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                                                                   Exhibit 10.17



                 VERSANT OBJECT TECHNOLOGY CORP AND DAVID BANKS

                   SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS


This Settlement Agreement and Release of Claims (the "Agreement") is made as of
January 7, 1998 by and between David Banks ("MR. BANKS") and Versant Object
Technology Corporation, a California Corporation ("VERSANT").

RECITALS

A.       Mr. Banks was employed by Versant as President and Chief Executive
         Officer from April 15, 1993 until his resignation effective January 7,
         1998.

B.       Mr. Banks and Versant desire to finally and completely settle all
         matters between them and to enter into a mutually beneficial severance
         arrangement under the terms of this Agreement,

C.       Nothing contained in this Agreement, and no act taken pursuant to it,
         will constitute an admission by either party of any unfulfilled
         obligations or liability to the other party.

BASED ON THE RECITALS THE PARTIES AGREE AS FOLLOWS:

1.       Mr. Banks has resigned from Versant as its President and Chief
         Executive Officer and any other employee position effective January 7,
         1998. Mr. Banks has not resigned as a member of the Board of Directors
         of Versant Object Technology Corporation, or from the Board of
         Directors of any of Versant's wholly owned subsidiaries including
         Versant Object Technology Pty Ltd., Versant Object Technology SARL,
         Versant Object Technology LTD and Versant Object Technology GmbH.

2.       Mr. Banks affirms and acknowledges that he has received payment for all
         salary, bonuses, accrued but unused, vacation, sick pay and any other
         compensation owed to him by Versant, as of January 7, 1998. Mr. Banks
         acknowledges that Versant has fully paid, on a timely basis, all
         compensation amounts owing to him as of the date of this Agreement. Mr.
         Banks also acknowledges that Versant has reimbursed him all of his
         authorized expenses incurred to date hereof.

3.       For a period of one (1) year from January 7, 1998 (the "Salary
         Continuation Period"), Versant will continue to pay to Mr. Banks his
         base salary of $210,000 per year ($17,500 per month). These payments
         are guaranteed in the event of Mr. Bank's death during the Salary
         Continuation Period. In such event the scheduled payments shall be made
         to Mr. Bank's estate.

4.       During this Salary Continuation Period, Mr. Bank's shall continue to
         have Versant supplied insurance benefits, email address, and income tax
         returns preparation by Arthur Andersen as existed on January 7, 1998.

5.       During the Salary Continuation Period, Mr. Bank's options and unvested
         shares will continue to vest. The exercise date on which Mr. Banks must
         exercise all of his options vested since the start of his employment
         with Versant, will be 90 days after the end of this Salary Continuation
         Period. Mr. Banks acknowledges that his stock options may have to be
         converted to non qualified options or such other options as required by
         law.

6.       During the Salary Continuation Period, Mr. Banks shall be paid a one
         time bonus of $62,250 to be paid in 12 equal monthly installments
         beginning with the first regular Versant pay period after January 8,
         1998.
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7.       Mr. Banks represents that he will return to Versant all documents,
         computer stored data or other information relating to Versant and its
         Confidential Information as well as its property, equipment and other
         materials belonging to Versant that were provided to him by Versant in
         connection with his employment. Notwithstanding the foregoing, Versant
         shall allow Mr. Banks to retain the Versant supplied IBM ThinkPad
         Notebook used by Mr. Banks prior to January 7, 1998.

8.       Versant shall have no other obligation to re-employ Mr. Banks and Mr.
         Banks will not otherwise seek employment with Versant or any of its
         related companies.

9.       Mr. Banks, on behalf of himself and his heirs, successors, agents, and
         all other persons who could assert a claim based on Mr. Bank's
         relationship and/or dealings with Versant, hereby waives and releases,
         and promises never to assert, any and all claims that exist, or might
         exist, against Versant and its current and former predecessors,
         successors, parents, affiliates, subsidiaries, directors, officers
         employees, contractors, stockholders, customers, agents, attorneys,
         insurers, and assigns connected with, related to or arising from his
         relationship with Versant through the date hereof. These released
         claims include, but are not limited to, claims arising under federal,
         state, or local law; California Fair Employment and Housing Acts, as
         amended; California Age Discrimination in Employment Act, Older Workers
         Benefit Protection Act, Title VII of the 1964 Civil Rights Act as
         amended, and other federal, state, or local law whether based on
         statute or common law and whether sounding in tort or in contract, and
         any claim for attorneys fees. This release does not extend to any
         rights or liabilities created by this Agreement. Notwithstanding the
         foregoing, Mr. Banks does not waive any indemnification rights he may
         have including his rights pursuant to that certain Indemnity Agreement
         between Mr. Banks and Versant dated June 13, 1996.

10       MR. BANKS ALSO WAIVES AND RELEASES AND PROMISES NEVER TO ASSERT ANY OF
         THE CLAIMS DESCRIBED IN PARAGRAPH 9 ABOVE, RESPECTIVELY, EVEN IF HE
         DOES NOT BELIEVE THAT HE HAS ANY SUCH CLAIM. MR. BANKS THEREFORE WAIVES
         HIS RIGHTS UNDER CALIFORNIA CIVIL CODE SECTION 1542 WHICH STATES:

                  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 TO HIM MUST HAVE
                  MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

         MR. BANKS ALSO WAIVES HIS RIGHTS UNDER ANY OTHER STATUE OR COMMON LAW
         PRINCIPLE OF SIMILAR EFFECT. MR. BANKS INTENDS, BY HIS RELEASE OF
         CLAIMS SET FORTH IN PARAGRAPH 9 ABOVE, TO RELEASE ALL SUCH CLAIMS
         WHETHER KNOWN OR UNKNOWN TO HIM.

11.      Versant, on behalf of itself and its successors, agents and all other
         persons who could assert a claim based on Versant's relationship and/or
         dealings with Mr. Banks, hereby waives and releases and promises never
         to assert any and all claims that exist, or that might exist, against
         Mr. Banks connected with, related to, or arising from, his relationship
         with Versant through the date hereof. This release does not extend to
         any rights and liabilities created by this Agreement.

12       Mr. Banks will keep confidential all trade secrets and other
         confidential and/or proprietary information about Versant and its
         business that he obtained during his employment with Versant, and will
         not make use of such information in a way that is adverse to Versant's
         interests. Mr. Bank's also acknowledges that he will continue to be
         bound by his Employee Invention Assignment and Propriety Information
         Agreement with Versant.

13       The parties acknowledge that no promises or inducements have been
         offered except as set forth in this Agreement and that they execute
         this Agreement without reliance upon any statement or representation
         other than which is contained in this Agreement.

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14       This Agreement constitutes the entire agreement between the parties
         with respect to the matters that it covers and supercedes all prior and
         contemporaneous agreements, representations, and understandings among
         the parties with respect to such matters, except Mr. Bank's Invention
         Agreement and Proprietary Information Agreement. This Agreement may be
         amended only by written agreement signed by the parties to this
         Agreement. Parole evidence will be inadmissible to show agreement by
         and between the parties as to any term or condition contrary to or in
         addition to the terms and conditions contained in this Agreement.

15       This Agreement is made and will be construed under California law
         without regard to the body of law concerning choice of law

16       If any provision of this Agreement is held to be void, voidable,
         unlawful, or unenforceable, the remaining portions of this Agreement
         will continue in full force and effect and such provision shall be
         enforced to the maximum extent permitted by law.

17       This Agreement may be executed in counterpart originals with each
         counterpart to be treated the same as a single original

18       Mr. Banks understands that he may take up to twenty-one (21) days to
         consider this Agreement, and, by signing below, Mr. Bank's affirms that
         he was advised to consult with an attorney prior to signing this
         Agreement.

EXECUTION BY PARTIES

The parties hereby agree to each and every term outlined above


Dated:___________________                DAVID BANKS


                                         __________________________

Dated:___________________                VERSANT OBJECT TECHNOLOGY CORP.


                                         __________________________
                                         GARY RHEA
                                         VICE PRESIDENT, FINANCE



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