EXHIBIT 10.26
[LOGO APPEARS HERE]
August 28, 2001 Revised
Kevin Kennedy
690 Loyola Drive
Los Altos, CA 94124
Dear Kevin:
I am delighted to make you this offer to join Openwave Systems Inc. effective
August 22, 2001. This offer letter serves to confirm our previous discussions.
The offer is for you to join us as Chief Operating Officer, reporting to me.
Your responsibilities will include: Product Development, Marketing, IT, Business
Development, Market Development, Corporate Development, including mergers and
acquisitions, and Office of Customer Operations {OCO Sales & Customer Advocacy}.
.. Your monthly salary will be $31,250 per month, or $375,000.00 on an
annualized basis.
.. You are eligible to participate in the Corporate Bonus Program with a target
of 75% of your annual salary. Your actual payout for the 2001 plan year will
be based on your actual base salary earned during 2001. Corporate performance
determines the payout pool, while your individual performance determines your
actual payout. The program is subject to specific terms and conditions, which
will be provided under separate cover. During your first 12 months of
employment only, Openwave will guarantee corporate performance at target
level.
.. Providing you are employed as a regular full time employee by Openwave
Systems Inc. (or one of its subsidiaries) on the following dates, and based
upon the completion of mutually agreed upon initial deliverables, Openwave
will pay you the gross cash bonus corresponding with each respective date
listed below:
September 1, 2001 $250,000
November 1, 2001 $250,000
January 1, 2002 $250,000
Should your employment with Openwave voluntarily terminate within your
first twelve (12) months of employment, you agree to pay back the bonuses
on a pro-rated basis, with pro-ration based upon the number of months of
your service with the Company.
.. Subject to the approval of the Compensation Committee of the Board of
Directors of Openwave you will be granted options to purchase 2,500,000
shares of Common Stock. This will be broken into three separate grants; the
first grant of 2,000,000 shares will be made within two(2) weeks of your
start date and subsequent grants for 250,000 shares each, will be granted in
February, 2002 and August, 2002, respectively, on dates determined by the
Compensation Committee at an exercise price equal to the closing price of the
Common Stock on the respective grant dates. The vesting commencement date and
the date of grant will be the same. The shares will vest over four years with
a one year cliff, meaning that one fourth of your shares will be vested one
year from your vesting commencement date and the remaining shares will vest
monthly thereafter. Vesting will, of course, depend on your continued
employment with Openwave.
.. Providing you are employed as a regular full time employee by Openwave
Systems Inc. (or one of its subsidiaries) on the following dates, and based
upon the completion of mutually agreed upon deliverables, Openwave will pay
you the net cash bonus (bonus will be grossed up for taxes) corresponding
with each respective date listed below:
June 30, 2002 $235,000
September 30, 2002 $210,000
December 31, 2002 $206,000
March 31, 2003 $205,000
June 30, 2003 $203,000
August 31, 2003 $200,000
[LOGO APPEARS HERE]
.. Subject to the approval of the Compensation Committee of the Board of
Directors of Openwave, you will be granted, as of your date of employment,
150,000 shares of restricted stock. The shares will vest as follows: 25,000
shares will be immediately vested upon date of grant, and 25,000 shares will
vest at the end of each calendar quarter beginning 12/31/01, with 100%
vesting on 12/31/02. Vesting will, of course, depend on your continued
employment with Openwave.
.. Openwave will provide you with a loan of $1,200,000 which you may use to
assist in the payment of taxes on the grant of restricted stock, should you
decide to file an 83(b) election. Details and terms of the loan will be
provided in the loan document.
.. As an employee, you are also eligible to receive our standard employee
benefits.
.. You should be aware that your employment with Openwave 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, Openwave is
free to conclude its employment relationship with you at any time, with or
without cause. Should your employment be terminated except "for cause" during
the first 24 months of employment, you will be eligible to receive a
severance package equal to 12 months of target pay and benefits, excluding
the further vesting of option. After 24 months of employment, this severance
package will be equal to six months of target pay and benefits, excluding the
further vesting of options.
"Cause" shall mean (i) gross negligence or willful misconduct in the
performance of the Employee's duties to the Company; (ii) repeated
unexplained or unjustified absence from the Company; (iii) a material
and willful violation of any federal or state law; (iv) refusal or
failure to act in accordance with any specific direction or order of
the Company; (v) commission of any act of fraud with respect to the
Company; or (vi) 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 determined by the Board of Directors of the
Company.
You will be offered to sign a change of control agreement that provides for
75% accelerated vesting of stock and stock options upon a change of control
and the remaining 25% vested if your employment is deemed involuntarily
terminated as a result of a substantial diminishment of responsibilities
within a 12-month period after the Company is acquired. In addition, under
these circumstances, and upon your termination the outstanding balance on any
loans extended to you by Openwave will also be forgiven and "grossed up" for
any taxes then due on income resulting from forgiveness of the indebtedness.
More details will be provided in the change of control agreement, which will
be provided under separate cover.
You are invited to attend Day One Orientation on your first day of work
during which you will learn more about Openwave's business, culture and
benefits. Our Human Resources Department will contact you regarding the
specific details for your orientation. For purposes of Federal Immigration
Law, you will be required to provide to the Company documentary evidence of
your identity and eligibility for employment in the United States. Such
documentation must be provided to us within three (3) business days of your
date of hire, or our employment relationship with you may be terminated.
Upon joining Openwave you will be required to sign confidentiality and
invention agreement in which you will be asked to protect the company's
confidential information and to assign to the company any inventions produced
in the course of your work.
[LOGO APPEARS HERE]
Please review these terms to make sure they are consistent with your
understanding. If so, please sign and return this offer letter via fax to
Alicia Villegas at 650 480-7414.
Your acceptance of this offer represents a unique opportunity for Openwave
both to grow and to succeed. I want to thank you for the commitment you
have made to our common vision and look forward to working with you.
Accepted by:
--------------------------- -----------------------------
Don Listwin Kevin Kennedy
President and CEO