Document:

exv10w21

Exhibit 10.21

			
	     	 	 
	CONFIDENTIAL TREATMENT REQUEST	 	 
	Confidential
	 	Phoenix Agreement Number: 73210100
	 
	 	Lenovo Agreement Number 4907L10470

	 	 	 
	

	 	TECHNOLOGY LICENSE AND SERVICES AGREEMENT

This Technology License and Services Agreement (“Agreement”) is entered into as of April 26,
2007 (the “Agreement Effective Date”) by and between Phoenix Technologies Ltd., having an
office at 915 Murphy Ranch Road, Milpitas, California 95035 U.S.A. (“Phoenix”), and Lenovo
(Singapore) Pte. Ltd., having an office at 151, Lorong Chuan, #02-01, New Tech Park, Singapore
556741 (“Licensee”). In consideration of the benefits and obligations exchanged in this Agreement,
the parties agree as follows:

	1.	 	CERTAIN DEFINED TERMS. All terms in this Agreement with initial capitals have the
meanings set forth in Attachment II — Definitions, unless defined elsewhere. All defined
terms in singular form shall include the plural meanings of such terms and vice versa, if
applicable. All references to a Section, Attachment or Amendment mean a section, attachment
or amendment of this Agreement. All references to this Agreement include all attachments,
exhibits, exhibit amendments, and amendments.
	 
	2.	 	LICENSE GRANT.
	 
	2.1	 	Subject to the additional restrictions and obligations as set forth in Section 3 and
Attachment III – Program (Object Code) License of this Agreement, Phoenix grants Licensee and
its Affiliates a non-exclusive, non-transferable, worldwide and royalty bearing license to:
(a) use, reproduce, have reproduced, perform, display and distribute the Programs, but solely
for use with or incorporation into Licensee Products; and (b) provide the Programs to TPDs and
Contract Manufacturers to use, reproduce, have reproduced, perform and display and distribute
the Programs for use with or incorporation into Licensee Products, on behalf of Licensee and
its Affiliates, pursuant to provisions consistent with the terms of this Agreement.
	 
	 	 	2.1.1 Licensee and its Affiliates shall be authorized to post a copy of the Programs licensed
pursuant to the provisions of this Agreement, for purposes of providing upgrades and support
to end users of the Programs on: (a) electronic media, such as Licensee’s website, Affiliate’s
website or secure FTP site and/or (b) physical media such as CD-ROM.
	 
	 	 	2.1.2 Licensee agrees to be responsible and liable for the actions of such Affiliates, TPD and
Contract Manufacturers, as relates to the rights granted to such parties, as set forth in this
Agreement.
	 
	2.2	 	Phoenix grants Licensee and its Affiliates a non-exclusive, non-transferable license to: (a)
use the Tools, pursuant to the provisions set forth in Attachment IV – Tool License of this
Agreement and subject to the applicable fees for such use; and (b) internally use the Source
Code, pursuant to the provisions set forth in Attachment VII – Source Code License of this
Agreement and subject to applicable fees for such use.
	 
	2.3	 	The licenses granted in this Agreement are subject to all terms, conditions, requirements,
restrictions and limitations set forth in this Agreement. All rights not expressly granted
are reserved by Phoenix.
	 
	2.4	 	Phoenix agrees to provide services to Licensee for: (a) engineering services, pursuant
to the provisions set forth in Attachment V – Engineering Services of this Agreement and
subject to the applicable fees for such services; (b) maintenance, pursuant to the provisions
set forth in Attachment VIII – Maintenance of this Agreement and subject to the applicable
fees for such services; and (c) CSS standard support services, pursuant to the provisions set
forth in Attachment – CSS Standard Support Services Program of this Agreement and subject to
the applicable fees for such services.
	 
	2.5	 	For purposes of clarification, Licensee and its Affiliates shall receive only those licenses
or services pursuant to the provisions of this Agreement when: (a) the specific Program
license, Tool license or Source Code license and applicable fees; and/or (b) specific services
and applicable fees are set forth in an Attachment or Amendment to this Agreement; and such
Attachment or Amendment may set forth special requirements particular to such licenses and
services.
	 
	2.6	 	The parties agree that the provisions of this Agreement, as relates to the Phoenix
Deliverables made by Phoenix to Licensee and any Services performed by Phoenix for Licensee,
shall be applicable, even if delivered or performed prior to the Agreement Effective Date.
	 
	3.	 	USE RESTRICTIONS. Licensee or any of Licensee’s Affiliates shall not, nor shall they
authorize any third party (including TPDs and Contract Manufacturers) to: (a)
sublicense, sell, or otherwise distribute any Program copies separately from Licensee Products
except as provided in Section 2.1.1; (b) alter, remove, disable or suppress the display of any
end-user license agreement, copyright, trademark, trade name, logo or trade dress included as
part of the Programs, except as may otherwise be agreed by the parties in writing; or
(c) modify (except as otherwise set forth in this Agreement), translate, reverse assemble,
decompile, or disassemble any Programs.
	 
	4.0	 	ADDITIONAL DELIVERABLES.

 

			
	THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

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	CONFIDENTIAL TREATMENT REQUEST	 	 
	Confidential
	 	Phoenix Agreement Number: 73210100
	 
	 	Lenovo Agreement Number 4907L10470

	4.1	 	The parties may subsequently add Deliverables, services and/or other items available by
Phoenix, to this Agreement using any one of the following methods:
	 
	 	 	Method I: (a) Licensee issues a purchase order to Phoenix for such Deliverables, services
and/or other items, referencing this Agreement; (b) Phoenix issues an invoice to Licensee; (c)
Phoenix delivers the relevant Deliverables, services and/or other items to Licensee;
and (d) Licensee pays Phoenix the applicable fees. Each invoice issued by Phoenix in response
to Licensee’s purchase order shall constitute an Amendment to this Agreement. For purposes of
clarification, a purchase order from Licensee will be issued only for renewal of any licenses
and services, as set forth in an Attachment or Amendment to this Agreement.
	 
	 	 	Method II: (a) Phoenix and Licensee execute an Amendment to this Agreement to include such
new Deliverables and services and/or other items, as applicable; (b) Phoenix delivers the
relevant Deliverables, services and/or other items to Licensee; and (c) Licensee pays Phoenix
the fees, as applicable, per the payment method as set forth in such Amendment to this
Agreement.
	 
	 	 	Method III: (a) Phoenix and Licensee execute an Authorization Form or Evaluation/Beta Product
Form, as set forth in Attachment X – Document Forms, to this Agreement to include such new
Deliverables and/or other items, as applicable, (b) Phoenix delivers the relevant
Deliverables, and/or other items to Licensee; and (c) Licensee pays Phoenix the fees per the
payment method as set forth in such Authorization Form or Evaluation/Beta Product Form to this
Agreement, as applicable. The parties agree that upon signature by both parties such forms
shall be considered Amendment(s) to this Agreement. The parties agree that such form, may be
updated by Phoenix, from time to time.
	 
	4.2	 	Notwithstanding anything to the contrary in this Section 4 or in this Agreement, the parties
agree that this Agreement be controlling over any additional or different terms and conditions
of any invoice, acknowledgement, purchase order or other business forms used by either party
(“Other Provisions”), even if accepted in writing by both parties. The terms and conditions of
such Other Provisions will have no effect on the rights, duties or obligations of the parties
with respect to any subsequent Deliverables, services, and/or other items available from
Phoenix, regardless of the failure of either party to object to those terms or conditions.
	 
	4.3	 	The parties agree that all subsequent Deliverables, services, and/or other items provided by
Phoenix to Licensee shall be subject to the terms of this Agreement (unless otherwise provided
in a written agreement duly executed by an authorized representative of each party).
	 
	5.	 	FEES AND PAYMENT TERMS.
	 
	5.1	 	Licensee will pay Phoenix all fees in accordance with the terms of this Agreement. Except as
otherwise specified in this Agreement, Licensee will pay all amounts due on net [***] day
terms from receipt of a valid invoice from Phoenix, in United States currency. All amounts due
under this Agreement are non-cancelable, and are an absolute commitment.
	 
	5.2	 	Licensee agrees to pay Phoenix the per-Program copy royalty set forth in this Agreement
(“Royalties”) for each copy of a Program distributed on a Licensee Product. Licensee will
account for and pay all Royalties owed to Phoenix by submitting [***] Royalty reports to
Phoenix, in a form reasonably acceptable to Phoenix. Each such report shall be provided to
Phoenix within [***] and, such report shall accurately set forth the number of Program copies
reproduced on Licensee Products during the subject [***]. With each Royalty report, Licensee
will submit payment for all Royalties due Phoenix pursuant to such report. Licensee’s
obligation to furnish [***] Royalty reports and to make [***] Royalty payments to Phoenix will
continue for as long as Licensee distributes any Programs on Licensee Products. Royalty
reports are required even if Licensee reports no distribution of any Programs during a
particular quarter. If Licensee completely stops distributing Programs, Licensee will promptly
provide Phoenix with a final [***] Royalty report, a final Royalty payment for the full amount
of all Royalties due, and a written certification that Licensee has stopped all distribution
of Programs on Licensee Products.
	 
	 	 	5.2.1 In the event that there is an error in royalty reporting, Licensee may adjust (for
overpayment or underpayment) the Royalties due by Licensee to Phoenix, as set forth in
Licensee’s next Royalty Report provided to Phoenix.
	 
	5.3	 	No per copy royalties shall be due and payable by Licensee to Phoenix, pursuant to this
Section 5, with respect to Program copies which are: (a) used or distributed internally for
software development (including Licensee’s TPDs who are performing services on Licensee’s
behalf); (b) used or distributed for demonstration, marketing or training purposes; (c) used
for backup or archival purposes; (d) used for manufacturing or testing purposes by Licensee or
Contract Manufacturers; (e) used to repair, fix an error, provide a defective copy or maintain
a Licensee Product which incorporates a Program; or (f) distributed to an
existing customer as an upgrade to their existing copy of a Program, provided Licensee has not
obtained any revenue for such upgrade.
	 
	5.4	 	During the term of this Agreement and for a period of [***] thereafter, Licensee agrees that
Phoenix may hire an independent accounting firm, mutually agreed by the

 

			
	THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

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	CONFIDENTIAL TREATMENT REQUEST

Confidential
	 	Phoenix Agreement Number: 73210100

Lenovo Agreement Number 4907L10470

	 	 	parties (“Auditor”), to audit all relevant books and records for the sole purpose of determining Licensee’s compliance with the payment of per
Program license fee obligations set forth in this Agreement. Such Auditor shall: (a) execute
the appropriate standard confidentiality agreement with Licensee, prior to conducting such
audit; and (b) report to Phoenix only such information obtained during the course of such
audit as is necessary to determine whether the payments made by Licensee hereunder are
correct. Phoenix shall cause such audit to be conducted no more than once in any [***] period.
Any such audit will be conducted at Licensee’s premises during regular business hours, after
[***] days notice, and in a manner that will not unduly interfere with Licensee’s normal
business practices. Licensee will provide all reasonable assistance and cooperation that
Phoenix may request during any audit. Licensee will promptly pay Phoenix the full amount of
any underpayment revealed by an audit, and [***], Licensee shall promptly reimburse Phoenix
for the reasonable cost of such audit.

	5.5	 	[***]. In no event shall Licensee be responsible for taxes computed upon Phoenix’s net
income, net worth, or gross receipts. [***].

	 	5.5.1	 	[***]
	 
	 	5.5.2	 	[***]

	6.	 	DELIVERY. Unless otherwise set forth in this Agreement, Phoenix will deliver the
Deliverables to Licensee within [***] days after final execution of this Agreement, an
Amendment, or in response to Licensee providing a purchase order to Phoenix. If delivery is
via common carrier, then it will be FOB, origin Phoenix’s facility. If delivery is via
Phoenix’s WWW or FTP site or service provider, then: (a) Phoenix will provide Licensee with
all information needed to download such Deliverables; and (b) Licensee shall
be deemed to have downloaded and taken possession of all Deliverables on the same date Phoenix
provides Licensee with the information required to complete such download.

	7.	 	OWNERSHIP.

	7.1	 	All Deliverables and Modifications, made by Phoenix or on behalf of Phoenix, are the
proprietary property of Phoenix and/or its suppliers. Except to the extent expressly
authorized in this Agreement, Licensee shall have no right to, nor shall it authorize any
third party (including Affiliates, TPDs and Contract Manufacturers) to: sell, assign, lease,
transfer, encumber, or otherwise suffer to exist any lien or security interest on the
Deliverables (or Modifications, made by Phoenix or on behalf of Phoenix).

	7.2	 	[***]
	 
	8.	 	WARRANTIES AND DISCLAIMERS.
	 
	8.1	 	Phoenix warrants and represents to Licensee that, as of the Agreement Effective Date, it owns
or has sufficient right, title, and interest in and to the Deliverables to grant the licenses,
and other rights granted to Licensee by Phoenix under this Agreement. [***]
	 
	8.2	 	Phoenix warrants and represents to Licensee that, to the best of its knowledge, it owns or
has sufficient right, title and interest in and to the trademarks, trade names, logos and
trade dress included as part of the Deliverables.
	 
	8.3	 	Phoenix warrants to Licensee that the Deliverables, in their unmodified form and when used as
authorized under this Agreement, will perform materially in accordance with the Phoenix
Specifications for a period of [***] from the date of initial delivery of the Deliverables to
Licensee (the “Warranty Period”). If, during the Warranty Period, the Deliverables do not
perform materially in accordance with their Specifications, Phoenix shall use commercially
reasonable efforts to rectify the non-conformity. If Phoenix determines that the preceding
option is commercially impractical, then Phoenix shall [***] and in such event, any licenses
granted by Phoenix to Licensee for such Deliverables shall terminate. THE PROVISIONS OF THIS
SECTION 8.3 STATE THE SOLE AND EXCLUSIVE REMEDIES AVAILABLE TO LICENSEE WITH RESPECT TO THE
WARRANITIES SET FORTH IN THIS SECTION 8.3.
	 
	8.4	 	In addition to the warranties stated above, Phoenix warrants to Licensee that:
	 
	 	 	(a) Phoenix has entered into written agreements with its employees, contractors,
licensees or other applicable third parties, as necessary for it to comply with all of
its obligations under this Agreement;
	 
	 	 	(b) [***]
	 
	 	 	(c) [***]
	 
	 	 	(d) [***]
	 
	 	 	(e) [***]
	 
	 	 	(f) Services will be performed in a good and workmanlike manner by individuals with
sufficient skill, experience and training to fulfill Phoenix’s obligations under the
terms of this Agreement;
	 
	 	 	(g) Phoenix will comply with all applicable export and import laws, regulations,
orders, and policies (including, but not limited to, securing all necessary clearance
requirements, export and import licenses and exemptions from, and making all proper
filings with appropriate governmental bodies and/or disclosures relating to the release
or transfer of technology and software to non U.S. nationals in the U.S., or outside the
U.S., release or transfer of technology and software having U.S. content or derived from
U.S.-origin software or technology);

 

			
	THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

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	CONFIDENTIAL TREATMENT REQUEST

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	 	Phoenix Agreement Number: 73210100

Lenovo Agreement Number 4907L10470

	 	 	(h) [***]
	 
	 	 	(i) [***]
	 
	 	 	(j) [***]
	 
	 	 	(k) Phoenix shall verify that any encryption technologies, included in any of the
Deliverables, are classified with an Export Control Classification Number (ECCN), with the
origin of the classification identified via CCATS number of self certification documentation
as per U.S. Export Administration Regulations (EAR) that are implemented and enforced by the
U.S. Department of Commerce Bureau of Industry and Security (BIS);
	 
	 	 	(l) [***]. Phoenix represents that it shall not include any explosive, hazardous, incendiary
and/or destructive materials in any products transported under this Agreement; and
	 
	 	 	(m) All Deliverables and Services will process date data correctly (including, without
limitation, correctly processing, providing, receiving, and displaying date data) within
and between the twentieth and twenty-first centuries, and are designed to exchange date
data accurately and correctly with other products (including, without limitation,
hardware, software, and firmware) used with Deliverables and Services.
	 
	8.5	 	PHOENIX DISCLAIMS ALL OTHER WARRANTIES, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE REGARDING
OR RELATING TO ANY DELIVERABLES OR SERVICES FURNISHED OR PROVIDED TO LICENSEE UNDER THIS
AGREEMENT. PHOENIX SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
	 
	9.	 	INDEMNIFICATION BY PHOENIX.
	 
	9.1	 	[***]
	 
	9.2	 	Phoenix will, at its own expense, defend, indemnify and hold Licensee harmless from any claim
made or threatened or any suit or proceeding brought against Licensee to the extent based on
an allegation that any Deliverable furnished to Licensee under this Agreement infringes a
[***] copyright, patent, trademark or trade secret in existence during the term of this
Agreement. Licensee shall: (a) notify Phoenix in writing within a reasonable period of time
of such action; (b) give Phoenix the right to control and direct the defense and settlement of
such action; (c) make no compromise, settlement or admission of liability that is not approved
by Phoenix; and (d) provide reasonable assistance and cooperates in the defense of such
action. Subject to the limitations set forth in Section 11, Phoenix shall pay any resulting
damages, costs and expenses finally awarded to a third party, including but not limited to
reasonable attorney’s fees, and any settlement to which Phoenix has agreed, and will pay
Licensee’s reasonable attorney’s fees incurred in reviewing the claim. Phoenix will have no
responsibility for the settlement of any claim, suit or proceeding made by Licensee without
Phoenix’s prior written approval. Notwithstanding the foregoing, Licensee may retain counsel
and participate in the defense of any such action or claim solely at its own option and
expense, provided however that Licensee’s defense corresponds with Phoenix’s defense.
	 
	9.3	 	With respect to any claim made or threatened or any suit or proceeding brought against
Licensee so far as it is based on an allegation that any Program furnished hereunder to
Licensee infringes a [***] and in such event, any licenses granted by Phoenix to Licensee for
such Programs shall terminate.
	 
	9.4	 	If any Deliverable is held to infringe and the use of such Deliverable is enjoined, Phoenix
will at its expense: [***] and at such event, any licenses granted by Phoenix to Licensee for
such Deliverable shall terminate.
	 
	9.5	 	Phoenix’s obligations as stated in this Section 9 will not apply to any claim, suit or
proceeding to the extent it is based on: (a) any modification of the Deliverables other than
by Phoenix or the combination of the Deliverables with non-Phoenix hardware or software, if
the claim, suit or proceeding would have been avoided if the Deliverables had not been so
modified or combined, [***]; or (b) any use of the Deliverables not authorized by this
Agreement.
	 
	9.6	 	This Section 9 sets forth the entire obligation of Phoenix, and Licensee’s exclusive remedy,
for the actual or alleged infringement by any Deliverables of any patent, copyright, trade
secret or other intellectual property right of any person or entity.
	 
	10.	 	INDEMNIFICATION BY LICENSEE.
	 
	10.1	 	Licensee will, at its own expense, defend, indemnify and hold Phoenix harmless from any claim
made or threatened or any suit or proceeding brought against Phoenix to the extent based on
[***], infringes a [***] copyright or patent, trade mark, or trade secret. Phoenix shall: (a)
notify Licensee in writing within a reasonable period of time of such action; (b) give
Licensee the right to control and direct the defense and settlement of such action; (c) make
no compromise, settlement or admission of liability that is not approved by Licensee; and (d)
provide reasonable assistance and cooperates in the defense of such action. Subject to the
limitations set forth in Section 11, Licensee shall pay any resulting damages, costs and
expenses finally awarded to a third party, including but not limited to reasonable attorney’s
fees, and any settlement to which Licensee has agreed, and will pay Phoenix’s reasonable
attorney’s fees incurred in reviewing the claim. Licensee will have no

 

			
	THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

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	CONFIDENTIAL TREATMENT REQUEST

Confidential

	 	Phoenix Agreement Number: 73210100

Lenovo Agreement Number 4907L10470

	 	 	responsibility for the settlement of any claim, suit or proceeding made by Phoenix without
Licensee’s prior written approval. Notwithstanding the foregoing, Phoenix may retain counsel
and participate in the defense of such action or claim solely at its own option and expense;
provided however that Phoenix’s defense corresponds with Licensee’s defense.
	 
	10.2	 	Licensee shall indemnify Phoenix against all claims, liabilities, proceedings, costs,
damages, losses, liabilities or expenses incurred by Phoenix caused by the negligence or
willful misconduct of any TPD or Affiliate in connection with the unauthorized use or
disclosure of the Source Code.
	 
	11.	 	LIMITATION OF LIABILITY.
	 
	11.1	 	EXCEPT FOR ANY LIABILITY ARISING FROM SECTION [***] AND SECTION [***], IN NO EVENT WILL
EITHER PARTY BE LIABLE TO EACH OTHER OR TO ANY THIRD PARTY FOR ANY CONSEQUENTIAL, INDIRECT,
INCIDENTAL OR SPECIAL DAMAGES, EVEN IF THE PARTY TO BE CHARGED HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
	 
	11.2	 	EXCEPT FOR ANY LIABILITY ARISING FROM [***] IN NO EVENT WILL EITHER PARTY’S TOTAL LIABILITY
UNDER ANY OR ALL PROVISIONS OF THIS AGREEMENT FOR ALL CAUSES OF ACTION ON A CUMULATIVE BASIS
EXCEED [***] THE PAYMENTS ACTUALLY MADE TO PHOENIX BY LICENSEE UNDER THIS AGREEMENT DURING THE
IMMEDIATELY PRECEDING [***] MONTH PERIOD [***].
	 
	11.3	 	NOTWITHSTANDING THE PROVISIONS OF SECTION 11.1 AND SECTION 11.2, EACH PARTY’S TOTAL LIABILITY
UNDER SECTION [***] AND SECTION [***], RESPECTIVELY, SHALL NOT EXCEED [***].
	 
	11.4	 	THE PARTIES AGREE THAT PHOENIX HAS SET ITS PRICES AND ENTERED INTO THIS AGREEMENT IN RELIANCE
UPON THE LIMITATIONS AND DISCLAIMERS IN THIS SECTION 11, WHICH REPRESENT A BARGAINED-FOR
ALLOCATION OF RISK BETWEEN THE PARTIES (INCLUDING THE RISK THAT A CONTRACT REMEDY MAY FAIL OF
ITS ESSENTIAL PURPOSE AND CAUSE CONSEQUENTIAL LOSS), AND FORMS AN ESSENTIAL BASIS OF THE
BARGAIN BETWEEN THE PARTIES.
	 
	12.	 	CONFIDENTIALITY.
	 
	12.1	 	On April 26, 2005, Phoenix and Licensee, as successor-in-interest to International Business
Machines Corporation, entered into a Confidential Disclosure Agreement; bearing agreement
number 4905RL1052 (“2005 NDA”). For reference purposes, the 2005 NDA is provided in Attachment
XII – Confidential Disclosure Agreement between Phoenix and Licensee.
	 
	12.2	 	The parties agree that any disclosure by a party (as “Discloser”) to the other party (as
“Recipient”) of Confidential Information, as defined in the 2005 NDA, shall be disclosed by
the parties pursuant to the provisions of the 2005 NDA.
	 
	12.3	 	Notwithstanding the provisions of the 2005 NDA, the parties agree as follows:

(a) the terms and conditions of this Agreement shall be considered Confidential Information,
and neither Party will disclose the provisions of this Agreement other than to business,
financial and legal advisors, or as required by law or regulation, without the express written
consent of the other Party;

(b) prior to any disclosure of the Source Code and/or Internal Use Tools, the parties shall
not be required to sign a Supplement to the 2005 NDA;

(c) prior to any disclosure of the Source Code and Internal Use Tools to any TPDs or
Affiliates, such parties must be identified in an Attachment or Amendment to this Agreement;

(d) the Source Code and Internal Use Tools shall be considered Confidential Information, even
if not so marked or identified as “confidential” or even if such information does not include
any restrictive marking;

(e) the duty to protect the confidentiality of the terms and conditions of this Agreement
shall continue for a period of five (5) years from the expiration date or termination date of
this Agreement;

(f) the duty to protect the confidentiality of the Source Code shall survive any expiration or
termination of this Agreement and continue until such time as Phoenix releases the Source Code
into the public domain without any restriction on disclosure, if such an event ever occurs;

(g) the duty to protect the confidentiality of Phoenix’s Internal Use Tools shall continue for
a period of five (5) years from the expiration date or termination date of this Agreement;

(h) the duty to protect the confidentiality of Lenovo Code and Lenovo Code Derivative Works
shall survive any expiration or termination of this Agreement and continue until such time as
Licensee releases the code into the public domain without any restriction on disclosure, if
such an event ever occurs;

(i) the parties agree not to terminate the 2005 NDA during the term of this Agreement;

(j) in the event that any provision of the 2005 NDA conflicts with the provisions of this
Agreement, then the provisions of this Agreement shall govern; and

 

			
	THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

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	 	Phoenix Agreement Number: 73210100

Lenovo Agreement Number 4907L10470

(k) in the event that the 2005 NDA does not include a provision with regard to a particular
subject matter, then the provisions of this Agreement shall govern.

	13.	 	TERM AND TERMINATION.
	 
	13.1	 	The term of this Agreement shall commence on the Agreement Effective Date and shall continue
for a period of [***] thereafter, unless earlier terminated by either party pursuant to this
Section.
	 
	13.2	 	At any time after [***], Licensee may terminate this Agreement by [***].
	 
	13.3	 	Either party may terminate this Agreement upon thirty (30) days written notice to the other
party if the other party is in material breach of this Agreement and such material breach is
not cured within such period.
	 
	13.4	 	If either party: (a) becomes insolvent; (b) makes an assignment for the benefit of creditors;
(c) files or has filed against it a petition in bankruptcy or seeking reorganization; (d) has
a receiver appointed; and/or (e) institutes any proceedings for liquidation or winding up;
then the other party may terminate this Agreement immediately by written notice.
	 
	13.5	 	Within ten (10) days after expiration or termination of this Agreement, each party shall (a)
return or destroy the original and all copies of any Confidential Information (including all
Deliverables) in its possession or control, including but not limited to all copies contained
on any magnetic or optical storage device owned or controlled by such party, and
(b) provide the other with a statement, signed by a authorized officer of such party, that
the originals and all copies have been returned or destroyed. Except as otherwise set forth in
this Section 13.5, upon expiration or termination, all licenses granted in this Agreement will
cease and shall have no further effect; provided that end users of the Programs shall be
permitted the continued and uninterrupted use. Upon expiration or termination, each Party
will remain obligated under this Agreement for transactions that have already been completed
and to those parts of the Agreement relating to ownership, confidentiality, warranties,
indemnity, limitation of liability, payment terms, obligations upon expiration or termination,
and any other applicable provisions which by their nature would survive any such expiration or
termination of this Agreement.
	 
	 	 	13.5.1 [***]
	 
	 	 	13.5.2 [***]
	 
	 	 	13.5.3 Notwithstanding the foregoing, upon termination of this Agreement due to Phoenix
becoming insolvent or Phoenix instituting any proceedings for liquidation or winding up, as
set forth in Section 13.3, then Phoenix agrees the license rights set forth herein for
Deliverables licensed by Phoenix to Licensee prior to such termination shall remain in effect;
and Licensee agrees such programs shall be subject to the provisions of this Agreement.
	 
	14.	 	GENERAL.
	 
	14.1	 	Assignment. Neither party may assign (by operation of law or otherwise) any or all
of its rights and obligations under this Agreement without the prior written consent of the
other party, provided however, that each Party may assign its rights and obligations on
written notice to the other Party without such consent: (a) in the case of Phoenix, to its
wholly-owned subsidiaries; and (b) in the case of Licensee, to Licensee’s parent and parent’s
wholly-owned subsidiaries; so long as, in any assignment to such a subsidiary, Phoenix or
Licensee’s parent, as the case may be, guarantee the performance of the assignee-subsidiary.
Subject to the foregoing sentence, this Agreement shall be binding upon and inure to the
benefit of the parties, their successors and permitted assigns.
	 
	14.2	 	Governing Law and Jurisdiction. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware, without reference to its conflict of law
rules. The United Nations Convention on Contracts for the International Sale of Goods is
expressly excluded from application to this Agreement.
	 
	14.3	 	Partial Invalidity; Waiver. In the event that any provision of this Agreement is
held by a court of competent jurisdiction to be invalid, such provision shall be severed from
this Agreement and shall not affect the validity of this Agreement as a whole or any of its
other provisions. No waiver of any provision of this Agreement shall be effective unless it
is set forth in a writing that refers to the provision so waived and is executed by an
authorized representative of the party waiving its rights. No failure or delay by either
party in exercising any right, power or remedy will operate as a waiver of any such right,
power or remedy.
	 
	14.4	 	Injunctive Relief. Each party agrees that any actual or threatened breach of the
confidentiality and licensing provisions of this Agreement may cause substantial harm to the
non-breaching party that may not be cured by money damages; therefore, either party may seek
equitable relief upon request to protect such rights under this Agreement.
	 
	14.5	 	Notices. Any notice required or permitted to be made or given by either party will
be deemed sufficiently made or given on the date of issuance if sent by certified mail,
commercial courier, personal delivery, or a similar delivery method with a receipt for
delivery. Any notice shall be addressed to the other party at the address in the header of
this Agreement or to such other address as a party may designate by written notice given to
the other party. Notices to Phoenix shall be sent to the attention of the General Counsel.

 

			
	THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

Page 6 of 56

 

 

			
	CONFIDENTIAL TREATMENT REQUEST

Confidential
	 	Phoenix Agreement Number: 73210100

Lenovo Agreement Number 4907L10470

      

	14.6	 	Export. Each party agrees that it will not, nor will it authorize any third party
to, export or re-export the Deliverables, in any form, without first obtaining any required
United States and/or other governmental licenses or other authorization. By entering into
this Agreement, Licensee represents and warrants that it is neither: (a) located in or under
the control of, nor is a national or resident of, any U.S. embargoed country; or (b) listed
on, or under the control of any person listed on, the U.S. Treasury Department’s list of
Specially Designated Nationals or the U.S. Commerce Department’s Table of Denial Orders. If
any licenses or authorizations are required, as relates to Phoenix products, then Phoenix
agrees to provide reasonable assistance to Licensee, upon request from Licensee.

	14.7	 	Entire Agreement. The provisions of this Agreement (including any attachments,
exhibits, exhibit amendments and amendments) constitute the entire agreement between the
parties and supersede all prior agreements, oral or written, and all other communications
relating to the subject matter of this Agreement.

As shown by its signature below, each party agrees to all provisions of this Agreement and has
caused this Agreement to be executed on the date specified below by an individual authorized to
sign on behalf of such party.

	 	 	 	 	 	 	 	 	 	 	 
	Phoenix: Phoenix Technologies Ltd.	 	Licensee: Lenovo (Singapore) Pte. Ltd.
	 
	 	 	 	 	 	 	 	 	 	 
	Authorized Signature:	 	/s/ Phoenix Technologies	 	Authorized Signature:	 	/s/ Lenovo
	 

	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Printed Name:

	 	 	 	 	 	Printed Name:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	Title:	 	 	 	 
	
 
	 	
 

	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	
 
	 	
 

 

	
	THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

Page 7 of 56

 

			
	CONFIDENTIAL TREATMENT REQUEST

Confidential
	 	Phoenix Agreement Number: 73210100

Lenovo Agreement Number 4907L10470

      

SUMMARY OF ATTACHMENTS

The following Attachments are referenced pursuant to the terms and conditions of this Agreement:

	 	 	 
	Attachment IA

	 	Licenses and Services (Mobile)
	 
	 	 
	Attachment IB

	 	Licenses and Services (Desktop)
	 
	 	 
	Attachment IC

	 	Licenses and Services (Options)
	 
	 	 
	Attachment ID

	 	Licenses and Services (Special Requirements)
	 
	 	 
	Attachment IE

	 	Licenses and Services (MLA Summary)
	 
	 	 
	Attachment II

	 	Definitions
	 
	 	 
	Attachment III

	 	Program (Object Code) License
	 
	 	 
	Attachment IV

	 	Tool License
	 
	 	 
	Attachment V

	 	Engineering Services
	 
	 	 
	Attachment VI

	 	Intentionally Left Blank
	 
	 	 
	Attachment VII

	 	Source Code License
	 
	 	 
	Attachment VIII

	 	Maintenance
	 
	 	 
	Attachment IX

	 	CSS Standard Support Program
	 
	 	 
	Attachment X

	 	Document Forms
	 
	 	 
	 

	 	Form A – Non-Disclosure Agreement
	 
	 	 
	 

	 	Form B – Authorization Form
	 
	 	 
	 

	 	Form C – Quarterly Support Services Usage Report
	 
	 	 
	 

	 	Form D – Certification of Originality
	 
	 	 
	 

	 	Form E – Lenovo Technology Form
	 
	 	 
	 

	 	Form F – Licensee Travel and Expense Policy
	 
	 	 
	 

	 	Form G – Evaluation/Beta Product Form
	 
	 	 
	Attachment XI

	 	Evaluation and Beta Licenses
	 
	 	 
	Attachment XII

	 	Confidential Disclosure Agreement between Phoenix and Licensee

 

	
	THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

Page 8 of 56exv10w5xay

Exhibit 10.5(a)

ATMOS ENERGY CORPORATION

CHANGE IN CONTROL SEVERANCE AGREEMENT

TIER I

     THIS AGREEMENT (the “Agreement”) made and entered into as of                                         , by and
between ATMOS ENERGY CORPORATION, a Texas and Virginia                     corporation                      (the                      “Company”),        
  
            and
                                                            (“Executive”).

WITNESSETH:

     WHEREAS, the Company recognizes that the current business environment makes it difficult to
attract and retain highly qualified executives unless a certain degree of security can be offered
to such individuals against organizational and personnel changes which frequently follow Changes in
Control (as defined below) of a corporation; and

     WHEREAS, even rumors of acquisitions or mergers may cause executives to consider major career
changes in an effort to assure financial security for themselves and their families; and

     WHEREAS, the Company desires to assure fair treatment of its key executives in the event of a
Change in Control and to allow them to make critical career decisions without undue time pressure
and financial uncertainty, thereby increasing their willingness to remain with the Company
notwithstanding the outcome of a possible Change in Control transaction; and

     WHEREAS, the Company recognizes that its key executives will be involved in evaluating or
negotiating any offers, proposals or other transactions which could result in Changes in Control of
the Company and believes that it is in the best interest of the Company and its stockholders for
such key executives to be in a position, free from personal financial and employment
considerations, to be able to assess objectively and pursue aggressively the interests of the
Company and its stockholders in making these evaluations and carrying on such negotiations; and

     WHEREAS, the Board of Directors of the Company (the “Board”) believes it is essential to
provide the Executive with compensation arrangements upon a Change in Control which provide the
Executive with individual financial security and which are competitive with those of other
corporations, and in order to accomplish these objectives, the Board has caused the Company to
enter into this Agreement.

     NOW, THEREFORE, in consideration of the mutual premises and conditions contained herein, the
parties hereto agree as follows:

 

 

     1. TERM. This Agreement shall be effective immediately upon its execution, but,
anything in this Agreement to the contrary notwithstanding, neither this Agreement nor any of its
provisions shall be operative unless and until there has been a Change in Control of the Company,
as such term is defined below. The term of this Agreement shall end on the third anniversary of
the date of execution of this Agreement; provided, however, that commencing on the
date one year after the date hereof, and on each annual anniversary of such date (such date and
each annual anniversary thereof is hereinafter referred to as the “Renewal Date”), the term of this
Agreement shall be automatically extended so as to terminate three years from such Renewal Date,
unless at least thirty (30) days prior to the Renewal Date the Company shall give written notice
that the term of the Agreement shall not be so extended; and provided, further,
that after a Change in Control of the Company during the term of this Agreement, this Agreement
shall remain in effect until three years after the Change in Control or until all of the
obligations of the parties hereunder are satisfied, whichever occurs later.

     2. CHANGE IN CONTROL.

          2.1 Change of Control Events. For purposes of this Agreement, a “Change in Control”
of the Company occurs upon a change in the Company’s ownership, its effective control or the
ownership of a substantial portion of its assets, as follows:

     (a) Change in Ownership. A change in ownership of the Company occurs on the
date that any “Person” (as defined in Section 2.2(b) below), other than (1) the Company or
any of its subsidiaries, (2) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates, (3) an underwriter
temporarily holding stock pursuant to an offering of such stock, or (4) a corporation owned,
directly or indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of the Company’s stock, acquires ownership of the Company’s
stock that, together with stock held by such Person, constitutes more than 50% of the total
fair market value or total voting power of the Company’s stock. However, if any Person is
considered to own already more than 50% of the total fair market value or total voting power
of the Company’s stock, the acquisition of additional stock by the same Person is not
considered to be a Change of Control. In addition, if any Person has effective control of
the Company through ownership of 30% or more of the total voting power of the Company’s
stock, as discussed in paragraph (b) below, the acquisition of additional control of the
Company by the same Person is not considered to cause a Change in Control pursuant to this
paragraph (a); or

     (b) Change in Effective Control. Even though the Company may not have
undergone a change in ownership under paragraph (a) above, a change in the effective control
of the Company occurs on either of the following dates:

     (1) the date that any Person acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such Person) ownership
of the Company’s stock possessing 30 percent or more of the total

2

 

voting power of the Company’s stock. However, if any Person owns 30% or more
of the total voting power of the Company’s stock, the acquisition of additional
control of the Company by the same Person is not considered to cause a Change in
Control pursuant to this subparagraph (b)(1); or

     (2) the date during any 12-month period when a majority of members of the Board
is replaced by directors whose appointment or election is not endorsed by a majority
of the Board before the date of the appointment or election; provided, however, that
any such director shall not be considered to be endorsed by the Board if his or her
initial assumption of office occurs as a result of an actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or

     (c) Change in Ownership of Substantial Portion of Assets. A change in the
ownership of a substantial portion of the Company’s assets occurs on the date that a Person
acquires (or has acquired during the 12-month period ending on the date of the most recent
acquisition by such Person) assets of the Company, that have a total gross fair market value
equal to at least 40% of the total gross fair market value of all of the Company’s assets
immediately before such acquisition or acquisitions. However, there is no Change in Control
when there is such a transfer to an entity that is controlled by the shareholders of the
Company immediately after the transfer, through a transfer to (i) a shareholder of the
Company (immediately before the asset transfer) in exchange for or with respect to the
Company’s stock; (ii) an entity, at least 50% of the total value or voting power of the
stock of which is owned, directly or indirectly, by the Company; (iii) a Person that owns
directly or indirectly, at least 50% of the total value or voting power of the Company’s
outstanding stock; or (iv) an entity, at least 50% of the total value or voting power of the
stock of which is owned by a Person that owns, directly or indirectly, at least 50% of the
total value or voting power of the Company’s outstanding stock.

          2.2 Definitions. For purposes of Section 2.1 above,

     (a) “Person” shall have the meaning given in Section 7701(a)(1) of the Internal Revenue
Code of 1986, as amended (the “Code”). Person shall include more than one Person acting as
a group as defined by the Final Treasury Regulations issued under Section 409A of the Code.

     (b) “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under
Section 12 of the Securities Exchange Act of 1934, as amended.

          2.3 Compliance with Code Section 409A. The provisions of Sections 2.1 and 2.2 shall
be interpreted in accordance with the requirements of the Final Treasury Regulations under Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”), it being the intent of the
parties that this Article 2 shall be in compliance with the requirements of said Code Section and
said Regulations.

3

 

     3. TERMINATION OF EMPLOYMENT FOLLOWING CHANGE IN CONTROL. If any of the events
described in Section 2.1 constituting a Change in Control of the Company shall have occurred,
Executive shall be entitled to the benefits provided in Article 4 upon the subsequent termination
of his employment that constitutes a separation from service (as defined in Section 1.409A-1(h) of
the Final Treasury Regulations under Code Section 409A, or any successor provision thereto)
(“Separation from Service”), provided that such termination occurs within three years after a
Change in Control of the Company, unless such termination is (a) because of his death, his
“Disability,” or “Retirement” (as defined in Section 3.1), (b) by the Company for “Cause” (as
defined in Section 3.2), or (c) by Executive other than for “Constructive Termination” (as defined
in Section 3.3) (any such termination qualifying for benefits under Article 4 hereof being
sometimes referred to herein as “CIC Termination”).

     If Executive’s employment with the Company is terminated by the Company for any reason other
than for “Cause” prior to the date on which a Change in Control occurs (whether or not the Change
in Control ever occurs), and such termination either (1) was at the request or direction of a
person who has entered into an agreement with the Company, the consummation of which would
constitute a Change in Control, or (2) was otherwise in connection with or in anticipation of a
Change in Control (whether or not the Change in Control ever occurs), then for all purposes hereof,
such termination shall be deemed to have occurred immediately following a Change in Control.

          3.1 Disability; Retirement. Executive’s employment shall be terminated due to
“Disability” if Executive (i) is qualified for disability benefits under the Atmos Energy
Corporation Group Long-Term Disability Plan, as in effect from time to time; or, (ii) if such
Long-Term Disability Plan is not then in existence, is eligible for Social Security disability
benefits.

          Termination by Executive of his employment based on “Retirement” shall mean termination in
accordance with the Company’s retirement policy generally applicable to its salaried employees, or
in accordance with any retirement arrangement established with Executive’s consent with respect to
him.

          3.2 Cause. For the purposes of this Agreement, the Company shall have “Cause” to
terminate Executive’s employment hereunder upon (1) the willful and continued failure by Executive
to substantially perform his duties with the Company (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for substantial performance
is delivered to Executive by the Board which specifically identifies the manner in which the Board
believes that he has not substantially performed his duties, or (2) the willful engaging by
Executive in conduct materially and demonstrably injurious to the Company, monetarily or otherwise.
For purposes of this Section 3.2, no act, or failure to act, on Executive’s part shall be
considered “willful” if, in Executive’s sole judgment, his action or omission was done, or omitted
to be done, in good faith and with a reasonable belief that his action or omission was in the best
interest of the Company. Notwithstanding the foregoing, Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to him a copy of a resolution
duly adopted by the affirmative vote of not less

4

 

than three-quarters (3/4) of the entire authorized membership of the Board at a meeting of the
Board called and held for the purpose (after reasonable notice to Executive and an opportunity for
Executive, together with counsel, to be heard before the Board), finding that in the good faith
opinion of the Board Executive was guilty of conduct set forth above in clause (1) or (2) of the
first sentence of this Section 3.2, and specifying the particulars thereof in detail.

          3.3 Constructive Termination. For purposes of this Agreement, “Constructive
Termination” shall mean:

     (a) Without his express written consent, the assignment to Executive of any duties
inconsistent with his positions, duties, responsibilities and status with the Company
immediately prior to a Change in Control, or a change in his reporting responsibilities,
titles or offices as in effect immediately prior to a Change in Control, or any removal of
Executive from or any failure to re-elect Executive to any of such positions, except in
connection with the termination of his employment for Cause, death, Disability or Retirement
or termination of employment by Executive for reasons other than Constructive Termination;

     (b) A reduction by the Company in Executive’s base salary as in effect on the date of a
Change in Control or as the same may be increased from time to time thereafter;

     (c) A reduction by the Company in the bonus payable to Executive in any year below a
percentage of Executive’s then base salary equal to the average percentage of Executive’s
base salary represented by the bonuses received by Executive for the three (3) years (or, if
shorter, the years of Executive’s employment by the Company) immediately preceding the year
in which a Change in Control occurs as percentages of his base salaries in each of such
three (3) years (or shorter number of years). By way of example, but not in limitation of
the provisions of this paragraph (c), assume a Change in Control occurs in 2008, and
Executive received bonuses for each of 2005, 2006 and 2007 as follows: 30% of his base
salary for 2005; 50% of his base salary for 2006; and 50% of his base salary for 2007. If
Executive receives a bonus for 2008 which is less than 43.33% of his 2008 base salary,
Executive may terminate his employment for “Constructive Termination” under this Section
3.3. If Executive was only employed during 2006 and 2007, using the same facts as recited
herein, Executive may terminate his employment for “Constructive Termination” if his 2008
bonus was less than 50% of his 2008 base salary;

     (d) The Company’s requiring Executive to be based anywhere other than either the
Company’s offices at which he was based immediately prior to a Change in Control or the
Company’s offices which are no more than seventy-five (75) miles from the offices at which
Executive was based immediately prior to a Change in Control, except for required travel on
the Company’s business to an extent substantially consistent with his business travel
obligations immediately prior to the Change in Control (excluding, however, any travel
obligations prior to the Change in Control that are associated with or caused by the Change
in Control events or circumstances), or, in the

5

 

event Executive consents to any relocation beyond such seventy-five-mile radius, the
failure by the Company to pay (or reimburse Executive) for all reasonable moving expenses
incurred by him relating to a change of his principal residence in connection with such
relocation and to indemnify Executive against any loss (defined as the difference between
the actual sale price of such residence and the higher of (a) his aggregate investment in
such residence or (b) the fair market value of such residence as determined by a real estate
appraiser designated by Executive and reasonably satisfactory to the Company) realized on
the sale of Executive’s principal residence in connection with any such change of residence;

     (e) The failure by the Company to continue in effect any benefit or compensation plan
(including but not limited to any stock option plan, pension plan, deferred compensation
plan, life insurance plan, health and accident plan or disability plan) in which Executive
is participating at the time of a Change in Control of the Company (or plans providing
substantially similar benefits), the taking of any action by the Company which would
adversely affect Executive’s participation in, payment from, or materially reduce his
benefits under any of such plans or deprive him of any material fringe benefit enjoyed by
him at the time of the Change in Control, or the failure by the Company to provide Executive
with the number of days of paid time off to which he is then entitled on the basis of years
of service with the Company in accordance with the Company’s normal paid time off or
vacation policy in effect immediately prior to the Change in Control;

     (f) Any failure of the Company to obtain the assumption of, or the agreement to
perform, this Agreement by any successor as contemplated in Article 5;

     (g) Any purported termination of Executive’s employment which is not effected pursuant
to a Notice of Termination satisfying the requirements of Section 3.4 (and, if applicable,
Section 3.2); and for purposes hereof, no such purported termination shall be effective; or

     (h) The failure of the Company otherwise to honor all the terms and provisions of this
Agreement.

For purposes of this Section 3.3, any good faith determination of “Constructive Termination” made
by Executive shall be conclusive and binding on the parties.

          3.4 Notice of Termination. Any termination pursuant to the foregoing provisions of
this Section (including termination due to Executive’s death) shall be communicated by written
Notice of Termination to the other party hereto. For purposes hereof, a “Notice of Termination”
shall mean a notice which shall indicate the specific termination provision herein relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so indicated. In the event that
Executive seeks to terminate his employment with the Company pursuant to Section 3.3, he must
communicate his written Notice of Termination to the Company

6

 

within sixty (60) days of being notified of such action or actions by the Company which
constitute Constructive Termination.

          3.5 Date of Termination. “Date of Termination” shall mean (i) if this Agreement is
terminated for Disability, thirty (30) days after Notice of Termination is given (provided that
Executive shall not have returned to the performance of his duties on a full-time basis during such
thirty (30)-day period); (ii) if Executive’s employment is terminated pursuant to Section 3.3, the
date specified in the Notice of Termination; and (iii) if Executive’s employment is terminated for
any other reason, the date on which a Notice of Termination is given; provided, however, in no
event shall such Date of Termination be earlier than the date of the Executive’s Separation from
Service.

     4. COMPENSATION UPON TERMINATION.

          4.1 Termination Without Cause or for Constructive Termination. If Executive suffers a
CIC Termination, then, subject to Section 4.2, Executive shall be entitled, if such CIC Termination
occurred within three (3) years of a Change in Control, to the following benefits:

     (a) The Company shall pay to Executive as severance pay in one lump sum an amount equal
to the product of (i) Executive’s Total Compensation (as defined below) multiplied by (ii)
the number two and one-half (2.5). Such severance pay shall be paid not later than the
tenth (10th) business day following the Date of Termination, unless Executive is a
“specified employee,” as defined in §1.409A-1(i) of the Final Treasury Regulations under
Code Section 409A, or any successor provision thereto, in which case, such severance pay
shall be paid on the date which is six (6) months following the Participant’s Date of
Termination (or, if earlier, the date of death of the Participant), provided the six months
delay requirements of Code Section 409A otherwise apply to the payments hereunder. All
severance pay that is delayed as provided in this paragraph (a) shall accrue interest for
the period from the tenth (10th) business day following the Date of Termination until the
date such payment is actually made. Said interest shall be equal to the applicable interest
rate as defined in Code Section 417(e)(3), without regard to the phase-in percentages
specified in Code Section 417(e)(3)(D)(iii), for the November preceding the first day of the
calendar year in which the participant retires or otherwise becomes entitled to payments
without regard to this Section 5.4(c).

For purposes of this Section 4.1(a), Executive’s “Total Compensation” shall mean the annual
base salary being paid to Executive at the Date of Termination plus Executive’s “Average
Bonus.” Executive’s “Average Bonus” shall mean the greater of (i) the bonus or incentive
award pursuant to any annual performance bonus or incentive compensation plan of the Company
(the “Bonus”) last paid to or earned by Executive immediately prior to his Date of
Termination, or (ii) the average of the highest three Bonuses or incentive awards (whether
or not consecutive) paid to or earned by Executive.

     (b)

7

 

     (i) The Company shall continue to provide Executive with all medical, dental,
vision, and any other health benefits which qualify for continuation coverage under
Code Section 4980B ( “COBRA Coverage”), for a period of 18 months from the Date of
Termination. Such benefits shall be equal to or economically equivalent to the
benefits in effect for Executive at the time of the Change in Control, and the
Company shall provide such benefits at the same cost to Executive as the cost, if
any, charged to Executive for those benefits immediately prior to the Date of
Termination. Within 10 business days following the end of said 18-month period,
Executive shall be paid a lump sum amount equal to the present value of the cost to
the Company of providing those benefits to Executive for an additional 18-month
period, with such cost being determined on the basis of the monthly cost to the
Company of providing such benefits during the 18th month following
Executive’s Date of Termination (net of the monthly cost, if any, charged to
Executive for those benefits in said 18th month).

     (ii) On the date that Executive is paid the severance pay, as provided for in
Section 4.1(a), the Company shall pay to Executive a lump sum amount equal to the
present value of the cost to the Company of providing Executive, for a period of 36
months from the Executive’s Date of Termination, with accident and life insurance
benefits, and disability benefits equal to such benefits in effect for Executive at
the time of the Change in Control, with such cost being determined on the basis of
the monthly cost to the Company of providing such benefits during the month
immediately preceding Executive’s Date of Termination (net of the monthly cost, if
any, charged to Executive for those benefits in the month immediately preceding
Executive’s Date of Termination).

          4.2 Gross-Up Payment. In the event it shall be determined that any payment,
distribution, or benefits of any type by the Company to or for the benefit of the Executive,
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 Code Section 4999
or any interest or penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are collectively referred to as the “Excise Tax”), then Executive
shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by Executive of all taxes (including additional excise taxes under said Section 4999,
and any interest and penalties imposed with respect to any taxes) 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 Company shall pay the Gross-Up Payment to Executive within thirty (30)
business days after Executive’s termination of employment.

          4.3 Determination By Accountant. All determinations required to be made under this
Article 4, including whether a Gross-Up Payment is required and the amount of such Gross-Up
Payment, shall be made by the independent accounting firm retained by the Company on the date of
the Change in Control (the “Accounting Firm”), which shall provide detailed supporting calculations
both to the Company and Executive within fifteen (15) business days of the Date of Termination , if
applicable, or such earlier time as is requested by the Company. If

8

 

the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish
Executive with an opinion that he 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. As a result of the 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 which will not have been made by the Company should have been made
(“Underpayment”), consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 4.4 and Executive thereafter is required
to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to
or for the benefit of Executive. Notwithstanding the foregoing provisions of this Section 4.3, in
no event shall such Underpayment be paid to Executive later than the end of the calendar year next
following the calendar year in which Executive remits the related taxes to the Internal Revenue
Service.

          4.4 Notification Required. Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than
ten (10) business days after Executive knows of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid. Executive shall not
pay such claim prior to the expiration of the thirty-day period following the date on which it
gives such notice to the Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies Executive in writing prior to
the expiration of such period that it desires to contest such claim, Executive shall:

     (a) give the Company any information reasonably requested by the Company relating to
such claim,

     (b) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably selected by the
Company,

     (c) cooperate with the Company in good faith in order to effectively contest such
claim,

     (d) permit the Company to participate in any proceedings relating to such claim,
provided, however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or
income tax, including interest and penalties with respect thereto, imposed as a result of
such representation and payment of costs and expenses. Without limitation on the foregoing
provisions of this Section 4.4, the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any and

9

 

all administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct Executive to
pay the tax claimed and sue for a refund, or contest the claim in any permissible manner,
and Executive agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such payment to
Executive, on an interest-free basis and shall indemnify and hold Executive harmless, on an
after-tax basis, from any Excise Tax or income tax, including interest or penalties with
respect thereto, imposed with respect to such advance or with respect to any imputed income
with respect to such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of Executive with respect to
which such contested amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s control of the contest shall be limited to issues with respect
to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

          4.5 Repayment.

     (a) If, after the receipt by Executive of an amount advanced by the Company pursuant to
Section 4.4, Executive becomes entitled to receive any refund with respect to such claim,
Executive shall (subject to the Company’s complying with the requirements of Section 4.4)
promptly pay to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by Executive of an
amount advanced by the Company pursuant to Section 4.4, a determination is made that
Executive shall not be entitled to any refund with respect to such claim and the Company
does not notify Executive in writing of its intent to contest such denial of refund prior to
the expiration of thirty (30) days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

     (b) Notwithstanding the foregoing provisions of this Section 4.5 and Section 4.4, (i)
any payment made to or on behalf of Executive which relates to taxes imposed on Executive
shall be made not later than the end of the calendar year next following the calendar year
in which such taxes are remitted by or on behalf of Executive , and (ii) any payment made
to or on behalf of Executive which relates to reimbursement of expenses incurred due to a
tax audit or litigation addressing the existence or amount of a tax liability shall be made
by the end of the calendar year following the calendar year in which the taxes that are the
subject of the audit or litigation are remitted to the taxing authority, or where as a
result of such audit or litigation no taxes are remitted, the end of the calendar year
following the calendar year in which the audit is completed or there is a final and
non-appealable settlement or other resolution of the litigation, whichever is the last event
to occur.

10

 

          4.6 Mitigation or Set-off of Amounts Payable Hereunder. Executive shall not be
required to mitigate the amount of any payment provided for in this
Article 4 by seeking other
employment or otherwise, nor shall the amount of any payment provided for in this Article 4 be
reduced by any compensation earned by Executive as the result of employment by another employer
after the Date of Termination, or otherwise. The Company’s obligations hereunder also shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against Executive.

     5. SUCCESSORS; BINDING AGREEMENT.

          5.1 Successors of the Company. The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, by agreement in form and substance satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if there had been a Change in Control
but no such succession had taken place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach hereof. As used herein, the “Company”
shall mean the Company as hereinbefore defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this Section 5.1 or which
otherwise becomes bound by all the terms and provisions hereof by operation of law.

          5.2 Executive’s Heirs, etc. This Agreement shall inure to the benefit of and be
enforceable by Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts
would still be payable to him hereunder as if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms hereof to his designated
beneficiary or, if there be no such designated beneficiary, to his estate.

     6. NOTICE. For the purposes hereof, notices and all other communications provided for
herein shall be in writing and shall be deemed to have been duly given when delivered or mailed by
United States registered or certified mail, return receipt requested, postage prepaid, addressed to
the Company at its principal place of business and to Executive at his address as shown on the
records of the Company, provided that all notices to the Company shall be directed to the attention
of the Chief Executive Officer of the Company with a copy to the Secretary of the Company, or to
such other in writing in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

     7. MISCELLANEOUS. No provisions hereof may be amended, modified, waived or discharged
unless such amendment, waiver, modification or discharge is agreed to in writing signed by
Executive and such officer as may be specifically designated by the Board (which shall in any event
include the Company’s Chief Executive Officer). No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition or provision hereof to
be performed by such other party shall be deemed a waiver of similar or

11

 

dissimilar provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with respect to the subject
matter hereof have been made by either party which are not set forth expressly herein.

     8. VALIDITY. The invalidity or unenforceability of any provisions hereof shall not
affect the validity or enforceability of any other provision hereof, which shall remain in full
force and effect.

     9. NON-EXCLUSIVITY OF RIGHTS. Nothing herein shall prevent or limit Executive’s
continuing or future participation in any benefit, bonus, incentive or other plans, practices,
policies or programs provided by the Company and for which Executive may qualify, nor shall
anything herein limit or otherwise affect such rights as Executive may have under any stock option
or other agreements with the Company. Amounts which are vested benefits or which Executive is
otherwise entitled to receive under any plan, practice, policy or program of the Company at or
subsequent to the Date of Termination shall be payable in accordance with such plan, practice,
policy or program. Notwithstanding the foregoing provisions of this Article 9, this Agreement
contains the entire agreement of the parties regarding the change in control severance benefits
provided for herein and shall supersede and replace any change in control severance agreements
previously entered into by the parties, and by execution of this Agreement, the parties understand
and agree that any other such agreement shall be and become null and void.

     10. LEGAL EXPENSES. The Company agrees to pay, upon written demand therefor by
Executive, all legal fees and expenses which Executive may reasonably incur as a result of any
dispute or contest (regardless of the outcome thereof) by or with the Company or others regarding
the validity or enforceability of, or liability under, any provision hereof (including as a result
of any contest about the amount of any payment pursuant to Section 4.2), plus in each case interest
at the “applicable Federal rate” (as defined in Section 1274(d) of the Code). In any such action
brought by Executive for damages or to enforce any provisions hereof, he shall be entitled to seek
both legal and equitable relief and remedies, including, without limitation, specific performance
of the Company’s obligations hereunder, in his sole discretion. The amount of fees and expenses
eligible for reimbursement during a calendar year shall not affect the fees and expenses eligible
for reimbursement in any other calendar year. Reimbursement of eligible fees and expenses shall be
made on or before the last day of the calendar year following the calendar year in which the fees
or expenses were incurred.

     11. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
instrument.

     12. GOVERNING LAW. This Agreement shall be governed by and construed under the laws
of the State of Texas.

     13. CAPTIONS AND GENDER. The use of captions and Article and Section headings herein
is for purposes of convenience only and shall not effect the interpretation or

12

 

substance of any provisions contained herein. Similarly, the use of the masculine gender with
respect to pronouns herein is for purposes of convenience and includes either sex who may be a
signatory.

     14. TAX WITHHOLDING. The Company shall have the right to deduct from all amounts paid
in cash or other form under this Agreement any Federal, state, local or other taxes required by law
to be withheld.

     15. AMENDMENT. The Company reserves the right, in its sole discretion, to amend this
Agreement in any manner it deems necessary or desirable in order to comply with or otherwise
address issues resulting from Code Section 409A or related Treasury regulations issued thereunder.

     IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day and year first
above written.

	 	 	 	 	 
	 	ATMOS ENERGY CORPORATION

 	 
	 	By:  	 	 
	 	 	Robert W. Best 	 
	 	 	Chairman and Chief Executive Officer 	 
	 
	 	EXECUTIVE

 	 
	 	 	 
	 	Name:  	 	 
	 	 	 	 
	 

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