exv10w4






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,



 









 




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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