Document:

Exhibit 10.3

    

      EXHIBIT
        10.3

       

      CHANGE
        OF CONTROL AGREEMENT

       

      This
        Change Of Control Agreement (“Agreement”)
        is made by and between Chordiant
        Software, Inc. (the
        “Company”) and Frank
        Florence (“Executive”).
        This Agreement will become effective upon its execution by both parties hereto
        (the “Effective Date”).

       

      RECITALS

       

      Whereas
        Executive
        is employed by the Company pursuant to the terms of Executive’s offer letter
        from the Company;

       

      Whereas
        Executive, prior to the Effective Date, may have been awarded, in respect
        of the
        Company’s Common Stock, stock options, stock appreciation rights, restricted
        shares, or restricted stock units pursuant to the applicable award agreements
        and equity incentive plans (collectively, “Prior Grants”);

       

      Whereas
        Executive, in the future, may be awarded, in respect of the Company’s Common
        Stock, additional stock options, stock appreciation rights, restricted shares
        or
        restricted stock units, subject to the Board’s sole discretion, (together with
        Prior Grants, collectively “Stock Awards”); and

       

      Whereas
        the Company believes it is imperative to provide Executive with accelerated
        vesting of the Stock Awards, as well as other severance benefits, in the
        event
        that Executive is terminated without Cause (as defined herein) or resigns
        for
        Good Reason (as defined herein) in connection with a Change of Control (as
        defined herein).

       

      Now,
        Therefore,
        in consideration of the foregoing, the mutual covenants contained herein,
        and
        other good and valuable consideration, the parties hereto hereby agree as
        follows:

       

      1. Termination
        of Employment.

       

      (a) At-Will
        Employment. Executive’s
        employment is at-will, which means that the Company may terminate Executive’s
        employment at any time, with or without advance notice, and with or without
        Cause. Similarly, Executive may resign his/her employment at any time, with
        or
        without advance notice or Good Reason. Executive shall not receive any
        compensation of any kind, including, without limitation, severance benefits,
        following Executive’s last day of employment with the Company (the “Termination
        Date”), except as expressly provided herein, as otherwise agreed in writing
        between Executive and the Chief Executive Officer of the Company, or as provided
        in any plan documents governing the Stock Awards. Executive shall devote
        all
        reasonable efforts to the performance of Executive’s duties, and shall perform
        such duties in good faith.

       

      (b) Termination
        Related to a Change of Control.
        If Executive’s employment is terminated without Cause or Executive resigns for
        Good Reason within twelve (12) months after a Change of Control, and Executive
        signs a release substantially in the form (whichever is applicable) attached
        hereto as Exhibit
        A (the
        “Release”), then the Company shall provide Executive with the following
        severance benefits: 

       

      (i) The
        Company shall make severance payments to Executive in the form of continuation
        of Executive’s base salary in effect on the Termination Date for six (6) months
        following the Termination Date (the “Severance Period”). These payments will be
        made on the Company’s ordinary payroll dates and will be subject to standard
        payroll deductions and withholdings. 

       

      (ii) The
        Company will pay Executive an amount equal to the Executive’s annual bonus
        (provided the Executive is under a non-commission Company bonus plan). The
        bonus
        will be calculated at one of the following rates, whichever is higher: (1)
        as if
        both Executive and the Company achieved one hundred (100) percent of their
        specified performance objectives; or (2) the actual performance of the Company
        and Executive as measured against the specified performance objectives. This
        amount will be paid over the entire Severance Period on the Company’s ordinary
        payroll dates, in equal installments, and will be subject to standard payroll
        deductions and withholdings.

       

      (iii) The
        Company will pay the premiums necessary to continue Executive’s life and health
        insurance during the Severance Period.

       

      (iv) The
        Company will accelerate the vesting of the Stock Awards such that the lesser
        of
        the following shall vest within ten (10) days after the date Executive signs
        the
        Release: (a) 50% of the unvested shares, rights, or units, as applicable,
        as of
        the Termination Date subject to the Stock Awards (after taking into account
        any
        additional acceleration of vesting Executive may be receiving under any award
        agreements or equity incentive plan documents governing the Stock Awards
        instituted prior to or after the Effective Date); or (b) all such shares,
        rights
        or units that would have vested if Executive had worked for the Company for
        twelve (12) additional months beyond the Termination Date. This acceleration
        of
        vesting will be in addition to any acceleration of vesting that the Executive
        would otherwise receive under the Company’s 2000 Nonstatutory Equity Incentive
        Plan, 1999 Equity Incentive Plan, 2005 Equity Incentive Plan or any other
        equity
        incentive plan documents governing the Stock Awards. With respect to all
        Stock
        Awards except the Prior Grants, Executive shall have sixty (60) months to
        exercise any such vested Stock Awards in addition to any time specified in
        the
        award agreements and equity incentive plan documents governing such Stock
        Awards, but in no event shall such exercise period extend beyond the expiration
        date of the Stock Award. The Stock Awards shall continue to be governed by
        the
        terms of the applicable award agreements and equity incentive plan documents.
        Notwithstanding anything to the contrary contained herein, the maximum number
        of
        months of additional vesting that may be credited to any Stock Award under
        this
        Agreement, when added to any additional vesting provided by any award agreement
        or equity incentive plan documents, shall not exceed twenty-four (24) months
        in
        the aggregate.

       

      (v) With
        respect to any Prior Grant intended to be an incentive stock option, the
        acceleration of the vesting of the Prior Grant and the extension of the time
        that Executive shall have to exercise the Prior Grant as provided in Paragraph
        1(b)(iv) of this Agreement are deemed to be a modification of the Prior Grant
        within the meaning of Section 424(h) of the Internal Revenue Code (“Code”). Such
        modification shall result in the granting of a new option as of the date
        of
        execution of this Agreement, including providing a new grant date for purposes
        of starting the holding period specified in Section 422(a)(1) of the Code
        and
        for purposes of the provision that the option price be not less than the
        fair
        market value of the stock at the time such option is granted as specified
        in
        Section 422(b)(4) of the Code. If Executive and the Company agree that the
        Prior
        Grant shall remain an incentive stock option and if the new option meets
        the
        requirements for incentive stock options specified in Section 422(b) of the
        Code, and the $100,000 per year limitation specified in Section 422(d) of
        the
        Code as of the date of execution of this Agreement, then the unexercised
        portion
        of the Prior Grant shall be appropriately modified as to the date of grant
        and
        the option price; provided, however, that the option price shall be the greater
        of the original option price of the Prior Grant or the fair market value
        of the
        stock on the date of execution of this Agreement. If Executive and the Company
        do not agree that such Prior Grant shall remain an incentive stock option,
        then
        the Prior Grant shall be deemed to be a nonstatutory stock option as of the
        date
        of execution of this Agreement, and the Prior Grant shall be appropriately
        modified to reflect such changed status.

       

      (c) Termination
        For Cause Procedure. The
        Company may not terminate Executive’s employment for Cause unless and until
        Executive receives 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, Executive was guilty
        of the
        conduct constituting “Cause” and specifying the particulars thereof in detail.
        The Company shall provide Executive with reasonable notice of the Board vote
        and
        an opportunity for Executive, together with Executive’s counsel, to be heard
        before the Board.

       

      2. Definitions.

       

      (a) Definition
        of Cause. For
        purposes of this Agreement, “Cause” shall mean that Executive has committed, or
        there has occurred, one or more of the following events: (1) conviction of
        any
        felony or misdemeanor involving moral turpitude, fraud or act of dishonesty
        against the Company; (2) a finding by the Board, after a good faith and
        reasonable factual investigation, that Executive has engaged in gross
        misconduct; or (3) material violation or material breach of any Company policy
        or statutory, fiduciary, or contractual duty of Executive to the Company;
        provided,
        however,
        that in the event that any of the foregoing events occurs, the Company shall
        provide notice to Executive describing the nature of such event and Executive
        shall thereafter have ten (10) days to cure such event if such event is capable
        of being cured.

       

      (b) Definition
        of Good Reason. For
        purposes of this Agreement, “Good Reason” shall mean that any one of the
        following events occurs during the Executive’s employment with the Company
        without Executive’s consent: (i) any reduction of Executive’s annual base salary
        (including bonus) as of the time period immediately preceding the Change
        of
        Control, except to the extent that the annual base salary (including bonus)
        of
        all other officers of the Company is similarly reduced; (ii) any material
        reduction in the package of benefits and incentives provided to the Executive,
        or any action by the Company which would materially and adversely affect
        the
        Executive’s participation or reduce the Executive’s benefits under any such
        plans, except to the extent that such benefits and incentives of all other
        officers of the Company are similarly reduced; (iii) any material change
        in
        Executive’s position or responsibilities (including the person or persons to
        whom Executive has reporting responsibilities) that represents an adverse
        change
        from Executive’s position or responsibilities as in effect at any time within
        ninety (90) days preceding the date of the Change of Control or at any time
        thereafter, excluding for this purpose an isolated, insubstantial and
        inadvertent action not taken in bad faith that is remedied by the Company
        promptly after notice thereof is given by Executive; (iv) the Company’s
        requiring Executive to relocate to any place outside of a twenty-five (25)
        mile
        driving distance of Executive’s current work site, except for reasonably
        required travel on the business of the Company or its affiliates that is
        not
        materially greater than such travel requirements prior to the Change in Control
        or unless Executive accepts such relocation opportunity; or (v) any failure
        to
        pay Executive any compensation or benefits to which Executive is entitled
        within
        fifteen (15) days of the date due. Executive may terminate his or her employment
        for Good Reason so long as Executive tenders his resignation to the Company
        within thirty (30) days after the occurrence of the event which forms the
        basis
        for his resignation for Good Reason. Executive shall provide written notice
        to
        the Company describing the nature of the event which forms the basis for
        Executive’s resignation for Good Reason, and the Company shall thereafter have
        ten (10) days to cure such event.

       

      (c) Definition
        of Change of Control. For
        purposes of this Agreement, a “Change of Control” means: (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
        Securities Exchange Act of 1934, as amended (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.

       

      3. Gross
        Up Provision. 

       

      (a)  In
        the event that the payments and benefits provided for in this Agreement (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 Executive’s “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 Executive’s “base amount” within the meaning of Code Section
        280G(b)(3), then Executive shall receive (i) a payment from the Company
        sufficient to pay such excise tax plus any interest or penalties incurred
        by
        Executive 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 Executive
        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 one time the Executive’s base salary.

       

      (b)  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 Executive in connection
        with transactions contemplated by a Change in Control, including Executive’s
        termination of employment (whether pursuant to the terms of this Agreement
        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; and
        

       

      (iii)  the
        value of any non-cash benefits or any deferred payment or benefit 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 Executive
        (the “Accounting Firm”) in accordance with the principles of Section 280G of the
        Code.

       

      (c)  For
        purposes of determining the amount of the Excise Tax Gross-Up Payment, Executive
        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 Executive’s 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.

       

      (d)  In
        the event that the Excise Tax is subsequently determined to be less than
        the
        amount taken into account under this Section 3, Executive 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 Executive 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.

       

      (e)  In
        the event that the Excise Tax is subsequently determined to exceed the amount
        taken into account under this Section 3 (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 Section 3.

       

      (f)  All
        determinations required to be made under this Section 3 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 Executive.
        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).

       

      4. Other
        Employment Terms and Conditions. The
        employment relationship between the parties shall be governed by the general
        employment policies and procedures of the Company, including those relating
        to
        the protection of confidential information and assignment of inventions;
        provided, however, that when the terms of this Agreement differ from or are
        in
        conflict with the Company’s general employment policies or procedures, this
        Agreement shall control. 

       

      5. General
        Provisions.

       

      (a) This
        Agreement, including all exhibits hereto, constitutes the complete, final
        and
        exclusive embodiment of the entire agreement between the parties with regard
        to
        the subject matter hereof. It is entered into without reliance on any promise
        or
        representation, written or oral, other than those expressly contained herein,
        and it supersedes any other such promises or representations. Notwithstanding
        the foregoing, nothing in this Agreement shall affect the parties’ obligations
        under the Stock Agreements or the Executive’s Employee Proprietary Information
        and Inventions Agreement. This Agreement cannot be modified except in a writing
        signed by Executive and a duly-authorized member of the Board.

       

      (b) Whenever
        possible, each provision of this Agreement will be interpreted in such a
        manner
        as to be effective under applicable law. The invalidity or unenforceability
        of
        any provision of this Agreement shall not affect the validity or enforceability
        of any other provision of this Agreement. Any invalid or unenforceable provision
        shall be modified so as to be rendered valid and enforceable in a manner
        consistent with the intent of the parties insofar as possible.

       

      (c) The
        Executive’s or the Company’s failure to insist upon strict compliance with any
        provision of this Agreement or the failure to assert any right the Executive
        or
        the Company may have hereunder shall not be deemed to be a waiver of such
        provision or right or any other provision or right of this
        Agreement.

       

      (d) This
        Agreement may be executed in several counterparts, each of which shall be
        deemed
        to be an original but all of which together will constitute one and the same
        instrument. Facsimile signatures shall be deemed as effective as
        originals.

       

      (e) This
        Agreement is intended to bind and inure to the benefit of and be enforceable
        by
        Executive, the Company and their respective successors, assigns, heirs,
        executives and administrators, except that Executive may not assign any of
        his
        duties hereunder and he may not assign any of his rights hereunder without
        the
        written consent of the Company. This Agreement shall be interpreted and enforced
        in accordance with the laws of the State of California.

       

      (f) If
        either party hereto bring any action to enforce such party’s rights hereunder,
        the prevailing party in any such action shall be entitled to recover such
        party’s reasonable attorneys’ fees and costs incurred in connection with such
        action.

       

      (g) For
        purposes of construction, this Agreement shall be deemed to have been drafted
        by
        the Company, and the rule of construction of contracts that ambiguities are
        construed against the drafting party shall be applied against the
        Company.

       

      (h) Any
        notice required to be given or delivered to the Company under the terms of
        this
        Agreement shall be in writing and addressed to the Corporate Secretary of
        the
        Company at its principal corporate offices. Any notice required to be given
        or
        delivered to Executive shall be in writing and addressed to Executive at
        the
        address indicated herein or to the last known address provided by Executive
        to
        the Company. All notices shall be deemed to have been given or delivered
        upon:
        personal delivery; three (3) days after deposit in the United States mail
        by
        certified or registered mail (return receipt requested); one (1) business
        day
        after deposit with any return receipt express courier (prepaid); or one (1)
        business day after transmission by facsimile.

       

      In
        Witness Whereof,
        the parties have executed this Agreement as of the day and year written
        below.

       

      
        	 	
                /s/
                  Frank Florence

              	
                 

              
	 	
                Frank
                  Florence

              	
                 

              
	 	 	 	 
	 	
                Address:

              	
                20120
                  Chateau Drive

              	 
	 	 	
                Saratoga,
                  CA 95070

              	 
	 	
                Date:

              	
                April
                  20, 2006

              	 
	 	 	 	 
	 	
                Chordiant
                  Software, Inc.

              	 
	 	 	 	 
	 	
                Jack
                  Moyer

              	 
	 	
                Name:
                  Jack Moyer

              	 
	 	
                Title:
                  VP Human Resources

              	 
	 	 	 
	 	
                Date:

              	
                May
                  22, 2006

              	 
	 	 	 	 

      

      Exhibit A
        - Release Agreements

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Exhibit
        A

       

      RELEASE
        AGREEMENT FOR EMPLOYEES 40 YEARS OF AGE OR OLDER

       

      In
        exchange for the severance 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.

       

      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:

              	
                April
                  20, 2006

              	 	
                AGREED:

              	
                /s/
                  Frank Florence

              
	 	 	 	 	
                [Employee’s
                  Name]Exhibit 10.4

    

      EXHIBIT
        10.4

       

      CHANGE
        OF CONTROL AGREEMENT

       

      This
        Change Of Control Agreement (“Agreement”)
        is made by and between Chordiant
        Software, Inc. (the
        “Company”) and P.K.
        Karnik (“Executive”).
        This Agreement will become effective upon its execution by both parties hereto
        (the “Effective Date”).

       

      RECITALS

       

      Whereas
        Executive
        is employed by the Company pursuant to the terms of Executive’s offer letter
        from the Company;

       

      Whereas
        Executive, prior to the Effective Date, may have been awarded, in respect
        of the
        Company’s Common Stock, stock options, stock appreciation rights, restricted
        shares, or restricted stock units pursuant to the applicable award agreements
        and equity incentive plans (collectively, “Prior Grants”);

       

      Whereas
        Executive, in the future, may be awarded, in respect of the Company’s Common
        Stock, additional stock options, stock appreciation rights, restricted shares
        or
        restricted stock units, subject to the Board’s sole discretion, (together with
        Prior Grants, collectively “Stock Awards”); and

       

      Whereas
        the Company believes it is imperative to provide Executive with accelerated
        vesting of the Stock Awards, as well as other severance benefits, in the
        event
        that Executive is terminated without Cause (as defined herein) or resigns
        for
        Good Reason (as defined herein) in connection with a Change of Control (as
        defined herein).

       

      Now,
        Therefore,
        in consideration of the foregoing, the mutual covenants contained herein,
        and
        other good and valuable consideration, the parties hereto hereby agree as
        follows:

       

      1. Termination
        of Employment.

       

      (a) At-Will
        Employment. Executive’s
        employment is at-will, which means that the Company may terminate Executive’s
        employment at any time, with or without advance notice, and with or without
        Cause. Similarly, Executive may resign his/her employment at any time, with
        or
        without advance notice or Good Reason. Executive shall not receive any
        compensation of any kind, including, without limitation, severance benefits,
        following Executive’s last day of employment with the Company (the “Termination
        Date”), except as expressly provided herein, as otherwise agreed in writing
        between Executive and the Chief Executive Officer of the Company, or as provided
        in any plan documents governing the Stock Awards. Executive shall devote
        all
        reasonable efforts to the performance of Executive’s duties, and shall perform
        such duties in good faith.

       

      (b) Termination
        Related to a Change of Control.
        If Executive’s employment is terminated without Cause or Executive resigns for
        Good Reason within twelve (12) months after a Change of Control, and Executive
        signs a release substantially in the form (whichever is applicable) attached
        hereto as Exhibit
        A (the
        “Release”), then the Company shall provide Executive with the following
        severance benefits: 

       

      (i) The
        Company shall make severance payments to Executive in the form of continuation
        of Executive’s base salary in effect on the Termination Date for six (6) months
        following the Termination Date (the “Severance Period”). These payments will be
        made on the Company’s ordinary payroll dates and will be subject to standard
        payroll deductions and withholdings. 

       

      (ii) The
        Company will pay Executive an amount equal to the Executive’s annual bonus
        (provided the Executive is under a non-commission Company bonus plan). The
        bonus
        will be calculated at one of the following rates, whichever is higher: (1)
        as if
        both Executive and the Company achieved one hundred (100) percent of their
        specified performance objectives; or (2) the actual performance of the Company
        and Executive as measured against the specified performance objectives. This
        amount will be paid over the entire Severance Period on the Company’s ordinary
        payroll dates, in equal installments, and will be subject to standard payroll
        deductions and withholdings.

       

      (iii) The
        Company will pay the premiums necessary to continue Executive’s life and health
        insurance during the Severance Period.

       

      (iv) The
        Company will accelerate the vesting of the Stock Awards such that the lesser
        of
        the following shall vest within ten (10) days after the date Executive signs
        the
        Release: (a) 50% of the unvested shares, rights, or units, as applicable,
        as of
        the Termination Date subject to the Stock Awards (after taking into account
        any
        additional acceleration of vesting Executive may be receiving under any award
        agreements or equity incentive plan documents governing the Stock Awards
        instituted prior to or after the Effective Date); or (b) all such shares,
        rights
        or units that would have vested if Executive had worked for the Company for
        twelve (12) additional months beyond the Termination Date. This acceleration
        of
        vesting will be in addition to any acceleration of vesting that the Executive
        would otherwise receive under the Company’s 2000 Nonstatutory Equity Incentive
        Plan, 1999 Equity Incentive Plan, 2005 Equity Incentive Plan or any other
        equity
        incentive plan documents governing the Stock Awards. With respect to all
        Stock
        Awards except the Prior Grants, Executive shall have sixty (60) months to
        exercise any such vested Stock Awards in addition to any time specified in
        the
        award agreements and equity incentive plan documents governing such Stock
        Awards, but in no event shall such exercise period extend beyond the expiration
        date of the Stock Award. The Stock Awards shall continue to be governed by
        the
        terms of the applicable award agreements and equity incentive plan documents.
        Notwithstanding anything to the contrary contained herein, the maximum number
        of
        months of additional vesting that may be credited to any Stock Award under
        this
        Agreement, when added to any additional vesting provided by any award agreement
        or equity incentive plan documents, shall not exceed twenty-four (24) months
        in
        the aggregate.

       

      (v) With
        respect to any Prior Grant intended to be an incentive stock option, the
        acceleration of the vesting of the Prior Grant and the extension of the time
        that Executive shall have to exercise the Prior Grant as provided in Paragraph
        1(b)(iv) of this Agreement are deemed to be a modification of the Prior Grant
        within the meaning of Section 424(h) of the Internal Revenue Code (“Code”). Such
        modification shall result in the granting of a new option as of the date
        of
        execution of this Agreement, including providing a new grant date for purposes
        of starting the holding period specified in Section 422(a)(1) of the Code
        and
        for purposes of the provision that the option price be not less than the
        fair
        market value of the stock at the time such option is granted as specified
        in
        Section 422(b)(4) of the Code. If Executive and the Company agree that the
        Prior
        Grant shall remain an incentive stock option and if the new option meets
        the
        requirements for incentive stock options specified in Section 422(b) of the
        Code, and the $100,000 per year limitation specified in Section 422(d) of
        the
        Code as of the date of execution of this Agreement, then the unexercised
        portion
        of the Prior Grant shall be appropriately modified as to the date of grant
        and
        the option price; provided, however, that the option price shall be the greater
        of the original option price of the Prior Grant or the fair market value
        of the
        stock on the date of execution of this Agreement. If Executive and the Company
        do not agree that such Prior Grant shall remain an incentive stock option,
        then
        the Prior Grant shall be deemed to be a nonstatutory stock option as of the
        date
        of execution of this Agreement, and the Prior Grant shall be appropriately
        modified to reflect such changed status.

       

      (c) Termination
        For Cause Procedure. The
        Company may not terminate Executive’s employment for Cause unless and until
        Executive receives 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, Executive was guilty
        of the
        conduct constituting “Cause” and specifying the particulars thereof in detail.
        The Company shall provide Executive with reasonable notice of the Board vote
        and
        an opportunity for Executive, together with Executive’s counsel, to be heard
        before the Board.

       

      2. Definitions.

       

      (a) Definition
        of Cause. For
        purposes of this Agreement, “Cause” shall mean that Executive has committed, or
        there has occurred, one or more of the following events: (1) conviction of
        any
        felony or misdemeanor involving moral turpitude, fraud or act of dishonesty
        against the Company; (2) a finding by the Board, after a good faith and
        reasonable factual investigation, that Executive has engaged in gross
        misconduct; or (3) material violation or material breach of any Company policy
        or statutory, fiduciary, or contractual duty of Executive to the Company;
        provided,
        however,
        that in the event that any of the foregoing events occurs, the Company shall
        provide notice to Executive describing the nature of such event and Executive
        shall thereafter have ten (10) days to cure such event if such event is capable
        of being cured.

       

      (b) Definition
        of Good Reason. For
        purposes of this Agreement, “Good Reason” shall mean that any one of the
        following events occurs during the Executive’s employment with the Company
        without Executive’s consent: (i) any reduction of Executive’s annual base salary
        (including bonus) as of the time period immediately preceding the Change
        of
        Control, except to the extent that the annual base salary (including bonus)
        of
        all other officers of the Company is similarly reduced; (ii) any material
        reduction in the package of benefits and incentives provided to the Executive,
        or any action by the Company which would materially and adversely affect
        the
        Executive’s participation or reduce the Executive’s benefits under any such
        plans, except to the extent that such benefits and incentives of all other
        officers of the Company are similarly reduced; (iii) any material change
        in
        Executive’s position or responsibilities (including the person or persons to
        whom Executive has reporting responsibilities) that represents an adverse
        change
        from Executive’s position or responsibilities as in effect at any time within
        ninety (90) days preceding the date of the Change of Control or at any time
        thereafter, excluding for this purpose an isolated, insubstantial and
        inadvertent action not taken in bad faith that is remedied by the Company
        promptly after notice thereof is given by Executive; (iv) the Company’s
        requiring Executive to relocate to any place outside of a twenty-five (25)
        mile
        driving distance of Executive’s current work site, except for reasonably
        required travel on the business of the Company or its affiliates that is
        not
        materially greater than such travel requirements prior to the Change in Control
        or unless Executive accepts such relocation opportunity; or (v) any failure
        to
        pay Executive any compensation or benefits to which Executive is entitled
        within
        fifteen (15) days of the date due. Executive may terminate his or her employment
        for Good Reason so long as Executive tenders his resignation to the Company
        within thirty (30) days after the occurrence of the event which forms the
        basis
        for his resignation for Good Reason. Executive shall provide written notice
        to
        the Company describing the nature of the event which forms the basis for
        Executive’s resignation for Good Reason, and the Company shall thereafter have
        ten (10) days to cure such event.

       

      (c) Definition
        of Change of Control. For
        purposes of this Agreement, a “Change of Control” means: (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
        Securities Exchange Act of 1934, as amended (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.

       

      3. Gross
        Up Provision. 

       

      (a)  In
        the event that the payments and benefits provided for in this Agreement (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 Executive’s “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 Executive’s “base amount” within the meaning of Code Section
        280G(b)(3), then Executive shall receive (i) a payment from the Company
        sufficient to pay such excise tax plus any interest or penalties incurred
        by
        Executive 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 Executive
        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 one time the Executive’s base salary.

       

      (b)  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 Executive in connection
        with transactions contemplated by a Change in Control, including Executive’s
        termination of employment (whether pursuant to the terms of this Agreement
        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; and
        

       

      (iii)  the
        value of any non-cash benefits or any deferred payment or benefit 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 Executive
        (the “Accounting Firm”) in accordance with the principles of Section 280G of the
        Code.

       

      (c)  For
        purposes of determining the amount of the Excise Tax Gross-Up Payment, Executive
        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 Executive’s 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.

       

      (d)  In
        the event that the Excise Tax is subsequently determined to be less than
        the
        amount taken into account under this Section 3, Executive 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 Executive 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.

       

      (e)  In
        the event that the Excise Tax is subsequently determined to exceed the amount
        taken into account under this Section 3 (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 Section 3.

       

      (f)  All
        determinations required to be made under this Section 3 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 Executive.
        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).

       

      4. Other
        Employment Terms and Conditions. The
        employment relationship between the parties shall be governed by the general
        employment policies and procedures of the Company, including those relating
        to
        the protection of confidential information and assignment of inventions;
        provided, however, that when the terms of this Agreement differ from or are
        in
        conflict with the Company’s general employment policies or procedures, this
        Agreement shall control. 

       

      5. General
        Provisions.

       

      (a) This
        Agreement, including all exhibits hereto, constitutes the complete, final
        and
        exclusive embodiment of the entire agreement between the parties with regard
        to
        the subject matter hereof. It is entered into without reliance on any promise
        or
        representation, written or oral, other than those expressly contained herein,
        and it supersedes any other such promises or representations. Notwithstanding
        the foregoing, nothing in this Agreement shall affect the parties’ obligations
        under the Stock Agreements or the Executive’s Employee Proprietary Information
        and Inventions Agreement. This Agreement cannot be modified except in a writing
        signed by Executive and a duly-authorized member of the Board.

       

      (b) Whenever
        possible, each provision of this Agreement will be interpreted in such a
        manner
        as to be effective under applicable law. The invalidity or unenforceability
        of
        any provision of this Agreement shall not affect the validity or enforceability
        of any other provision of this Agreement. Any invalid or unenforceable provision
        shall be modified so as to be rendered valid and enforceable in a manner
        consistent with the intent of the parties insofar as possible.

       

      (c) The
        Executive’s or the Company’s failure to insist upon strict compliance with any
        provision of this Agreement or the failure to assert any right the Executive
        or
        the Company may have hereunder shall not be deemed to be a waiver of such
        provision or right or any other provision or right of this
        Agreement.

       

      (d) This
        Agreement may be executed in several counterparts, each of which shall be
        deemed
        to be an original but all of which together will constitute one and the same
        instrument. Facsimile signatures shall be deemed as effective as
        originals.

       

      (e) This
        Agreement is intended to bind and inure to the benefit of and be enforceable
        by
        Executive, the Company and their respective successors, assigns, heirs,
        executives and administrators, except that Executive may not assign any of
        his
        duties hereunder and he may not assign any of his rights hereunder without
        the
        written consent of the Company. This Agreement shall be interpreted and enforced
        in accordance with the laws of the State of California.

       

      (f) If
        either party hereto bring any action to enforce such party’s rights hereunder,
        the prevailing party in any such action shall be entitled to recover such
        party’s reasonable attorneys’ fees and costs incurred in connection with such
        action.

       

      (g) For
        purposes of construction, this Agreement shall be deemed to have been drafted
        by
        the Company, and the rule of construction of contracts that ambiguities are
        construed against the drafting party shall be applied against the
        Company.

       

      (h) Any
        notice required to be given or delivered to the Company under the terms of
        this
        Agreement shall be in writing and addressed to the Corporate Secretary of
        the
        Company at its principal corporate offices. Any notice required to be given
        or
        delivered to Executive shall be in writing and addressed to Executive at
        the
        address indicated herein or to the last known address provided by Executive
        to
        the Company. All notices shall be deemed to have been given or delivered
        upon:
        personal delivery; three (3) days after deposit in the United States mail
        by
        certified or registered mail (return receipt requested); one (1) business
        day
        after deposit with any return receipt express courier (prepaid); or one (1)
        business day after transmission by facsimile.

       

      In
        Witness Whereof,
        the parties have executed this Agreement as of the day and year written
        below.

       

      
        	 	
                /s/
                  P.K. Karnik

              	
                 

              
	 	
                P.K.
                  KARNIK

              	
                 

              
	 	 	 	 
	 	
                Address:

              	
                301
                  Albert Drive

              	 
	 	 	
                Los
                  Gatos, CA 95032

              	 
	 	
                Date:

              	
                July
                  20, 2006

              	 
	 	 	 	 
	 	
                Chordiant
                  Software, Inc.

              	 
	 	 	 	 
	 	
                John
                  E. Landers Jr.

              	 
	 	
                Name:
                  John E. Landers Jr.

              	 
	 	
                Title:
                  Vice President, Human Resources

              	 
	 	 	 
	 	
                Date:

              	
                April
                  13, 2007

              	 
	 	 	 	 

      

      

      Exhibit A
        - Release Agreements

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Exhibit
        A

       

      RELEASE
        AGREEMENT FOR EMPLOYEES 40 YEARS OF AGE OR OLDER

       

      In
        exchange for the severance 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.

       

      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:

              	
                July
                  20, 2006

              	 	
                AGREED:

              	
                /s/
                  P.K. Karnik

              
	 	 	 	 	
                P.K.
                  Karnik

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