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EXHIBIT
10.1
SEVERANCE &
RELEASE AGREEMENT
This Severance Agreement and
Release (“Agreement”) is made by and between Openwave
Systems Inc. (the “Company”), and Harold L.
Covert (“Employee”).
WHEREAS, Employee has been
employed by the Company since September 12, 2005, most
recently in the position of Chief Financial Officer;
WHEREAS, the Company and
Employee have entered into a Confidential Information and Invention
Assignment Agreement (the “Confidentiality Agreement”)
dated October 20, 2005, which is incorporated herein by
reference;
WHEREAS, the Company and
Employee have entered into a Change of Control Severance Agreement
(the “CoC Agreement”) dated December 19, 2006,
which is incorporated herein by reference;
NOW THEREFORE, in
consideration of the mutual promises made herein, the Company and
Employee (collectively referred to as “the Parties”)
hereby agree as follows:
A. Last Date Worked .
Employee’s last date worked for the Company shall be
August 3, 2007 (“Last Date Worked”). Employee
shall not be required to work beyond the Last Date Worked, except
to the extent necessary to complete the orderly transition of his
duties.
B. Final Date of
Employment . Employee’s employment with the Company will
end on August 15, 2007, or earlier as permitted herein (the
actual end date of employment is referred to herein as the
“Final Date of Employment”).
C. Transition Period .
From the date of this Agreement through August 2, 2007,
Employee shall continue to perform his duties as assigned and
consistent with his role as Chief Financial Officer in a
professional and competent manner. From August 2, 2007 to the
Final Date of Employment, Employee shall assist in the transition
of duties to the Chief Financial Officer in a professional and
competent manner. From the date of this Agreement through the Final
Date of Employment, the Employee’s employment is and shall
continue to be at will, as defined under applicable law.
D. Consideration .
Provided Employee’s employment with the Company does not
terminate prior to August 15, 2007, for any of the reasons set
forth in Section 3(b) of the CoC Agreement and has complied
with Paragraph F below, the Company agrees to provide Employee with
the following severance benefits in lieu of any other severance pay
and/or benefits to which he would otherwise be entitled under any
Company plan or policy concerning such benefits:
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1. |
As soon as practicable, but no later than March 15 of the
calendar year following the Final Date of Employment, the Company
shall pay to Employee severance compensation in the form of a lump
sum payment equal to $700,000, which consists of one year’s
base salary plus target CIP bonus; customary payroll taxes and
income tax withholding will be deducted from this lump sum payment;
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2. |
On the Final Date of Employment the Company shall waive the
Company’s right to repurchase Employee’s restricted
stock awards as follows: |
a. Grant No. 017247
granted on September 12, 2005 as to zero (0) shares. For
the avoidance of doubt, 25,000 shares shall vest on August 15,
2007, and the Company shall exercise its right to repurchase the
remaining 50,000 shares from this grant.
b. Grant No. 018136
granted on September 22, 2006 as to 4,723 shares.
All other stock options,
restricted stock or other compensatory stock awards held by
Employee that remain outstanding as of the Final Date of Employment
(including, for avoidance of doubt, options, restricted stock or
other awards issued after the effective date of the CoC Agreement)
shall remain outstanding for a period of two (2) months
following such Final Date of Employment, and, in the event that a
Change of Control (as defined in the CoC Agreement) occurs during
such two (2) month period, then: (i) all such stock
options, restricted stock or other compensatory stock awards shall
be subject to Section 3(a) of the CoC Agreement and
(ii) Employee’s entitlement to exercise vested stock
options following the termination of employment shall continue to
be governed by the terms of the applicable Stock Option and
Restricted Stock Agreements and Plans provided, however, that the
date on which the Change of Control occurs shall be treated as the
date of Employee’s termination of employment with the
Company; and
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3. |
to provide Employee and his/her eligible dependents, at
Company’s expense (on an after-tax basis to Employee, and
after Employee’s contribution of his share of the applicable
premiums as described in subsection 1), with medical, dental, and
vision insurance benefit coverage in coordination with COBRA for a
period of twelve (12) months, provided Employee executes
and timely returns all necessary COBRA election
documentation which will be sent to Employee after the
Final Date of Employment; thereafter, if Employee wishes to
continue such COBRA coverage, Employee will be required to pay all
requisite premiums for such continued coverage. |
E. Change of Control .
Employee agrees that in the event that a Change of Control (as
defined in the CoC Agreement) occurs within two months following
Employee’s Final Date of Employment and, as a result,
Employee otherwise would become entitled to benefits under the CoC
Agreement: (1) Employee’s entitlement to such benefits
shall be conditioned upon Employee’s execution of Exhibit A
and Exhibit A becoming effective and (2) the severance pay and
other benefits under the CoC Agreement shall be reduced by the
severance pay and other benefits provided to Employee pursuant to
Paragraph D above.
F. Confidential
Information and Company Property . Employee shall maintain the
confidentiality of the terms of this Agreement and shall continue
to maintain all confidential and proprietary information of the
Company and shall continue to comply with the terms and conditions
of the Confidentiality Agreement at all times during and after his
employment with the Company. Employee shall return, in good working
condition, all Company property and confidential and proprietary
information in his possession to the Company on or before the Final
Date of Employment.
2
G. Expense Reports .
Company agrees that it will pay all reasonable expenses incurred by
Employee as part of his employment consistent with the provisions
of Company’s Travel and Expense reimbursement policy.
Employee agrees that he shall submit all expense reports to Company
no later than sixty (60) days following the Final Date of
Employment.
H. Release of Claims .
In exchange for the consideration described in Paragraph D above,
Employee, on behalf of himself, and his heirs, family members,
executors, administrators and affiliates, and assigns, hereby fully
and forever releases the Company and its officers, directors,
employees, investors, stockholders, administrators, affiliates,
divisions, subsidiaries, predecessor and successor corporations,
insurers, and assigns, from, any claim, duty, obligation or cause
of action relating to any matters of any kind, whether presently
known or unknown, suspected or unsuspected, arising from any
omissions, acts or facts that have occurred up until and including
the date on which this Agreement is signed by Employee including,
without limitation,
1. any and all claims
relating to or arising from Employee’s employment
relationship with the Company or the termination of that
relationship;
2. any and all claims
relating to, or arising from, Employee’s right to purchase,
or actual purchase of shares of stock of the Company, including,
without limitation, any claims for fraud, misrepresentation, breach
of fiduciary duty, breach of duty under applicable state corporate
law, and securities fraud under any state or federal
law;
3. any and all claims for
wrongful discharge of employment; termination in violation of
public policy; discrimination; breach of contract, both express and
implied; breach of a covenant of good faith and fair dealing, both
express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; fraud; negligent or intentional
misrepresentation; negligent or intentional interference with
contract or prospective economic advantage
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