Exhibit 10.1
 
SEVERANCE AGREEMENT
AND
GENERAL RELEASE OF ALL CLAIMS
 
1.
 
This Agreement is made between Michael Regan (“Employee”) and Portal Software,
Inc., on behalf of itself and its subsidiaries, owners, agents, employees and
any persons related to or acting on behalf of the Company (hereinafter generally
referred to as “Portal”).

 
2.
 
It is recognized herein that Employee’s employment with Portal has terminated or
will terminate effective October 31, 2002 (the “Termination Date”), and that
Portal wishes to provide certain separation benefits to Employee to aid in
Employee’s transition to other employment in exchange for this release.

 
3.
 
Portal shall pay Employee the lump sum in an amount equal to twelve (12) months
of his base salary in two installments: the first installment shall be in an
amount equal to six (6) months of base salary and shall be paid within ten days
of the Effective Date of this Agreement (as hereinafter defined); the second
installment shall be in an amount equal to six (6) months of base salary and
shall be paid three (3) months from the Effective Date.

 
4.
 
Portal shall pay for Employee’s COBRA benefits for twelve (12) months following
the Termination Date (“Extended COBRA Coverage Period”), provided that Employee
completes the necessary election forms to elect COBRA coverage.

 
5.
 
Employee shall return promptly return all Portal property provided to Employee
or in Employee’s possession or control. In the event Employee fails to return
Portal property in accordance with the terms of this Agreement and the
Nondisclosure Agreement, Portal shall have the right to offset against payments
or benefits owing to Employee hereunder the replacement value of any and all
such unreturned property.

 
6.
 
All required and authorized payroll deductions will be withheld from the amounts
to be paid to Employee under this Agreement. Employee’s ability to exercise
Employee’s vested options following the Termination Date shall be governed by
the provisions of Employee’s stock option agreements and the provisions of the
stock option plans pursuant to which such options were originally granted with
the following exception: the period of time following termination of employment
during which Employee may elect to exercise his Eligible Stock Options is
extended from ninety (90) days to one (1) year. “Eligible Stock Options” means
the employee stock options granted to Employee to the extent vested but not
purchased (i.e., exercised) by Employee, as of the Termination Date that have a
per share exercise price greater than the per share closing market price of
Portal common stock on the Effective Date of this Agreement. As of the
Termination Date, Employee will be entitled to receive a refund of any accrued
but unused Employee Stock Purchase Plan (ESPP) contributions. Employee

1

--------------------------------------------------------------------------------

 
may elect optional health insurance continuation under COBRA following the
Extended COBRA Coverage Period at Employee’s expense.

 
7.
 
Employee will be paid for all accrued but unused vacation.

 
8.
 
All unreimbursed travel and business expenses to which Employee is entitled to
reimbursement as of the Termination Date will be promptly paid to Employee after
submission of expense reports in accordance with standard Portal policy.

 
9.
 
Employee and Portal desire to settle fully and finally any existing or potential
differences between them including, without limitation, all tort, contractual,
discrimination, statutory and common law claims related in any way to Employee’s
employment and/or the termination of employment with Portal.

 
10.
 
In exchange for the above promises and agreements, including Portal’s retention
of Employee as an employee until the Termination Date, Employee personally and
for Employee’s heirs, legal representatives, estates and successors in interest
does hereby completely release and forever discharge Portal, its officers,
directors, agents, employees, attorneys, successors and assigns (collectively,
“Released Parties”) from any and all claims, rights, demands, actions,
obligations, liabilities, and causes of action of any and every kind, nature and
character whatsoever, whether known or unknown, whether based on a tort,
contract, statute, or any other theory of recovery, and whether for compensatory
or punitive damages which Employee may now have, has ever had, or may in the
future have, arising or in any way connected with Employee’s employment with
Portal, or the manner in which that employment terminated, including without
limitation all wrongful discharge actions; all actions arising under the
Americans with Disabilities Act, the Age Discrimination in Employment Act (if
applicable), Title VII of the Civil Rights Act of 1991, California Fair
Employment and Housing Act, or any other federal or state statute which may be
held applicable; all actions for breach of contract or the covenant of good
faith and fair dealing; all tort claims; and any and all claims for
compensation, wages, bonuses, severance pay, commissions, vacation pay, or
reimbursement for expenses, attorneys’ fees and costs, except for claims for
workers’ compensation insurance benefits under the terms of any workers’
compensation insurance policy or fund, unemployment or any unemployment or state
disability insurance benefits pursuant to the terms of applicable state law, and
continued participation in certain of the Company’s group benefit plans pursuant
to the federal law known as COBRA.

 
11.
 
Employee understands and hereby agrees that by signing this Agreement and by
accepting the payment described above, Employee gives up any and all rights
Employee may have to file any claim or action which Employee may now have, has
ever had, or may in the future have, with respect to any matter pertaining to or
arising from Employee’s employment or termination of employment with Portal. In
addition, Employee hereby waives any and all rights or benefits which Employee
may have under the terms of section 1542 of the California Civil Code, which
section is set forth as follows:

 
Section 1542:    A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of executing
 

Severance Agreement                                       
                             Page 2 of 5

--------------------------------------------------------------------------------

 
the release, which if known by him must have materially affected his settlement
with debtor.

 
12.
 
Employee represents that Employee does not have pending against Portal or any
employee, agent, official, or director of Portal any claim, charge, or action in
or within any federal, state, or local court or administrative agency. Employee
agrees, to the extent necessary to effectuate the provisions of this Agreement,
within ten (10) days after the execution of this Agreement, to cause to be
dismissed, withdrawn or discontinued all complaints or proceedings instituted by
Employee against Portal with any state or federal administrative agency or
judicial body, with copies of relevant documents delivered to Portal within the
same time period. Employee also agrees not to initiate, assist, support, join,
participate in, encourage, or actively cooperate in the pursuit of any
employment-related legal claims against Portal or its employees or agents,
whether the claims are brought on Employee’s own behalf or on behalf of any
other person or entity. Nothing in this Section 12 will preclude Employee from
testifying truthfully in any legal proceeding pursuant to subpoena or other
legal process.

 
13.
 
It is understood and agreed that this is a compromise settlement of a disputed
claim or potential disputed claims, and that the furnishing of the consideration
for this Severance Agreement and General Release of All Claims shall not be
deemed or construed as an admission of any wrongdoing, deficiency, liability or
responsibility at any time for any purpose.

 
14.
 
Employee agrees to hereby waive any alleged right to employment or re-employment
with Portal.

 
15.
 
Employee understands and acknowledges Employee’s continuing obligations to
Portal under the Proprietary Information and Inventions Agreement (or any
similar predecessor agreement) previously executed by Employee (“Nondisclosure
Agreement”). Further, Employee agrees that for a period of twelve (12) months
from the Termination Date, Employee will not directly or indirectly, either for
Employee or for any other person or business entity: (a) solicit or encourage
any employee of Portal (whether through recruiting, interviewing participating
in the extension of an employment offer or any other means) to either: (i)
terminate his or her employment with Portal, or (ii) accept employment with any
subsequent employer with whom Employee is affiliated or associated in any way.
In the event of any breach by Employee of this Paragraph 15, Portal shall
immediately cease making any payments or providing any benefits to Employee
under this Agreement and the waivers and release that Employee agreed to in this
Agreement shall remain in full force and effect at all times in the future.

 
16.
 
Employee and Portal both agree that now and forever they will keep the terms and
monetary severance amount of the Agreement completely confidential, and that
they will not disclose such to any other person or indirectly. As an exception
to the foregoing, and the only exception, the parties may disclose the terms and
monetary amount of this Agreement to their attorneys, tax advisors, accountants
and immediate family members (defined as and limited to parents, spouse,
siblings and children) who shall be advised of its confidentiality.
Notwithstanding the foregoing, the parties may make such disclosures of the
terms and

Severance Agreement                                       
                             Page 3 of 5

--------------------------------------------------------------------------------

 
monetary amount of the Agreement as are required by law or as necessary for
legitimate enforcement or compliance purposes.

 
17.
 
Employee further agrees that Employee shall not disparage Portal Software, Inc.
or its affiliated companies, or their products, owners, agents, employees,
attorneys, and any persons related to or acting on behalf of Portal. Employee
shall be responsible and liable for any damages caused by any such
disparagement. If any prospective employer of Employee makes a request to Portal
for a reference concerning Employee, Portal will respond to the request by
providing only the dates of Employee’s employment and the position(s) held.

 
18.
 
The parties agree that any dispute of any kind whatsoever arising from the
subject matter of this Agreement, including claims regarding this Agreement,
shall be resolved under the following procedures:

 

 
a.
 
The party claiming to be aggrieved shall furnish to the other party, within
thirty (30) days of the disputed action, a written statement of the grievance
identifying any witnesses or documents that support the grievance and the relief
requested or proposed. Employee is required to furnish the written statement of
grievance to Portal’s General Counsel, 10200 South De Anza Boulevard, Cupertino,
CA 95014.

 

 
b.
 
If the grievance is denied, the parties agree that the dispute shall be resolved
by final and binding arbitration. A single arbitrator shall be mutually selected
by the parties. If no agreement on the selection is reached within fifteen (15)
days, then a neutral arbitrator shall be selected under the Expedited Labor
Arbitration Rules of the American Arbitration Association, except that the
arbitrator shall be selected by alternately striking names from the panel of
five (5) neutral labor or employment arbitrators designated by the American
Arbitration Association. The arbitrator shall have the authority to grant the
requested relief if authorized by law; provided, however, that nothing herein
shall limit the right of Portal to obtain injunctive relief to prevent a
violation of the Nondisclosure Agreement.

 

 
c.
 
Arbitration shall be the exclusive and final remedy for any dispute between the
parties, and the parties agree that no dispute shall be submitted to arbitration
where the party claiming to be aggrieved has not complied with the preliminary
steps provided for above.

 
19.
 
Each party agrees and assumes the risk that any fact with respect to any matter
covered in this Agreement may hereafter be found to be other than or different
from the facts it believes at the time of this Agreement to be true, and agrees
that this Agreement shall be and will remain effective notwithstanding any such
difference in fact. Should any provision of this Agreement be declared or be
determined by any court to be illegal or invalid, the validity of the remaining
parts or provisions shall not be effected thereby and said illegal or invalid
part, term or provision(s) shall be deemed not to be a part of this Agreement.

 
20.
 
This Severance Agreement and General Release of All Claims incorporates the
entire understanding among the parties, and recites the sole consideration for
the promises exchanged herein and supersedes and cancels any prior or
contemporaneous written or oral

Severance Agreement                                       
                             Page 4 of 5

--------------------------------------------------------------------------------

agreements. In reaching this Agreement, no party has relied upon any
representation or promise except those expressly set forth herein. This
Agreement shall in all cases be interpreted in accordance with its fair meaning,
and not strictly for or against either party hereto. This Agreement will be
governed by and construed in accordance with California law.
 
21.
 
Employee understands and agrees that Employee:

 

 
a.
 
Has carefully read and fully understands all of the provisions of this
Agreement;

 

 
b.
 
Is, through this Agreement, releasing Portal from any and all claims Employee
may have against the company;

 

 
c.
 
Knowingly and voluntarily agrees to all of the terms set forth in this
Agreement;

 

 
d.
 
Knowingly and voluntarily intends to be legally bound by the same.

 
22.
 
Acknowledgment of Waiver of Claims Under ADEA.    Employee acknowledges that
Employee is waiving and releasing any rights Employee may have under the Age
Discrimination in Employment Act of 1967, as amended. Employee further
acknowledges that:

 

 
a.
 
Employee may have, and has had at least twenty-one (21) days after receipt of
this Agreement within which Employee may review and consider, discuss with an
attorney of Employee’s own choosing, and decide to execute or not execute this
Agreement;

 

 
b.
 
Employee has seven (7) days after the execution of this Agreement within which
Employee may revoke this Agreement;

 

 
c.
 
In order to revoke this Agreement, Employee must deliver to Portal’s general
counsel on or before seven (7) days after the execution of this Agreement, a
letter stating that Employee is revoking this Agreement; and

 

 
d.
 
That this Agreement shall not become effective or enforceable until after the
expiration of seven (7) days following the date Employee executes this Agreement
(the “Effective Date”).

 
Dated:                                    
                                                                           
     
                                                                              
                                               
           
Michael Regan
       
Address:                                    
                                                                       
       
                                                                              
                                               
       
PORTAL SOFTWARE, INC.
Dated:                                    
                                                                           
     
By:                                     
                                                                               
 
       
Name:                                    
                                                                           
       
Title:                                    
                                                                             

 
Severence Agreement

Page 5 of 5