EXHIBIT 10.5

 

Marímba Software UK Limited

 

CONTRACT OF EMPLOYMENT

 

1. Parties

 

  a. Marimba Software UK Limited (the “Employer”)

440 Clyde Avenue

Mountain View, California USA

 

  b. Mr. Adrian Rayner

3 Ashley Hill Place

Cockpole Green, Wargrave

Berkshire, UK RG10 8NL (the “Employee”)

 

2. Date of Employment

 

  a. The Employee’s employment commenced on 2nd May 01.

 

  b. The Employee’s period of continuous employment for the purposes of the
Employment Rights Act 1996 commenced on                     .

 

3. Nature of Employment

 

  a. The Employee is employed as Vice President & General Manager Europe.

 

  b. The Employee shall carry out such duties, as shall from time to time be
them by the Employer.

 

  c. The Employee is not authorized to bind the Employer in any contract for
sale or provision of services by them.

 

  d. The Employee will be expected to report to and liaise with their manager.

 

  e. The Employee agrees that they will spend the whole of their time and
attention on the Employer’s business and that during the term of their
employment with the Employer they will not engage in any other employment,
occupation, consulting, or other business activity.

 

4. Probationary Period

 

[This clause superceded by offer letter.]

 

5. Notice of Termination

 

[This clause superceded by offer letter.]

 

The Employer reserves the right to pay the relevant net salary in lieu of
notice.

 

--------------------------------------------------------------------------------

EMPLOYEE’S INITIALS

  PAGE 1

--------------------------------------------------------------------------------

Marímba Software UK Limited

CONTRACT OF EMPLOYMENT

 

After the Employer or the Employee has served notice the Employer may:

 

  a. require the Employee to carry out no duties; or

 

  b. require the Employee to remain away from the office; or

 

  c. require the Employee to carry out such duties as the employer may require
provided that such duties are of a standard appropriate to the Employee’s job
description.

 

For the avoidance of doubt, the Employee shall remain an employee of the
Employer during the notice period and will continue to be bound by the terms of
this contract.

 

6. Remuneration

 

Base Compensation You will receive an annual base salary of £150,000, which will
be paid monthly in arrears.

 

Total Target Earnings Your total commission (base plus commission and bonus) at
100% of goal achievement will be paid at £300,000 per the Sales Compensation
Plan.

 

Salaries are paid by direct transfer to the employee’s bank account on the
twentieth day of the month except that, where such day does not fall on a
working day, payment will be made on the next working day.

 

7. Expenses

 

The Employee shall be reimbursed all reasonable expenses properly incurred in
discharge of the Employee’s duties in accordance with this contract and subject
to any other instructions or regulations issued by the Employer from time to
time. As a pre-condition of payment, the Employee will be expected to produce
vouchers, receipts or other evidence of the expenses in respect of which the
Employee claims reimbursement.

 

8. Other Benefits

 

In addition to the above remuneration the Employee shall be entitled to:

 

  (a) Private Medical Insurance: The Company intends to provide group medical
insurance coverage through a Company designated carrier. Full details of the
coverage will be provided upon your joining the Company. Coverage is extended to
include your spouse and dependents. Pre-existing conditions will normally be
excluded.

 

  (b) Life Assurance/Death in Service. The Company intends to provide a Death in
Service benefit of four (4) times base annual salary. As these benefits are
secured by insurance policies, it is, therefore, necessary for medical evidence
to be provided. In the event that the insurance company applies a loading to the
premium, Employer will reserve the right to proportionately reduce the level of
coverage provided. This would be discussed with you in the event that this
situation arises.

 

  (c) Car Allowance: £1,250 per month as well as mileage reimbursement for
petrol.

 

  (d) Permanent Health Insurance. The company intends to provide its employees
with Permanent Health/Long Term Disability insurance. The basis of coverage is
that a benefit equal to 75% of your base annual salary, less Single Person’s
State Invalidity Benefit will be payable after thirteen (13) weeks continuous
absence from work as a result of accident or illness. The benefit Is
index-linked (subject to a maximum of 12% per annum) whilst in payment, and the
benefit is payable until either age sixty (60) or your earlier return to work.
As with the Life Assurance coverage, this benefit is secured through insurance
policies, and in the event or a loading to the premium being required by the
insurance company, Employer reserves the right to apply a proportionate
reduction in benefits. Again, this will be discussed with you should the
situation arise.

 

To the extent that any of the benefits offered to you in your employment package
constitute taxable income you will be responsible for all related tax
liabilities. Additionally, you will be entitled to twenty (20) vacation days per
year, as well as the usual public holidays.

 

9. Place of Work

 

The Employee’s primary place of work will be in Reading. In addition, the
Employee will be required to work at such other places as the Employer may from
time to time specify for the performance of the Employee’s duties.

 

PAGE 2

--------------------------------------------------------------------------------

Marímba Software UK Limited

CONTRACT OF EMPLOYMENT

 

If the Employer requires the Employee to change his/her residence the Employer
will reimburse such removal and other incidental expenses as the Employer
considers reasonable in the circumstances. In addition. the Employee shall
travel to such parts of the world as the Employer may direct or authorize. If
the Employer requires the Employee to work outside the United Kingdom for a
period of more than one (1) month it will provide him with written details of
any terms and conditions which may apply to that work and his/her return to the
United Kingdom.

 

10. Hours of work

 

The normal working hours of the Employee will be from 9.00 a.m. to 5.00 p.m.,
Monday through Friday. The Employee will be entitled to an hour’s lunch break
during each working day.

 

In addition the Employee stall be required to work at such other times as the
Employer may reasonably require to meet the needs of the business. The Employee
will not receive additional payment for such further work.

 

11. Holidays

 

Annual Holidays

 

  a. The Employee’s annual paid holiday entitlement is 25 days each holiday
year. Holiday entitlement will accrue pro-rata to each completed month of
employment.

 

  b. The Employee is required to submit a holiday request form to their manager
for approval for all periods of leave.

 

  c. No leave will be permitted during the month of December.

 

  d. The holiday year runs from January 1 to December 31.

 

  e. It is not permitted to carry forward holiday entitlement from one holiday
year to the next nor will payments in lieu be made in respect of holiday not
taken in the relevant holiday year.

 

  f. The Employee must ensure that there is no unnecessary overlapping with the
holidays of other staff who would be responsible for the Employee’s duties while
they are on holiday.

 

  g. Holiday pay on termination of employment will be calculated by establishing
the number of days holiday accrued in the holiday year up to the date of
termination and subtracting from this the number of days taken during the
current holiday year. The number of days remaining, if any, will be paid.

 

  h. Bank holidays and Public Holidays. In addition to annual holidays the
Employee shall be entitled to paid holidays on all statutory and public holidays
together with any additional holidays awarded by the Employer.

 

12. Sickness or Injury

 

  a. Absence due to sickness or injury must be notified to the employee’s
Manager, or to the Human Resources Manager if the Manager is not available,
before 10.00 a.m. on the first day of sickness together with an estimate of the
period of absence envisaged. Any change in the estimated period of absence must
be notified as soon as possible.

 

  b. If the absence continues for more than five (5) continuous working days, a
certificate from the Employee’s doctor should be submitted explaining the nature
of the sickness or injury.

 

  c. During all periods of absence due to sickness or injury the Employee should
keep the Employer informed as to their likely date of return.

 

  d. A Form SC2 (Self-Certification of Sickness) is required in all cases of
uncertified sickness.

 

  e. The employee shall be entitled to statutory sick pay in accordance with the
Social Security and Housing Benefits Act 1982 (as amended), and any other
payment will be at the discretion of the Employer.

 

  f. If the Employee is absent for more than eight (8) weeks in any twelve (12)
month period due to sickness or injury then the employer is entitled to
terminate the employment.

 

13. Maternity Leave/Maternity Pay

 

Employees with the requisite period of service will, if pregnant, be entitled to
statutory maternity pay and statutory maternity leave.

 

Full details of the relevant regulations and entitlements may be obtained on
request from the Human Resources Manager

 

PAGE 3

--------------------------------------------------------------------------------

Marímba Software UK Limited

CONTRACT OF EMPLOYMENT

 

14. Retirement

 

The Employee’s employment shall, unless alternative arrangements are made in
writing, terminate automatically upon the Employee reaching the age of 60. This
may be extended by written consent of the Employer. The exact day on which the
Employee is expected to leave should, however, be agreed to least one month in
advance with the Employer.

 

15. Health and Safety

 

The Employee is bound to comply with the duties imposed by the Health and Safety
at Work Act 1974 or any substitution thereof or amendment or alteration thereto
(“the Act”) and the Health and Safety Regulations made or to be made under the
Act and in particular with the duties set out under section 7 of the Act which
require an employee to:

 

  a. take reasonable care for the health and safety of him or herself and of
others who may be affected by his/her acts or omissions at work;

 

  b. as regards any duty imposed on the Employer or any other person, co-operate
with the Employer so far as is necessary to enable that duty to be performed or
complied with.

 

16. Grievance Procedure

 

If the Employee has any grievance relating to his/her employment they should
raise it in the first instance either orally or in writing with his/her Manager
who will respond within seven (7) days. If the grievance is not satisfactorily
resolved in this way then the Employee may raise the matter in writing with the
Human Resources Manager. The Human Resources Manager then has seven (7) days
from receipt to make a decision and communicate that decision in writing the
Employee. The decision of the Human Resources Manager shall be final.

 

17. Disciplinary Procedure

 

This disciplinary procedure does not form part of the Employee’s contract of
employment. The Employer accepts that it is in the interests of good relations
with its staff to ensure that there is a fair and proper disciplinary procedure.
Any Employee who departs from normally expected standards or who violates the
Employer’s rules will be liable to disciplinary action.

 

  a. In the following circumstances, which are intended by way of example only
and not by way of a complete list, the Employee will be dismissed summarily by
written notice to operate from the date of such notice and the Employee will not
be entitled to any further payment under his/her terms of employment except such
sum as has accrued and is due at the date of termination:

 

  i) refusing to carry out any proper direction given in the course of the
employment;

 

  ii) improperly divulging to any third party any information regarding the
Employer, its employees or any person with whom the Employer deals;

 

  iii) committing any act or divulging any information which is contrary to or
damages the interests or objectives of the Employer;

 

  iv) committing any criminal offence which in the opinion of the employer makes
the Employee unsuitable for the type of work that the Employee is employed to do
or may reasonably be expected to do or which makes him/her unacceptable to other
employees;

 

  v) dishonest conduct;

 

  vi) violent, obscene or abusive behavior towards other employees or officers
of the Employer;

 

  vii) serious or willful breach or the Employee’s duties.

 

  b. With the exception of acts of the nature referred to in (a) above, the
following disciplinary procedure will usually be adopted. The stages will
normally be implemented in order but action may start at any stage in the event
of serious misconduct or an aspect of poor performance that creates a risk to
other employees. The Employee accepts that in the case of’ a senior employee of
the Employer it may not always be appropriate to follow this procedure.

 

  i) On the first occasion that at an Employee fails to reach the standards
required, the Employee will receive a formal verbal warning.

 

  ii) If the required improvement is not made, or if the first offense is
considered so serious for a formal verbal warning, the employee will receive a
formal written warning.

 

PAGE 4

--------------------------------------------------------------------------------

Marímba Software UK Limited

CONTRACT OF EMPLOYMENT

 

  iii) Continued failure to achieve the required improvement, or further
transgressions, will result in a final written warning being issued.

 

  iv) Failure to comply with the conditions of a final written warning will
result in dismissal after the requisite period of notice or payment of salary in
lieu thereof.

 

  c. The following, which are intended by way of example only and not by way of
a complete list, are examples of conduct warranting disciplinary action:

 

  i) poor timekeeping

 

  ii) poor attendance

 

  iii) inadequate or incompetent performance of the Employee’s job

 

  iv) failure to comply with the Employer’s established procedures, as notified
from time to time

 

  v) attending the Employer’s premises or engaging in the Employer’s business
whilst under the influence of alcohol or unlawful drugs

 

  vi) rudeness or discourtesy to people with whom the Employer deals or to other
employees.

 

  d. The Employer reserves the right to suspend the Employee on full pay pending
investigation where the Employer has reasonable grounds to believe that the
Employee’s continued employment might be prejudicial to the Employer’s business
or other employees.

 

  e. The Employer reserves the right to exclude the Employee from the premises
during the period of notice and shall be under no obligation to provide any work
for the Employee or to assign them any duties.

 

  f. If the Employee has outside interests which in the opinion of the Employer
conflict with its interests, the Employee may be asked to leave the service of
the Employer.

 

  g. The Employer reserves the right to suspend the Employee without pay as a
disciplinary measure.

 

  h. The Employee may appeal in accordance with the provisions of the grievance
procedure set out in Clause 16 above against any disciplinary action taken.

 

18. Sexual Harassment

 

Software UK Limited considers that sexual harassment in the workplace is
unacceptable and will treat all complaints seriously. An Employee who feels that
he/she has been subjected to sexual harassment should raise the matter with
their Manager under the terms of the grievance procedure set out in Clause 16
above.

 

An Employee who is found to be the perpetrator of harassment will be liable to
disciplinary action under the terms of file disciplinary procedure set out in
Clause 16 above.

 

The Employer may exercise its discretion as to the disciplinary measures that
will be taken, depending on the nature of the conduct.

 

19. Confidential Information

 

The Employee agrees and undertakes not to discuss, divulge, or make use of,
either directly or indirectly, otherwise than in the proper performance of their
duties hereunder any information relating to the business of the Employer. This
obligation shall continue after the termination of the Employee’s employment.
The Employee accepts that a breach of this undertaking may result in the
termination of the Employee’s employment or the institution of legal proceedings
if at the date of the breach the employment has already been terminated.

 

PAGE 5

--------------------------------------------------------------------------------

Marímba Software UK Limited

CONTRACT OF EMPLOYMENT

 

20. Duties upon Termination

 

Upon the termination of Employee’s employment, the Employee will return all
documents, computer software, computer equipment, and other property belonging
to the Employer without making or retaining copies thereof.

 

EXECUTED as a Deed    )          

for and on behalf of

   )          

Marimba Software UK Limited

   )          

by Ken Owyang

      Director

   )   

/s/ Ken Owyang

          

--------------------------------------------------------------------------------

           

AUTHORIZED SIGNATORY

     EXECUTED as a Deed    )          

for and on behalf of

   )          

Marimba Software UK Limited

   )          

by Fritz Koehler

      Director

   )   

/s/ Fritz K. Koehler

          

--------------------------------------------------------------------------------

           

AUTHORIZED SIGNATORY

     EXECUTED as a Deed    )          

by the Employee

   )          

in the presence of

   )                )   

/s/ Adrian G. Rayner

            

--------------------------------------------------------------------------------

             

EMPLOYEE SIGNATORY

    

 

PAGE 6

--------------------------------------------------------------------------------

Amendment to Contract of Employment

 

This Amendment to Contract of Employment (“this Amendment”) is made and entered
into effective as of 01 January 2003 (“the Effective Date”) by and between
Marimba Software UK Limited (“the Employer”) and Mr. Adrian Rayner (“the
Employee”). Unless otherwise defined herein, all capitalized terms not defined
in this Amendment will have the same meanings as specified in the existing
Contract of Employment between the Employer and the Employee dated of as 02 May
2001 (“the Agreement”).

 

RECITALS

 

WHEREAS, the parties now wish to amend the Agreement, subject to the terms and
conditions set forth below;

 

NOW, THEREFORE, the parties agree as follows:

 

1. Clause 8 of the Contract is hereby replaced in its entirety by the following:

 

“Other Benefits In addition to the above remuneration, the employee may be
entitled to receive from Employer the following benefits, subject to the
applicable scheme rules in force from time to time:

 

  a. private medical insurance.

 

  b. life assurance/death in service benefits.

 

  c. long term disability insurance.

 

  d. a car allowance of £1250 per month as well as business mileage
reimbursement for petrol.

 

A summary description of the above benefits will be made available to the
Employee upon request. The Employer reserves the right to change, amend or
withdraw any such scheme or the insurer or provider of such scheme. The
Employee’s entitlement to any such benefits will not affect the Employer’s right
to terminate the Employee’s employment.

 

A contracting out certificate is not in force in respect of the employment.

 

To the extent that any of the benefits offered to you in your employment package
constitute taxable income, the Employee will be responsible for all related tax
liabilities.”

 

2. All terms and conditions of the Agreement not revised by this Amendment will
remain in full force and effect. In the event of any conflict or inconsistency
between the terms of this Amendment and the Agreement, the terms of this
Amendment will prevail and govern. This Amendment may be executed in one or more
counterparts, each of which shall be deemed as an original but all of which
together shall constitute one and the same instrument.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
Effective Date.

 

/s/ Fritz K. Koehler

--------------------------------------------------------------------------------

    

13 March 2003

--------------------------------------------------------------------------------

      

Date

SIGNED

for and on behalf of the Employer

by Mr. Fritz Koehler

      

--------------------------------------------------------------------------------

SIGNED by the Employee     

Date

/s/ Adrian G. Rayner

--------------------------------------------------------------------------------

    

6 Feb 03

--------------------------------------------------------------------------------

 

2

--------------------------------------------------------------------------------

Marímba Software UK Limited

 

 

 

9 April, 2001

 

 

Mr. Adrian Rayner

3 Ashley Hill Place

Cockpole Green, Wargrave

Berkshire, UK RG10 8NL

 

Dear Adrian:

 

We are pleased to offer you a position as Vice President & General Manager
Europe with Marimba Software UK Limited. (“the Company”) reporting to Matt
Thompson.

 

The following, in conjunction with the Contract of Employment, are the terms and
conditions of your employment.

 

Compensation

 

Base Compensation -You will receive an annual base salary of £150,000, which
will be paid monthly in arrears.

 

Commission. Your target bonus at 100% of goal achievement is £150,000. Details
will be outlined in your Bonus Plan after you commence employment.

 

Total Target Earnings. Your total target compensation (base plus commission and
bonus) at 100% of goal achievement is £300,000.

 

By accepting this offer you warrant that:

 

1. You are under no employment contract, bond, confidentiality agreement or
obligation which would breach or be in conflict with the terms and conditions of
employment with us or encumber your performance of duties assigned to you by us.

 

2. You have not signed or committed to any employment or consultant duties or
other obligations, which would divert your full attention from the duties
assigned to you by us under your employment.

 

3. You are currently in good health and will pass any medical examination
necessary for the establishment of your benefits package.

 

4. Before you commence your employment you will provide to the Company an
original, official document bearing your National Insurance number and/or other
evidence of your ability to accept legal employment in the United Kingdom in
accordance with the Asylum and Immigration Act 1996 to the complete satisfaction
of the Company.

 

Start Date. May, 2001

 

Contingency. This offer is contingent upon the results of background and
reference checks and your providing the company with the legally required proof
of your identity and authorization to work in the United Kingdom.

 

Upon meeting the Company’s eligibility requirements mentioned above, you will be
entitled to additional benefits as indicated in your Contract of Employment.

--------------------------------------------------------------------------------

1. Private Medical Insurance: The Company intends to provide group medical
insurance coverage through a Company designated carrier. Full details of the
coverage will be provided upon your joining the Company. Coverage is extended to
include your spouse and dependents. Pre-existing conditions will normally be
excluded.

 

2. Life Assurance/Death in Service. The Company intends to provide a Death in
Service benefit of four (4) times base annual salary. As these benefits are
secured by insurance policies, it is, therefore, necessary for medical evidence
to be provided. In the event that the insurance company applies a loading to the
premium, the Company will reserve the right to proportionately reduce the level
of coverage provided. This would be discussed with you in the event that this
situation arises.

 

3. Car Allowance: £1,250 per month as well as mileage reimbursement for petrol.

 

4. Stock Options: Subject to Board approval, you will receive an option to
purchase 120,000 shares of the Company’s Common Stock at the fair market value
of the Company’s Common Stock at the time such options are approved by the Board
of Directors. For all grants (unless otherwise indicated), 25% of the option
shares shall vest upon completion of one (1) year of service measured from the
Vesting Base Date and the balance of the options shares shall vest in a series
of successive equal monthly installments upon the optionee’s completion of each
of the next thirty- six (36) months of service thereafter.

 

5. Vacation and Holidays. You will be entitled to twenty-five (25) vacation days
per year, as well as the usual public holidays.

 

6. Permanent Health Insurance. The company intends to provide its employees with
Permanent Health/Long Term Disability insurance. The basis of coverage is that a
benefit equal to 75% of your base annual salary, less Single Person’s State
Invalidity Benefit will be payable after thirteen (13) weeks continuous absence
from work as a result of accident or illness. The benefit is index-linked
(subject to a maximum of 12% per annum) whilst in payment, and the benefit is
payable until either age sixty (60) or your earlier return to work. As with the
Life Assurance coverage, this benefit is secured through insurance policies, and
in the event or a loading to the premium being required by the insurance
company, the Company reserves the right to apply a proportionate reduction in
benefits. Again, this will be discussed with you should the situation arise.

 

7. Notice Period. In the event that either you or the company should wish to
terminate the employment, three (3) months written notice is required by either
party.

 

To the extent that any of the benefits offered to you in your employment package
constitute taxable income you will be responsible for all related tax
liabilities. Additionally, you will be entitled to twenty-five (25) vacation
days per year, as well as the usual public holidays.

 

This offer of employment with the Company comprises this letter and the
Confidentiality and Proprietary Information Agreement. Your acceptance of this
offer is conditional upon your signing your acceptance of this letter and its
attachments and should reach us by May 2001 failing, which the offer shall
lapse. You will be given the Contract of Employment in the form attached within
one month of your start date, which you will be required to sign.

 

No prior promises, representations or understandings relative to any terms or
conditions of your employment are to be considered as part of the offer of
employment to you unless expressed in writing in this offer package.

 

Yours sincerely,

 

/s/ Jonathan Schoonmaker

--------------------------------------------------------------------------------

Jonathan Schoonmaker

Vice President of

Human Resources

--------------------------------------------------------------------------------

Enclosures

 

AGREED AND ACCEPTED BY

 

Accepted:

  

/s/ Adrian G. Rayner

--------------------------------------------------------------------------------

    

Date Accepted:

  

1st May 2001

--------------------------------------------------------------------------------

    

Start Date:

  

2nd May 2001

--------------------------------------------------------------------------------