AutoCoded Document





Exhibit 10.1




EMPLOYMENT
AND NON-COMPETITION AGREEMENT



     THIS
EMPLOYMENT AND NON-COMPETITION AGREEMENT (the “Agreement”) is
made and entered into on March 14, 2000 by and between E.piphany, Inc., a
Delaware corporation (“Parent”) and Andrew Sherman (the
“Employee”), to be effective on the Effective Date (as defined
in the Reorganization Agreement described below).



     WHEREAS,
concurrently with the execution of this agreement, Parent, Octane Software, Inc.
(“Company”) and Orchid Acquisition Corporation, a California
corporation (“Sub”), and certain other parties have entered
into an Agreement and Plan of Reorganization dated of even date herewith (the
“Reorganization Agreement”), pursuant to which, among other
things, Sub shall merge with and into Company (the “Merger”).



     WHEREAS,
the term “Parent,” as used in this Agreement, shall include any
current or future, direct or indirect subsidiaries of Parent.



     WHEREAS,
Parent and the Employee desire to enter into this Agreement to provide for
Employee’s employment with Parent following the Merger contemplated by the
Reorganization Agreement.



     NOW,
THEREFORE, in consideration of the mutual promises contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:



     1.    Duties and Scope of Employment.



           (a)    Employment and Duties.    Beginning on the Effective Date, Parent agrees to
employ the Employee, and Employee agrees to be employed, initially in the
position to be determined by the Chief Executive Officer of Parent in his
reasonable discretion, and report directly to the Chief Executive Officer of
Parent. Employee shall use his or her best efforts to perform his or her duties
and responsibilities faithfully, diligently and competently in a manner
consistent with accepted management practices of Parent. The Employee shall have
all of the powers, duties and responsibilities customary to his or her office.
The Employee shall also use his or her best efforts to further the business of
Parent and its affiliated entities. In addition, Employee shall assume and
discharge such duties as are mutually agreed upon by Parent and Employee and as
are commensurate with his or her position.



           (b)    Exclusive Employment.    At all times during the Term, the Employee shall
devote substantially all of his or her business time, attention and energies to
the performance, fulfillment and satisfaction of his or her duties and
responsibilities to Parent under this Agreement, and shall not undertake or be
engaged in any other activities, whether or not pursued for gain, profit or
other pecuniary advantage, which could materially impair his or her ability to
perform, fulfill and satisfy his or her duties and responsibilities to Parent
under this Agreement, in any case without the prior written consent of Parent.




-1-












           (c)    Term of Employment.    Employee’s employment with Parent pursuant to
this Agreement shall commence on the Effective Date. Employee shall be an
“at will” employee of Parent, subject to such policies, benefits and
practices and procedures that are then applicable with respect to an at will
employee of Parent.



           (d)    Waiver of Constructive Termination.    Employee acknowledges and agrees that
in accepting the employment terms with Parent set forth in this Agreement and in
the amendments to Employee’s stock option and/or stock purchase agreements
with Company, and subject to Parent’s compliance with such employment terms
and the terms of the stock option and/or stock purchase agreements, Employee
hereby waives any claim that Employee has been subject to a diminution of duties
in connection with the Merger.



     2.    Compensation.



           (a)    Cash Compensation.    Parent shall pay the Employee as compensation for his
or her services hereunder a base salary and target incentive in the same amount
as the Employee has previously agreed with the Company (the
“Compensation”). Such Compensation shall be reviewed on an annual
basis consistent with Parent’s annual salary review cycle it may adopt for
officers of Parent by the Board of Directors of Parent or by the Chief Executive
Officer of Parent, and may be increased and decreased within the budgetary
guidelines established by Parent in connection with such annual review. Such
base salary shall be paid periodically in accordance with Parent’s payroll
practices. Such target incentive shall be paid periodically in accordance with
the Company’s target incentive program.



           (b)    Stock Options; Restricted Stock.    All of Employee’s existing options to
purchase Company common stock will be assumed by Parent and all repurchase
rights held by Company will be assigned, as provided in the Reorganization
Agreement.



     3.    Employee Benefits.    The Employee shall be eligible to
participate in the employee benefit plans and executive compensation programs
maintained by Parent applicable to other officers of Parent, including (without
limitation) retirement plans, savings or profit sharing plans, incentive or
other bonus plans, life, disability, health, accident and other insurance
programs, paid vacations, and similar plans or programs, subject, in each case,
to the generally applicable terms and conditions of the applicable plan or
program in question. During the Employee’s period of employment, the
Employee shall be entitled to receive all fringe benefits and perquisites in
accordance with the plans, practices, programs and policies of Parent as from
time to time in effect. Employee shall receive credit for service with Company
for each such benefit plan as provided in the Reorganization Agreement.



     4.    Expenses.    Parent will pay or reimburse Employee for
reasonable travel, entertainment or other expenses incurred by Employee in the
furtherance of or in connection with the performance of Employee’s duties
hereunder in accordance with Parent’s established policies. Employee shall
furnish Parent with evidence of the incurrence of such expenses within a
reasonable period of time from the date that they were incurred.






-2-












     5.    Proprietary Information, Invention Assignment and Arbitration
Agreement.    Concurrent with the execution of this Agreement,
Employee shall execute a copy of Parent’s standard form of Proprietary
Information, Invention Assignment and Arbitration Agreement in the form attached
hereto as Annex A.



     6.    Conflicting Obligations.    Employee certifies that Employee
has no outstanding agreement or obligation that is in conflict with any of the
provisions of this Agreement, or that would preclude Employee from complying
with the provisions hereof, and further certifies that Employee will not enter
into any such conflicting agreement during the term of this Agreement.



     7.    Employee Covenants.



           (a)    
Non-Compete. In consideration of: (i) the several agreements made by
Parent with Employee in and pursuant to the Reorganization Agreement, and (ii)
Parent’s willingness to enter into the Reorganization Agreement, Employee
agrees that (A) for the twenty-four (24) month period following the Effective
Date for or (B) in the event that the period set forth in clause (A) is
determined to be unenforceable by the court of competent jurisdiction, the
maximum period allowable (the “Non-Compete Period”), Employee will
not, directly or indirectly, engage in, be employed by (whether as an officer,
employee, director, proprietor, partner, consultant or otherwise), or have any
ownership interest in, or participate in the financing, operation, management or
control of, any person, firm, corporation, business or entity that engages in
customer relationship management or electronic customer relationship management
consisting of any of the following: sales, service and marketing functionality
(including related inbound services and support and inbound and outbound
electronic mail); customer reporting; customer analytics; or campaign management
(a “Company Competitor”). It is agreed that ownership of no more than
one percent (1%) of the outstanding voting stock of a publicly-traded or
private company shall not, in and of itself, constitute a violation of this
section. Nothing herein shall prevent Employee from investing in venture capital
or other investment funds as a limited partner, provided that Employee’s
investment is solely of a passive nature. In the event that Employee wishes to
invest in a Company Competitor, Employee may seek a written waiver from
Parent’s Chief Executive Officer.



           (b)    Non-Solicit; Non-Hire.    Employee agrees that until the later of: (i)
expiration of the Non-Compete Period specified above in subsection (a) or (ii)
twelve (12) months following the date of termination of Employee’s
employment with the Parent, Employee shall not:



                   (i)    directly or indirectly take any action to, or do anything reasonably intended
to, divert business from Parent or any of its respective subsidiaries, or
influence or attempt to influence any retailer, dealer, vendor, supplier,
licensor, consultant, customer or potential customer of Parent or any of its
respective subsidiaries, to cease doing business with or compete with Parent or
any of its respective subsidiaries, as the case may be; or



                   (ii)    hire, recruit, solicit, or assist others in hiring, recruiting, or soliciting,
any person who is an employee of Parent or any of its subsidiaries, or encourage
or induce, or attempt to encourage or induce any such employee to terminate his
or her employment with Parent or any of its affiliates, unless such employee is
no longer employed by Parent (or its subsidiaries).






-3-













           (c)    REMEDIES.    THE EMPLOYEE HEREBY RECOGNIZES AND ACKNOWLEDGES THAT A MATERIAL
VIOLATION OF THE TERMS AND PROVISIONS OF THIS SECTION 7 WOULD CAUSE IRREPARABLE
INJURY TO PARENT OR ANY OF ITS AFFILIATES, AS THE CASE MAY BE, FOR WHICH PARENT
OR ANY OF ITS AFFILIATES WOULD HAVE NO ADEQUATE REMEDY AT LAW. ACCORDINGLY, IN
THE EVENT THAT THE EMPLOYEE SHALL FAIL TO MATERIALLY COMPLY WITH THE TERMS AND
PROVISIONS OF THIS SECTION 7 IN ANY RESPECT, AND NOTWITHSTANDING ANY ARBITRATION
AGREEMENT BETWEEN PARENT AND EMPLOYEE, PARENT SHALL BE ENTITLED TO PRELIMINARY
AND OTHER INJUNCTIVE RELIEF AND TO SPECIFIC PERFORMANCE OF THE TERMS AND
PROVISIONS HEREOF. IN FURTHERANCE AND NOT IN LIMITATION OF THE FOREGOING, WITH
RESPECT TO ANY VIOLATION OR BREACH BY THE EMPLOYEE OF THE TERMS AND PROVISIONS
OF THIS SECTION 7 THE EMPLOYEE HEREBY WAIVES ANY CLAIM OR DEFENSE THAT PARENT OR
ANY OF ITS AFFILIATES HAVE AN ADEQUATE REMEDY AT LAW OR THAT MONEY DAMAGES WOULD
PROVIDE AN ADEQUATE REMEDY FOR SUCH VIOLATION OR BREACH.



           (d)    Severability.    The parties intend that the covenants contained in the
preceding paragraphs shall be construed as a series of separate covenants, one
for each county, city, state and other political subdivision of each country in
which a Company Competitor is located. Except for geographic coverage, each
separate covenant shall be deemed identical in terms to the covenant contained
in the preceding paragraphs. If, in any judicial proceeding, a court shall
refuse to enforce any of the separate covenants (or any part thereof) deemed
included in said paragraphs, then such unenforceable covenant (or such part)
shall be deemed eliminated from this Agreement for the purpose of those
proceedings to the extent necessary to permit the remaining separate covenants
(or portions thereof) to be enforced by such court. It is the intent of the
parties that the covenants set forth herein be enforced to the maximum degree
permitted by applicable law.



     8.    Representations of Employee.    Employee represents that:



           (a)    Employee:    (i) is familiar with the covenants not to compete and not to
solicit/hire set forth in this Agreement, (ii) is fully aware of his or her
obligations hereunder and (iii) is receiving specified, bargained-for
consideration for his or her covenants not to compete and not to solicit/hire.



           (b)    Execution of this Agreement and performance of Employee’s obligations
hereunder, will not conflict with, or result in a violation of or breach of and
any other agreement to which Employee is a party or any judgment, order or decree
to which Employee is subject.



     9.    Termination.    If Employee’s employment with Parent (or
any of its affiliates) is terminated by Parent (or any of its affiliates), by
Employee, as a result of death or disability, or in any other manner, then
Employee shall not be entitled to receive severance or other benefits other than
those set forth in Employee’s stock option or stock purchase agreements
with Company, as amended in connection with the Merger; provided,
however, Parent shall pay the Employee his or her base salary then due
and payable through the date of such termination (the “Termination
Date”), any unused accrued vacation and any previously earned and
unpaid target incentive through, and any





-4-










unpaid
reimbursable expenses  outstanding as of, the Termination Date. Any benefits to which the
Employee or  his or her beneficiaries may be entitled under the plans and programs
described  in Section 3 above, or any other applicable plans and programs in which the
Employee participated as an employee of Parent, shall be determined as of the
Termination Date in accordance with the terms of such plans and programs.



     10.   Arbitration; Consent to Personal Jurisdiction.



           (a)    Employee
agrees that any dispute or controversy arising out of, relating to, or in
connection with this Agreement or the interpretation, validity, construction,
performance, breach, or termination thereof, shall be settled by binding
arbitration to be held in San Mateo County, California, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (the
“Rules”). The arbitrator may grant injunctive or other relief
in such dispute or controversy. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator’s decision in any court having jurisdiction.



           (b)    The arbitrator(s) shall apply California law to the merits of any dispute or
claim, without reference to rules of conflicts of law.



           (c)    Parent shall pay the costs and expenses of the arbitrator, and each shall
separately pay its counsel fees and expenses.



           (d)    EMPLOYEE HAS READ AND UNDERSTANDS THIS SECITON 10, WHICH DISCUSSES ARBITRATION.
EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EMPLOYEE AGRESS TO SUBMIT
ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR
THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION
THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A
WAIVER OF EMPLOYEE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF
ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP,
INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:



                   (i)    ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT,
BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING,
BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL
DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL
INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION;



                   (ii)    ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE,
INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE
CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE
AMERICANS WITH





-5-












DISABILITIES
ACT OF 1990, THE FAIR LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING
ACT, AND LABOR CODE SECTION 201, et seq;



                   (iii)    ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO
EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.



     11.    General Provisions.



           (a)    Entire
Agreement.    This Agreement, together with the stock option and stock purchase
agreements with Company described in Sections 1(d) and 9 and Annex A, represents
the entire agreement and understanding between the parties as to the subject
matter hereof, and supersedes all prior or contemporaneous agreements, whether
written or oral.



           (b)    Waiver.    No waiver, alteration, or modification of any of the provisions
of this Agreement shall be binding unless in writing and signed by duly
authorized representatives of the parties hereto. No failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or future exercise thereof or the exercise of any other right, power or
privilege hereunder.



           (c)    Severability.    If one or more of the provisions in this Agreement are
deemed void by law, then the remaining provisions will continue in full force
and effect.



           (d)    Successors.



                   (i)    Parent’s
affiliates may assume the liabilities and obligations, and succeed to the rights
and interests, of Parent under this Agreement at any time and without
limitation. In addition, any successor to Parent (whether direct or indirect and
whether by purchase, lease, merger, consolidation, liquidation or otherwise) to
all or substantially all of Parent’s business and/or assets shall assume
the obligations under this Agreement and agree expressly to perform the
obligations under this Agreement in the same manner and to the same extent as
Parent would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term “Parent”
shall include any successor to Parent’s business and/or assets which
executes and delivers the assumption agreement required by this Section, or
which otherwise becomes bound by the terms of this Agreement by operation of
law.



                   (ii)    The terms of 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,
devises and legatees.



           (e)    Counterparts.    This Agreement may be executed by either of the parties
hereto in counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.



           (f)    Governing Law; Consent to Personal Jurisdiction.    This agreement shall be
governed in all respects by the internal laws of the State of California without
regard to conflict of laws provisions. Each of the Employee and Parent hereby
consents to the personal jurisdiction of






-6-












the state and
federal courts located in  the counties of San Mateo, California for any action or
proceeding arising from  or relating to this Agreement or relating to any arbitration in
which the  parties are participants.



           (g)    Notice.    Any notice or communication required or permitted under this
Agreement shall be made in writing and delivered personally to the other party or
sent by certified or registered mail, return receipt requested and postage
prepaid.



           (h)    Effectiveness.    This Agreement shall automatically be effective upon the
Effective Time of the Merger contemplated by the Reorganization Agreement
without any further action of any parties hereto. This Agreement will terminate
if the Merger contemplated by the Reorganization Agreement fails to occur by
October 15, 2000.



                   (i)    ADVICE OF COUNSEL.    I ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, I
HAVE HAD THE OPPORTUNITY TO SEEK THE ADVICE OF LEGAL COUNSEL, AND I HAVE READ
AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT
SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR
PREPARATION HEREOF.









[Remainder
of Page Intentionally Left Blank]






-7-











     IN
WITNESS WHEREOF, the parties have executed this Agreement on the date first above
written.


	E.PIPHANY, INC.	EMPLOYEE		 
	 
	By: 	Roger Siboni
	By: 	Andrew Sherman
	 
	Name: 	Roger Siboni
	Name: 	Andrew Sherman
	 
	Title: 	CEO
	Employee's Address for Notice	 
	 	 	1737 Jones St
	 
	 	 	San Francisco
	 
	 	 	CA 940109
	 











   [Signature
Page to Employment Agreement]






-8-











AMENDMENT TO
EMPLOYMENT AND NON-COMPETITION AGREEMENT



     This
Amendment to Employment and Non-Competition Agreement (the
“Amendment”) is made and entered into on May 31, 2000 by and between
E.piphany, Inc., a Delaware corporation, (“Parent”) and Andrew Sherman
(“Employee”). Parent and Employee are parties to an Employment and
Non-Competition Agreement of March 14, 2000 (the “Agreement”), and
they now agree to amend the Agreement as set forth below.



     1.    
A new Section 10 is hereby added to the Agreement which states as follows:



	 	        10.    Leave of Absence.    Notwithstanding anything contained in Section 9, Employee may elect
to take a personal leave of absence under the circumstances described in this section.







	 	                 (a)    
If Employee remains an employee of Parent in good standing (which means that
Employee has performed all of his duties and responsibilities for Parent in a
satisfactory fashion) through December 31, 2000, and signs a general release of
known and unknown claims in a form satisfactory to Parent, Employee may, at any
time thereafter while employed by Parent, elect to take a personal leave of
absence for a period of three months. While on such leave, Employee will
receive the following:







	 	                            (i)     
Employee will be paid a nominal base salary (the salary rate will be determined
by Parent in its sole discretion), which salary will be paid in accordance with
Parent’s normal payroll procedures;







	 	                            (ii)    
Employee will continue to receive group health insurance coverage under
Parent’s applicable group health insurance plans; and







	 	                            (iii)   
any unvested stock options granted to Employee by Parent will continue to vest
during such leave.







	 	Employee
will not be entitled to any compensation or benefits during his personal leave
of absence except as set out in subsections (i)-(iii). At the conclusion of
such leave, Employee’s employment with Parent will terminate as a result of
Employee voluntary resignation.







	 	                 (b)    
If Employee remains an employee of Parent in good standing through June 1, 2001,
and signs a general release of known and unknown claims in a form satisfactory
to Parent, Employee may, at any time thereafter while employed by Parent, elect
to take a personal leave of absence for a period of six months. While on such
leave, Employee will receive the following.










-9-













	 	                            (i)     
Employee will be paid a nominal base salary (the salary rate will be determined
by Parent in its sole discretion), which salary will be paid in accordance with
Parent’s normal payroll procedures;







	 	                            (ii)     
Employee will continue to receive group health insurance coverage under
Parent’s applicable group health insurance plans; and







	 	                            (iii)    
any unvested stock options granted to Employee by Parent will continue to vest
during such leave.







	 	Employee
will not be entitled to any compensation or benefits during his personal leave
of absence except as set out in subsections (i)-(iii). At the conclusion of such
leave, Employee’s employment with Parent will terminate as a result of
Employee’s voluntary resignation.







       2.    
Sections 10  (Arbitration)  and 11 (General  Provisions)  of the  Agreement  are
renumbered as Sections 11 and 12,  respectively.



Except
as modified by this Amendment, the Agreement shall remain in full force and
effect.


	E.piphany, Inc.		Employee	 
	 
	By: 	Steve Hams
	 	Andrew Sherman
	 
	 	Steve Hams, VP Human Resources	 	Andrew Sherman	 








-10-