Document:

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                                                                   EXHIBIT 10.42

                            COLORADO MEDTECH, INC.

                       1996 EMPLOYEE STOCK PURCHASE PLAN

                 AS AMENDED AND RESTATED ON NOVEMBER 19, 1999

                        EFFECTIVE AS OF JANUARY 1, 2000

1)   Purpose
     -------

     This Employee Qualified Stock Purchase Plan (the "Plan") is intended to
serve as an incentive and to encourage stock ownership by all eligible employees
of Colorado MEDtech, Inc. (the "Company") and participating subsidiaries (as
defined in Section 17 hereof) so that they may share in the fortunes of the
Company by acquiring or increasing their proprietary interest in the Company.
The Plan is designed to encourage eligible employees to remain in the employ of
the Company.  It is intended that options issued pursuant to the Plan shall
constitute options issued pursuant to an "employee stock purchase plan" within
the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code").

2)   Eligible Employees
     ------------------

     All employees of the Company or any of its participating subsidiaries who
have completed thirty (30) days of employment with the Company or any of its
participating subsidiaries ("Eligible Employees") prior to the beginning of any
Payment Period (as defined below) shall be eligible to receive options under the
Plan to purchase the Company's Common Stock, no par value (the "Stock").  In no
event may an employee be granted an option if such employee, immediately after
the option is granted, owns stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Company or
of its parent corporation or subsidiary corporation, as the terms "parent
corporation" and "subsidiary corporation" are defined in Section 424(d) of the
Code shall apply and all stock which the employee may purchase under outstanding
options (notwithstanding that such options may not be presently exercisable)
shall be treated as stock owned by the employee.

     For purposes of this Article 2, the term "employee" shall not include an
employee whose customary employment by the Company or participating subsidiary
is twenty (20) hours or less per week or is for not more than five (5) months in
any calendar year.

3)   Stock Subject to the Plan
     -------------------------

     The stock subject to the options issued under the Plan shall be shares of
the Company's authorized but unissued shares of Stock or shares of Stock
reacquired by the Company.  The aggregate number of shares which may be issued
pursuant to the Plan is 540,000 subject to increase

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or decrease as provided herein by reason of stock split-ups, reclassifications,
stock dividends, changes in par value and the like. The maximum number of shares
available during each annual Payment Period shall not exceed 100,000 shares. If
the total number of shares to be purchased by all Participants on any exercise
date exceeds the number of shares then available for issuance under the Plan, a
pro rata allocation of the shares available shall be made in a uniform and
equitable manner.

4)   Payment Periods and Stock Options
     ---------------------------------

     The annual period, January 1 to December 31 is a payment period during
which payroll deductions will be accumulated under the Plan ("Annual Payment
Periods").  The Plan will be implemented in three (3) Annual Payment Periods
beginning January 1, 1997.  Thereafter, it will be continued for three (3)
additional Annual Payment Periods beginning January 1, 2000.  Each Annual
Payment Period consists of four (4) separate payment periods (each, a "Payment
Period"), beginning on January 1, April 1, July 1 and October 1, as applicable,
and each ending on December 31.  Each Payment Period includes only regular pay
days falling within it.

     On the first business day of each Payment Period, the Company will grant to
each Eligible Employee who has elected to participate in the Plan (a
"Participant") an option to purchase on the last day of such Payment Period, at
the Option Price (defined below), such number of shares of Stock as his/her
accumulated payroll deductions during such Payment Period will pay for at the
Option Price, provided that such employee remains eligible to participate in the
Plan throughout such Payment Period.  If the Payment Period terminates on a
Saturday, Sunday or legal holiday, then the last day of the Payment Period shall
be the last business day prior to December 31.

     The "Option Price" for each Payment Period shall be the lesser of (i) 85%
of the fair market value (as defined below) of the Stock on the first business
day of the applicable Payment Period in which the Participant entered the Plan
(or, with respect to increased contributions, the Payment Period when such
increase takes place);or (ii) 85% of the fair market value of the Stock on the
last day of the Annual Payment Period, in either case rounded up to avoid
fractions other than 1/8, 1/4, 1/2 and 3/4.  In the event of an increase or
decrease in the number of outstanding shares of Stock through stock split-ups,
reclassifications, stock dividends, changes in par value and the like, an
appropriate adjustment shall be made in the number of shares and Option Price
per share provided for under the Plan, either by a proportionate increase in the
number of shares and a proportionate decrease in the Option Price per share, or
by a proportionate decrease in the number of shares and proportionate increase
in the Option Price per share, as may be required to enable an Eligible Employee
who is then a Participant in the Plan as to whom an option is exercised on the
last day of any then current Payment Period to acquire such number of full
shares as his/her accumulated payroll deduction on such date will pay for at the
adjusted Option Price.  The determination of what constitutes an "appropriate
adjustment" shall be made by the Board of Directors, whose determination thereof
shall be final.

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     For purposes of this Plan the term "fair market value" means, if the Stock
is listed on a national securities exchange, the average of the high and low
prices of the Stock on such exchange or if the Stock is traded in the over-the-
counter securities market, the mean between the closing bid and asked prices of
the Stock.

     No employee shall be granted an option which permits his/her rights to
purchase Stock under the Plan and any other employee stock purchase plans of the
Company or any parent or subsidiary corporations to accrue at a rate which
exceeds $25,000 in fair market value of such stock (determined at the time such
option is granted) for each calendar year in which such option is outstanding at
any time.  A right to purchase Stock under the Plan "accrues" on the last day of
the Payment Period.  The purpose of the limitation in the preceding sentence is
to comply with Section 423(b)(8) of the Code.

5)   Exercise of Option
     ------------------

     Each Participant who fails to withdraw from participation in the Plan on or
prior to the last business day of a Payment Period shall be deemed to have
exercised his/her option on such date and shall be deemed to have purchased from
the Company such number of full shares of Stock reserved for the purpose of the
Plan as his/her accumulated payroll deductions on such date will pay for at such
Option Price.  If a Participant is not an employee on the last day of a Payment
Period, he/she shall not be entitled to exercise his/her option.

6)   Unused Payroll Deductions
     -------------------------

     Only full shares of Stock may be purchased.  Any balance remaining in a
Participant's account after a purchase will be reported to the employee and will
be carried in the employee's account towards the purchase of additional shares
in the next Payment Period.

7)   Authorization for Entering Plan
     -------------------------------

     An Eligible Employee may elect to participate in the Plan by completing,
signing and delivering to the Company's Human Resources department an
authorization:

     (a) stating the amount to be deducted regularly from his/her pay;

     (b) authorizing the purchase of Stock for him/her in each Payment Period in
accordance with the terms of the Plan; and

     (c) specifying the exact name in which stock purchased for him/her is to be
issued as provided under Article 11 hereof.

     Such Authorization must be received by the Human Resources department at
least ten (10) days before the beginning date of a Payment Period to be
effective for that Payment Period.

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     Unless a Participant files a new Authorization or withdraws from the Plan,
his/her deductions and purchases under the Authorization he/she has on file
under the Plan will continue as long as the Plan remains in effect.

     The Company will accumulate and hold for the Participant's account the
amounts deducted from his/her pay.  Interest earned, if any, will be credited to
the Participant's account for the purchase of additional shares.

8)   Maximum Amount of Payroll Deductions
     ------------------------------------

     An employee may authorize payroll deductions spread evenly over a Payment
Period in any even dollar amount up to, but not more than, ten percent (10%) of
his/her regular base pay in any payroll period, over that Payment Period, or may
make lump sum contributions (but not later than the first day of a Payment
Period); provided, however, that the aggregate of lump sum contributions and
         -----------------
payroll deductions may not be greater than ten percent (10%) of a Participant's
base pay over the applicable Annual Payment Period.  The minimum deduction in
respect of any payroll period shall be Five Dollars ($5.00) (or such lesser
amount as the Board shall establish).

9)   Increase or Decrease in Payroll Deductions.
     ------------------------------------------

     (a) Increases.  Once an employee is a Participant in the Plan during an
         ---------
Annual Payment Period (by making payroll deductions or a lump sum contribution),
a Participant may increase deductions or make a lump sum contribution only once
during the remainder of the applicable Annual Payment Period.  An authorization
to increase deductions or make a lump sum contribution in a Payment Period must
be received by the Human Resources department at least ten (10) days before the
beginning of such Payment Period.

     (b) Price for Increases and Lump Sum Contributions.  If a Participant makes
         ----------------------------------------------
a lump sum contribution or increases his or her deductions to the Plan, only
such lump sum contribution or increased deductions will have an Option Price
calculated pursuant to Section 4 using as measurement dates: (i) the first
business day of the Payment Period in which the increase in deductions or lump
sum payment was made, and (ii) the last business day of the applicable Annual
Payment Period.

     (c) Decreases in Deductions.  Deductions may be decreased only once in an
         -----------------------
Annual Payment Period.  An authorization to decrease deductions will be required
and must be received by the Human Resources department at least ten (10) days
before the end of the payroll period for which it is to become effective.

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10)  Withdrawal from the Plan
     ------------------------

     A Participant may withdraw from the Plan in whole but not in part, at any
time prior to the fifteenth (15th) calendar date prior to the end of each Annual
Payment Period or, if such day is not a business day, then the next succeeding
business day, by delivering a Withdrawal Notice to the Human Resources
department, in which event the Company will promptly refund the entire balance
of the Participant's deductions not theretofore used to purchase Stock under the
Plan.

     A Participant who has withdrawn from the Plan shall be treated as an
employee who has never elected to participate in the Plan.  To re-enter the Plan
a new Authorization must be filed at least ten (10) days before the beginning
date of the next Annual Payment Period, which Authorization will not become
effective before the beginning of the next Annual Payment Period.

11)  Issuance of Stock
     -----------------

     Certificates for Stock issued to Participants will be delivered as soon as
practicable after each Payment Period.

     Stock purchased under the Plan will be issued only in the name of the
Participant, or if his/her Authorization so specified, in the name of the
Participant and another person of legal age as joint tenants with rights of
survivorship.

12)  No Transfer or Assignment of Employee's Rights
     ----------------------------------------------

     An employee's rights under the Plan may not be transferred to, assigned to,
or availed of by, any other person.  Any option granted to an employee under
this Plan may be exercised only by him/her during his/her lifetime.

13)  Termination of Employee's Rights
     --------------------------------

     An employee's rights to participate in, and a Participant's rights under,
the plan will terminate when he/she ceases to be an employee because of
retirement, resignation, layoff, discharge, death, change of status, or for any
other reason.  A Withdrawal Notice will be considered as having been received
from a Participant on the day his/her employment ceases, and all payroll
deductions not used to purchase Stock will be refunded to him/her.

     If a Participant's payroll deductions are interrupted by any legal process,
a Withdrawal Notice will be considered as having been received from him/her on
the day the interruption occurs.

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14)  Termination and Amendments to Plan
     ----------------------------------

     The Plan may be terminated at any time by the Company's Board of Directors.
It will terminate in any case when all or substantially all the unissued shares
of Stock reserved for the purposes of the Plan have been purchased.  If at any
time shares of Stock reserved for the purposes of the Plan remain available for
purchase but not in sufficient number to satisfy all then unfilled purchase
requirements, the available shares shall be apportioned among participants in
proportion to their options and the Plan shall terminate.  Upon such termination
or any other termination of the Plan, all payroll deductions not used to
purchase Stock will be refunded.

     The Board of Directors also reserves the right to amend the Plan from time
to time, in any respect; provided, however, that no amendment shall be effective
without prior approval of the shareholders entitled to vote thereon, which would
(a) except as provided in Articles 3 and 4, increase the number of shares of
Stock to be offered under the Plan or (b) change the class of employees eligible
to participate in the Plan.  Further, no amendment shall be made without prior
approval of the shareholders of the Company if such amendment would cause the
Plan to no longer comply with Rule 16b-3 under the Securities Exchange Act of
1934 or with Section 423 of the Internal Revenue Code.

15)  Limitations on Sale of Stock Purchased Under the Plan; Tax Matters
     ------------------------------------------------------------------

     Each Participant who is subject to Section 16(a) promulgated under the
Securities Exchange Act of 1934 (i.e., officers of the Company), will agree upon
entering the Plan to hold the Stock for a period of six (6) months after its
acquisition.  Because of certain federal tax law requirements, each Participant
will agree upon entering the Plan, promptly to give the Chief Financial Officer
of the Company notice of any Stock disposed of within two (2) years after the
date of the first day of the Payment Period during which the Stock was purchased
under the Plan showing the number of such shares disposed of.  The employee
assumes the risk of any fluctuations in the price of such Stock.

     Satisfaction of Withholding Obligations.  The Company or participating
     ---------------------------------------
subsidiary may take such steps as it may deem necessary or appropriate for the
withholding of any taxes or funds which the Company or the participating
subsidiary is required by any law or regulation of any governmental authority,
whether federal, state or local, domestic or foreign, to withhold in connection
with any Company stock received hereunder (collectively, "Withholding
Obligations").  Such steps may include, by way of example only and not
limitation, (i) requiring a Participant to remit to the Company in cash an
amount sufficient to satisfy such Withholding Obligations; (ii) allowing the
Participant to tender to the Company shares of Company stock, the fair market
value of which at the tender date the Committee determines to be sufficient to
satisfy such Withholding Obligations; (iii) withholding shares of Company stock
otherwise issuable upon the exercise of a stock option and which have a fair
market value at the exercise date sufficient to satisfy such Withholding
Obligations; or (iv) any combination of the foregoing.

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     Notification of Inquiries and Agreements.  Each Participant shall notify
     ----------------------------------------
the Company in writing within 10 days after the date such Participant (i) first
obtains knowledge of any Internal Revenue Service inquiry, audit, assertion,
determination, investigation, or question relating in any manner to the value of
Company stock or options purchased or granted hereunder; (ii) includes or agrees
(including, without limitation, in any settlement, closing or other similar
agreement) to include in gross income with respect to any Company stock or
option received under this Plan (A) any amount in excess of the amount reported
on Form 1099 or Form W-2 to such Participant by the Company, or (B) if no such
Form was received, any amount; (iii) exercises, sells, disposes of, or otherwise
transfers an option acquired pursuant to this Plan; or (iv) sells, disposes of,
or otherwise transfers stock acquired pursuant to the Plan within the
Disqualified Period.  Upon request, a Participant shall provide to the Company
any information or document relating to any event described in the preceding
sentence which the Company (in its sole discretion) requires in order to
calculate and substantiate any change in the Company's Tax liability or
withholding obligations as a result of such event.

16)  Company's Payment of Expenses Related to Plan
     ---------------------------------------------

     The Company will bear all costs of administering and carrying out the Plan.

17)  Participating Subsidiaries
     --------------------------

     The term "participating subsidiaries" shall mean any subsidiary of the
Company which is designated by the Board of Directors to participate in the
Plan.  The Board of Directors shall have the power to make such designation
before or after the plan is approved by the stockholders.

18)  Administration of the Plan
     --------------------------

     The Plan shall be administered by the Board of Directors of the Company or
by a committee composed solely of two or more directors (the "Committee") each
of whom is a Non-Employee Director.  A "Non-Employee Director" is a person who
satisfies the definition of a "non-employee director" set forth in Rule 16b-3,
as in effect from time to time, under the Securities Exchange Act of 1934, as
amended.  The Board of Directors may from time to time, remove members from, or
add members to, the Committee.  Vacancies on the Committee, however caused,
shall be filled by the Board of Directors.  The Committee shall select one of
its members as Chairman, and shall hold meetings at such times and places as it
may determine.  Acts by a majority of the Committee, or acts reduced to or
approved in writing by a majority of the members of the Committee, shall be the
valid acts of the Committee.

     The interpretation and construction of any provision of the Plan and
adoption of rules and regulations for administering the Plan will be made by the
Committee, subject, however, at all times to the final jurisdiction which shall
rest in the Board.  Determinations made by the Committee and approved by the
Board with respect to any matter or provision contained in the Plan will be
final, conclusive and binding upon the Company and upon all Participants, their
heirs or legal

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representatives. No member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any option granted under it. No member of the Committee shall be
eligible to participate in the Plan while serving as a member of the Committee.

19)  Optionees Not Stockholders
     --------------------------

     Neither the granting of an option to an employee nor the deductions from
his/her pay shall constitute such employee a stockholder of the shares covered
by an option until such shares have been purchased by a certificate representing
such shares has been issued to him/her.

20)  Governmental Regulation
     -----------------------

     The Company's obligation to sell and deliver shares of the Stock under this
Plan is subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such stock.

21)  Effectiveness of the Plan
     -------------------------

     The Plan shall become effective September 27, 1996, the date of its
adoption by the Board of Directors, subject to the approval of the holders of a
majority of the securities of the Company entitled to vote, which approval must
occur within the period beginning twelve (12) months before the ending twelve
(12) months after the date the Plan is adopted by the Board of Directors.
Anything to the contrary notwithstanding, no Stock may be issued under the Plan
until such shareholder approval is obtained.

                                       8<PAGE>

                                                                   EXHIBIT 10.45

                        EXECUTIVE EMPLOYMENT AGREEMENT

     This EXECUTIVE EMPLOYMENT AGREEMENT is entered into as of the 23rd day of
June 2000, by and between COLORADO MEDTECH, INC., a Colorado corporation
("Employer") and Stephen K. Onody ("Executive").  In consideration of the mutual
covenants contained in this Agreement, Employer agrees to employ Executive and
Executive agrees to be employed by Employer upon the terms and conditions
hereinafter set forth.

                                   ARTICLE I
                              TERM OF EMPLOYMENT

     The term of employment hereunder commenced on June 23, 2000 ("Commencement
Date") and shall continue for a period of three (3) years (the "Term of
Employment").  The Term of Employment may be extended by mutual written
agreement of the parties.

                                  ARTICLE II
                                    DUTIES

     2.1  Duties.  Executive shall be employed with the titles of Chief
          ------
Executive Officer and President of Employer with such responsibilities and
authority as are customarily performed by such officers including, but not
limited to, those duties as may from time to time be assigned to Executive by
the Board of Directors of Employer.  Executive shall have full responsibility
and authority for formulating policies and for the management and operation of
Employer, subject to the general direction and control of the Board of
Directors.  Executive shall report directly to Employer's Board of Directors.

     2.2  Extent of Duties.  Executive shall devote all of his working time,
          ----------------
efforts, attention and energies to Employer's business.  He shall render the
services described herein diligently, using his best efforts.  Executive shall
hold no other employment during the Term of Employment.

                                  ARTICLE III
                                 COMPENSATION

     3.1  Base Compensation.  As compensation for services rendered under this
          -----------------
Agreement, Employer shall pay Executive a base salary of $200,000 per annum,
payable over the Term of Employment in accordance with Employer's normal payroll
practices. Executive shall also be eligible to participate in any other
compensation arrangements and benefit plans of Employer offered generally to
Employer's other executives.

     3.2  Stock Options.  On the date which is two days after Employer's public
          -------------
release of its financial results for the quarter and year ended June 30, 2000
("Grant
<PAGE>

Date"), Employer will grant to Executive incentive and non-statutory stock
options ("Options") under Employer's Stock Option Plan to purchase Two Hundred
Seventy Thousand (270,000) shares of Employer's Common Stock. The exercise price
of such options shall be the fair market value of Employer's Common Stock at the
close of the market on the Grant Date. Such options shall vest and become
exercisable as follows:

          (a) Ninety Thousand (90,000) Options shall irrevocably vest and become
exercisable on each of the first, second and third anniversaries ("Contract
Year") of the Commencement Date of this Agreement, subject to Executive's
continued employment on each vesting date.  The Options shall expire ten (10)
years after the Grant Date.

          (b) If Executive's employment is terminated by Employer without
"Cause" (defined below), any unvested options as of the Date of Termination, as
hereinafter defined, which would have vested at the next anniversary of the
effective date of this Agreement shall vest in proportion the number of complete
months that have expired in the current Contract Year bears to a full Contract
Year.

          (c) If Executive's employment is terminated by Executive for "Good
Reason" (defined below) pursuant to Section 5(a)(iv) or (v), any unvested
options as of the Date of Termination shall immediately vest in full.

     3.3  Other Benefits.  Executive shall be entitled to participate in all of
          --------------
Employer's Executive benefit plans and Executive benefits, including any
retirement, pension, profit-sharing, stock option (taking the Options into
consideration), insurance, hospital, vacation, paid holiday, or other plans and
benefits which now may be in effect or which may hereafter be adopted, it being
understood that Executive shall have the same rights and privileges to
participate in such plans and benefits as other executive Executives.

     3.4  Expenses.  Executive shall be entitled to reimbursement for all
          --------
reasonable expenses incurred by Executive in the performance of his duties
hereunder, provided all requests for reimbursement comply with Employer's
current policies regarding expense reimbursement.

                                  ARTICLE IV
                       NON-COMPETITION; CONFIDENTIALITY

Executive may not participate in any areas of business in which the Employer is
engaged during the term of this Agreement except through and on behalf of the
Employer.  Upon the execution of this Agreement, Executive shall execute a Non-
Competition Agreement in the form attached hereto as Exhibit A.  Executive
                                                     ---------
agrees that his current non-disclosure agreement with Employer shall continue in
full force and effect.  Executive further agrees that he shall promptly execute
any revised non-disclosure form implemented by Employer.

                                       2
<PAGE>

                                   ARTICLE V
                           TERMINATION OF EMPLOYMENT

     5.1  Termination.  Executive's employment hereunder may be terminated
          -----------
without any breach of this Agreement under the following circumstances:

          (a)  By Executive for Good Reason.  Upon the occurrence of any of the
               ----------------------------
following events, Executive may terminate his employment for good reason ("Good
Reason") by written notice to Employer:

               (i)   if Employer makes a general assignment for the benefit of
creditors, files a voluntary bankruptcy petition, files a petition or answer
seeking a reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any law, or there shall have been filed any
petition or application for the involuntary bankruptcy of Employer, or other
similar proceeding, in which an order for relief is entered or which remains
undismissed for a period of thirty days or more, or Employer seeks, consents to,
or acquiesces in the appointment of a trustee, receiver, or liquidator of
Employer or any material part of its assets;

               (ii)  the closing of a sale by Employer of substantially all of
its assets to not more than two (2) buyers;

               (iii) if Executive elects to remain employed after a "change in
control of Employer" (defined below) and thereafter, during the Term of
Employment or twelve (12) months from the change in control, whichever is
longer, Executive: (1) is terminated without Cause or is demoted from the
position he held prior to the change in control; (2) is assigned duties
inconsistent with his roles and responsibilities prior to the change in control;
(3) is required to materially increase his travel obligations from those he had
prior to the change in control; (4) is relocated to an office or site greater
than 50 miles from his location prior to the change in control; or (5) the
compensation or benefits of Executive are materially reduced (including paid
time off and vacation).  A "change of control of Employer" will be deemed to
occur under either of the following circumstances:  (A) any "person" (as that
term is used in Section 13(d) and 14(d) of the Exchange Act), other than the
Employer or any "person" who on the date hereof is a director or officer of the
Employer, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Employer
representing forty percent (40%) or more of the combined voting power of the
Employer's then outstanding securities, or (B) if, during any period of two
consecutive years during the term of this Agreement, individuals who at the
beginning of such period constitute the Board cease for any reason to constitute
at least a majority thereof, unless the election of each director who was not a
director at the beginning of such period has been approved in advance by
directors representing at least two-thirds of the directors then in office who
were directors at the beginning of the period; or

               (iv)  within 90 days following a change in control of Employer.

                                       3
<PAGE>

          (b)  Death.  This Agreement shall terminate upon the death of
               -----
Executive.

          (c)  Disability.  Employer may terminate this Agreement upon the
               ----------
permanent disability of Executive.  "Disability" means the failure of Executive,
due to illness, accident, or other physical or mental incapacity, to perform his
duties substantially as required hereunder for a period of any ninety (90)
consecutive days, or, if earlier, upon written certification from a physician
acceptable to Employer as to Executive's inability to carry on his duties and
responsibilities if such condition is expected to continue for at least such
period.

          (d)  By Employer for Cause.  Employer may terminate Executive's
               ---------------------
employment for cause ("Cause") for:

               (i)   misappropriation or unauthorized disclosure of Confidential
Information or funds by Executive or with Executive's direct involvement;

               (ii)  fraud, embezzlement, theft or dishonesty by Executive
reasonably suspected by the Company;

               (iii) negligent or willful misconduct or dereliction of duty by
Executive; provided, however, that no discharge shall be deemed for Cause under
           -----------------
this clause (iii) unless Executive shall have first received written notice from
the Company advising Executive of the specific acts or omissions alleged to
constitute such negligent or willful misconduct, and such misconduct continues
uncured by Executive for a period of twenty (20) days; or

               (iv)  a material breach by Executive of the terms of this
Agreement and a failure by Executive to cure such breach within twenty (20) days
after receiving written notice from an officer of the Company advising Executive
of the action allegedly resulting in the material breach.

          (e)  By Employer Other than for Cause.  Employer may terminate
               --------------------------------
Executive's employment hereunder other than for Cause upon written notification
to Executive given at any time.

     5.2  Date of Termination.  "Date of Termination" means (i) if Executive's
          -------------------
employment is terminated by his death, the date of his death; (ii) if the
Executive's employment is terminated for Cause, the date on which notice of
termination is delivered to Executive; and (iii) if the Executive's employment
is terminated for any other reason, the date specified in a notice of
termination by Employer or Executive.

                                       4
<PAGE>

     5.3  Compensation Upon Termination.
          -----------------------------

          (a)  Upon termination of this Agreement for Cause pursuant to Section
               5.1(d) Executive shall be entitled to compensation only through
               the Date of Termination.

          (b)  In the event of termination of this Agreement by Employer for
               reason other than Cause pursuant to Section 5.1(e) within the
               first 12 months of the Term of Employment, Employer shall: (1)
               continue to pay Executive base salary payments through the
               twenty-fourth month of the Term of Employment; and (2) if such
               termination occurs within the original Term of Employment,
               provide for immediate vesting of the pro-rated portion of options
               for the portion of the year worked as set forth in Section
               3.2(b).

          (c)  In the event of termination of this Agreement by Employer for
               reason other than Cause pursuant to Section 5.1(e) after the
               first 12 months of the Term of Employment and prior to the end of
               the Term of Employment, Employer shall: (1) continue to pay
               Executive base salary payments for twelve (12) months; and (2) if
               such termination occurs within the original Term of Employment,
               provide for immediate vesting of the pro-rated portion of options
               for the portion of the year worked as set forth in Section
               3.2(b).

          (d)  In the event of termination of this Agreement by Executive
               pursuant to Section 5.1(a)(ii) or (iii) for Good Reason, Employer
               shall: (1) pay Executive the greater of (i) continuation of base
               salary payments for twelve (12) months; or (ii) the continuation
               of base salary payments for the number of months remaining in the
               Term of Employment following the Date of Termination; (2)
               accelerate vesting of any unvested stock options such that all
               such options shall immediately vest; (3) reimburse outplacement
               services provided Executive for a period of 12 months; and (4)
               reimburse Executive for reasonable legal fees in connection with
               the enforcement of the Agreement.

          (e)  In the event this Agreement is terminated at any time by
               Executive for Good Reason pursuant to Section 5.1(a)(iv),
               Executive shall be entitled to receive continuation of 12 months
               of base salary payments; (2) accelerated vesting of any unvested
               stock options such that all such options shall immediately vest;
               (3) reimbursement outplacement services provided Executive for a
               period of 12 months; and (4) reimburse Executive for reasonable
               legal fees in connection with the enforcement of the Agreement.

                                       5
<PAGE>

          (f)  If after termination pursuant to Section 5.1(a)(iii) or (iv) or
               Section 5.1(e) Executive elects to continue group health
               insurance coverage through COBRA, the Employer will also pay the
               monthly medical insurance premium payment required to maintain
               his then current medical insurance coverage (less any amount he
               is paying for such insurance at the time of termination, which
               payment from Executive will be required by the beginning of each
               month) for the period during which continuing base salary
               payments are made or until Executive obtains new employment or a
               consulting position, whichever occurs first.

          (g)  Following the termination of this Agreement pursuant to Section
               5.1(b), Employer shall pay to Executive's estate the compensation
               which would otherwise be payable to Executive to the end of the
               month in which his death occurs.

          (h)  In the event of temporary or permanent disability of the
               Executive as described in Section 5.1(c), whether or not the
               Employer elects to terminate this Agreement, Executive shall be
               entitled to receive such compensation and benefits, if any, as
               are payable to Executives generally in accordance with Employer's
               normal practices.

          (i)  Upon termination of his employment and for a period of two years
               thereafter, Executive shall immediately notify Employer of each
               employment or agency relationship entered into by the Executive
               and each corporation or other entity formed or used by the
               Executive, the business of which is directly or indirectly
               similar to or in competition with the Employer's business and
               provided Executive's participation in such business is the same
               as or similar to those activities in which Executive was involved
               at the time of Executive's termination from Employer and during
               the prior 12-month period.

     5.4  Remedies.  Any termination of this Agreement shall not prejudice any
          --------
other remedy to which the Employer or Executive may be entitled, either at law,
equity, or under this Agreement.

     5.5  Request for Post-Employment Allowance:  In order to obtain any payment
          -------------------------------------
pursuant to Paragraph 5.3, excluding sub-paragraph 5.3(a), Executive shall
submit a Request for Post-Employment Allowance (attached hereto as Exhibit B).
Employer shall have no obligation to make any payments to Executive unless and
until Employee shall have submitted an executed copy of such request.

                                       6
<PAGE>

                                  ARTICLE VI
                              GENERAL PROVISIONS

     6.1  Governing Law.  This Agreement shall be governed by and construed in
          -------------
accordance with the laws of the State of Colorado.

     6.2  Arbitration.  Any and all disputes arising under or related to this
          -----------
Agreement which cannot be resolved through negotiations between the parties
shall be submitted to binding arbitration.  If the parties fail to reach a
settlement of their dispute within fifteen (15) days after the earliest date
upon which one of the parties notified the other(s) of its desire to attempt to
resolve the dispute, then the dispute shall be promptly submitted to arbitration
by a single arbiter through the Judicial Arbiter Group ("JAG"), any successor of
the Judicial Arbiter Group, or any similar arbitration provider who can provide
a former judge to conduct such arbitration if JAG is no longer in existence, or
an arbiter appointed by the court.  The arbiter shall be selected by JAG or the
court on the basis, if possible, of his or her expertise in the subject
matter(s) of the dispute.  The decision of the arbiter shall be final, non-
appealable and binding upon the parties, and it may be entered in any court of
competent jurisdiction.  The arbitration shall take place in Boulder, Colorado.
The arbitrator shall be bound by the laws of the State of Colorado applicable to
the issues involved in the arbitration and all Colorado rules relating to the
admissibility of evidence, including, without limitation, all relevant
privileges and the attorney work product doctrine.  All such discovery shall be
completed in accordance with the time limitations prescribed in the Colorado
Rules of Civil Procedure, unless otherwise agreed by the parties or ordered by
the arbitrator on the basis of strict necessity adequately demonstrated by the
party requesting an extension or reduction of time.  The arbitrator shall have
the power to grant equitable relief where applicable under Colorado law.  The
arbitrator shall issue a written opinion setting forth her or his decision and
the reasons therefor within thirty (30) days after the arbitration proceeding is
concluded.  The obligation of the parties to submit any dispute arising under or
related to this Agreement to arbitration as provided in this Section shall
survive the expiration or earlier termination of this Agreement.
Notwithstanding the foregoing, either party may seek and obtain an injunction or
other appropriate relief from a court to preserve or protect the status quo with
respect to any matter pending conclusion of the arbitration proceeding, but no
such application to a court shall in any way be permitted to stay or otherwise
impede the progress of the arbitration proceeding.

     6.3  Entire Agreement.  This Agreement supersedes any and all other
          ----------------
Agreements, whether oral or in writing, between the parties with respect to the
employment of Executive by Employer, excluding any non-
disclosure/confidentiality agreements previously entered into between Executive
and Employer.  Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, orally or otherwise, have
been made by either party, or anyone acting on behalf of any party, that are not
embodied in this Agreement, and that no agreement, statement, or promise not
contained in this Agreement shall be valid or binding.

                                       7
<PAGE>

     6.4  Successors and Assigns.  This Agreement, all terms and conditions
          ----------------------
hereunder, and all remedies arising herefrom, shall inure to the benefit of and
be binding upon Employer, any successor in interest to all or substantially all
of the business and/or assets of Employer, and the heirs, administrators,
successors and assigns of Executive.  Except as provided in the preceding
sentence, the rights and obligations of the parties hereto may not be assigned
or transferred by either party without the prior written consent of the other
party.

     6.5  Notices.  For purposes of this Agreement, notices, demands and all
          -------
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed as
follows:

     If to Executive: Stephen K. Onody
                      6640 So. Waco Way
                      Aurora, CO  80016

     If to Employer:  Colorado MEDtech, Inc.
                      Attn:  Chairman of the Board of Directors
                      6175 Longbow Drive
                      Boulder, CO 80301
                      Phone: (303) 530-2660
                      Fax: (303) 581-1010

     with a copy to:  Colorado MEDtech, Inc.
                      Attn:  General Counsel
                      6175 Longbow Drive
                      Boulder, CO 80301
                      Phone: (303) 530-2660
                      Fax: (303) 581-1010

     and a copy (which shall not constitute notice) to:

                      Chrisman, Bynum & Johnson, P.C.
                      Attn:  Christopher Hazlitt
                      1900 Fifteenth Street
                      Boulder, CO  80302

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

     6.6  Severability.  If any provision of this Agreement is prohibited by or
          ------------
is unlawful or unenforceable under any applicable law of any jurisdiction as to
such jurisdiction, such provision shall be ineffective to the extent of such
prohibition without invalidating the remaining provisions hereof.

                                       8
<PAGE>

     6.7  Section Headings.  The section headings used in this Agreement are for
          ----------------
convenience only and shall not affect the construction of any terms of this
Agreement.

     6.8  Survival of Obligations.  Termination of this Agreement for any reason
          -----------------------
shall not relieve Employer or Executive of any obligation accruing or arising
prior to such termination.

     6.9  Amendments.  No waiver or modification of this Agreement or any
          ----------
covenant, condition, or limitation herein contained shall be valid unless in
writing and duly executed by the party to be charged therewith, and no evidence
of any waiver or modification shall be offered or received in evidence of any
proceeding, arbitration or litigation between the parties hereto arising out of
or affecting this Agreement, or the rights or obligations of the parties
hereunder, unless such waiver or modification is in writing, duly executed as
aforesaid.

     6.10 Counterparts.  This Agreement may be executed in one or more
          ------------
counterparts, each of which shall constitute an original but all of which, when
taken together, shall constitute only one legal instrument.  This Agreement
shall become effective when copies hereof, when taken together, shall bear the
signatures of both parties hereto.  It shall not be necessary in making proof of
this Agreement to produce or account for more than one such counterpart.

     6.11 Fees and Costs.  If any action at law or in equity is necessary to
          --------------
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys fees, costs and necessary disbursements in
addition to any other relief to which that party may be entitled.

     6.12 Taxes. Executive expressly acknowledges that Employer has not made,
          ------
nor herein makes, any representation about the tax consequences of any
consideration provided by Employer to Executive pursuant to this Agreement or
any Stock Option Agreement. Executive further acknowledges that all such
consideration shall be subject to various taxes and withholding which shall be
made by Employer.  It is also possible that amounts or benefits paid or
distributed to the Executive pursuant to this Agreement, taken together with any
amount or benefits otherwise paid or distributed to the Executive would be an
"excess parachute payment" as defined in (S)280G of the Internal Revenue Code
(the "Code") and would subject Executive to an excise tax.  In the event such
tax is triggered, Employer may limit its payments as follows: If (x) the
aggregate value of all compensation payments or benefits to be paid or provided
to the Executive under this Agreement and any other plan, agreement, or
arrangement with Employer exceeds the amount which can be paid to the Executive
without the Executive incurring an Excise Tax and (y) the Executive would
receive a greater net after-tax amount (taking into account all applicable taxes
payable by the Executive, including any Excise Tax) by applying the limitation
contained in this Paragraph, then the amounts payable to the Executive under
this Agreement shall be reduced (but not below zero) to the maximum amount which
may be paid hereunder without the Executive becoming subject to such an

                                       9
<PAGE>

Excise Tax (such reduced payments to be referred to as the "Payment Cap").
In the event that Executive receives reduced payments and benefits hereunder,
Executive shall have the right to designate which of the payments and benefits
otherwise provided for in this Agreement that Executive will receive in
connection with the application of the Payment Cap. If the Executive receives
reduced payments and benefits under this Paragraph (or the Payment Cap is
determined not to be applicable to the Executive because the parties conclude
that Executive is not subject to any Excise Tax) and it is established pursuant
to a final determination of a court or an Internal Revenue Service proceeding (a
"Final Determination") that, notwithstanding the good faith of the Executive and
Employer in applying the terms of this Agreement, the aggregate "parachute
payments" within the meaning of Section 280G of the Code paid to the Executive
or for his  benefit are in an amount that would result in the Executive being
subject an Excise Tax, then the amount equal to such excess parachute payments
shall be deemed for all purposes to be a loan to the Executive made on the date
of receipt of such excess payments, which the Executive shall have an obligation
to repay to Employer on demand, together with interest on such amount at the
applicable federal rate (as defined in Section 1274(d) of the Code) from the
date of the payment hereunder to the date of repayment by the Executive.  If
this Paragraph is not applied to reduce the Executive's entitlements under this
Paragraph because the parties determine that the Executive would not receive a
greater net after-tax benefit by applying this Paragraph and it is established
pursuant to a Final Determination that, notwithstanding the good faith of the
Executive and Employer in applying the terms of this Agreement, the Executive
would have received a greater net after-tax benefit by subjecting his payments
and benefits hereunder to the Payment Cap, then the aggregate "parachute
payments" paid to the Executive or for his benefit in excess of the Payment Cap
shall be deemed for all purposes a loan to the Executive made on the date of
receipt of such excess payments, which the Executive shall have an obligation to
repay to Employer on demand, together with interest on such amount at the
applicable federal rate (as defined in Section 1274(d) of the Code) from the
date of the payment hereunder to the date of repayment by the Executive.  If the
Executive receives reduced payments and benefits by reason of this Paragraph and
it is established pursuant to a Final Determination that the Executive could
have received a greater amount without exceeding the Payment Cap, then Employer
shall promptly thereafter pay the Executive the aggregate additional amount
which could have been paid without exceeding the Payment Cap.

                                       10
<PAGE>

     IN WITNESS WHEREOF, Employer and Executive have entered into this Executive
Employment Agreement as of the date first above written.

"EMPLOYER"

COLORADO MEDTECH, INC.

By:  /s/ John V. Atanasoff
   ----------------------------------
   John V. Atanasoff,
   Chairman of the Board of Directors

"EXECUTIVE"

     /s/ Stephen K. Onody
-------------------------------------
Stephen K. Onody

                                      11
<PAGE>

                                   EXHIBIT A

                           NON-COMPETITION AGREEMENT

     THIS AGREEMENT is made and entered into on and as of the 23rd  day of June,
2000, by and between Colorado MEDtech, Inc., a Colorado corporation (the
"Company") and Stephen K. Onody ("Executive").

     WHEREAS, Executive is being promoted as of the date hereof to the offices
of President and Chief Executive Officer of the Company, and in such positions
is a key, valued executive employee of the Company, and, as such, is in a
position to damage the business of the Company by engaging in competing
activities; and

     WHEREAS, the Company wishes to protect itself from competitive activities
of Executive which would injure its business and subject Company to the
inevitable disclosure of trade secret information; and

     WHEREAS, it is a condition of the promotion of Executive, as described
above Executive has agreed not to compete with the Company during, or for a
period of two years after, his employment with the Company;

     NOW, THEREFORE, in consideration of the promotion of Executive, for the
compensation to be paid to Executive in respect of his new positions as
described in the Executive Employment Agreement which is entered into by the
parties as of the date hereof, and for the protection of Company's trade secret
information and other valuable consideration, the receipt and sufficiency of
which is acknowledged, the parties agree as follows:

     1.   Executive agrees that he possesses or will possess the knowledge,
skills and reputation in the outsourcing industry in which the Company operates
which are of material importance to the Company, and which are special, unique
and extraordinary.  Executive acknowledges that his services cannot be replaced
and that the loss of his services, or the use of his services by a competitor,
may cause the inevitable disclosure of trade secret information and other
irreparable harm to the Company.  Therefore, Executive agrees that during the
period commencing with the date hereof and ending two  (2) years after his
employment with the Company is terminated (voluntarily or involuntarily) he will
not, knowingly, directly or indirectly, as a principal, officer, director,
shareholder (other than as a holder of 5% or less of a publicly traded
corporation's capital stock), partner, become employed by, consult for or with,
or in any other capacity whatsoever, engage in, be or become associated with, or
advise or assist any business, firm, partnership, individual, corporation, or
any other entity which is engaged in any outsourcing business engaged in, or
anticipated to be engaged in, by the Company as of his Date of Termination, as
defined in Executive's Executive Employment Agreement, anywhere in the United
States of America.
<PAGE>

     2.   Executive acknowledges that Company has invested substantial time and
effort in assembling its present staff of personnel.  Executive agrees that so
long as he is employed by the Company and during two (2) years immediately
thereafter, Executive shall not either directly or indirectly employ, solicit
for employment or advise or recommend to any other person that a third party
employ or solicit for employment, any of the Company's employees.

     3.   Executive agrees that so long as he is employed by the Company and
during two (2) years immediately thereafter, Executive shall not either directly
or indirectly solicit business, as to products or services competitive with the
business of the Company from any of Company's customers with whom Executive had
contact during his employment. Executive agrees that during such post-employment
period he will not influence or attempt to interfere with any of Company's
relationships with its investors, customers or clients.

     4.   Executive agrees that so long as he is employed by the Company and for
two (2) years immediately thereafter, Executive shall not either directly or
indirectly interfere with any relationship between the Company and any of its
suppliers, clients or their employees.

     5.   Any waiver of any of the terms and conditions of this Agreement shall
not operate as a waiver of any other breach of such terms or conditions, or any
other term or condition, nor shall any failure to enforce any provision hereof
operate as a waiver of such provision or any other provision hereof.

     6.   It is agreed that Executive's services are unique, and that any breach
or threatened breach by Executive of any provisions of this Agreement may not be
remedied solely by damages.  Accordingly, in the event of a breach or threatened
breach by Executive of any of the provisions of this Agreement, the Company
shall be entitled to injunctive relief, restraining Executive and any business,
firm, partnership, individual, corporation, or entity participating in such
breach or attempted breach, from engaging in any activity which would constitute
a breach of this Agreement.  Nothing herein, however, shall be construed as
prohibiting the Company from pursuing any other remedies available at law or in
equity for such breach or threatened breach, including the recovery of damages.

     7.   The restrictive period for all of the aforementioned covenants shall
be extended for every day that Executive is in violation of any one of the
covenants.

     8.   Any and all notices referred to herein shall be sufficient if
furnished in writing, sent by registered or certified mail to Executive at his
address as shall be furnished to the Company in writing, and to the Company at
its principal office in Boulder, Colorado.
<PAGE>

     9.   This Agreement shall be governed by and construed in accordance with
the laws of the State of Colorado.

     10.  No modification or changes in this Agreement shall be valid unless
such modification or changes are in writing and signed by all parties hereto.

     11.  The invalidity or unenforceability of any provision in this Agreement
shall not affect the other provisions hereof.  This Agreement shall be construed
as though such invalid or unenforceable provisions were modified to the minimum
extent necessary to make this Agreement valid and enforceable.

     12.  Company may assign this Agreement to its successors. Executive may not
assign this Agreement without the prior written approval of the Company.

     13.  Any controversy or claim arising out of or relating to this Agreement
or the breach thereof shall be settled by arbitration in Boulder, Colorado in
accordance with the rules then existing of the American Arbitration Association
and judgment upon the award may be entered in any court having jurisdiction
thereof.

     14.  As used herein, any reference to the masculine shall include, if
appropriate, the feminine.
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Non-Competition
Agreement as of the date first above written.

COLORADO MEDTECH, INC.

By:   /s/ John V. Atanasoff
   -------------------------

"EXECUTIVE"

      /s/ Stephen K. Onody
----------------------------
Stephen K. Onody
<PAGE>

                                   EXHIBIT B

                     Request for Post-Employment Allowance

     This request for severance allowance is made by ___________(hereinafter
"the Employee") pursuant to the provisions of the Agreement between the Employee
and _______________(hereinafter "the Company") as of (the "Agreement").

     1.   In consideration of the execution of this request for post-employment
          allowance, the Company agrees to pay me the amount set forth in the
          Agreement.

     2.   In return for these payments, I fully and finally release, waive and
          discharge Company, including any of its parents, subsidiaries, or
          otherwise affiliated corporations, partnerships or business
          enterprises, and their respective present and former directors,
          shareholders, employees, assigns, insurers and employee benefit
          administrators (hereinafter "Released Parties") from all charges,
          claims and causes of action of any sort which I may have, including
          but not limited to, claims arising from or related to my employment or
          termination of my employment, any age, race, any unlawful employment
          practices of any kind, whether such claims arise under federal, state,
          local, common, contract, tort or other laws or regulations,
          specifically including Title VII of the Civil Rights Act of 1964 as
          amended by the Equal Employment Opportunity Act of 1972 and the Age
          Discrimination in Employment Act, 42 U.S.C. Section 1981. BY SIGNING
          THIS AGREEMENT, I ACKNOWLEDGE THAT COMPANY HAS ADVISED ME TO DISCUSS
          THIS AGREEMENT WITH AN ATTORNEY BEFORE SIGNING IT. I further
          acknowledge and agree that the Company is not responsible for any of
          my costs, expenses, and attorneys' fees, if any, incurred in
          connection with the review and signing of this Agreement. I
          acknowledge that I have been given a period of at least twenty-one
          (21) days in which to consider the terms of this Agreement.  If I have
          chosen to waive the twenty-one day period, I represent that I did so
          voluntarily without any pressure by Company. I also understands that I
          have the right to revoke this Agreement at any time within seven (7)
          days after signing it, by providing written notice to Company, and
          that upon such revocation, this Agreement will not have any further
          legal effect.

     3.   I represent and warrant that I have returned all property of the
          Company in my possession, including but not limited to, documents,
          manuals, pertinent business contacts (names and addresses),
          shareholder lists, software, computers and computer disks, notes,
          keys, cellular phone, and other articles or equipment I used in the
          course of my employment.
<PAGE>

     4.   It is understood that the Company does not admit the existence or
          validity of any such claims or any liability of any sort nor has the
          Company made any agreement or promise to do or omit to do any act or
          thing not herein set forth.

     5.   I agree that I will not disclose this document or its terms or
          provisions without first obtaining the written consent of the Company.

     6.   I understand that this Request shall be governed by Colorado law.

     7.   I have read and completely understand this request and recognize that
          it constitutes a general release and waiver of all claims, and I agree
          that this is an acceptable compromise of any such claims and knowingly
          and voluntarily intend to be bound by these provisions without any
          further promises or consideration by the Company. I further agree that
          this agreement terminates all other agreements between myself and the
          Company, excluding any non-disclosure or non-compete obligations which
          may survive my employment. As such, except as provided in this
          Agreement, I am not entitled to any other benefits as a result of my
          separation.

_____________________________                      _________________________
Stephen K. Onody                                             Date

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