Exhibit 10.23
OPENWAVE SYSTEMS INC.
FORM OF CHANGE CONTROL SEVERANCE
AGREEMENT
This Change of Control Severance
Agreement (the “Agreement”) is made and entered into by
and between
(the “Employee”) and Openwave Systems Inc., a Delaware
corporation (the “Company”), effective as of
, 2008 (the “Effective Date”).
RECITALS
It is expected that the Company from
time to time will consider the possibility of an acquisition by
another company or other change of control. The Board of Directors
of the Company (the “Board”) recognizes that such
consideration can be a distraction to the Employee and can cause
the Employee to consider alternative employment opportunities. The
Board has determined that it is in the best interests of the
Company and its shareholders to ensure that the Company will have
the continued dedication and objectivity of the Employee,
notwithstanding the possibility, threat or occurrence of a Change
of Control (as defined below) of the Company.
The Board believes that it is in the
best interests of the Company and its shareholders to provide the
Employee with an incentive to continue his or her employment and to
motivate the Employee to maximize the value of the Company upon a
Change of Control for the benefit of its shareholders.
The Board believes that it is
imperative to provide the Employee with certain benefits upon the
Employee’s termination of employment following a Change of
Control that provide the Employee with enhanced financial security
and incentive and encouragement to the Employee to remain with the
Company notwithstanding the possibility of a Change of
Control.
The Board has approved this
Agreement and wishes to replace any existing individual agreements
or arrangements with the Employee entered into prior to the
Effective Date and that relate to severance payments or vesting
acceleration with respect to options, restricted stock or other
compensatory stock-based awards upon a change of control of the
ownership of the Company, with this Agreement which is now the
Company’s standard form of agreement with its officers with
respect to this subject matter.
The benefits which are provided by
virtue of this Agreement are in consideration of the
Employee’s future execution of an agreement to certain terms,
including a release of all claims against the Company and related
parties that releases the Company and such parties from any claims
whatsoever arising from or related to the Employee’s
employment relationship with the Company substantially in the form
attached hereto Exhibit A of this Agreement (the “Separation
and Mutual Release Agreement).
Certain capitalized terms used in
the Agreement are defined in Section 6 below.
The parties hereto agree as
follows:
TERM OF AGREEMENT. This Agreement
became effective on the Effective Date and shall terminate only
upon the date that all obligations of the parties hereto with
respect to this Agreement have been satisfied. Except as otherwise
expressly provided in Section 3(a) below, this Agreement
supersedes and replaces any individual agreements or arrangements,
or any relevant portions thereof, between the Company or any of its
subsidiaries and the Employee entered into prior to the Effective
Date that relate to (1) any severance payments or benefits,
(2) any other payments or benefits, or (3) any vesting
acceleration, lapse of restrictions or other amendment with respect
to options or restricted stock of the Company, in each case related
to a change of control of the ownership of the Company (however
defined in any such agreements or arrangements). Any such
individual agreements or arrangements, or any relevant portions
thereof addressing this subject matter (whether in the form of
offer letters, employment
agreements, change of control agreements,
severance agreements, transition agreements, severance policies or
plans, or otherwise) are hereby terminated and shall no longer have
any force or effect.
AT-WILL EMPLOYMENT. The Company and
the Employee acknowledge that this Agreement does not change the
“at-will” status of Employee’s employment with
the Company, as defined under applicable law. If the
Employee’s employment terminates for any reason not in
connection with a Change of Control, the Employee shall not be
entitled to any benefits, damages, awards or compensation under
Section 3 of this Agreement but may be entitled to payments or
benefits in accordance with the Company’s other established
employee plans and practices or pursuant to other agreements with
the Company.
SEVERANCE AND OTHER
BENEFITS.
Termination in Connection with a
Change of Control. If the Employee’s employment terminates as
a result of Involuntary Termination at any time during the period
commencing two (2) months prior to a Change of Control and
ending eighteen (18) months following a Change of Control,
then immediately after the later of (i) five (5) business
days after the Employee’s last date of employment with the
Company and (ii) seven (7) calendar days after the
execution and delivery of the Mutual Separation and Release
Agreement, 100% of the unvested portion of any stock option,
restricted stock or any other compensatory stock award granted to
the Employee by the Company and then held by the Employee (except
for any stock option, restricted stock or other compensatory stock
award which by the express terms of the grant or by express
designation by the Board are expressly excluded from the effect of
this Agreement) shall automatically be accelerated in full so as to
become immediately and completely vested and no longer subject to
any contractual restrictions.
In addition to such vesting
acceleration, on the date that such acceleration occurs, the
Employee shall receive the following payments and benefits;
provided, however, that it is the intention of the parties that the
payments described in Section 3(a)(i) shall be made not later
than March 15 of the calendar year after the Involuntary
Termination occurs, and, if not made by such date, because of the
Employee’s failure to deliver an effective release of claims
to the Company on or before March 8, the Employee shall be
subject to the six-month delay described in Section 8(f) if
applicable:
(i) A lump sum cash payment equal to
the Employee’s then current annual base salary and target
annual bonus multiplied by the factor specified below (without
taking into account any reduction in base salary which could
trigger an Involuntary Termination), less applicable withholding
taxes or other withholding obligations of the Company. The factor
to be applied to the lump sum payment above shall be two
(2) if the Employee is the Chief Executive Officer, one and
one-half (1.5) if the Employee is the General Counsel or a
member of E-Staff, and one (1) in all other cases; in each
case measured as of the date of the event constituting or giving
rise to the occurrence of an Involuntary Termination. For example,
if the Employee is a member of E-Staff, then the lump sum cash
payment shall be equal to one and one-half times the amount equal
to the Employee’s annual base salary plus target annual
bonus.
(ii) At the Company’s expense,
the Company will continue to provide Employee, and eligible
dependents or other qualified beneficiaries of Employee, with
medical, dental and vision insurance benefit coverage in
coordination with the provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”) eighteen
(18) months if the Employee is the Chief Executive Officer,
the General Counsel or a member of E-Staff, and twelve
(12) months in all other cases, provided that the Employee
completes and timely files all necessary COBRA election
documentation which will be sent to Employee after the last day of
employment. After the periods specified in this
Section 3(a)(ii), if Employee wishes to continue such COBRA
coverage, Employee will be required to pay all requisite premiums
for such continued coverage.
Voluntary Resignation; Termination
For Cause. If the Employee’s employment terminates by reason
of the Employee’s voluntary resignation (which is not an
Involuntary
Termination) or if the Employee is terminated
for Cause, then the Employee shall not be entitled to receive any
benefits under this Agreement, but may be entitled to benefits and
other rights (if any) as may then be established under the terms of
the Company’s other then-existing severance and benefits
plans and programs or pursuant to other agreements with the
Company.
Disability; Death. If the Company
terminates the Employee’s employment as a result of the
Employee’s Disability, or such Employee’s employment is
terminated due to the death of the Employee, then the Employee
shall not be entitled to receive any benefits under this Agreement,
but may be entitled to benefits and other rights (if any) as may
then be established under the Company’s other then-existing
severance and benefits plans and programs or pursuant to other
agreements with the Company.
Termination Not in Connection With a
Change of Control. In the event the Employee’s employment
terminates not in connection with a Change of Control, for any
reason or no reason, whether on account of Disability, death, or
otherwise, either prior to the period commencing two
(2) months before the occurrence of a Change of Control or
after the eighteen (18) month period following a Change of
Control, then the Employee shall not be entitled to receive
severance and any other benefits under this Agreement, but only as
may then be established under the Company’s other
then-existing severance and benefits plans and programs or pursuant
to other agreements with the Company.
Mitigation. The Employee shall not
be required to mitigate damages or the amount of any payment or
benefit provided under this Agreement by seeking other employment
or otherwise, nor shall the amount of any payment provided for
under this Agreement be reduced by any compensation earned by the
Employee as a result of employment by another employer or by any
retirement benefits received by the Employee after the date of the
termination of employment, or otherwise.
ATTORNEY FEES, COSTS
AND EXPENSES. The Company shall promptly reimburse the Employee, on
a monthly basis, for one-half ( 1 / 2 ) of the reasonable
attorney fees, costs and expenses (collectively “Fees”)
incurred by the Employee in connection with any action brought by
the Employee to enforce his or her rights hereunder. In the event
the Employee is the prevailing party, the Company shall reimburse
the Employee for any Fees incurred by the Employee not previously
reimbursed by the Company. However, if the Employee is not the
prevailing party, the Employee shall immediately repay to the
Company all previously paid reimbursements. The prevailing party
shall be determined based upon the applicable court’s or
arbitrator’s determination of which party prevailed on the
major contested issues, with reference to the amount awarded or
agreed to and without regard to whether or not the action resulted
in a final judgment or was settled.
TAX MATTERS. In the event that any
severance and other payments and benefits provided for in this
Agreement or otherwise payable to the Employee (i) constitute
“parachute payments” within the meaning of
Section
