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 and natural persons listed on Schedule A
hereto (collectively, the “Ramius Group”) (each of the
Company and the Ramius Group, a “Party” to this
Agreement, and collectively, the “Parties”).
A. The Ramius
Group beneficially owns in the aggregate 3,502,941 shares of
outstanding Phoenix Technologies Common Stock and has initiated a
proxy solicitation (the “Proxy Solicitation”) to elect
two individuals to the Phoenix Technologies Board of Directors (the
“Phoenix Technologies Board”);
B. The
Parties have agreed that the Ramius Group shall withdraw its
nominees to the Phoenix Technologies Board and terminate the Proxy
Solicitation and that the Ramius Group will not present any
nominees or proposals at the Company’s 2007 Annual Meeting of
Stockholders (including any adjournment or postponement thereof,
the “Annual Meeting”);
C. 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;
D. The Ramius
Group has agreed to vote its shares in favor of the Nominees at the
Annual Meeting;
E. Concurrently
with the execution of this Agreement, the Company is entering into
an agreement (the “AWM Agreement”) with certain
entities and individuals affiliated with Austin W. Marxe (the
“AWM Group”), pursuant to which, among other things,
the AWM Group has agreed to vote its shares in favor of the
Nominees at the Annual Meeting; and
F. The
Company and the Ramius 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 Ramius
Group hereby withdraws its nomination of Philip Moyer and John
Mutch, withdraws and terminates the Proxy Solicitation and shall
promptly file with the Securities and Exchange Commission
(“SEC”) a request to withdraw the Schedule 14A
filed by the Ramius
Group. The
Ramius Group shall also (i) promptly file with the SEC as
definitive additional soliciting materials on Schedule 14A,
the press release described in Section 13, the form of which
is attached as Exhibit A hereto, and shall indicate that it is
no longer soliciting proxies and does not intend to vote any
proxies it has received or receives and (ii) take any other
actions necessary to terminate the Proxy Solicitation.
2. The
Company shall promptly amend the Schedule 14A filed by the
Company and the Company Board to indicate that (i) the
Nominees are nominated 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 Company’s Board of Directors
recommends a vote “for” the Nominees at the Annual
Meeting, and (iv) proxies solicited by the Board of Directors
of the Company will be voted “for” the Nominees at the
Annual Meeting.
3. At the
Annual Meeting, the Ramius Group agrees to appear in person or by
proxy and vote all shares of Common Stock beneficially owned by it
and its controlled affiliates in favor of the election to the
Phoenix Technologies Board of the Nominees. The Ramius Group shall
cause to be executed proxies for 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 Ramius Group shall not withdraw
or modify any such proxies.
4. The Ramius
Group agrees not to nominate any other person for election at the
Annual Meeting or to otherwise bring any business before the Annual
Meeting.
5. From the
date hereof through the Annual Meeting, each of the Company and the
Ramius Group agree they 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.
6. In
accordance with the Company’s bylaws, the Company shall take
all action necessary in furtherance of (and John Mutch, as a
director, agrees to vote in favor of):
(a) following
the election of the Nominees to the Phoenix Technologies Board, the
appointment of (i) John Mutch as a member, but not chairman,
of the Audit Committee of the Phoenix Technologies Board and
(ii) Robert J. Majteles as a member, but not chairman, of the
Nominating and Governance Committee of the Phoenix Technologies
Board, in each case provided that the director is qualified to
serve on such committee under applicable law and listing standards;
and
(b) following
the Annual Meeting, the election of Dale Fuller as the new chairman
of the Phoenix Technologies Board.
7. John Mutch
hereby consents to be named as a Nominee.
2
8. 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 to
allow additional time for the Company stockholders to receive the
amended proxy materials contemplated by Section 2 of this
Agreement.
9. For a
period commencing with the date of this Agreement and ending on the
earlier to occur of (i) December 6, 2007 or (ii) in
the event the Company’s 2008 annual meeting is held before
February 9, 2008 (in which case, the Company shall either make
a public announcement of the 2008 annual meeting date at least
70 days before the 2008 annual meeting or give the Ramius
Group written notice of the 2008 annual meeting date at least
70 days before the 2008 annual meeting), then the date that is
70 days before the date of the 2008 annual stockholder meeting
(the “Standstill Period”), neither the Ramius Group nor
any of its controlled affiliates shall, without the prior written
consent of the Phoenix Technologies Board, specifically expressed
in a written resolution adopted by a majority vote of the entire
Phoenix Technologies Board:
(a) acquire
or agree to acquire, or publicly offer or propose to acquire,
directly or indirectly, by purchase or otherwise, any voting
securities or direct or indirect rights or options to acquire any
voting securities of the Company or any subsidiary thereof, or of
any successor to or person in control of Company, or any assets of
the Company or any subsidiary or division thereof or of any such
successor or controlling person in excess of the Standstill Limit;
provided, however, that nothing herein shall limit the ability of
the Ramius Group to transfer any voting securities or direct or
indirect rights or options to acquire any voting securities of the
Company to any of its controlled affiliates, so long as such any
such controlled affiliates agree to be bound by the terms of this
Agreement and execute a joinder agreement to this Agreement, in the
form attached hereto as Exhibit B;
(b) other
than as provided in this Agreement, seek or propose to influence or
control the management or the policies of the Company or to obtain
representation on the Company’s board of directors, or
solicit, or encourage or in any way participate in the solicitation
of, any proxies or consents with respect to any voting securities
of the Company; provided that nothing herein shall limit the
ability of the Ramius Group to vote its voting securities on any
matter submitted to a vote of the stockholders of the
Company;
(c) make
any public announcement with respect to, or publicly offer to
effect, seek or propose (with or without conditions) a merger,
consolidation, business combination or other extraordinary
transaction with or involving the Company or any of its
subsidiaries or any of its or their securities or assets in excess
of the Standstill Limit; provided, however, that nothing herein
shall limit the ability of the Ramius Group to issue any
communication contemplated by Rule 14a-1(l)(2)(iv) stating how they
intend to vote and the reasons therefor with respect to any
extraordinary transaction of any kind or nature between the Company
and any third party unaffiliated with the Ramius Group; provided
further, that nothing contained herein shall limit the ability of
the Ramius Group to file an amendment or amendments to its
Schedule 13D regarding the Common Stock of the
3
Company as
required by law or to make other filings as required by law so long
as the Ramius Group does not enter into any contract, arrangement,
understanding or relationship (legal or otherwise) with respect to
the Company’s voting securities in violation of clauses
(a)-(e) of Section 9 hereof;
(d) (i) form,
join or in any way participate in a “group” as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (for
the avoidance of doubt, including, without limitation, a group
containing members of the Ramius Group and members of the AWM
Group), other than a “group” that includes all or some
lesser number of persons identified as members of the Ramius Group,
but does not include any other members who are not currently
identified as members of the Ramius Group, or (ii) enter into
any negotiations, arrangements or understandings with any third
parties, other than members of the Ramius Group solely with respect
to the existing members of the Ramius Group, in connection with any
of the foregoing; or
(e) publicly
seek or request permission to do any of the foregoing, request to
amend or waive any provision of this paragraph (including, without
limitation, any of clauses (a)-(d) hereof), or make or seek
permission to make any public announcement with respect to any of
the foregoing.
“Standstill
Limit” shall mean that number of Common Shares, the
Beneficial Ownership of which would qualify a person or a group of
affiliated or associated persons as an “Acquiring
Person” under that certain Preferred Share Rights Agreement,
dated as of October 22, 1999, between the Company and
BankBoston, N.A. (the “Preferred Share Rights
Agreement”), including any amendments thereto, other than any
exception approved by the Phoenix Technologies Board to the
definition of “Acquiring Person” under the Preferred
Share Rights Agreement allowing a person or a “group”
to purchase newly issued shares of the Company’s voting
securities directly from the Company. For purposes of this
Agreement, “Beneficial Ownership” and “Common
Shares” shall have the meaning given to them in the Preferred
Share Rights Agreement.
10. 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 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 I
|
