CEO Employment Agreement - Stephen K. Onody

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


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.


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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.


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(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.


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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.
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