10-Q

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2009
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                   

Commission File Number 000-28540

VERSANT CORPORATION

(Exact name of Registrant as specified in its charter)

California	94-3079392
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

255 Shoreline Drive, Suite 450, Redwood City, California 94065

(Address of principal executive offices) (Zip code)

(650) 232-2400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o  No o

*Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large Accelerated Filer o	Accelerated Filer x
Non-Accelerated Filer o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  o Yes  x No

As of September 4, 2009, there were outstanding 3,558,218 shares of the Registrant’s common stock, no par value.

VERSANT CORPORATION

QUARTERLY REPORT ON FORM 10-Q

For the Quarterly Period Ended July 31, 2009

Table of Contents

Certifications

2

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

VERSANT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for share amounts)

(unaudited)

	July 31,			October 31,
	2009			2008
ASSETS
Current assets:
Cash and cash equivalents	$	26,755		$	27,234
Trade accounts receivable, net of allowance for doubtful accounts of $8 and $16 at July 31, 2009 and October 31, 2008, respectively	2,576			2,801
Other current assets	736			399
Total current assets	30,067			30,434
Property and equipment, net	595			670
Goodwill	8,410			6,720
Intangible assets, net	879			565
Other assets	—			172
Total assets	$	39,951		$	38,561
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	200		$	371
Accrued liabilities	1,159			1,525
Deferred revenues	3,834			3,120
Deferred rent	18			17
Total current liabilities	5,211			5,033
Deferred revenues	243			317
Deferred rent	—			13
Other long-term liabilities	48			44
Total liabilities	5,502			5,407
Stockholders’ equity:
Common stock, no par value, 7,500,000 shares authorized, 3,565,992 shares issued and outstanding at July 31, 2009, and 3,746,581 shares issued and outstanding at October 31, 2008	95,714			97,717
Accumulated other comprehensive income	252			183
Accumulated deficit	(61,517		)	(64,746		)
Total stockholders’ equity	34,449			33,154
Total liabilities and stockholders’ equity	$	39,951		$	38,561

See accompanying notes to condensed consolidated financial statements

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VERSANT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended					Nine Months Ended
	July 31,			July 31,		July 31,		July 31,
	2009			2008		2009		2008
Revenues:
License	$	2,025		$	3,943	$	7,198	$	12,330
Maintenance	2,345			2,305		6,617		6,764
Professional services	63			52		196		211
Total revenues	4,433			6,300		14,011		19,305
Cost of revenues:
License	84			75		206		233
Amortization of intangible assets	96			79		296		237
Maintenance	364			354		1,080		1,103
Professional services	29			18		100		74
Total cost of revenues	573			526		1,682		1,647
Gross profit	3,860			5,774		12,329		17,658
Operating expenses:
Sales and marketing	1,049			898		3,046		2,696
Research and development	1,022			1,003		2,996		3,159
General and administrative	813			1,181		2,817		4,244
Total operating expenses	2,884			3,082		8,859		10,099
Income from operations	976			2,692		3,470		7,559
Interest and other income (expenses), net	(24		)	261		232		591
Income from continuing operations before taxes	952			2,953		3,702		8,150
Provision for income taxes	61			295		473		992
Net income from continuing operations	891			2,658		3,229		7,158
Net income from discontinued operations, net of income taxes	—			—		—		98
Net income	$	891		$	2,658	$	3,229	$	7,256
Basic income per share:
Net income from continuing operations	$	0.25		$	0.71	$	0.89	$	1.93
Net income from discontinued operations, net of income taxes	$	—		$	—	$	—	$	0.03
Net income per share, basic	$	0.25		$	0.71	$	0.89	$	1.96
Diluted income per share:
Net income from continuing operations	$	0.25		$	0.70	$	0.88	$	1.89
Net income from discontinued operations, net of income taxes	$	—		$	—	$	—	$	0.03
Net income per share, diluted	$	0.25		$	0.70	$	0.88	$	1.92
Shares used in per share calculation:
Basic	3,574			3,729		3,648		3,704
Diluted	3,609			3,806		3,683		3,781
Non-cash stock-based compensation included in the above expenses:
Cost of revenues	$	15		$	14	$	42	$	42
Sales and marketing	$	37		$	51	$	95	$	153
Research and development	$	66		$	43	$	166	$	124
General and administrative	$	145		$	119	$	430	$	308

See accompanying notes to condensed consolidated financial statements

4

VERSANT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended
	July 31,			July 31,
	2009			2008
Cash flows from operating activities:
Net income	$	3,229		$	7,256
Adjustments to reconcile net income to net cash provided by operating activities:
Net income from discontinued operations, net of income taxes	—			(98		)
Depreciation and amortization	274			236
Amortization of intangible assets	296			237
Stock-based compensation	733			627
Recovery of bad debt allowance	(8		)	(1		)
Changes in assets and liabilities:
Accounts receivable	420			(999		)
Other assets	(132		)	(359		)
Accounts payable	(184		)	187
Accrued liabilities and other liabilities	(427		)	(229		)
Deferred revenues	500			(162		)
Deferred rent	(11		)	(4		)
Net cash provided by operating activities	4,690			6,691
Cash flows from investing activities:
Acquisition of business	(2,383		)	—
Purchases of property and equipment	(163		)	(172		)
Net cash used in investing activities	(2,546		)	(172		)
Cash flows from financing activities:
Proceeds from sale of common stock	251			775
Repurchases of common stock	(2,987		)	—
Principal payments under capital lease obligations	(4		)	(8		)
Net cash (used in) provided by financing activities	(2,740		)	767
Effect of foreign exchange rate changes on cash and cash equivalents	117			937
Net (decrease) increase in cash and cash equivalents from operating, investing and financing activities	(479		)	8,223
Net increase in cash and cash equivalents from discontinued operations	—			98
Cash and cash equivalents at beginning of period	27,234			19,086
Cash and cash equivalents at end of period	$	26,755		$	27,407
Supplemental disclosures of cash flows information:
Cash paid for:
Foreign, federal, foreign withholding and state income taxes	$	488		$	1,164

See accompanying notes to condensed consolidated financial statements

5

VERSANT CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1.  GENERAL AND BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements contained in this report on Form 10-Q include all of the assets, liabilities, revenues, expenses and cash flows of Versant Corporation (“Versant”) and all entities in which Versant has a controlling voting interest (subsidiaries) required to be consolidated in accordance with U.S. generally accepted accounting principles. Inter-company accounts and transactions between consolidated companies have been eliminated in consolidation.

The financial statements included herein reflect all adjustments, which, in the opinion of the Company, are necessary for a fair presentation of the results for the interim periods presented. All such adjustments are normal recurring adjustments. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America related to interim financial statements and the applicable rules of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

The financial statements and related disclosures have been prepared with the presumption that users of the interim financial information contained in this report have read or have access to the audited financial statements for the Company’s preceding fiscal year ended October 31, 2008. Accordingly, these financial statements should be read in conjunction with those audited financial statements and the related notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2008, filed on January 14, 2009 (File No. 000-28540). The Company’s operating results for the three and nine months ended July 31, 2009 are not necessarily indicative of the results that may be expected for the full fiscal year ending October 31, 2009, or for any future periods. Further, the preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect the recorded amounts reported therein. A change in facts or circumstances relating to these estimates or assumptions could result in a change to the estimates and impact future operating results.

NOTE 2.  ACQUISITION, GOODWILL AND INTANGIBLE ASSETS

Acquisition

On December 1, 2008, the Company acquired the assets of the database software business of privately-held Servo Software, Inc. or “Servo” (formerly known as db4objects, Inc.) pursuant to an asset purchase agreement between Versant and Servo dated December 1, 2008 (the “db4o Purchase Agreement”). The acquisition of the db4o assets allows Versant to provide an open source object database software solution targeting the embedded device market. Our results of operations include db4o transactions from the acquisition date of December 1, 2008.

The total purchase price of $2,383,201 consists of the following:

a)Initial cash payment of $2,100,000 made in December 2008; and

b)Direct transaction costs of $183,201; and

c)Contingent deferred payment of $100,000 due June 1, 2009.

Under the terms of the db4o Purchase Agreement, in consideration of its acquisition of the assets of the db4o business, Versant paid Servo the above-mentioned closing payment of $2,100,000 in cash, agreed to pay up to a maximum of an additional $300,000 payable in three contingent deferred payments of up to $100,000 each during the 18-month period immediately following the December 1, 2008 acquisition date and assumed certain liabilities of Servo under certain contracts included among the db4o assets. The three contingent deferred payments of up to $100,000 each are payable on the dates that are six months, twelve months and eighteen months, respectively, following the December 1, 2008 acquisition date. The Company made the first contingent deferred payment of $100,000 to Servo on May 29, 2009. Each of these contingent payments is subject to adjustment and reduction if certain former key service providers to Servo cease, for certain reasons, to be employed by or to provide services to Versant as a full-time employee or a full-time independent contractor. Consequently, the remaining two contingent deferred payment amounts are subject to reduction dependent on the retention of these identified key service providers.

6

Under the purchase method of accounting, the total purchase price for the db4o assets was allocated to db4o’s net tangible and identifiable intangible assets based on their estimated fair values as of the acquisition date, with the excess of the purchase price over these aggregate fair values recorded as goodwill. The fair value assigned to identifiable intangible assets acquired is determined using the income approach, which values each intangible asset based upon the estimated impact on the Company’s expected future after-tax cash flows and discounts the net changes in the Company’s expected future after-tax cash flows to present value. The discount was based on an analysis of the weighted-average cost of capital for the industry. The Company’s allocation of the purchase price for the db4o assets and liabilities is summarized below:

Tangible net assets acquired	$	83,400
Customer relationships	210,000
Developed technology	300,000
Trade name	100,000
Goodwill	1,689,801
Total	$	2,383,201

Purchased identifiable intangible assets are amortized on a straight-line basis over their useful lives. The estimated useful economic lives of the acquired customer relationships, developed technology and trade name are nine, five and five years, respectively. Changes to the allocation of the purchase price for the acquisition may occur as additional information (such as contingent payments) becomes available.

db4o’s results of operations for periods prior to this acquisition were not material to the Company’s condensed consolidated statements of income and, accordingly, pro forma financial information has not been presented.

Goodwill

The following table presents goodwill balances and acquisitions of, and adjustments to, goodwill during the nine months ended July 31, 2009 (in thousands):

	Net Carrying Amount As of October 31, 2008		Goodwill Acquired		Adjustments to Goodwill		Net Carrying Amount As of July 31, 2009
Goodwill:
Versant Europe and India	$	241	$	—	$	—	$	241
Poet Holdings, Inc.	5,752		—		—		5,752
FastObjects, Inc.	677		—		—		677
JDO Genie (PTY), LTD.	50		—		—		50
db4o	—		1,578		112		1,690
Total	$	6,720	$	1,578	$	112	$	8,410

In accordance with FAS No. 142, “Goodwill and Other Intangible Assets,” goodwill is subject to at least an annual assessment for impairment, applying a fair-value based test. Versant conducted its annual impairment test in October 2008 and determined there was no impairment. There were no events or circumstances from that date through July 31, 2009 indicating that a further assessment was necessary.

The goodwill acquired in the db4o acquisition will be deductible for tax purposes based upon a 15 year tax life.

Intangible Assets

The Company’s intangible asset balances as of July 31, 2009 and October 31, 2008 are as follows (in thousands):

7

	As of July 31, 2009						As of October 31, 2008
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Intangible assets:
Poet Holdings, Inc. (Amortized over 7 years)	$	1,919	$	1,596	$	323	$	1,919	$	1,454	$	465
JDO Genie (PTY), LTD. (Amortized over 5 years)	550		550		0		550		477		73
db4o-Developed Technology (Amortized over 5 years)	300		40		260		—		—		—
db4o-Customer Relationships (Amortized over 9 years)	210		16		194		—		—		—
FastObjects, Inc. (Amortized over 6 years)	148		133		15		148		121		27
db4o-Trade Name (Amortized over 5 years)	100		13		87		—		—		—
Total	$	3,227	$	2,348	$	879	$	2,617	$	2,052	$	565

As of July 31, 2009 and October 31, 2008, the net carrying amount of intangible assets was approximately $879,000 and $565,000, respectively. Aggregate amortization expense for intangible assets was $96,000 and $296,000, respectively, for the three and nine months ended July 31, 2009 and $79,000 and $237,000, respectively, for the three and nine months ended July 31, 2008.

The projected amortization of the Company’s existing intangible assets as of July 31, 2009 is as follows (in thousands):

	Amortization
Three months ending October 31, 2009	$	77
Fiscal year ending October 31,
2010	304
2011	190
2012	103
2013	103
Thereafter	102
Total	$	879

We test and evaluate our intangible assets for impairment whenever indicators of potential impairment are identified.

NOTE 3.  STOCK-BASED COMPENSATION

Stock-based compensation expense recognized in the consolidated statements of income for the three and nine months ended July 31, 2009 totaled $263,000 and $733,000 respectively; the amount of stock-based compensation expense related to the Company’s equity incentive plan (“Equity Incentive Plan”) and directors stock option plan (“Director Plan”) was $249,000 and $713,000, respectively; and related to the Company’s employee stock purchase plan (“ESPP”) was $14,000 and $20,000, respectively. Stock-based compensation expense recognized in the consolidated statements of income for the three and nine months ended July 31, 2008 totaled $227,000 and $627,000, respectively; the amount of stock-based compensation expense related to the Company’s stock option plans was $186,000 and $541,000, respectively; and related to the Company’s ESPP was $41,000 and $86,000, respectively.

NOTE 4.  STOCK REPURCHASE PROGRAM

On December 1, 2008, Versant’s Board of Directors approved a stock repurchase program. Under this program, Versant is authorized to potentially repurchase up to $5.0 million worth of its outstanding common shares from time to time on the open market, in block trades or otherwise. Whether and when any such repurchases are made depends on market conditions, share price and other factors. The stock repurchase program is currently scheduled to expire upon the earlier of October 31, 2009, or such time as Versant has expended $5.0 million to repurchase outstanding common shares under the program; however the program may be earlier suspended or discontinued, or may be extended, at any time by the Company. Any repurchases made under the stock repurchase program are expected to be funded from the Company’s working capital.

Since announcement of the stock repurchase program through July 31, 2009, Versant acquired 206,377 common shares on the open market for approximately $3.0 million at an average purchase price of $14.43 per share, leaving approximately $2.0 million in authorized funds available for future repurchases of stock under this program at July 31, 2009. Shares repurchased under this program are restored to the status of authorized but unissued shares and thus may be reissued by Versant in the future.

8

The stock repurchase activity under the stock repurchase program during the three months ended July 31, 2009 is summarized as follows:

					Maximum Approximate
				Total Number of Shares	Dollar Value that
	Total Number of	Average Price		Purchased as Part of	May Yet Be Purchased
	Shares Purchased	Paid Per Share(1)		Publicly Announced Program	Under the Program
Period:
As of January 31, 2009	76,692	$	14.39	76,692	$	3,896,026
As of April 30, 2009	81,698	$	14.29	81,698	$	2,728,965
May 1, 2009 - May 31, 2009	38,349	$	14.71	38,349	$	2,164,701
June 1, 2009 - June 30, 2009	8,114	$	14.84	8,114	$	2,044,282
July 1, 2009 - July 31, 2009	1,524	$	15.28	1,524	$	2,020,994
Total	206,377	$	14.43	206,377

(1) Average price paid per share is calculated on a settlement basis and excludes commission.

NOTE 5.  FAIR VALUE MEASUREMENTS

On November 1, 2008, we adopted FASB Statement No. 157, Fair Value Measurements and certain related FASB staff positions. The adoption of Statement 157 and related positions did not have a material impact on our consolidated financial statements. Statement 157 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

Statement 157 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Statement 157 establishes three levels of inputs that may be used to measure fair value:

·Level 1:  quoted prices in active markets for identical assets or liabilities;

·Level 2:  inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

·Level 3:  unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Financial Assets Measured at Fair Value on a Recurring Basis

Our significant financial assets measured at fair value on a recurring basis consisted of the following types of instruments as of July 31, 2009 (Level 1, 2 and 3 inputs are defined above):

9

	Fair Value Measurements Using Input Type
	Level 1		Level 2		Level 3
	(in thousands)
Assets:
Money market funds	$	12,987	$	—	$	—
Time deposits	12,452		—		—
Total	$	25,439	$	—	$	—

Our valuation techniques used to measure the fair values of our money market funds and time deposits were derived from quoted market prices, as all of these instruments have maturity dates (if any) within 90 days from our date of purchase, and active markets for these instruments exist.

NOTE 6.   NET INCOME PER SHARE

Basic net income per share excludes the effect of potentially dilutive securities and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted net income per share, however, reflects the potential dilution of securities by adding dilutive common stock options and shares subject to repurchase to the weighted average number of common shares outstanding for the period.

Additionally, SFAS 128, Earnings per Share, requires that employee equity share options, non-vested shares, and similar equity instruments granted to employees be treated as potential common shares in computing diluted earnings per share. Diluted earnings per share are based on the actual number of options or shares granted and not yet forfeited, unless doing so would be anti-dilutive.

A reconciliation of the numerators and denominators used in the calculation of basic and diluted net income per share is as follows (in thousands, except per share data):

10

	Three Months Ended				Nine Months Ended
	July 31,		July 31,		July 31,		July 31,
	2009		2008		2009		2008
Net income from continuing operations	$	891	$	2,658	$	3,229	$	7,158
Net income from discontinued operations, net of income taxes	—		—		—		98
Net income	$	891	$	2,658	$	3,229	$	7,256
Calculation of basic net income per share:
Weighted Average - common shares outstanding	3,574		3,729		3,648		3,704
Net income from continuing operations	$	0.25	$	0.71	$	0.89	$	1.93
Net income from discontinued operations, net of income taxes	$	—	$	—	$	—	$	0.03
Net income per share, basic	$	0.25	$	0.71	$	0.89	$	1.96
Calculation of diluted net income per share:
Weighted Average - common shares outstanding	3,574		3,729		3,648		3,704
Dilutive effect of employee and director stock options	35		77		35		77
Weighted Average - common shares outstanding and potentially dilutive common shares	3,609		3,806		3,683		3,781
Net income from continuing operations	$	0.25	$	0.70	$	0.88	$	1.89
Net income from discontinued operations, net of income taxes	$	—	$	—	$	—	$	0.03
Net income per share, diluted	$	0.25	$	0.70	$	0.88	$	1.92

The computation of diluted net income per share does not include shares that are anti-dilutive under the treasury stock method because their exercise prices are higher than the average market value of Versant’s stock during the period. For the three months ended July 31, 2009 and 2008, 188,000 and 20,000 potentially dilutive shares, respectively, were excluded from the computation of diluted net income per share. For the nine months ended July 31, 2009 and 2008, 586,000 and 51,000 potentially dilutive shares, respectively, were excluded from the computation of diluted net income per share.

NOTE 7.    OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income presented in the accompanying condensed consolidated balance sheets consists of cumulative foreign currency translation adjustments.

Comprehensive income for the three and nine month periods ended July 31, 2009 and July 31, 2008, is as follows (in thousands):

	Three Months Ended					Nine Months Ended
	July 31,		July 31,			July 31,		July 31,
	2009		2008			2009		2008
Net income, as reported	$	891	$	2,658		$	3,229	$	7,256
Foreign currency translation adjustment	137		(79		)	69		794
Comprehensive income	$	1,028	$	2,579		$	3,298	$	8,050

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NOTE 8.   SEGMENT AND GEOGRAPHIC INFORMATION

Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information, establishes standards for the manner in which public companies report information about operating segments in annual and interim financial statements. It also establishes standards for related disclosures about products and services, geographic areas, and major customers. The Company has determined that it operates in a single operating segment, Data Management.

The Company operates in North America, Europe and Asia. In general, revenues are attributed to the country in which the contract was originated.

The following table reflects revenues for the three and nine month periods ended July 31, 2009 and July 31, 2008 by each geographic region (in thousands):

	Three Months Ended				Nine Months Ended
	July 31,		July 31,		July 31,		July 31,
	2009		2008		2009		2008
Revenues by Region:
North America	$	1,560	$	1,470	$	5,219	$	6,250
Europe	2,821		4,341		8,351		10,379
Asia	52		489		441		2,676
	$	4,433	$	6,300	$	14,011	$	19,305

The following table reflects long-lived assets as of July 31, 2009 and October 31, 2008 in each geographic region (in thousands):

	July 31,		October 31,
	2009		2008
Total long-lived assets by region:
North America	$	142	$	229
Europe	308		383
Asia	145		230
	$	595	$	842

NOTE 9.  DISCONTINUED OPERATIONS

On February 1, 2006 Versant completed the sale of the assets associated with its WebSphere consulting practice to Sima Solutions (“Sima”), a privately held U.S. based company. Versant’s WebSphere consulting practice provided consulting and training services to end-users of IBM’s WebSphere® application server software. As a result of this transaction, Versant ceased conducting its WebSphere business. In connection with Versant’s sale of its WebSphere assets, certain employees of Versant, who formerly worked in Versant’s WebSphere consulting practice, joined Sima.

The sale of Versant’s WebSphere consulting practice assets was consummated pursuant to an Asset Purchase Agreement dated February 1, 2006 (the “Sale Agreement”) between Versant and Sima, pursuant to which Versant was entitled to receive contingent earn-out payments from Sima related to the WebSphere business for a 24-month period following the closing of the Sale Agreement which expired on January 31, 2008. Based on Statement of Financial Accounting Standard No. 144 (“SFAS 144”), Impairments of Long-Lived Assets and Discontinued Operations, the WebSphere transaction met the criteria of a long-lived asset (disposal group) held for sale at the end of the first quarter ended January 31, 2006 when the disposition occurred. As a result, Versant has reflected the results of operations of its WebSphere consulting practice for the three months ended January 31, 2008 as net income from discontinued operations, net of income taxes. Reported revenues following January 31, 2008 no longer include any revenues from the WebSphere consulting practice. The results from the discontinued WebSphere operations, however, are reported as net income from discontinued operations, net of income taxes. For the nine months ended July 31, 2008, Versant recorded $98,000 in royalties from Sima pursuant to the Sale Agreement as net income from discontinued operations. As no further payments were due from Sima after January 31, 2008 there is no net income from discontinued operations in the three and nine months ended July 31, 2009.

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NOTE 10.  INCOME TAXES

The Company is subject to U.S. federal income taxes and to income taxes in various states in the U.S. as well as in foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or foreign tax examinations by tax authorities for tax years before 2003.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes for all periods presented, which were not significant.

NOTE 11.  RECENT ACCOUNTING PRONOUNCEMENTS

In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162” (“SFAS 168”).  SFAS 168 provides for the FASB Accounting Standards CodificationTM (the “Codification”) to become the single official source of authoritative, nongovernmental U.S. generally accepted accounting principles (GAAP).  The Codification did not change GAAP but reorganizes the literature.  SFAS 168 is effective for interim and annual periods ending after September 15, 2009, and thus will first become effective for the Company for the quarter ending October 31, 2009.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS 165”).  SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued.  We do not anticipate the adoption of SFAS 165 will materially impact the Company.  SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009, and thus became effective for the Company for the quarter ended July 31, 2009. The Company has evaluated subsequent events through the date of this filing.

In April 2008, the FASB issued FASB Staff Position SFAS No. 142-3 (“FSP SFAS No. 142-3”), Determination of the Useful Life of Intangible Assets. FSP SFAS No. 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets. This FSP shall be effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. FSP SFAS No. 142-3 is effective for Versant beginning November 1, 2009. The Company will adopt this FSP as required, and its adoption is not expected to have an impact on the consolidated financial statements.

In March 2008, the FASB issued FASB Statement of Financial Accounting Standards No. 161 (“SFAS 161”), Disclosures about Derivative Instruments and Hedging Activities — an Amendment of FASB Statement No. 133. SFAS 161 requires companies with derivative instruments to disclose information that should enable financial statement users to understand how and why a company uses derivative instruments, how derivative instruments and related hedged items are accounted for under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, and how derivative instruments and related hedged items affect a company’s financial position, financial performance and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. SFAS 161 is effective for Versant beginning November 1, 2009. The Company will adopt SFAS 161 as required, and its adoption is not expected to have an impact on the consolidated financial statements.

In February 2008, the FASB issued FASB Staff Position SFAS No. FAS 157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13 and FASB Staff Position SFAS No. FAS 157-2, Effective Date of FASB Statement No. 157. Collectively, the Staff Positions defer the effective date of Statement 157 to fiscal years beginning after November 15, 2008 for nonfinancial assets and nonfinancial liabilities except for items that are recognized or disclosed at fair value on a recurring basis at least annually, and amend the scope of Statement 157. In addition, in October 2008 the FASB issued FASB Staff Position SFAS No. 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, which clarified the application of how the fair value of a financial asset is determined when the market for that financial asset is inactive. FSP SFAS No. 157-3 was effective upon issuance, including prior periods for which financial statements had not been issued. As described in Note 5, we have adopted Statement 157 and the related FASB staff positions except for those items specifically deferred under FSP SFAS No.  157-2. We are currently evaluating the impact of the full adoption of Statement 157 on our consolidated financial statements.

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In December 2007, the FASB issued Statement No. 141 (revised), Business Combinations, (“SFAS 141R”). The standard changes the accounting for business combinations including the measurement of acquirer shares issued in consideration for a business combination, the recognition of contingent consideration, the accounting for pre-acquisition gain and loss contingencies, the recognition of capitalized in-process research and development, the accounting for acquisition-related restructuring cost accruals, the treatment of acquisition-related transaction costs and the recognition of changes in the acquirer’s income tax valuation allowance. SFAS 141R is required to be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.  As such, SFAS 141R will become effective for Versant on November 1, 2009.

In December 2007, the FASB issued Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51, (“SFAS 160”). The standard changes the accounting for noncontrolling (minority) interests in consolidated financial statements including the requirements to classify noncontrolling interests as a component of consolidated stockholders’ equity, and the elimination of “minority interest” accounting in results of operations with earnings attributable to noncontrolling interests reported as part of consolidated earnings. Additionally, SFAS 160 revises the accounting for both increases and decreases in a parent’s controlling ownership interest. SFAS 160 is effective for Versant beginning November 1, 2009 and will apply prospectively, except for the presentation and disclosure requirements, which will apply retrospectively. The Company believes adoption of SFAS 160 will not have an impact on its consolidated financial statements.

NOTE 12.  LEASE COMMITMENTS

On July 17, 2009, the Company entered into an Office Building Lease with DIC DP Hamburg Halenreie Gmbh, pursuant to which the Company will lease approximately 10,200 square feet in an office facility located in Hamburg, Germany. The lease has a term of sixty months, which is currently expected to commence in December 2009. The total rent payable over the full sixty month lease term will be approximately $862,000.

On September 3, 2009, the Company and CA-Shorebreeze Limited Partnership entered into the First Amendment (the “Amendment”) of an Office Building Lease executed between the parties on March 23, 2007.  The Amendment extends the term of the Company’s lease of approximately 6,800 square feet in an office facility located in Redwood City, California, to May 31, 2013.  The total rent payable over the thirty-six month extended lease term will be approximately $553,000.

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis should be read in conjunction with the Company’s financial statements and accompanying notes included in this report and the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2008 filed with the SEC on January 14, 2009. Our historic operating results are not necessarily indicative of results that may occur in future periods.

The following discussion and analysis contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. These forward-looking statements include, among other things, statements regarding the Company’s expected future financial performance, assets, liquidity and trends anticipated for the Company’s business. These statements are based on the Company’s current expectations, assumptions, estimates and projections about the Company’s business, the Company’s industry and the market for the Company’s goods and services, which are based on information that is reasonably available to the Company as of the date of this report. Forward-looking statements may include words such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “should,” “estimates,” “predicts,” “forecasts,” “guidance,” “potential,” “continue” or the negative of such terms or other similar expressions. We caution readers that these forward-looking statements are not assurances of our future performance or financial condition and are subject to and involve significant known and unknown risks, uncertainties and other factors that may cause the Company’s actual operating results, financial condition, levels of activity, performance or achievement to be materially different from any future operating results, financial condition, levels of activity, performance or achievements that are expressed, forecasted, projected, implied in, anticipated or contemplated by the forward-looking statements.  These known and unknown risks, uncertainties and other factors include, but are not limited to, those risks, uncertainties and factors discussed in this report, in the Company’s other SEC filings and in Part I, Item 1A (“Risk Factors”) and in Part II, Item 7 (“Management’s Discussion and Analysis of Financial Condition and Results of Operations”) of the Company’s report on Form 10-K for the fiscal year ended October 31, 2008 (File No. 000-28540). Versant

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undertakes no obligation to revise or update any forward-looking statement in order to reflect events or circumstances that may arise or occur after the date of this report.

Background and Overview

We design, develop, market and support high performance, object-oriented database management systems and provide related maintenance and professional services. Our products and services address the complex data management needs of enterprises and providers of products requiring data management functions.  Our products and services collectively comprise our single operating segment, which we call “Data Management.”

Our end-user customers typically use our products to manage data for business systems and to enable these systems to access and integrate data necessary for the customers’ data management applications. Our data management products and services offer customers the ability to manage real-time, XML and other types of hierarchical and navigational data. We believe that by using our data management solutions, customers cut their hardware costs, accelerate and simplify their development efforts, significantly reduce administration costs and deliver products and services with a significant competitive edge.

Our Data Management business is currently comprised of the following key products:

· Versant Object Database or “VOD”, previously known as VDS, a seventh generation object-oriented database management system that is used in high-performance, large-scale, real-time applications. We also offer several optional ancillary products for use with Versant Object Database to extend Versant Object Database’s capabilities, provide compatibility and additional protection of stored data.

· FastObjects, an object-oriented database management system that can be embedded as a high performance component into customers’ applications and systems.

· db4o, an open source object-oriented database software solution targeted towards the embedded device market.

Our Versant Object Database product offerings are used primarily by larger organizations, such as technology providers, telecommunications carriers, government defense agencies, defense contractors, healthcare companies and companies in the financial services and transportation industries, each of which have significant large-scale data management requirements. With the incorporation of the FastObjects solution into our product line following our March 2004 merger with Poet Holdings, Inc., we expanded the scope of our solutions to also address the data management needs of smaller business systems. By our recent acquisition of db4o in December 2008, we further expanded the scope of our solutions to include the embedded device market.

Our customers’ data management needs can involve many business functions, ranging from management of the use and sharing of a company’s internal enterprise data to the processing of externally originated information such as customer enrollment, billing and payment transaction data. Our solutions have also been used to solve complex data management issues such as fraud detection, risk analysis and yield management and can be adapted for use with many different applications.

In addition to our product offerings, to assist users in developing and deploying applications based on Versant Object Database, FastObjects and db4o, we offer a variety of services, including consulting, training and technical support services.

We license our products and sell associated maintenance, training and consulting services to end-users through our direct sales force and through value-added resellers, systems integrators and distributors.

In addition to these products and services, we resell related software developed by third parties. To date, substantially all of our revenues have been derived from the following data management products and related services:

·Sales of licenses for Versant Object Database and FastObjects;

·Maintenance and technical support services for our products;

·Consulting and training services;

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·Nonrecurring engineering fees received in connection with providing services associated with Versant Object Database;

·The resale of licenses, and maintenance, training and consulting services for third-party products that complement Versant Object Database;

·Reimbursements received for out-of-pocket expenses, which we incurred and are recorded as revenues in our statements of income.

Continued Adverse Global Economic Conditions Are Negatively Impacting Our Business

The national and global economies and financial markets have continued to experience a severe downturn stemming from a multitude of factors, including adverse credit conditions, slower economic activity, concerns about failures or the instability of major financial institutions and other businesses, inflation and deflation, reduced corporate profits and capital spending, adverse business conditions, liquidity concerns and other factors. As a result of these conditions, the United States and global economies are in a significant recession, which is expected to continue. The severity or length of time these economic and financial market conditions may persist is unknown.

Our business has been negatively affected by the ongoing worldwide economic conditions. It is unclear when the macroeconomic environment may improve. During the third quarter of 2009, our selling environment remained very challenging, causing customers to delay or reduce technology purchases or to make smaller investments in our solutions. We are seeing increasing pressures on our customers’ budgets, and while facing uncertainty and cost pressures in their own businesses, some of our customers are deferring purchases of our products. The difficult and uncertain economic conditions caused some of our customers to face financial challenges during the first three quarters of fiscal 2009 and they may continue to face such challenges during the remainder of fiscal 2009.  The current economic downturn in our customers’ industries has contributed to the recent substantial reduction in our revenue, particularly our license revenue, and could continue to harm our business, operating results and financial condition.  This situation will likely cause us to cautiously monitor and reduce our spending in the remainder of fiscal 2009 and thereafter if these economic conditions persist.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amount of our assets and liabilities at the date of our financial statements and the amount of our revenues and expenses during the reporting period covered by our financial statements. We base these estimates and judgments on information reasonably available to us, such as our historical experience and industry trends, economic and seasonal fluctuations and on our own internal projections that we derive from that information. Although we believe our estimates to be reasonable under the circumstances, there can be no assurances that such estimates will be accurate given that the application of these accounting policies necessarily involves the exercise of subjective judgment and the making of assumptions regarding many future variables and uncertainties that involve substantial risk. We consider “critical” those accounting policies that require our most difficult, subjective or complex judgments, and that are the most important to the portrayal of our financial condition and results of operations. These critical accounting policies relate to revenue recognition, goodwill and acquired intangible assets, and income taxes.

During the three and nine months ended July 31, 2009, there were no significant changes in our critical accounting policies and estimates. Please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for our fiscal year ended October 31, 2008, filed with the SEC on January 14, 2009 (File No. 000-28540) for a more complete discussion and analysis of our critical accounting policies and estimates.

Results of Operations

The following table sets forth, for the periods indicated, the percentage relationship of certain items from our condensed consolidated statements of income to total revenues:

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	Three Months Ended				Nine Months Ended
	July 31,		July 31,		July 31,		July 31,
	2009		2008		2009		2008
Revenues:
License	46	%	63	%	52	%	64	%
Maintenance	53		36		47		35
Professional services	1		1		1		1
Total revenues	100		100		100		100
Cost of revenues:
License	2		1		1		1
Amortization of intangible assets	2		1		2		1
Maintenance	8		6		8		6
Professional services	1		—		1		1
Total cost of revenues	13		8		12		9
Gross profit	87		92		88		91
Operating expenses:
Sales and marketing	24		14		22		14
Research and development	23		16		21		16
General and administrative	18		19		20		22
Total operating expenses	65		49		63		52
Income from operations	22		43		25		39
Interest and other income (expenses), net	(1	)	4		1		3
Income from continuing operations before taxes	21		47		26		42
Provision for income taxes	1		5		3		5
Net income from continuing operations	20		42		23		37
Net income from discontinued operations, net of income taxes	—		—		—		1
Net income	20	%	42	%	23	%	38	%

Revenues

The following table summarizes license, maintenance and professional services revenues for the three and nine months ended July 31, 2009 and July 31, 2008 (in thousands, except percentages):

	Three Months Ended									Nine Months Ended
	July 31,		July 31,		Change					July 31,		July 31,		Change
	2009		2008		Amount			Percentage		2009		2008		Amount			Percentage
	(unaudited)									(unaudited)
Revenues:
License revenues	$	2,025	$	3,943	$	(1,918	)	(49	)%	$	7,198	$	12,330	$	(5,132	)	(42	)%
Maintenance revenues	2,345		2,305		40			2		6,617		6,764		(147		)	(2	)
Professional services revenues	63		52		11			21		196		211		(15		)	(7	)
Total	$	4,433	$	6,300	$	(1,867	)	(30	)%	$	14,011	$	19,305	$	(5,294	)	(27	)%

Total Revenues. Total revenues are comprised of license fees, and revenues from maintenance, consulting, training and other support services. Fluctuations in total revenues are generally attributable to changes in product and customer mix, competition and general trends in information technology spending and general economic conditions, as well as to changes in geographic mix and the corresponding impact of changes in foreign exchange rates. Further, product life cycles impact revenues periodically as old contracts end and new products are released. In 2009, license revenues have been negatively impacted by the weakened global economy.

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Our revenues as shown in the above table and in the accompanying statement of income for the nine months ended July 31, 2008 included in this report do not include revenues from our disposed WebSphere consulting practice. Instead, as required by generally accepted accounting principles, our financial statements for the nine months ended July 31, 2008 report former WebSphere activities as “net income from discontinued operations, net of income taxes.” Our results for the three and nine months ended July 31, 2009 do not include any amounts from discontinued operations since our rights to receive revenues from our disposed WebSphere consulting practice terminated in January, 2008.  See NOTE 9 of our “NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) “ in Item 1 of this Quarterly Report on Form 10-Q.

Our total revenues decreased by $1.9 million (or 30%) for the three months ended July 31, 2009 compared to the corresponding period in fiscal 2008. This decrease resulted primarily from an approximate $1.9 million (or 49%) decrease in license revenues for the three months ended July 31, 2009 from the corresponding period in fiscal 2008, and includes an approximate $376,000 decrease in revenues (or 20% of the decrease in total revenues) resulting from unfavorable foreign currency exchange rate fluctuations. Maintenance and professional services revenues remained relatively stable, increasing $40,000 (or 2%) and $11,000 (or 21%), respectively, for the three months ended July 31, 2009 over the corresponding period in fiscal 2008.

Our total revenues decreased by $5.3 million (or 27%) for the nine months ended July 31, 2009 compared to the corresponding period in fiscal 2008. This decrease resulted primarily from an approximate $5.1 million (or 42%) decrease in license revenues for the nine months ended July 31, 2009 from the corresponding period in fiscal 2008, and includes an approximate $1.2  million (or 23% of the decrease in total revenues) from unfavorable foreign currency exchange rate fluctuations.  Maintenance and professional services revenues remained relatively stable decreasing $147,000 (or 2%) and $15,000 (or 7%), respectively, for the nine months ended July 31, 2009 over the corresponding period in fiscal 2008.

No customer accounted for more than 10% of our total revenues for the three and nine months ended July 31, 2009 as we continued to experience fewer larger license transactions in these periods. By contrast, in the corresponding periods in fiscal 2008, significant customers who contributed 10% or more of our total revenues included two telecommunications customers who together contributed approximately 33% of total revenues in the third quarter of fiscal 2008, and one such telecommunications customer who also accounted for approximately 12% of our total revenues for the nine months ended July 31, 2008.

The inherently unpredictable business cycle of an enterprise software company makes discernment of continued and meaningful business trends difficult, particularly in the current recessionary economic environment. In terms of license revenues, we are still experiencing lengthy sales cycles and customers’ preference for licensing our software on an “as needed” basis, versus the historical practice of prepaying license fees in advance of usage, a factor which can adversely affect the amount of our license revenues. In addition, the deterioration in general economic conditions has further lengthened our sales cycle and created increased pricing pressure.  License revenues are a critical factor in driving the amount of our services revenues, as new license customers typically enter into support and maintenance agreements with us, from which our maintenance revenues are derived over future fiscal periods.

License. License revenues represent license fees received and recognized from our End-Users and Value Added Resellers.

License revenues were $2.0 million for the three months ended July 31, 2009, a decrease of $1.9 million (or 49%) from $3.9 million reported for the comparable period in fiscal 2008. The decrease in license revenues for the three months ended July 31, 2009 compared to the same three month period in 2008 resulted primarily from fewer license transactions and the relative absence of larger license transactions and includes an approximate $192,000 decrease in revenues (or 10% of the decrease in total revenues) resulting from unfavorable foreign currency exchange rate fluctuations. By way of illustration, during the three months ended July 31, 2008 we derived approximately $1.9 million in revenues from two significant license agreements with telecommunications customers but had no such comparable license transactions in the three months ended July 31, 2009.

License revenues were $7.2 million for the nine months ended July 31, 2009, a decrease of $5.1 million (or 42%) from $12.3 million reported for the comparable period in fiscal 2008. The decrease in license revenues for the nine months ended July 31, 2009 compared to the same nine month period in 2008 primarily resulted from fewer license transactions and fewer larger license transactions and includes an approximate $677,000 decrease in revenue (or 13% of the decrease in total revenues) due to unfavorable foreign currency exchange rate fluctuations.  During the nine months ended July 31, 2009 we derived approximately $5.3 million of revenues from several significant license transactions with four telecommunications customers, whereas we did not have comparable license transactions of this scale in the nine months ended July 31, 2009.

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Maintenance. Maintenance and technical support revenues include revenues derived from maintenance agreements, under which we provide customers with internet and telephone access to support personnel and software upgrades, dedicated technical assistance and emergency response support options.

Maintenance revenues were $2.3 million for the three months ended July 31, 2009, remaining stable from $2.3 million reported for the comparable period in fiscal 2008. Maintenance revenues for the quarter ended July 31, 2009 included an increase of $219,000 of back maintenance for one European telecommunications customer that was offset by a decrease of approximately $177,000 resulting from unfavorable foreign currency exchange rate fluctuations during the quarter compared to the corresponding period in fiscal 2008.

Maintenance revenues were $6.6 million for the nine months ended July 31, 2009, a decrease of $147,000 (or 2%) from $6.8 million reported for the comparable period in fiscal 2008.  The decrease was primarily due to approximately $544,000 of unfavorable foreign currency exchange rate fluctuations as well as approximately $200,000 of back maintenance for one European customer recognized in the second quarter of fiscal 2008, and was partially offset by approximately $559,000 of back maintenance revenue from two European customers that was recognized in the first and third quarters of fiscal 2009.

Professional Services. Professional services revenues consist of revenues from consulting, training and technical support as well as billable travel expenses incurred by our professional services organization.

Professional services revenues were $63,000 for the three months ended July 31, 2009, an increase of $11,000 (or 21%) from $52,000 reported for the comparable period in fiscal 2008. Professional services revenues were $196,000 for the nine months ended July 31, 2009, a decrease of $15,000 (or 7%) from $211,000 reported for the comparable period in fiscal 2008.

International Revenues. The following table summarizes our revenues by geographic area for the three and nine months ended July 31, 2009 and July 31, 2008 (in thousands, except percentages):

	Three Months Ended July 31,													Nine Months Ended July 31,
			Percentage				Percentage		Change							Percentage				Percentage		Change
	2009		of revenues		2008		of revenues		Amount			Percentage		2009		of revenues		2008		of revenues		Amount			Percentage
	(unaudited)															(unaudited)
Revenues by Region:
North America	$	1,560	35	%	$	1,470	23	%	$	90		6	%	$	5,219	37	%	$	6,250	32	%	$	(1,031	)	(16	)%
Europe	2,821		64		4,341		69		(1,520		)	(35	)	8,351		60		10,379		54		(2,028		)	(20	)
Asia	52		1		489		8		(437		)	(89	)	441		3		2,676		14		(2,235		)	(84	)
	$	4,433	100	%	$	6,300	100	%	$	(1,867	)	(30	)%	$	14,011	100	%	$	19,305	100	%	$	(5,294	)	(27	)%

International revenues (revenues from the European and Asian regions) represented approximately 65% of our total revenues for the three months ended July 31, 2009, as compared to 77% for the comparable period in fiscal 2008.

International revenues represented approximately 63% of our total revenues for the nine months ended July 31, 2009, as compared to 68% for the comparable period in fiscal 2008.

For the three months ended July 31, 2009, the decrease in international revenues included approximately $376,000 of unfavorable foreign currency exchange rate fluctuations as well as an absence of larger international license transactions compared with the three months ended July 31, 2008, during which two significant license transactions with two European telecommunications customers totaling approximately $1.9 million were recognized.

For the nine months ended July 31, 2009, the decrease in international revenues resulted from fewer license transactions; a situation we believe is primarily attributable to the weakness in the overall world economy.  We experienced a decrease in revenues of approximately $2.2 million (or 84%) from the Asia Pacific region, due primarily to the absence of significant license transactions in that period, unlike the nine months ended July 31, 2008, when we had recognized $1.9 million in revenue from two Asian telecommunications customers. In the nine months ended July 31, 2009 we also experienced a decrease in revenues of approximately $2.0 million (or 20%) from our European operations, which includes an approximate $1.2 million decrease resulting from unfavorable foreign currency exchange rate fluctuations.  The decrease in revenues from Europe was primarily due to license transactions with one European telecommunications customer that totaled $2.0 million recognized in fiscal 2008 but which was not repeated in 2009. We also experienced a decrease of $1.0 million (or 16%) in revenues from North America primarily due to our

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recognition in the nine months ended July 31, 2008 of $1.2 million in royalty revenues from one telecommunications customer which was not repeated in the comparable period in 2009.

Since the Company’s acquisition of Poet Holdings, Inc. in early 2004, we have generally derived a higher percentage of international revenues due to stronger demand for our products in Europe. We expect in the future to continue to experience a somewhat stronger demand for our products in Europe as compared to our other geographic markets.

A variety of factors may impact Versant’s future revenues, including the potential strengthening of the U.S. dollar (which would have the effect of reducing portions of our revenue that resulted from favorable currency exchange fluctuations) and the generally more difficult economic environment currently being experienced in the U.S. and Europe, which may impact demand for our products and services.

Cost of Revenues

The following table summarizes total cost of revenues for the three and nine months ended July 31, 2009 and July 31, 2008 (in thousands, except percentages):

	Three Months Ended								Nine Months Ended
	July 31,		July 31,		Change				July 31,		July 31,		Change
	2009		2008		Amount		Percentage		2009		2008		Amount			Percentage
	(unaudited)								(unaudited)
Cost of revenues:
Cost of license	$	84	$	75	$	9	12	%	$	206	$	233	$	(27	)	(12	)%
Amortization of intangible assets	96		79		17		22		296		237		59			25
Cost of maintenance	364		354		10		3		1,080		1,103		(23		)	(2	)
Cost of professional services	29		18		11		61		100		74		26			35
Total	$	573	$	526	$	47	9	%	$	1,682	$	1,647	$	35		2	%

Total Cost of Revenues.  Total cost of revenues was $573,000 and $1.7 million for the three and nine months ended July 31, 2009, respectively, remaining at a relatively consistent level in absolute dollars compared to $526,000 and $1.6 million for the comparable periods in fiscal 2008.

License. Cost of license revenues consists primarily of royalties, the cost of third party products which we resell to our customers, product media and packaging costs.

Cost of license revenues was $84,000 (or 4% of license revenues) and $206,000 (or 3% of license revenues) for the three and nine months ended July 31, 2009, remaining at a relatively consistent level in absolute dollars compared to $75,000 (or 2% of license revenues) and $233,000 (or 2% of license revenues) reported for the comparable periods in fiscal 2008.

Amortization of Intangible Assets. Amortization of intangible assets consists of the amortization of intangible assets from our fiscal 2009 acquisition of db4o and fiscal 2004 acquisitions of Poet Holdings, Inc., FastObjects, Inc. and JDO Genie technology.

Amortization of intangible assets was $96,000 and $296,000, respectively, for the three and nine months ended July 31, 2009, increases of $17,000 (or 22%) and $59,000 (or 25%), respectively, from $79,000 and $237,000, respectively, reported for the comparable periods in 2008. The increases were primarily due to the amortization of intangible assets recorded from our acquisition of the db4o business during the three and nine months ended July 31, 2009, which were not reflected in our results of operations in fiscal 2008. We expect to incur amortization charges of approximately $77,000 for the fourth quarter of fiscal 2009.

Maintenance. Cost of maintenance revenues consists primarily of cost of customer support personnel and related expenses, including payroll, employee benefits and allocated overhead.

Cost of maintenance revenues was $364,000 (or 16% of maintenance revenues) and $1.1 million (or 16% of maintenance revenues) for the three and nine months ended July 31, 2009, respectively, remaining consistent in both absolute dollars and as a percentage of maintenance revenues, compared to $354,000 (or 15% of maintenance revenues) and $1.1 million (or 16% of maintenance revenues) reported for the comparable periods in fiscal 2008.

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Professional Services. Cost of professional services consists of salaries, bonuses, third party consulting fees and other costs associated with supporting our professional services organization.

Cost of professional services revenues increased slightly to $29,000 (or 46% of professional services revenues) for the three months ended July 31, 2009 compared to $18,000 (or 35% of professional services revenues) reported for the comparable period in fiscal 2008.  Cost of professional services revenues was $100,000 (or 51% of professional services revenues) for the nine months ended July 31, 2009 compared to $74,000 (or 35% of professional services revenues) reported for the comparable period in fiscal 2008.

Operating Expenses

The following table summarizes our operating expenses for the three and nine months ended July 31, 2009 and July 31, 2008 (in thousands, except percentages):

	Three Months Ended									Nine Months Ended
	July 31,		July 31,		Change					July 31,		July 31,		Change
	2009		2008		Amount			Percentage		2009		2008		Amount			Percentage
	(unaudited)									(unaudited)
Operating expenses:
Sales and marketing	$	1,049	$	898	$	151		17	%	$	3,046	$	2,696	$	350		13	%
Research and development	1,022		1,003		19			2		2,996		3,159		(163		)	(5	)
General and administrative	813		1,181		(368		)	(31	)	2,817		4,244		(1,427		)	(34	)
Total	$	2,884	$	3,082	$	(198	)	(6	)%	$	8,859	$	10,099	$	(1,240	)	(12	)%

Total Operating Expenses. Total operating expenses were $2.9 million (or 65% of revenues) for the three months ended July 31, 2009 and $3.1 million (or 49% of revenues) for the comparable period in 2008. The $198,000 (or 6%) absolute dollar decrease in total operating expenses for the three months ended July 31, 2009 resulted primarily from a decrease of approximately $261,000 in our general and administrative expenses related to SOX 404 compliance and legal fees, and a decrease of approximately $202,000 due to favorable foreign currency exchange rate fluctuations, with these decreases being partially offset by an increase in sales, marketing, research and development costs related to db4o of $220,000 for this three month period.

Total operating expenses were $8.9 million (or 63% of revenues) for the nine months ended July 31, 2009 and $10.1 million (or 52% of revenues) for the comparable period in 2008. The $1.2 million (or 12%) decrease in absolute dollars of our total operating expenses for the nine months ended July 31, 2009 resulted from a $1.1 million decrease in our general and administrative expenses as a result of a litigation settlement expense in fiscal 2008 which was not repeated in fiscal 2009, and a decrease of approximately $725,000 from favorable foreign currency exchange rate fluctuations, with these decreases being partially offset by increased sales, marketing, research and development costs of $691,000 related to db4o.

Sales and Marketing. Sales and marketing expenses consist primarily of personnel and personnel related expenses, commissions earned by sales personnel, and expenses associated with trade shows, travel and other marketing communication costs, such as advertising and other marketing programs.

Sales and marketing expenses were $1.0 million (or 24% of revenues) for the three months ended July 31, 2009 and $898,000 (or 14% of revenues) for the comparable period in fiscal 2008. The $151,000 (or 17%) increase in absolute dollars in sales and marketing expenses in the three months ended July 31, 2009 was primarily related to increased expenses in our U.S. operations, including an approximate $174,000 in increased salary and related costs, recruiting and travel costs associated with hiring two new salespeople and a new VP of Sales North America, an approximate $83,000 increase in salary and related costs and consulting fees in connection with db4o and an increase of $57,000 in marketing consulting fees, with these increases being partially offset by a decrease of approximately $49,000 resulting from favorable foreign currency exchange fluctuations. These increases were offset by reduced expenses in our European operations for the three months ended July 31, 2009, which did not include approximately $123,000 in salary and related expenses from the corresponding period in fiscal 2008 relating to the departure of the Executive Vice President of Field Operations and two other sales and marketing personnel.

Sales and marketing expenses were $3.0 million (or 22% of revenues) for the nine months ended July 31, 2009 and $2.7 million (or 14% of revenues) for the comparable period in fiscal 2008. The $350,000 (or 13%) increase in absolute dollars in our sales and marketing expenses for the nine months ended July 31, 2009 was due to the expansion of our U.S. sales operations, including an approximate $237,000 increase in salary, recruiting, higher facility costs attributable to additional personnel, travel and related costs

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associated with hiring two new salespeople and a new VP of Sales North America, an increase of $125,000 in marketing consulting fees, and increased costs in connection with db4o including an approximate $147,000 increase in salary and related costs for one employee and consulting fees for two consultants as well as increased advertising costs of $62,000, with these increases being partially offset by a decrease of approximately $208,000 due to favorable foreign currency exchange fluctuations. These increases for the nine months ending July 31, 2009 were partially offset by reduced expenses in our European operations of approximately $277,000 in salary and related expenses attributable to the departure of the Executive Vice President of Field Operations and two other sales and marketing personnel, and reduced trade show and collateral expenses of $68,000, partially offset by an approximate $275,000 non recurring separation payment made to the former Executive Vice President of Field Operations in the first quarter of fiscal 2009. As db4o was acquired on December 1, 2008, only eight months of sales and marketing expenditures associated with db4o as described above is reflected in the Company’s statement of income for the nine months ended July 31, 2009 and no db4o-associated expenses are reflected in the nine months ended July 31, 2008.

For the fourth quarter of fiscal 2009, we expect our quarterly sales and marketing expenses to generally remain at current levels and to continue to represent a considerable percentage of our total operating expenditures in the future.

Research and Development. Research and development expenses consist primarily of personnel and related expenses, including payroll and employee benefits, facility expenses and costs to engage software development contractors.

Research and development expenses were very slightly above $1.0 million (or 23% of revenues) for the three months ended July 31, 2009 and $1.0 million (or 16% of revenues) for the comparable period in fiscal 2008  The $19,000 (or 2%) increase in absolute dollars for the three months ended July 31, 2009 included an increase of $137,000 in consulting fees in connection with three contractors and salary and related costs for two personnel additions related to db4o, offset by an approximate decrease of $122,000 due to favorable foreign currency exchange fluctuations.

Research and development expenses were $3.0 million (or 21% of revenues) for the nine months ended July 31, 2009 and $3.2 million (or 16% of revenues) for the comparable period in fiscal 2008. The $163,000 (or 5%) decrease in absolute dollars in these expenses for the nine months ended July 31, 2009 was mainly due to favorable foreign currency exchange fluctuations of approximately $426,000, a decrease of approximately $176,000 resulting from the use of fewer third party contractors for certain research and development projects in our European operations, and a decrease of $33,000 due to reduced personnel in our Indian operations. These decreases were partially offset by an increase of $482,000 in consulting fees in connection with three contractors and salary and related costs for two personnel related to db4o. As db4o was acquired on December 1, 2008, only eight months of research and development expenditures associated with db4o are reflected in the Company’s statement of income for the nine months ended July 31, 2009.

We anticipate that we will continue to invest significant resources in research and development activities to develop new products, advance the technology of our existing products and develop new business opportunities. We expect research and development expenditures to generally remain at current levels for the remainder of fiscal 2009.

General and Administrative. General and administrative expenses consist primarily of personnel and related expenses and general operating expenses.

General and administrative expenses were $813,000 (or 18% of revenues) for the three months ended July 31, 2009 and $1.2 million (or 19% of revenues) for the comparable period in fiscal 2008. The $368,000 (or 31%) decrease in absolute dollars in these expenses for the three months ended July 31, 2009 was due to an approximate $135,000 decrease in audit fees, consulting services and salary related expenses, due to the fact that Versant has not been subject to Sarbanes Oxley Section 404 during fiscal year 2009, a decrease of $126,000 in legal fees associated with a litigation settlement occurring in fiscal 2008, a decrease of $52,000 in employee bonuses due to reduced revenue and net income levels, and a decrease of $31,000 due to favorable foreign currency exchange rate fluctuations.

General and administrative expenses were $2.8 million (or 20% of revenues) for the nine months ended July 31, 2009 and $4.2 million (or 22% of revenues) for the comparable period in fiscal 2008. The $1.4 million (or 34%) decrease in absolute dollars for the nine months ended July 31, 2009 was primarily due to a decrease of $1.1 million in expenses related to the settlement of litigation occurring in fiscal 2008 and not duplicated in fiscal 2009, a decrease of $175,000 in employee bonuses due to reduced revenue and net income levels, an approximate $123,000 decrease in SOX 404 related audit fees, consulting services and salary related expenses, and a decrease of $91,000 due to favorable foreign currency exchange rate fluctuations. These decreases were partially offset by an

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approximate $107,000 increase in stock–based compensation expense as a result of the higher average market value of stock option grants.

We expect our quarterly general and administrative expenses to generally remain at current levels for the remainder of fiscal 2009.

Interest and Other Income (Expenses), Net

Interest and other income (expenses), net, consists of interest income earned on our cash and cash equivalents, net of interest expense due to our financing activities, miscellaneous refunds and foreign exchange rate gains and losses as a result of settling transactions denominated in currencies other than our functional currency.

Interest and other income (expenses), net, was ($24,000) (or 1% of total revenues) and $232,000 (or 1% of total revenues) for the three and nine months ended July 31, 2009, respectively, and was $261,000 (or 4% of total revenues) and $591,000 (or 3% of total revenues), respectively, for the comparable periods in 2008. The decreases in absolute dollars of $285,000 (or 109%) and $359,000 (or 61%) for the three and nine months ended July 31, 2009 were largely due to decreases in interest income of $178,000 and $369,000, respectively, as a result of the lower general level of interest rates.  During the three months ended July 31, 2009 we also experienced $51,000 in foreign exchange rate losses as a result of settling transactions denominated in currencies other than our functional currency.

Provision for Income Taxes

The following table reflects the Company’s provision for income taxes for the three and nine months ended July 31, 2009 and July 31, 2008 (in thousands, except percentages):

	Three Months Ended									Nine Months Ended
	July 31,		July 31,		Change					July 31,		July 31,		Change
	2009		2008		Amount			Percentage		2009		2008		Amount			Percentage
	(unaudited)									(unaudited)
Provision for income taxes:
Foreign withholding taxes	$	4	$	17	$	(13	)	(76	)%	$	51	$	258	$	(207	)	(80	)%
Provision for income taxes - Europe	47		272		(225		)	(83	)	352		726		(374		)	(52	)
Provision for income taxes - India	—		1		(1		)	(100	)	1		2		(1		)	(50	)
Federal, state and franchise taxes	10		5		5			100		69		6		63			1,050
Total	$	61	$	295	$	(234	)	(79	)%	$	473	$	992	$	(519	)	(52	)%

Although we have not exhausted our net operating tax loss carry forwards in Germany, the German tax code provides for certain annual statutory limitations related to the use of tax loss carry forward amounts. Consequently, we accrued income taxes for our European operations of approximately $47,000 and $272,000, for the three months ended July 31, 2009 and 2008, respectively, and approximately $352,000 and $726,000 for the nine months ended July 31, 2009 and 2008, respectively. The Company’s tax provisions were based upon our projected fiscal 2009 and fiscal 2008 effective tax rates.

We incurred foreign withholding taxes of approximately $4,000 and $17,000, respectively, for the three months ended July 31, 2009 and 2008, and approximately $51,000 and $258,000, respectively, for the nine months ended July 31, 2009 and 2008, which we have included in our income tax provision. The decrease of approximately $207,000 in foreign withholding taxes for the nine months ended July 31, 2009 over the comparable period in fiscal 2008 was mainly attributable to withholding taxes related to one significant license agreement with an Asia Pacific customer during the first quarter of fiscal 2008.

We record a valuation allowance to reduce our tax assets to an amount for which realization is deemed more likely than not. We have recorded a valuation allowance for all of our deferred tax assets as of July 31, 2009, except to the extent of deferred tax liabilities, as we are presently unable to conclude that it is more likely than not that the existing net deferred tax assets will be realized.

LIQUIDITY AND CAPITAL RESOURCES

Cash and Cash Equivalents

We funded our business from cash generated by our operations during the nine months ended July 31, 2009. As of July 31, 2009, we had cash and cash

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equivalents of approximately $26.8 million, a decrease of $479,000 from the $27.2 million of cash and cash equivalents we held at October 31, 2008. The $479,000 decrease was primarily a result of cash expenditures of $2.4 million for our acquisition of the db4o assets and $3.0 million to repurchase shares of our common stock under the stock repurchase program we announced in December 2008, and these expenditures were partially offset by cash generated from operations of $4.7 million for the nine months ended July 31, 2009.

As of July 31, 2009, $13.5 million of our $26.8 million in cash and cash equivalents at that date was held in foreign financial institutions, of which $3.8 million was held in foreign currencies.

The following table summarizes our cash balances held in foreign currencies and their equivalent U.S. dollar amounts for the periods indicated (in thousands):

	As of July 31, 2009					As of October 31, 2008
	Local Currency			U.S. Dollar		Local Currency			U.S. Dollar
	(unaudited)					(unaudited)
Cash in foreign currency:
Euros	€	2,456		$	3,453	€	1,366		$	1,783
British Pound	£	22		37		£	28		47
Indian Rupee	Rs		17,182	353		Rs		12,605	241
Total				$	3,843				$	2,071

We transact business in various foreign currencies and, accordingly, we are subject to exposure from adverse movements in foreign currency exchange rates. The effect of changes in foreign currency exchange rates on our net operating results in the first nine months of fiscal 2009 was comprised of approximately $1.2 million of unfavorable foreign currency fluctuations on our revenues, $96,000 of favorable foreign currency fluctuations on our cost of revenues, and $725,000 of favorable foreign currency fluctuations on our operating expenses, resulting in a net unfavorable effect of approximately $420,000 on our total operating income for the nine months ended July 31, 2009. Operating expenses incurred by our foreign subsidiaries are denominated primarily in local currencies. We currently do not use financial instruments to hedge these operating expenses. We intend to assess the need to utilize financial instruments to hedge currency exposures on an ongoing basis during fiscal 2009.

Our exposure to foreign exchange risk is primarily related to the magnitude of foreign net profits and losses denominated in euros, as well as our net position of monetary assets and monetary liabilities in the euro. This exposure has the potential to produce either gains or losses within our consolidated results. However, in some instances our European operations act as a natural hedge, since both operating expenses as well as revenues are denominated in local currencies. In these instances, although an unfavorable change in the exchange rate of the euro against the U.S. dollar will result in lower revenues when translated into U.S. dollars, our European operating expenditures will be lower as well.

Additionally, we held approximately 86% of our total cash balance at July 31, 2009 in the form of U.S. dollars to assist in neutralizing the impact of foreign currency fluctuations.

In relation to our cash balances held overseas, there were no European Union foreign exchange restrictions on repatriating our overseas-held cash to the United States.  However, we may be subject to income tax withholding in the source countries and to U.S. federal and state income taxes in the future if the cash payment or transfer from our subsidiaries to the U.S. parent were to be classified as a dividend.  Other payments made by our European overseas subsidiaries in the ordinary course of business (e.g. payment of royalties or interest from the subsidiaries to the U.S. parent) were generally not subject to income tax withholding under existing tax treaties.

Our cash equivalents primarily consist of money market accounts and short term time deposits; accordingly, our interest rate risk is not considered significant.

On December 1, 2008, our Board of Directors approved a stock repurchase program. Under the program, we are authorized to potentially repurchase up to $5.0 million worth of our outstanding common shares from time to time on the open market, in block trades or otherwise. Any repurchases made under the program are expected to be funded from the company’s working capital. Since announcement of the stock repurchase program, Versant has acquired 206,377 common shares on the open market for approximately $3.0 million at an average purchase price of $14.43 per share, leaving approximately $2.0 million in authorized funds available for future repurchases of stock under this program at July 31, 2009.

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In December 2008, we acquired the assets of the database software business of privately-held Servo Software, Inc. (formerly db4objects, Inc.) for $2.6 million in cash (including $300,000 of contingent payments and $183,000 of direct transaction costs).

Taking into consideration the contingent cash outflows related to both the db4o acquisition of assets and potential common stock repurchases, we believe that with our current cost structure and based on our current estimates of revenues and collections in fiscal 2009, we can reasonably expect to operate at a slight positive cash flow level in the remainder of fiscal 2009.

Cash Flows from Operating Activities

The main source of our operating cash flows is cash collections from customers who have purchased our products and services. Our primary uses of cash in operating activities are for personnel related expenditures and facility costs.

The timing of payments to our vendors for accounts payable and collections from our customers for accounts receivable will significantly impact cash flows in our operating activities. We typically pay our vendors and service providers in accordance with their invoice terms and conditions. Our standard payment terms for our invoices are usually between 30 and 60 days net.

We measure the effectiveness of our collection efforts by an analysis of our accounts receivable and our days sales outstanding (DSO). We calculate DSO by taking the ending accounts receivable balances (net of bad debt allowance) divided by the average daily sales amount. Average daily sales amount is calculated by dividing the total quarterly revenue recognized net of changes in deferred revenues by 91.25 days. Our DSOs were 55 days and 53 days for the three months ended July 31, 2009 and July 31, 2008, respectively. Collections of accounts receivable and related DSO could fluctuate in future periods due to the timing and amount of our revenues and the effectiveness of our collection efforts.

For the nine months ended July 31, 2009, $275,000 of cash was used in operating activities related to a non recurring separation payment to a former sales executive.

Our working capital was $24.9 million as of July 31, 2009 compared to $25.4 million as of October 31, 2008.

Cash Flows from Investing Activities

The change in cash flows from investing activities primarily relates to our acquisition of db4o for $2.4 million in December 2008.

Cash Flows from Financing Activities

On December 1, 2008, our Board of Directors approved a stock repurchase program. Under the program, we are authorized to potentially repurchase up to $5.0 million worth of our outstanding common shares from time to time on the open market, in block trades or otherwise.

The primary source of cash flows from financing activities is proceeds from the sale of common stock under our Equity Incentive Plan, Directors’ Plan and Employee Stock Purchase Plan.

For the nine months ended July 31, 2009, $2.7 million of cash was used by financing activities, consisting of $3.0 million of cash used to repurchase our common stock and principal payments of $4,000 under capital lease obligations, offset by cash inflows of $251,000 from the sale of common stock under our Equity Incentive and Employee Stock Purchase Plans.

Our future liquidity and capital resources could be impacted by our stock repurchase program as described above, and by the exercise of outstanding common stock options and the cash proceeds we receive upon exercise of these securities. At the annual meeting of shareholders on April 24, 2009, the shareholders approved amendments to the 2005 Equity Incentive Plan, the 2005 Employee Stock Purchase Plan and the 2005 Directors’ Stock option plan to increase the number of shares of common stock reserved for issuance under the plans by 200,000 shares, 50,000 shares and 20,000 shares, respectively. Further, as of July 31, 2009, we had approximately 324,857 shares available to issue under our current Equity Incentive Plan and our Director Stock Option Plan. The timing of the issuance, the duration of their vesting provisions and the grant price will all impact the timing of any proceeds. Accordingly, we cannot estimate the amount of such proceeds at this time.

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Commitments and Contingencies

Our principal commitments as of July 31, 2009 consist of obligations under operating leases for facilities and equipment. As reported in Note 12, Lease Commitments of the Notes to Condensed Consolidated Financial Statements under Item 1 of Part I, of this Report, in September 2009, the Company entered into an amended lease agreement to extend the office facilities lease for its U.S. headquarters.  The resulting change to future minimum lease payments is reflected in our minimum commitments table below.

Our minimum commitments under non-cancelable operating leases not recorded on our Condensed Consolidated Balance Sheet are as follows (in thousands):

	Facilities Leases		Equipment Leases		Total
Three months ending October 31, 2009	$	132	$	3	$	135
Fiscal year ending October 31,
2010	357		6		363
2011	369		—		369
2012	377		—		377
2013	296		—		296
Thereafter	192		—		192
Total	$	1,723	$	9	$	1,732

After taking into account potential contingent payments related to our acquisition of the db4o assets and potential common stock repurchases under our current stock repurchase program, we believe that our existing cash and cash equivalents and cash to be generated from operations will be sufficient to finance our operations during the next twelve months. However, if we fail to generate adequate cash flows from operations in the future, due to an unexpected decline in our revenues, difficulties or delays in collection of revenues or due to a sustained increase in cash expenditures in excess of the revenues generated, then our cash balances may not be sufficient to fund our continuing operations without obtaining additional debt or equity financing. Additional cash may also be needed to acquire or invest in complementary businesses or products or to obtain the right to use complementary technologies, and we expect that, in the event of such an acquisition or investment that is significant, it will be necessary for us to seek additional debt or equity financing.

In December 2008, we acquired the assets of the database software business of privately-held Servo Software, Inc. (formerly db4objects, Inc.) for $2.6 million, including $300,000 of contingent payments which may become payable in the 18 month period beginning December 1, 2008. The Company made the first contingent deferred payment of $100,000 to Servo on May 29, 2009.

On December 1, 2008, our Board of Directors approved a stock repurchase program. Under the program, we are authorized to potentially repurchase up to $5.0 million worth of our outstanding common shares from time to time on the open market, in block trades or otherwise. Any repurchases made under the program are expected to be funded from the company’s working capital. However, nothing obligates us to repurchase shares pursuant to this stock repurchase program, and the program may be terminated at any time. Since announcement of the stock repurchase program, Versant has acquired 206,377 common shares on the open market for approximately $3.0 million at an average purchase price of $14.43 per share, leaving approximately $2.0 million in authorized funds available for future repurchases of stock under this program at July 31, 2009.

A $3.0 million credit facility we had with a financial institution expired by its terms in June 2007, and we currently do not anticipate establishing another credit or loan facility in fiscal 2009.

Recent Accounting Pronouncements

For recent accounting pronouncements see Note 11, Recent Accounting Pronouncements of Notes to Condensed Consolidated Financial Statements under Item 1 of Part I, of this Report.

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Risk Factors

Global economic conditions and financial markets have remained substantially negative, and national and global economies and financial markets continue to experience a severe downturn stemming from a multitude of factors, including adverse credit conditions, slower economic activity, concerns about failures or the instability of major financial institutions and other businesses, inflation and deflation, reduced corporate profits and capital spending, adverse business conditions and liquidity concerns and other factors. Economic growth in the U.S. and many other countries has slowed and may slow further in 2009. The severity or length of time these economic and financial market conditions may persist is unknown. During challenging economic times and in tight credit markets, many customers may delay or reduce technology purchases. This has resulted, and could continue to result in, reductions in sales of our products, longer sales cycles, difficulties in collection of accounts receivable, slower adoption of new technologies and increased price competition. Continued softness in corporate information technology spending would have a direct impact on our business and any of these events would likely harm our business, including decreasing our revenues, decreasing cash provided by operating activities and negatively impacting our liquidity.

In addition to the foregoing risks of the economic downturn, the Company’s business faces many other risks and uncertainties. When evaluating our business and prospects you should, in addition to other information contained in this report and our other filings with the SEC, particularly consider the risk factors set forth in Part I, Item 1A (“Risk Factors”) of the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2008, filed with the SEC on January 14, 2009 (File No.000-28540).

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Foreign currency hedging instruments. We transact business in various foreign currencies and, accordingly, we are subject to exposure from adverse movements in foreign currency exchange rates. The effect of changes in foreign currency exchange rates on our net operating results in the first nine months of fiscal 2009 was comprised of approximately $1.2 million of unfavorable foreign currency fluctuations on our revenues, $96,000 of favorable foreign currency fluctuations on our cost of revenues, and $725,000 of favorable foreign currency fluctuations on our operating expenses, resulting in a net unfavorable effect of approximately $420,000 on total operating income for the nine months ended July 31, 2009. Operating expenses incurred by our foreign subsidiaries are denominated primarily in local currencies. We currently do not use financial instruments to hedge these operating expenses. We intend to assess the need to utilize financial instruments to hedge currency exposures on an ongoing basis during fiscal 2009.

Our exposure to foreign exchange risk is primarily related to the magnitude of foreign net profits and losses denominated in euros, as well as our net position of monetary assets and monetary liabilities in the euro (though in the future the same could be true of other foreign currencies depending on the source of our revenues). This exposure has the potential to produce either gains or losses within our consolidated results. However, in some instances our European operations act as a natural hedge, since both operating expenses as well as revenues are denominated in local currencies. In these instances, although an unfavorable change in the exchange rate of the euro against the U.S. dollar will result in lower revenues when translated into U.S. dollars, our European operating expenditures will be lower as well.

Additionally, we held approximately 86% of our total cash balance at July 31, 2009 in the form of U.S. dollars to assist in neutralizing the impact of foreign currency fluctuations.

We do not own any derivative financial instruments as of July 31, 2009.

Interest rate risk.Our cash equivalents primarily consist of money market accounts and short term time deposits; therefore, we do not believe that our interest rate risk is significant at this time.

ITEM 4. CONTROLS AND PROCEDURES

(a)  Evaluation of Disclosure Controls and Procedures.

SEC rules define the term “disclosure controls and procedures” to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in its reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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Our disclosure controls and procedures include components of our internal control over financial reporting. Management’s assessment of the effectiveness of our internal control over financial reporting is expressed at the level of reasonable assurance because a control system, no matter how well designed and operated, can provide only reasonable, but not absolute, assurance that the control system’s objectives will be met.

Based on the evaluation of the effectiveness of our disclosure controls and procedures by our management, with the participation of our chief executive officer and chief financial officer, as of the end of the period covered by this report, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.

(b)  Changes in Internal Control over Financial Reporting.

There was no change in our internal control over financial reporting during the three months ended July 31, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

SEC rules define the term “internal control over financial reporting” as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

·Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

·Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

·Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

PART II.  OTHER INFORMATION

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a)           Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

On December 1, 2008, Versant’s Board of Directors approved a stock repurchase program. Under this program, Versant is authorized to potentially repurchase up to $5.0 million worth of its outstanding common shares from time to time on the open market, in block trades or otherwise. Whether and when any such repurchases are made depends on market conditions, share price and other factors. The stock repurchase program is currently scheduled to expire upon the earlier of October 31, 2009, or such time as Versant has expended $5.0 million to repurchase outstanding common shares under the program; however the program may be suspended or discontinued, or may be extended, at any time by the Company. Any repurchases made under the stock repurchase program are expected to be funded from the Company’s working capital.   Since announcement of the stock repurchase program, Versant has acquired 206,377 common shares on the open market for approximately $3.0 million at an average purchase price of $14.43 per share, leaving approximately $2.0 million in authorized funds available for future repurchases of stock under this program at July 31, 2009.

The stock repurchase activity under the stock repurchase program during the three months ended July 31, 2009 is summarized as follows:

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					Maximum Approximate
				Total Number of Shares	Dollar Value that
	Total Number of	Average Price		Purchased as Part of	May Yet Be Purchased
	Shares Purchased	Paid Per Share(1)		Publicly Announced Program	Under the Program
Period:
As of January 31, 2009	76,692	$	14.39	76,692	$	3,896,026
As of April 30, 2009	81,698	$	14.29	81,698	$	2,728,965
May 1, 2009 - May 31, 2009	38,349	$	14.71	38,349	$	2,164,701
June 1, 2009 - June 30, 2009	8,114	$	14.84	8,114	$	2,044,282
July 1, 2009 - July 31, 2009	1,524	$	15.28	1,524	$	2,020,994
Total	206,377	$	14.43	206,377

(1) Average price paid per share is calculated on a settlement basis and excludes commission.

ITEM 5. OTHER INFORMATION

(a)          Lease Commitments

On July 17, 2009, the Company entered into an Office Building Lease with DIC DP Hamburg Halenreie Gmbh, pursuant to which the Company will lease approximately 10,200 square feet in an office facility located in Hamburg, Germany. The lease has a term of sixty months, which is currently expected to commence in December 2009. The total rent payable over the full sixty month lease term will be approximately $862,000.

On September 3, 2009, the Company and CA-Shorebreeze Limited Partnership entered into the First Amendment (the “Amendment”) of an Office Building Lease executed between the parties on March 23, 2007.  The Amendment extends the term of the Company’s lease of approximately 6,800 square feet in an office facility located in Redwood City, California, to May 31, 2013.  The total rent payable over the thirty-six month extended lease term will be approximately $553,000.

(b)          Joint Employment Agreement and Managing Director Service Contract with CEO

On September 9, 2009, Versant Corporation (“Versant” or the “Company”) and its subsidiary Versant GmbH (“Versant Germany”) entered into a Joint Employment Agreement and Managing Director Service Contract (the “Agreement”) with Jochen Witte, Versant’s Chief Executive Officer and President, which sets forth the terms on which Mr. Witte is employed as Versant’s Chief Executive Officer and President and as Managing Director of Versant Germany.  The Agreement replaces Mr. Witte’s prior employment agreement of November 2006.  In summary, the principal terms of the Agreement provide that:  (a) as Managing Director of Versant Germany, Mr. Witte will be paid a base salary by Versant Germany at a rate of 216,000 Euros per year; (b) if he is terminated as Managing Director of Versant Germany without cause (as defined in the Agreement) he will be entitled to receive a cash severance payment, payable in one lump sum, equal to the sum of (i) his then effective annual base salary plus (ii) all bonus payments (if any) paid to him under his Versant contingent incentive bonus program during the four (4) completed Versant fiscal quarters ended immediately prior to such termination without cause; (c) while Mr. Witte serves as Versant’s Chief Executive Officer, for each Versant fiscal year beginning after October 31, 2009, Versant’s board of directors and/or the board’s compensation committee will determine whether Mr. Witte will be granted any additional stock options and will adopt a contingent incentive bonus program for Mr. Witte on terms to be determined by the board and/or the compensation committee, except that Mr. Witte’s target bonus (i.e., the bonus to be paid if goals designated by the board or the compensation committee as “target” goals are achieved) will be at least $240,000; (d) all of Mr. Witte’s then outstanding Versant stock options and any other unvested Versant equity awards will be subject to 12 months of accelerated vesting if his employment is terminated without cause (as defined in the Agreement) and if, within 12 months after consummation of a “change of control” transaction involving Versant, Mr. Witte’s employment is either terminated without cause or terminated in a “termination for good reason” as defined in the agreement (i.e., a termination by Mr. Witte following certain defined adverse events, such as certain reductions in his base salary or responsibilities) then the vesting of all his then outstanding Versant stock options and any other unvested equity awards will accelerate in full.

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(c)          Retention Incentive Agreement with Chief Financial Officer

On September 9, 2009, Versant entered into a Retention Incentive Agreement with Jerry Wong, Versant’s Vice President, Finance and Chief Financial Officer.  The Retention Incentive Agreement provides that if, within 12 months after consummation of a “change of control” transaction involving Versant, Mr. Wong’s employment is terminated without cause (as defined in the agreement) or Mr. Wong terminates his employment in a “termination for good reason” (i.e., a termination by Mr. Wong following certain defined adverse events, such as certain reductions in his base salary or responsibilities) then: (i) Mr. Wong would be entitled to receive a lump sum cash payment equal to one-twelfth (1/12) of his annual target compensation (his “annual target compensation” being the sum of his then effective annual base salary rate plus an amount equal to his target annual cash bonus under his variable incentive compensation plan then in effect (or if no such plan is then in effect, the most recent such plan)) multiplied by the number of years (including fractional years) that he has been continuously employed by Versant as of the termination date, provided that this cash payment is not to exceed a maximum of fifty percent (50%) of Mr. Wong’s annual target compensation as of the termination date; and (ii) the vesting of all Mr. Wong’s then outstanding and unvested Versant stock options or other unvested Versant equity awards would accelerate by six (6) months of additional vesting for each year (or fraction thereof) that he has been continuously employed by the Company as of the date of termination, not to exceed as maximum total of thirty-six (36) months of additional vesting.

ITEM 6.  EXHIBITS

(a)Exhibits

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The following exhibits are filed with this Quarterly Report on Form 10-Q:

Exhibit		Incorporated by Reference				Filed with this
Number	Exhibit Description	Form	File Number	Exhibit	File Date	10-Q
10.01	First Amendment dated September 3, 2009 to Office Building Lease dated March 23, 2007, between Versant Corporation and CA-Shorebreeze Limited Partnership					X
10.02†	English Summary of Office Building Lease dated July 17, 2009 between Versant Corporation and DIC DP Hamburg Halenreie Gmbh					X
10.03 Θ	Joint Employment Agreement and Managing Director Service Contract with CEO					X
10.04 Θ	Retention Incentive Agreement with Chief Financial Officer					X
31.01	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X
31.02	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X
32.01*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
32.02*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X

*This exhibit is being furnished rather than filed, and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

†  This exhibit is an English summary of a foreign language document pursuant to Rule 306 of Regulation S-T.

Θ  Management contract or compensatory plan.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	VERSANT CORPORATION
Dated: September 9, 2009	/s/ Jerry Wong
	Jerry Wong
	Vice President, Finance

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Chief Financial Officer

(Duly Authorized Officer, Principal Financial Officer and Principal Accounting Officer)

/s/Jochen Witte

Jochen Witte

President and Chief Executive Officer
(Duly Authorized Officer and Principal Executive Officer)

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EX-10.01

Exhibit 10.01

FIRST AMENDMENT

THIS FIRST AMENDMENT (the “Amendment”) is made and entered into as of September 3, 2009, by and between CA-SHOREBREEZE LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”), and VERSANT CORPORATION, a California corporation (“Tenant”).

RECITALS

A.Landlord and Tenant are parties to that certain lease dated March 23, 2007 (the “Lease”).  Pursuant to the Lease, Landlord has leased to Tenant space currently containing approximately 6,758 rentable square feet (the “Premises”) described as Suite 450 on the fourth floor of the building commonly known as Shorebreeze II located at 255 Shoreline Drive, Redwood City, California (the “Building”).

B.The Lease will expire by its terms on May 31, 2010 (the “Prior Termination Date”), and the parties wish to extend the term of the Lease on the following terms and conditions.

NOW, THEREFORE, in consideration of the above recitals which by this reference are incorporated herein, the mutual covenants and conditions contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant agree as follows:

1.Extension.  Although the term of the Lease is scheduled to expire on the Prior Termination Date, the parties wish to recalculate the Base Rent as of October 1, 2009 (the “Reset Date”). In addition, the term of the Lease is hereby extended until May 31, 2013 (the “Extended Termination Date”).  The portion of the term of the Lease commencing on the Reset Date and ending on the Extended Termination Date shall be referred to herein as the “Extended Term”.

2.Base Rent.  Notwithstanding anything to the contrary in Lease, effective as of the Reset Date through the Extended Term, the schedule of Base Rent shall be as follows:

Period of Extended Term	Annual Rate Per Square Foot		Monthly Base Rent
10/1/09 – 5/31/10	$	30.00	$	16,895.00
6/1/10 – 5/31/11	$	28.80	$	16,219.20
6/1/11 – 5/31/12	$	29.66	$	16,703.52
6/1/12 – 5/31/13	$	30.55	$	17,204.74

Notwithstanding the foregoing, so long as no Default exists, Tenant shall be entitled to an abatement of Base Rent, in the amount of $16,219.20 per month, for three (3) consecutive full calendar months beginning on June 1, 2010.

All such Base Rent shall be payable by Tenant in accordance with the terms of the Lease, as amended.

3.Additional Security Deposit.  No additional Security Deposit shall be required in connection with this Amendment.

4.Expenses and Taxes.  Notwithstanding any provision in the Lease to the contrary, with respect to that period of time commencing on January 1, 2010 and ending on the Extended Termination Date, the Base Year for Expenses and Taxes shall be 2010.  With respect to the Extended Term, Tenant shall pay for Tenant’s Pro Rata Share of Expenses and Taxes in accordance with the terms of the Lease (as amended hereby).

5.Improvements to Premises.

5.1.Condition of Premises.  Tenant is in possession of the Premises and accepts the same “as is” without any agreements, representations, understandings or obligations

September 5, 2009

Matter ID Number:  733

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on the part of Landlord to perform or pay for any alterations, repairs or improvements, except as may be expressly provided otherwise in this Amendment.

5.2.Responsibility for Improvements to Premises.  Any improvements to the Premises performed by Tenant shall be paid for by Tenant and performed in accordance with the terms of the Lease.

6.Other Pertinent Provisions.  Landlord and Tenant agree that, effective as of the date of this Amendment (unless different effective date(s) is/are specifically referenced in this Section), the Lease shall be amended in the following additional respects:

6.1.Landlord’s Notice Address.  The Landlord’s Notice Address set forth in Section 1.12 of the Lease is hereby deleted in its entirety and replaced with the following:

LANDLORD’S NOTICE ADDRESS:

CA-Shorebreeze Limited Partnership
c/o Equity Office2655 Campus Drive, Suite 100
San Mateo, California 94403
Attention: Building manager with a copy to:
CA-Shorebreeze Limited Partnership
c/o Equity Office2655 Campus Drive, Suite 100
San Mateo, California 94403
Attention: Managing Counsel

with a copy to:
CA-Shorebreeze Limited Partnership
c/o Equity OfficeTwo North Riverside Plaza, Suite 2100
Chicago, Illinois 60606
Attention: Lease Administration

Notwithstanding anything to the contrary contained in the Lease, as amended hereby, Rent shall be made payable to the entity, and sent to the address, Landlord designates and shall be made by good and sufficient check or by other means acceptable to Landlord.

6.2.Deletion.  Section 1 (Renewal Option) of Exhibit F to the Lease is hereby deleted in its entirety and is of no further force or effect.

6.3.Second Extension Option.

A.Grant of Option; Conditions.  Tenant shall have the right (the “Second Extension Option”) to extend the Extended Term for one additional period of one (1) year commencing on the day following the Extended Termination Date and ending on the first anniversary of the Extended Termination Date (the “Second Extension Term”), if:

1.Not less than 9 and not more than 12 full calendar months before the Extended Termination Date, Tenant delivers written notice to Landlord (for purposes hereof, the “Extension Notice”) electing to exercise the Second Extension Option and stating Tenant’s estimate of the Prevailing Market (defined in Section 6.3.E below) rate for the Second Extension Term;

2.Tenant is not in default under the Lease, as amended, beyond any applicable cure period when Tenant delivers the Extension Notice;

3.No part of the Premises is sublet (other than to pursuant to a Business Transfer) when Tenant delivers the Extension Notice; and

4.The Lease, as amended, has not been assigned (other than to pursuant to a Business Transfer) before Tenant delivers the Extension Notice.

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B.Terms Applicable to Second Extension Term.

1.During the Second Extension Term, (a) the Base Rent rate per rentable square foot shall be equal to the Prevailing Market rate per rentable square foot; (b) Base Rent shall increase, if at all, in accordance with the increases assumed in the determination of Prevailing Market rate; and (c) Base Rent shall be payable in monthly installments in accordance with the terms and conditions of the Lease, as amended.

2.During the Second Extension Term Tenant shall pay Tenant’s Pro Rata Share of Expenses and Taxes for the Premises in accordance with the Lease, as amended.

C.Procedure for Determining Prevailing Market.  Within 30 days after receiving the Extension Notice, Landlord shall give Tenant either (i) written notice (for purposes hereof, the “Landlord’s Binding Notice”) accepting Tenant’s estimate of the Prevailing Market rate for the Second Extension Term stated in the Extension Notice, or (ii) written notice (for purposes hereof, the “Landlord’s Rejection Notice”) rejecting such estimate and stating Landlord’s estimate of the Prevailing Market rate for the Second Extension Term.  If Landlord gives Tenant a Landlord’s Rejection Notice, Tenant, within 15 days thereafter, shall give Landlord either (i) written notice (for purposes hereof, the “Tenant’s Binding Notice”) accepting Landlord’s estimate of the Prevailing Market rate for the Second Extension Term stated in such Landlord’s Rejection Notice, or (ii) written notice (for purposes hereof, the “Tenant’s Rejection Notice”) rejecting such estimate.  If Tenant gives Landlord a Tenant’s Rejection Notice, Landlord and Tenant shall work together in good faith to agree in writing upon the Prevailing Market rate for the Second Extension Term.  If, within 30 days after delivery of a Tenant’s Rejection Notice, the parties fail to agree in writing upon the Prevailing Market rate, Tenant’s Second Extension Option shall be of no further force or effect.

D.Extension Amendment.  If Tenant is entitled to and properly exercises its Second Extension Option, and if the Prevailing Market rate for the Second Extension Term is determined in accordance with Section 6.3.C above, Landlord, within a reasonable time thereafter, shall prepare and deliver to Tenant an amendment (for purposes hereof, the “Extension Amendment”) reflecting changes in the Base Rent, the term of the Lease, the expiration date of the Lease, and other appropriate terms, and Tenant shall execute and return the Extension Amendment to Landlord within 15 days after receiving it. Notwithstanding the foregoing, upon determination of the Prevailing Market rate for the Second Extension Term in accordance with Section 6.3.C above, an otherwise valid exercise of the Second Extension Option shall be fully effective whether or not the Extension Amendment is executed.

E.Definition of Prevailing Market. For purposes of this Second Extension Option, “Prevailing Market” shall mean the arms-length, fair-market, annual rental rate per rentable square foot under extension and renewal leases and amendments entered into on or about the date on which the Prevailing Market is being determined hereunder for space comparable to the Premises in the Building and office buildings comparable to the Building in the Redwood City, California area.  The determination of Prevailing Market shall take into account any material economic differences between the terms of the Lease, as amended, and any comparison lease or amendment, such as rent abatements, construction costs and other concessions, and the manner, if any, in which the landlord under any such lease is reimbursed for operating expenses and taxes.  The determination of Prevailing Market shall also take into consideration any

3

reasonably anticipated changes in the Prevailing Market rate from the time such Prevailing Market rate is being determined and the time such Prevailing Market rate will become effective under the Lease, as amended.

7.Other Provisions.

7.1.Liability Insurance.  Clause (a) of the first sentence of Section 14 of the Lease is hereby amended by replacing the amount “$2,000,000.00” set forth therein with the amount “$3,000,000.00.”

7.2.Waiver of Subrogation.  Each party waives, and shall cause its insurance carrier to waive, any right of recovery against the other party, any of its (direct or indirect) owners, or any of their respective beneficiaries, trustees, officers, directors, employees or agents for any loss of or damage to property which loss or damage is (or, if the insurance required under the Lease had been carried, would have been) covered by insurance.  For purposes of this Section only, (a) any deductible with respect to a party’s insurance shall be deemed covered by, and recoverable by such party under, valid and collectable policies of insurance; and (b) any contractor retained by Landlord to install, maintain or monitor a fire or security alarm for the Building shall be deemed an agent of Landlord.

7.3.Compliance with Law.  Without limiting Tenant’s obligations under the Lease, if, as a result of Tenant’s performance of any Alteration, Landlord becomes required under Law to perform any inspection or give any notice relating to the Premises or such Alteration, or to ensure that such alteration is performed in any particular manner, Tenant shall comply with such requirement on Landlord’s behalf and promptly thereafter provide Landlord with reasonable documentation of such compliance.

7.4.Base Year Expenses.  Notwithstanding any contrary provision of the Lease, Expenses for the Base Year shall exclude (a) any market-wide cost increases resulting from extraordinary circumstances, including Force Majeure, boycotts, strikes, conservation surcharges, embargoes or shortages, and (b) at Landlord’s option, the cost of any repair or replacement that Landlord reasonably expects will not recur on an annual or more frequent basis.

7.5.Application.  Notwithstanding any contrary provision hereof, Sections 7.1 through 7.4 above shall not apply to any period occurring before the Extension Date.

8.Miscellaneous.

8.1.This Amendment and the attached exhibits, which are hereby incorporated into and made a part of this Amendment, set forth the entire agreement between the parties with respect to the matters set forth herein.  There have been no additional oral or written representations or agreements.  Under no circumstances shall Tenant be entitled to any free rent, improvement allowance, leasehold improvements, or other work to the Premises, or any similar economic incentives that may have been provided Tenant in connection with entering into the Lease, unless specifically set forth in this Amendment.

8.2.Except as herein modified or amended, the provisions, conditions and terms of the Lease shall remain unchanged and in full force and effect.

8.3.In the case of any inconsistency between the provisions of the Lease and this Amendment, the provisions of this Amendment shall govern and control.

8.4.Submission of this Amendment by Landlord is not an offer to enter into this Amendment but rather is a solicitation for such an offer by Tenant.  Landlord shall not be bound by this Amendment until Landlord has executed and delivered it to Tenant.

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8.5.The capitalized terms used in this Amendment shall have the same definitions as set forth in the Lease to the extent that such capitalized terms are defined therein and not redefined in this Amendment.

8.6.Tenant agrees to indemnify and hold Landlord, its trustees, members, principals, beneficiaries, partners, officers, directors, employees, mortgagee(s) and agents, and the respective principals and members of any such agents harmless from all claims of any brokers (other than Sherry Gubera of Cornish and Carey) claiming to have represented Tenant in connection with this Amendment.  Landlord agrees to indemnify and hold Tenant, its trustees, members, principals, beneficiaries, partners, officers, directors, employees, and agents, and the respective principals and members of any such agents harmless from all claims of any brokers claiming to have represented Landlord in connection with this Amendment.  Any assistance rendered by any agent or employee of any affiliate of Landlord in connection with this Amendment or any subsequent amendment or modification hereto has been or will be made as an accommodation to Tenant solely in furtherance of consummating the transaction on behalf of Landlord, and not as agent for Tenant.

8.7.Each signatory of this Amendment represents hereby that he or she has the authority to execute and deliver it on behalf of the party hereto for which such signatory is acting.

[SIGNATURES ARE ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Amendment as of the day and year first above written.

LANDLORD:
CA-SHOREBREEZE LIMITED PARTNERSHIP, a Delaware limited partnership
By:	EOP Owner GP L.L.C., a Delaware limited liability company, its general partner
	By:		/s/ Kenneth Young
	Name:		Kenneth Young
	Title:		Vice President - Leasing
TENANT:
VERSANT CORPORATION, a California corporation
By:		/s/ Jerry Wong
Name:		Jerry Wong
Title:		CFO
By:		/s/ Robert Greene
Name:		Robert Greene
Title:		V.P. Operations

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EX-10.02

Exhibit 10.02

Summary of Lease Agreement between Versant Gmbh and  DIC DP Hamburg Halenreie Gmbh, dated July 17, 2009. (Original document in German)

On July 17, 2009, Versant’s subsidiary, Versant Gmbh (“Versant Germany”) entered into an agreement with DIC DP Hamburg Halenreie Gmbh, pursuant to which Versant Germany will lease approximately 10,200 square feet of space in a commercial office facility located in Hamburg, Germany for a term of sixty months, commencing on December 1, 2009 and expiring on November 30, 2014. Versant has the option to extend the term of the lease for up to two additional three-year periods at an inflation adjusted monthly rent. 

The leased property is located at Halenreie 40-44, 22359 Hamburg, Germany and includes 884m² of office space, 63m² of storage space and 15 parking places.  The initial monthly rental is as follows:

Office Rental	9,503.00	€
Storage Rental	283.50
Parking Space Rental	375.00
Ancillary Costs	2,367.50
German VAT @ 19%	2,380.51
Total Monthly Rental	14,909.51	€

The monthly rental is subject to an annual adjustment based on the German General Price Index, similar to the U.S. Consumer Price Index, using a common index reference period (2005=100).  The Operating Costs included in the rent are similar to those costs or expenses which are customarily reimbursed to commercial lessors in the United States as rent, including common area maintenance, heating etc., and are subject to changes based upon actual costs and Versant’s consumption, and in some cases based on the percentage of the office complex leased by Versant Germany. Versant Germany will receive one month’s rent abatement in January 2010. Any tenant improvement costs will be borne by Versant Germany.

Under the lease, Versant Germany is required to pay and maintain a security deposit of approximately 45,000€.

The lease requires Versant Germany to maintain certain insurance coverage, including liability insurance, office insurance and business interruption insurance and, as is customary in commercial leases, requires Versant to indemnify the lessor for certain damages or liabilities related to Versant Germany’s use and occupancy of the leased premises.  The lease in many cases limits the landlord’s liability to Versant Germany for certain acts or omissions of the landlord to acts or omissions that involve gross negligence or willful misconduct on the part of the landlord, and the lease also provides that Versant Germany may not recover damages for lost profits.

EX-10.03

Exhibit 10.03

Joint

Employment Agreement

and

Managing Director Service Contract

Effective as of September 9, 2009 (the “Effective Date”)

Between

Versant Corporation,

a California corporation

with offices at 255 Shoreline Drive, Suite # 450, Redwood City, California, 94065 USA

(hereinafter “Versant”), and

Versant GmbH,

a German corporation that is a subsidiary of Versant,

with offices at Wiesenkamp 22b 22359, Hamburg, Germany

(hereinafter “Versant Germany”),

on the one hand,

and

Mr. Jochen Witte

Buchenstieg 13b

22359 Hamburg

(hereinafter “Witte”, “Employee” or “Managing Director”, as applicable),

on the other hand.

Preamble and Recitals

Witte is currently the President and Chief Executive Officer of Versant and also currently serves as Managing Director of Versant Germany.  The Parties desire to set forth in this Agreement the terms and conditions on which Witte will serve as (i) an officer and employee of Versant and (ii) Managing Director of Versant Germany.  References herein to “Employee” refer to Witte in his capacity as Chief Executive Officer and an employee of Versant and references herein to “Managing Director” refer to Witte in his capacity as Managing Director of Versant Germany.

PART A:

Employment With Versant

Employee’s employment with Versant shall be subject to and governed by the provisions of this Part A and, as applicable, Part C of this Agreement:

§ 1A:Employment; Duties.  Subject to the terms and conditions of this Agreement, Versant hereby employs Employee, and Employee hereby accepts employment, as Versant’s Chief Executive Officer and President, reporting to Versant’s Board of Directors (the “Versant Board”), and Employee agrees that, in that capacity, Employee shall be an “exempt” employee within the meaning of California law.  Employee shall perform his services as Versant’s Chief Executive Officer and President subject to the supervision and direction of the Versant Board (or any committee thereof) and shall have such responsibilities, duties and authority as are consistent with those offices. In addition, Employee shall have such other duties as the Versant Board may direct and may be asked to hold additional management positions within the Versant group of companies without additional compensation (except for the compensation paid to Employee for his service as Managing Director of Versant Germany, which shall be as provided in Part B of this Agreement).  During Employee’s employment with Versant, Employee shall not engage in any business activities outside those of Versant and the Versant group of companies.

§ 2A:Compensation.  As his sole and exclusive compensation for Employee’s services as Versant’s Chief Executive Officer and President, Employee will, subject to the terms of this Agreement, receive the following compensation from Versant:

(1)Bonus Program.

(a)Existing Fiscal 2009 Bonus Program.  The parties acknowledge that, as of the Effective Date of this Agreement, Employee is currently participating in a Versant bonus program for Versant’s fiscal year ending October 31, 2009 (“Fiscal 2009”), the terms and conditions of which are summarized on Versant’s Report on Form 8-K dated December 17, 2008 and filed with the U.S. Securities and Exchange Commission (the “FY 2009 Bonus Program”).  Versant and Employee agree that, for services provided by Employee to Versant in Fiscal 2009, Employee will participate in the FY 2009 Bonus Program in accordance with, and subject to, the existing terms and conditions of the FY 2009 Bonus Program, and also subject to the terms of this Agreement.

(b)Subsequent Bonus Programs After Fiscal 2009.  For so long as Employee continues to serve as Versant’s Chief Executive Officer and this Agreement is in effect, for each fiscal year of Versant beginning after Fiscal 2009, the Versant Board and/or the Compensation Committee of the Versant Board (“Versant Compensation Committee”) shall adopt a contingent incentive bonus program for Employee on such terms and conditions as the Versant Board and/or the Versant Compensation Committee shall determine in its sole discretion; provided that the total Target Bonus for each such contingent incentive bonus program for each fiscal year of Versant beginning after Fiscal 2009 shall be not less than US$240,000.  As used herein, the term “Target Bonus” shall mean (with reference to each such contingent incentive bonus program), the total cash payment that would be payable to Employee under the terms of such contingent incentive bonus program upon the successful achievement of each of the outcomes, results or other metrics that are designated as the

2

“target” outcomes, results or other metrics under such contingent incentive bonus program by the Versant Compensation Committee.

(c)Effect of Termination.  If Employee ceases to be employed as Versant’s Chief Executive Officer for any reason, then the effect of such termination on Employee’s rights to be paid  under (i) the FY 2009 Bonus Program or (ii) under any subsequent Versant bonus program described in §2A(1)(b) shall each be governed by the applicable provisions of §3A below.

(2)Potential Future Stock Option Grants.  For so long as Employee continues to serve as Versant’s Chief Executive Officer and this Agreement is in effect, on an annual basis for each fiscal year of Versant beginning after Fiscal 2009 during which Employee is Versant’s Chief Executive Officer, the Versant Board and/or the Versant Compensation Committee shall review and consider the appropriateness of granting Employee an additional option to purchase shares of Versant Common Stock (a “Versant Stock Option”) in such amounts and on such terms and conditions (including without limitation vesting terms and conditions) as the Versant Board and/or the Versant Compensation Committee shall determine in its sole discretion; except that the vesting of any such Versant Stock Option will be subject to potential acceleration as provided in §3A(2)(a)(ii) or §3A(4) below; provided however, that nothing herein shall obligate Versant, the Versant Board or the Versant Compensation Committee to grant Employee (i) any additional Versant Stock Option or any other option to purchase shares of Versant’s stock or other securities of Versant or its affiliates or (ii) or any award of stock or other securities of Versant or any company in the Versant group of companies.

§ 3A:Employment At Will; Effect of Termination.

(1)Right of Termination; At Will Employment.  Employee’s employment by Versant is and shall be “at will” and can be terminated by either Employee or by Versant at any time with or without Cause (as defined in Part C below) in accordance with the provisions of §1C.

(2)Effects of a Termination Without Cause.  If Employee’s employment as Chief Executive Officer of Versant is involuntarily terminated by Versant (or by a successor to Versant) in a Termination Without Cause (as defined in Part C below) then, the following provisions of this §3A(2) shall apply:

(a)Effect of Termination Without Cause on Employee’s Stock Options.

(i)Generally  Upon a Termination Without Cause the vesting of Employee’s right to exercise all Employee’s then outstanding options to purchase shares of Versant stock (“Versant Options”) will then accelerate by twelve (12) months of vesting based on the then-effective vesting schedules of such Versant Options (i.e. such Versant Options will become vested and exercisable to the same extent that (but for this paragraph) such Versant Options would have been vested and exercisable by their terms on the date that is (12) months after Employee’s Termination Without Cause (the “Vesting Extension Date”) if Employee had been continuously employed by Versant at all times through and including the Vesting Extension Date; provided however, that notwithstanding the foregoing, Employee will not be entitled to such acceleration of the vesting of Employee’s Versant Stock Options

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unless Employee has first executed and delivered to Versant the Release (as that term is defined in §4B(2)).  For purposes of this Section 3(A)(2)(a)(i) the Release is required to be executed and delivered by Employee to Versant not later than sixty (60) days following Employee’s Termination Without Cause and Versant will provide the Release to Employee on a timely basis consistent with this provision to enable Employee to so execute and deliver the Release.

(ii)Special Vesting Acceleration Provisions.  Notwithstanding the provisions of §3A(2)(a)(i) above, if Employee’s Termination Without Cause occurs within the twelve (12) month period immediately following the consummation of the first Change of Control (as defined in §1C) occurring after the Effective Date of this Agreement, then the vesting of all then outstanding and unvested Versant Stock Options or other unvested equity awards of Versant held by Employee as of immediately prior to the consummation of such Change of Control will accelerate in full so that such Versant Stock Options or other unvested equity awards shall then become exercisable in full; provided however, that notwithstanding the foregoing, Employee will not be entitled to such acceleration of the vesting of Employee’s Versant Stock Options unless Employee has first executed and delivered to Versant the Release (as that term is defined in §4B(2)).  For purposes of this Section 3A(2)(a)(ii) the Release is required to be executed and delivered by Employee to Versant not later than sixty (60) days following Employee’s Termination Without Cause and Versant will provide the Release to Employee on a timely basis consistent with this provision to enable Employee to so execute and deliver the Release.

(iii)No Other Change.  Except as expressly provided in this §3A(2) or in §3A(4), nothing herein will alter or modify the terms of any Versant Options held by Employee.

(b)Effect of Termination Without Cause on Bonus Programs.  Upon a Termination Without Cause, Employee shall not be entitled to be paid any bonus or other payment under any bonus program established by Versant for Employee pursuant to this Agreement or otherwise except and only to the extent that (i) such bonus had already been fully earned by Employee under the terms and conditions of the then applicable bonus program as of the date of Employee’s Termination Without Cause and (ii) such bonus had not previously been paid to Employee; provided however, that nothing in this §3A(2)(b) shall prevent Witte, in his capacity as Managing Director, from being paid any severance payment required to be paid to him in accordance with the terms of §4B(2) of this Agreement.

(c)No Severance.  Employee will not be entitled to any severance payment or any salary continuation or similar payment from Versant upon a Termination Without Cause; provided however, that nothing in this §3A(2)(c) shall prevent Witte, in his capacity as Managing Director, from being paid any severance payment required to be paid to him in accordance with the terms of §4B(2) of this Agreement.

(d)No Other Compensation.  Except as otherwise expressly provided in this §3A(2), Versant shall have no other obligation to pay or provide Employee with any other payment, compensation or benefit of any kind due to a Termination Without Cause; provided however, that nothing in this §3(A)(2)(d) shall prevent Witte, in his capacity as Managing Director, from being paid any severance payment required to be paid in accordance with the terms of §4B(2) of this Agreement or affect the terms of §8B.

(3)Effects of Termination Other Than a Termination Without Cause.  If Employee’s employment with Versant is terminated for any reason other than a Termination Without Cause (including without limitation if Employee’s employment is (i) terminated in a Termination for Cause (as defined in Part C), (ii) terminated due to Employee’s death, (iii) terminated in a Voluntary Termination (as defined in Part C) or (iv) terminated in a Termination for Good Reason (as defined in Part C)), then in such event:

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(a)there shall be no acceleration of vesting of any of Employee’s Versant Options (except to the extent otherwise expressly provided below in §3A(4) with respect to a Qualified Termination for Good Reason in the circumstances expressly described in §3A(4));

(b)Employee shall not be entitled to be paid any bonus under any bonus program established by Versant for Employee pursuant to this Agreement except and only to the extent that (i) such bonus had already been fully earned by Employee under the terms and conditions of the applicable bonus program as of the date of Employee’s termination, and (ii) such bonus had not previously been paid to Employee; and

(c)Employee will not be entitled to any severance payment or any salary continuation from Versant or any other payment, compensation or benefit of any kind; provided however, that nothing in this §3(A)(3)(c) is intended to conflict with §8B of this Agreement.

(4)Option Vesting Acceleration Upon Qualified Termination for Good Reason.  Notwithstanding the provisions of §3A(3) above, if within the twelve (12) month period immediately following the consummation of the first Change of Control occurring after the Effective Date of this Agreement, Employee terminates Employee’s employment with Versant in a Termination for Good Reason, then the vesting of all then outstanding and unvested Versant Stock Options or other unvested equity awards granted by Versant to Employee prior to the consummation of such Change of Control shall accelerate in full so that such Versant Stock Options or other unvested equity awards shall then become exercisable in full; provided however, that notwithstanding the foregoing, Employee will not be entitled to such acceleration of the vesting of Employee’s Versant Stock Options unless Employee has first executed and delivered to Versant a written general release of claims in customary form acceptable to Versant and Versant Germany releasing Versant, Versant Germany and all their respective subsidiaries, affiliates, officers, directors and personnel from any and all claims or causes of action that Managing Director may have or hold.  For purposes of this Section 3A(4) such release is required to be executed and delivered by Employee to Versant not later than sixty (60) days following Employee’s Termination for Good Reason and Versant will provide the release to Employee on a timely basis consistent with this provision to enable Employee to so execute and deliver the Release.Except as expressly provided in this §3A(4) or in §3A(2), nothing herein will alter or modify the terms of any Versant Options held by Employee.

(5)No Severance.  Upon termination of Employee’s employment with Versant for any reason (whether such termination is a Termination Without Cause, a Termination for Cause, a Voluntary Termination, a Termination for Good Reason or a termination due to Employee’s death), Employee will not be entitled to any severance payment or any salary continuation or similar payment from Versant or any other payment or compensation of any kind whatsoever.  However, nothing in this §3A(5) is intended to alter or affect the provisions of §4B(2) or §8B of this Agreement.

§ 4A:Intellectual Property / Confidentiality.  Employee has previously entered into, and shall continue to be bound and obligated by, Versant’s Employee Invention Assignment and Confidentiality Agreement, a copy of which is attached hereto as Annex 1 (the “Invention Assignment and Confidentiality Agreement”).

PART B:

Managing Director Service Contract with Versant Germany

Managing Director’s employment as the Managing Director of Versant Germany shall be subject to and governed by the provisions of this Part B and, as applicable, Part C of this Agreement:

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§ 1B:Position and Tasks.

(1)Subject to the terms and conditions of this Agreement, Versant Germany hereby employs Managing Director, and Managing Director hereby accepts employment, as Versant Germany’s Managing Director.  The Managing Director of Versant Germany is responsible for the European operations of Versant and its subsidiaries. At the discretion of the shareholder assembly of Versant Germany the Managing Director may be asked to hold additional management positions inside the Versant group without additional compensation (other than the position of Chief Executive Officer and President of Versant, which shall be compensated for as provided in Part A of this Agreement).

(2)The Managing Director shall conduct the business of Versant Germany conscientiously with the care of a proper businessman and shall exercise in a responsible manner the duties assigned to him by the law, Versant Germany’s articles of association, contract and where necessary general codes of practice and rules of procedure. In particular, Managing Director shall also obey the basic principles of Versant Germany’s business plan.

(3)The Managing Director’s main activity as the Managing Director of Versant Germany comprises the responsible management and supervision of Versant Germany (including the initiation, co-ordination and execution of all procedures).

(4)The Managing Director may not appoint any additional Managing Directors of Versant Germany.  Additional Managing Directors of Versant Germany may be appointed only with the prior approval of Versant (given with the approval of the Versant Board) as the sole shareholder of Versant Germany (the “Shareholder”).

§ 2B:Shareholder Resolutions.

(1)The Managing Director is bound by the resolutions of the Shareholder adopted at a Shareholders’ Meeting. In particular, actions taken by the Shareholder at a Shareholders’ Meeting can define general guidelines regarding the conduct of business transactions.  Moreover, through the Shareholders’ Meeting the Shareholder can issue binding rules of procedure defining the demarcation of the areas of activity of the Managing Director.

(2)Subject to further instructions provided by the Shareholder at a Shareholders’ Meeting, the Managing Director shall require the prior approval of Shareholder at a Shareholders’ Meeting for all activities going above and beyond Versant Germany’s ordinary scope of business activities.

(3)Consent of the Shareholder can already be granted in advance, including for individual groups of transactions.  Specific inclusion of a particular matter in the annual budget for Versant Germany approved by the Shareholder shall count as the Shareholder’s consent to such matter, unless a reservation was attached to its adoption in this respect.

(4)All consents and approvals of the Shareholder described in this §2B mean such consents and approvals of the Shareholder as are approved by the Versant Board.

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§ 3B:Power of Representation.

(1)The Managing Director represents Versant Germany (alongside the other Managing Directors, if any are appointed by the Shareholder) legally and extrajudicially in accordance with the conditions of his appointment and Versant Germany’s articles of association.

(2)The Managing Director shall obey the restrictions imposed on him by this Agreement, Versant Germany’s articles of association, the law, an instruction or a resolution by the Shareholder approved or adopted at any Shareholders’ Meeting.

§ 4B:Termination; Effect of Termination

(1)Right of Termination.  Managing Director’s service and employment as Managing Director can be terminated with or without Cause as provided in §1C.

(2)Effect of Termination Without Cause; Severance.  Subject to the provisions of this §4B(2), in case of a Termination Without Cause of Managing Director by Versant Germany and Versant, Managing Director will be entitled to receive a cash severance payment (the “Severance Payment”) which shall be equal to the sum of:

(a)the amount of Managing Director’s then effective annual Base Salary from Versant Germany as provided in (and defined in) §5B(1) below (for clarification, as of the Effective Date the amount of such Base Salary is EUR 216.000 - gross); plus

(b)an amount equal to all payments that were actually paid by Versant to Managing Director (in his capacity as an employee of Versant) pursuant to a contingent incentive bonus program as provided in §2A(1) of Part A above during the four (4) successive completed fiscal quarters of Versant (i.e. Versant’s reporting fiscal quarters) ended immediately preceding the date of such Termination Without Cause; provided, that if the payments paid by Versant to Witte pursuant to the contingent incentive bonus program referred to above in this subparagraph (b) were paid in United States Dollars (the amount of such payments, the “US Dollar-Denominated Amount”), then the amount of the Severance Payment described in this paragraph (b) shall be paid in an amount of Euros determined by converting the US Dollar-Denominated Amount into Euros at  the US Dollar/Euro exchange rate in effect on the effective date of the Termination Without Cause.

The Severance Payment will be due and payable to Managing Director in a single lump sum payment that will be due and payable to Managing Director within one (1) month after the date of the Termination Without Cause of Managing Director.  Notwithstanding the foregoing, Managing Director will not be entitled to receive any part of the Severance Payment unless and until Managing Director has first executed and delivered to Versant and Versant Germany a written general release of claims in customary form acceptable to Versant and Versant Germany releasing Versant, Versant Germany and all their respective subsidiaries, affiliates, officers, directors and personnel from any and all claims or causes of action that Managing Director may have or hold (the “Release”).  The Release is required to be executed and delivered by Managing Director to Versant and Versant Germany not later than sixty (60) days following the Termination Without Cause of Managing Director and Versant or Versant Germany will provide the release to Managing Director on a timely basis consistent with this provision to enable Managing Director to so execute and deliver the Release.  Except for the Severance Payment and except as otherwise expressly provided in Part B of this Agreement, Versant Germany shall have no other obligation to pay or provide Managing Director

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with any other payment or compensation of any kind, or to otherwise provide Managing Director with any benefit, due to a Termination Without Cause; provided however, that nothing in this §4B(2) is intended to conflict with the provisions of §3A(2) of this Agreement.

If Managing Director is terminated in a Termination Without Cause and the Severance Payment is payable, then the Severance Payment shall be considered to include sufficient compensation and consideration for Witte’s covenants and obligations under §4B(5) (Non Competition Covenant).

(3)Effect of Termination Other Than a Termination Without Cause.  For the avoidance of doubt, the parties acknowledge and agree that, if Managing Director’s employment with Versant Germany is terminated (i) upon a Termination for Cause (as defined in Part C), (ii) as a result of a Voluntary Termination (as defined in Part C), (iii) as a result of a Termination for Good Reason (as defined in Part C), (iii) due to Managing Director’s death, or for any reason other than a Termination Without Cause, then such termination shall not be a Termination Without Cause and in such event Managing Director will not be entitled to the Severance Payment, any other severance or similar payment of any kind or any salary continuation from Versant or any other payment, compensation or benefit of any kind whatsoever except as may be otherwise expressly provided in §8(B)).

(4)Shareholder’s Right of Revocation.  The Managing Director’s appointment as Managing Director of Versant Germany can be revoked at any time by the Shareholder at any Shareholders’ Meeting, notwithstanding any rights of Managing Director to compensation pursuant to this Agreement.

(5)Non-Competition Covenant.  Subject to the following provisions of this §4B(5), for a period of one (1) year after the date of (i) a Voluntary Termination or Termination for Good Reason by Managing Director of his employment with Versant Germany, (ii) a Termination Without Cause, (iii) a Termination for Cause or (iv) any other termination of Witte’s employment with Versant and Versant Germany other than due to Witte’s death (such one (1) year period being hereinafter referred to as the “Non-Competition Period”), Witte shall not, directly or indirectly, engage in any Competitive Activities (as defined below) with, or for the direct or indirect benefit of, any of the companies or businesses listed in Annex 2 attached hereto or any of their affiliates or successors-in-interest.  In consideration of the foregoing covenant, if Witte’s employment is terminated by Versant and Versant Germany other than in a Termination Without Cause, then during the Non-Competition Period Versant Germany shall pay to Witte a monthly payment equal to fifty percent (50%) of Managing Director’s monthly Base Salary (as defined in §5B below) in effect on the date of termination of his employment (such payment hereinafter referred to as the “Special Non-Competition Compensation”); but if Witte’s employment is terminated in a Termination Without Cause, then Witte shall not be entitled to receive any Special Non-Competition Compensation and the Severance Payment payable to Witte as a result of such Termination Without Cause under §4B(2) shall include the consideration for Witte’s obligations and covenants under this §4B(5).  As used herein, the term “Competitive Activities” shall mean (i) providing services, whether as an employee, officer, director, independent contractor, freelancer, consultant, advisor to, or other service provider, whether such services are rendered for any compensation or are provided free of

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charge, or (ii) or investing or lending money to a third party.  Versant and Versant Germany may waive this Non-Competition Covenant at any time, in which case Managing Director’s right to receive Non-Competition Compensation will cease to exist and terminate three (3) months after receipt of the waiver from Versant and Versant Germany.  If Managing Director breaches this obligation not to compete, then Versant and Versant Germany shall be immediately released of all further obligation to pay Managing Director any unpaid Non-Competition Compensation that would otherwise be payable to Managing Director and, in addition, can claim a contractual fine for each case of a breach in the amount of one (1) month of Managing Director’s last Base Salary, in addition to seeking an injunction against such breach by Managing Director.  In case of a permanent breach this fine is due again for each commenced month of a breach.  Any further claims, including claims for cease-and-desist and for damages, shall not be affected hereby.

§ 5B:Compensation.

As his sole and exclusive compensation for Managing Director’s services as Versant Germany’s Managing Director, Managing Director will receive the following compensation from Versant Germany, Managing Director shall receive the compensation and benefits described in this §5B and in §§6B, 7B and 8B of this Part B:

(1)Managing Director shall receive from Versant Germany an annual fixed gross salary at the annual rate of EUR 216.000. - gross (“Base Salary”) as compensation for his work for Versant Germany, which shall be payable in 12 equal instalments of EUR 18.000. - gross (Monthly Gross Salary) less statutory deductions at the end of each calendar month. If a contract year is shorter than the calendar year, the compensation shall be paid pro rata temporis.

(2)No employer’s pension commitment exists.

(3)The compensation of Managing Director payable under this Part B is the settlement for the entire activity by the Managing Director as Managing Director of Versant Germany, in particular where necessary also that for subsidiaries, part-owned or other companies of the Versant group (other than Versant itself as provided in Part A hereof) or on Sundays and public holidays. Insofar as the Managing Director receives compensation for such activities directly from the companies involved, these shall be off-set against the compensation according to this agreement, except as expressly agreed otherwise.

§ 6B:Other Benefits.

(1)Versant Germany will provide the Managing Director with a company car with a monthly lease rate up to EUR 800,- net. An upgrading shall be financed by the Managing Director. A downgrading shall be taken into account as gross motor vehicle compensation in the monthly salary statement. The Managing Director is entitled to use the company car for private purposes. According to German tax regulations, as in force from time to time, the private use is taxable as compensation in kind, which shall be taken into consideration for the payroll. Otherwise, the motor vehicle guidelines of the Versant Germany shall apply in their respectively applicable version. Upon termination of the employment, the Managing Director shall return the company car immediately.

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(2)Versant Germany will reimburse the Managing Director for proved travel expenses and other expenditure which became necessary in the interest of the Versant Germany or its affiliates in accordance with guidelines of Versant Germany or Versant in force from time to time and German tax regulations in force from time to time.

(3)The Managing Director is entitled to a life insurance benefit with a monthly premium up to EUR 130, - net.

(4)Versant Germany shall insure the Managing Director against accident to the usual and appropriate amount.

§ 7B:Vacation.

(1)The Managing Director is entitled to an annual vacation of twenty-eight (28) working days.

(2)The Managing Director shall agree with the other managing directors (if any) on the time of his vacation reasonably in advance. This shall also apply for the grant of extra vacation for exceptional circumstances (e.g. death of close relatives).

(3)The vacation entitlement for each calendar year expires at the latest on 31st March of the following calendar year. There is no compensation for vacation days that are not taken.

§ 8B:Sickness/Death/Accident.

(1)The Managing Director shall promptly notify Versant Germany and its parent Versant about sickness, if any, and, in case the sickness lasts more than three days, submit a medical certificate attesting to his inability to work and the probable length thereof.

(2)In the event of temporary illness or other impediment for which he is not to blame, the monthly Base Salary (§5B(1)) will continue to be paid for a period ending on the earlier of (i) six (6) months or (ii) termination of Managing Director’s employment.

(3)Any benefits from third parties, for example based on legal liability claims or sickness insurances, shall be off-set against Versant Germany’s obligations to pay the Managing Director hereunder to the extent that, as a result of these benefits from third parties and Versant Germany’s performances, the net earnings the Managing Director would have had according to §5B(1) if he had not been unable to work, are exceeded.

(4)If the Managing Director dies while employed as Managing Director then, if applicable, his widow and his legitimate children (provided that the latter have not yet completed the 25th year of their life and are still in professional training), shall as joint creditors be entitled to the continuation of the monthly Base Salary (§5B(1)) for the month of death and for the six (6) following months and the provisions of §8B(3) above will apply accordingly to such payments.

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§ 9B:Duties and Secondary Activities.

(1)Except for Managing Director’s duties as an officer of Versant as provided in Part A hereof, Managing Director shall put his entire working efforts and their results as well as the whole of his experience and knowledge at the sole disposal of Versant Germany. The working hours are governed by the duties arising and amount to at least 40 hours per week.

(2)Every other employment of Managing Director aimed at earning income requires the prior written consent of Versant Germany’s shareholder(s) given at a Shareholders’ Meeting.  The Managing Director undertakes an obligation to give Versant and Versant Germany advance written notice of every secondary employment that may actually or possibly require permission. Under no circumstance shall the Managing Director during the term of his employment engage himself in any Competitive Activities (as defined in §4B(5) above) for any enterprise that (i) is primarily engaged in database management or (ii) is primarily engaged in any other areas that Versant Germany or any of its parent or affiliated companies has derived more than five percent (5%) of its gross revenue within the prior 12 month period.

(3)The written consent of the Shareholder at a Shareholders’ Meeting is also required in order for Managing Director to undertake honorary offices that cause a not inconsiderable expenditure of work, as well as for appointments to a supervisory board, association committee or similar institution. The same also applies to a scientific, authorship, consultancy or similar activity.

(4)The Shareholders’ Meeting is permitted to refuse or, as is possible at any time, revoke its consent to a notified secondary activity only if the secondary activity involved, in itself or in conjunction with other secondary activities, gives reason to fear an impairment of the Managing Director’s activity for Versant Germany or Versant Germany’s other needs or involves any Competitive Activities.

(5)On the termination of this service relationship and/or at the time release is given in the case of premature release, the Managing Director shall, in response to a resolution by the Shareholders’ Meeting, give up all appointments he undertook and/or carried out on the basis of his activity or in relation to his activity in Versant Germany.

§ 10B:  Confidentiality/Return of Documents.

(1)Managing Director acknowledges and agrees that he shall be bound and obligated by his Invention Assignment and Confidentiality Agreement (as defined in §4A) with Versant, which shall survive any termination of Managing Director’s employment or services to Versant Germany as Managing Director or otherwise.  Accordingly the following obligations of Managing Director in this §10B and in §11B below shall be in addition to (and not in lieu of) Managing Director’s’ duties and obligations under the Invention Assignment and Confidentiality Agreement.  In the event of any conflict or inconsistency between the terms of Managing Director’s Invention Assignment and Confidentiality Agreement with Versant and the following provisions of this §10B and of §11B below, such terms

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shall be construed to provide Versant, Versant Germany and their respective subsidiaries and affiliates the maximum possible rights and protections:

(2)The Managing Director shall, during the period of employment with Versant Germany or at any time thereafter, strictly keep confidential any confidential information concerning the business, contractual arrangements, deals, transactions or particular affairs of Versant Germany or its affiliates, and will not utilise any such information for his own benefit or for the benefit of others.

(3)Publications and lectures concerning the scope of business of Versant Germany or its affiliates shall require the prior consent of the shareholder(s) of Versant Germany at a Shareholders’ Meeting. They constitute intellectual property of Versant Germany or its affiliates.

(4)During his employment, upon request of Versant Germany, without request at the latest upon his resignation from Versant Germany and/or at the time release is given in the case of release at an earlier time, the Managing Director shall return to Versant Germany all files and other documents concerning the business of Versant Germany and its affiliates in his possession or open to his access, specifically all designs, customer and price lists, printed material, documents, sketches, notes, drafts - - as well as copies thereof — regardless whether or not the same were originally furnished by Versant Germany or by its affiliates. The Managing Director is not entitled to exercise any right of retention or possession with respect to any of such items.

§ 11B:  Copyright and Other Intellectual Property Rights, Inventions.

(1)It is acknowledged and agreed by Versant Germany and Managing Director that, except as expressly provided below in §11B(2), the Invention Assignment and Confidentiality Agreement between Managing Director and Versant shall apply to and exclusively govern the assignment of any inventions, trade secrets and intellectual property rights or other similar property Managing Director to Versant during his employment with Versant Germany or Versant.

(2)To the extent that any assignment by Managing Director to Versant of any invention, trade secret, intellectual property right or other similar property pursuant to the Invention Assignment and Confidentiality Agreement is not permitted or is restricted or limited under German law or is otherwise not covered or accomplished by the Invention Assignment and Confidentiality Agreement, the Managing Director hereby assigns to Versant Germany the exclusive right of use and exploitation, unrestricted in time, territory and content, of all work output which is capable of copyright protection or of protection under trademark, registered design and/or utility model or any other intellectual property rights, which the Managing Director produces during the period of his employment, during his working hours or outside of his working hours, insofar as they relate to his service duties under this agreement. The assignment of the use and exploitation rights includes the authorisation to further revision and to the issue of licenses to third parties and is fully compensated for by the Base Salary set out in §5B(1) of this Agreement. The Managing Director expressly waives all other rights

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due to him as holder of copyright or other intellectual property rights in the work output, in particular the right to be named or to access to the work.

§ 12B:  Place of Fulfilment.

(1)Solely for purposes of Managing Director’s employment by Versant Germany under the provisions of this Part B, the place of fulfilment shall be the registered office of Versant Germany.

PART C:

Termination; Certain Defined Terms; Miscellaneous Terms

§1C:Termination of Employment.

(1)Employment.  This Agreement shall become effective when it is signed by each of Versant, Versant Germany and Witte.  Witte’s employment with Versant and Versant Germany under this Agreement shall thereafter continue in effect until Witte’s employment with Versant and Versant Germany is terminated as provided in this Agreement.

(2)Termination Generally.  Subject to the terms of this Agreement, Witte’s employment by Versant and Versant Germany is and shall be “at will” and this Agreement and Witte’s employment by Versant and Versant Germany can be terminated, at any time, with or without Cause, by either (i) Versant and Versant Germany (only by both of them acting together) or (ii) Witte.

§2C:Certain Definitions.  As used in this Agreement, the term:

(1)affiliate” means, with respect to any person or entity, any entity or organization directly or indirectly controlling, controlled by, or under common control with such person or entity.  For purposes of this definition of “affiliate”, the terms “controlling,” “controlled by,” or “under common control with” shall mean the possession, directly or indirectly, of (i) the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract, or otherwise, or (ii) the power to elect or appoint at least 50% of the directors, managers, general partners, or persons exercising similar authority with respect to such person or entity.

(2)“Cause” shall mean:  (a) any willful, material violation by Witte of any law or regulation applicable to the business of Versant or its subsidiaries or affiliates or any other misconduct by Witte which is materially injurious to Versant or any of its subsidiaries or affiliates; (b) Witte’s conviction for, or guilty plea to, a felony or a crime involving serious moral turpitude; (c) Witte’s commission of an act of personal dishonesty or fraud; (d) the continued failure or refusal of Witte, after warning from the Versant Board or a committee thereof, (i) to follow the lawful directions of the Versant Board or a committee thereof or the policies of Versant or any of its subsidiaries or affiliates or (ii) to perform Witte’s material duties as an employee or officer of Versant or a subsidiary or affiliate of Versant (including Versant Germany); (e) 

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Witte’s willful, material breach of his Invention Assignment and Confidentiality Agreement (as defined in §4A above) or any similar agreement with Versant or with Versant Germany or any Versant affiliate or subsidiary that is not susceptible to cure or that is not cured within ten (10) days after Employee is given notice of such breach by Versant; (f) Witte’s serious illness of more than six (6) months’ duration or disability; (g) a Voluntary Termination or any Termination for Good Reason by Witte of his employment with either Versant or Versant Germany, but not with both; and (h) any other grounds or circumstances constituting “important cause” (“wichtiger Grund”) under applicable German law.

(3)“Change of Control” means the occurrence of any of the following events:  (i) the consummation of a merger or consolidation of Versant with or into any corporation or other entity, other than a merger or consolidation which would result in the voting securities of Versant outstanding immediately prior to the consummation of such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity of such merger or consolidation or of such surviving entity’s parent) more than fifty percent (50%) of the total voting power represented by the voting securities of Versant or of such surviving entity or its parent that are outstanding immediately after such merger or consolidation; (ii) the sale or other disposition of all or substantially all of Versant’s assets; or (iii) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becoming the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of Versant possessing fifty percent (50%) or more of the total voting power represented by all Versant’s then outstanding voting securities.

(4)“Qualified Termination for Good Reason” means a Termination for Good Reason that occurs within the twelve (12) month period immediately following the consummation of the first Change of Control (as defined above) occurring after the Effective Date of this Agreement.

(5)“Termination for Cause” means an involuntary termination by Versant and Versant Germany of this Agreement and Witte’s employment with Versant and Versant Germany for Cause, where Versant and Versant Germany give Witte written notice that such termination is a Termination for Cause.

(6)“Termination for Good Reason” means Witte’s resignation or other voluntary termination by Witte of Witte’s employment with Versant and Versant Germany with an effective date that is not later than sixty (60) days after the occurrence of a Good Reason Event (as defined below) and which is documented by Witte’s delivery to Versant within such sixty (60 day period, of written notice of such resignation or termination identifying the Good Reason Event(s) (as defined below) that are the basis for such resignation or termination and stating that such resignation or termination is a “Termination for Good Reason” due to such identified Good Reason Event(s) (such notice, a “Good Reason Notice”); provided that such a resignation or voluntary termination by Witte shall be a “Termination for Good Reason” only if Versant fails to cure the Good Reason Event(s) that are identified by Witte in such Good Reason Notice within thirty (30) days after Versant’s receipt of Witte’s Good Reason Notice.  “Good Reason Event” means the occurrence of any of the following events without Witte’s express written consent thereto:  (i) a material reduction of Witte’s duties, position or responsibilities relative to Witte’s duties, position or responsibilities with Versant in effect

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immediately prior to such reduction, unless Witte is provided with comparable duties, position and responsibilities; (ii) the reduction of Witte’s then current Base Salary from Versant Germany or Witte’s target incentive compensation from Versant and Versant Germany by ten percent (10%) or more (other than in connection with a general decrease in the base salary or target incentive compensation of other similarly situated executives of Versant or Versant Germany); or (iii) the relocation of Witte’s principal work location to a facility or a location that is more than thirty (30) miles from Witte’s then-current principal work location and which increases Witte’s commute from Witte’s residence by at least fifty (50) miles.  For the avoidance of doubt, neither a Termination for Cause, a Termination Without Cause, termination of Employee’s employment due to Employee’s death, nor any Voluntary Termination shall constitute a Termination for Good Reason or a Good Reason Event.

(7)“Termination Without Cause” means an involuntary termination by Versant and Versant Germany of this Agreement and Witte’s employment with Versant and Versant Germany without Cause (other than due to Witte’s illness, death or disability) and without Witte’s consent or agreement.  For the avoidance of doubt, a Termination Without Cause does not include (i) any Termination for Cause, (ii) any Termination for Good Reason, (iii) any Voluntary Termination or (iv) any termination of Witte’s employment due to Witte’s death, illness or disability.

(8)“Voluntary Termination” means any voluntary termination or resignation by Witte of his employment with Versant or his employment with Versant Germany (other than a termination or resignation due to Witte’s serious physical illness or disability), other than a Termination for Good Reason.

§ 3C:Amendments.

Amendments to and revisions of this agreement including this clause must be in writing to be effective. It shall not be possible for the contracting parties to cite an actual exercise deviating from the Agreement for as long as such deviation has not been recorded in writing.

§ 4C:Other Provisions.

1)Shareholders Rights.  All declarations of intent by the Managing Director that affect this Agreement shall be addressed to the Shareholders’ Meeting.  All of the rights reserved to the Shareholders’ Meeting in this Agreement can be exercised by an advisory board, if any.

2)Severability. If individual provisions of this Agreement should be or become invalid, this shall not affect the legal validity of the other provisions of this Agreement. The invalid provision shall be replaced by the legally admissible provision which comes closest to the economic intent of the invalid provision. The same applies in the event of any gaps in this Agreement.

3)Governing Law.  Part A of this Agreement and all provisions hereof relating to Employee’s service or employment by Versant shall be governed by the internal laws of the State of California, USA without reference to any such laws regarding conflict of laws or choice of law (“Part A Governing Law”).  Part B of this Agreement and all provisions thereof relating to Managing Director’s service or employment by Versant Germany shall be governed by

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German law without reference to any such laws regarding conflict of laws or choice of law (“Part B Governing Law”).  The provisions of Part C shall be governed by (i) Part A Governing Law to the extent such provisions of Part C are apply or relate to Part A hereof; and (ii) Part B Governing Law to the extent such provisions of Part C are apply or relate to Part B hereof.

4)Execution in Counterparts.  This Agreement may be executed in counterpart signature pages.

5)Entire Agreement; Prior Agreement Terminated.  Versant and Witte agree that, upon the Effective Date of this Agreement: (a) the Joint Employment Agreement and Managing Director Service Contract dated effective as of November 1, 2006 among Witte, Versant and Versant Germany (the Prior Agreement”), shall automatically terminate and cease to have any further force or effect and shall be entirely replaced and superseded by this Agreement; (b) Witte shall have no further rights under the Prior Agreement; and (c) the conditions of employment of Witte an officer and employee of Versant and Versant Germany shall be governed solely and exclusively by the provisions of this Agreement.

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[Signature Page to Follow]

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In Witness Whereof, the undersigned parties have executed and delivered this Joint Employment Agreement and Managing Director Service Contract effective as of the Effective Date.

VERSANT CORPORATION (“Versant”)

By:	/s/ Jerry Wong
Name:	Jerry Wong
Title:	Chief Financial Officer

VERSANT GMBH (“Versant Germany”)

represented by its shareholder Versant Corporation

represented in turn by its Chief Financial Officer, Jerry Wong

September 9, 2009, Redwood City, California
(Date, place)
By:	/s/ Jerry Wong
Versant Corporation, by Jerry Wong its Chief Financial Officer)

EMPLOYEE / MANAGING DIRECTOR

September 9, 2009, Hamburg, Germany

(Date, place)

/s/ Jochen Witte

(Jochen Witte)

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ANNEX 1

INVENTION ASSIGNMENT AND CONFIDENTIALITY AGREEMENT

EMPLOYEE INVENTION ASSIGNMENT AND
CONFIDENTIALITY AGREEMENT

In consideration of, and as a condition of my employment with VERSANT CORPORATION, a California corporation (the “Company”), I hereby represent to, and agree with the Company as follows:

1.Purpose of Agreement.  I understand that the Company is engaged in a continuous program of research, development, production and marketing in connection with its business and that it is critical for the Company to preserve and protect its “Proprietary Information” (as defined in Section 7 below), its rights in “Inventions” (as defined in Section 2 below) and in all related intellectual property rights.  Accordingly, I am entering into this Employee Invention Assignment and Confidentiality Agreement (this “Agreement”) as a condition of my employment with the Company, whether or not I am expected to create inventions of value for the Company.

2.Disclosure of Inventions.  I will promptly disclose in confidence to the Company all inventions, improvements, designs, original works of authorship, formulas, processes, compositions of matter, computer software programs, databases, mask works and trade secrets that I make or conceive or first reduce to practice or create, either alone or jointly with others, during the period of my employment, whether or not in the course of my employment, and whether or not patentable, copyrightable or protectable as trade secrets (the “Inventions”).

3.Work for Hire; Assignment of Inventions.  I acknowledge and agree that any copyrightable works prepared by me within the scope of my employment are “works for hire” under the Copyright Act and that the Company will be considered the author and owner of such copyrightable works.  I agree that all Inventions that (i) are developed using equipment, supplies, facilities or trade secrets of the Company, (ii) result from work performed by me for the Company, or (iii) relate to the Company’s business or actual or demonstrably anticipated research and development (the “Assigned Inventions”), will be the sole and exclusive property of the Company.  I agree to assign, and do hereby assign, the Assigned Inventions to the Company.  Attached hereto as Exhibit A is a list describing all inventions, original works of authorship, developments and trade secrets which were made by me prior to the date of this Agreement, which belong to me and which are not assigned to the Company (“Prior Inventions”).  If no such list is attached, I agree that it is because no such Prior Inventions exist.  I acknowledge and agree that if I use any of my Prior Inventions in the scope of my employment, or include them in any product or service of the Company, I hereby grant to the Company a perpetual, irrevocable, nonexclusive, world-wide, royalty-free license to use, disclose, make, sell, copy, distribute, modify and create works based on, perform or display such Prior Inventions and to sublicense third parties with the same rights.

4.Labor Code Section 2870 Notice.  I have been notified and understand that the provisions of Sections 3 and 5 of this Agreement do not apply to any Assigned Invention that qualifies fully under the provisions of Section 2870 of the California Labor Code, which states as follows:

ANY PROVISION IN AN EMPLOYMENT AGREEMENT WHICH PROVIDES THAT AN EMPLOYEE SHALL ASSIGN, OR OFFER TO ASSIGN, ANY OF HIS OR HER RIGHTS IN AN INVENTION TO HIS OR HER EMPLOYER SHALL NOT APPLY TO AN INVENTION THAT THE EMPLOYEE DEVELOPED ENTIRELY ON HIS OR HER OWN TIME WITHOUT USING THE EMPLOYER’S EQUIPMENT, SUPPLIES, FACILITIES, OR TRADE SECRET INFORMATION

EXCEPT FOR THOSE INVENTIONS THAT EITHER:  (1) RELATE AT THE TIME OF CONCEPTION OR REDUCTION TO PRACTICE OF THE INVENTION TO THE EMPLOYER’S BUSINESS, OR ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT OF THE EMPLOYER; OR (2) RESULT FROM ANY WORK PERFORMED BY THE EMPLOYEE FOR THE EMPLOYER.  TO THE EXTENT A PROVISION IN AN EMPLOYMENT AGREEMENT PURPORTS TO REQUIRE AN EMPLOYEE TO ASSIGN AN INVENTION OTHERWISE EXCLUDED FROM BEING REQUIRED TO BE ASSIGNED UNDER CALIFORNIA LABOR CODE SECTION 2870(a), THE PROVISION IS AGAINST THE PUBLIC POLICY OF THIS STATE AND IS UNENFORCEABLE.

5.Assignment of Other Rights.  In addition to the foregoing assignment of Assigned Inventions to the Company, I agree to assign, and do hereby irrevocably transfer and assign, to the Company:  (i) all worldwide patents, patent applications, copyrights, mask works, trade secrets and other intellectual property rights, including but not limited to rights in databases, in any Assigned Inventions, along with any registrations of or applications to register such rights; and (ii) any and all “Moral Rights” (as defined below) that I may have in or with respect to any Assigned Inventions.  I also hereby forever waive and agree never to assert any and all Moral Rights I may have in or with respect to any Assigned Inventions, even after termination of my work on behalf of the Company.  “Moral Rights” mean any rights to claim authorship of or credit on an Assigned Inventions, to object to or prevent the modification or destruction of any Assigned Inventions or Prior Inventions licensed to Company under Section 3, or to withdraw from circulation or control the publication or distribution of any Assigned Inventions or Prior Inventions licensed to Company under Section 3, and any similar right, existing under judicial or statutory law of any country or subdivision thereof in the world, or under any treaty, regardless of whether or not such right is denominated or generally referred to as a “moral right.”

6.Assistance.  I agree to assist the Company in every proper way to obtain for the Company and enforce patents, copyrights, mask work rights, trade secret rights and other legal protections for the Company’s Assigned Inventions in any and all countries.  I will execute any documents that the Company may reasonably request for use in obtaining or enforcing such patents, copyrights, mask work rights, trade secrets and other legal protections.  My obligations under this paragraph will continue beyond the termination of my employment with the Company, provided that the Company will compensate me at a reasonable rate after such termination for time or expenses actually spent by me at the Company’s request on such assistance.  I appoint the Secretary of the Company as my attorney-in-fact to execute documents on my behalf for this purpose.

7.Proprietary Information.  I understand that my employment by the Company creates a relationship of confidence and trust with respect to any information of a confidential or secret nature that may be disclosed to me by the Company or a third party that relates to the business of the Company or to the business of any parent, subsidiary, affiliate, customer or supplier of the Company or any other party with whom the Company agrees to hold information of such party in confidence (the “Proprietary Information”).  Such Proprietary Information includes, but is not limited to, Assigned Inventions, marketing plans, product plans, business strategies, financial information, forecasts, personnel information, customer lists and data, and domain names.

8.Confidentiality.  At all times, both during my employment and after its termination, I will keep and hold all such Proprietary Information in strict confidence and trust.  I will not use or disclose any Proprietary Information without the prior written consent of the Company, except as may be necessary to perform my duties as an employee of the Company for the benefit of the Company.  Upon

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termination of my employment with the Company, I will promptly deliver to the Company all documents and materials of any nature pertaining to my work with the Company and, upon Company’s request, will execute a document confirming my agreement to honor my responsibilities contained in this Agreement.  I will not take with me or retain any documents or materials or copies thereof containing any Proprietary Information.

9.No Breach of Prior Agreement.  I represent that my performance of all the terms of this Agreement and my duties as an employee of the Company will not breach any invention assignment, proprietary information, confidentiality or similar agreement with any former employer or other party.  I represent that I will not bring with me to the Company or use in the performance of my duties for the Company any documents or materials or intangibles of a former employer or third party that are not generally available to the public or have not been legally transferred to the Company.

10.Efforts; Duty Not to Compete.  I understand that my employment with the Company requires my undivided attention and effort.  As a result, during my employment, I will not, without the Company’s express written consent, engage in any other employment or business that (i) directly competes with the current or future business of the Company; (ii) uses any Company information, equipment, supplies, facilities or materials; or (iii) otherwise conflicts with the Company’s business interest and causes a disruption of its operations.

11.Notification.  I hereby authorize the Company to notify third parties, including, without limitation, customers and actual or potential employers, of the terms of this Agreement and my responsibilities hereunder.

12.Non-Solicitation of Employees/Consultants.  During my employment with the Company and for a period of one (1) year thereafter, I will not directly or indirectly solicit away employees or consultants of the Company for my own benefit or for the benefit of any other person or entity.

13.Non-Solicitation of Suppliers/Customers.  During and after the termination of my employment with the Company, I will not directly or indirectly solicit or otherwise take away customers or suppliers of the Company if, in so doing, I use or disclose any trade secrets or proprietary or confidential information of the Company.  I agree that the non-public names and addresses of the Company’s customers and suppliers, and all other confidential information related to them, including their buying and selling habits and special needs, created or obtained by me during my employment, constitute trade secrets or proprietary or confidential information of the Company.

14.Name & Likeness Rights.  I hereby authorize the Company to use, reuse, and to grant others the right to use and reuse, my name, photograph, likeness (including caricature), voice, and biographical information, and any reproduction or simulation thereof, in any form of media or technology now known or hereafter developed (including, but not limited to, film, video and digital or other electronic media), both during and after my employment, for any purposes related to the Company’s business, such as marketing, advertising, credits, and presentations.

15.Injunctive Relief.  I understand that in the event of a breach or threatened breach of this Agreement by me the Company may suffer irreparable harm and will therefore be entitled to injunctive relief to enforce this Agreement.

16.Governing Law; Severability.  This Agreement will be governed by and construed in accordance with the laws of the State of California, without giving effect to its laws pertaining to conflict of laws.  If any provision of this Agreement is determined by any court or arbitrator of competent

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jurisdiction to be invalid, illegal or unenforceable in any respect, such provision will be enforced to the maximum extent possible given the intent of the parties hereto.  If such clause or provision cannot be so enforced, such provision shall be stricken from this Agreement and the remainder of this Agreement shall be enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not enforceable) never been contained in this Agreement.

17.Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

18.Entire Agreement.  This Agreement and the documents referred to herein constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

19.Amendment and Waivers.  This Agreement may be amended only by a written agreement executed by each of the parties hereto.  No amendment of or waiver of, or modification of any obligation under this Agreement will be enforceable unless set forth in a writing signed by the party against which enforcement is sought.  Any amendment effected in accordance with this section will be binding upon all parties hereto and each of their respective successors and assigns.  No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance.  No waiver granted under this Agreement as to any one provision herein shall constitute a subsequent waiver of such provision or of any other provision herein, nor shall it constitute the waiver of any performance other than the actual performance specifically waived.

20.Successors and Assigns; Assignment.  Except as otherwise provided in this Agreement, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.  The Company may assign any of its rights and obligations under this Agreement.  No other party to this Agreement may assign, whether voluntarily or by operation of law, any of its rights and obligations under this Agreement, except with the prior written consent of the Company.

21.Further Assurances.  The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

22.“At Will” Employment.  I understand that this Agreement does not constitute a contract of employment or obligate the Company to employ me for any stated period of time.  I understand that I am an “at will” employee of the Company and that my employment can be terminated at any time, with or without notice and with or without cause, for any reason or for no reason, by either the Company or myself.  I acknowledge that any statements or representations to the contrary are ineffective, unless put into a writing signed by the Company.  I further acknowledge that my participation in any stock option or benefit program is not to be construed as any assurance of continuing employment for any particular period of time.

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[Signature page follows]

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23.Effective Date of Agreement.  This Agreement shall be effective as of the first day of my employment by the Company, which is March 18, 2004.

VERSANT CORPORATION:		Employee:
By:
		Signature
Name:	Jerry Wong	Jochen Witte
		Name (Please Print)
Title:	Vice President, Finance

[Signature Page to Employee Invention Assignment and Confidentiality Agreement]

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ANNEX 2

COMPETITORS

·Pervasive Software

·Progress Software

·Objectivity

·Gemstone

·The database software divisions of the following companies:

·Oracle Corporation

·International Business Machines Corporation (IBM)

·Microsoft Corporation

EX-10.04

Exhibit 10.04

VERSANT CORPORATION

RETENTION INCENTIVE AGREEMENT

This Retention Incentive Agreement (the “Agreement”) is made and entered into effective as of September 9, 2009 (the “Effective Date”), by and between JERRY WONG (“Employee”) and VERSANT CORPORATION, a California corporation (the “Company”).

RECITALS

A.It is possible that the Company may in the future consider the possibility of a Change of Control.  The Compensation Committee of the Board of Directors of the Company (the “Committee”) recognizes that such considerations can be a distraction to Employee and can cause Employee to consider alternative employment opportunities and thus believes that it is in the best interests of the Company and its shareholders to provide Employee an incentive to continue Employee’s employment with the Company and to maximize the value of the Company upon a potential Change of Control for the benefit of its shareholders.

B.In order to provide Employee with enhanced security and encouragement to remain with the Company notwithstanding the possibility of a Change of Control, the Committee believes it is important to provide Employee with certain severance benefits upon Employee’s termination of employment following a Change of Control in certain circumstances.

NOW THEREFORE, in consideration of the above-recited facts, the mutual agreements of the Company and Employee contained herein and the continued employment of Employee by the Company, the parties agree as follows:

1.Certain Definitions.  As used in this Agreement, the following terms shall have the following meanings:

(a)“Affiliate” means any entity directly or indirectly controlling, controlled by or under common control with the Company, where “control” for this purpose means ownership of stock and/or other equity interest in an entity possessing more than fifty (50%) of the voting power of such entity.

(b)“Cause” means any of the following:  (i) Employee’s conviction of or plea of nolo contendere to a felony or a crime involving moral turpitude; (ii) Employee’s commission of any act of fraud, dishonesty or willful violence or gross misconduct against the Company or any of its Affiliates or their properties or assets; (iii) a material and willful breach of any invention or technology assignment confidentiality agreement or similar agreement between Employee and the Company or any Affiliate of the Company; (iv) Employee’s willful disregard or disobedience or violation of any of the material stated policies or rules of the Company that is not susceptible to cure or that is not cured within five (5) business days after the Company gives Employee written notice of such disregard, disobedience or violation; or (v) Employee’s habitual neglect of Employee’s obligations and duties to the Company (other than due to Employee’s

Disability) that is not cured within ten (10) business days after the Company has delivered to Employee a written notice thereof describing facts constituting such habitual neglect.

(c)A “Change of Control” means the occurrence of any of the following events:  (i) the consummation of a merger or consolidation of the Company with or into any corporation or other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to the consummation of such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity of such merger or consolidation or of such surviving entity’s parent) more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or of such surviving entity or its parent that are outstanding immediately after such merger or consolidation; (ii) the sale or other disposition of all or substantially all of the Company’s assets; or (iii) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becoming the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company possessing fifty percent (50%) or more of the total voting power represented by all the Company’s then outstanding voting securities.

(d)“Code” means the United States Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder.

(e)“Disability” has the meaning set forth in Section 22(e)(3) of the Code.

(f)“Release” means a written general release agreement in a form provided promptly by the Company pursuant to which Employee grants the Company, its Affiliates and their respective officers, directors, shareholders and other related parties a general release of all claims and demands (but which shall not include any release by Employee of claims with respect to any contract or arrangement under which Employee is entitled to indemnification from the Company or any release of Employee’s rights under this Agreement).

(g)“Annual Target Compensation” shall mean, at the Trigger Date, solely the sum of (i) Employee’s then effective annual base salary rate plus (ii) the amount of Employee’s target annual cash bonus under the variable incentive compensation plan then in effect for Employee as approved by the Compensation Committee of the Company’s Board of Directors (or Employee’s supervisor, if applicable), or if no such variable incentive compensation plan is in effect on the Trigger Date, the amount of Employee’ target annual cash bonus under the latest variable incentive compensation plan of the Company that was most recently in effect for Employee.  For the avoidance of doubt, the term “Annual Target Compensation” shall not include any employee benefits, insurance, equity awards, auto or other expense allowances or any other item not expressly described in the preceding sentence.

(h)“Termination for Good Reason” means Employee’s resignation or other voluntary termination by Employee of Employee’s employment with the Company with an effective date that is not later than seventy (70) days after the occurrence of a Good Reason Event (as defined below) and which is documented by Employee’s delivery to the Company, within such seventy (70) day period, of written notice of such resignation or termination identifying the Good Reason Event(s) that are the basis for such resignation or termination and stating that such resignation or termination is a “Termination for Good Reason” due to such

2

identified Good Reason Event(s) (such notice, a “Good Reason Notice”); provided that such a resignation or voluntary termination by Employee shall be a “Termination for Good Reason” only if the Company fails to cure the Good Reason Event(s) that are identified by Employee in such Good Reason Notice within forty (40) days after the Company’s receipt of Employee’s Good Reason Notice.  “Good Reason Event” means the occurrence of any of the following events without Employee’s express written consent thereto:  (i) a material reduction of Employee’s duties, position or responsibilities relative to Employee’s duties, position or responsibilities in effect immediately prior to such reduction, unless Employee is provided with comparable duties, position and responsibilities;” (ii) the reduction of Employee’s then current base salary or target incentive compensation by ten percent (10%) or more (other than in connection with a general decrease in the base salary or target incentive compensation of other similarly situated executives of the Company); or (iii) the relocation of Employee’s principal work location to a facility or a location that is more than thirty (30) miles from Employee’s then-current principal work location and which increases Employee’s commute from Employee’s residence by at least fifty (50) miles.  For the avoidance of doubt, neither a Termination Without Cause nor a termination of Employee’s employment due to Employee’s death or Disability shall constitute a Termination for Good Reason or a Good Reason Event.

(i)“Termination Without Cause” means any involuntary termination of Employee’s employment by the Company which is not effected for Cause (except for a termination due to Employee’s death or Disability, neither of which shall constitute a Termination Without Cause).

2.Term of Agreement; Eligibility.

(a)Term.  This Agreement and the Company’s obligations hereunder shall terminate upon the date that all obligations of the parties hereto under this Agreement have been satisfied or, if earlier, on the date prior to consummation of the first Change of Control occurring after the Effective Date of this Agreement, that Employee ceases to be employed by the Company for any reason.

(b)Eligibility.  In addition, notwithstanding anything in this Agreement to the contrary, Employee shall not be entitled to receive any payments or other benefits under Section 4 of this Agreement (or otherwise under this Agreement) unless and until Employee has been continuously employed by the Company (or a Company subsidiary) as a full-time employee for at least nine (9) months prior to the date of the first Change of Control occurring after the Effective Date of this Agreement.

3.At-Will Employment.  The Company and Employee acknowledge that Employee’s employment is on an at-will basis and that nothing in this Agreement is intended to change Employee’s status as an at-will employee.

4.Severance Benefits and Vesting Acceleration.

(a)Severance and Vesting Acceleration.  Subject to the provisions of this Agreement (including without limitation the provisions of Sections 2, 5 and 6 hereof) if, within the twelve (12) month period immediately following the consummation of the first Change of Control occurring after the Effective Date of this Agreement, (i) Employee’s employment with

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the Company is terminated by the Company or its successor (or an Affiliate of the Company or its successor) in a Termination Without Cause or (ii) Employee terminates Employee’s employment with the Company as a result of a Termination for Good Reason (the date of such Termination Without Cause or such Termination for Good Reason, as applicable, being hereinafter referred to as the “Trigger Date”) then, after the execution and nonrevocation by Employee of a Release which has become effective and not subject to revocation by Employee in whole or in part, Employee shall be entitled to receive the following severance benefits from the Company described in clause (i) and clause (ii) below:

(i)Cash Payment.  A lump sum payment to Employee of an amount of cash (in US Dollars) equal to the product obtained by multiplying (A) one-twelfth (1/12) of Employee’s Annual Target Compensation as of the Trigger Date by (B) the number of years (including fractions thereof, but not to exceed a maximum of six (6) years) that Employee has been continuously employed by the Company as of the Trigger Date; provided, that for the avoidance of doubt, the maximum amount payable to Employee under this clause (i) shall in no event exceed fifty percent (50%) of Employee’s Annual Target Compensation as of the Trigger Date; and

(ii)Stock Option Vesting Acceleration.  The vesting of all then outstanding and unvested stock options or other unvested equity awards granted by the Company to Employee prior to the consummation of such Change of Control shall accelerate to afford Employee six (6) months of additional vesting for each year (or fraction thereof) that Employee has been continuously employed by the Company as of the Trigger Date; provided however, that notwithstanding the foregoing, the additional vesting that Employee may obtain under this Section 4(b)(ii) shall not exceed a maximum total of thirty-six (36) months of additional vesting.

Subject to the provisions of Section 6, cash severance benefits payable pursuant to this Section 4(a) shall be payable within sixty (60) days of the termination of Employee under the conditions specified above in this Section 4(a) provided Employee has executed the Release, and the Release is effective (and not subject to revocation by Employee in whole or in part) following the execution and effective date of the Release.

All references to the “Change of Control” in this Section 4(a) and in Section 4(b) shall refer only to the first Change of Control occurring after the Effective Date of this Agreement and the benefits provided for in this Section 4(a) shall be payable only once.

(b)Other Terminations.  If Employee’s employment with the Company terminates other than as a result of (i) a Termination Without Cause within the twelve (12) month period immediately following the consummation of the Change of Control, or (ii) a Termination for Good Reason by Employee within the twelve (12) month period immediately following the consummation of the Change of Control, then Employee shall not be entitled to receive any severance or other benefits pursuant to Section 4(a).  If Employee is eligible to receive the cash severance and accelerated vesting benefits as set forth in Section 4(a) above, then the receipt of such benefits shall be the sole entitlement to benefits and Employee shall not be entitled to any severance benefits under any policies and plans of the Company or other agreements between the Company and Employee.

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5.Six Month Hold-Back and Separation from Service.  To the extent (a) any payments or benefits to which Employee becomes entitled under this Agreement, or under any agreement or plan referenced herein, in connection with Employee’s termination of employment with the Company constitute deferred compensation subject to Section 409A of the Code and (b) Employee is deemed at the time of such termination of employment to be a “specified employee” under Section 409A of the Code, then such payments shall not be made or commence until the earliest of (i) the expiration of the six (6)-month period measured from the date of Employee’s “separation from service” (as such term is at the time defined in Treasury Regulations under Section 409A of the Code) from the Company; or (ii) the date of Employee’s death following such separation from service; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to Employee, including (without limitation) the additional twenty percent (20%) tax for which Employee would otherwise be liable under Section 409A(a)(1)(B) of the Code in the absence of such deferral.  Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this paragraph shall be paid to Employee or Employee’s beneficiary in one lump sum (without interest).  Any termination of Employee’s employment is intended to constitute a “separation from service” as such term is defined in Treasury Regulation Section 1.409A-1.

6.Limitation on Payments Under Code Section 280G.  In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Employee (a) constitute “parachute payments” within the meaning of Section 280G of the Code and (b) but for this Section, would be subject to the excise tax imposed by Section 4999 of the Code, then, at Employee’s discretion, Employee’s severance and other benefits under this Agreement shall be payable either (i) in full, or (ii) as to such lesser amount which would result in no portion of such severance and other benefits being subject to the excise tax under Section 4999 of the Code, whichever of the foregoing amounts (after taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999), results in the receipt by Employee on an after-tax basis, of the greatest amount of severance benefits under this Agreement, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code.   Any such reduction shall reduce cash payments first followed by reductions in equity compensation benefits.  Unless the Company and Employee otherwise agree in writing, any determination required under this Section shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon Employee and the Company for all purposes.  For purposes of making the calculations required by this Section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section.

7.Successors.

(a)Company’s Successors.  Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise,

5

including, without limitation, pursuant to a Change of Control) or any purchaser of all or substantially all of the Company’s business and/or assets shall assume the Company’s obligations under this Agreement and agree expressly to perform the Company’s obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession, unless otherwise agreed upon in writing by Employee and such successor.  For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets.

(b)Employee’s Successors.  Without the written consent of the Company, Employee shall not assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity.  Notwithstanding the foregoing, the terms of this Agreement and all rights of Employee hereunder shall inure to the benefit of, and be enforceable by, Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

8.Notices.  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 for deliveries within the United States, by U.S. registered or certified mail, return receipt requested and postage prepaid.  In the case of Employee, mailed notices shall be addressed to Employee at the home address which Employee most recently communicated to the Company in writing.  In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Chief Executive Officer.

9.Arbitration.  The parties agree that any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be submitted to the American Arbitration Association (“AAA”) and that a neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes.  The arbitration proceedings will allow for discovery according to the rules set forth in the National Rules for the Resolution of Employment Disputes.  All arbitration proceedings shall be conducted in San Francisco County, California.

10.Miscellaneous Provisions.

(a)No Duty to Mitigate.  Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings that Employee may receive from any other source.

(b)Amendment; Waiver.  No provision of this Agreement may be modified, or amended unless the modification or amendment is agreed to in a writing signed by Employee and by an authorized officer of the Company (other than Employee).  Neither party will be deemed to have waived any of its rights under this Agreement unless such waiver is set forth in a writing signed by such party.  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.

(c)Integration.  This Agreement represents the entire agreement and understanding between the parties as to the subject matter herein regarding severance and

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acceleration benefits and supersede all prior or contemporaneous agreements, whether written or oral, with respect to this Agreement, including but not limited to any offer of employment from the Company to Employee.

(d)Choice of Law; Severability.  The validity, interpretation, construction and performance of this Agreement shall be governed by the internal substantive laws, but not the conflicts of law rules, of the State of California.  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.

(e)Employment Taxes.  All payments made pursuant to this Agreement shall be subject to withholding of applicable income and employment taxes.

(f)Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

IN WITNESS WHEREOF, each of the parties has executed this Retention Incentive Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.

COMPANY:	VERSANT CORPORATION.
	By:	/s/ Jochen Witte
	Title:	President and Chief Executive Officer
EMPLOYEE:	/s/ Jerry Wong
	Jerry Wong

Signature Page to Retention Incentive Agreement

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EX-31.01

EXHIBIT 31.01

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jochen Witte, President and Chief Executive Officer of Versant Corporation, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Versant Corporation (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 9, 2009

By	/s/ Jochen Witte
	Jochen Witte
	Chief Executive Officer

EX-31.02

EXHIBIT 31.02

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jerry Wong, Vice President, Finance and Chief Financial Officer of Versant Corporation, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Versant Corporation (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s), and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s), and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 9, 2009
By	/s/ Jerry Wong
	Jerry Wong
	Vice President, Finance and Chief Financial Officer

EX-32.01

EXHIBIT 32.01

Certification of Chief Executive Officer
Furnished Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Versant Corporation (the “Company”) on Form 10-Q for the quarter ended July 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jochen Witte, as Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company for the quarterly period covered by the Report.

/s/ Jochen Witte

Jochen Witte

President and Chief Executive Officer

September 9, 2009

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.02

EXHIBIT 32.02

Certification of Chief Financial Officer
Furnished Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Versant Corporation (the “Company”) on Form 10-Q for the quarter ended July 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jerry Wong, as Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company for the quarterly period covered by the Report.

/s/ Jerry Wong

Jerry Wong

Vice President, Finance and Chief Financial Officer

September 9, 2009

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.