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exv10w1

 

Exhibit 10.1

PHOENIX TECHNOLOGIES LTD.

SEVERANCE AND CHANGE OF CONTROL AGREEMENT

     This Severance and Change of Control Agreement (the “Agreement”) is made and entered into by
and between Timothy Chu (“Executive”) and Phoenix Technologies Ltd. (the “Company”),
effective as of April 27, 2007 (the “Effective Date”).

RECITALS

     1. It is possible that the Company could terminate Executive’s employment with the Company.
The Board of Directors of the Company (the “Board”) recognizes that such consideration can be a
distraction to Executive and can cause Executive to consider alternative employment opportunities.
The Compensation Committee of the Board (pursuant to its delegated authority) has determined that
it is in the best interests of the Company and its stockholders to assure that the Company will
have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat
or occurrence of such a termination.

     2. The Compensation Committee of the Board believes that it is in the best interests of the
Company and its stockholders to provide Executive with an incentive to continue his employment and
to motivate Executive to maximize the value of the Company for the benefit of its stockholders.

     3. The Compensation Committee of the Board believes that it is imperative to provide Executive
with certain severance benefits upon certain terminations of Executive’s employment with the
Company. These benefits will provide Executive with enhanced financial security and incentive and
encouragement to remain with the Company.

     4. Certain capitalized terms used in the Agreement are defined in Section 6 below.

AGREEMENT

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

     1. Term of Agreement. This Agreement will have an initial term of three (3) years
commencing on the Effective Date. Notwithstanding the previous sentence, in the event of a Change
of Control within three years of the Effective Date, the term of this Agreement will extend through
the one-year anniversary of such Change of Control.

     2. At-Will Employment. The Company and Executive acknowledge that Executive’s
employment is and will continue to be at-will, as defined under applicable law. If Executive’s
employment terminates for any reason, Executive will not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this Agreement.

 

 

     3. Severance Benefits.

          (a) Termination other than for Cause. If the Company (or any parent or subsidiary of
the Company employing Executive) terminates Executive’s employment with the Company (or any parent
or subsidiary of the Company) for a reason other than Cause, Executive’s Disability or Executive’s
death, then, subject to Section 4, Executive will receive the following severance benefits from the
Company:

               (i) Accrued Compensation. Executive will be entitled to receive all accrued vacation,
expense reimbursements and any other benefits due to Executive through the date of termination of
employment in accordance with the Company’s then existing employee benefit plans, policies and
arrangements.

               (ii) Severance Payments. Executive will be paid continuing payments of severance pay
for six (6) months from the date of such termination at a monthly rate equal to Executive’s monthly
base salary rate, as then in effect. Such payments shall be paid periodically in accordance with
the Company’s normal payroll policies.

               (iii) Continued Benefits. Executive will receive Company-paid coverage during the
first six (6) months following such termination for Executive and Executive’s eligible dependents
under the Company’s Benefit Plans.

               (iv) Option Exercisability. The vested portion of any stock options held by Executive
as of the termination date will remain exercisable until the earlier of (i) the term of the
applicable option or (ii) the date six (6) months from the termination date.

               (v) Payments or Benefits Required by Law. Executive will receive such other
compensation or benefits from the Company as may be required by law.

          (b) Certain Terminations in Connection with a Change of Control. If Executive
terminates his employment with the Company (or any parent or subsidiary of the Company) for Good
Reason or the Company (or any parent or subsidiary of the Company employing Executive) terminates
Executive’s employment with the Company (or any parent or subsidiary of the Company) for a reason
other than Cause, Executive’s Disability or Executive’s death within two (2) months prior to or
twelve (12) months following a Change of Control, then (i) Executive shall receive the severance
and other benefits set forth in Section 3(a)(i)-(v), and (ii) 50% of the unvested shares subject to
all of Executive’s outstanding rights to purchase or receive shares of the Company’s common stock
(including, without limitation, through awards of stock options, stock appreciation rights,
restricted stock units or similar awards) whether acquired by Executive before or after the date of
this Agreement and 50% of any of Executive’s shares of Company common stock subject to a Company
right of repurchase or forfeiture upon Executive’s termination of employment for any reason
(whether acquired by Executive before or after the date of this Agreement), will immediately vest
and, if applicable, become exercisable upon such termination. In all other respects, such awards
will continue to be subject to the terms and conditions of the plans, if any, under which they were
granted and any applicable agreements between the Company and Executive.

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          (c) Other Terminations. If Executive voluntarily terminates Executive’s employment
with the Company or any parent or subsidiary of the Company (other than for Good Reason within two
(2) months prior to or twelve (12) months following a Change of Control) or if the Company (or any
parent or subsidiary of the Company employing Executive) terminates Executive’s employment with the
Company (or any parent or subsidiary of the Company) due to Executive’s death, Disability or for
Cause, then Executive will (i) receive his earned but unpaid base salary through the date of
termination of employment, (ii) receive all accrued vacation, expense reimbursements and any other
benefits due to Executive through the date of termination of employment in accordance with
established Company plans, policies and arrangements, and (iii) not be entitled to any other
compensation or benefits (including, by way of example but not limitation, accelerated vesting of
any equity awards) from the Company except to the extent provided under agreement(s) relating to
any equity awards or as may be required by law (for example, “COBRA” coverage under Section 4980B
of the Internal Revenue Code of 1986, as amended (the “Code”)).

          (d) Exclusive Remedy. In the event of a termination of Executive’s employment with
the Company (or any parent or subsidiary of the Company), and whether separate or in connection
with a Change of Control, the provisions of this Section 3 are intended to be and are exclusive and
in lieu of any other rights or remedies to which Executive may otherwise be entitled, whether at
law, tort or contract, in equity, or under this Agreement. Executive will be entitled to no
benefits, compensation or other payments or rights upon termination of employment other than those
benefits expressly set forth in this Section 3.

     4. Conditions to Receipt of Severance.

          (a) Separation Agreement and Release of Claims. The receipt of any severance pursuant
to Section 3 will be subject to Executive signing and not revoking a separation agreement and
release of claims in a form acceptable to the Company. No severance pursuant to Section 3 will be
paid or provided until the separation agreement and release of claims becomes effective.

          (b) Noncompetition; Nonsolicitation. The receipt of any severance benefits pursuant
to Section 3 will be subject to Executive not violating the provisions of Section 7. In the event
Executive breaches the provisions of Section 7, all continuing payments and benefits to which
Executive would have been entitled pursuant to Section 3 will immediately cease.

          (c) Section 409A. Any cash severance to be paid pursuant to Section 3 will not be
paid during the six-month period following Executive’s termination of employment, unless the
Company reasonably determines that paying such amounts immediately following Executive’s
termination of employment would not result in the imposition of additional tax under Section 409A
of the Code (“Section 409A”), in which case such amounts shall be paid in accordance with normal
payroll practices. If no cash severance is paid to Executive upon termination of his employment as
a result of the previous sentence, on the first day following such six-month period, the Company
will pay Executive a lump-sum amount equal to the cumulative amounts that would have otherwise been
paid to Executive pursuant to Section 3. Thereafter, Executive will receive his cash severance
payments pursuant to Section 3 in accordance with the Company’s normal payroll practices.

     5. Limitation on Payments.

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          (a) In the event that the severance and other benefits provided for in this Agreement or
otherwise payable to Executive (i) constitute “parachute payments” within the meaning of Section
280G of the Code and (ii) but for this Section 5, would be subject to the excise tax imposed by
Section 4999 of the Code, then Executive’s severance benefits under this Agreement shall be payable
either

               (i) in full, or

          (b) as to such lesser amount which would result in no portion of such severance benefits being
subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking
into account the applicable federal, state and local income taxes and the excise tax imposed by
Section 4999, results in the receipt by Executive on an after-tax basis, of the greatest amount of
severance benefits under this Agreement, notwithstanding that all or some portion of such severance
benefits may be taxable under Section 4999 of the Code. Unless the Company and Executive otherwise
agree in writing, any determination required under this Section 5 shall be made in writing by the
Company’s independent public accountants (the “Accountants”), whose determination shall be
conclusive and binding upon the Executive and the Company for all purposes. For purposes of making
the calculations required by this Section 5, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code. The Company and Executive shall
furnish to the Accountants such information and documents as the Accountants may reasonably request
in order to make a determination under this Section 5. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations contemplated by this Section
5.

     6. Definition of Terms. The following terms referred to in this Agreement will have
the following meanings:

          (a) Benefit Plans. “Benefit Plans” means plans, policies or arrangements that the
Company sponsors (or participates in) and that immediately prior to Executive’s termination of
employment provide Executive and/or Executive’s eligible dependents with medical, dental, and/or
vision benefits. Benefit Plans do not include any other type of benefit (including, but not by way
of limitation, disability, life insurance or retirement benefits). A requirement that the Company
provide Executive and Executive’s eligible dependents with coverage under the Benefit Plans will
not be satisfied unless the coverage is no less favorable than that provided to Executive and
Executive’s eligible dependents immediately prior to Executive’s termination of employment.
Notwithstanding any contrary provision of this Section 6(a), but subject to the immediately
preceding sentence, the Company may, at its option, satisfy any requirement that the Company
provide coverage under any Benefit Plan by (i) reimbursing Executive’s premiums under COBRA after
Executive has properly elected continuation coverage under COBRA (in which case Executive will be
solely responsible for electing such coverage for Executive and Executive’s eligible dependents),
or (ii) instead providing coverage under a separate plan or plans providing coverage that is no
less favorable or by paying Executive a lump sum payment sufficient to provide Executive and
Executive’s eligible dependents with equivalent coverage under a third party plan that is
reasonably available to Executive and Executive’s eligible dependents.

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          (b) Cause. “Cause” means a failure by Executive to substantially perform Executive’s
duties as an employee, other than a failure resulting from the Executive’s complete or partial
incapacity due to physical or mental illness or impairment, (ii) a willful act by Executive that
constitutes misconduct, (iii) circumstances where Executive intentionally or negligently imparts
material confidential information relating to the Company or its business to competitors or to
other third parties other than in the course of carrying out Executive’s duties, (iv) a material
violation by Executive of a federal or state law or regulation applicable to the business of the
Company, (v) a willful violation of a material Company employment policy or the Company’s insider
trading policy, (vi) any act or omission by Executive constituting dishonesty (other than a good
faith expense account dispute) or fraud, with respect to the Company or any of its affiliates,
which is injurious to the financial condition of the Company or any of its affiliates or is
injurious to the business reputation of the Company or any of its affiliates, (vii) Executive’s
failure to cooperate with the Company in connection with any actions, suits, claims, disputes or
grievances against the Company or any of its officers, directors, employees, stockholders,
affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns, whether
or not such cooperation would be adverse to Executive’s own interest, or (viii) Executive’s
conviction or plea of guilty or no contest to a felony.

          (c) Change of Control. “Change of Control” means the occurrence of any of the
following:

               (i) the sale, lease, conveyance or other disposition of all or substantially all of the
Company’s assets to any “person” (as such term is used in Section 13(d) of the Securities Exchange
Act of 1934, as amended), entity or group of persons acting in concert;

               (ii) any person or group of persons becoming the “beneficial owner” (as defined in
Rule 13d-3
under said Act), directly or indirectly, of securities of the Company representing 50% or more of
the total voting power represented by the Company’s then outstanding voting securities;

               (iii) a merger or consolidation of the Company with any other corporation, other than a merger
or consolidation that would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity or its controlling entity) more than 50% of the total
voting power represented by the voting securities of the Company or such surviving entity (or its
controlling entity) outstanding immediately after such merger or consolidation; or

               (iv) a contest for the election or removal of members of the Board that results in the removal
from the Board of at least 50% of the incumbent members of the Board.

          (d) Disability. “Disability” means that Executive has been unable to perform the
principal functions of his duties due to a physical or mental impairment, but only if such
inability has lasted or is reasonably expected to last for at least six (6) months. Whether
Executive has a Disability will be determined by the Board based on evidence provided by one or
more physicians selected or approved by the Board.

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          (e) Good Reason. “Good Reason” means (without Executive’s consent) (i) a material
reduction in Executive’s title, authority, status, or responsibilities, unless the Executive is
provided with a comparable position (i.e., a position of equal or greater organizational level,
duties, authority, compensation and status); provided, however, that a reduction in duties,
position or responsibilities solely by virtue of the Company being acquired and made part of a
larger entity (as, for example, when the Chief Executive Officer of the Company remains as such
following a Change of Control but is not made the Chief Executive Officer of the acquiring
corporation) shall not constitute an “Involuntary Termination”; (ii) the reduction of Executive’s
aggregate base salary and target bonus opportunity as in effect immediately prior to such reduction
(other than a reduction applicable to executives generally); or (iii) a relocation of Executive’s
principal place of employment by more than fifty (50) miles.

     7. Restrictive Covenants.

          (a) Noncompete. For a period beginning on the Effective Date and ending twelve (12)
months after Executive ceases to be employed by the Company (or any parent or subsidiary of the
Company), Executive agrees to not, directly or indirectly, engage in (whether as an employee,
consultant, agent, proprietor, principal, partner, stockholder, corporate officer, director or
otherwise), nor have any ownership interest in or participate in the financing, operation,
management or control of, any person, firm, corporation or business that competes with Company (or
any parent or subsidiary of the Company).

          (b) Nonsolicit. For a period beginning on the Effective Date and ending twelve (12)
months after Executive ceases to be employed by the Company (or any parent or subsidiary of the
Company), Executive, directly or indirectly, whether as employee, owner, sole proprietor, partner,
director, member, consultant, agent, founder, co-venturer or otherwise, will not: (i) solicit,
induce or influence any person to leave employment with the Company (or any parent or subsidiary of
the Company); or (ii) directly or indirectly solicit business from any of the Company’s customers
and users on behalf of any business that directly competes with the principal business of the
Company (or any parent or subsidiary of the Company).

          (c) Understanding of Covenants. Executive represents that he (i) is familiar with the
foregoing covenants not to compete and not to solicit, and (ii) is fully aware of his obligations
hereunder, including, without limitation, the reasonableness of the length of time, scope and
geographic coverage of these covenants.

     8. Litigation. Executive agrees to cooperate with the Company beginning on the
Effective Date and thereafter (including following Executive’s termination of employment for any
reason), by making himself reasonably available to testify on behalf of the Company or any of its
affiliates in any action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, and to assist the Company, or any affiliate, in any such action, suit, or
proceeding, by providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to the Company, or any affiliate as
reasonably requested. The Company agrees to reimburse Executive for all expenses actually incurred
in connection with his provision of testimony or assistance.

     9. Successors.

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          (a) The Company’s Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company’s business and/or assets will assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement in the same manner
and to the same extent as the Company would be required to perform such obligations in the absence
of a succession. For all purposes under this Agreement, the term “Company” will include any
successor to the Company’s business and/or assets which executes and delivers the assumption
agreement described in this Section 9(a) or which becomes bound by the terms of this Agreement by
operation of law.

          (b) The Executive’s Successors. The terms of this Agreement and all rights of
Executive hereunder will inure to the benefit of, and be enforceable by, Executive’s personal or
legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees.

     10. Notice.

          (a) General. Notices and all other communications contemplated by this Agreement will
be in writing and will be deemed to have been duly given when personally delivered or when mailed
by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of
Executive, mailed notices will be addressed to him at the home address which he most recently
communicated to the Company in writing. In the case of the Company, mailed notices will be
addressed to its corporate headquarters, and all notices will be directed to the attention of its
General Counsel.

          (b) Notice of Termination. Any termination by the Company for Cause or by Executive
for Good Reason or as a result of a voluntary resignation will be communicated by a notice of
termination to the other party hereto given in accordance with Section 10(a) of this Agreement.
Such notice will indicate the specific termination provision in this Agreement relied upon, will
set forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated, and will specify the termination date (which will be
not more than thirty (30) days after the giving of such notice).

     11. Miscellaneous Provisions.

          (a) No Duty to Mitigate. Executive will not be required to mitigate the amount of any
payment contemplated by this Agreement, nor will any such payment be reduced by any earnings that
Executive may receive from any other source.

          (b) Resignation as Director. Upon the Company’s written request, Executive agrees to
promptly resign as a member of the Company’s Board of Directors following any termination of his
employment with the Company (or any parent or subsidiary of the Company).

          (c) Waiver. No provision of this Agreement will be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by
an authorized officer of the Company (other than Executive). No waiver by either party of any
breach of, or of compliance with, any condition or provision of this Agreement by the other party
will be considered a waiver of any other condition or provision or of the same condition or
provision at another time.

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          (d) Headings. All captions and section headings used in this Agreement are for
convenient reference only and do not form a part of this Agreement.

          (e) Entire Agreement. This Agreement constitutes the entire agreement of the parties
hereto and supersedes in their entirety all prior representations, understandings, undertakings or
agreements (whether oral or written and whether expressed or implied) of the parties with respect
to the subject matter hereof, including without limitation, any formal offer letter or employment
agreement by and between the Company and Executive. No future agreements between the Company and
Executive may supersede this Agreement, unless they are in writing and specifically mention this
Agreement.

          (f) Choice of Law. The laws of the State of California (without reference to its
choice of laws provisions) will govern the validity, interpretation, construction and performance
of this Agreement.

          (g) Severability. The invalidity or unenforceability of any provision or provisions
of this Agreement will not affect the validity or enforceability of any other provision hereof,
which will remain in full force and effect.

          (h) Withholding. All payments made pursuant to this Agreement will be subject to
withholding of applicable income and employment taxes.

          (i) Counterparts. This Agreement may be executed in counterparts, each of which will
be deemed an original, but all of which together will constitute one and the same instrument.

[Remainder of Page Intentionally Left Blank]

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

	 	 	 	 	 
	COMPANY	 	PHOENIX TECHNOLOGIES LTD.
	 
	 	 	 	 
	 

	 	By:
	 	     /s/ RICHARD W. ARNOLD
	 

	 	 	 	 
	 

	 	Title:
	 	Executive Vice President, Strategy &
	 

	 	 	 	Corporate Development and Chief Financial
	 

	 	 	 	Officer
	 
	 	 	 	 
	EXECUTIVE	 	TIMOTHY CHU
	 
	 	 	 	 
	 

	 	By:
	 	     /s/ TIMOTHY CHU 
	 

	 	 	 	 
	 

	 	Title:
	 	Vice President and General Counsel

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EXHIBIT 10.25

2007 Bonus Plan Summary

     Under the 2007 bonus plan, the target bonus for Onyx’s Chief Executive Officer is 60% of his
2007 base salary, the target bonus for each Executive Vice President is 40% of his or her 2007 base
salary, and the target bonus for each Vice President is 30% of his or her 2007 base salary. For the
Chief Executive Officer, Chief Financial Officer, and each Executive Vice President, 100% of his or
her 2007 bonus will be determined on the basis of the Company’s achievement of its corporate
objectives for the year. For other Vice Presidents, 70% of his or her 2007 bonus will be determined
on the basis of the Company’s achievement of its corporate objectives for the year, and 30% of
their 2007 bonus will be determined on the basis of their individual performance during the year.

     Under the 2007 bonus plan, in determining the Company’s achievement of its corporate
objectives, equal weight will be given to the achievement of the Company’s financial objectives,
taken as a whole, and to the achievement of the Company’s non-financial objectives, taken as a
whole. In applying the 2007 bonus plan, the Compensation Committee and Board of Directors also have
the discretion to determine that the Company out-performed its corporate objectives, up to a
maximum performance of 150%, however, no bonus shall be paid if the Company does not achieve at
least 50% of its corporate objectives. The weighting of individual performance of individual goals
can range from 0% to 150%, as determined in the judgment of the Compensation Committee and the
Board of Directors.

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