TO THE COMPANY, WHICH SHALL BE SUBSTANTIALLY IN THE FORM ATTACHED
HERETO AS EXHIBIT 1 (THE "RELEASE"), FOLLOWING EXPIRATION OF THE STATUTORY
RESCISSION PERIOD WITHOUT ANY RESCISSION OF THE RELEASE THE COMPANY WILL PROVIDE
EMPLOYEE WITH THE FOLLOWING (HEREINAFTER REFERRED TO COLLECTIVELY AS THE
"SEPARATION PAYMENTS"):
(I)
A SIMPLE LUMP SUM PAYMENT OF $83,333.33 (EQUAL TO FOUR (4) MONTHS OF
EMPLOYEE'S BASE SALARY IN EFFECT ON THE TERMINATION DATE) LESS APPLICABLE TAXES
AND STANDARD DEDUCTIONS; AND
(II)
PAYMENT OF EMPLOYEE'S COBRA INSURANCE PREMIUMS SHOULD EMPLOYEE TIMELY
ELECT TO CONTINUE GROUP HEALTH COVERAGE UNDER COBRA FOR FOUR (4) MONTHS
FOLLOWING THE TERMINATION DATE; PROVIDED, HOWEVER, THAT THE COMPANY'S OBLIGATION
TO PAY EMPLOYEE'S COBRA INSURANCE PREMIUMS IS CONDITIONED ON EMPLOYEE REMAINING
ELIGIBLE FOR SUCH COVERAGE.
Notwithstanding the foregoing, Employee acknowledges and agrees that in the
event that, prior to the Termination Date, the Company terminates Employee's
employment for Cause (as defined in below and as determined in its sole
discretion by the Board acting in good faith) or Employee resigns for any
reason, Employee will not be entitled to the Separation Payments.
For purposes of this Agreement, "Cause" shall have the meaning ascribed to it in
Employee's Stock Option Agreement dated March 21, 2007.
(C)
COMPANY STOCK OPTIONS; RESTRICTED STOCK.
(I)
VESTED OPTIONS.
NOTWITHSTANDING THE POST-TERMINATION OF SERVICES
EXPIRATION DATE SPECIFIED IN EACH GOVERNING WRITTEN STOCK OPTION AGREEMENT TO
PURCHASE SHARES OF THE COMPANY'S COMMON STOCK ("OPTIONS"), EMPLOYEE SHALL HAVE
ONE YEAR FOLLOWING THE TERMINATION DATE TO EXERCISE SUCH OPTIONS THAT ARE
VESTED, OUTSTANDING AND NOT EXERCISED AS OF THE TERMINATION DATE.
(II)
UNVESTED OPTIONS.
ANY OPTIONS THAT ARE UNVESTED AS OF THE TERMINATION
DATE SHALL EXPIRE EFFECTIVE AS OF THE TERMINATION DATE.
(III)
RESTRICTED STOCK.
THE COMPANY HEREBY PROVIDES EMPLOYEE NOTICE PURSUANT
TO THE RESTRICTED STOCK PURCHASE AGREEMENT, DATED DECEMBER 21, 2005, BETWEEN
EMPLOYEE AND COMPANY (THE "RESTRICTED STOCK PURCHASE AGREEMENT"), THAT THE
COMPANY SHALL EXERCISE ITS RIGHT TO REPURCHASE ANY SHARES OF THE COMPANY'S
COMMON STOCK HELD BY EMPLOYEE THAT ARE UNVESTED AND SUBJECT TO THE COMPANY'S
RIGHT OF REPURCHASE PURSUANT TO THE RESTRICTED STOCK PURCHASE AGREEMENT
("RESTRICTED STOCK") AS OF THE TERMINATION DATE.
UPON THE TERMINATION DATE, THE
COMPANY SHALL PAY TO EMPLOYEE THE REPURCHASE PRICE FOR SUCH REPURCHASED SHARES
OF RESTRICTED STOCK AS SET FORTH IN THE RESTRICTED STOCK PURCHASE AGREEMENT.
FROM AND AFTER THIS EXERCISE OF OPSWARE'S REPURCHASE RIGHT, EMPLOYEE SHALL NO
LONGER OWN OR HAVE ANY RIGHTS TO THE RESTRICTED SHARES.
(D)
BENEFITS. EMPLOYEE'S HEALTH INSURANCE BENEFITS WILL CEASE ON THE
TERMINATION DATE AND COMPANY SHALL PAY EMPLOYEE'S COBRA INSURANCE PREMIUMS AS
SET FORTH ABOVE IN SECTION 4(B)(II).
EMPLOYEE'S PARTICIPATION IN ALL OTHER
EMPLOYEE BENEFITS AND INCIDENTS OF EMPLOYMENT WILL CEASE ON THE TERMINATION
DATE.
EMPLOYEE WILL CEASE ACCRUING EMPLOYEE BENEFITS, INCLUDING, BUT NOT
LIMITED TO, VACATION TIME AND PAID TIME OFF, AS OF THE TERMINATION DATE.
5.
CONSIDERATION FOR RELEASE.
THE PARTIES AGREE THAT SOME OF THE PAYMENTS
AND BENEFITS PROVIDED TO EMPLOYEE PURSUANT TO THIS AGREEMENT, ARE OVER AND ABOVE
ANYTHING OWED TO