Exhibit 10.4
PHOENIX TECHNOLOGIES LTD.
SEVERANCE AND CHANGE OF CONTROL AGREEMENT
     This Severance and Change of Control Agreement (the “Agreement”) is entered
into by and between Thomas Lacey (“Executive”) and Phoenix Technologies Ltd.
(the “Company”), effective as of February 25, 2010 (the “Effective Date”).
RECITALS
     1. It is possible that the Company could terminate Executive’s employment
with the Company. The Board of Directors of the Company (the “Board”) recognizes
that such consideration can be a distraction to Executive and can cause
Executive to consider alternative employment opportunities. The Compensation
Committee of the Board (pursuant to its delegated authority) has determined that
it is in the best interests of the Company and its stockholders to assure that
the Company will have the continued dedication and objectivity of Executive,
notwithstanding the possibility, threat or occurrence of such a termination.
     2. The Compensation Committee of the Board believes that it is in the best
interests of the Company and its stockholders to provide Executive with an
incentive to continue his employment and to motivate Executive to maximize the
value of the Company for the benefit of its stockholders.
     3. The Compensation Committee of the Board believes that it is imperative
to provide Executive with certain severance benefits upon certain terminations
of Executive’s employment with the Company. These benefits will provide
Executive with enhanced financial security and incentive and encouragement to
remain with the Company.
     4. Certain capitalized terms used in the Agreement are defined in Section 6
below.
AGREEMENT
     NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
     1. Term of Agreement. This Agreement will have a term of four (4) years
commencing on the Effective Date and shall automatically renew for an additional
four (4) year term unless the Company provides written notice to Executive at
least sixty (60) days prior to the end of the first term of its intention not to
renew this Agreement. Notwithstanding the previous sentence, in the event of a
Change of Control within four (4) or, if applicable, eight (8) years of the
Effective Date, the term of this Agreement will extend through the one-year
anniversary of such Change of Control.
     2. At-Will Employment. The Company and Executive acknowledge that
Executive’s employment is and will continue to be at-will, as defined under
applicable law. If Executive’s employment terminates for any reason, Executive
will not be entitled to any payments, benefits,

 

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damages, awards or compensation other than as provided by this Agreement or any
other agreements between Executive and the Company.
     3. Severance Benefits.
          (a) Involuntary Termination other than for Cause, Disability or Death.
If the Company (or any parent or subsidiary of the Company employing Executive)
terminates Executive’s employment with the Company (or any parent or subsidiary
of the Company) for a reason other than Cause, Executive’s Disability or
Executive’s death, then, in addition to Executive’s accrued vacation, expense
reimbursements and any other benefits due to Executive through the date of
termination of employment in accordance with the Company’s then existing
employee benefit plans, policies and arrangements, and subject to Section 4,
Executive will receive the following severance benefits from the Company:
               (i) Severance Payments. Executive will be paid continuing
payments of severance pay for six (6) months at a monthly rate equal to
Executive’s monthly base salary rate, as then in effect, unless the termination
is for Good Reason following the reduction of Executive’s base salary, in which
case the severance amount will be based upon Executive’s base salary rate as in
effect prior to such reduction. . The period during which the Company pays the
Executive severance shall be referred to as the “Severance Period.”
               (ii) Bonus. If the Executive is terminated, the Executive shall
be entitled to a bonus equal to 50% of the Executive’s target bonus opportunity
for the fiscal year in which the termination occurs, unless the termination is
for Good Reason following the reduction of Executive’s target bonus opportunity,
in which case the severance amount will be based upon Executive’s target bonus
opportunity as in effect prior to such reduction. This amount will be paid in a
lump sum on the Severance Payment Date (as such term is defined in Section 4(b).
               (iii) Continued Health Insurance Benefits. Executive will receive
continuation of the health, dental and vision insurance benefits provided to
Executive and Executive’s eligible dependents under the Company’s Benefit Plans
at Company expense for a period of six (6) months from the date of such
termination.
               (iv) Option Exercisability. The vested portion of any stock
options or other outstanding rights to purchase or receive shares of the
Company’s common stock (including, without limitation, stock appreciation rights
or similar awards) held by Executive as of the termination date will remain
exercisable until the earlier of (A) the expiration of the original term of the
applicable option or right (notwithstanding any provisions in the equity
agreement providing for earlier expiration of vested rights upon termination of
employment) or (B) (ii) the date twelve (12) months from the termination date.
               (v) Payments or Benefits Required by Law. Executive will receive
such other compensation or benefits from the Company as may be required by law.
          (b) Certain Terminations in Connection with a Change of Control. If
Executive terminates his employment with the Company (or any parent or
subsidiary of the Company) for Good Reason or the Company (or any parent or
subsidiary of the Company employing Executive)

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terminates Executive’s employment with the Company (or any parent or subsidiary
of the Company) for a reason other than Cause, Executive’s Disability or
Executive’s death within two (2) months prior to or twelve (12) months following
a Change of Control, then:
               (i) Executive shall receive the severance and other benefits set
forth in Section 3(a)(i)-(v); and
               (ii) 100% of the unvested shares subject to all of Executive’s
outstanding rights to purchase or receive shares of the Company’s common stock
(including, without limitation, through awards of stock options, stock
appreciation rights, restricted stock units or similar awards) whether acquired
by Executive before or after the date of this Agreement and 100% of any of
Executive’s shares of Company common stock subject to a Company right of
repurchase or forfeiture upon Executive’s termination of employment for any
reason (whether acquired by Executive before or after the date of this
Agreement), will immediately vest and, if applicable, become exercisable upon
the later of the effective date of the Change of Control or the effective date
of the release required pursuant to Paragraph 4. In addition, if the plan
document or agreement governing any equity award would provide greater vesting
rights than those provided under this Section 3(b), then the provisions of the
plan, or agreement, as applicable, shall govern. In all other respects, such
awards will continue to be subject to the terms and conditions of the plans, if
any, under which they were granted and any applicable agreements between the
Company and Executive.
          (c) Death. If Executive’s employment with the Company (or any parent
or subsidiary of the Company) terminates due to Executive’s death, then
Executive (or his estate) will (i) receive his earned but unpaid base salary
through the date of termination of employment, (ii) receive all accrued
vacation, expense reimbursements and any other benefits due to Executive through
the date of termination of employment in accordance with established Company
plans, policies and arrangements, (iii) receive continuing payments of severance
pay for three (3) months at a monthly rate equal to Executive’s monthly base
salary rate as in effect at the time of such termination to be paid in
accordance with Section 4 below and (iv) not be entitled to any other
compensation or benefits (including, by way of example but not limitation,
accelerated vesting of any equity awards) from the Company except to the extent
provided under agreement(s) relating to any equity awards or as may be required
by law (for example, “COBRA” coverage under Section 4980B of the Internal
Revenue Code of 1986, as amended (the “Code”)); provided, that (1) Executive (or
his estate) shall be able to exercise any options that are vested as of the date
of termination of Executive’s employment for the period specified in the
agreement evidencing the options and retain any restricted stock awards that are
vested as of the date of termination of Executive’s employment and
(2) notwithstanding any other provision in this Agreement to the contrary,
Executive’s eligible dependants shall also receive continuation of the health,
dental and vision insurance benefits under the Company’s Benefit Plans at
Company expense for a period of six (6) months following Executive’s termination
date.
          (d) Other Terminations. If Executive voluntarily terminates
Executive’s employment with the Company or any parent or subsidiary of the
Company (other than for Good Reason within two (2) months prior to or twelve
(12) months following a Change of Control) or if the Company (or any parent or
subsidiary of the Company employing Executive) terminates Executive’s employment
with the Company (or any parent or subsidiary of the Company) due to Executive’s
Disability or for Cause, then Executive will (i) receive his earned but unpaid
base salary

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through the date of termination of employment, (ii) receive all accrued
vacation, expense reimbursements and any other benefits due to Executive through
the date of termination of employment in accordance with established Company
plans, policies and arrangements, and (iii) not be entitled to any other
compensation or benefits (including, by way of example but not limitation,
accelerated vesting of any equity awards) from the Company except to the extent
provided under agreement(s) relating to any equity awards or as may be required
by law (for example, “COBRA” coverage under Section 4980B of the Internal
Revenue Code of 1986, as amended (the “Code”)); provided, that (1) Executive
shall be able to exercise any options that are vested as of the date of
termination of Executive’s employment for the period specified in the agreement
evidencing the options and retain any restricted stock awards that are vested as
of the date of termination of Executive’s employment and (2) notwithstanding any
other provision in this Agreement to the contrary, if Executive’s employment
with the Company (or any parent or subsidiary of the Company employing
Executive) is terminated as a result of Executive’s Disability, then Executive
shall also receive continuation of the health, dental and vision insurance
benefits provided to Executive and Executive’s eligible dependents under the
Company’s Benefit Plans at Company expense for a period of six (6) months
following Executive’s termination date.
          (e) Exclusive Remedy. In the event of a termination of Executive’s
employment with the Company (or any parent or subsidiary of the Company), and
whether separate or in connection with a Change of Control, the provisions of
this Section 3 are intended to be and are exclusive and in lieu of any other
rights or remedies to which Executive may otherwise be entitled, whether at law,
tort or contract, in equity, or under this Agreement. Executive will be entitled
to no benefits, compensation or other payments or rights upon termination of
employment other than those benefits expressly set forth in this Section 3.
     4. Conditions to Receipt of Severance.
          (a) Separation Agreement and Release of Claims. The receipt of any
severance pursuant to Section 3(a) and Section 3(b) will be subject to Executive
signing a release of claims as attached hereto as Exhibit A within twenty one
(21) days (or such longer period as provided by law) and not revoking the
release during the applicable revocation period. In the event the Company (or
any parent or subsidiary of the Company) terminates Executive’s employment, the
release shall become effective upon expiration of seven (7) days following
execution of the release provided it has not been revoked. In the event
Executive terminates his employment with the Company (or parent or subsidiary of
the Company) for Good Reason, the release will become effective on the later of
(i) expiration of seven (7) days following execution of the release or (ii) the
effective date of a Change of Control that occurs within two (2) months
following such termination of employment, provided the release has not been
revoked. In the event Executive terminates for Good Reason prior to a Change of
Control and a Change of Control does not occur within two (2) months following
such termination, then the release will not become effective.
          (b) Payment of Severance Benefits. Subject to the foregoing, and any
delay required under Section 4(d) below, on the sixty-fifth (65th) day following
Executive’s separation date the Company shall commence payment of Executive’s
severance benefits in accordance with the terms of Section 3 (the “Severance
Payment Date”). All subsequent payments under Section 3(a)(i) or Section 3(c)
shall be paid periodically in accordance with the Company’s normal payroll
policies for salaried employees.

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          (c) Nonsolicitation. The receipt of any severance benefits pursuant to
Section 3 will be subject to Executive not violating the provisions of
Section 7. In the event Executive breaches the provisions of Section 7, all
continuing payments and benefits to which Executive would have been entitled
pursuant to Section 3 will immediately cease.
          (d) Section 409A. Notwithstanding any provision of this Agreement to
the contrary, if, at the time of Executive’s termination of employment with the
Company, Executive is a “specified employee” as defined in Code Section 409A,
then any cash severance or other payments or benefits to be paid pursuant to
Section 3 will not be paid during the six-month period following Executive’s
termination of employment, unless the Company reasonably determines that paying
all or a portion of such amounts immediately following Executive’s termination
of employment would not result in the imposition of additional tax under Code
Section 409A, in which case that portion of such amounts which may be paid
without imposition of additional tax under Code Section 409A shall be paid or
commence on the Severance Payment Date. To the extent that payment of any cash
severance or other payments or benefits to Executive upon termination of his
employment is postponed as a result of the previous sentence, such payments will
accrue (without interest) and will become payable to Executive in a lump-sum
amount on the earlier to occur of (i) the first business day following such
six-month period and (ii) Executive’s death. For these purposes, each
installment of the payments and benefits provided for in this Agreement is a
separate “payment” for purposes of Treasury
Regulation Section 1.409A-2(b)(2)(i).
     5. Excise Tax on Parachute Payments
          (a) Gross-Up Payment. If it is determined that any payment or
distribution of any type to Executive or for his benefit by the Company, any of
its affiliates, any person who acquires ownership or effective control of the
Company or ownership of a substantial portion of the Company’s assets (within
the meaning of Section 280G of the Code and the regulations thereunder) or any
affiliate of such person, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (the “Total
Payments”), would be subject to the excise tax imposed by section 4999 of the
Code or any interest or penalties with respect to such excise tax (such excise
tax and any such interest or penalties are collectively referred to as the
“Excise Tax”), then the Executive shall be entitled to receive an additional
payment (a “Gross-Up Payment”) in an amount calculated to ensure that after
Executive pays all taxes (and any interest or penalties imposed with respect to
such taxes), including any Excise Tax, imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Total Payments. The Gross-Up Payment shall be paid to Executive
on, or as soon as practicable following, the date on which Executive remits the
Excise Tax (and in no event later than December 31 of the calendar year
following the calendar year in which Executive remits the Excise Tax).
          (b) Determination by Accountant. All determinations and calculations
required to be made under this Section 5 shall be made by an independent
accounting firm selected by the Company’s independent public accountants (the
“Accounting Firm”). The Accounting Firm shall provide its determination (the
“Determination”), together with detailed supporting calculations regarding the
amount of any Gross-Up Payment and any other relevant matter, to Executive and
the Company within five (5) days after Executive or the Company make a request
(if Executive or the Company reasonably believe that any of the Total Payments
may be subject to the Excise Tax). If the Accounting Firm determines that no
Excise Tax is payable by Executive, it shall furnish

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Executive and the Company with a written statement that it has concluded that no
Excise Tax is payable (including the reasons therefor) and that Executive has
substantial authority not to report any Excise Tax on his federal income tax
return. Any determination by the Accounting Firm shall be binding upon the
Company and Executive, absent manifest error.
          (c) Over- and Underpayments. As a result of uncertainty in the
application of section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made
by the Company should have been made (“Underpayment”) or that Gross-Up Payments
will have been made by the Company that should not have been made
(“Overpayment”). In either event, the Accounting Firm shall determine the amount
of the Underpayment or Overpayment that has occurred. In the case of an
Underpayment, the Company shall promptly pay the amount of such Underpayment to
Executive or for his benefit. The Underpayment shall be paid to Executive on, or
as soon as practicable following, the date on which Executive remits the Excise
Tax (and in no event later than December 31 of the calendar year following the
calendar year in which Executive remits the Excise Tax). In the case of an
Overpayment, Executive shall, at the direction and expense of the Company, take
such steps as are reasonably necessary (including the filing of returns and
claims for refund), follow reasonable instructions from, and procedures
established by, the Company, and otherwise reasonably cooperate with the Company
to correct such Overpayment, provided, however, that (i) Executive shall in no
event be obligated to return to the Company an amount greater than the net
after-tax portion of the Overpayment that Executive has retained or has
recovered as a refund from the applicable taxing authorities and (ii) this
provision shall be interpreted in a manner consistent with the intent of
Subsection (a) above, which is to make Executive whole, on an after-tax basis,
from the application of the Excise Tax, it being understood that the correction
of an Overpayment may result in Executive’s repaying to the Company an amount
that is less than the Overpayment.
          (d) Limitation on Parachute Payments. Any other provision of this
Section 5 notwithstanding, if the Excise Tax could be avoided by reducing the
Total Payments by $10,000 or less, then the Total Payments shall be reduced to
the extent necessary to avoid the Excise Tax and no Gross-Up Payment shall be
made. If the Accounting Firm determines that the Total Payments are to be
reduced under the preceding sentence, then the Company shall promptly give
Executive notice to that effect and a copy of the detailed calculation thereof.
Any necessary reductions shall be implemented by reduction of the cash payments
to Executive.
     6. Definition of Terms. The following terms referred to in this Agreement
will have the following meanings:
          (a) Benefit Plans. “Benefit Plans” means plans, policies or
arrangements that the Company sponsors (or participates in) and that immediately
prior to Executive’s termination of employment provide Executive and/or
Executive’s eligible dependents with medical, dental, and/or vision benefits.
Benefit Plans do not include any other type of benefit (including, but not by
way of limitation, disability, life insurance or retirement benefits). A
requirement that the Company provide Executive and Executive’s eligible
dependents with coverage under the Benefit Plans will not be satisfied unless
the coverage is no less favorable than that provided to Executive and
Executive’s eligible dependents immediately prior to Executive’s termination of
employment. Notwithstanding any contrary provision of this Section 6(a), but
subject to the immediately preceding sentence, the Company may, at its option,
satisfy any requirement that the Company provide coverage under any

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Benefit Plan by (i) reimbursing Executive’s premiums under COBRA after Executive
has properly elected continuation coverage under COBRA (in which case Executive
will be solely responsible for electing such coverage for Executive and
Executive’s eligible dependents), or (ii) providing Executive and Executive’s
eligible dependents with equivalent coverage that is no less favorable under (or
reimbursing Executive’s actual premiums pursuant to) a third party plan that is
reasonably available to Executive and Executive’s eligible dependents.
          (b) Cause. “Cause” means (i) a failure by Executive to substantially
perform Executive’s duties as an employee, other than a failure resulting from
the Executive’s complete or partial incapacity due to physical or mental illness
or impairment, (ii) a willful act by Executive that constitutes misconduct,
(iii) circumstances where Executive intentionally or negligently imparts
material confidential information relating to the Company or its business to
competitors or to other third parties other than in the course of carrying out
Executive’s duties, (iv) a material violation by Executive of a federal or state
law or regulation applicable to the business of the Company, (v) a willful
violation of a material Company employment policy or the Company’s insider
trading policy, (vi) any act or omission by Executive constituting dishonesty
(other than a good faith expense account dispute) or fraud, with respect to the
Company or any of its affiliates, which is injurious to the financial condition
of the Company or any of its affiliates or is injurious to the business
reputation of the Company or any of its affiliates, (vii) Executive’s failure to
cooperate with the Company in connection with any actions, suits, claims,
disputes or grievances against the Company or any of its officers, directors,
employees, stockholders, affiliates, divisions, subsidiaries, predecessor and
successor corporations, and assigns, whether or not such cooperation would be
adverse to Executive’s own interest, or (viii) Executive’s conviction or plea of
guilty or no contest to a felony, which involves moral turpitude and is
injurious to the business reputation of the Company or any of its affiliates.
          (c) Change of Control. “Change of Control” means the occurrence of any
of the following:
               (i) the sale, lease, conveyance or other disposition of all or
substantially all of the Company’s assets to any “person” (as such term is used
in Section 13(d) of the Securities Exchange Act of 1934, as amended), entity or
group of persons acting in concert;
               (ii) any person or group of persons becoming the “beneficial
owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing 50% or more of the total voting power
represented by the Company’s then outstanding voting securities;
               (iii) a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its controlling entity) more
than 50% of the total voting power represented by the voting securities of the
Company or such surviving entity (or its controlling entity) outstanding
immediately after such merger or consolidation; or
               (iv) a contest for the election or removal of members of the
Board that results in the replacement during any 12-month period of at least 50%
of the incumbent members of

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the Board, whose appointment is not endorsed by the majority of the incumbent
members of the Board prior to such contest.
          (d) Confidential Information. “Confidential Information” means any
proprietary information, technical data, trade secrets or know-how of the
Company or any of its affiliates, including, but not limited to, research,
product plans, source code, products, services, suppliers, customer lists and
customers. Confidential Information does not include any of the foregoing items
which has become publicly and widely known and made generally available through
no wrongful act of Executive or of others who were under confidentiality
obligations as to the item or items involved.
          (e) Disability. “Disability” means that Executive has been unable to
perform the principal functions of his duties due to a physical or mental
impairment, but only if such inability has lasted or is reasonably expected to
last for at least six (6) months. Whether Executive has a Disability will be
determined by the Board based on evidence provided by one or more physicians
selected or approved by the Board.
          (f) Good Reason. “Good Reason” means that, without Executive’s express
written consent, any one of the following events occurs: (i) a material
reduction in Executive’s title, authority, status, or responsibilities, unless
the Executive is provided with a comparable position (i.e., a position of equal
or greater organizational level, duties, authority, compensation and status);
(ii) the reduction of Executive’s aggregate base salary or target bonus
opportunity as in effect immediately prior to such reduction (other than a
reduction applicable to executives generally); or (iii) a relocation of
Executive’s principal place of employment by more than fifty (50) miles;
provided, however (x) Executive provides written notice to the Company within
the thirty (30) day period immediately following such event; (y) such event is
not remedied by the Company within thirty (30) days following the Company’s
receipt of such written notice; and (z) Executive’s resignation is effective not
later than thirty (30) days after the expiration of such thirty (30) day cure
period.
     7. Restrictive Covenant.
          (a) Nonsolicit. For a period beginning on the Effective Date and
ending twelve (12) months after Executive ceases to be employed by the Company
(or any parent or subsidiary of the Company), Executive, directly or indirectly,
whether as employee, owner, sole proprietor, partner, director, member,
consultant, agent, founder, co-venturer or otherwise, will not: (i) solicit,
induce or influence any person to leave employment with the Company (or any
parent or subsidiary of the Company); or (ii) use any Confidential Information
of the Company (or any parent or subsidiary of the Company) to attempt to
negatively influence any of the clients or customers of the Company (or any
parent or subsidiary of the Company) from purchasing Company products or
services or to solicit or influence or attempt to influence any client, customer
or other person either directly or indirectly, to direct his or its purchase of
products and/or services to any person, firm, corporation, institution or other
entity in competition with the business of the Company (including any parent or
subsidiary of the Company).
          (b) Understanding of Covenants. Executive represents that he (i) is
familiar with the foregoing covenant not to solicit, and (ii) is fully aware of
his obligations hereunder, including,

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without limitation, the reasonableness of the length of time, scope and
geographic coverage of this covenant.
     8. Litigation. Executive agrees to cooperate with the Company beginning on
the Effective Date and thereafter (including following Executive’s termination
of employment for any reason), by making himself reasonably available to testify
on behalf of the Company or any of its affiliates in any action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, and to
assist the Company, or any affiliate, in any such action, suit, or proceeding,
by providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to the Company, or any
affiliate as reasonably requested. The Company agrees to reimburse Executive for
all expenses actually incurred in connection with his provision of testimony or
assistance, and agrees to pay Executive a reasonable daily fee in the event
Executive is required to spend more than ten (10) hours time in any one month
providing such testimony or assistance to the Company.
     9. Successors.
          (a) The Company’s Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company’s business and/or
assets will assume the obligations under this Agreement and agree expressly to
perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the
absence of a succession. For all purposes under this Agreement, the term
“Company” will include any successor to the Company’s business and/or assets
which executes and delivers the assumption agreement described in this Section
9(a) or which becomes bound by the terms of this Agreement by operation of law.
          (b) The Executive’s Successors. The terms of this Agreement and all
rights of Executive hereunder will inure to the benefit of, and be enforceable
by, Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
     10. Notice.
          (a) General. Notices and all other communications contemplated by this
Agreement will be in writing and will be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of Executive, mailed notices
will be addressed to him at the home address which he most recently communicated
to the Company in writing. In the case of the Company, mailed notices will be
addressed to its corporate headquarters, and all notices will be directed to the
attention of its General Counsel.
          (b) Notice of Termination. Any termination by the Company for Cause or
by Executive for Good Reason or as a result of a voluntary resignation will be
communicated by a notice of termination to the other party hereto given in
accordance with Section 10(a) of this Agreement. Such notice will indicate the
specific termination provision in this Agreement relied upon, will set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated, and, in the case of termination by
the Company for

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Cause or as a result of a voluntary resignation by Executive, will specify the
termination date (which will be not more than thirty (30) days after the giving
of such notice).
     11. Miscellaneous Provisions.
          (a) No Duty to Mitigate. Executive will not be required to mitigate
the amount of any payment contemplated by this Agreement, nor will any such
payment be reduced by any earnings that Executive may receive from any other
source.
          (b) Relinquishment of Titles and Positions. Executive agrees to
promptly relinquish all titles and positions then held by Executive with the
Company and any subsidiary or affiliate of the Company following any termination
of Executive’s employment with the Company (or any parent or subsidiary of the
Company).
          (c) Waiver. No provision of this Agreement will be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by Executive and by an authorized officer of the Company (other than
Executive). No waiver by either party of any breach of, or of compliance with,
any condition or provision of this Agreement by the other party will be
considered a waiver of any other condition or provision or of the same condition
or provision at another time.
          (d) Headings. All captions and section headings used in this Agreement
are for convenient reference only and do not form a part of this Agreement.
          (e) Entire Agreement. This Agreement, the offer letter between
Executive and the Company dated February 25, 2010, the Stock Option Agreement
between Executive and the Company dated February 25, 2010, the Restricted Stock
Purchase Agreement between Executive and the Company dated February 25, 2010,
the terms of any other equity award agreements between the Company and Executive
(as modified by this Agreement) and any indemnification agreement between the
Company and Executive, constitute the entire agreement of the parties hereto and
supersedes in their entirety all prior representations, understandings,
undertakings or agreements (whether oral or written and whether expressed or
implied) of the parties with respect to the subject matter hereof, including
without limitation, any formal offer letter or employment agreement by and
between the Company and Executive. No future agreements between the Company and
Executive may supersede this Agreement, unless they are in writing and
specifically mention this Agreement.
          (f) Choice of Law. The laws of the State of California (without
reference to its choice of laws provisions) will govern the validity,
interpretation, construction and performance of this Agreement. Any legal action
or other legal proceeding relating to this Agreement shall be brought or
otherwise commenced in any state or federal court located in Santa Clara County,
California and both parties expressly and irrevocably consent and submit to the
jurisdiction of each state and federal court located in Santa Clara County,
California (and each appellate court located in the State of California), in
connection with any such legal proceeding; agree not to assert (by way of
motion, as a defense or otherwise), in any such legal proceeding commenced in
any state or federal court located in Santa Clara County, California, any claim
that the party is not subject personally to the jurisdiction of such court, that
such legal proceeding has been brought in an inconvenient forum,

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that the venue of such proceeding is improper or that this Agreement or the
subject matter of this Agreement may not be enforced in or by such court.
          (g) All legal fees and expenses which may reasonably incur as a result
of any dispute or contest between Executive and the Company with respect to the
validity or enforceability of, or liability under, any provision of this
Agreement, or any guarantee of performance thereof (including as a result of any
dispute or contest by Executive about the amount of any payment pursuant to this
Agreement), shall be paid promptly, by the non-prevailing party in such dispute
or contest.
          (h) Severability. The invalidity or unenforceability of any provision
or provisions of this Agreement will not affect the validity or enforceability
of any other provision hereof, which will remain in full force and effect.
          (i) Income and Employment Taxes. Executive agrees that Executive shall
be responsible for any employee-side (but not employer-side) applicable taxes of
any nature (including any penalties or interest that may apply to such taxes)
that the Company reasonably determines apply to any payment made hereunder, that
Executive’s receipt of any benefit hereunder is conditioned on Executive’s
satisfaction of any applicable withholding or similar obligations that apply to
such benefit, and that any cash payment owed hereunder will be reduced to
satisfy any such withholding or similar obligations that may apply.
          (j) Compliance with Code Section 409A. To the extent there is any
ambiguity as to whether any provision of this Agreement would otherwise
contravene one or more requirements or limitations of Code Section 409A, such
provision shall be interpreted and applied in a manner that does not result in a
violation of the applicable requirements or limitations of Code Section 409A and
the Treasury Regulations thereunder. Notwithstanding anything in this Agreement
to the contrary, payments may only be made under this Agreement upon an event
and in a manner permitted by Code Section 409A to the extent applicable.
          (k) Counterparts. This Agreement may be executed in counterparts, each
of which will be deemed an original, but all of which together will constitute
one and the same instrument.
[Remainder of Page Intentionally Left Blank]

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     IN WITNESS WHEREOF, each of the parties has executed this amended and
restated Agreement, in the case of the Company by its duly authorized officer,
as of the day and year set forth above.

          COMPANY  PHOENIX TECHNOLOGIES LTD.
      By:   /s/ Timothy C. Chu         Name:   Timothy C. Chu        Title:  
Vice President, General Counsel and Secretary      EXECUTIVE  THOMAS LACEY
      By:   /s/ Thomas Lacey         Title: President and CEO           

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Exhibit a
Release Agreement
     I understand that my position with Phoenix Technologies, Ltd. (the
“Company”) terminated effective ___, 20___ (the “Separation Date”). The Company
has agreed that if I choose to sign this Release, the Company will extend to me
certain benefits (minus the standard withholdings and deductions, if applicable)
pursuant to the terms of the Severance and Change of Control Agreement (the
“Agreement”) entered into as of February 25, 2010, between me and the Company,
and any agreements incorporated therein by reference. I understand that I am not
entitled to such severance benefits unless I sign this Release. I understand
that, regardless of whether I sign this Release, the Company will pay me all of
my accrued salary and vacation through the Separation Date and any unreimbursed
business expenses, to which I am entitled by law.
     In consideration for the severance benefits I am receiving under the
Agreement, I hereby release the Company and its officers, directors, agents,
attorneys, employees, shareholders, parents, subsidiaries, and affiliates from
any and all claims, liabilities, demands, causes of action, attorneys’ fees,
damages, or obligations of every kind and nature, whether they are now known or
unknown, arising at any time prior to the date I sign this Release. This general
release includes, but is not limited to: all federal and state statutory and
common law claims, claims related to my employment or the termination of my
employment or related to breach of contract, tort, wrongful termination,
discrimination, wages or benefits, or claims for any form of equity or
compensation. Notwithstanding the release in the preceding sentence, I am not
releasing any right of indemnification or any right to payments under any
Company insurance policy I may have for any liabilities arising from my actions
within the course and scope of my employment with the Company or within the
course and scope of my role as a member of the Board of Directors and/or officer
of the Company, nor am I releasing my right to receive any severance benefits
pursuant to the Agreement.
     I UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS. In giving this release, which includes claims which may be
unknown to me at present, I hereby waive the benefit of any provision of
California law, and of any other jurisdiction, which is similar to the
following: “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,
which if known by him must have materially affected his settlement with the
debtor.”
     I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the federal Age Discrimination in Employment Act of
1967, as amended (“ADEA”). I also acknowledge that the consideration given for
the waiver in the above paragraph is in addition to anything of value to which I
was already entitled. I have been advised by this writing, as required by the
ADEA that: (a) my waiver and release do not apply to any claims that may arise
after my signing of this Release; (b) I should consult with an attorney prior to
executing this Release; (c) I have twenty-one (21) days within which to consider
this Release (although I may choose to voluntarily execute this Release
earlier); (d) I have seven (7) days following the execution of this release to
revoke the Release; and (e) this Release will not be effective until the eighth
day after this Release has been signed by me.

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     I UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.

                  By:           Thomas Lacey     
Date:      

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