Exhibit
10.12





CONFIDENTIAL


March 17,
2004


Dear Ajay:


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 Vice President and General
Manager, Enterprise Applications Group. In that regard, the following are the
details of this offer of employment:


Title


Your title will be
Vice President and General Manager, Enterprise Applications Group. 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.


Incentive Bonus


Additionally, you will be entitled to an incentive
bonus of up to fifty percent (50%) of your base salary based on your meeting
certain Revenue (50% of eligible bonus) and Management Business Objectives
(MBOs) (50% of eligible bonus) as are mutually agreed upon. The Target for the
Fiscal Year Ended March 31, 2005, as discussed and agreed to, will be $2.6
million in recognized U.S. G.A.A.P. Revenue, which is directly attributed to
your efforts and the efforts of the Enterprise Applications Group. The MBOs for
your first year of employment shall be mutually established, after you have
been employed by the Company for a reasonable period of time, but no later than
three (3) months. Falling short of achieving 100% of the Revenue and MBO
target, as measured individually and separately, would result in a factor being
applied to the maximum potential bonus as per the following schedule:











 


	
  % of Revenue
  or MBOs Target

  	
   

  	
  Earned Factor

  
	
  60%

  	
   

  	
  0.25

  
	
  70%

  	
   

  	
  0.30

  
	
  80%

  	
   

  	
  0.35

  
	
  90%

  	
   

  	
  0.40

  
	
  100%

  	
   

  	
  1.00

  



 


Stock Options


At the first Board
meeting following your acceptance of employment and 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 Board 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:



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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.


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 



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                         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, 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 12 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.


If your employment
is terminated for any reason other than Cause after your first 12 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.


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.



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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 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 April 12, 2004.


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-



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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.


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, 



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(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.


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 March 29, 2004, or unless otherwise withdrawn by the Company prior to
your acceptance.


Ajay, 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:


	
   

  	
   

  	
   

  
	
  Ajay Ramachandran

  	
   

  	
  Date

  



 


	
  

  
	
  Start Date

  



 



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