Document:

Prepared by MERRILL CORPORATION

QuickLinks
 -- Click here to rapidly navigate through this document

EXHIBIT 4.1  

 
 

PHOENIX TECHNOLOGIES LTD. 1999
  STOCK PLAN    
  

    1.  PURPOSES
OF THE PLAN. The purposes of this Stock Plan are: 

	•
	to
attract and retain the best available personnel for positions of substantial responsibility,

	•
	to
provide additional incentive to Employees, Directors and Consultants, and

	•
	to
promote the success of the Company's business. 

    Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant. Stock Purchase Rights may also be
granted under the Plan. 

    2.  DEFINITIONS.
As used herein, the following definitions shall apply: 

    (a) "ADMINISTRATOR"
means the Board, or any of its Committees as shall be administering the Plan, in accordance with Section 4 of the Plan. 

    (b) "APPLICABLE
LAWS" means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities
laws, the Code, any stock exchange or quotation system on which the Common stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Options or Stock Purchase
Rights are, or will be, granted under the Plan. 

    (c) "BOARD"
means the Board of Directors of the Company. 

    (d) "CODE"
means the Internal Revenue Code of 1986, as amended. 

    (e) "COMMITTEE"
means a committee of Directors appointed by the Board in accordance with Section 4 of the Plan. 

    (f)  "COMMON
STOCK" means the common stock of the Company. 

    (g) "COMPANY"
means Phoenix Technologies, Ltd., a Delaware corporation. 

    (h) "CONSULTANT"
means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity. 

    (i)  "DIRECTOR"
means a member of the Board. 

    (j)  "DISABILITY"
means total and permanent disability as defined in Section 22(e)(3) of the Code. 

    (k) "EMPLOYEE"
means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. A Service Provider shall not
cease to be an Employee in the case of (i) any leave of absence approved by the company or (ii) transfers between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. For purposes of Incentive Stock Options, no such leave may exceed ninety days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If
reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 181st day of such leave any Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. Neither service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company. 

    (l)  "EXCHANGE
ACT" means the Securities Exchange Act of 1934, as amended. 

 

    (m) "FAIR MARKET VALUE" means, as of any date, the value of common Stock determined as follows: 

    (i)  If
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq
SmallCap Market or The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system
for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 

    (ii) If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock
shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; or 

    (iii) In
the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator. 

    (n) "INCENTIVE
STOCK OPTION" means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder. 

    (o) "NONSTATUTORY
STOCK OPTION" means an Option not intended to qualify as an Incentive Stock Option. 

    (p) "NOTICE
OF GRANT" means a written or electronic notice evidencing certain terms and conditions of an individual option or Stock Purchase Right grant. The Notice of
Grant is part of the Option Agreement. 

    (q) "OFFICER"
means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder. 

    (r) "OPTION"
means a stock option granted pursuant to the Plan. 

    (s) "OPTION
AGREEMENT" means an agreement between the Company and an Optionee evidencing the terms and conditions of an individual option grant. The Option Agreement is
subject to the terms and conditions of the Plan. 

    (t)  "OPTION
EXCHANGE PROGRAM" means a program whereby outstanding Options are surrendered in exchange for Options with a lower exercise price. 

    (u) "OPTIONED
STOCK" means the Common Stock subject to an Option or Stock Purchase Right. 

    (v) "OPTIONEE"
means the holder of an outstanding Option or Stock Purchase Right granted under the Plan. 

    (w) "PARENT"
means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the Code. 

    (x) "PLAN"
means this 1999 Stock Plan. 

    (y) "RESTRICTED
STOCK" means shares of Common Stock acquired pursuant to a grant of Stock Purchase Rights under Section 11 of the Plan. 

    (z) "RESTRICTED
STOCK PURCHASE AGREEMENT" means a written agreement between the Company and the Optionee evidencing the terms and restrictions applying to stock 

2

 

purchased under a Stock Purchase Right. The Restricted Stock Purchase Agreement is subject to the terms and conditions of the Plan and the Notice of Grant. 

    (aa)"RULE
16B-3" means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan. 

    (bb)"SECTION
16(B)" means Section 16(b) of the Exchange Act. 

    (cc)"SERVICE
PROVIDER" means an Employee, Director or Consultant. 

    (dd)"SHARE"
means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan. 

    (ee)"STOCK
PURCHASE RIGHT" means the right to purchase Common Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant. 

    (ff)"SUBSIDIARY"
means a "subsidiary corporation", whether now or hereafter existing, as defined in Section 424(f) of the Code. 

    3.  STOCK
SUBJECT TO THE PLAN. Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares which may be optioned and sold under
the Plan is 5,668,635 Shares. The Shares may be authorized, but unissued, or reacquired Common Stock. 

    If
an Option or Stock Purchase Right expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased
Shares which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an option or Right, shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if Shares of Restricted
Stock are repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan. 

    4.  ADMINISTRATION
OF THE PLAN. 

    (a) PROCEDURE.

    (i)  MULTIPLE
ADMINISTRATIVE BODIES. The Plan may be administered by different Committees with respect to different groups of Service Providers. 

    (ii) SECTION
162(M). To the extent that the Administrator determines it to be desirable to qualify Options granted hereunder as "performance-based compensation" within
the meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more "outside directors" within the meaning of Section 162(m) of the Code. 

    (iii) RULE
16B-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3. 

    (iv) OTHER
ADMINISTRATION. Other than as provided above, the Plan shall be administered by (A) the Board or (B) a Committee, which committee shall be
constituted to satisfy Applicable Laws. 

    (b) POWERS
OF THE ADMINISTRATOR. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such
Committee, the Administrator shall have the authority, in its discretion: 

    (i)  to
determine the Fair Market Value; 

3

 

    (ii) to select the Service Providers to whom Options and Stock Purchase Rights may be granted hereunder; 

    (iii) to
determine the number of shares of Common Stock to be covered by each Option and Stock Purchase Right granted hereunder; 

    (iv) to
approve forms of agreement for use under the Plan; 

    (v) to
determine the terms and conditions, not inconsistent with the terms of the Plan, of any Option or Stock Purchase Right granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or times when Options or Stock Purchase Rights may be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any option or Stock Purchase Right or the shares of Common Stock relating thereto, based in each case on
such factors as the Administrator, in its sole discretion, shall determine; 

    (vi) to
reduce the exercise price of any Option or Stock Purchase Right to the then current Fair Market value if the Fair Market Value of the Common Stock covered by
such Option or Stock Purchase Right shall have declined since the date the Option or Stock Purchase Right was granted; 

    (vii) to
institute an Option Exchange Program; 

    (viii) to
construe and interpret the terms of the Plan and awards granted pursuant to the Plan; 

    (ix) to
prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax laws; 

    (x) to
modify or amend each option or Stock Purchase Right (subject to Section 15(c) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of options longer than is otherwise provided for in the Plan; 

    (xi) to
authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Option or Stock Purchase Right previously granted by
the Administrator; 

    (xii) to
make all other determinations deemed necessary or advisable for administering the Plan. 

    (c) EFFECT
OF ADMINISTRATOR'S DECISION. The Administrator's decisions, determinations and interpretations shall be final and binding on all Optionees and any other
holders of Options or Stock Purchase Rights. 

    5.  ELIGIBILITY.
Nonstatutory Stock Options and Stock Purchase Rights may be granted to Service Providers. Incentive Stock Options may be granted only to Employees. 

    6.  LIMITATIONS. 

    (a) Notwithstanding
anything to the contrary in this Plan, no person who is an officer or Director will be eligible to receive a grant of Option or Stock Purchase Right
hereunder until such time as this Plan is approved by the stockholders of the Company. 

    (b) Each
Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the optionee during Any calendar year
(under all plans of the 

4

 

Company and any Parent or Subsidiary) exceeds $100,000, such options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall be taken
into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. 

    (c) Neither
the Plan nor any Option or stock Purchase Right shall confer upon an Optionee any right with respect to continuing the Optionee's relationship as a Service
Provider with the Company, nor shall they interfere in any way with the optionee's right or the Company's right to terminate such relationship at any time, with or without cause. 

    (d) The
following limitations shall apply to grants of options: 

    (i)  No
Service Provider shall be granted, in any fiscal year of the Company, Options to purchase more than 125,000 Shares. 

    (ii) In
connection with his or her initial service, a Service Provider may be granted Options to purchase up to an additional 125,000 Shares which shall not count
against the limit set forth in subsection (i) above. 

    (iii) The
foregoing limitations shall be adjusted proportionately in connection with any change in the Company's capitalization as described in Section 13. 

    (iv) If
an option is cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in
Section 13), the cancelled option will be counted against the limits set forth in subsections W and (ii) above. For this purpose, if the exercise price of an option is reduced, the
transaction will be treated as a cancellation of the option and the grant of a new Option. 

    7.  TERM
OF PLAN. Subject to Section 19 of the Plan, the Plan shall become effective upon its adoption by the Board. It shall continue in effect for a term of
ten (10) years unless terminated earlier under Section 15 of the Plan. 

    8.  TERM
OF OPTION. The term of each Option shall be stated in the option Agreement. In the case of an Incentive Stock Option, the term shall be ten (10) years
from the date of grant or such shorter term as may be provided in the Option Agreement. Moreover, in the case of an Incentive Stock Option granted to an Optionee who, at the time the Incentive Stock
Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive
Stock Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Option Agreement. 

    9.  OPTION
EXERCISE PRICE AND CONSIDERATION. 

    (a) EXERCISE
PRICE. The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined by the Administrator, subject to the
following: 

    (i)  In
the case of an Incentive Stock Option 

    (A) granted
to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant. 

    (B) granted
to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price shall be no less than 100% of the
Fair Market Value per Share on the date of grant. 

    (ii) In
the case of a Nonstatutory Stock Option, the per Share exercise price shall be determined by the Administrator. In the case of a Nonstatutory Stock option
intended to 

5

 

qualify as "performance-based compensation" within the meaning of Section 162(m) of the Code, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the
date of grant. 

    (iii) Notwithstanding
the foregoing, Options may be granted with a per Share exercise price of less than 100% of the Fair Market value per Share on the date of grant
pursuant to a merger or other corporate transaction. 

    (b) WAITING
PERIOD AND EXERCISE DATES. At the time an Option is granted, the Administrator shall fix the period within which the Option may be exercised and shall
determine any conditions which must be satisfied before the Option may be exercised. 

    (c) FORM
OF CONSIDERATION. The Administrator shall determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case
of an Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of: 

    (i)  cash;

    (ii) check;

    (iii) promissory
note; 

    (iv) other
Shares which (A) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than six months on the date of
surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised; 

    (v) consideration
received by the Company under a cashless exercise program implemented by the Company in connection with the Plan; 

    (vi) a
reduction in the amount of any Company liability to the optionee, including any liability attributable to the Optionee's participation in any Company-sponsored
deferred compensation program or arrangement; 

    (vii) any
combination of the foregoing methods of payment; or 

    (viii) such
other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws. 

    10. EXERCISE
OF OPTION. 

    (a) PROCEDURE
FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and under
such conditions as determined by the Administrator and set forth in the Option Agreement. Unless the Administrator provides otherwise, vesting of options granted hereunder shall be suspended during
any unpaid leave of absence. An Option may not be exercised for a fraction of a Share. 

    An
Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled
to exercise the Option, and (ii) full payment for the Shares with respect to which the option is exercised. Full payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an option shall be issued in the name of the optionee or, if requested by the Optionee, in the name of
the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a stockholder shall exist with respect to the 

6

 

Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13 of the Plan. 

    Exercising
an option in any manner shall decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to
which the Option is exercised. 

    (b) TERMINATION
OF RELATIONSHIP AS A SERVICE PROVIDER. If an Optionee ceases to be a Service Provider, other than upon the Optionee's death or Disability, the Optionee
may exercise his or her Option within such period of time as is specified in the option Agreement to the extent that the Option is vested on the date of termination (but in no event later than the
expiration of the term of such option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for three (3) months
following the Optionee's termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the option shall revert
to the Plan. If, after termination, the Optionee does not exercise his or her option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan. 

    (c) DISABILITY
OF OPTIONEE. If an Optionee ceases to be a Service Provider as a result of the Optionee's Disability, the Optionee may exercise his or her Option within
such period of time as is specified in the Option Agreement to the extent the option is vested on the date of termination (but in no event later than the expiration of the term of such option as set
forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee's termination. If,
on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her option within the time specified herein, the Option shall terminate, and the Shares covered by such option shall revert to the Plan. 

    (d) DEATH
OF OPTIONEE. If an Optionee dies while a Service Provider, the Option may be exercised within such period of time as is specified in the Option Agreement (but
in no event later than the expiration of the term of such Option as set forth in the Notice of Grant), by the Optionee's estate or by a person who acquires the right to exercise the Option by bequest
or inheritance, but only to the extent that the Option is vested on the date of death. In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Optionee's termination. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the option
shall immediately revert to the Plan. The Option may be exercised by the executor or administrator of the Optionee's estate or, if none, by the person(s) entitled to exercise the Option under the
Optionee's will or the laws of descent or distribution. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan. 

    (e) BUYOUT
PROVISIONS. The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously granted based on such terms and
conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made. 

7

 

    11. STOCK
PURCHASE RIGHTS. 

    (a) RIGHTS
TO PURCHASE. Stock Purchase Rights may be issued either alone, in addition to, or in tandem with other awards granted under the Plan and/or cash awards made
outside of the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing or electronically, by means of a Notice of
Grant, of the terms, conditions and restrictions related to the offer, including the number of Shares that the offeree shall be entitled to purchase, the price to be paid, and the time within which
the offeree must accept such offer. The offer shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator. 

    (b) REPURCHASE
OPTION. Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable
upon the voluntary or involuntary termination of the purchaser's service with the Company for any reason (including death or Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall
lapse at a rate determined by the Administrator. 

    (c) OTHER
PROVISIONS. The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator in its sole discretion. 

    (d) RIGHTS
AS A STOCKHOLDER. Once the Stock Purchase Right is exercised, the purchaser shall have the rights equivalent to those of a stockholder, and shall be a
stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record
date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 13 of the Plan. 

    12. NON-TRANSFERABILITY
OF OPTIONS AND STOCK PURCHASE RIGHTS. Unless determined otherwise by the Administrator, an Option or Stock Purchase Right may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee,
only by the Optionee. If the Administrator makes an Option or Stock Purchase Right transferable, such Option or Stock Purchase Right shall contain such additional terms and conditions as the
Administrator deems appropriate. 

    13. ADJUSTMENTS
UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET SALE. 

    (a) CHANGES
IN CAPITALIZATION. Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each outstanding
Option and Stock Purchase Right, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no options or Stock Purchase Rights have yet been
granted or which have been returned to the Plan upon cancellation or expiration of an Option or Stock Purchase Right, as well as the price per share of Common Stock covered by each such outstanding
option or Stock Purchase Right, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding 

8

 

and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option or Stock Purchase Right. 

    (b) DISSOLUTION
OR LIQUIDATION. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Optionee as soon as
practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for an Optionee to have the right to exercise his or her Option until ten
(10) days prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which the option would not otherwise be exercisable. In addition, the Administrator
may provide that any Company repurchase option applicable to any Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse as to all such Shares, provided the proposed
dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, an Option or Stock Purchase Right will terminate immediately
prior to the consummation of such proposed action. 

    (c) MERGER
OR ASSET SALE. In the event of a merger of the Company with or into another corporation, or the sale of substantially all of the assets of the Company, each
outstanding Option and Stock Purchase Right shall be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the
event that the successor corporation refuses to assume or substitute for the Option or Stock Purchase Right, the Optionee shall fully vest in and have the right to exercise the Option or Stock
Purchase Right as to all of the optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option or Stock Purchase Right becomes fully vested and exercisable
in lieu of assumption or substitution in the event of a merger or sale of assets, the Administrator shall notify the Optionee in writing or electronically that the Option or Stock Purchase Right shall
be fully vested and exercisable for a period of fifteen (15) days from the date of such notice, and the Option or Stock Purchase Right shall terminate upon the expiration of such period. The
Option or Stock Purchase Right shall be considered assumed if, following the merger or sale of assets, the Optionee has the right to purchase or receive the same consideration the shareholders of the
Company received in the merger or sale of assets. If the shareholders of the Company received any consideration other than common stock of the successor
corporation, the Administrator may, with the consent of the successor corporation, provide that the consideration received upon exercise of the Option or Stock Purchase Right will be solely the common
stock of the successor corporation, with the exercise price of the option and the number of shares subject to the option adjusted for the exchange rate used in the merger or sale of assets. If the
shareholders of the Company received any consideration other than common stock of the successor corporation, the exchange rate will reflect the fair market value of any such consideration received. 

    14. DATE
OF GRANT. The date of grant of an Option or Stock Purchase Right shall be, for all purposes, the date on which the Administrator makes the determination
granting such option or Stock Purchase Right, or such other later date as is determined by the Administrator. Notice of the determination shall be provided to each Optionee within a reasonable time
after the date of such grant. 

    15. AMENDMENT
AND TERMINATION OF THE PLAN. 

    (a) AMENDMENT
AND TERMINATION. The Board may at any time amend, alter, suspend or terminate the Plan. 

    (b) STOCKHOLDER
APPROVAL. The Company shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws. 

9

 

    (c) EFFECT OF AMENDMENT OR TERMINATION. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed
otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the optionee and the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination. 

    16. CONDITIONS
UPON ISSUANCE OF SHARES. 

    (a) LEGAL
COMPLIANCE. Shares shall not be issued pursuant to the exercise of an Option or Stock Purchase Right unless the exercise of such Option or Stock Purchase
Right and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance. 

    (b) INVESTMENT
REPRESENTATIONS. As a condition to the exercise of an Option or Stock Purchase Right, the Company may require the person exercising such Option or Stock
Purchase Right to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if,
in the opinion of counsel for the Company, such a representation is required. 

    17. INABILITY
TO OBTAIN AUTHORITY. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the
Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained. 

    18. RESERVATION
OF SHARES. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan. 

    19. STOCKHOLDER
APPROVAL. The Plan shall be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted.
Such stockholder approval shall be obtained in the manner and to the degree required under Applicable Laws. 

10

QuickLinks

PHOENIX TECHNOLOGIES LTD. 1999 STOCK PLANPrepared by MERRILL CORPORATION

QuickLinks
 -- Click here to rapidly navigate through this document

EXHIBIT 4.2  

 
 

PHOENIX TECHNOLOGIES LTD.
  
    1999 DIRECTOR OPTION PLAN    
  

    1.  Purposes of the Plan.  The purposes of this 1999 Director Option Plan are to attract and retain the
best available personnel for service as Outside Directors (as defined herein) of the Company, to provide additional incentive to the Outside Directors of the Company to serve as Directors, and to
encourage their continued service on the Board. 

    All
options granted hereunder shall be nonstatutory stock options. 

	2.
	Definitions.
As used herein, the following definitions shall apply: 

    (a) "Board" means the Board of Directors of the Company. 

    (b) "Code" means the Internal Revenue Code of 1986, as amended. 

    (c) "Common Stock" means the common stock of the Company. 

    (d) "Company" means Phoenix Technologies Ltd., a Delaware corporation. 

    (e) "Director" means a member of the Board. 

    (f)  "Disability" means total and permanent disability as defined in section 22(e)(3) of the Code. 

    (g) "Employee" means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary
of the Company. The payment of a Director's fee by the Company shall not be sufficient in and of itself to constitute "employment" by the Company. 

    (h) "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

    (i)  "Fair Market Value" means, as of any date, the value of Common Stock determined as follows: 

    (i)  If
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq
SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system
on the day of determination as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 

    (ii) If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock
shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination, as reported in The Wall Street Journal or
such other source as the Board deems reliable; or 

    (iii) In
the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Board. 

    (j)  "Inside Director" means a Director who is an Employee. 

    (k) "Option" means a stock option granted pursuant to the Plan. 

    (l)  "Optioned Stock" means the Common Stock subject to an Option. 

    (m) "Optionee" means a Director who holds an Option. 

    (n) "Outside Director" means a Director who is not an Employee. 

 

    (o) "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the
Code. 

    (p) "Plan" means this 1999 Director Option Plan. 

    (q) "Share" means a share of the Common Stock, as adjusted in accordance with Section 10 of the Plan. 

    (r) "Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in
Section 424(f) of the Internal Revenue Code of 1986. 

    3.  Stock Subject to the Plan.  Subject to the provisions of Section 10 of the Plan, the maximum
aggregate number of Shares which may be optioned and sold under the Plan is 330,000 Shares (the "Pool"). The Shares may be authorized, but unissued, or reacquired Common Stock. 

    If
an Option expires or becomes unexercisable without having been exercised in full, the unpurchased Shares which were subject thereto shall become available for future grant or sale
under the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan shall not be returned to the Plan and shall not become available for future distribution under the
Plan. 

    4.  Administration and Grants of Options under the Plan.  

    (a) Procedure for Grants. All grants to Outside Director under this Plan shall be automatic in accordance with the
following provisions: 

    (i)  Each
Outside Director shall be automatically granted an Option to purchase 40,000 Shares (the "First Option") on the date on (A) the date on which such
person first becomes an Outside Director, whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy; provided, however, that an Inside Director who
ceases to be an Inside Director but who remains a Director shall not receive a First Option. 

    (ii) Each
Outside Director shall be automatically granted an Option to purchase 15,000 Shares (a "Subsequent Option") promptly after the anniversary date on which each
director became an Outside Director provided he or she is then an Outside Director and if as of such date, he or she shall have served on the Board for at least the preceding six (6) months. 

    (iii) Notwithstanding
the provisions of subsections (i) and (ii) hereof, any exercise of an Option granted before the Company has obtained stockholder
approval of the Plan in accordance with Section 16 thereof shall be conditioned upon obtaining stockholder approval of the Plan in accordance with Section 16 hereof. 

    (iv) The
terms of a First Option granted hereunder shall be as follows: 

    (A) the
term of the First Option shall be ten (10) years. 

    (B) the
First Option shall be exercisable only while the Outside Director remains a Director of the Company, except as set forth in Sections 8 and 10 hereof. 

    (C) the
exercise price per Share shall be 100% of the Fair Market Value per Share on the date of grant of the First Option. 

    (D) the
First Option shall vest and become exercisable for 100% of the shares subject to the First Option on the date of grant. 

    (v) The
terms of a Subsequent Option granted hereunder shall be as follows: 

    (A) the
term of the Subsequent Option shall be ten (10) years. 

    (B) the
Subsequent Option shall be exercisable only while the Outside Director remains a Director of the Company, except as set forth in Sections 8 and 10 hereof. 

2

 

    (C) the exercise price per Share shall be 100% of the Fair Market Value per Share on the date of grant of the Subsequent Option. 

    (D) the
Subsequent Option shall vest and become exercisable for 100% of the shares subject to the Subsequent Option on the date of grant. 

    (vi) In
the event that any Option granted under the Plan would cause the number of Shares subject to outstanding Options plus the number of Shares previously purchased
under Options to exceed the Pool, then the remaining Shares available for Option grant shall be granted under Options to the Outside Directors on a pro rata basis. No further grants shall be made
until such time, if any, as additional Shares become available for grant under the Plan through action of the Board or the stockholders to increase the number of Shares which may be issued under the
Plan or through cancellation or expiration of Options previously granted hereunder. 

    5.  Eligibility.  Options may be granted only to Outside Directors. All Options shall be automatically
granted in accordance with the terms set forth in Section 4 hereof. 

    The
Plan shall not confer upon any Optionee any right with respect to continuation of service as a Director or nomination to serve as a Director, nor shall it interfere in any way
with any rights which the Director or the Company may have to terminate the Director's relationship with the Company at any time. 

    6.  Term of Plan.  The Plan shall become effective upon the earlier to occur of its adoption by the
Board or its approval by the stockholders of the Company as described in Section 16 of the Plan. It shall continue in effect for a term of ten (10) years unless sooner terminated under
Section 11 of the Plan. 

    7.  Form of Consideration.  The consideration to be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall consist of (i) cash, (ii) check, (iii) other shares which (x) in the case of Shares acquired upon exercise of an option, have
been owned by the Optionee for more than six (6) months on the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised,
(iv) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan, or (v) any combination of the foregoing methods of
payment. 

    8.  Exercise of Option.  

    (a) Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder shall be exercisable at such times as
are set forth in Section 4 hereof; provided, however, that no Options shall be exercisable until stockholder approval of the Plan in accordance with Section 16 hereof has been obtained. 

    An
Option may not be exercised for a fraction of a Share. 

    An
Option shall be deemed to be exercised when notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the
Option and full payment for the Shares with respect to which the Option is exercised has been received by the Company. Full payment may consist of any consideration and method of payment allowable
under Section 7 of the Plan. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. A share certificate for the number of Shares so acquired shall be issued to the Optionee as soon as practicable after exercise of the Option. No adjustment shall be made for a dividend or 

3

 

other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 10 of the Plan. 

    Exercise
of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale under the Option,
by the number of Shares as to which the Option is exercised. 

    (b) Termination of Continuous Status as a Director. Subject to Section 10 hereof, in the event an Optionee's
status as a Director terminates (other than upon the Optionee's death or Disability), the Optionee may exercise his or her Option, but only within three (3) months following the date of such
termination. To the extent that the Optionee does not exercise such Option (to the extent otherwise so entitled) within the time specified herein, the Option shall terminate. 

    (c) Disability of Optionee. In the event Optionee's status as a Director terminates as a result of Disability, the
Optionee may exercise his or her Option, but only within twelve (12) months following the date of such termination (but in no event later than the expiration of its ten (10) year term).
To the extent that the Optionee does not exercise such Option (to the extent otherwise so entitled) within the time specified herein, the Option shall terminate. 

    (d) Death of Optionee. In the event of an Optionee's death, the Optionee's estate or a person who acquired the right to
exercise the Option by bequest or inheritance may exercise the Option, but only within twelve (12) months following the date of death (but in no event later than the expiration of its ten
(10) year term). To the extent that the Optionee's estate or a person who acquired the right to exercise such Option does not exercise such Option (to the extent otherwise so entitled) within
the time specified herein, the Option shall terminate. 

    9.  Non-Transferability of Options.  Except as determined otherwise by the Board, the Option
may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of
the Optionee, only by the Optionee. 

    10.  Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale.  

    (a) Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number of Shares
covered by each outstanding Option, the number of Shares which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per Share covered by each such outstanding Option, and the number of Shares issuable pursuant to the automatic grant provisions of
Section 4 hereof shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject
to an Option. 

    (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, to the extent
that an Option has not been previously exercised, it shall terminate immediately prior to the consummation of such proposed action. 

    (c) Merger or Asset Sale. In the event of a merger of the Company with or into another corporation or the sale of
substantially all of the assets of the Company, outstanding Options may be assumed or equivalent options may be substituted by the successor corporation or a Parent or 

4

 

Subsidiary thereof (the "Successor Corporation"). If an Option is assumed or substituted for, the Option or equivalent option shall continue to be exercisable as provided in Section 4 hereof
for so long as the Optionee serves as a Director or a director of the Successor Corporation. In addition, following such assumption or substitution, the Option shall remain exercisable in accordance
with Sections 8(b) through (d) above. 

    If
the Successor Corporation does not assume an outstanding Option or substitute for it an equivalent option, the Board shall notify the Optionee that the Option shall be fully
exercisable for a period of thirty (30) days from the date of such notice, and upon the expiration of such period the Option shall terminate. 

    For
the purposes of this Section 10(c), an Option shall be considered assumed if, following the merger or sale of assets, the Option confers the right to purchase or receive,
for each Share of Optioned Stock subject to the Option immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the
merger or sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares). If such consideration received in the merger or sale of assets is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option, for each Share of Optioned Stock subject to the
Option, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or sale of
assets. 

    11.  Amendment and Termination of the Plan.  

    (a) Amendment and Termination. The Board may at any time amend, alter, suspend, or discontinue the Plan, but no
amendment, alteration, suspension, or discontinuation shall be made which would impair the rights of any Optionee under any grant theretofore made, without his or her consent. In addition, to the
extent necessary and desirable to comply with any applicable law, regulation or stock exchange rule, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a
degree as required. 

    (b) Effect of Amendment or Termination. Any such amendment or termination of the Plan shall not affect
Options already granted and such Options shall remain in full force and effect as if this Plan had not been amended or terminated. 

    12.  Time of Granting Options.  The date of grant of an Option shall, for all purposes, be the date
determined in accordance with Section 4 hereof. 

    13.  Conditions Upon Issuance of Shares.  Shares shall not be issued pursuant to the exercise of an
Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities
Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, state securities laws, and the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with respect to such compliance. 

    As
a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to sell or distribute such Shares, if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law. 

5

 

    Inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance
and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 

    14.  Reservation of Shares.  The Company, during the term of this Plan, will at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 

    15.  Option Agreement.  Options shall be evidenced by written option agreements in such form as the
Board shall approve. 

    16.  Shareholder Approval.  The Plan shall be subject to approval by the stockholders of the Company
within twelve (12) months after the date the Plan is adopted. Such stockholder approval shall be obtained in the degree and manner required under applicable state and federal law and any stock
exchange rules. 

6

QuickLinks

PHOENIX TECHNOLOGIES LTD. 1999 DIRECTOR OPTION PLAN

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00032-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00032-of-00352.parquet"}]]