Exhibit 10.1

 

1400 Seaport Boulevard

   LOGO [g12670image002.jpg]

Redwood City

  

California 94063

  

U.S.A.

  

main   +1 650 562 0200

  

fax      +1 650 817 1499

  

www.openwave.com

  

 

October 4, 2004

 

Mr. Steve Peters

c/o Openwave Systems Inc.

1400 Seaport Boulevard

Redwood City, CA 94063

 

Re: Amended and Restated Employment Terms

 

Dear Steve:

 

This letter sets forth the terms of your employment at Openwave Systems Inc.
(the “Company”). This letter supersedes all prior agreements relating to the
terms of your employment, except for the Change of Control Severance Agreement
dated April 28, 2003, between you and the Company (the “Change of Control
Agreement”) and the Confidentiality and Invention Assignment Agreement dated
April 24, 2003 between you and the Company (the “Confidentiality and Invention
Assignment Agreement”). The terms set forth below are effective as of October 1,
2004, except as otherwise set forth below.

 

1. Title and Cash Compensation.

 

Your title will be Executive Vice President and Chief Administrative Officer.
You will continue to report to me in my capacity as President and CEO. Effective
October 1 2004, your monthly base salary will be $25,000 per month or $300,000
on an annualized basis. In addition, for the fourth calendar quarter of 2004,
you shall be eligible for a cash award from the Company under the Company’s
Variable Pay Plan (“VPP”), based upon a target for such quarter which shall be
fifteen (15%) of your annual base salary (ie., $45,000). Your actual incentive
cash award for this quarter may be below, at, or above target, and shall be
determined based upon a combination of (a) the Company’s achievement level
against the financial and performance objectives and (b) an individual modifier
component based upon your individual performance as determined by the
Compensation Committee of the Board of Directors (the “Compensation Committee”)
in consultation with the CEO. Your maximum quarterly incentive cash award shall
not exceed one hundred fifty percent (150%) of your target quarterly incentive.

 

Commencing January 1, 2005, you shall be eligible for a semi-annual incentive
cash award from the Company under the VPP or alternatively the Company’s
Corporate Incentive Plan for Executives (“CIP”), based upon a target for each
semi-annual period which shall be thirty percent (30%) of your annual base
salary ($90,000 for each semi-annual period based upon your current base
salary). Your actual annual incentive cash award for each such semi-annual
period may be below, at, or above target and shall be determined based upon a
combination of (a) the Company’s achievement level against financial and
performance objectives and (b) an individual modifier component based upon your
individual performance as determined by the Compensation Committee in
consultation with the CEO. The Company and you agree that the incentive cash
awards shall be determined under the VPP until such time as the CIP is in effect
and is designed to be fully funded if the Company meets the CIP performance
targets, at which point your incentive cash awards will be determined by the
CIP. Regardless, you are only eligible for payments under either the VPP or CIP
for any given period, and not both, and the maximum possible payout to you under
the VPP and the CIP, as applicable, for each six-month period is one hundred
fifty percent (150%) of the target incentive cash for each such period. The
terms of the VPP or CIP, as applicable, including the financial and performance
objectives for the Company shall be established by the Compensation Committee in
consultation with the CEO.

 

2. Equity Awards.

 

Subject to approval of the Compensation Committee, you will receive (a) an
option to purchase two hundred thousand (200,000) shares of Company common stock
(the “Option”) and (b) a restricted stock award of one hundred sixty thousand
(160,000) shares of Company common stock (the “Restricted Stock Award”). The
Option shall have an exercise price equal to fair market value on the date of
grant and shall vest in equal monthly installments over a three-year period
commencing from August 30, 2004. The Restricted Stock Award shall vest over four
years in four equal installments of forty thousand (40,000) shares each on the
first four anniversaries after August 30, 2004. All vesting for the Option and

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the Restricted Stock Award shall be contingent upon your continued employment at
the Company on the applicable vesting date. Except as otherwise expressly set
forth in this letter agreement, the Restricted Stock Award will be granted under
and subject to the terms of the Company’s standard form of restricted stock
award agreement.

 

You should be aware that you will incur federal and state income taxes as a
result of your receipt or the vesting of the Restricted Stock Award, with the
timing of such income contingent upon whether you timely make an election under
Section 83(b) of the Internal Revenue Code of 1986, as amended (an “83(b)
election”). It is entirely your choice whether you make an 83(b) election and
you should consult with your own tax and financial advisors in that regard. The
Company will not provide you with any assistance in paying your taxes on the
Restricted Stock Award, regardless of whether or not you make an 83(b) election.

 

In addition, if you are terminated without Cause (as defined in Exhibit A) the
next forty thousand (40,000) shares under the Restricted Stock Award due to vest
within the next twelve (12) months, if any such shares remain unvested, shall
accelerate and vest automatically upon termination of your employment.

 

You also will not be eligible for a stock option award in connection with the
Company’s 2004 executive option program.

 

3. Other Benefits.

 

You will continue to be entitled to any benefits applicable to you under the
Company’s Executive Severance Policy, as in effect at the applicable time. As an
employee, you also will continue to be eligible to receive our standard employee
benefits except to the extent that this letter agreement provides you with more
valuable benefits than the Company’s standard policies.

 

4. Additional Terms.

 

You should be aware that your employment with the Company is for no specified
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, subject to the severance obligations under or referred to in this letter.

 

In consideration of the foregoing, you hereby reconfirm your obligations under
the Confidentiality and Invention Assignment Agreement.

 

Please review these terms to make sure they are consistent with your
understanding. If so, please send the original signed offer letter in the
provided envelope to Susan Gonzalez no later than two days after your receipt of
this letter.

 

/s/ DON LISTWIN

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Don Listwin

President and CEO

Accepted by:

/s/ STEVE PETERS

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Steve Peters

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EXHIBIT A

 

“Cause” shall mean (i) negligence or misconduct in the performance of your
duties to the Company; (ii) repeated unexplained or unjustified absences from
the Company; (iii) a material and willful violation of any federal or state law
which if made public would injure the business or reputation of the Company as
reasonably determined by the Board of Directors of the Company; (iv) refusal or
willful failure to act in accordance with any specific lawful direction or order
of the Company or stated written policy of the Company; (v) unsatisfactory
performance after prior notice and a reasonable opportunity to cure the
unsatisfactory performance in accordance with the Company’s policies, (vi)
commission of any act of fraud with respect to the Company; or (vii) conviction
of a felony or a crime involving moral turpitude causing material harm to the
standing and reputation of the Company, in each case as reasonably determined by
the Board of Directors of the Company.