EX-10.38



 





Exhibit 10.38




AFFIDAVIT, RELEASE & WAIVER OF CLAIMS




ARTICLE I




CONSIDERATION




     This Affidavit, Release & Waiver of Claims (“Release”) is given to OpenTV, Inc. (the
“Company”) and its affiliates in consideration of the Company’s agreement to provide me, Mazin S.
Jadallah, with the following as provided by my Retention Agreement, dated July 26, 2004 (the
“Retention Agreement”), as modified by this Release, my Stock Option Agreements as modified by the
provisions of this Release, and as otherwise agreed by me and the Company under the terms set forth
herein:




	 	1.	 	Payment of my base salary, which is $244,524.00, through the “Termination Date,” which
shall be April 1, 2007 for purposes of this Agreement, subject
to continuance thereof in accordance with paragraph 4 below;
	 
	 	2.	 	A lump sum payment, on or before the fifth business day after the Termination Date (or,
if I have not returned this Release to the Company by that date, within five days after I
return a signed Release to the Company), of my vacation time not used as of the Termination
Date to the extent that such vacation time has been accrued through the Termination Date,
calculated based upon my base salary at the Termination Date, which, based on the
information available to the Company, will consist of 8.42 vacation days resulting in an
aggregate payment of $7,918.84;
	 
	 	3.	 	A lump sum payment, on or before the fifth business day after the Termination Date (or,
if I have not returned this Release to the Company by that date, within five days after I
return a signed Release to the Company), of all business expenses reimbursable to the
extent not theretofore paid, understanding that any business expenses for which
reimbursement has not been requested on or before the day immediately preceding the
Termination Date, will be reimbursed to me in accordance with normal Company business
practices as in effect as of the Termination Date;
	 
	 	4.	 	Continuation of my base salary, payable in accordance with normal Company payroll
practices in effect on the Termination Date, until, and including the payment period ending
on, September 30, 2007 (such date being referred to as the
“End Date”), understanding that the Company will not deduct
from my base salary for my healthcare coverage during that period
since I will be entitled to COBRA coverage that I will pay directly,
and for which I will be reimbursed in accordance with
paragraph 5 below. My base salary
continuation shall not be extended beyond the End Date for any reason, including in the
event of any Change in Control of the Company prior to that date;
	 
	 	5.	 	For the period beginning on the Termination Date and ending on the End Date (or such
earlier date as I receive alternative health coverage with comparable coverage levels),
reimbursement through a gross-up of my base salary payments referred to in paragraph 4
above of the full difference between (A) monthly COBRA payments actually made by me for
continued health benefits (which includes medical, dental and vision coverage) during such
period (consistent with the level of health benefits to which I was entitled as of the
Termination Date) and (B) the amount I would have paid for health coverage for
myself and my dependents under the Company’s health plan had I remained an employee of the
Company during such period (the difference between (A) and (B)
expected to be approximately $829.39 per month). I agree to provide the Company with prompt notice







 









 






	 		 	 of the
effective date of any alternative health coverage that has comparable coverage levels as the
Company’s plan. Prepayment by the Company on or before the Termination Date, for the period
from the Termination Date through the period ending on the End Date, of the full costs of my
Life Insurance and Accidental Death & Dismemberment Policies, so that such coverages, as in
effect as of the Termination Date, remain effective through the End Date, understanding that
such Policies are, thereafter, “portable” in accordance with their respective terms;






	 	6.	 	Payment of your 2006 bonus, in cash, in the amount of $85,583.00 on the earlier of (x)
the date on which 2006 bonus payments are made to rank and file employees of the Company or
(y) the Termination Date. I understand that I will not be entitled to any discretionary
bonus for 2007;
	 
	 	7.	 	Continued vesting of options granted to me under the Plan (as defined in the Retention
Agreement) in the manner set forth in Exhibit A hereto;
	 
	 	8.	 	The right to exercise vested stock options granted to me under the Plan in the manner
set forth in Exhibit A hereto; and
	 
	 	9.	 	The opportunity to provide consulting services to the Company, to the extent that I am
available and the Company requests my services, as contemplated in Article V below.





     All payments referred to in the preceding Sections 1 through 9 of this Article I, inclusive,
will be made by the Company subject to any and all applicable payroll deductions, including payment
of applicable withholding taxes. I understand that I am fully responsible for any and all taxes
that may be imposed on me pursuant to Section 409A of the Internal Revenue Code of 1986, as
amended, in respect of any deferred compensation that I may be deemed to receive hereunder.



     I acknowledge that effective from the day immediately succeeding the End Date, I shall be
responsible for the payment of any premiums associated with continuation of my health insurance
under the provisions of COBRA, subject to the Company’s agreement to reimburse me for those costs
for the period, and in the manner, set forth in paragraph 5 above. The entitlement under COBRA
shall not be extended in any way by virtue of any terms of this Release.



     I acknowledge that I have been both encouraged and given the opportunity to discuss this
document with counsel of my own choosing.



     I understand that the consideration described in this Release includes various benefits for
which I am not eligible unless I elect to sign and return to the Company, and I do not revoke, this
Release. I understand that I have forty-five days (45) days from receipt of this Release to
consider whether I wish to accept these additional benefits in exchange for executing this Release.
I understand that I may sign this document sooner, and if I do so, I acknowledge with my signature
that the decision to sign was mine and mine alone and that, as a result, I voluntarily have waived
the 45-day consideration period referred to in the preceding sentence. I also
understand that even if I do sign and return this Release to the Company, I may change my mind
and revoke this Release and forego the Release consideration as described in this Release,





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provided
I notify Human Resources in writing via confidential fax at (415) 962-5362 within seven (7) days of
my signing and returning this Release to the Company that I wish to revoke this Release and that I
no longer want any of the benefits to referred to in this Release which would not otherwise be
expressly provided under the terms of my Retention Agreement in connection with my termination.




ARTICLE II




RELEASES




     In consideration of the Company entering into this Release and the consideration provided to
me hereunder, I, on behalf of my heirs, spouse and assigns, hereby completely release and forever
discharge the Company, together with its past and present affiliates, agents, officers, directors,
shareholders, employees, attorneys, insurers, successors and assigns (collectively referred to as
the “Company Releasees”, which term shall include, without limitation and for the avoidance of
doubt, OpenTV Corp. and OpenTV, Inc.), from any and all claims, of any and every kind, nature and
character, known or unknown, foreseen or unforeseen, based on any act or omission occurring prior
to the date of my signing this Release, including but not limited to any claims arising out of my
offer of employment, my employment or termination of my employment with any Company Releasee, and,
without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty and breach of
duty under applicable state corporate law. Subject to the terms of this Agreement, I expressly
agree and consent to the termination of my employment effective as of the Termination Date. This
Release shall also constitute my resignation, effective immediately, from all officer and director
positions that I hold with the Company or any of its subsidiaries or affiliates; I understand that
if any additional documentation is required to effect those resignations, I shall execute such
documentation as may be reasonably requested by the Company. The matters released include, but are
not limited to, any claims under federal, state or local laws, including claims arising under the
federal Age Discrimination in Employment Act or the Older Workers Benefit Protection Act, Title VII
of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Civil Rights Act of 1991, the
Employee Retirement and Income Security Act of 1974 (“ERISA”), the Americans with Disabilities Act,
the Worker Adjustment and Retraining Act and applicable regulations and the California Fair
Employment and Housing Act or any similar state or local law, and any claims for attorneys’ fees
and costs. The only exceptions are any claims I may have: (i) for unemployment or workers
compensation; (ii) to enforce the terms of this Release against the Company; and (iii) with respect
to obligations of the Company, if any, that are contemplated by their terms to survive my Retention
Agreement and Stock Option Agreements, and which are not otherwise superseded by the terms of this
Release.



     I understand and agree that this Release extinguishes all claims, whether known or unknown,
foreseen or unforeseen, occurring prior to the date of my signing this Release, except for those
claims expressly described above. I expressly waive any rights or benefits under Section 1542 of
the California Civil Code, or any similar state or local law. California Civil Code Section 1542
provides as follows:




	 	 	 	“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 the release,







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





     I fully understand that, if any fact with respect to any matter covered by this Release is
found hereafter to be other than or different from the facts now believed by me to be true, I
expressly accept and assume that this Release shall be and remain effective, notwithstanding such
difference in the facts.



     I represent that I have no complaint, charge, grievance, lawsuit, or any other action of any
kind pending against any Company Releasee. I promise that neither I nor anyone acting on my behalf
will assert or file any complaint, charge, grievance, lawsuit, or action of any kind against any
Company Releasee, which is based in any way, in whole or in part, on facts or circumstances
arising, or alleged to have arisen, on or before the last date of execution of this document. I
further promise that if any agency, person, or court, on my behalf, assumes jurisdiction over any
such complaint, charge or grievance naming me as a plaintiff, complainant, charging party or
grievant against any Company Releasee, I will explain to the agency, person, or court the effect of
this Release and request that the complaint, charge, or grievance be dismissed.



     I acknowledge that I will continue to be bound by any obligations under any confidential or
proprietary information, inventions assignment or non-disclosure agreement or other similar
agreement that I have signed during my employment, including those provisions set forth in my
Retention Agreement, which remain effective notwithstanding this Release.



     In consideration of my release as set forth above, the Company hereby completely releases and
forever discharges me from any and all claims, of any and every kind, nature and character, based
on any act or omission occurring prior to the date of my signing this Release, that are, in each
such case, known to the Company as of the date of this Release. The Company represents that it is
not aware of any known claims that it may have against me as of the date of this Release.



ARTICLE III





COMPANY PROPERTY




     As of the date of this Release, I confirm that I have returned to the Company any and all
confidential information (in whatever medium recorded), including all copies, reproductions,
compilations, summaries, analyses, or other documents containing or reflecting my or other Company
representatives’ use of any confidential information, as well as all Company property, including
without limitation, all computers, cell phones, pda’s, Blackberrys or other equipment or devices,
all files and records, regardless of the media and all copies thereof, except (i) only files of a
personal nature, such as Retention Agreements, benefits information, option agreements, etc., (ii) files and property that I have been specifically authorized by the Chief Executive Officer to
retain (provided that I will promptly return any of these files and property upon request) and (iii) my Hewlett-Packard notebook computer and Blackberry personal digital assistant as agreed by the Chief Executive Officer (provided that confidential Company information is deleted therefrom).
Notwithstanding the return of the confidential information, I shall continue to be bound by the
obligations of confidentiality contained in my Retention Agreement. I further
represent that I have not recreated or delivered to anyone else any confidential information
and that I will not recreate or deliver to anyone else any confidential information, and that I
have not





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used, nor will I use, any confidential information for the benefit of myself, any future
employer, or any other third party. If, and to the extent, that I perform consulting services for
the Company, I understand that I may receive confidential information regarding the Company, and I
will continue to hold that confidential information in a manner consistent with the manner in which
I held confidential information while an employee of the Company.




ARTICLE IV




NONDISPARAGEMENT AND DESTRUCTIVE ACTS




     I agree not to impugn the business of the Company and its affiliates, including use of
disparaging or defamatory statements toward the Company and its affiliates, or their respective
past or present officers, directors, employees, consultants and advisors. I will not interfere
with the Company’s relationship with its prospective or current customers, suppliers or partners in
any way that would be detrimental to the Company, nor cause any services to be delayed.



     I acknowledge that I have not committed nor will I commit, directly or indirectly, any
destructive action against the Company and its affiliates or the property of the Company and its
affiliates, including, but not limited to, gaining or allowing unauthorized access to or
introducing viruses or bugs into their products, computer systems or networks.



ARTICLE V




CONSULTING ARRANGEMENTS




     I understand that the Company may request that I consult on various matters after the
Termination Date, but that neither the Company nor I have any obligation to undertake such a
relationship or to continue any such relationship after it has commenced. Any consulting
arrangements will be subject to mutual agreement by the Company and me on scope of services and
terms of compensation.



ARTICLE VI




MISCELLANEOUS




     This Release constitutes the entire agreement between the Company and me with respect to any
matters referred to in this Release.



     This Release supersedes any and all of the other agreements between the Company and me, except
for continuing obligations under my Employee Proprietary Information and Inventions Agreement (the
“Employee Inventions Agreement”). The Company confirms that my termination is being
effected without cause, and that the non-competition provisions set forth in my Retention Agreement
and Stock Option Agreements are, therefore, not applicable or effective any longer. In the event
of any conflict between the terms of this Release and my Retention Agreement or Stock Option
Agreements, the terms of this Release shall control and supersede the similar provisions set forth
in my Retention Agreement and Stock Option Agreements.





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     No other consideration, agreements, representations, oral statements, understandings or course
of conduct which are not expressly set forth in this Release should be implied or are binding. I
am not relying upon any other agreement, representation, statement, omission, understanding or
course of conduct which is not expressly set forth in this Release. I understand and agree that
this Release shall not be deemed or construed at any time or for any purposes as an admission of
any liability or wrongdoing by either myself or any Company Releasee. I also agree that to the
extent that any term, condition or provision of this Release is held to be invalid, illegal or
otherwise unenforceable under applicable law, then such term, condition or provision shall be
deemed amended only to the extent necessary to render such term, condition or provision enforceable
under applicable law, preserving to the fullest extent possible the intent and agreements of the
parties set forth herein; in the event that such term, condition or provision cannot be so amended
as to be enforceable under applicable law, then such term, condition or provision shall be deemed
excluded from this Release and the other terms, conditions and provisions hereof shall remain in
full force and effect as if such unenforceable term, condition or provision had not been included
herein.



     The terms and conditions of this Release shall be interpreted and construed in accordance with
the internal laws of the State of California, without regard to the principles of the conflict of
laws thereof. The terms and conditions of this Release shall inure to the benefit of and be
binding upon the respective successors and assigns of the Company.



     I have read this Release and understand all of its terms. I further acknowledge and agree
that this Release is executed voluntarily and with full knowledge of its legal significance. I
also understand and agree that if any suit is brought to enforce the provisions of this Release,
the prevailing party shall be entitled to its costs, expenses, and attorneys’ fees as well as any
and all other remedies specifically authorized under the law.



[Remainder of Page Intentionally Left Blank]






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EMPLOYEE’S ACCEPTANCE OF RELEASE




     I HAVE CAREFULLY READ THE FOREGOING AND UNDERSTAND, APPROVE AND VOLUNTARILY AGREE TO THE TERMS
OF THE RELEASE IN EXCHANGE FOR THE ADDITIONAL BENEFITS PROVIDED FOR HEREIN TO WHICH I WOULD
OTHERWISE NOT BE ENTITLED.



	 	 	 	 	 
	Dated:
March 13, 2007

	 	/s/  MAZIN S. JADALLAH
	 
	 	 	 	 
	 
	 	MAZIN S. JADALLAH
	 	 	 	 	 
	Dated: March 13, 2007	 	OPENTV, INC.
	 
	 	 	 	 
	 

	 	By:	 	/s/ SHUM MUKHERJEE
	 

	 	 	 	 
	 
	 

	 	Name:
	 	Shum Mukherjee
	 
	 

	 	Title:
	 	Chief Financial Officer








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ATTACHMENT 1




CALIFORNIA LABOR CODE SECTION 2870




EMPLOYMENT AGREEMENTS, ASSIGNMENT OF RIGHTS



California Labor Code § 2870. Invention on Own Time — Exemption from Agreement.



(a) Any provision in an employment agreement which provides that an employee shall assign, or offer
to assign, any of his or her rights in an invention to his or her employer shall not apply to an
invention that the employee developed entirely on his or her own time without using the employer’s
equipment, supplies, facilities, or trade secret information except for those inventions that
either:





	 	(1)	 	Relate at the time of conception or reduction to practice of the invention to
the employer’s business, or actual or demonstrably anticipated research or development
of the employer.
	 
	 	(2)	 	Result from any work performed by the employee for the employer.




(b) To the extent a provision in an employment agreement purports to require an employee to assign
an invention otherwise excluded from being required to be assigned under subdivision (a), the
provision is against the public policy of this state and is unenforceable.
















 





Exhibit A




Schedule of Stock Options



Notwithstanding anything to the contrary contained in each of the Stock Option Agreements governing
the stock options referred to below, the vesting term (and the period through which vesting shall
continue) and exercise period for the option grants to Mr. Jadallah identified in the table below
shall be modified (and the relevant Stock Option Agreements shall be deemed so modified and
amended, without further action, to reflect such modifications) as follows:




	 	 	 	 	 	 	 	 	 	 	 	 
	 		 	 	 	End of Vesting	 	 	 	 	 	 
	 		 	 	 	Term (end date	 	 	 	 	 	 
	 		 	 	 	through which	 	 	 	 	 	 
	 		 	 	 	options will	 	 	 	 	 	Exercise Period
	 		 	 	 	continue to vest,	 	 	 	 	 	(date through
	 		 	 	 	unless earlier	 	 	 	 	 	which vested
	 		 	 	 	vested in	 	Vested	 	 	 	options may be
	 		 	 	 	accordance with	 	Options as of	 	 	 	exercised after
	Option Grant		Number of	existing	 	the End of	 	 	 	end of vesting
	Date		Options	 	schedule)	 	Vesting Term	 	Exercise Price	 	term)
	7/27/2004

		50,000
	 	9/30/2007
	 	25,000
	 	$2.50
	 	12/31/2007
	1/28/2005

		50,000
	 	9/30/2007
	 	33,333
	 	$2.72
	 	12/31/2007
	3/31/2005

		27,500
	 	9/30/2007
	 	17,187
	 	$2.84
	 	12/31/2007
	4/4/2006

		25,000
	 	9/30/2007
	 	9,312
	 	$2.84
	 	12/31/2007