exv10w35






Exhibit 10.35




January 9, 2008




Mr. Michael R. Shaw

C/O SpencerStuart




Dear Mike:




     On behalf of Selectica, Inc. (the “Company”), I am pleased to offer you the position of Vice
President/General Manager for the Sales Configuration Solutions Business Unit, as a regular
full-time employee, reporting directly to the Chairman and CEO, commencing on or before January 14,
2008. The terms and conditions of your offer will be as follows:


Salary: This position is considered salaried exempt, with an annual base salary of
$250,000.00, which will be paid semi-monthly in the amount of $10,416.67, less applicable taxes and
withholdings according to the Company’s standard payroll procedures. The Company performs annual
salary and performance reviews and endeavors to remain competitive with industry compensation
standards. By signing this letter agreement, you represent and warrant to the Company that you are
under no contractual commitments that are inconsistent with your obligations to the Company.



Incentive Plan: You will eligible to participate in the Company’s formal Incentive Plan,
which is based upon both pre-determined Company operational goals as well as reasonable goals
relevant to your position (MBO). The details of both the corporate goals as well as the MBOs will
be communicated and agreed between you and your manager within your first month of employment with
Selectica. The Incentive Plan is based upon percentage of annual salary, and this position is
eligible for an incentive of 25% of annual salary. Therefore, for the balance of FY’08, this
position will be eligible for an annual incentive of $62,500, calculated and paid quarterly against
established goals as detailed above. You will also be eligible for an overachievement incentive
TBD should the annual revenue goal for FY’08 be exceeded.



Restricted Shares: You will receive 75,000 restricted shares of the Company’s Common Stock
under the Plan (the “Shares”). All of the Shares will vest on the earliest Permissible Trading Day
after the close of the second consecutive fiscal quarter for which the Company’s consolidated
financial statements, as reported on a Form 10-K or Form 10-Q filed with the Securities and
Exchange Commission, show that the Company earned net income. In addition, (a) 50% of the Shares
will vest if the Company is subject to a Change in Control and (b) 50% of the Shares will vest if
(i) the Company is subject to a Change in Control and (ii) you are subject to an Involuntary
Termination within 12 months after the Change in Control. The grant of the Shares will be subject
to the other terms and conditions set forth in the Plan and the Company’s form of Restricted Stock
Agreement. A “Permissible Trading Day” is a day on which you are able to sell shares of the
Company’s Common Stock in a public market without violating applicable laws or Company policies, as
defined more specifically in your Restricted Stock Agreement.



Stock Options: Subject to Board approval, you will receive an option to purchase 150,000
shares of the Company’s Common Stock at an exercise price per share equal to the fair market value
of the Company’s Common Stock per share on the day when your options are granted by the Company’s
Board of Directors. The



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term of the option will be 10 years, subject to earlier expiration in the event of the termination
of your service. You will vest in 25% of the option shares after 12 months of continuous service,
and the remaining balance will vest in monthly installments over the next 36 months of continuous
service, as described in the applicable stock option agreement. The option will become exercisable
in full if the Company is subject to a Change in Control, as defined in the Company’s 1999 Equity
Incentive Plan (the “Plan”), after you have completed your first 12 months of continuous service.
The option will also become exercisable in full if (a) the Company is subject to a Change in
Control during your first 12 months of continuous service and (b) you are subject to an Involuntary
Termination, as defined in the Plan, within 12 months after the Change in Control. The grant of the
option will be subject to the other terms and conditions set forth in the Plan and in the Company’s
standard form of Stock Option Agreement.



Severance Benefits: You and the Company will enter into a Severance Agreement, the form of
which is enclosed as Exhibit A. The Severance Agreement provides, among other things, for (a) the
continuation of your base salary and health insurance benefits for six months if you are discharged
without Cause at any time or (b) the continuation of your base salary and health insurance benefits
for 12 months if you are discharged without Cause or resign for Good Reason within 12 months after
a Change in Control. (The capitalized terms are defined in the Severance Agreement.) You will be
required to execute a release in the form attached to the Severance Agreement as a condition of
receiving these benefits.



Benefits: You will be entitled to receive employee benefits, including PTO and holidays,
under the Company’s standard employee benefits program, as it may be amended from time to time.
Your eligibility to receive employee benefits will be subject in each case to the generally
applicable terms and conditions of the benefit plan in question and to the determination of any
person or committee administering such plan.




     Your employment with the Company will be “at will” meaning that either you or the Company will
be entitled to terminate our employment at any time for any reason, with or without cause. Any
contrary representations that have been made to you are superseded by this offer. This is the full
and complete agreement between you and the Company on this term. Although your job duties, title,
compensation and benefits, as well as the Company’s personnel policies and procedures, may change
from time to time, the “at-will” nature of your employment may only changed in an express written
agreement signed by you and an authorized officer of the Company.



     During the period that you render services to the Company, you will not engage in any
employment, business or activity that is in any way competitive with or otherwise conflicts with
the business or proposed business of the Company. While you render services to the Company, you
also will not assist any other person or organization in competing with the Company, in preparing
to compete with the Company or in hiring any employees of the Company.



     Other than your Stock Option and Restricted Stock Agreements (the terms of which shall be
determined by the Company’s Board of Directors in its sole discretion and evidenced and governed by
the applicable stock option agreement and 1999 Equity Incentive Plan) as well as your Severance
Agreement, this letter and all of the exhibits attached hereto contain all of the terms of your
employment with the Company and supersede any other understandings or agreements, oral or written,
between you and the Company.



     Any additions or modifications of these terms will have to be in writing and signed by you and
an officer of the Company. The terms of this letter agreement and the resolution of any disputes
will be governed by California law.



     On your first day of work, please bring with you evidence of your U.S. citizenship or proof of
your legal right to live and work in this country. We are required by federal law to examine
documentation of your employment eligibility within three business days after you begin work.



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     We believe there is a tremendous opportunity in your joining Selectica’s Executive Team at
this time. We hope that you find the foregoing terms acceptable, and look forward to the start of
your new career with the Company.



     This offer is contingent upon the successful completion of a reference and background check.
Please find a background check consent form enclosed to be returned to Karen O’Brien in Human
Resources. As with all Company employees, you will be required, as a condition of your employment
with the Company, to sign the Company’s standard Proprietary Information and Inventions Agreement
as well as the Arbitration Agreement. This offer is effective as of January 9, 2008. You may
indicate your agreement with these terms and accept this offer by signing and dating both the
enclosed duplicate original of this letter as well as the enclosed Proprietary Information and
Inventions Agreement and the Arbitration Agreement and returning them to Karen O’Brien.


This offer of employment supersedes any prior offers of employment with Selectica and will expire
at the close of business on January 11, 2008.




Sincerely,




SELECTICA, INC.




Robert Jurkowski

Chairman & CEO



Agreed and
accepted on January 10, 2008




	 	 	 	 	 	 	 
	/s/ Michael R. Shaw/ 

Signature

	 	 
	 	January 14, 2008 

Start Date
	 	 
	 
	 	 	 	 	 	 
	Michael R. Shaw 

(Print Name)
	 	 	 	 	 	 






Enclosures:

Change In Control Agreement

Proprietary Information and Inventions Agreement

Background Consent Form

Arbitration Agreement




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