employment is
terminated due to a change in control, their death or retirement.]

	
    Exercise Schedule:	
    Same as Vesting Schedule
	
     
	
    Vesting Schedule:	
    [1/4th of the shares vest one
    year after the Vesting Commencement Date.1/48th of the shares vest monthly
    thereafter over the next three years.]
	
     

    	
    Payment:	
    By one or a combination of the
    following items (described in the Stock Option Agreement):

    [ ] By cash or check

    [ ] Pursuant to a Registration T
    Program if the Shares are publicly traded

    [ ] By delivery of already-owned
    shares if the Shares are publicly traded

    	
     

 

Additional Terms/Acknowledgements:
The undersigned Optionholder acknowledges receipt of, and understands and agrees
to, this Stock Option Grant Notice, the Stock Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Stock
Option Grant Notice, the Stock Option Agreement and the Plan set forth the
entire understanding between Optionholder and the Company regarding the
acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted
and delivered to Optionholder under the Plan, and (ii) the following agreements
only:

 

OTHER AGREEMENTS:
___________________________________________________________

 

2   If
this is an Incentive Stock Option, it (plus other outstanding Incentive Stock
Options) cannot be first Exercisable for more than $100,000 in value (measured
by exercise price) in any calendar year.  Any excess over $100,000 is a
Nonstatutory Stock Option.

 

 

 

	
    
    Chordiant
    Software,
    Inc.	
     	
    Optionholder:
	
    
    By:__________________________

                     
    Signature
	
     	
    ______________________________

                           
    Signature

	
    Title:_________________________	
     	
    Date:__________________________
	
    Date:_________________________	
     	
     

ATTACHMENTS: Stock
Option Agreement, 2005 Equity Incentive Plan, and Notice of Exercise

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