This Agreement
(this “Agreement”) is made and entered into as of
February 12, 2007, by and between Phoenix Technologies Ltd.
(the “Company” or “Phoenix Technologies”),
and the entities listed on the signature page hereto (collectively,
the “AWM Group”) (each of the Company and the AWM Group
a “Party” to this Agreement, and collectively, the
“Parties”).
A. The AWM
Group beneficially owns in the aggregate 3,218,459 shares of
outstanding Phoenix Technologies Common Stock;
B. Certain
entities and individuals associated with the Starboard Value and
Opportunity Master Fund Ltd. (the “Ramius Group”)
beneficially own in the aggregate 3,502,941 shares of outstanding
Phoenix Technologies Common Stock and the Ramius Group has
initiated a proxy solicitation (the “Proxy
Solicitation”) to elect two individuals to the Phoenix
Technologies Board of Directors (the “Phoenix Technologies
Board”);
C. Concurrently
with the execution of this Agreement, the Company and the Ramius
Group are entering into a settlement agreement (the “Ramius
Settlement Agreement”) pursuant to which the Ramius Group has
agreed, among other things: (i) to withdraw its nominees to
the Phoenix Technologies Board and terminate the Proxy
Solicitation, (ii) not to present any nominees or proposals at
the Company’s 2007 Annual Meeting of Stockholders (including
any adjournment or postponement thereof, the “Annual
Meeting”) and (iii) to vote its shares of the
Company’s Common Stock in favor of the Nominees (as defined
below) at the Annual Meeting;
D. The
Phoenix Technologies Board has determined that it is in the best
interests of the stockholders of the Company to nominate John Mutch
and Robert J. Majteles (collectively, the “Nominees”)
for election to the Phoenix Technologies Board as Class 2
directors at the Company’s Annual Meeting in place of David
S. Dury and Taher Elgamal and to recommend the Nominees for
election to the Phoenix Technologies Board; and
E. The
Company and the AWM Group desire, in connection with the nomination
of the Nominees to the Phoenix Technologies Board, to make certain
covenants and agreements with one another pursuant to this
Agreement.
NOW THEREFORE, in
consideration of the covenants and premises set forth herein, and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto
hereby agree as follows:
1. The
Company shall promptly amend its proxy solicitation materials (the
“Proxy Materials”) previously filed with the Securities
and Exchange Commission by the Company on behalf of the Phoenix
Technologies Board to disclose that (i) the Phoenix
Technologies Board has nominated the Nominees as the sole nominees
for election as Class 2 directors at the Annual
Meeting,
(ii) David S. Dury and Taher Elgamal will not stand for
election at the Annual Meeting, (iii) the Phoenix Technologies
Board recommends that stockholders vote “for” the
Nominees at the Annual Meeting, and (iv) proxies solicited by
the Phoenix Technologies Board will be voted “for” the
Nominees at the Annual Meeting. The Phoenix Technologies Board will
not nominate any other person for election as a Class 2
director at the Annual Meeting and shall not modify or withdraw its
recommendation that stockholders vote for the Nominees at the
Annual Meeting.
2. At the
Annual Meeting, the AWM Group shall appear in person or by proxy
and vote all shares of Common Stock beneficially owned by them and
their controlled affiliates in favor of the election to the Phoenix
Technologies Board of the Nominees. The AWM Group shall cause to be
executed proxies voting in favor of the election of the Nominees
(in the form utilized by the Company to solicit proxies for all
stockholders) so as to vote all shares of Common Stock beneficially
owned by it and its controlled affiliates in favor of the election
of the Nominees to the Phoenix Technologies Board. The AWM Group
shall not withdraw or modify any such proxies so long as the
Company is in compliance with the terms hereof and the Ramius
Settlement Agreement.
3. The AWM
Group agrees not to nominate any other person for election at the
Annual Meeting or to otherwise bring any business before the Annual
Meeting so long as the Company is in compliance with the terms
hereof and the Ramius Settlement Agreement.
4. From the
date hereof through the Annual Meeting, the AWM Group agrees that
it shall not directly or indirectly engage in any activities in
opposition to the election of the Nominees as the sole directors
elected at the Annual Meeting so long as the Company is in
compliance with the terms hereof and the Ramius Settlement
Agreement.
5. In
accordance with the Company’s bylaws, immediately following
the conclusion of the Annual Meeting, the Company shall take all
action necessary to:
(a) appoint
(i) John Mutch as a member, but not chairman, of the Audit
Committee of the Phoenix Technologies Board (the “Audit
Committee”) and (ii) Robert J. Majteles as a member, but
not chairman, of the Nominating and Governance Committee of the
Phoenix Technologies Board (the “Nominating
Committee”); and
(b) elect
Dale Fuller as the new chairman of the Phoenix Technologies
Board.
6. The
Company shall convene the Annual Meeting on February 14, 2007
at 10:00 a.m. local time and immediately adjourn the Annual
Meeting, prior to the opening of the polls, to another date and
time as promptly as possible following February 14, 2007 as
the Company may deem reasonably necessary to allow additional time
for the Company stockholders to receive the amended Proxy Materials
contemplated by Section 1 of this Agreement.
7. Following
the Annual Meeting and prior to the 2008 annual meeting of
stockholders, the Company agrees to review and consider, and to
deliberate upon, at a meeting of the Phoenix
2
Technologies
Board, the corporate governance recommendations of Institutional
Shareholder Services (“ISS”), including the
Company’s ISS Corporate Governance Quotient (the
“CGQ”) and factors of the CGQ which ISS categorized as
“negative” in its report dated February 6,
2007.
8. Promptly
following the concurrent execution of this Agreement and the Ramius
Settlement Agreement, the Company shall issue a press release
announcing the terms of this Agreement and the Ramius Settlement
Agreement, in the form attached hereto as
Exhibit A.
9. The AWM
Group agrees it will cause its controlled affiliates to comply with
the terms of this Agreement.
10. The
effectiveness of this Agreement is conditioned upon the
effectiveness of the Ramius Settlement Agreement.
11. This
Agreement constitutes the entire agreement between the Parties with
respect to the subject matter hereof and supersedes all prior
agreements understandings, both written and oral, among the parties
with respect to the subject matter hereof. No modi
|
