Exhibit 10.1

 

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CONFIDENTIAL

 

April 22, 2006

 

Thomas G. C. Lim

34397 Torrey Pine Lane

Union City, CA 94587

 

Dear Thomas:

 

It has been a real pleasure discussing the opportunities ahead for Raining Data
Corporation. We believe that you have the background and experience that we need
to help us grow in our new directions, and we are pleased to offer you a
position with Raining Data Corporation (the “Company”) as its Chief Financial
Officer and Vice President of Finance. In that regard, the following are the
details of this offer of employment:

 

Title

 

Your title will be Chief Financial Officer and Vice President of Finance. In
this position, you will report directly to me.

 

Base Compensation

 

Your initial annual base salary will be $175,000, paid in accordance with the
Company’s normal payroll procedures. Your base salary shall be subject to review
at the end of each year of your employment, and any adjustment will be a
function of performance, which I will evaluate and may be subject to approval of
the Compensation of the Board of Directors.

 

Incentive Bonus

 

Additionally, you will receive a signing bonus of $20,000 and be entitled to an
annual incentive bonus of up to thirty five percent (35%) of your base salary
based on your meeting certain Management Business Objectives (MBOs) as are
mutually agreed upon.

 

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Stock Options

 

At a Compensation Committee Meeting (or sub-committee meeting) that will be held
on your actual start date, you will be granted a stock option, which shall be,
to the extent possible under the rule of Section 422(d) of the Internal Revenue
Code of 1986, as amended (the “Code”), an “incentive stock option” (as defined
in Section 422 of the Code) to purchase 150,000 shares of the Company’s Common
Stock, at an exercise price equal to the then NASDAQ market price as of the
close of the markets on the day of that meeting.

 

Twenty-five percent (25%) of the shares subject to the above option shall vest
one year after your start date and 1/36th of the remaining shares subject to the
option shall vest monthly thereafter, so that the option shall be fully vested
and exercisable four years from your start date, subject to your continued
service to the Company on the relevant vesting dates. In all other respects the
option shall be subject to the terms, definitions and provisions of the
Company’s Stock Plan and the stock option agreement by and between you and the
Company, both of which documents are incorporated herein by reference.

 

Change of Control, Additional Accelerated Vesting and Related Items

 

In addition to the vesting schedule as set forth above, in the event you are
terminated as a result of an Involuntary Termination other than for Cause or
Disability within 12 months after a Change of Control, one hundred percent
(100%) of the Shares subject to the above option shall be vested upon the date
of such termination, provided that you sign a general release in a commercially
customary form prescribed by the Company, which releases and discharges all
known and unknown claims that you may have against the Company or persons and
entities affiliated with the Company, and a covenant not to sue or prosecute any
legal action or proceeding based upon such claims. For the purposes of this
paragraph, the following terms shall have the following meanings:

 

A)          “Cause” shall mean

 

(i)                                     Gross and willful failure to
perform services:

 

(ii)                                  Conviction of, or a plea of “guilty” or
“no contest” to, a felony under the laws of the United States or any state
thereof, if such felony either is work-related or materially impairs your
ability to perform services for the Company:

 

(iii)          A material breach of fiduciary duty, including fraud,
embezzlement, dishonesty or any intentional action that materially injures the
Company as determined in good faith by the Company’s Board of Directors;

 

(iv)          Death;

 

(v)           A material breach of the Confidential Information Agreement.

 

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In all of the foregoing cases, the Company shall provide written notice to you
indicating in reasonable detail the event or circumstances that constitute Cause
under this Agreement and the Company will provide you with forty-five days to
cure such breach or failure prior to termination for Cause. During such 45-day
cure period, the Company may place you on unpaid leave.

 

B)            “Change in Control” shall mean (i) any “person” (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) who becomes the “beneficial owner” (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting power
represented by the Company’s then outstanding voting securities, provided,
however, that Change in Control shall not include any change resulting from any
capital financings of the Company; or (ii) the consummation of the sale or
disposition by the Company of all or substantially all of the Company’s assets;
or (iii) the consummation of a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would result in
the voting securities of the company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or its parent outstanding immediately after
such merger or consolidation.

 

C)            “Disability” shall mean that you physically or mentally are unable
regularly to perform your duties hereunder for a period in excess of sixty (60)
consecutive days or more than ninety (90) days in any consecutive twelve (12)
month period. The Company shall make a good faith determination of whether you
are physically or mentally unable to regularly perform your duties subject to
its review and consideration of any physical and/or mental health information
provided to it by you.

 

D)           “Involuntary Termination” shall mean (i) without your express
written consent, the substantial reduction your duties or responsibilities
relative to your duties or responsibilities in effect immediately prior to such
reduction; provided, however, that a reduction in duties or responsibilities
solely by virtue of the Company being acquired and made part of a larger entity
(as, for example, when the Vice President of Company remains as such following a
Change of Control and is not made the Vice President of the acquiring
corporation) shall not constitute an “Involuntary Termination”; (iii) without
your express written consent, a material reduction by the Company in your base
compensation as in effect immediately prior to such reduction; (iv) a material
reduction by the Company in the kind or level of employee benefits package is
significantly reduced; (v) your relocation to a facility or a location more than
50 miles from your then present location,

 

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without your express written consent; (vi) any purported termination of you by
the Company which is not effected for death or Disability or for Cause; or
(vii) the failure of the Company to obtain the assumption of this agreement by
any successors.

 

Severance

 

If your employment is terminated for any reason other than for Cause prior to
the first six months from your start date, you shall continue to receive your
then basic salary for three months following the date of your termination (the
“Severance Period”). If you obtain other employment during the Severance Period,
the total amount of your earnings from other sources will be deducted from your
severance payments. You agree to notify the Company of other employment during
the Severance Period, and provide the Company with complete information
regarding your earnings. Except for Change of Control as set forth above, the
vesting of your stock options shall be accelerated such that you shall be
entitled to purchase a number of shares of the Company’s Common Stock pursuant
to the Stock Option Agreement as if the Company had employed you for one year.

 

If your employment is terminated for any reason other than Cause after your
first six months of service, you shall continue to receive your then basic
salary for six months following the date of your termination subject to the
credit for other earnings described above. Except for Change of Control as set
forth above, your stock options shall continue to vest during the six month
severance period such that you shall be entitled to purchase a number of shares
of the Company’s Common Stock pursuant to the Stock Option Agreement as if the
Company had employed you through the end of that six month severance period.

 

Your receipt of the severance benefits described above will be contingent upon
your signing a general release in a commercially customary form prescribed by
the Company, which releases and discharges all known and unknown claims that you
may have against the Company or persons and entities affiliated with the
Company, and a covenant not to sue or prosecute any legal action or proceeding
based upon such claims. Additionally, your receipt of the severance benefits
described above also will be contingent upon your compliance with the
noncompetition and nonsolicitation obligations set forth below, and your
obligations under the Company’s Employment Confidential Information, Invention
Assignment, and Arbitration Agreement.

 

Noncompetition and Nonsolicitation

 

During the severance periods described above, you agree that you will not,
directly or indirectly, engage in (whether as an employee, consultant,
proprietor, partner, director or otherwise) or have any ownership interest in,
or participate in the financing operation, management, control of, any person,
firm, corporation or business that engages in any business activity that is
competitive with the Company (or of any Affiliated Company), provided, however,
that nothing contained in this paragraph shall be construed to prohibit

 

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you from purchasing and owning (directly or indirectly) up to one percent (1%)
of the capital stock or other securities of any corporation or other entity
whose stock or securities are traded on any national or regional securities
exchange or the national over-the- counter market and such ownership shall not
constitute a violation of this paragraph.

 

Additionally, for a period of one (1) year following the termination of your
employment for any reason, you agree that you will not, directly or indirectly,
(A) divert or attempt to divert from the Company (or any Affiliated Company) any
business of any kind in which it is engaged, including, without limitation, the
solicitation of or interference with any of its suppliers or customers; or
(B) solicit, hire, recruit, or employ any person or entity who is employed by or
has a contractual relationship with the Company, or encourage any person or
entity who is employed by or has a contractual relationship with the Company to
terminate their employment or contractual relationship with the Company.

 

Benefit Plans

 

You shall be entitled to participate, to the extent permitted by law, in the
medical insurance plans and other benefits offered by the Company. You should
note that the Company reserves the right to cancel or change the benefit plans
and programs it offers to its employees at any time.

 

Vacation

 

You shall also be eligible to receive three weeks of paid time-off per year,
which, if unused, shall accrue in accordance with the Company’s standard benefit
policies.

 

Start Date

 

We hope that you will be able to start with the Company as soon as possible.
However, in any case your start date will be on or prior to May 29, 2006.

 

The Company is excited about your joining and looks forward to a beneficial and
fruitful relationship. Nevertheless, you should be aware that your employment
with the Company is for no specific period and constitutes at-will employment.
As a result, you are free to resign at any time, for any reason or for no
reason. Similarly, the Company is free to conclude its employment relationship
with you at any time, with or without cause and with at least one-month notice.
We request that, in the event of resignation, you give the Company at least one
month’s notice. You understand and agree that neither your job performance nor
promotions, commendations, bonuses or the like from the Company give rise to or
in any way serve as the basis for modification, amendment, or extension, by
implication or otherwise, of your employment with the Company.

 

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Miscellaneous

 

For purpose of federal immigration law, you will be required to provide to the
Company documentary evidence of your identity and eligibility for employment in
the United States. Such documentation must be provided to the Company within
three (3) business days of your date of hire, or our employment relationship
with you may be terminated.

 

This Agreement and all benefits due you hereunder shall inure to the benefit of,
and be enforceable by, your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.

 

We also ask that, if you have not already done so, you disclose to the Company
any and all agreements relating to your prior employment that may affect your
eligibility to be employed by the Company or limit the manner in which you
may be employed. It is the Company’s understanding that any such agreements will
not prevent you from performing the duties of your position and you represent
that such is the case.

 

You agree that you will not enter into any agreements with another entity that
requires you to be an employee or consultant, in name or duties, during your
employment with the Company. Moreover, you agree that, during the term of your
employment with the Company, you will not engage in any other employment,
occupation, consulting or other business activity directly related to the
business in which the Company is now involved or become involved during the term
of your employment, nor will you engage in any other activities that conflict
with your obligations to the Company. Similarly, you agree not to bring any
third party confidential information to the Company, including that of your
former employer, and that in performing your duties for the Company you will not
in any way utilize any such information.

 

As a Company employee, you will be expected to abide by Company rules and
standards. You will be specifically required to sign an acknowledgment that you
have read and that you understand the Company’s rules of conduct with are
included in the Company Handbook. As a condition of your employment, you are
also required to sign and comply with an Employment, Confidential Information,
Invention Assignment and Arbitration Agreement which requires, among other
provisions, the assignment of patent rights to any invention made during your
employment at the Company, and non-disclosure of Company proprietary
information. In the event of any dispute or claim relating to or arising out of
your employment relationship, you and the Company agree that (i) any and all
disputes between you and the Company shall be fully and finally resolved by
binding arbitration, (ii) you are waiving any and all rights to a jury trial but
all court remedies will be available in arbitration, (iii) all disputes shall be
resolved by a neutral arbitrator who shall issue a written opinion, (iv) the
arbitration shall provide for adequate discovery, and (v) the Company shall pay
all arbitration fees, excluding attorneys fees and legal costs. Please note that
we must receive your signed Agreement before your first day of employment.

 

This letter shall be governed by the internal substantive laws, but not the
choice of law rules, of the State of California.

 

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In the event that any provision hereof becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable, or void, this letter shall
continue in full force and effect without such provision. In the event that
there is any conflict between this offer letter and your Stock Option Plan or
Stock Option Agreement, this offer letter will govern.

 

To indicate your acceptance of the Company’s offer, please sign and date this
letter in the space provided below. A duplicate original is enclosed for your
records. This letter, along with any agreements relating to proprietary rights
between you and the Company, sets forth the terms of your employment with the
Company and supersedes any prior representations or agreements including, but
not limited to, any representation made during your recruitment, interviews or
pre employment negotiations, whether written or oral. This letter, including,
but not limited to, its at-will employment provision, may not be modified or
amended except by a written agreement signed by the Company’s Chief Executive
Officer and you. This offer of employment will terminate if it is not accepted,
signed and returned by April 23, 2006, or unless otherwise withdrawn by the
Company prior to your acceptance.

 

Thomas, we all look forward to working with you at Raining Data, and believe
that your contributions will be significant in moving the Company into its new
market opportunities.

 

Best regards,

 

 

Carlton H. Baab

President & CEO

Raining Data Corporation

 

 

AGREED AND ACCEPTED:

 

 

 

 

 

 

 

Thomas G. C. Lim

Date

 

 

 

 

 

Start Date

 

 

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