Document:

AMENDMENT TO EMPLOYMENT AGREEMENT

Exhibit 10.16 
 
AMENDMENT NO. 1 
TO 
EMPLOYMENT AGREEMENT 
 
THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this
“Amendment”) is made and entered into as of the 23rd day of January, 2003, by and between Pillowtex Corporation, a Delaware corporation (the “Company”), and Michael T. Gannaway (“Employee”). 
 
W I T N E S S E T H: 
 
WHEREAS, the parties hereto are parties to that certain Employment Agreement dated as of October 1, 2002 (the “Employment
Agreement”) (capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to such terms in the Employment Agreement); and 
 
WHEREAS, Section 2.2(e) of the Employment Agreement provides in part that the Company will grant to Employee
a restricted stock award in the amount of Sixty Thousand (60,000) shares of Pillowtex Common Stock on or before January 31, 2003 (the “Issuance Date”), and 
 
WHEREAS, the Company and Employee desire to amend Section 2.2(e) of the Employment Agreement to change the
Issuance Date from January 31, 2003 to February 28, 2003; 
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, the parties hereto agree as follows: 
 
1. Section 2.2(e) of the Employment Agreement is hereby amended to change the date referenced therein from January 31, 2003 to February
28, 2003. 
 
2. In all other respects, and as so
amended, the Employment Agreement shall remain in full force and effect according to its terms and conditions. 
 
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first set forth above intending to be bound hereby.

 

	 PILLOWTEX CORPORATION

	
	 By:
	 	 /S/    DAVID A.
PERDUE        

	 Name: David A. Perdue
 Title: Chief Executive Officer

	
	 /S/    MICHAEL T. GANNAWAY

	 Michael T. Gannaway<PAGE>

                                                                    EXHIBIT 10.6

                                  Marimba, Inc.

                          2000 Supplemental Stock Plan

                            (As Amended and Restated
                           Effective November 8, 2000)

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                                TABLE OF CONTENTS

<TABLE>
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                                                                            Page
<S>                                                                         <C>
ARTICLE 1. INTRODUCTION ...............................................        1

ARTICLE 2. ADMINISTRATION .............................................        1
      2.1 Committee Composition .......................................        1
      2.2 Committee Responsibilities ..................................        1

ARTICLE 3. SHARES AVAILABLE FOR GRANTS ................................        1
      3.1 Basic Limitation ............................................        1
      3.2 Additional Shares ...........................................        1
      3.3 Dividend Equivalents ........................................        2

ARTICLE 4. ELIGIBILITY ................................................        2

ARTICLE 5. OPTIONS ....................................................        2
      5.1 Stock Option Agreement ......................................        2
      5.2 Number of Shares ............................................        2
      5.3 Exercise Price ..............................................        2
      5.4 Exercisability and Term .....................................        2
      5.5 Modification or Assumption of Options .......................        2
      5.6 Buyout Provisions ...........................................        2

ARTICLE 6. PAYMENT FOR OPTION SHARES ..................................        3
      6.1 General Rule ................................................        3
      6.2 Surrender of Stock ..........................................        3
      6.3 Exercise/Sale ...............................................        3
      6.4 Exercise/Pledge .............................................        3
      6.5 Promissory Note .............................................        3
      6.6 Other Forms of Payment ......................................        3

ARTICLE 7. RESTRICTED SHARES ..........................................        3
      7.1 Restricted Stock Agreement ..................................        3
      7.2 Payment for Awards ..........................................        3
      7.3 Vesting Conditions ..........................................        4
      7.4 Voting and Dividend Rights ..................................        4

ARTICLE 8. CHANGE IN CONTROL ..........................................        4

ARTICLE 9. PROTECTION AGAINST DILUTION ................................        4
      9.1 Adjustments .................................................        4
      9.2 Dissolution or Liquidation ..................................        5
      9.3 Reorganizations .............................................        5
</TABLE>

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<TABLE>
<S>                                                                          <C>
ARTICLE 10. DEFERRAL OF AWARDS ........................................      5

ARTICLE 11. AWARDS UNDER OTHER PLANS ..................................      5

ARTICLE 12. LIMITATION ON RIGHTS ......................................      6
      12.1 Retention Rights ...........................................      6
      12.2 Stockholders' Rights .......................................      6
      12.3 Regulatory Requirements ....................................      6

ARTICLE 13. WITHHOLDING TAXES .........................................      6
      13.1 General ....................................................      6
      13.2 Share Withholding ..........................................      6

ARTICLE 14. FUTURE OF THE PLAN ........................................      6
      14.1 Term of the Plan ...........................................      6
      14.2 Amendment or Termination ...................................      7

ARTICLE 15. DEFINITIONS ...............................................      7
</TABLE>

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                                  Marimba, Inc.

                          2000 Supplemental Stock Plan

         ARTICLE 1. INTRODUCTION.

                  The Plan was adopted by the Board on March 21, 2000 to be
effective as of the date adopted by the Board. The purpose of the Plan is to
promote the long-term success of the Company and the creation of stockholder
value by (a) encouraging Employees and Consultants to focus on critical
long-range objectives, (b) encouraging the attraction and retention of Employees
and Consultants with exceptional qualifications and (c) linking Employees and
Consultants directly to stockholder interests through increased stock ownership.
The Plan seeks to achieve this purpose by providing for Awards in the form of
Restricted Shares and Options (which may constitute nonstatutory stock options).

                  The Plan shall be governed by, and construed in accordance
with, the laws of the State of Delaware (except their choice-of-law provisions).

         ARTICLE 2. ADMINISTRATION.

         2.1 Committee Composition. The Plan shall be administered by the
Committee. The Committee shall consist exclusively of one or more directors of
the Company, who shall be appointed by the Board.

         2.2 Committee Responsibilities. The Committee shall (a) select the
Employees and Consultants who are to receive Awards under the Plan, (b)
determine the type, number, vesting requirements and other features and
conditions of such Awards, (c) interpret the Plan and (d) make all other
decisions relating to the operation of the Plan. The Committee may adopt such
rules or guidelines as it deems appropriate to implement the Plan. The
Committee's determinations under the Plan shall be final and binding on all
persons.

         ARTICLE 3. SHARES AVAILABLE FOR GRANTS.

         3.1 Basic Limitation. Common Shares issued pursuant to the Plan may be
authorized but unissued shares or treasury shares. The aggregate number of
Options and Restricted Shares awarded under the Plan shall not exceed 3,500,000,
plus the additional Common Shares described in Section 3.2. The limitations of
this Section 3.1 and 3.2 shall be subject to adjustment pursuant to Article 9.

         3.2 Additional Shares. If Restricted Shares or Common Shares issued
upon the exercise of Options are forfeited, then such Common Shares shall again
become available for Awards under the Plan. If Options are forfeited or
terminate for any other reason before being exercised, then the corresponding
Common Shares shall again become available for Awards under the Plan.

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<PAGE>

         3.3 Dividend Equivalents. Any dividend equivalents paid or credited
under the Plan shall not be applied against the number of Restricted Shares or
Options available for Awards.

         ARTICLE 4. ELIGIBILITY.

                  Only Employees, who are not officers of the Company or members
of the Board, and Consultants shall be eligible for the grant of Options and
Restricted Shares.

         ARTICLE 5. OPTIONS.

         5.1 Stock Option Agreement. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms of the Plan and
may be subject to any other terms that are not inconsistent with the Plan. The
Stock Option Agreement shall specify that the Option is an NSO. The provisions
of the various Stock Option Agreements entered into under the Plan need not be
identical. Options may be granted in consideration of a reduction in the
Optionee's other compensation. A Stock Option Agreement may provide that a new
Option will be granted automatically to the Optionee when he or she exercises a
prior Option and pays the Exercise Price in the form described in Section 6.2.

         5.2 Number of Shares. Each Stock Option Agreement shall specify the
number of Common Shares subject to the Option and shall provide for the
adjustment of such number in accordance with Article 9.

         5.3 Exercise Price. Each Stock Option Agreement shall specify the
Exercise Price provided that the Exercise Price under an NSO shall in no event
be less than 85% of the Fair Market Value of a Common Share on the date of
grant. A Stock Option Agreement may specify an Exercise Price that varies in
accordance with a predetermined formula while the NSO is outstanding.

         5.4 Exercisability and Term. Each Stock Option Agreement shall specify
the date or event when all or any installment of the Option is to become
exercisable. The Stock Option Agreement shall also specify the term of the
Option. A Stock Option Agreement may provide for accelerated exercisability in
the event of the Optionee's death, disability or retirement or other events and
may provide for expiration prior to the end of its term in the event of the
termination of the Optionee's service.

         5.5 Modification or Assumption of Options. Within the limitations of
the Plan, the Committee may modify, extend or assume outstanding options or may
accept the cancellation of outstanding options (whether granted by the Company
or by another issuer) in return for the grant of new options for the same or a
different number of shares and at the same or a different exercise price. The
foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, alter or impair his or her rights or obligations under
such Option.

         5.6 Buyout Provisions. The Committee may at any time (a) offer to buy
out for a payment in cash or cash equivalents an Option previously granted or
(b) authorize an Optionee to elect to cash out an Option previously granted, in
either case at such time and based upon such terms and conditions as the
Committee shall establish.

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<PAGE>

         ARTICLE 6. PAYMENT FOR OPTION SHARES.

         6.1 General Rule. The entire Exercise Price of Common Shares issued
upon exercise of Options shall be payable in cash or cash equivalents at the
time when such Common Shares are purchased, except the Committee may at any time
accept payment in any form(s) described in this Article 6.

         6.2 Surrender of Stock. To the extent that this Section 6.2 is
applicable, all or any part of the Exercise Price may be paid by surrendering,
or attesting to the ownership of, Common Shares that are already owned by the
Optionee. Such Common Shares shall be valued at their Fair Market Value on the
date when the new Common Shares are purchased under the Plan. The Optionee shall
not surrender, or attest to the ownership of, Common Shares in payment of the
Exercise Price if such action would cause the Company to recognize compensation
expense (or additional compensation expense) with respect to the Option for
financial reporting purposes.

         6.3 Exercise/Sale. To the extent that this Section 6.3 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) an irrevocable direction to a
securities broker approved by the Company to sell all or part of the Common
Shares being purchased under the Plan and to deliver all or part of the sales
proceeds to the Company.

         6.4 Exercise/Pledge. To the extent that this Section 6.4 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) an irrevocable direction to
pledge all or part of the Common Shares being purchased under the Plan to a
securities broker or lender approved by the Company, as security for a loan, and
to deliver all or part of the loan proceeds to the Company.

         6.5 Promissory Note. To the extent that this Section 6.5 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) a full-recourse promissory
note. However, the par value of the Common Shares being purchased under the
Plan, if newly issued, shall be paid in cash or cash equivalents.

         6.6 Other Forms of Payment. To the extent that this Section 6.6 is
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid in any other form that is consistent with applicable laws, regulations
and rules.

         ARTICLE 7. RESTRICTED SHARES.

         7.1 Restricted Stock Agreement. Each grant of Restricted Shares under
the Plan shall be evidenced by a Restricted Stock Agreement between the
recipient and the Company. Such Restricted Shares shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Stock
Agreements entered into under the Plan need not be identical.

         7.2 Payment for Awards. Subject to the following sentence, Restricted
Shares may be sold or awarded under the Plan for such consideration as the
Committee may determine, including (without limitation) cash, cash equivalents,
full-recourse promissory notes and past services. To the extent that an Award
consists of newly issued Restricted Shares, the Award

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<PAGE>

recipient shall furnish consideration with a value not less than the par value
of such Restricted Shares in the form of cash, cash equivalents or past services
rendered to the Company (or a Parent or Subsidiary), as the Committee may
determine.

         7.3 Vesting Conditions. Each Award of Restricted Shares may or may not
be subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Restricted Stock Agreement. A
Restricted Stock Agreement may provide for accelerated vesting in the event of
the Participant's death, disability or retirement or other events.

         7.4 Voting and Dividend Rights. The holders of Restricted Shares
awarded under the Plan shall have the same voting, dividend and other rights as
the Company's other stockholders. A Restricted Stock Agreement, however, may
require that the holders of Restricted Shares invest any cash dividends received
in additional Restricted Shares. Such additional Restricted Shares shall be
subject to the same conditions and restrictions as the Award with respect to
which the dividends were paid.

         ARTICLE 8. CHANGE IN CONTROL.

                    Unless the applicable agreement evidencing the Award
provides otherwise, in the event of any Change in Control, the vesting of each
outstanding Award shall automatically accelerate so that each such Award shall,
immediately prior to the effective date of the Change in Control, become fully
exercisable for all of the Common Shares at the time subject to such Award and
may be exercised for any or all of those shares as fully-vested Common Shares.
However, an outstanding Award shall not so accelerate if and to the extent such
Award, in connection with the Change in Control, remains outstanding, or is
assumed by the surviving corporation (or parent thereof) or substituted with an
award with substantially the same terms by the surviving corporation (or parent
thereof). The determination of whether a substituted award has substantially the
same terms as an Award shall be made by the Committee, and its determination
shall be final, binding and conclusive.

         ARTICLE 9. PROTECTION AGAINST DILUTION.

         9.1 Adjustments. In the event of a subdivision of the outstanding
Common Shares, a declaration of a dividend payable in Common Shares, a
declaration of a dividend payable in a form other than Common Shares in an
amount that has a material effect on the price of Common Shares, a combination
or consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a lesser number of Common Shares, a recapitalization, a spin-off
or a similar occurrence, the Committee shall make such adjustments as it, in its
sole discretion, deems appropriate in one or more of:

                  (a) The number of Options and Restricted Shares available for
         future Awards under Article 3;

                  (b) The number of Common Shares covered by each outstanding
         Option; or

                  (c) The Exercise Price under each outstanding Option.

                                        4

<PAGE>

Except as provided in this Article 9, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.

         9.2 Dissolution or Liquidation. To the extent not previously exercised
or settled, Options shall terminate immediately prior to the dissolution or
liquidation of the Company.

         9.3 Reorganizations. In the event that the Company is a party to a
merger or other reorganization, outstanding Awards shall be subject to the
agreement of merger or reorganization. Such agreement shall provide for (a) the
continuation of the outstanding Awards by the Company, if the Company is a
surviving corporation, (b) the assumption of the outstanding Awards by the
surviving corporation or its parent or subsidiary, (c) the substitution by the
surviving corporation or its parent or subsidiary of its own awards for the
outstanding Awards, (d) full exercisability or vesting and accelerated
expiration of the outstanding Awards or (e) settlement of the full value of the
outstanding Awards in cash or cash equivalents followed by cancellation of such
Awards.

         ARTICLE 10. DEFERRAL OF AWARDS.

                  The Committee (in its sole discretion) may permit or require a
Participant to:

                     (a) Have Common Shares that otherwise would be delivered to
         such Participant as a result of the exercise of an Option converted
         into an equal number of stock units; or

                     (b) Have Common Shares that otherwise would be delivered to
         such Participant as a result of the exercise of an Option converted
         into amounts credited to a deferred compensation account established
         for such Participant by the Committee as an entry on the Company's
         books. Such amounts shall be determined by reference to the Fair Market
         Value of such Common Shares as of the date when they otherwise would
         have been delivered to such Participant.

A deferred compensation account established under this Article 10 may be
credited with interest or other forms of investment return, as determined by the
Committee. A Participant for whom such an account is established shall have no
rights other than those of a general creditor of the Company. Such an account
shall represent an unfunded and unsecured obligation of the Company and shall be
subject to the terms and conditions of the applicable agreement between such
Participant and the Company. If the deferral or conversion of Awards is
permitted or required, the Committee (in its sole discretion) may establish
rules, procedures and forms pertaining to such Awards, including (without
limitation) the settlement of deferred compensation accounts established under
this Article 10.

         ARTICLE 11. AWARDS UNDER OTHER PLANS.

                  The Company may grant awards under other plans or programs.
Such awards may be settled in the form of Common Shares issued under this Plan.
Such Common Shares

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shall be treated for all purposes under the Plan like Common Shares issued in
settlement of stock units and shall, when issued, reduce the number of Common
Shares available under Article 3.

         ARTICLE 12. LIMITATION ON RIGHTS.

         12.1 Retention Rights. Neither the Plan nor any Award granted under the
Plan shall be deemed to give any individual a right to remain an Employee or
Consultant. The Company and its Parents, Subsidiaries and Affiliates reserve the
right to terminate the service of any Employee or Consultant at any time, with
or without cause, subject to applicable laws, the Company's certificate of
incorporation and by-laws and a written employment agreement (if any).

         12.2 Stockholders' Rights. A Participant shall have no dividend rights,
voting rights or other rights as a stockholder with respect to any Common Shares
covered by his or her Award prior to the time when a stock certificate for such
Common Shares is issued or, if applicable, the time when he or she becomes
entitled to receive such Common Shares by filing any required notice of exercise
and paying any required Exercise Price. No adjustment shall be made for cash
dividends or other rights for which the record date is prior to such time,
except as expressly provided in the Plan.

         12.3 Regulatory Requirements. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Common Shares under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Award prior to the satisfaction of all legal requirements relating to the
issuance of such Common Shares, to their registration, qualification or listing
or to an exemption from registration, qualification or listing.

         ARTICLE 13. WITHHOLDING TAXES.

         13.1 General. To the extent required by applicable federal, state,
local or foreign law, a Participant or his or her successor shall make
arrangements satisfactory to the Company for the satisfaction of any withholding
tax obligations that arise in connection with the Plan. The Company shall not be
required to issue any Common Shares or make any cash payment under the Plan
until such obligations are satisfied.

         13.2 Share Withholding. The Committee may permit a Participant to
satisfy all or part of his or her withholding or income tax obligations by
having the Company withhold all or a portion of any Common Shares that otherwise
would be issued to him or her or by surrendering all or a portion of any Common
Shares that he or she previously acquired. Such Common Shares shall be valued at
their Fair Market Value on the date when taxes otherwise would be withheld in
cash.

         ARTICLE 14. FUTURE OF THE PLAN.

         14.1 Term of the Plan. The Plan, as set forth herein, shall become
effective as of the adoption date by the Board. The Plan shall remain in effect
until it is terminated under Section 14.2.

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<PAGE>

         14.2 Amendment or Termination. The Board may, at any time and for any
reason, amend or terminate the Plan. An amendment of the Plan shall be subject
to the approval of the Company's stockholders only to the extent required by
applicable laws, regulations or rules. No Awards shall be granted under the Plan
after the termination thereof. The termination of the Plan, or any amendment
thereof, shall not affect any Award previously granted under the Plan. The Board
amended the Plan on April June 30, 2000 to increase the number of shares
available under the Plan by 1,000,000 shares to a maximum of 2,000,000 shares
and on November 8, 2000 to increase the number of shares available under the
Plan by 1,500,000 shares to a maximum of 3,500,000 shares.

         ARTICLE 15. DEFINITIONS.

         15.1 "Affiliate" means any entity other than a Subsidiary, if the
Company and/or one or more Subsidiaries own not less than 50% of such entity.

         15.2 "Award" means any award of an Option or a Restricted Share under
the Plan.

         15.3 "Board" means the Company's Board of Directors, as constituted
from time to time.

         15.4 "Change in Control" shall mean:

                  (a) The consummation of a merger or consolidation of the
         Company with or into another entity or any other corporate
         reorganization, if more than 50% of the combined voting power of the
         continuing or surviving entity's securities outstanding immediately
         after such merger, consolidation or other reorganization is owned by
         persons who were not stockholders of the Company immediately prior to
         such merger, consolidation or other reorganization;

                  (b) The sale, transfer or other disposition of all or
         substantially all of the Company's assets;

                  (c) A change in the composition of the Board, as a result of
         which fewer than 50% of the incumbent directors are directors who
         either (i) had been directors of the Company on the date 24 months
         prior to the date of the event that may constitute a Change in Control
         (the "original directors") or (ii) were elected, or nominated for
         election, to the Board with the affirmative votes of at least a
         majority of the aggregate of the original directors who were still in
         office at the time of the election or nomination and the directors
         whose election or nomination was previously so approved; or

                  (d) Any transaction as a result of which any person is the
         "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
         directly or indirectly, of securities of the Company representing at
         least 50% of the total voting power represented by the Company's then
         outstanding voting securities. For purposes of this Paragraph (d), the
         term "person" shall have the same meaning as when used in sections
         13(d) and 14(d) of the Exchange Act but shall

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         exclude (i) a trustee or other fiduciary holding securities under an
         employee benefit plan of the Company or of a Parent or Subsidiary and
         (ii) a corporation owned directly or indirectly by the stockholders of
         the Company in substantially the same proportions as their ownership of
         the Common Shares of the Company.

A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.

         15.5 "Code" means the Internal Revenue Code of 1986, as amended.

         15.6 "Committee" means a committee of the Board, as described in
Article 2.

         15.7 "Common Share" means one share of the common stock of the Company.

         15.8 "Company" means Marimba, Inc., a Delaware corporation.

         15.9 "Consultant" means a consultant or adviser who provides bona fide
services to the Company, a Parent, a Subsidiary or an Affiliate as an
independent contractor. Service as a Consultant shall be considered employment
for all purposes of the Plan.

         15.10 "Employee" means a common-law employee of the Company, a Parent,
a Subsidiary or an Affiliate.

         15.11 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

         15.12 "Exercise Price" means the amount for which one Common Share may
be purchased upon exercise of such Option, as specified in the applicable Stock
Option Agreement.

         15.13 "Fair Market Value" means the market price of Common Shares,
determined by the Committee in good faith on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in the Wall Street Journal. Such determination
shall be conclusive and binding on all persons.

         15.14 "NSO" means a stock option not described in sections 422 or 423
of the Code.

         15.15 "Option" means an NSO granted under the Plan and entitling the
holder to purchase Common Shares.

         15.16 "Optionee" means a person or estate who holds an Option.

         15.17 "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date.

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<PAGE>

         15.18 "Participant" means a person or estate who holds an Award.

         15.19 "Plan" means this Marimba, Inc. 2000 Supplemental Stock Plan, as
amended from time to time.

         15.20 "Restricted Share" means a Common Share awarded under the Plan.

         15.21 "Restricted Stock Agreement" means the agreement between the
Company and the recipient of a Restricted Share which contains the terms,
conditions and restrictions pertaining to such Restricted Share.

         15.22 "Stock Option Agreement" means the agreement between the Company
and an Optionee that contains the terms, conditions and restrictions pertaining
to his or her Option.

         15.23 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.

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<PAGE>

                   Marimba, Inc. 2000 Supplemental Stock Plan

                          Notice of Stock Option Grant

                  You have been granted the following option to purchase
Common Stock of Marimba, Inc. (the "Company"):

                  Name of Optionee:

                  Total Number of Shares Granted:

                  Type of Option:                      Nonstatutory Stock Option

                  Exercise Price Per Share:

                  Date of Grant:

                  Vesting Commencement Date:

                  Vesting Schedule:

                  Expiration Date:

By your signature and the signature of the Company's representative below, you
and the Company agree that this option is granted under and governed by the
terms and conditions of the 2000 Supplemental Stock Plan (the "Plan") and the
Stock Option Agreement, both of which are attached to and made a part of this
document.

Optionee:                                       Marimba, Inc.

____________________________________            By:_____________________________

____________________________________            Title:__________________________
Print Name

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<PAGE>

                   Marimba, Inc. 2000 Supplemental Stock Plan

                             Stock Option Agreement

Tax Treatment      This option is intended to be a nonstatutory option, as
                   provided in the Notice of Stock Option Grant.

Vesting            This option becomes exercisable in installments, as shown in
                   the Notice of Stock Option Grant. In addition, this option
                   becomes exercisable in full if the Company is subject to a
                   "Change in Control" (as defined in the Plan) while you are an
                   employee or consultant of the Company or a subsidiary of the
                   Company, unless this option remains outstanding following the
                   "Change in Control," or is assumed by the surviving
                   corporation (or parent thereof) or substituted with an option
                   with substantially the same terms by the surviving
                   corporation (or parent thereof). The determination of whether
                   a substituted option has substantially the same terms as this
                   option shall be made by the Compensation Committee, and its
                   determination shall be final, binding and conclusive.

                   No additional shares become exercisable after your service as
                   an employee or consultant of the Company or a subsidiary of
                   the Company has terminated for any reason.

Term               This option expires in any event at the close of business at
                   Company headquarters on the day before the 10th anniversary
                   of the Date of Grant, as shown in the Notice of Stock Option
                   Grant. (It will expire earlier if your service terminates, as
                   described below.)

Regular            If your service as an employee or consultant of the Company
Termination        or a subsidiary of the Company terminates for any reason
                   except death or disability, then this option will expire at
                   the close of business at Company headquarters on the date
                   three months after your termination date. The Company
                   determines when your service terminates for this purpose.

Death              If you die as an employee or consultant of the Company or a
                   subsidiary of the Company, then this option will expire at
                   the close of business at Company headquarters on the date 12
                   months after the date of death.

Disability         If your service as an employee or consultant of the Company
                   or a subsidiary of the Company terminates because of your
                   disability, then this option will expire at the close of
                   business at Company headquarters on the date six months after
                   your termination date.

                   For all purposes under this Agreement, "disability" means
                   that you are

                                        2

<PAGE>

                     unable to engage in any substantial gainful activity by
                     reason of any medically determinable physical or mental
                     impairment.

Leaves of Absence    For purposes of this option, your service does not
                     terminate when you go on a military leave, a sick leave or
                     another bona fide leave of absence, if the leave was
                     approved by the Company in writing and if continued
                     crediting of service is required by the terms of the leave
                     or by applicable law. But your service terminates when the
                     approved leave ends, unless you immediately return to
                     active work. In addition, at the discretion of the Company,
                     the vesting and exercisability of your option may be
                     suspended during a leave of absence, in accordance with the
                     Company's general policies, which may be amended from time
                     to time.

Restrictions on      The Company will not permit you to exercise this option if
Exercise             the issuance of shares at that time would violate any law
                     or regulation.

Notice of Exercise   When you wish to exercise this option, you must notify the
                     Company by filing the proper "Notice of Exercise" form at
                     the address given on the form. Your notice must specify how
                     many shares you wish to purchase. Your notice must also
                     specify how your shares should be registered (in your name
                     only or in your and your spouse's names as community
                     property or as joint tenants with right of survivorship).
                     The notice will be effective when it is received by the
                     Company.

                     If someone else wants to exercise this option after your
                     death, that person must prove to the Company's satisfaction
                     that he or she is entitled to do so.

Form of Payment      When you submit your notice of exercise, you must include
                     payment of the option exercise price for the shares you are
                     purchasing. Payment may be made in one (or a combination of
                     two or more) of the following forms:

                     .  Your personal check, a cashier's check or a money order.

                     .  Certificates for shares of Company stock that you own,
                        along with any forms needed to effect a transfer of
                        those shares to the Company. The value of the shares,
                        determined as of the effective date of the option
                        exercise, will be applied to the option exercise price.
                        Instead of surrendering shares of Company stock, you may
                        attest to the ownership of those shares on a form
                        provided by the Company and have the same number of
                        shares subtracted from the option shares issued to you.
                        However, you may not surrender, or attest to the
                        ownership of, shares of Company stock in payment of the
                        exercise price if your action would cause the Company to
                        recognize compensation expense (or additional
                        compensation expense) with respect to this option for
                        financial reporting purposes.

                     .  Irrevocable directions to a securities broker approved
                        by the Company

                                        3

<PAGE>

                        to sell all or part of your option shares and to deliver
                        to the Company from the sale proceeds an amount
                        sufficient to pay the option exercise price and any
                        withholding taxes. (The balance of the sale proceeds, if
                        any, will be delivered to you.) The directions must be
                        given by signing a special "Notice of Exercise" form
                        provided by the Company.

                      . Irrevocable directions to a securities broker or lender
                        approved by the Company to pledge option shares as
                        security for a loan and to deliver to the Company from
                        the loan proceeds an amount sufficient to pay the option
                        exercise price and any withholding taxes. The directions
                        must be given by signing a special "Notice of Exercise"
                        form provided by the Company.

Withholding           You will not be allowed to exercise this option unless you
Taxes and Stock       make arrangements acceptable to the Company to pay any
Withholding           withholding taxes that may be due as a result of the
                      option exercise. These arrangements may include
                      withholding shares of Company stock that otherwise would
                      be issued to you when you exercise this option. The value
                      of these shares, determined as of the effective date of
                      the option exercise, will be applied to the withholding
                      taxes.

Restrictions on       By signing this Agreement, you agree not to sell any
Resale                option shares at a time when applicable laws, Company
                      policies or an agreement between the Company and its
                      underwriters prohibit a sale. This restriction will apply
                      as long as your option has not expired.

Transfer of           Prior to your death, only you may exercise this option.
Option                You cannot transfer or assign this option. For instance,
                      you may not sell this option or use it as security for a
                      loan. If you attempt to do any of these things, this
                      option will immediately become invalid. You may, however,
                      dispose of this option in your will or a beneficiary
                      designation.

                      Regardless of any marital property settlement agreement,
                      the Company is not obligated to honor a notice of exercise
                      from your former spouse, nor is the Company obligated to
                      recognize your former spouse's interest in your option in
                      any other way.

Retention Rights      Your option or this Agreement do not give you the right to
                      be retained by the Company or a subsidiary of the Company
                      in any capacity. The Company and its subsidiaries reserve
                      the right to terminate your service at any time, with or
                      without cause.

Stockholder           You, or your estate or heirs, have no rights as a
Rights                stockholder of the Company until you have exercised this
                      option by giving the required notice to the Company and
                      paying the exercise price. No adjustments are made for
                      dividends or other rights if the applicable record date
                      occurs before you exercise this option, except as
                      described in the Plan.

                                        4

<PAGE>

Adjustments           In the event of a stock split, a stock dividend or a
                      similar change in Company stock, the number of shares
                      covered by this option and the exercise price per share
                      may be adjusted pursuant to the Plan.

Applicable Law        This Agreement will be interpreted and enforced under the
                      laws of the State of Delaware (without regard to their
                      choice-of-law provisions).

The Plan and          The text of the Plan is incorporated in this Agreement by
Other Agreements      reference.

                      This Agreement and the Plan constitute the entire
                      understanding between you and the Company regarding this
                      option. Any prior agreements, commitments or negotiations
                      concerning this option are superseded. This Agreement may
                      be amended only by another written agreement, signed by
                      both parties.

      By signing the cover sheet of this Agreement, you agree to all of the
              terms and conditions described above and in the Plan.

                                        5

<PAGE>

                   MARIMBA, INC. 2000 SUPPLEMENTAL STOCK PLAN:

                        NOTICE OF RESTRICTED STOCK AWARD

                  You have been granted restricted shares of Common Stock of
Marimba, Inc. (the "Company") on the following terms:

                  Name of Recipient:

                  Total Number of Shares Granted:

                  Fair Market Value per Share:

                  Total Fair Market Value of Award:

                  Aggregate Purchase Price:

                  Date of Grant:

                  Vesting Commencement Date:

                  Date of Purchase:

                  Vesting Schedule:

By your signature and the signature of the Company's representative below, you
and the Company agree that these shares are granted under and governed by the
terms and conditions of the 2000 Supplemental Stock Plan (the "Plan") and the
Restricted Stock Agreement, both of which are attached to and made a part of
this document.

Recipient:                                Marimba, Inc.

______________________________            By:___________________________________

______________________________            Title:________________________________
Print Name

                                        1

<PAGE>

                   MARIMBA, INC. 2000 SUPPLEMENTAL STOCK PLAN:

                           RESTRICTED STOCK AGREEMENT

Payment for Shares    In accordance with the requirements of Delaware law, you
                      paid par value ($0.0001) per share for the shares you
                      received.

Vesting               The shares vest in installments, as shown in the Notice of
                      Restricted Stock Award. If the Company is subject to a
                      Change in Control (as defined in the Plan) while you are
                      providing service to the Company and if the Company's
                      right of repurchase (as described below) is not assigned
                      to the successor corporation or its parent or subsidiary,
                      then the right of repurchase will lapse entirely and you
                      will become vested in all of the shares.

                      No additional shares vest after your service as an
                      employee, consultant or director of the Company or a
                      subsidiary of the Company has terminated for any reason.

Shares Restricted     Unvested shares will be considered "Restricted Shares."
                      You may not sell, transfer, pledge or otherwise dispose of
                      any Restricted Shares, except as provided in the next
                      sentence. With the consent of the Compensation Committee
                      of the Company's Board of Directors, you may transfer
                      Restricted Shares to your spouse, children or
                      grandchildren or to a trust established by you for the
                      benefit of yourself or your spouse, children or
                      grandchildren. A transferee of Restricted Shares must
                      agree in writing on a form prescribed by the Company to be
                      bound by all provisions of this Agreement.

Right of              If your service as an employee, consultant or director of
Repurchase            the Company or a subsidiary of the Company terminates for
                      any reason while you are holding Restricted Shares, the
                      Company may buy those Restricted Shares back from you at
                      the purchase price you originally paid. If the Company
                      wishes to exercise its right to repurchase the Restricted
                      Shares, it must give you written notice within 60 days
                      after the termination of your employment. The Company
                      determines when your service terminates for this purpose.

                      If the Company exercises its right to repurchase your
                      Restricted Shares, you must deliver the appropriate number
                      of shares to the Company within 30 days after you receive
                      the Company's notice. The stock certificate(s) must be
                      fully endorsed or accompanied by a duly executed stock
                      transfer power. You will receive a check for the purchase
                      price you originally paid for the Restricted Shares. If
                      your Restricted Shares are not delivered as required, then
                      you will no longer have any rights with respect to the
                      Restricted Shares (including the

                                        1

<PAGE>

                      right to vote or transfer the shares) and the Restricted
                      Shares will be deemed to have been repurchased by the
                      Company.

                      The certificates for Restricted Shares will have stamped
                      on them a special legend referring to the Company's right
                      of repurchase. In addition or in lieu of the legend, the
                      certificates may be held in escrow by the Company. As your
                      vested percentage increases, you may request (at
                      reasonable intervals) that the Company release to you a
                      non-legended certificate for your vested shares.

Leaves of Absence     For purposes of this award, your service does not
                      terminate when you go on a military leave, a sick leave or
                      another bona fide leave of absence, if the leave was
                      approved by the Company in writing and if continued
                      crediting of service is required by the terms of the leave
                      or by applicable law. But your service terminates when the
                      approved leave ends, unless you immediately return to
                      active work. In addition, at the discretion of the
                      Company, the vesting of your shares may be suspended
                      during a leave of absence, in accordance with the
                      Company's general policies, which may be amended from time
                      to time.

Stock Certificates    Your Restricted Shares will be held for you by the
                      Company. After shares have vested, a stock certificate for
                      those shares will be released to you.

Voting Rights         You may vote your shares even before they vest.

Withholding Taxes     No stock certificates will be released to you unless you
                      have made acceptable arrangements to pay any withholding
                      taxes that may be due as a result of this award or the
                      vesting of the shares. These arrangements may include
                      withholding shares of Company stock that otherwise would
                      be released to you when they vest. These arrangements may
                      also include surrendering shares of Company stock that you
                      already own. The fair market value of the shares you
                      surrender, determined as of the date when taxes otherwise
                      would have been withheld in cash, will be applied as a
                      credit against the withholding taxes.

Restrictions on       By signing this Agreement, you agree not to sell any
Resale                shares at a time when applicable laws or Company policies
                      prohibit a sale. This restriction will apply as long as
                      you are an employee, consultant or director of the Company
                      or a subsidiary of the Company.

No Retention Rights   Neither your award nor this Agreement gives you the right
                      to be employed or retained by the Company or a subsidiary
                      of the Company in any capacity. The Company and its
                      subsidiaries reserve the right to terminate your service
                      at any time, with or without Cause.

Adjustments           In the event of a stock split, a stock dividend or a
                      similar change in Company stock, the number of Restricted
                      Shares that remain subject to

                                        2

<PAGE>

                      repurchase will be adjusted accordingly.

Applicable Law        This Agreement will be interpreted and enforced under the
                      laws of the State of Delaware (without regard to their
                      choice-of-law provisions).

The Plan and Other    The text of the 2000 Supplemental Stock Plan is
Agreements            incorporated in this Agreement by reference.

                      This Agreement and the Plan constitute the entire
                      understanding between you and the Company regarding this
                      award. Any prior agreements, commitments or negotiations
                      concerning this award are superseded. This Agreement may
                      be amended only by another written agreement, signed by
                      both parties.

      By signing the cover sheet of this Agreement, you agree to all of the
              terms and conditions described above and in the Plan.

                                        3

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