Document:

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                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

THIS AGREEMENT is entered into as of the 14th day of March, 2001, by and between
Brian Henry (the "Executive") and Onyx Software Corporation, a Washington
corporation (the "Corporation").

For ease of reference, this Agreement is divided into the following parts, which
begin on the pages indicated:

FIRST PART:   TERM OF EMPLOYMENT, DUTIES AND SCOPE, COMPENSATION AND BENEFITS
              DURING EMPLOYMENT
              (Sections 1 - 10, beginning on page 2)

SECOND PART:  COMPENSATION AND BENEFITS IN CASE OF TERMINATION
              (Sections 11 - 13 beginning on page 7)

THIRD PART:   TRADE SECRETS, ASSIGNMENT OF INVENTIONS, SUCCESSORS, MISCELLANEOUS
              PROVISIONS, SIGNATURE PAGE
              (Sections 14 - 18 beginning on page 10)
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FIRST PART:  TERM OF EMPLOYMENT, DUTIES AND SCOPE, COMPENSATION AND BENEFITS
             DURING EMPLOYMENT

Section 1.  Term of Employment
----------

(a)  Basic Rule. The Corporation agrees to employ the Executive and the
     Executive agrees to remain in employment with the Corporation, from April
     4th, 2001 until the earliest of:

       1.  The date of the Executive's death; or

       2.  The date when the Executive's employment terminates pursuant to
           Subsection (b), (c), (d) or (e) below.

(b)  Early Termination or Resignation.  The Corporation may terminate the
     Executive's employment at any time and for any reason, with or without
     Cause, by giving the Executive 30 days' advance written notice.  The
     Executive may terminate the Executive's employment for any reason by giving
     the Corporation not less than 30 days' advance notice.  In the event of
     such termination, Executive shall be entitled to the compensation and
     benefits as detailed in the Second Part of this Agreement.

(c)  Termination for Cause.  The Corporation may terminate the Executive's
     employment at any time for Cause shown.  For all purposes under this
     Agreement, "Cause" shall mean (1) a willful and continued failure, after
     notice from the Corporation's Board of Directors (the "Board") and an
     opportunity to cure, to perform the Executive's duties under this
     Agreement, other than a failure resulting from the Executive's complete or
     partial incapacity due to physical or mental illness or impairment, (2) a
     willful act by the Executive that constitutes gross misconduct and that
     results in material harm to the Corporation, (3) a willful breach by the
     Executive of a material provision of this Agreement or (4) a material and
     willful violation of a federal or state law or regulation applicable to the
     business of the Corporation that results in material harm to the
     Corporation.   For purposes of this Agreement, no act, or failure to act,
     on the Executive's part shall be deemed "willful" unless done, or omitted
     to be done, by the Executive not in good faith and without reasonable
     belief that the Executive's action or omission was in the best interest of
     the Corporation.  Notwithstanding the foregoing, the Executive shall not be
     deemed to have been terminated for Cause unless and until the Corporation
     provides notice to the Executive by providing a copy of a resolution duly
     adopted by the affirmative vote of not less than three-quarters of the
     entire membership of the Board at a meeting of the Board called and held
     for such purpose,(after reasonable notice to the Executive and an
     opportunity for the Executive, together with counsel, to be heard before
     the Board) finding that, in the good faith opinion of the Board, the
     Executive was guilty of conduct set forth above and specifying the
     particulars thereof in reasonable detail.

(d)  Termination for Disability.  The Corporation may terminate the Executive's
     employment for Disability by giving the Executive written notice.  For all
     purposes under this Agreement, "Disability" shall mean that the Executive,
     at the time the notice is given, has been unable to perform the Executive's
     duties under this Agreement for a period of not less than three consecutive
     months as a result of the Executive's incapacity due to

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     physical or mental illness. In the event that the Executive resumes the
     performance of substantially all of the Executive's duties under this
     Agreement before the termination of the Executive's employment under this
     Section becomes effective, the notice of termination shall automatically be
     deemed to have been revoked.

(e)  Termination of Agreement.  This Agreement shall expire when all obligations
     of the parties hereunder have been satisfied.

Section 2.  Duties and Scope of Employment
----------

(a)  Position.  The Corporation agrees to employ the Executive for the term of
     employment under this Agreement in the position of Executive Vice President
     and Chief Financial Officer.  The Executive shall be the Corporation's
     highest ranking financial officer and shall report directly to the
     Corporation's Chief Executive Officer.  The Executive shall be given such
     duties, responsibilities and authorities as are normally associated with or
     appropriate to his position.

(b)  Obligations.  During the term of employment under this Agreement, the
     Executive shall devote the Executive's full business efforts and time to
     the business and affairs of the Corporation as needed to carry out his
     duties and responsibilities hereunder subject to the overall supervision of
     the Corporation's Chief Executive Officer.  The foregoing shall not
     preclude the Executive from engaging in appropriate civic, charitable or
     religious activities or from devoting a reasonable amount of time to
     private investments or from serving on the boards of directors of other
     entities, as long as such activities and service do not interfere or
     conflict with the Executive's responsibilities to the Corporation.

Section 3.  Base Compensation
----------

During the term of employment under this Agreement, the Corporation agrees to
pay the Executive as compensation for services a base salary at the annual rate
of $325,000 or at such higher rate as the Corporation may determine from time to
time.  Such salary shall be payable semi-monthly in accordance with the standard
payroll procedures of the Corporation.  The Executive's base salary shall be
reviewed annually and increased, to the extent appropriate, based upon the
Executive's performance; provided, however, that the increase for any year shall
not be less than the increase in the Consumer Price Index for all Urban
Consumers for the preceding 12-month period.  The annual compensation specified
in this Section 3, together with any increases in such compensation that the
Corporation may grant from time to time is referred to in this Agreement as
"Base Compensation."

Section 4.  Leveraged Compensation Plan
----------

As a member of the executive team, the Executive will participate each year in
the Corporation's annual incentive compensation plan ("Leveraged Compensation
Plan").  Under the Leveraged Compensation Plan, the Executive will be eligible
for a target incentive bonus of sixty five percent (65%) of his Base
Compensation prorated, in the case of 2001, to the first day of Executive's
commencement of employment.  The Executive's leveraged compensation will be
determined based upon the Corporation's achievement of designated financial and
business goals which are believed to

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be achievable given the Corporation's competitive and marketplace position, and
which are established, after consultation with the Executive no later than sixty
days after the beginning of each year. The leveraged compensation for the period
beginning with employment through June 30, 2001 will be, at a minimum, the
target incentive bonus amount, pro-rated for such initial period of employment.

Section 5.  Signing Bonus
----------

The Executive shall receive a bonus (the "Signing Bonus") of one hundred
thousand dollars ($100,000), payable within thirty (30) days of the first day of
the Executive's commencement of employment.  In the event that the Executive is
not employed with the Corporation at the one- year anniversary of the first day
of the Executive's commencement of employment, the Executive shall be required
to repay to the Corporation twenty five percent (25%) of the Signing Bonus, net
of income and employment taxes paid thereon, for each three month period during
the previous year in which the Executive was not so employed (or such pro-rated
amount for any partial period).  In the event that the Executive is not employed
with the Corporation as a result of a Qualifying Termination (as defined in
Section 13 of this Agreement), no such repayment shall be required.

Section 6.  Stock Options
----------

(a)  Initial Grant.  Subject to approval by the Corporation's Board of
     Directors, the Executive shall receive an option to purchase five hundred
     thousand (500,000) shares of the Corporation's common stock (the "Option")
     within two (2) weeks of the Executive's first day of commencement of
     employment, the exact date to be determined solely by the Board of
     Directors ("Grant Date"), at an exercise price equal to the fair market
     value of the Corporation's common stock on the Grant Date (fair market
     value to be calculated as defined in the Corporation's 1998 Stock Incentive
     Compensation Plan).   Such option shall be consistent with the provisions
     set forth in the Corporation's 1998 Stock Incentive Compensation Plan, and
     shall provide that twenty five percent (25%) of the shares covered by the
     Option shall vest on the one-year anniversary of the first day of
     Executive's employment (the "Initiation Date"), and an additional 2.0833%
     shall vest at the end of each month thereafter, with the result that 100%
     of the options are vested four years from the Initiation Date.

(b)  Additional Grants.  Subject to approval by the Corporation's Board of
     Directors, the Executive shall receive two additional options, each such
     option to purchase fifty thousand (50,000) shares of the Corporation's
     common stock (the "Additional Options") within two (2) weeks of the
     Executive's first day of commencement of employment, the exact date to be
     determined solely by the Board of Directors, at an exercise price equal to
     the fair market value of the Corporation's common stock on the Grant Date
     (fair market value to be calculated as defined in the Corporation's 1998
     Stock Incentive Compensation Plan).   Such Additional Options shall be
     consistent with the provisions set forth in the Corporation's 1998 Stock
     Incentive Compensation Plan, and shall provide that all of the shares
     covered by each such Additional Option shall vest in their entirety on the
     four year anniversary of the Initiation Date.  Notwithstanding the
     foregoing, each Additional Option shall further provide for immediate
     acceleration of the entire fifty

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     thousand (50,000) shares in the event that Executive achieves the relevant
     milestones as set forth in Schedule 1 to this Agreement.

(c)  Potential Future Grants.  Executive shall be eligible for additional annual
     option grants as provided by the Corporation.  Provided that the
     Executive's performance. meets expectations, the Executive shall receive
     annual option grants to purchase no less than one hundred thousand
     (100,000) shares, with the first such additional grant targeted for the one
     year anniversary of this Employment Agreement.  Each such additional grant
     shall be at an exercise price equal to the fair market value on the date of
     such grant and shall vest 2.0833% each month thereafter, with the result
     that 100% of any such option is vested in four (4) years.  For the
     avoidance of doubt, the one hundred thousand (100,000) share targeted
     future options shall be adjusted for future stock splits or similar changes
     in capitalization to the same extent, if any, that the future option grants
     are adjusted for other senior executives of the Corporation.

(d)  The Corporation agrees to file a Form S-8, or other applicable registration
     form, promptly after the issuance of all options granted hereunder.

Section 7.  Executive Benefits
----------

During the term of employment under this Agreement, the Executive shall be
eligible to participate in the executive benefit plans and executive
compensation programs maintained by the Corporation on a basis no less favorable
than that applicable to the Corporation's other senior executives, including
(without limitation) 401(k) and employee stock purchase plans, life, disability,
medical, dental, vision, accident and other insurance programs, transportation
fringe benefit plans, paid vacations, and similar plans or programs, subject in
each case to the generally applicable terms and conditions of the plan or
program in question and to the discretion and determinations of any person,
committee or entity administering such plan or program.  The Executive shall be
entitled to four weeks of paid vacation per year.

Section 8.  Relocation
----------

Executive shall be entitled to reimbursement from the Corporation for his
relocation expenses in accordance with the Corporation's executive relocation
program as set forth in Schedule 2 to this Agreement.  In addition, the
Corporation agrees that the Executive will normally spend three days a week in
the Bellevue or other appropriate Corporate office from the Executive's first
day of employment through June 30, 2001 and four days a week from July 1, 2001
through September 1, 2001.  The Corporation agrees to provide hotel or
reasonable furnished apartment accommodations for the Executive's use in
Bellevue and to reimburse as business expenses, the Executive's weekly round
trip coach airfare and related expenses from the first day of the Executive's
employment through September 1, 2001.

In the event that the Executive is not employed with the Corporation at the one-
year anniversary of the first day of the Executive's commencement of employment,
the Executive shall be required to repay to the Corporation twenty five percent
(25%) of the Mortgage Assistance, Closing Cost Assistance and Shipment of
Household Goods fees detailed in Schedule 2 for each three month period during
the previous year in which the Executive was not so employed (or

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such pro-rated amount for any partial period). In the event that the Executive
is not employed with the Corporation as a result of a Qualifying Termination (as
defined in Section 11 of this Agreement), no such repayment shall be required.

Section 9.  Legal Expenses
----------

Provided that the Executive commences employment with the Corporation, the
Corporation shall reimburse the Executive for up to ten thousand dollars
($10,000) in documented legal expenses incurred by the Executive in association
with this Agreement.

Section 10.  Business Expenses and Travel
-----------

During the term of employment under this Agreement, the Executive shall be
authorized to incur necessary and reasonable travel, entertainment and other
business expenses in connection with the Executive's duties hereunder.  The
Corporation shall reimburse the Executive for such expenses upon presentation of
an itemized account and appropriate supporting documentation, all in accordance
with generally applicable policies.

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SECOND PART:  COMPENSATION AND BENEFITS IN CASE OF TERMINATION

Section 11.  Involuntary, Actual or Constructive Termination Without Cause or
-----------  Disability

In the event that, during the term of this Agreement, the Executive's employment
terminates in a Qualifying Termination, as defined in Subsection (a), then,
following the effective date of the Release and Waiver of Claims described in
Section 11(e) (the "Release"), the Executive shall be entitled to receive the
payments and benefits described in Subsections (b)  (c) and (d).

(a)  Qualifying Termination.  A Qualifying Termination occurs if:

     (1)  The Corporation terminates the Executive's employment for any reason
          other than Cause or Disability; or

     (2)  The Executive separates from employment with the Corporation in
          response to a "Constructive Termination".  Constructive Termination is
          defined as (i) a material change in Executive's duties,
          responsibilities, or authorities (ii) a breach of Subsection 2(a), or
          (iii) a relocation of the Corporation's headquarters of more than 35
          miles from its location on the date hereof or a change in the
          Executive's principal business location to a location other than the
          corporate headquarters.

(b)  Severance.  The Corporation shall pay to the Executive within ten (10) days
     after the effective date of the Release, in one lump sum, an amount equal
     to the following:

     (1)  One hundred percent (100%) (i.e. twelve months) of the sum of the
          Executive's Base Compensation and target incentive bonus in effect on
          the date of the employment termination; plus

     (2)  A pro-rata portion of the Executive's unpaid target incentive bonus
          in effect on the date of the employment termination; plus

     (3)  All earned, but unpaid, bonuses outside of the leveraged compensation
          program owed to Executive as of the date of the termination.

(c)  One (1) Year of Life Insurance and Health Plan Coverage.  The coverage
     described in this Subsection (c) shall be provided for a "Continuation
     Period" beginning on the date when the employment termination is effective
     and ending on the earlier of (1) the one year anniversary of the date when
     the employment termination is effective or (2) the date of the Executive's
     death.  During the Continuation Period, the Executive (and, where
     applicable, the Executive's dependents) shall be entitled to continue
     participation in the group term life insurance plan and in the health care
     plan for Executives maintained by the Corporation as if the Executive were
     still an Executive of the Corporation.  The coverage provided under this
     Subsection (c) shall run concurrently with and shall be offset against any
     continuation coverage under Part 6 of Title I of the Executive Retirement
     Income Security Act of 1974, as amended.  Where applicable, the Executive's

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     compensation for purposes of such plans shall be deemed to be equal to the
     Executive's compensation (as defined in such plans) in effect on the date
     of the employment termination.  To the extent that the Corporation finds it
     undesirable to cover the Executive under the group life insurance and
     health plans of the Corporation, the Corporation shall provide the
     Executive (at its own expense) with the same level of coverage under
     individual policies.

(d)  Acceleration of Vesting.  As of the effective date of termination, all
     stock options not previously vested will become immediately vested and
     shall remain exercisable for a period of not less than 120 days; provided,
     however, that if the options are not exercisable during portion of such 120
     day period, by reason of applicable securities laws, the rules of any stock
     exchange on which the shares are listed, any agreement with an underwriter,
     or any agreement with or policy of the Corporation, the 120- day period
     shall be correspondingly extended.

(e)  Release of Claims.  As a condition to the receipt of the payments and
     benefits described in this Section 11, the Executive shall be required to
     execute a release substantially in the form attached hereto of all claims
     arising out of the Executive's employment or the termination thereof
     including, but not limited to, any claim of discrimination under state or
     federal law, but excluding claims for benefits accrued under the
     Corporation's employee benefit plans, and claims for indemnification from
     the Corporation under any indemnification agreement with the Corporation,
     its certificate of incorporation and by-laws or applicable law or claims
     for directors and officers' insurance coverage.

(f)  Conditions to Receipt of Payments and Benefits.  In view of the Executive's
     position and his access to Confidential Information, as defined below, the
     Executive agrees that, as a condition to the receipt of payments and
     benefits described in this Section  11, the Executive shall not, for a
     period of one (1) year, without the Corporation's prior written consent,
     directly or indirectly, alone or as a partner, joint venturer, officer,
     director, Executive, consultant, agent or stockholder (other than a less
     than 5% stockholder of a publicly traded company) (i) engage in any
     activity which is in competition with the business, the products or
     services of the Corporation, (ii) solicit any of the Corporation's
     employees, consultants or customers, (iii) hire any of the Corporation's
     employees or consultants in an unlawful manner or actively encourage
     employees or consultants to leave the Corporation, or (iv) otherwise breach
     his Confidential Information obligations.  Notwithstanding the foregoing,
     nothing herein shall restrict the Executive from employment with any entity
     which is in competition with the Corporation, if (a) the business unit of
     such entity which competes with the Corporation is not  a  principal
     business of such entity and (b)  if the Executive's duties with respect to
     such entity do not involve the activities which are in competition with the
     Corporation

(g)  No Mitigation.  The Executive shall not be required to mitigate the amount
     of any payment or benefit contemplated by this Section 11, nor shall any
     such payment or benefit be reduced by any earnings or benefits that the
     Executive may receive from any other source.

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Section 12.  Termination Resulting from a Change in Control
-----------

In the event of a Qualifying Termination occurring within two years after a
"Corporate Transaction" described in Section 2.6 of the 1998 Stock Incentive
Compensation Plan), the Executive's severance and benefits under Subsections
11(b) and 11(c) above shall be based upon an eighteen-month period rather than a
twelve-month period.

Section 13.  Other Terminations Under This Part
-----------

If termination of employment, actual or constructive, is not described in
Section 11, then the Executive is entitled only to the compensation, benefits
and reimbursements payable under the terms of Part I of this Agreement for the
period preceding the effective date of the termination including any disability
or death benefits to which Executive (or his estate or beneficiary(s)) may be
entitled as a result of termination of his employment on account of Disability
or death.  The payments under this Agreement shall fully discharge all
responsibilities of the Corporation to the Executive upon termination of the
Executive's employment.  This Section 13 applies, without limitation, to any
termination of employment initiated by the Executive (except an Executive-
initiated termination that is described in Paragraph 2 of Section 11(a)),
termination of employment caused by the Executive's death or Disability,
termination of the Executive for Cause, and any constructive termination (not
described in Section 11).

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THIRD PART:   TRADE SECRETS, ASSIGNMENT OF INVENTIONS SUCCESSORS, MISCELLANEOUS
              PROVISIONS, SIGNATURE PAGE

Section 14.  Confidential Information
-----------

(a)  Acknowledgement.  The Corporation and the Executive acknowledge that the
     services to be performed by the Executive under this Agreement are unique
     and extraordinary and that, as a result of the Executive's employment, the
     Executive will be in a relationship of confidence and trust with the
     Corporation and will come into possession of "Confidential Information" (1)
     owned or controlled by the Corporation, (2) in the possession of the
     Corporation and belonging to third parties or (3) conceived, originated,
     discovered or developed, in whole or in part, by the Executive.  As used
     herein "Confidential Information" includes trade secrets and other
     confidential or proprietary business, technical, personnel or financial
     information, whether or not the Executive's work product, in written,
     graphic, oral or other tangible or intangible forms, including but not
     limited to specifications, samples, records, data, computer programs,
     drawings, diagrams, models, customer names, ID's or e-mail addresses,
     business or marketing plans, studies, analyses, projections and reports,
     communications by or to attorneys (including attorney-client privileged
     communications), memos and other materials prepared by attorneys or under
     their direction (including attorney work product), and software systems and
     processes, unless and to the extent that the aforementioned matters become
     generally known to and available for use by the public other than as a
     result of the Executive's actions.  Any information that is not readily
     available to the public shall be considered to be a trade secret and
     confidential and proprietary, even if it is not specifically marked as
     such, unless the Corporation advises the Executive otherwise in writing.

(b)  Nondisclosure.  The Executive agrees that, except in the good faith
     performance of his duties under this Agreement or as otherwise required by
     law or legal process, he will not, without the prior written consent of the
     Corporation, directly or indirectly use Confidential Information for his
     own benefit or intentionally disclose Confidential Information to any
     unauthorized person, during or after the Executive's employment.  The
     Executive will keep the Confidential Information in strictest confidence
     and trust.  This Section 14 shall apply indefinitely, both during and after
     the term of this Agreement.

(c)  Surrender Upon Termination.  The Executive agrees that in the event of the
     termination of the Executive's employment for any reason, the Executive
     will promptly deliver to the Corporation all property belonging to the
     Corporation, including all documents and materials of any nature pertaining
     to the Executive's work with the Corporation, and will not take with the
     Executive any documents or materials of any description, or any
     reproduction thereof of any description, containing or pertaining to any
     Confidential Information.  It is understood that the Executive is free to
     use information that is in the public domain (not as a result of a breach
     of this Agreement).

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Section 15.  Inventions and Creations Belong to the Corporation
-----------

Any and all inventions, discoveries, improvements, or creations (collectively
"Creations") which the Executive has conceived or made or may conceive or make
during the period of employment under this Agreement in any way, directly or
indirectly, connected with the Corporation's business shall be the sole and
exclusive property of the Corporation.  The Executive agrees that all
copyrightable works created by the Executive or under the Corporation's
direction in connection with the Corporation's business are "works made for
hire" and shall be the sole and complete property of the Corporation and that
any and all copyrights to such works shall belong to the Corporation.  To the
extent such works are not deemed to be "works made for hire," the Executive
hereby assigns all proprietary rights, including copyright, in these works to
the Corporation without further compensation.

The Executive further agrees to (i) disclose promptly to the Corporation all
such Creations which the Executive has made or may make solely, jointly, or
commonly with others, (ii) assign all such Creations to the Corporation, and
(iii) execute and sign any and all applications, assignments, or other
instruments which the Corporation may deem necessary in order to enable it, at
its expense, to apply for, prosecute, and obtain copyrights, patents or other
proprietary rights in the United States and foreign countries or in order to
transfer to the Corporation all right, title, and interest in said Creations.

Section 16.  NOTICE REQUIRED BY REVISED CODE OF WASHINGTON 49.44.140
-----------

Any assignment of Inventions required by this Agreement does not apply to an
Invention for which no equipment, supplies, facilities or trade secret
information of the Company was used and which was developed entirely on the
employee's own time, unless (a) the Invention relates (i) directly to the
business of the Company or (ii) to the Company's actual or demonstrably
anticipated research or development, or (b) the Invention results from any work
performed by the employee for the Company.

Section 17.  Successors
-----------

(a)  Corporation's Successors.  The Corporation 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
     Corporation's business and/or assets, by an agreement in substance and form
     satisfactory to the Executive, to assume this Agreement and to agree
     expressly to perform this Agreement in the same manner and to the same
     extent as the Corporation would be required to perform it in the absence of
     a succession.  The Corporation's failure to obtain such agreement prior to
     the effectiveness of a succession shall be a breach of this Agreement and
     shall entitle the Executive to all of the compensation and benefits to
     which the Executive would have been entitled hereunder if the Corporation
     had involuntarily terminated the Executive's employment without Cause or
     Disability, on the date when such succession becomes effective.  For all
     purposes under this Agreement, the term "Corporation" shall include any
     successor to the Corporation's business and/or assets that executes and
     delivers the assumption agreement

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     described in this Subsection (a) or that becomes bound by this Agreement by
     operation of law.

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

Section 18.  Miscellaneous Provisions
-----------

(a)  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 Executive and by an authorized officer of the
     Corporation (other than the Executive).  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.

(b)  Whole Agreement.  No agreements, representations or understandings (whether
     oral or written and whether express or implied) that are not expressly set
     forth in this Agreement have been made or entered into by either party with
     respect to the subject matter hereof.

(c)  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
     Executive, mailed notices shall be addressed to the Executive at the home
     address that the Executive most recently communicated to the Corporation in
     writing.  In the case of the Corporation, mailed notices shall be addressed
     to its corporate headquarters, and all notices shall be directed to the
     attention of its General Counsel.

(d)  No Setoff. There shall be no right of setoff or counterclaim, with respect
     to any claim, debt or obligation, against payments to the Executive under
     this Agreement.

(e)  Choice of Law.  The validity, interpretation, construction and performance
     of this Agreement shall be governed by the laws of the State of Washington.
     Jurisdiction and venue for any claims arising under this Agreement shall
     lie exclusively in King County, Washington State, USA.

(f)  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.

(g)  No Assignment of Benefits.  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
     (i) shall be void.

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(h)  Employment at Will; Limitation of Remedies.  The Corporation and the
     Executive acknowledge that the Executive's employment is at will, as
     defined under applicable law. If the Executive's employment terminates for
     any reason, the Executive shall not be entitled to any payments, benefits,
     damages, awards or compensation other than as provided by this Agreement.

(i)  Employment Taxes.  All payments made pursuant to this Agreement shall be
     subject to withholding of applicable taxes.

(j)  Benefit Coverage Non-Additive.  In the event that the Executive is entitled
     to life insurance and health plan coverage under more than one provision
     hereunder, only one provision shall apply, and neither the periods of
     coverage nor the amounts of benefits shall be additive.

(k)  Arbitration of Disputes.  Any controversy or claim arising out of or
     relating to this Agreement (or the breach thereof) shall be settled by
     final, binding and non-appealable arbitration in Seattle, Washington by
     three arbitrators.  Subject to the following provisions, the arbitration
     shall be conducted in accordance with the rules of the American Arbitration
     Association (the "Association") then in effect.  One of the arbitrators
     shall be appointed by the Corporation, one shall be appointed by the
     Executive, and the third shall be appointed by the first two arbitrators.
     If the first two arbitrators cannot agree on the third arbitrator within 30
     days of the appointment of the second arbitrator, then the third arbitrator
     shall be appointed by the Association.  Any award entered by the
     arbitrators shall be final, binding and nonappealable and judgment may be
     entered thereon by either party in accordance with applicable law in any
     court of competent jurisdiction.  This arbitration provision shall be
     specifically enforceable.  The arbitrators shall have no authority to
     modify any provision of this Agreement or to award a remedy for a dispute
     involving this Agreement other than a benefit specifically provided under
     or by virtue of the Agreement.  In  the event the subject matter of the
     arbitration proceedings is whether or not the Executive was terminated for
     Cause, and Executive prevails on substantially all  material issues  of
     such claim, the Corporation shall be responsible for  up to an  maximum of
     $50,000, such figure which may be comprised of (a)  fees of the American
     Arbitration Association and the arbitrators  or (b) any expenses relating
     to the conduct of the arbitration (including  the Executive's reasonable
     attorneys' fees and expenses).  In the event the subject matter of the
     arbitration proceedings is other than whether or not the Executive was
     terminated for Cause, Executive shall be entitled to recover the monies
     contemplated above if he is awarded a material amount under such claim.
     Except as otherwise provided above,  each party shall be responsible for
     its own expenses relating to the conduct of the arbitration (including
     reasonable attorneys' fees and expenses) and shall share the fees of the
     American Arbitration Association equally.  Nothing in this paragraph shall
     be construed as precluding the Corporation from bringing a civil action in
     court for injunctive relief or other equitable relief relating to the
     breach or threatened breach of the agreements set forth in Sections 11(f)
     and 14 of this Agreement, provided that if a court determines that the
     Corporation is not entitled to such relief, the Corporation shall reimburse
     the Executive for his reasonable attorney's fees and expenses incurred in
     the defense of such action.

                                       13
<PAGE>

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Corporation by its duly authorized officer, as of the day and year first
above written.  Executive has consulted (or has had the opportunity to consult)
with his own counsel (who is other than the Corporation's counsel) prior to
execution of this Agreement.

                                      /s/ Brian C. Henry
                                      ---------------------
                                            Executive

                                      ONYX SOFTWARE CORPORATION

                                      By: /s/ Brent Frei
                                          ------------------
                                          Brent Frei

                                      Its:  Chief Executive Officer

                                       14
<PAGE>

                                   Schedule 1
                       Milestones for Stock Acceleration

As contemplated in Section 6(b) of this Agreement, each of the two option grants
detailed therein shall be accelerated so as to vest 100% immediately upon
achievement of the relevant metric detailed below.

1.  The first additional option grant of 50,000 shares shall immediately vest
    and become exercisable at such time as the Corporation's stock price trades
    for a period of thirty (30) consecutive days at an average price greater
    than or equal to $30.00 per share. Average price is defined as the average
    high and low per share sales price of the Corporation's common stock as
    reported by the Nasdaq National Market.

2.  The second additional option grant of 50,000 shares shall immediately vest
    and become exercisable at such time as the number of financial analysts
    covering the Corporation increases by a minimum of three relative to the
    number of financial analysts covering the Corporation as of the date of this
    Employment Agreement. At least one of the three new financial analysts
    commencing coverage of the Corporation must be an analyst of either Morgan
    Stanley, Goldman Sachs or Merrill Lynch. Each of the 3 new analysts must
    initiate their coverage with a "buy" rating or better, and each such rating
    must have a duration of at least ninety days.

                                       15
<PAGE>

                                   Schedule 2
                       Onyx Executive Relocation Program

The following summary is provided of your relocation package.  Any excess
weight, special charges or storage should be authorized by the Human Resources
Department.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
                  Benefit                                       Executive
---------------------------------------------------------------------------------------------
<S>                                          <C>
Relocation Allowance - Incidentals           $10,000
---------------------------------------------------------------------------------------------
House Hunting Trip                           Up to 7 days
  # of trips                                 3
  Lodging                                    7 Nights
  Meals                                      7 Days
  Airfare                                    Employee & Spouse (one trip with family)
CAR RENTAL                                   7 days
---------------------------------------------------------------------------------------------
Home Finding Assistance                      Yes
  Pre-move Counseling
  Cost of Living Analysis
  Relocation Package
---------------------------------------------------------------------------------------------
Rental Assistance                            Yes
  Market Research
  4 hour tour
---------------------------------------------------------------------------------------------
Expense Tracking                             Yes
---------------------------------------------------------------------------------------------
Tax Filing Assistance                        Yes
---------------------------------------------------------------------------------------------
Work Permit                                  Yes
---------------------------------------------------------------------------------------------
Temporary Living                             Up to 180 days

RENTAL CAR                                   Up to 60 days or until owner car arrives
---------------------------------------------------------------------------------------------
Shipment of Household Goods                  Full Pack/Unpack
  Weight                                       Full Weight
  Storage                                      45 days
  Insurance                                    Up to $1,000,000
  Shipment of Auto                             N/A
---------------------------------------------------------------------------------------------
Mortgage Assistance                          Provided that Executive has used all reasonable
                                             efforts to market and sell his home in a timely
                                             fashion, Onyx will pay the lesser of
                                             Executive's two documented carrying costs(ie.
                                             for his Chicago or Seattle home) until such
                                             time that Executive sells his Chicago home, up
                                             to a maximum of $ 19,625 per month, and
                                             provided that in no event shall such period
                                             exceed  six (6) months.  The estimated carrying
                                             costs would be the value invested in the house
                                             (in Winnetka it is about 3,000,000) times
                                             (6.875% interest plus 1% property tax).
---------------------------------------------------------------------------------------------
Closing Cost Assistance                      Onyx will pay for Executive's documented,
                                             direct closing costs associated with selling
                                             his Chicago home up to a maximum reimbursement
                                             of $150,000.  Onyx will pay for Executive's
                                             documented, direct closing costs associated
                                             with purchasing a new Seattle home, up to a
                                             maximum reimbursement of $25,000.
---------------------------------------------------------------------------------------------
</TABLE>

                                       16<PAGE>
                                                                    EXHIBIT 10.2

                             Stock Option Agreement

                           Onyx Software Corporation

I.    OPTION GRANT.  ONYX SOFTWARE CORPORATION, a Washington corporation (the
      "Company") hereby grants a nonqualified stock option to purchase a total
      of 500,000 shares of Common Stock of the Company, par value $0.01 per
      share, (the "Common Stock") as of April 4, 2001 (the "Grant Date") to
      BRIAN HENRY (the "Optionee"), subject in all respects to the terms and
      provisions of this Stock Option Agreement (the "Option"). This Option
      shall be governed by, and construed in accordance with, the laws of the
      state of Washington without regard for principles of conflict of laws.

II.   VESTING SCHEDULE.  The Vesting Initiation Date shall be April 4, 2001.
      This Option shall vest and become exercisable as to 25% of the total
      number of shares of Common Stock covered by this Option on the one year
      anniversary of the Vesting Initiation Date and an additional 2.0833% of
      the shares covered by the Option shall vest each month thereafter, with
      the result that the Option shall be fully vested and exercisable four
      years after the Vesting Initiation Date. Notwithstanding the foregoing, if
      Optionee's employment with the Company terminates in a Qualifying
      Termination (as defined in the Employment Agreement by and between the
      Company and Optionee entered into as of the 14th day of March, 2001 (the
      "Employment Agreement")), this Option shall, immediately upon such
      Qualifying Termination, become fully vested and become exercisable
      pursuant to the terms of Subsection 12(d) of the Employment Agreement.

III.  PRICE.  The Option exercise price per share (the "Exercise Price") as
      determined by the Board of Directors (the "Board") of the Company is
      $3.03. The Exercise Price shall be paid by delivery of cash or, subject to
      the discretion of the Board, by delivery of an approved equivalent to
      cash.

IV.   PURCHASE FOR INVESTMENT.  This Option may not be exercised if the issuance
      of shares of Common Stock pursuant to an exercise would constitute a
      violation of any applicable federal or state securities or other law or
      valid regulation. Any other provision of this Option notwithstanding, the
      obligation of the Company to issue shares pursuant to an exercise of the
      Option shall be subject to all applicable laws, rules and regulations and
      such approval by any regulatory body as may be required. The Company
      reserves the right to restrict, in whole or in part, the delivery of
      shares prior to the satisfaction of all legal requirements relating to the
      issuance of such shares, to their registration, qualification or listing
      or to an exemption from registration, qualification or listing.

V.    NON-ASSIGNABILITY.  The Option may not be transferred or hypothecated in
      any manner and shall only be exercisable by the Optionee or his legal
      representative. The terms of this Option shall be binding upon the
      executors, administrators, heirs, successors, and assigns of the Optionee.

VI.   EXERCISE.

      A.  This Option shall be exercisable, to the extent of the number of
          shares purchasable by Optionee at the date of termination, only (a)
          within one year after
<PAGE>

          such termination if the Optionee's termination is coincident with the
          Optionee's death or Disability (as defined in the Employment
          Agreement) or (b) within ninety days after the date that Optionee
          ceases to be an employee, director, officer, consultant, agent,
          advisor or independent contractor of the Company or a subsidiary if
          termination of the Optionee's employment or services is for any reason
          other than death, Disability, or a Qualifying Termination, but in no
          event later than the remaining Term of the Option or (c) within one
          hundred twenty (120) days after the date that Optionee ceases to be an
          employee, director, officer, consultant, agent, advisor or independent
          contractor of the Company or a subsidiary if termination of the
          Optionee's employment or services results from a Qualifying
          Termination, but in no event later than the remaining Term of the
          Option. Notwithstanding the foregoing provisions of Subsection
          V.I.A.(c) above, in the event that such options are not exercisable
          within any portion of such 120 day period, by reason of applicable
          securities laws, the rules of any stock exchange on which the shares
          are listed, any agreement with an underwriter, or any agreement with
          or policy of the Corporation, the 120-day period shall be
          correspondingly extended, provided that in no event shall extension
          continue later than the remaining Term of the Option. Any portion of
          this Option exercisable at the time of the Optionee's death may be
          exercised, to the extent of the number of shares purchasable by the
          Optionee at the date of the Optionee's death, by the personal
          representative of the Optionee's estate or the person(s) to whom the
          Optionee's rights under the Option have passed by will or the
          applicable laws of descent and distribution, at any time or from time
          to time within one year after the date of death, but in no event later
          than the remaining Term of the Option.

      B.  This Option may not be exercised more than ten (10) years from the
          date hereof (the "Term"), and may be exercised during the Term only in
          accordance with the terms and provisions set forth herein.

      C.  In the event that Optionee's employment terminates in a Qualifying
          Termination within two years of a Corporate Transaction (as defined
          below) involving the Company, this Option shall immediately accelerate
          so as to become fully vested and exercisable. A "Corporate
          Transaction" means any of the following events: (a) consummation of
          any merger or consolidation of the Company in which the Company is not
          the continuing or surviving corporation, or pursuant to which shares
          of the Common Stock are converted into cash, securities or other
          property, if following such merger or consolidation the holders of the
          Company's outstanding voting securities immediately prior to such
          merger or consolidation own less than a majority of the outstanding
          voting securities of the surviving corporation; (b) consummation of
          any sale, lease, exchange or other transfer in one transaction or a
          series of related transactions of all or substantially all of the
          Company's assets other than a transfer of the Company's assets to a
          majority-owned subsidiary corporation of the Company; or (c) approval
          by the holders of the Common Stock of any plan or proposal for the
          liquidation or dissolution of the Company. Ownership of voting
          securities shall take into account and shall include ownership as
          determined by applying Rule 13d-3(d)(1)(i) (as in effect on the date
          hereof) under the Securities and Exchange Act of 1934, as amended. The

                                       2
<PAGE>

          accelerated vesting of the Option pursuant to this Section VI(C) or
          pursuant to the Employment Agreement shall not be adversely altered or
          rendered null and void, without Optionee's express written consent,
          even if such accelerated vesting would preclude a Corporate
          Transaction or other transaction involving the Company from qualifying
          for financial accounting treatment of such transaction as a pooling of
          interests under APB Opinion No. 16.

      D.  This Option may be exercised for all or part of the shares eligible
          for exercise by presenting a written notice (the "Notice") to the
          Company that this Option is exercised in strict accordance with the
          terms and provisions of this Option. The Company shall determine
          whether or not the Notice complies with the terms and provisions of
          this Option. Such Notice shall identify this Option, state the number
          of shares as to which the Option is exercised and be signed by the
          Optionee. Delivery of the cash or cash equivalent in payment for the
          shares to be purchased pursuant to the exercise of this Option shall
          accompany the Notice. The Letter of Investment, representations and
          such other documentation required by Section IV hereof shall also
          accompany the Notice. If the Optionee is deceased, the Notice shall be
          signed, and if the Optionee is Disabled, it may be signed, by the
          Optionee's legal representatives or beneficiaries, and in all
          instances shall be accompanied by evidence satisfactory to the Company
          and its transfer agent of the right of such person or persons to
          exercise this Option.

      E.  The Optionee shall make arrangements satisfactory to the Company for
          the satisfaction of any withholding tax obligations that arise in
          connection with his Option. The Company shall not be required to issue
          any shares of Common Stock until such obligations are satisfied.

VII.  MARKET STANDOFF.  In connection with any underwritten public offering by
      the Company of its equity securities pursuant to an effective registration
      statement filed under the Securities Act, Optionee shall not sell, make
      any short sale of, loan, hypothecate, pledge, grant any option for the
      purchase of, or otherwise dispose or transfer for value or otherwise agree
      to engage in any of the foregoing transactions with respect to, any shares
      issued pursuant to this Option without the prior written consent of the
      Company or its underwriters. Such limitations shall be in effect for such
      period of time as may be requested by the Company or such underwriters and
      agreed to by the Company's officers and directors with respect to their
      shares; provided, however, that in no event shall such period exceed 180
      days. Holders of shares issued pursuant to this Option shall be subject to
      the market standoff provisions of this paragraph only if the other
      officers and directors of the Company are also subject to similar
      arrangements. In the event of any stock split, stock dividend,
      recapitalization, combination of shares, exchange of shares or other
      change affecting the outstanding Common Stock effected as a class without
      the Company's receipt of consideration, then any new, substituted or
      additional securities distributed with respect to the purchased shares
      shall be immediately subject to the provisions of this Section VII., to
      the same extent the purchased shares are at such time covered by such
      provisions. In order to enforce the limitations of this Section VII., the
      Company may impose stop-transfer instructions with respect to the
      purchased shares until the end of the applicable standoff period.

                                       3
<PAGE>

VIII. EFFECT OF CHANGE IN COMMON STOCK SUBJECT TO OPTION.  If the outstanding
      shares of Common Stock shall at any time be changed or exchanged by
      declaration of a stock dividend, split-up, combination of shares, or
      recapitalization, the number and kind of shares subject to this Option,
      and the Exercise Price, shall be appropriately and equitably adjusted so
      as to maintain the proportionate number of shares subject to this Option
      and the Exercise Price in relation to the change in stock; provided,
      however, that no adjustment shall be made by reason of the distribution of
      subscription rights on outstanding stock.

IX.   AMENDMENT OR ALTERATION.  The Board may amend or alter this Option, except
      that no amendment or alteration shall be made which would impair the
      rights of the Optionee hereunder, without his consent, and, except
      further, this Option shall be subject to the requirement that, if, at any
      time the Board shall determine, in its discretion, that the listing,
      registration or qualification of the stock issuable or transferable upon
      exercise thereof upon any securities exchange or under any state or
      federal law or the consent or approval of any governmental regulatory body
      is necessary or desirable as a condition of, or in connection with, the
      granting of this Option or the issue, transfer, or purchase of shares
      hereunder, this Option may not be exercised in whole or in part unless
      such listing, registration, qualification, consent, or approval shall have
      been effected or obtained free of any conditions not acceptable to the
      Board.

X.    OPTION NOT A SERVICE CONTRACT.  This Option is not an employment contract
      and nothing in this Option shall be construed as giving Optionee any right
      to be retained in the employ of the Company or limit the Company's right
      to terminate the employment or services of Optionee .

XI.   NO RIGHTS AS A SHAREHOLDER.  The Optionee, or a transferee of the
      Optionee, shall have no rights as a shareholder with respect to any Common
      Stock covered by the Option until such person becomes entitled to receive
      such Common Stock by filing a Notice and paying the Exercise Price
      pursuant to the terms of this Option.

                              ONYX SOFTWARE CORPORATION

                              By: /s/ Brent Frei
                                  -----------------------
                                  Chief Executive Officer

                                       4
<PAGE>

If the following acknowledgment and acceptance is not executed within ten (10)
days of the effective date of this Option, it shall lapse and be treated for all
purposes as if it were never granted.

The Optionee acknowledges and represents that he is familiar with and
understands the terms and provisions of this Option.  The Optionee hereby
accepts this Option subject to all the terms and provisions contained herein.
The Optionee hereby agrees to accept as binding, conclusive, and final all
decisions and interpretations of the Board upon any questions arising under the
Option.

Dated:  4/7/01

WITNESS:                               OPTIONEE:

                                       /s/ Brian C. Henry
--------------------------------       ---------------------------------------
                                       Brian Henry

                                       5

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