8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 13, 2005

Openwave Systems Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-16073	94-3219054
(State or other jurisdiction of incorporation)	(Commission file number)	(I.R.S. Employer Identification Number)

2100 Seaport Boulevard Redwood City, CA	94063
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (650) 480-8000

None

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On October 13, 2005, the Board of Directors of Openwave Systems Inc. (the “Company”) adopted a cash compensation program for its non-employee Directors consisting of: (1) a $25,000 annual retainer; (2) additional annual retainers for service as the non-executive Board chairperson ($20,000), Audit Committee chairperson ($30,000), Compensation Committee chairperson ($15,000) or other regular Board committee chairperson ($10,000); (3) additional annual retainers for service on the Audit Committee ($15,000), the Compensation Committee ($9,000) or other Board committee ($5,000); and (4) meeting fees for attendance at meetings of the Board ($2,000 for each Board meeting), Audit Committee ($2,000 for each Audit Committee meeting attended over eight meetings a year) and other Board committees ($1,500 for each other regular Board committee meeting attended over five meetings a year). The program is effective as of at the beginning of fiscal year 2006.

On October 13, 2005, the Compensation Committee of the Board of Directors of the Company approved stock grants to David Peterschmidt, the Company’s Chief Executive Officer, of (1) an option to purchase 750,000 shares of the Company’s common stock with an exercise price equal to the fair market value on the date of grant (with vesting ratably on a monthly basis over a four-year period) on the Company’s standard form of non-qualified stock option agreement under the Company’s 1995 Stock Plan, and (2) a restricted stock award of 100,000 shares of the Company’s common stock on the Company’s standard form of restricted stock purchase agreement under the Company’s 1995 Stock Plan (vesting after three years from the date of grant, however, if the Company achieves certain financial targets for the 12 month period coinciding with the 2006 calendar year, this stock grant will become 100% vested on the date that the Compensation Committee certifies the Company’s achievement of those goals following the completion of the preparation of financial statements covering that period). The vesting of both the options and the restricted stock is contingent upon continued employment on the applicable vesting date. A letter confirming the stock option grant and restricted stock award is attached here to as Exhibit 99.1.

On October 14, 2005, the Company, and David Whalen, formerly Vice President and General Manager of the Company’s business operations in the Americas, entered into a new employment agreement, effective October 3, 2005. Under this agreement, Mr. Whalen: (i) agreed to serve as Senior Vice President of Worldwide Sales; (ii) is entitled to an annual base salary of $250,000; and (iii) will be eligible for an executive incentive cash bonus award under the Company’s 2005 General Manager Sales Incentive Plan targeted at $250,000. The actual bonus payout shall be determined based upon achievement level against financial and performance objectives. The foregoing description of the agreement is qualified in its entirety by the terms of the agreement which is filed herewith as Exhibit 10.1 and incorporated herein by reference. The Company and Mr. Whalen also entered into the following two agreements at the same time.

The Company and Mr. Whalen also entered into the Company’s standard executive change of control severance agreement, effective October 3, 2005. The agreement provides that 50% of Mr. Whalen’s then-unvested options and shares of restricted stock will vest upon a “change of control” (as defined therein), and that, if employment is terminated (other than as a result of death or disability) either by the Company without “cause” (as described therein) or as a result of a “involuntary termination” (as described therein) within the period commencing two months preceding the change of control and ending twenty-four months following the change of control, any remaining unvested options and shares of restricted stock shall vest and Mr. Whalen shall receive severance payments equal to one year’s base salary. The foregoing description of the executive change of control severance agreement is qualified in its entirety by the terms of the form of change of control severance agreement which was previously filed as Exhibit 10.17 to the Company’s Annual Report on Form 10-K dated September 28, 2001.

The Company and Mr. Whalen also entered into the Company’s standard director and executive officer indemnification agreement (the “Indemnification Agreement”). The Indemnification Agreement provides for indemnification of Mr. Whalen for expenses, judgments, fines and settlement amounts incurred by him in any action or proceeding arising out of his services as an officer or at the Company’s request. The Company’s form of indemnification agreement was previously filed as Exhibit 10.16 to the Company’s Annual Report on Form 10-K dated September 28, 2001.

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Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

Exhibit No.	Description
10.1	Employment Offer Letter Agreement by and between Openwave Systems Inc. and David Whalen, dated October 14, 2005.
99.1	Letter to David Peterschmidt, dated October 18, 2005, confirming Stock Option Grant and Restricted Stock Award.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

OPENWAVE SYSTEMS INC.
By:	/s/ DOUGLAS SOLOMON
Name:	Douglas Solomon
Title:	Vice President and Assistant Secretary

Date: October 19, 2005

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Employment Offer Letter Agreement by and between Openwave Systems Inc. and David Whalen, dated October 14, 2005.
99.1	Letter to David Peterschmidt, dated October 18, 2005, confirming Stock Option Grant and Restricted Stock Award.

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EX-10.1

2100 Seaport Boulevard Redwood City California 94063 U.S.A. main +1 650 562 0200 fax +1 650 817 1499 www.openwave.com

October 14, 2004

Mr. Dave Whalen

c/o Openwave Systems Inc.

2100 Seaport Boulevard

Redwood City, CA 94063

Re: Amended and Restated Employment Terms

Dear Dave:

This letter sets forth the terms of your employment at Openwave Systems Inc. (the “Company”). This letter supersedes all prior agreements relating to the terms of your employment except for the Confidentiality and Invention Assignment Agreement (“Confidentiality Agreement”) previously entered into between you and the Company. The terms of the offer are set forth below, as supplemented by the employment terms set forth in the Company’s standard form of Indemnification Agreement for Executive Officers and Directors, a copy of which is attached to this letter, and referred to, collectively with this letter, as the “Executive Offer Documents.” The terms set forth below are effective as of October 3, 2005, except as otherwise set forth below.

1. Title and Cash Compensation.

Your title will be Senior Vice President of Worldwide Sales. You will continue to report to Al Snyder. Effective October 3, 2005, your monthly base salary will be $20,833.33 or $250,000 on an annualized basis. Additionally, you will be eligible for incentive compensation under the Company’s 2005 General Manager Sales Incentive Plan, as amended from time to time, and your target variable compensation will be $250,000 based on your performance in achieving defined objectives according to the Plan. At target, your total cash compensation (TCC) is $500,000 on an annualized basis.

2. Other Benefits.

You will continue to be entitled to any benefits applicable to you under the Company’s Executive Severance Policy, as in effect at the applicable time. As an employee, you also will continue to be eligible to receive our standard employee benefits except to the extent that this letter agreement provides you with more valuable benefits than the Company’s standard policies.

3. Additional Terms.

You should be aware that your employment with the Company 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, the Company is free to conclude its employment relationship with you at any time, with or without cause, subject to the severance obligations under or referred to in this letter.

Mr. Dave Whalen

Page 2 of 2

In consideration of the foregoing, you hereby reconfirm your obligations under the Confidentiality and Invention Assignment Agreement.

Please review these terms to make sure they are consistent with your understanding. If so, please send the original signed offer letter in the provided envelope to Angela Polk in Openwave’s Legal Department no later than two days after your receipt of this letter.

/s/ Tim Burch

Tim Burch

SVP, Human Resources

Accepted by:

/s/ Dave Whalen

Dave Whalen

EX-99.1

Exhibit 99.1

October 18, 2005

Mr. David Peterschmidt

Chief Executive Officer

Openwave Systems Inc.

2100 Seaport Blvd.

Redwood City, CA 94063

Re: Confirmation of Stock Awards

Dear Dave:

As you know, recently the Compensation Committee evaluated the performance of the members of the Company’s senior management team in connection with determining the size and types of annual stock grants to be awarded with respect to the Company’s 2006 fiscal year. At that meeting the Committee did not assess the stock grants to be made to you. Last Thursday the Compensation Committee performed that task with respect to your performance over the past eleven months. The Committee and the Board have been very pleased with your performance and have felt that in many different respects your performance and leadership have exceeded their expectations at the time that you were hired.

Accordingly it is with pleasure that I confirm on behalf of the Compensation Committee of the Board of Directors that on October 13, 2005 the Committee granted to you two stock awards under the Company’s 1995 Stock Plan. The first grant is an option to acquire 750,000 shares of the Company’s common stock. This option will vest commencing on the grant date and shall become exercisable over a period of four years, vesting in 48 equal monthly installments based on your continued service with the Company. The exercise price of this option is the closing price of the Company’s common stock on the date of grant, which was $15.95. The option will be documented using the Company’s standard form of non-qualified stock option agreement under the Company’s 1995 Stock Plan. In light of the size of this option grant in addition to the option that you received at the time you commenced employment with Openwave in November 2004, the Committee does not at this time expect to make further stock option grants to you prior to the end of calendar year 2008. The Committee believes that your current option grants, along with the grants of restricted stock that you have received, closely align your personal financial interests over the next few years with those of Openwave’s stockholders and provide you with a substantial opportunity for capital wealth accumulation.

In addition to this option grant, the Compensation Committee has also granted to you 100,000 shares of restricted stock under the Company’s 1995 Stock Plan. This stock grant will be documented using the Company’s standard form of restricted stock purchase agreement under this plan. You will be required to pay the Company the par value of the Company’s common stock, which is $.001, for each share of restricted stock that is being awarded to you. The shares subject to this award become vested in their entirety after three years from the date of grant. However, if the Company’s achieves certain financial targets for the twelve month period

Mr. David Peterschmidt

October 18, 2005

Page 2

coinciding with the 2006 calendar year, this stock grant will become 100% vested on the date that the Compensation Committee certifies the Company’s achievement of those goals following the completion of the preparation of financial statements covering that period.

We hope that you understand that these grants underscore and reflect the confidence that the Board of Directors has in your leadership and the satisfaction it feels in your accomplishments to date for the benefit of all of Openwave’s stockholders. Keep up the good work!

Best regards,

/s/ Bernard Puckett

Bernard Puckett

Chairman of the Compensation Committee

and the Board of Directors