EX-10.7 7 ex10_7.htm EXHIBIT 10.7

Exhibit 10.7

Severance Agreement

THIS AGREEMENT is entered into as of December __, 2001, by and between
[_____________] (the "Employee") and ACTIONPOINT, INC., a Delaware corporation
(the "Company").

Term of Agreement.

This Agreement shall remain in effect from the date hereof until the earlier of:

The date when the Employee's employment with the Company terminates for any
reason not described in Section 6;

The date when the Company has met all of its obligations under this Agreement
following a termination of the Employee's employment with the Company for a
reason described in Section 6; or

[June __, 2002], if a Change-in-Control (as defined below) has not occurred by
such date.

Definition of Cause.

For all purposes under this Agreement, "Cause" shall mean:

The unauthorized use or disclosure of the confidential information or trade
secrets of the Company;

Conviction of, or a plea of "guilty" or "no contest" to, a felony under the laws
of the United States or any state thereof;

An act of embezzlement, fraud or theft with respect to the property of the
Company;

Gross misconduct, gross negligence or other conduct that is cause for
termination under any written Company policy that was in effect before the
Change in Control;

Repeated abuse of alcohol or drugs on the job or in a manner affecting job
performance; or

Failure to perform assigned duties.

The foregoing, however, shall not be deemed an exclusive list of all acts or
omissions that the Company may consider as grounds for the discharge of the
Employee with Cause. In the case of conduct described in Subsection (e) above,
such conduct shall constitute "Cause" only if such conduct recurs after the
Employee has received written notice that the Company considers such conduct to
be "Cause" under this Agreement. In the case of conduct described in
Subsection (f) above, such conduct shall constitute "Cause" only if such conduct
recurs after the Employee has received written notice that the Company considers
such conduct to be "Cause" under this Agreement and had an opportunity to cure
such conduct during a period of not less than 30 days.

Definition of Change in Control.

For all purposes under this Agreement, "Change in Control" shall mean the
consummation, at any time prior to [June __, 2002], of a merger or consolidation
of the Company or its wholly-owned subsidiary with or into Captiva Software
Corporation or its wholly-owned subsidiary (collectively, "Captiva") or other
corporate reorganization involving the Company and Captiva, without regard as to
whether or not more than 50% of the combined voting power of the continuing or
surviving entity's securities outstanding immediately after such merger,
consolidation or other reorganization is owned by persons who were not
stockholders of the Company immediately prior to such merger, consolidation or
other reorganization.

Definition of Continuation Period.

For all purposes under this Agreement, "Continuation Period" shall mean the
period commencing on the date when the termination of the Employee's employment
under Section 6 is effective and ending on the earlier of:

The date [__] months after the date when the employment termination was
effective; or

The date of the Employee's death.

Definition of Good Reason.

For all purposes under this Agreement, "Good Reason" shall mean that the
Employee:

Has incurred a material reduction in his/her authority or responsibility as an
employee of the Company, with the result that his/her position is no longer
comparable to the position that he/she occupied before the Change in Control;

Has incurred a reduction in excess of 10% in his/her base salary as an employee
of the Company;

Has been notified by the Company after the Change in Control that his/her
principal place of work as an employee of the Company will be relocated, which
will cause his/her one-way commuting distance to increase by more than 40 miles;
or

Is employed by a successor to the Company that has failed to comply with Section
10(a).

Eligibility for Severance Pay and Benefits.

Change in Control and Employment Termination

. The Employee shall be entitled to receive the severance pay described in
Section 7 and the benefits described in Section 8 from the Company if, and only
if, one of the following events occurs:

Within the first three-month period after the occurrence of a Change in Control,
the Employee voluntarily resigns his/her employment for Good Reason; provided,
however, that the reason set forth in Section 5(a) above shall not be Good
Reason during such three-month period;

Within the second three-month period after the occurrence of a Change in
Control, the Employee voluntarily resigns his/her employment for Good Reason; or

Within the first 12-month period after the occurrence of a Change in Control,
the Company terminates the Employee's employment for any reason other than
Cause.

The determination of whether the Employee's employment has terminated shall be
made without regard to whether the Employee continues to provide services to the
Company as a member of the Board or otherwise in the capacity of an independent
contractor. A transfer of the Employee's employment from the Company to a
successor of the Company shall not be considered a termination of employment, if
such successor complies with the requirements of Section 10(a).

Other Requirements

. The Employee shall be entitled to receive the severance pay described in
Section 7 and the benefits described in Section 8 from the Company only if the
Employee (i) continues his/her employment for such reasonable period (not to
exceed 90 days) as the Company may request in order to ensure an orderly
transition to his/her successor, (ii) has executed a general release (in a form
prescribed by the Company) of all known and unknown claims that he/she may then
have against the Company or persons affiliated with the Company and (iii) has
agreed not to prosecute any legal action or other proceeding based upon any of
such claims.

Amount of Severance Pay.

Within five business days after the termination of the Employee's employment
under Section 6, the Company shall pay the Employee a lump sum equal to [__]% of
the Employee's base compensation at the greater of (a) the annual rate in effect
on the date when the termination of the Employee's employment with the Company
is effective or (b) the annual rate in effect on the date of the Change in
Control.

Bonus, Group Insurance and Option Exercisability.

Bonus

. In the event of an employment termination described in Section 6, the Company
shall pay the Employee a bonus for the year in which such termination occurs.
Such bonus shall not be less than the bonus that would have been payable absent
such termination, calculated on the basis of the most recent interim results
available and prorated to reflect the portion of such year during which the
Employee was employed by the Company.

Group Insurance

. During the Continuation Period, the Employee (and, where applicable, the
Employee's dependents) shall be entitled to continue participation in the group
insurance plans maintained by the Company, including life, disability and health
insurance programs, as if the Employee were still an employee of the Company.
Where applicable, the Employee's salary for purposes of such plans shall be
determined at the greater of (i) the annual rate in effect on the date when the
termination of the Employee's employment with the Company is effective or
(ii) the annual rate in effect on the date of the Change in Control. To the
extent that the Company finds it impossible to cover the Employee under its
group insurance policies during the Continuation Period, the Company shall
provide the Employee with individual policies which offer at least the same
level of coverage and which impose not more than the same costs on the Employee.
The foregoing notwithstanding, in the event that the Employee becomes eligible
for comparable group insurance coverage in connection with new employment, the
coverage provided by the Company under this Subsection (c) shall terminate
immediately. Any group health continuation coverage that the Company is required
to offer under the Consolidated Omnibus Budget Reconciliation Act of 1986 shall
commence when coverage under this Subsection (c) terminates.

Option Exercisability

. If, at any time during the 12-month period after the occurrence of a Change in
Control, the Employee's employment is terminated by the Company without Cause or
by the Employee for Good Reason, any option to purchase the Company's Common
Stock held by the Employee that is exercisable at the time of such termination
of employment shall remain exercisable until the one-year anniversary of such
termination.

Limitation on Payments.

Application of Limitation

. This Section 9 shall apply only if the Employee, on an after-tax basis, would
receive more value under this Agreement after the application of this Section 9
than before the application of this Section 9. For this purpose, "after-tax
basis" shall mean a calculation taking into account all federal and state income
and excise taxes imposed on the Employee, including (without limitation) the
excise tax described in section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"). If this Section 9 is applicable, it shall supersede any
conflicting provision of this Agreement.

Basic Rule

. The Company shall not make any payment or property transfer to, or for the
benefit of, the Employee (under this Agreement or otherwise) that would subject
the Employee to the excise tax described in section 4999 of the Code. All
calculations required by this Section 9 shall be performed by the independent
auditors retained by the Company most recently prior to the Change in Control
(the "Auditors"), based on information supplied by the Company and the Employee,
and shall be binding on the Company and the Employee. All fees and expenses of
the Auditors shall be paid by the Company.

Reductions

. If the amount of the aggregate payments or property transfers to the Employee
must be reduced under this Section 9, then the Employee shall direct in which
order the payments or transfers are to be reduced, but no change in the timing
of any payment or transfer shall be made without the Company's consent. As a
result of uncertainty in the application of section 4999 of the Code at the time
of an initial determination by the Auditors hereunder, it is possible that a
payment will have been made by the Company that should not have been made (an
"Overpayment") or that an additional payment that will not have been made by the
Company could have been made (an "Underpayment"). In the event that the
Auditors, based upon the assertion of a deficiency by the Internal Revenue
Service against the Employee that the Auditors believe has a high probability of
success, determine that an Overpayment has been made, such Overpayment shall be
treated for all purposes as a loan to the Employee that the Employee shall repay
to the Company, together with interest at the applicable federal rate specified
in section 7872(f)(2) of the Code; provided, however, that no amount shall be
payable by the Employee to the Company if and to the extent that such payment
would not reduce the amount that is subject to an excise tax under section 4999
of the Code. In the event that the Auditors determine that an Underpayment has
occurred, such Underpayment shall promptly be paid or transferred by the Company
to, or for the benefit of, the Employee, together with interest at the
applicable federal rate specified in section 7872(f)(2) of the Code.

Successors.

Company's Successors

. The Company shall require any successor (whether direct or indirect and
whether by purchase, lease, merger, consolidation, liquidation or otherwise) to
all or substantially all of the Company's business or assets or all or
substantially all of the capital stock or assets of a subsidiary or other
business unit in which the Employee is employed to assume this Agreement and to
agree expressly in writing to perform this Agreement in the same manner and to
the same extent as the Company would be required to perform it in the absence of
a succession. For all purposes under this Agreement, the term "Company" shall
include any successor to a business or assets of the Company which executes and
delivers the assumption agreement described in this Subsection (a) or which
becomes bound by this Agreement by operation of law.

Employee's Successors

. This Agreement and all rights of the Employee hereunder shall inure to the
benefit of, and be enforceable by, the Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

Amendment of Prior Severance Agreement.

The definition of "Change-in-Control" under the Severance Agreement by and
between the Employee and the Company (f/n/a Input Software, Inc.), dated
______________ (the "Prior Agreement") is hereby amended such that any event
which would constitute a Change-in-Control under this Agreement shall not
constitute a Change-in-Control for any purpose pursuant to the Prior Agreement.

Miscellaneous Provisions.

Notice

. Notices and all other communications contemplated by this Agreement shall be
in writing and shall be deemed to have been duly given when personally delivered
or when mailed by U.S. registered or certified mail, return receipt requested
and postage prepaid. In the case of the Employee, mailed notices shall be
addressed to the Employee at the home address which the Employee most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of its Secretary.

Waiver

. No provision of this Agreement shall be modified, waived or discharged unless
the modification, waiver or discharge is agreed to in writing and signed by the
Employee and by an authorized officer of the Company (other than the Employee).
No waiver by either party of any breach of, or of compliance with, any condition
or provision of this Agreement by the other party shall be considered a waiver
of any other condition or provision or of the same condition or provision at
another time.

Whole Agreement; Amendments

. No agreements, representations or understandings (whether oral or written and
whether express or implied) which are not expressly set forth in this Agreement
have been made or entered into by either party with respect to the subject
matter hereof other than the Prior Agreement. This Agreement may be amended only
in writing, by an instrument executed by both parties.

No Setoff; Withholding Taxes

. There shall be no right of setoff or counterclaim, with respect to any claim,
debt or obligation, against payments to the Employee under this Agreement. All
payments made under this Agreement shall be subject to reduction to reflect
taxes required to be withheld by law.

Choice of Law

. The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of California, except their
choice-of-law provisions.

Severability

. The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
hereof, which shall remain in full force and effect.

Arbitration

.

Scope of Arbitration Requirement. Except as otherwise provided in Section 9, the
parties hereby waive their rights to a trial before a judge or jury and agree to
arbitrate before a neutral arbitrator any and all claims or disputes arising out
of this Agreement or the breach hereof.

Procedure. The arbitrator's decision shall be written and shall include the
findings of fact and law that support the decision. The arbitrator's decision
shall be final and binding on both parties, except to the extent applicable law
allows for judicial review of arbitration awards. The arbitrator may award any
remedies that would otherwise be available to the parties if they were to bring
the dispute in court. The arbitration shall be conducted in accordance with the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association; provided, however that the arbitrator shall allow the
discovery authorized by the California Arbitration Act or the discovery that the
arbitrator deems necessary for the parties to vindicate their respective claims
or defenses. The arbitration shall take place in San Jose, California or, at the
Employee's option, the county in which the Employee primarily worked with the
Company at the time when the arbitrable dispute or claim first arose.

Costs. The parties shall share the costs of arbitration equally, except that the
Company shall bear the cost of the arbitrator's fee and any other type of
expense or cost that the Employee would not be required to bear if he were to
bring the dispute or claim in court. Both the Company and the Employee shall be
responsible for their own attorneys' fees, and the arbitrator may not award
attorneys' fees unless a statute or contract at issue specifically authorizes
such an award.

No Assignment

. The rights of any person to payments or benefits under this Agreement shall
not be made subject to option or assignment, either by voluntary or involuntary
assignment or by operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor's process, and any action in violation
of this Subsection (h) shall be void.

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written.

ACTIONPOINT, INC.

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