EXHIBIT 10.5
OPENWAVE SYSTEMS INC.
1999 EMPLOYEE STOCK PURCHASE PLAN/1/
(As Amended effective November 17, 2000)
(As Further Amended effective May 1, 2001)
The following constitute the provisions of the 1999 Employee Stock
Purchase Plan of Openwave Systems Inc.
1. Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company. It is the intention of the Company to have the Plan
qualify as an "Employee Stock Purchase Plan" under Section 423 of the Code. The
provisions of the Plan shall, accordingly, be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
2. Definitions.
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" means the Common Stock of the Company.
(d) "Company" means Openwave Systems Inc., a Delaware
corporation.
(e) "Compensation" means all base straight time gross earnings,
sales commissions, incentive compensation, incentive payments, bonuses,
shift premium, payments for overtime and other compensation.
(f) "Continuous Status as an Employee" means the absence of any
interruption or termination of service as an Employee. Continuous Status as
an Employee shall not be considered interrupted in the case of (i) sick
leave; (ii) military leave; (iii) any other leave of absence approved by
the Administrator, provided that such leave is for a period of not more
than 90 days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute, or unless provided otherwise pursuant to
Company policy adopted from time to time; or (iv) in the case of transfers
between locations of the Company or between the Company and its Designated
Subsidiaries.
(g) "Contributions" means all amounts credited to the account
of a participant pursuant to the Plan.
(h) "Corporate Transaction" means a sale of all or
substantially all of the Company's assets, or a merger, consolidation or
other capital reorganization of the Company with or into another
corporation, or any other transaction or series of related transactions in
which the Company's stockholders immediately prior thereto own less than
50% of the voting stock of the Company (or its successor or parent)
immediately thereafter.
(i) "Designated Subsidiaries" means the Subsidiaries which have
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan; provided however that the Board shall
only have the discretion to designate Subsidiaries if the issuance of
options to such Subsidiary's Employees pursuant to the Plan would not cause
the Company to incur adverse accounting charges.
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/1/ Formerly known as the Phone.com 1999 Employee Stock Purchase Plan.
(j) "Employee" means any person, including an Officer, who is
customarily employed for at least twenty (20) hours per week and more than
five (5) months in a calendar year by the Company or one of its Designated
Subsidiaries.
(k) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(l) "Offering Date" means the first business day of each
Offering Period of the Plan.
(m) "Offering Period" means a period of twenty-four (24) months
commencing on November 1 and May 1 of each year, except for the first
Offering Period as set forth in Section 4(a).
(n) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(o) "Plan" means this Employee Stock Purchase Plan.
(p) "Purchase Date" means the last day of each Purchase Period
of the Plan.
(q) "Purchase Period" means a period of six (6) months within
an Offering Period, except for the Purchase Periods in the first Offering
Period as set forth in Section 4(b).
(r) "Purchase Price" means with respect to a Purchase Period an
amount equal to 85% of the Fair Market Value (as defined in Section 7(b)
below) of a Share of Common Stock on the Offering Date or on the Purchase
Date, whichever is lower; provided, however, that in the event (i) of any
increase in the number of Shares available for issuance under the Plan as a
result of a stockholder-approved amendment to the Plan, and (ii) all or a
portion of such additional Shares are to be issued with respect to one or
more Offering Periods that are underway at the time of such increase
("Additional Shares"), and (iii) the Fair Market Value of a Share of Common
Stock on the date of such increase (the "Approval Date Fair Market Value")
is higher than the Fair Market Value on the Offering Date for any such
Offering Period, then in such instance the Purchase Price with respect to
Additional Shares shall be 85% of the Approval Date Fair Market Value or
the Fair Market Value of a Share of Common Stock on the Purchase Date,
whichever is lower.
(s) "Share" means a share of Common Stock, as adjusted in
accordance with Section 19 of the Plan.
(t) "Subsidiary" means a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.
3. Eligibility.
(a) Any person who is an Employee as of the Offering Date of a
given Offering Period shall be eligible to participate in such Offering
Period under the Plan, subject to the requirements of Section 5(a) and the
limitations imposed by Section 423(b) of the Code; provided however that
eligible Employees may not participate in more than one Offering Period at
a time.
(b) Any provisions of the Plan to the contrary notwithstanding,
no Employee shall be granted an option under the Plan (i) if, immediately
after the grant, such Employee (or any other person whose stock would be
attributed to such Employee pursuant to Section 424(d) of the Code) would
own capital stock of the Company and/or hold outstanding options to
purchase stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company or of any
subsidiary of the Company, or (ii) if such option would permit his or her
rights to purchase stock under all employee stock purchase plans (described
in Section 423 of the Code) of the Company and its Subsidiaries to accrue
at a rate which exceeds Twenty-Five Thousand Dollars
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($25,000) of the Fair Market Value (as defined in Section 7(b) below) of
such stock (determined at the time such option is granted) for each
calendar year in which such option is outstanding at any time.
4. Offering Periods and Purchase Periods.
(a) Offering Periods. The Plan shall be generally implemented
by a series of Offering Periods of twenty-four (24) months' duration, with
new Offering Periods (other than the first Offering Period) commencing on
or about November 1 and May 1 of each year (or at such other time or times
as may be determined by the Board of Directors). The first Offering Period
shall commence on the beginning of the effective date of the Registration
Statement on Form S-1 for the initial public offering of the Company's
Common Stock (the "IPO Date") and continue until April 30, 2001. The Plan
shall continue until terminated in accordance with Section 19 hereof. The
Board of Directors of the Company shall have the power to change the
duration and/or the frequency of Offering Periods with respect to future
offerings without stockholder approval if such change is announced at least
five (5) days prior to the scheduled beginning of the first Offering Period
to be affected.
(b) Purchase Periods. Each Offering Period shall generally
consist of four (4) consecutive purchase periods of six (6) months'
duration. The last day of each Purchase Period shall be the "Purchase Date"
for such Purchase Period. A Purchase Period commencing on November 1 shall
end on the next April 30. A Purchase Period commencing on May 1 shall end
on the next October 31. The first Purchase Period of the first Offering
Period shall commence on the IPO Date and shall end on January 31, 2000
with subsequent Purchase Periods ending on April 30, 2000, October 31, 2000
and April 30, 2001. The Board of Directors of the Company shall have the
power to change the duration and/or frequency of Purchase Periods with
respect to future purchases without stockholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of the
first Purchase Period to be affected.
5. Participation.
(a) An eligible Employee may become a participant in the Plan
by completing a subscription agreement on the form provided by the Company
and filing it with the Company's payroll office prior to the applicable
Offering Date, unless a later time for filing the subscription agreement is
set by the Board for all eligible Employees with respect to a given
Offering Period. The subscription agreement shall set forth the percentage
of the participant's Compensation (subject to Section 6(a) below) to be
paid as Contributions pursuant to the Plan.
(b) Payroll deductions shall commence on the first payroll
following the Offering Date and shall end on the last payroll paid on or
prior to the last Purchase Period of the Offering Period to which the
subscription agreement is applicable, unless sooner terminated by the
participant as provided in Section 10.
6. Method of Payment of Contributions.
(a) A participant shall elect to have payroll deductions made
on each payday during the Offering Period in an amount not less than one
percent (1%) and not more than twenty percent (20%) (or such other
percentage as the Board may establish from time to time before an Offering
Date) of such participant's Compensation on each payday during the Offering
Period. All payroll deductions made by a participant shall be credited to
his or her account under the Plan. A participant may not make any
additional payments into such account.
(b) A participant may discontinue his or her participation in
the Plan as provided in Section 10, or, on one occasion only during each
Purchase Period may either increase or decrease the rate of his or her
Contributions with respect to the Purchase Period by completing and filing
with the Company a new subscription agreement authorizing a change in the
payroll deduction rate. The change in rate shall be effective as of the
beginning of the next calendar month following the date of filing of the
new subscription agreement, if the agreement is filed at least ten (10)
business days prior to such date and, if not, as of the beginning of the
next succeeding calendar month.
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(c) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) herein, a
participant's payroll deductions may be decreased during any Purchase
Period scheduled to end during the current calendar year to 0%. Payroll
deductions shall re-commence at the rate provided in such participant's
subscription agreement at the beginning of the first Purchase Period which
is scheduled to end in the following calendar year, unless terminated by
the participant as provided in Section 10.
7. Grant of Option.
(a) On the Offering Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option
to purchase on each Purchase Date a number of Shares of the Company's
Common Stock determined by dividing such Employee's Contributions
accumulated prior to such Purchase Date and retained in the participant's
account as of the Purchase Date by the applicable Purchase Price; provided
however that the maximum number of Shares an Employee may purchase during
each Purchase Period shall be 5,000 Shares (after giving effect to the 2-1
stock split in November 1999 and subject to any further adjustment pursuant
to Section 19 below), and provided further that such purchase shall be
subject to the limitations set forth in Sections 3(b) and 13.
(b) The fair market value of the Company's Common Stock on a
given date (the "Fair Market Value") shall be determined by the Board in
its discretion based on the closing sales price of the Common Stock for
such date (or, in the event that the Common Stock is not traded on such
date, on the immediately preceding trading date), as reported by the
National Association of Securities Dealers Automated Quotation (Nasdaq)
National Market or, if such price is not reported, the mean of the bid and
asked prices per share of the Common Stock as reported by Nasdaq or, in the
event the Common Stock is listed on a stock exchange, the Fair Market Value
per share shall be the closing sales price on such exchange on such date
(or, in the event that the Common Stock is not traded on such date, on the
immediately preceding trading date), as reported in The Wall Street
Journal. For purposes of the Offering Date under the first Offering Period
under the Plan, the Fair Market Value of a share of the Common Stock of the
Company shall be the Price to Public as set forth in the final prospectus
filed with the Securities and Exchange Commission pursuant to Rule 424
under the Securities Act of 1933, as amended.
8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in Section 10, his or her option for the purchase of Shares will be
exercised automatically on each Purchase Date of an Offering Period, and the
maximum number of full Shares subject to the option will be purchased at the
applicable Purchase Price with the accumulated Contributions in his or her
account. No fractional Shares shall be issued. The Shares purchased upon
exercise of an option hereunder shall be deemed to be transferred to the
participant on the Purchase Date. During his or her lifetime, a participant's
option to purchase Shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after each Purchase Date of
each Offering Period, the Company shall arrange the delivery to each
participant, as appropriate, of a certificate representing the Shares purchased
upon exercise of his or her option. Any payroll deductions accumulated in a
participant's account which are not sufficient to purchase a full Share shall be
retained in the participant's account for the subsequent Purchase Period or
Offering Period, subject to earlier withdrawal by the participant as provided in
Section 10 below. Any other amounts left over in a participant's account after a
Purchase Date shall be returned to the participant.
10. Voluntary Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all the
Contributions credited to his or her account under the Plan at any time
prior to each Purchase Date by giving written notice to the Company. All of
the participant's Contributions credited to his or her account will be paid
to him or her promptly after receipt of his or her notice of withdrawal and
his or her option for the current period will be automatically terminated,
and no further Contributions for the purchase of Shares will be made during
the Offering Period.
(b) Upon termination of the participant's Continuous Status as
an Employee prior to the Purchase Date of an Offering Period for any
reason, including retirement or death, the Contributions credited to his
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or her account will be returned to him or her or, in the case of his or her
death, to the person or persons entitled thereto under Section 14, and his
or her option will be automatically terminated.
(c) In the event an Employee fails to remain in Continuous
Status as an Employee of the Company for at least twenty (20) hours per
week during the Offering Period in which the employee is a participant, he
or she will be deemed to have elected to withdraw from the Plan and the
Contributions credited to his or her account will be returned to him or her
and his or her option terminated.
(d) A participant's withdrawal from an offering will not have
any effect upon his or her eligibility to participate in a succeeding
offering or in any similar plan which may hereafter be adopted by the
Company.
11. Automatic Withdrawal. If the Fair Market Value of the Shares on
any Purchase Date of an Offering Period is less than the Fair Market Value of
the Shares on the Offering Date for such Offering Period, then every participant
shall automatically (i) be withdrawn from such Offering Period at the close of
such Purchase Date and after the acquisition of Shares for such Purchase Period,
and (ii) be enrolled in the Offering Period commencing on the first business day
subsequent to such Purchase Period. Participants shall automatically be
withdrawn as of October 31, 1999 from the Offering Period beginning on the IPO
Date and re-enrolled in the Offering Period beginning on November 1, 1999 if the
Fair Market Value of the Shares on the IPO Date is greater than the Fair Market
Value of the Shares on October 31, 1999, unless a participant notifies the
Administrator prior to October 31, 1999 that he or she does not wish to be
withdrawn and re-enrolled.
12. Interest. No interest shall accrue on the Contributions of a
participant in the Plan.
13. Stock.
(a) Subject to adjustment as provided in Section 19, the
maximum number of Shares which shall be made available for sale under the
Plan shall be 1,200,000 Shares (after giving effect to the 2-1 stock split
in November 1999), plus an automatic annual increase on the first day of
each of the Company's fiscal years beginning in 2000, 2001, 2002, 2003 and
2004 equal to the lesser of (i) 1,000,000 Shares (after giving effect to
the 2-1 stock split in November 1999), or (ii) one percent (1%) of the
Shares outstanding on the last day of the immediately preceding fiscal
year. If the Board determines that, on a given Purchase Date, the number of
shares with respect to which options are to be exercised may exceed (i) the
number of shares of Common Stock that were available for sale under the
Plan on the Offering Date of the applicable Offering Period, or (ii) the
number of shares available for sale under the Plan on such Purchase Date,
the Board may in its sole discretion provide (x) that the Company shall
make a pro rata allocation of the Shares of Common Stock available for
purchase on such Offering Date or Purchase Date, as applicable, in as
uniform a manner as shall be practicable and as it shall determine in its
sole discretion to be equitable among all participants exercising options
to purchase Common Stock on such Purchase Date, and continue all Offering
Periods then in effect, or (y) that the Company shall make a pro rata
allocation of the shares available for purchase on such Offering Date or
Purchase Date, as applicable, in as uniform a manner as shall be
practicable and as it shall determine in its sole discretion to be
equitable among all participants exercising options to purchase Common
Stock on such Purchase Date, and terminate any or all Offering Periods then
in effect pursuant to Section 20 below. The Company may make pro rata
allocation of the Shares available on the Offering Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional Shares for issuance under the Plan by the
Company's stockholders subsequent to such Offering Date.
(b) The participant shall have no interest or voting right in
Shares covered by his or her option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will
be registered in the name of the participant or in the name of the
participant and his or her spouse.
14. Administration. The Board, or a committee named by the Board,
shall supervise and administer the Plan and shall have full power to adopt,
amend and rescind any rules deemed desirable and appropriate for the
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administration of the Plan and not inconsistent with the Plan, to construe and
interpret the Plan, and to make all other determinations necessary or advisable
for the administration of the Plan.
15. Designation of Beneficiary.
(a) A participant may file a written designation of a
beneficiary who is to receive any Shares and cash, if any, from the
participant's account underthe Plan in the event of such participant's
death subsequent to the end of a Purchase Period but prior to delivery to
him or her of such Shares and cash. In addition, a participant may file a
written designation of a beneficiary who is to receive any cash from the
participant's account under the Plan in the event of such participant's
death prior to the Purchase Date of an Offering Period. If a participant is
married and the designated beneficiary is not the spouse, spousal consent
shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the
participant (and his or her spouse, if any) at any time by written notice.
In the event of the death of a participant and in the absence of a
beneficiary validly designated under the Plan who is living at the time of
such participant's death, the Company shall deliver such Shares and/or cash
to the executor or administrator of the estate of the participant, or if no
such executor or administrator has been appointed (to the knowledge of the
Company), the Company, in its discretion, may deliver such Shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the
Company, then to such other person as the Company may designate.
16. Transferability. Neither Contributions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
Shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 15) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds in
accordance with Section 10.
17. Use of Funds. All Contributions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such Contributions.
18. Reports. Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to participating
Employees at least annually, which statements will set forth the amounts of
Contributions, the per Share Purchase Price, the number of Shares purchased and
the remaining cash balance, if any.
19. Adjustments Upon Changes in Capitalization; Corporate Transactions.
(a) Adjustment. Subject to any required action by the
stockholders of the Company, the number of Shares covered by each option
under the Plan which has not yet been exercised and the number of Shares
which have been authorized for issuance under the Plan but have not yet
been placed under option (collectively, the "Reserves"), as well as the
maximum number of shares of Common Stock which may be purchased by a
participant in a Purchase Period, the number of shares of Common Stock set
forth in Section 13(a)(i) above, and the price per Share of Common Stock
covered by each option under the Plan which has not yet been exercised,
shall be proportionately adjusted for any increase or decrease in the
number of issued Shares resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock
(including any such change in the number of Shares of Common Stock effected
in connection with a change in domicile of the Company), or any other
increase or decrease in the number of Shares effected without receipt of
consideration by the Company; provided however that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made
by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issue by the
Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of Shares
subject to an option.
(b) Corporate Transactions. In the event of a dissolution or
liquidation of the Company, any Purchase Period and Offering Period then in
progress will terminate immediately prior to the consummation of
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such action, unless otherwise provided by the Board. In the event of a
Corporate Transaction, each option outstanding under the Plan shall be
assumed or an equivalent option shall be substituted by the successor
corporation or a parent or Subsidiary of such successor corporation. In the
event that the successor corporation refuses to assume or substitute for
outstanding options, each Purchase Period and Offering Period then in
progress shall be shortened and a new Purchase Date shall be set (the "New
Purchase Date"), as of which date any Purchase Period and Offering Period
then in progress will terminate. The New Purchase Date shall be on or
before the date of consummation of the transaction and the Board shall
notify each participant in writing, at least ten (10) days prior to the New
Purchase Date, that the Purchase Date for his or her option has been
changed to the New Purchase Date and that his or her option will be
exercised automatically on the New Purchase Date, unless prior to such date
he or she has withdrawn from the Offering Period as provided in Section 10.
For purposes of this Section 19, an option granted under the Plan shall be
deemed to be assumed, without limitation, if, at the time of issuance of
the stock or other consideration upon a Corporate Transaction, each holder
of an option under the Plan would be entitled to receive upon exercise of
the option the same number and kind of shares of stock or the same amount
of property, cash or securities as such holder would have been entitled to
receive upon the occurrence of the transaction if the holder had been,
immediately prior to the transaction, the holder of the number of Shares of
Common Stock covered by the option at such time (after giving effect to any
adjustments in the number of Shares covered by the option as provided for
in this Section 19); provided however that if the consideration received in
the transaction is not solely common stock of the successor corporation or
its parent (as defined in Section 424(e) of the Code), the Board may, with
the consent of the successor corporation, provide for the consideration to
be received upon exercise of the option to be solely common stock of the
successor corporation or its parent equal in Fair Market Value to the per
Share consideration received by holders of Common Stock in the transaction.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per Share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of Shares of its outstanding Common
Stock, and in the event of the Company's being consolidated with or merged into
any other corporation.
20. Amendment or Termination.
(a) The Board may at any time and for any reason terminate or
amend the Plan. Except as provided in Section 19, no such termination of
the Plan may affect options previously granted, provided that the Plan or
an Offering Period may be terminated by the Board on a Purchase Date or by
the Board's setting a new Purchase Date with respect to an Offering Period
and Purchase Period then in progress if the Board determines that
termination of the Plan and/or the Offering Period is in the best interests
of the Company and the stockholders or if continuation of the Plan and/or
the Offering Period would cause the Company to incur adverse accounting
charges as a result of a change after the effective date of the Plan in the
generally accepted accounting rules applicable to the Plan. Except as
provided in Section 19 and in this Section 20, no amendment to the Plan
shall make any change in any option previously granted which adversely
affects the rights of any participant. In addition, to the extent necessary
to comply with Rule 16b-3 under the Exchange Act, or under Section 423 of
the Code (or any successor rule or provision or any applicable law or
regulation), the Company shall obtain stockholder approval in such a manner
and to such a degree as so required.
(b) Without stockholder consent and without regard to whether
any participant rights may be considered to have been adversely affected,
the Board (or its committee) shall be entitled to change the Offering
Periods and Purchase Periods, limit the frequency and/or number of changes
in the amount withheld during an Offering Period, establish the exchange
ratio applicable to amounts withheld in a currency other than U.S. dollars,
permit payroll withholding in excess of the amount designated by a
participant in order to adjust for delays or mistakes in the Company's
processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common
Stock for each participant properly correspond with amounts withheld from
the participant's Compensation, and establish such other limitations or
procedures as the Board (or its committee) determines in its sole
discretion advisable which are consistent with the Plan.
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21. Notices. All notices or other communications by a participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued
with respect to an option unless the exercise of such option and the issuance
and delivery of such Shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, applicable state securities laws and the requirements of
any stock exchange upon which the Shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
23. Term of Plan; Effective Date. The Plan shall become effective upon
the IPO Date. It shall continue in effect for a term of twenty (20) years unless
sooner terminated under Section 20.
24. Additional Restrictions of Rule 16b-3. The terms and conditions of
options granted hereunder to, and the purchase of Shares by, persons subject to
Section 16 of the Exchange Act shall comply with the applicable provisions of
Rule 16b-3. This Plan shall be deemed to contain, and such options shall
contain, and the Shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may be required by Rule 16b-3 to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
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OPENWAVE SYSTEMS INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
New Election ______
Change of Election ______
1. I, ________________________, hereby elect to participate in the
Openwave Systems Inc. 1999 Employee Stock Purchase Plan (the "Plan") for the
Offering Period ______________, ____ to _______________, ____, and subscribe to
purchase shares of the Company's Common Stock in accordance with this
Subscription Agreement and the Plan.
2. I elect to have Contributions in the amount of ____% of my
Compensation, as those terms are defined in the Plan, applied to this purchase.
I understand that this amount must not be less than 1% and not more than 20% of
my Compensation during the Offering Period. (Please note that no fractional
percentages are permitted).
3. I hereby authorize payroll deductions from each paycheck during the
Offering Period at the rate stated in Item 2 of this Subscription Agreement. I
understand that all payroll deductions made by me shall be credited to my
account under the Plan and that I may not make any additional payments into such
account. I understand that all payments made by me shall be accumulated for the
purchase of shares of Common Stock at the applicable purchase price determined
in accordance with the Plan. I further understand that, except as otherwise set
forth in the Plan, shares will be purchased for me automatically on the Purchase
Date of each Offering Period unless I otherwise withdraw from the Plan by giving
written notice to the Company for such purpose.
4. I understand that I may discontinue at any time prior to the
Purchase Date my participation in the Plan as provided in Section 10 of the
Plan. I also understand that I can increase or decrease the rate of my
Contributions on one occasion only with respect to either an increase or a
decrease during any Purchase Period by completing and filing a new Subscription
Agreement with such increase or decrease taking effect as of the beginning of
the calendar month following the date of filing of the new Subscription
Agreement, if filed at least ten (10) business days prior to the beginning of
such month. Further, I may change the rate of deductions for future Offering
Periods by filing a new Subscription Agreement, and any such change will be
effective as of the beginning of the next Offering Period. In addition, I
acknowledge that, unless I discontinue my participation in the Plan as provided
in Section 10 of the Plan, my election will continue to be effective for each
successive Offering Period.
5. I have received a copy of the Company's most recent description of
the Plan and a copy of the complete "Openwave Systems Inc. 1999 Employee Stock
Purchase Plan." I understand that my participation in the Plan is in all
respects subject to the terms of the Plan.
6. Shares purchased for me under the Plan should be issued in the
name(s) of (name of employee or employee and spouse only):
____________________________________
____________________________________
7. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due to me under the Plan:
NAME: (Please print) ____________________________________
(First) (Middle) (Last)
____________________ ____________________________________
(Relationship) (Address)
____________________________________
8. I understand that if I dispose of any shares received by me pursuant
to the Plan within 2 years after the Offering Date (the first day of the
Offering Period during which I purchased such shares) or within 1 year after the
Purchase Date, I will be treated for federal income tax purposes as having
received ordinary compensation income at the time of such disposition in an
amount equal to the excess of the fair market value of the shares on the
Purchase Date over the price which I paid for the shares, regardless of whether
I disposed of the shares at a price less than their fair market value at the
Purchase Date. The remainder of the gain or loss, if any, recognized on such
disposition will be treated as capital gain or loss.
I hereby agree to notify the Company in writing within 30 days after the
date of any such disposition, and I will make adequate provision for federal,
state or other tax withholding obligations, if any, which arise upon the
disposition of the Common Stock. The Company may, but will not be obligated to,
withhold from my compensation the amount necessary to meet any applicable
withholding obligation including any withholding necessary to make available to
the Company any tax deductions or benefits attributable to the sale or early
disposition of Common Stock by me.
9. If I dispose of such shares at any time after expiration of the
2-year and 1-year holding periods, I understand that I will be treated for
federal income tax purposes as having received compensation income only to the
extent of an amount equal to the lesser of (1) the excess of the fair market
value of the shares at the time of such disposition over the purchase price
which I paid for the shares under the option, or (2) 15% of the fair market
value of the shares on the Offering Date. The remainder of the gain or loss, if
any, recognized on such disposition will be treated as capital gain or loss.
I understand that this tax summary is only a summary and is subject to
change. I further understand that I should consult a tax advisor concerning the
tax implications of the purchase and sale of stock under the Plan.
10. I hereby agree to be bound by the terms of the Plan. The
effectiveness of this Subscription Agreement is dependent upon my eligibility to
participate in the Plan.
SIGNATURE: _____________________________
SOCIAL SECURITY #: _____________________
DATE: __________________________________
SPOUSE'S SIGNATURE (necessary
if beneficiary is not spouse):
________________________________________
(Signature)
________________________________________
(Print name)
-2-
OPENWAVE SYSTEMS INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
I, __________________________, hereby elect to withdraw my participation
in the Openwave Systems Inc. 1999 Employee Stock Purchase Plan (the "Plan") for
the Offering Period that began on _________ ___, _____. This withdrawal covers
all Contributions credited to my account and is effective on the date designated
below.
I understand that all Contributions credited to my account will be paid
to me within ten (10) business days of receipt by the Company of this Notice of
Withdrawal and that my option for the current period will automatically
terminate, and that no further Contributions for the purchase of shares can be
made by me during the Offering Period.
The undersigned further understands and agrees that he or she shall be
eligible to participate in succeeding offering periods only by delivering to the
Company a new Subscription Agreement.
Dated:___________________ _______________________________
Signature of Employee
_______________________________
Social Security Number