EGAIN COMMUNICATIONS CORP
LETTER OF EMPLOYMENT
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<TYPE>EX-10.1
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<FILENAME>0003.txt
<DESCRIPTION>LETTER OF EMPLOYMENT
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                                                                    Exhibit 10.1

October 16, 2000


Charles Jepson
Vice President, Business Development
eGain Communications Corporation
Sunnyvale, CA 94086

Dear Chuck:

     I am extremely pleased to offer you the position of Senior Vice President
of North American Field Operations with eGain Communications Corporation (the
"Company").  The terms of your employment with the Company are set forth below.

     1.   Position.
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     (a)  You will become the Senior Vice President of North American Field
Operations with the Company, working out of eGain's offices in Sunnyvale,
California. You will report to me. Your start date will be October 23, 2000.

     (b)  You agree to the best of your ability and experience that you will at
all times loyally and conscientiously perform all of the duties and obligations
required of you pursuant to the express and implicit terms hereof, and to the
reasonable satisfaction of the Company. During the term of your employment, you
further agree that you will devote all of your business time and attention to
the business of the Company, unless the Company expressly agrees otherwise. You
are not permitted to engage in any business activity that competes with the
Company's business.

     2.   Compensation.  You will be paid an annual salary of $250,000.00
          ------------
($10,416.67 per month, payable semi-monthly), less regular payroll deductions,
which covers all hours worked. Your salary will be reviewed annually as part of
the Company's normal salary review process. In addition, you will be eligible to
receive an annual bonus of $175,000.00 based upon the achievement of goals and
objectives to be agreed upon by you and the Company, and upon the achievement of
quotas at plan as agreed upon by you and the Company. Determination of the
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extent to which the bonus has been attained will be in the discretion of the
Compensation Committee of the Board of Directors, provided that, for the quarter
ending December 31, 2000, your quarterly bonus shall not be less than $20,000.

     In satisfaction of the commitments set forth in paragraph 2 of the letter
agreement between you and the Company dated March 15, 2000 ("March 15
Agreement") (see copy attached), the Company will also make one time payments to
you of $ 83,333 on November 1, 2000 and December 1, 2000.

     Additionally,  in recognition of the fact that your employment will, from
time to time, require you to be travelling for extended periods, the Company
agrees to reimburse you (upon submission of original receipts) for reasonable
actual personal expenses (spousal travel and pet care) incurred due to work-
related trips lasting 5 days or longer.  Finally, if you are still employed by
the Company in the position set forth above on October 23, 2001, the Company
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agrees to pay off the remaining lease obligations on the 1997 BMW automobile you
are currently using and transfer title and ownership of the automobile to you.

     3.   Stock Options.  Subject to the approval of the Board of Directors of
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the Company, you will be granted an option to purchase 50,000 shares of Common
Stock at an exercise price equal to the fair market value of the Company's
Common Stock at the date of grant, which shall become vested and exercisable one
year from October 23, 2000. Should the Company terminate your employment for any
reason other than for Cause (as defined on Exhibit A, attached) prior to October
23, 2001, a prorated share of these 50,000 options corresponding to the actual
time you worked as Senior Vice President of North American Field Operations
shall vest upon the date of your termination. Should you leave eGain voluntarily
prior to the first anniversary of your tenure in this position, this option
grant will be forfeited. The specific terms of the option will be set forth in
an option agreement to be issued pursuant to the Company's 1998 Stock Plan,
which agreement will provide that the option must be exercised within 180 days
of the last day of your employment by the Company.

     4.   Benefits. You will be eligible for paid vacation, sick leave and
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holidays according to Company policy. Paid vacation will be governed by the
former Inference plan until December 31, 2000, and thereafter by the new eGain
paid vacation policy to be implemented before that date. The Company will
provide you with standard medical and dental insurance benefits in accordance
with Company policy. These benefits may change from time to time. You will be
covered by workers' compensation insurance and State Disability Insurance, as
required by state law.

     5.   Proprietary Information Agreement. You will be required to sign and
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abide by the terms of the Company's standard proprietary information agreement,
which is incorporated into this agreement by reference. You will also represent
and warrant to the Company that the performance of your duties will not violate
any agreements with or trade secrets of any other person or entity.

     6.   Term of Employment. You agree that your employment with the Company is
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"at-will." In other words, either you or the Company can terminate your
employment at any time for any reason, with or without Cause and with or without
notice (subject to the provisions above concerning payment of severance
benefits).

     7.   Dispute Resolution Procedure. You and the Company (the "parties")
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agree that any dispute arising out of or related to your employment shall be
resolved by binding arbitration, except where the law specifically forbids the
use of arbitration as a final and binding remedy, or where section (g) below
specifically allows a different remedy.

     (a)  The complainant shall provide the other party with a written statement
of the claim identifying any supporting witnesses or documents and the requested
relief.

     (b)  The respondent shall furnish a statement of the relief, if any, that
it is willing to provide, and identify supporting witnesses or documents. If the
matter is not resolved, the parties shall submit the dispute to nonbinding
mediation, paid for by the Company, before a mediator to be selected by the
parties.

     (c)  If the matter is not resolved through mediation, the parties agree
that the dispute shall be resolved by binding arbitration. If the parties are
unable to jointly select an arbitrator, they
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will obtain a list of arbitrators from the Federal Mediation and Conciliation
Service and select an arbitrator by striking names from that list.

     (d)  The arbitrator shall have the authority to determine whether the
conduct complained of in section (a) of this section violates the complainant's
rights and, if so, to grant any relief authorized by law; subject to the
exclusions of section (g) below. The arbitrator shall not have the authority to
modify, change or refuse to enforce the terms of any employment agreement
between the parties, or change any lawful policy or benefit plan.

     (e)  eGain shall bear the costs of the arbitration if you prevail. If eGain
prevails, you will pay half the cost of the arbitration or $500, whichever is
less. Each party shall pay its own attorneys fees, unless the arbitrator orders
otherwise pursuant to applicable law.

     (f)  Arbitration shall be the exclusive final remedy for any dispute
between the parties, such as disputes involving claims for discrimination or
harassment (such as claims under the Fair Employment and Housing Act, Title VII
of the Civil Rights Act of 1964, the Americans with Disabilities Act, or the Age
Discrimination in Employment Act), wrongful termination, breach of contract,
breach of public policy, physical or mental harm or distress or any other
disputes, and the parties agree that no dispute shall be submitted to
arbitration where the complainant has not complied with the preliminary steps
provided for in sections (a) and (b) above.

     (g)  The parties agree that the arbitration award shall be enforceable in
any court having jurisdiction to enforce this Agreement, so long as the
arbitrator's findings of fact are supported by substantial evidence on the whole
and the arbitrator has not made errors of law; however, either party may bring
an action in a court of competent jurisdiction related to matters involving the
Company's confidential, proprietary or trade secret information, or related to
inventions that you may claim to have developed prior to joining eGain or after
joining eGain, pursuant to California Labor Code Section 2870 ("Invention
Disputes"). The parties further agree that for Invention Disputes that the
parties have elected to submit to arbitration, each party retains the right to
seek preliminary injunctive relief in court in order to preserve the status quo
or prevent irreparable injury before the matter can be heard in arbitration.

     8.   Integrated Agreement. With the exception of the commitments set forth
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in Paragraph 3 and the first sentence of Paragraph 6 of the March 15 Agreement,
which shall remain binding and in effect notwithstanding this Agreement, this
Agreement supersedes any prior agreements (including the March 15 Agreement),
representations or promises of any kind, whether written, oral, express or
implied between the parties hereto with respect to the subject matters herein.
This Agreement constitutes the full, complete and exclusive agreement between
you and the Company with respect to the subject matters herein. This agreement
cannot be changed unless in writing, signed by you and another officer of the
Company.

     9.   Severability. If any term of this Agreement is held to be invalid,
          ------------
void or unenforceable, the remainder of this Agreement shall remain in full
force and effect and shall in no way be affected; and, the parties shall use
their best efforts to find an alternative way to achieve the same result.

     Chuck, as you know, we are very excited about the ongoing contribution you
can make to the future success of eGain, and we look forward to working with you
in this new capacity.  In order to confirm your agreement with and acceptance of
these terms, please sign a copy of this
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letter and return it to me. If there is any matter in this letter that you wish
to discuss further, please do not hesitate to call me.

Sincerely,


/s/ Gunjan Sinha                               10/16/00
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Gunjan Sinha                                 Date
President


 ................................................................................
I accept eGain's offer under the terms expressed in this letter.  I understand
that this is not an employment contract for any fixed period, and that, subject
to the provisions of this letter agreement, either party may end the employment
relationship at any time for any reason.



/s/ Charles Jepson                             10/16/00
---------------------------------            ------------------------
Charles Jepson                               Date
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                                  APPENDIX A

                                  DEFINITIONS

     "Cause" for termination will exist at any time after the happening of one
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     or more of the following events: (i) employee's willful misconduct or gross
     negligence in performance of employee's duties hereunder, including
     employee's refusal to comply in any material respect with the legal
     directives of the Company's Board of Directors, President or Chief
     Executive Officer, so long as such directives are not inconsistent with
     employee's position and duties, and such refusal to comply is not remedied
     within ten (10) working days after the written notice from the Company,
     which written notice shall state that failure to remedy such conduct may
     result in termination for Cause; (ii) dishonest or fraudulent conduct, a
     deliberate attempt to do an injury to the Company, or conduct that
     materially discredits the Company or is materially detrimental to the
     reputation of the Company, including conviction of a felony; or (iii)
     employee's material breach of any element of the Company's Proprietary
     Information and Intellectual Property Agreement, including without
     limitation, employee's misappropriation of the Company's proprietary
     information.
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