**Exhibit 10.37**

 

March 25, 2005

 

 

William C. Bousema

1815 Port Tiffin Place

Newport Beach, CA  92660

 

Dear Bill:

We are pleased to offer you the position of SeniorVice President and Chief Financial Officer with Primal Solutions, Inc., aDelaware Corporation (“Primal”). Additionally, you have agreed to serve as Corporate Secretary.   This is an exempt position based at ourIrvine office, located at 18881 Von Karman Avenue, Suite 500, Irvine, California.  You will report directly to me.  Yourstart date is retroactive to February 1, 2005.

Our normal office hours are Monday through Friday,8:30 am to 5:30 pm.  We maintain abusiness casual office environment. Client meetings may require more formal business attire.

As a condition of employment, you will be required tosign our standard Employee Confidentiality & Invention AssignmentAgreement, which is enclosed.  Further,this offer of employment is contingent on verification of your right to work inthe United States, as required by the Immigration Reform and Control Act of1986.

Your compensation will include:
| **Base Salary**                        | $7,291.66 paid  semi-monthly based on Primal’s payroll schedule ($175,000 annualized amount  working full time).                                                                                                                                                                                                                                                                                                                                                          |
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| ***Executive Incentive Compensation*** | You may be entitled to  receive, in the form of additional compensation, an amount not less than 35%  of your base salary upon meeting or exceeding certain Company Performance  Goals.  The Company Performance Goals  for Fiscal Year 2005 incentive compensation purposes will include both  individual and company-wide targets. The Company Performance Goals for Fiscal  Year 2005 are still under development and are expected to be finalized by  March 31, 2005. |
| **Duties**                             | In  addition to those duties and responsibilities set forth on Exhibit A  hereto, you will have such duties as are assigned or delegated to you by the Chief  Executive Officer or the Company’s Board of Directors.                                                                                                                                                                                                                                                      |
| **Stock Options**                      | Following  commencement of employment, a recommendation will be made to the Board of  Directors to grant to you options to purchase 1,081,062 shares of common  stock under our 2004 Flexible Incentive Plan, which Primal stock options are  scheduled to vest over a three year period.

You  will receive credit for your service as a consultant in calculating your 

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| ** **        | stock option  vesting.  Additionally, if at any time  during your employment by Primal, (i) you are terminated without Cause, or  (ii) you terminate your employment for Good Reason, all outstanding unvested  stock options granted to you will accelerate and vest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| **Paid Time-Off** | As an employee  of Primal, you are eligible for paid vacations, personal holidays, and sick  leave.  The Employee Handbook describes  Primal’s current policies regarding these benefits.  As a member of Primal’s  senior management team, you will be  eligible to accrue up to four (4) weeks annual paid vacation in addition to  those paid holidays recognized in Primal’s employment policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **Benefits**      | Primal  provides medical, dental, life, AD&D, short- and long- term disability  insurance and a 401(k) program. You will be eligible to participate in the  Primal benefits plan per Primal’s standard benefits policy.  You will receive credit for your 4 months  of service as a consultant to Primal.

Primal  will pay or reimburse you for reasonable expenses incurred and expenditures made  by you on behalf of or at the request of Primal in the performance of your  duties as Senior Vice President, Chief Financial Officer and Secretary, in  accordance with the Primal’s employment policies, including attending  conventions, seminars, and other business meetings, in appropriate business  entertainment activities and for promotional expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **Termination**   | A  description of benefits you may be entitled to receive in the event of a  change in control has been separately addressed in that certain Change in  Control Agreement between you and Primal, of even date herewith.

The  following paragraphs of this Termination section (the “Severance Provisions”)  shall expire on the 1st anniversary of your employment with Primal  and are applicable to circumstances other than a Change in Control:

(A)          Other than in the event of a Change  in Control, if Primal terminates your employment without Cause or if you  terminate your employment for Good Reason (as those capitalized terms are  defined in the Change in Control Agreement), Primal will pay you (i) your  salary for the remainder, if any, of the calendar month in which such  termination is effective and for an additional 9-month period, (ii) 75% of  your incentive compensation for the Fiscal Year during which the termination  is effective and calculated assuming that 100% of the targets under such  bonus plans are achieved,  (iii)  accrued vacation through the date of termination, (iv) accrued but unpaid  incentive compensation from the previous Fiscal Year, if any, (v) executive  outplacement assistance for a period of 9 months, and (vi) continued coverage  under Primal’s medical, dental, life and disability plans or under a COBRA  plan providing similar benefits if continued coverage under Primal’s

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| ** ** | benefits  plans is not permitted, for you and your dependents on the same terms as in  effect at the time of termination of employment, for the period from the date  of termination until you obtain replacement coverage through other employment  or for a period of 9 months after such employment termination, whichever is  less.  Payments will only be made for  termination for Good Reason if you terminate within 1 month of the occurrence  of Good Reason. In no event will payments under (i), (ii), (iv) and (v),  above extend beyond 2-1/2 months following the close of the calendar year in  which termination under this paragraph occurs, and payments will be  accelerated, if necessary, to prevent such 2-1/2 month period to be exceeded.

(B)           If Primal terminates you for Cause,  or if you terminate your employment other than for Good Reason or disability,  Primal will pay you (i) your salary plus accrued vacation through the date  such termination is effective, and (ii) accrued and unpaid incentive compensation  from the previous Fiscal Year and for the then-current Fiscal Year (but only  to the extent such incentive compensation has been earned and appropriate  Company Performance Goals have been achieved prior to the termination of  employment), if any.

(C)           Upon Disability (as defined in the  Change in Control Agreement) for 120 consecutive days, or 180 days in any  12-month period, your employment may be terminated by either you or Primal  and upon such termination you will be entitled to (i) your salary, offset by  any payments made or benefits received by you in connection with any Company  disability policy, disability insurance or state disability program, plus  accrued vacation through the date of such termination, (ii) your  incentive compensation, if any, for the Fiscal Year in which the Disability  occurs, prorated through the end of the calendar month in which the  disability is deemed to have occurred, provided that the Company Performance  Goals for such Fiscal Year have been met, (iii) accrued and unpaid incentive  compensation, if any, from the previous Fiscal Year, and (iv) continued  coverage under Primal’s medical, dental, life and disability plans or under a  COBRA plan providing similar benefits if continued coverage under Primal’s  benefits plans is not permitted, for you and your dependents on the same  terms as in effect at the time of termination of employment, for a period of  3 months after such employment termination.   Payments under  (ii) and (iii),  above will be made no later than 2-1/2 months following the close of the  calendar year in which termination under this paragraph occurs.

(D)          Upon death, your designated  beneficiary will be entitled to  (i) your salary plus accrued vacation through the date of such termination,  (ii) your incentive compensation, if any, for the Fiscal Year in which your  death occurs, prorated through the end of the calendar month in which such  death occurs, provided that the Company Performance Goals for such Fiscal  Year have been met, 

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| ** **           | (iii)  accrued and unpaid incentive compensation, if any, from the previous Fiscal  Year, and (iv) continued coverage under Primal’s medical, dental, life and  disability plans or under a COBRA plan providing similar benefits if  continued coverage under Primal’s benefits plans is not permitted, for your  dependents on the same terms as in effect at the time of termination of  employment, for a period of 3 months after such employment termination.

As  a condition of and prior to you receiving any unvested pay or benefits  hereunder, Primal may require you to execute a release of all claims that you  may have against Primal or its affiliates arising from your employment with  Primal or its affiliates or the termination thereof, in a form reasonably  satisfactory to Primal.

Notwithstanding  the foregoing, for the 60 day period prior to the expiration of the 1st  anniversary of your employment with Primal, Primal will commence negotiations  with you in good faith regarding the new terms of this Termination section  (the “New Severance Provisions”).  If,  following such good faith negotiations of the New Severance Provisions, you  and Primal are unable to reach agreement regarding the New Severance  Provisions, the Severance Provisions contained herein shall expire on their  terms.  If Primal does not negotiate in  good faith, this letter agreement will expire on the one year anniversary of  your employment, your employment with Primal will be terminated and you will  be paid the severance benefits provided for in paragraph A of this  Termination section and all outstanding unvested stock options granted to you  will accelerate and vest. |
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| **Non-Interference** | In consideration of the compensation and benefits to  be paid or provided to you by Primal, you hereby covenant that you will not,  directly or indirectly during your employment with Primal and for as long as  you are entitled to severance benefits thereafter (i)  solicit business of the same or similar  type being carried on by Primal, (ii) solicit as an employee, independent contractor,  or otherwise, any person who is an employee of Primal or in any manner induce  or attempt to induce any employee of Primal to terminate his or her  employment with Primal, or (iii) interfere with Primal’s relationship with  any person, including any person who at any time during your period of  employment with Primal was an employee, contractor, supplier, or customer of  Primal.

If you breach any of the terms and provisions of  this Non-Interference section following the termination of your employment, Primal  may, in addition to any other remedies that Primal may have for any such  breach, immediately terminate the payment of any severance payments or  benefits then being paid to you hereunder, other than payments vested prior  to the date of termination of your employment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

 

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| **Miscellaneous** |  

Arbitration.

(A)          Arbitration  shall be the sole and exclusive remedy for any dispute, claim, or controversy  of any kind or nature (a “Claim”) arising out of, related to, or connected  with this letter agreement or the termination of the your employment  relationship with Primal. This mutual agreement to arbitrate includes any  Claim by you against any parent, subsidiary, or affiliated entity of Primal,  or any director, officer, general or limited partner, employee or agent of  Primal or of any such parent, subsidiary or affiliated entity. It also  includes any claim against you by Primal, or any parent, subsidiary or  affiliated entity of Primal.

(B)           This  section does not apply to any claims by you: (1) for workers’ compensation  benefits; (2) for unemployment insurance benefits; (3) under a benefit plan  where the plan specifies a separate arbitration procedure; (4) filed with an  administrative agency which are not legally subject to arbitration under this  letter agreement; or (5) which are otherwise expressly prohibited by law from  being subject to arbitration under this letter agreement.

(C)           Any  arbitration proceedings shall be conducted in Orange County, California. Any  Claim submitted to arbitration shall be decided by a single, neutral  arbitrator (the “Arbitrator”). The parties to the arbitration shall mutually  select the Arbitrator not later than 45 days after service of the demand for  arbitration. If the parties for any reason do not mutually select the  Arbitrator within the 45 day period, then any party may apply to any court of  competent jurisdiction to appoint a retired judge as the Arbitrator. The  parties agree that arbitration shall be conducted in accordance with California  Code of Civil Procedure sections 1280 et seq., including Code of Civil  Procedure section 1283.05 regarding discovery, except as modified in  this Agreement. The Arbitrator shall apply the substantive federal, state, or  local law and statute of limitations governing any Claim submitted to  arbitration. In ruling on any Claim submitted to arbitration, the Arbitrator  shall have the authority to award only such remedies or forms of relief as  are provided for under the substantive law governing such Claim. The Arbitrator  shall issue a written decision revealing the essential findings and  conclusions on which the decision is based. Judgment on the Arbitrator’s  decision may be entered in any court of competent jurisdiction.

(D)          Primal  shall be responsible for paying the fees and costs incurred in the  arbitration (e.g., filing fees, transcript costs and Arbitrator’s fees). The  parties shall be responsible for their own attorneys’ fees and costs, except  that the Arbitrator shall have the authority to award attorneys’ fees and  costs to the prevailing party in accordance with the applicable |
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| ** ** | law governing the dispute.

(E)           The  Arbitrator, and not any federal or state court, shall have the exclusive  authority to resolve any issue relating to the interpretation, formation or  enforceability of this letter agreement, or any issue relating to whether a  Claim is subject to arbitration under this letter agreement, except that any  party may bring an action in any court of competent jurisdiction to compel  arbitration in accordance with the terms of this letter agreement.

Severability.  In the  event any provision of this letter agreement or the application thereof to  any circumstance shall be held by a court of competent jurisdiction to be  invalid, illegal or unenforceable, then such provision shall be deemed to be  deleted herefrom in any action before that court, and all other provisions of  this letter agreement shall remain in full force and effect. |
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You acknowledge that this offer letter is not intendedto be construed as an employment agreement for any specific term, and thatPrimal is an “at-will” employer. Either you or Primal are free to terminateyour employment relationship at any time, with or without cause and with or withoutnotice. This is the full and complete agreement between us concerning durationof employment and termination of employment. The “at-will” nature of youremployment may only be changed in an expressed writing signed by you and thePresident of Primal.

If you have any questions concerning the terms of thisoffer, please do not hesitate to contact me. I feel the position will be a challenging, exciting and rewarding onefor you, and I personally look forward to working with you.  Please acknowledge your acceptance andunderstanding of these terms by signing and returning the following endorsementno later than March   , 2005. If possible, please fax a copy of the signed letter and the last page ofthe Confidentiality Agreement within the next day to (949) 221-8590.  This offer is valid through March   ,2005.  The additional copy is for yourrecords. Congratulations!

 
| Sincerely,                                                                           |             |    |
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|                                                                                 |             |    |
| /s/ Joseph R. Simrell                                                                |             |    |
| Joseph R. Simrell                                                                    |             |    |
| President & Chief Executive Officer                                              |             |    |
|                                                                                 |             |    |
| Attachment:   Employee  Confidentiality and Invention Assignment Agreement |             |
|                                                                                 |             |    |
| Accepted and Agreed to:                                                              | /s/ Bill Bousema | 3/25/04 |
|                                                                                 | Signature        | Date    |
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Exhibit A

 

 

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