Exhibit 10.67
SEVERANCE AGREEMENT
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This Severance Agreement (the "Agreement") is made and entered into effective as
of January 4, 2001, by and between Xxxx X. Xxxxxxx (the "Executive") and Phoenix
Technologies Ltd., a Delaware corporation (the "Company").
RECITALS
A. Management of the Company believes that it is in the best interest of the
Company and its stockholders to provide the Executive with certain severance
benefits should Executive's employment with the Company terminate under
certain circumstances. Such benefits will provide Executive with enhanced
financial security and with sufficient incentive and encouragement for
Executive to remain with the Company.
B. To accomplish the foregoing objectives, the Company will, upon execution of
this Agreement by the parties, agree to the terms provided herein.
C. Certain capitalized terms used in the Agreement are defined in Section 7
below.
AGREEMENT
In consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of Executive by the Company, the
parties agree as follows:
1. Duties and Scope of Employment. The Company currently employs Executive
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as Senior Vice President and Chief Financial Officer. The Executive
shall comply with and be bound by the Company's operating policies,
procedures and practices from time to time in effect during his
employment. Executive shall continue to devote his full time, skill and
attention to her duties and responsibilities, and shall perform them
faithfully, diligently and competently, and the Executive shall use his
best efforts to further the business of the Company and its affiliated
entities.
2. Base Compensation. The Company shall continue to pay Executive as
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compensation for his services a base salary in accordance with normal
Company payroll practices ("Base Compensation"). The Base Compensation
may be increased from time to time, in which case the "Base
Compensation" will refer to the base salary earned by Executive at the
time in question.
3. Executive Benefits. The Executive shall be eligible to participate in
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the employee benefit plans and executive compensation programs
maintained by the Company applicable to other key executives of the
Company, including (without limitation) retirement plans, savings or
profit-sharing plans, stock options, incentive or other bonus plans,
life, disability, health, accident and other insurance programs, paid
vacations, and similar plans or programs, subject in each case to the
generally applicable terms and conditions of the applicable plan or
program in question and to the sole determination of the Board or any
committee administering such plan or program.
(a) Stock Option Grants. Executive will receive an annual grant of stock
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options during the term of this Agreement in a manner and under terms
that are consistent with grants made to other executives of the Company.
(b) Bonus Eligibility and Payment. Executive is currently eligible to
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receive a bonus based on application of the terms of the executive bonus
plan (i.e. if the Company fails to meet minimum financial objectives or
Executive fails to complete personal objectives under the plan, no bonus
will be paid). Such bonus, if any, will be paid to Executive at
approximately the same time other Company Executives receive their
bonuses.
4. Term of Agreement. The terms of this Agreement shall terminate on the date
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that all obligations of the parties hereunder have been satisfied. A
termination of the terms of this Agreement pursuant to this Section shall be
effective for all purposes.
5. Severance Benefits.
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(a) Termination Not for Cause. If the Company terminates Executive's
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employment for any reason other than Cause, or terminates Executive by
Constructive Termination as defined in this Agreement, the Executive
shall be entitled to receive the following severance benefits:
(i) Severance Payments.
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(1) Guaranteed Severance Payments. Subject to Executive entering
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into a Release of Claims (in a form substantially similar to the
release of claims attached as Exhibit A), Executive shall be
entitled to receive severance payments for twelve (12) months
from the date of termination at Executive's then current base
salary, which may be greater than, but will not be less than the
Base Compensation (the "Guaranteed Severance Payment"). The
Guaranteed Severance Payment will be paid to Executive in
accordance with the Company's standard payroll practices. Upon
termination, Executive will also be entitled to receive a pro
rate portion of his then current targeted bonus for the fiscal
year following his termination as described in Section 3(b)(ii).
(2) Contingent Severance Payments. If Executive has not secured
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Reemployment as of the end of the twelve (12) month period,
Executive shall be eligible to receive an additional six (6)
months of Base Compensation, also paid in accordance with the
Company's standard payroll practices ("Contingent Severance
Payments"). The Contingent Severance Payments shall discontinue
upon Executive notifying Company of Re-Employment.
(ii) Medical Benefits. The Company, at the Company's sole expense, shall
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provide Executive (and, if applicable, his eligible dependents) with
the same level of health coverage and benefits as in effect for
Executive (and, if applicable, his eligible dependents) on the day
immediately preceding the day of the Executive's termination of
employment (the "Company-Paid Coverage"); provided, however, that
(i) Executive and each eligible dependent constitutes a qualified
beneficiary, as defined in Section 4980B(g)(1) of the Internal
Revenue Code of 1986, as amended (collectively, "Qualified
Beneficiaries"); (ii) each Qualified Beneficiary elects continuation
coverage under the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA"), within the time period prescribed
pursuant to COBRA; and (iii) if the health coverage is no longer
offered by the Company to its current employees, then the Company
shall be under no obligation to continue the existing coverage for
Executive (and, if applicable, his eligible dependents). Such
Company-Paid Coverage shall continue in effect for each Qualified
Beneficiary until the earlier of (i) the Qualified Beneficiary is no
longer eligible to receive continuation coverage under COBRA, or
(ii) eighteen (18) months following termination of employment
pursuant to Section 5(a).
(iii)Change in Control. In the event the Company undergoes a Change in
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Control, or other material event in that the Company or Key
Executive's position undergoes a material change as a result of the
material event, Key Executive's stock options will accelerate
vesting such that fifty percent (50%) of the options will vest at
the completion of the Change in Control, or material event, and the
remaining fifty percent (50%) will vest 90 days thereafter. If there
is an inconsistency between this Agreement and the Company's Stock
Option Plan or a Stock Option Agreement, the terms of this Agreement
shall prevail.
(b) Voluntary Resignation; Termination For Cause. If the Executive voluntarily
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resigns from the Company, or if the Company terminates the Executive's
employment for Cause, then the Executive shall not be entitled to receive
severance or other benefits pursuant to this Agreement. However, Executive
shall remain eligible for the severance and other benefits (if any) as may
then be available under the Company's then existing severance and benefits
plans and policies at the time of Executive's termination.
(c) Disability; Death. If the Company terminates the Executive's employment as a
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result of the Executive's Disability or if the Executive's employment
terminates due to the death of the Executive, then the Executive shall not
be entitled to receive severance or other benefits pursuant to this
Agreement. However, Executive shall remain eligible for those severance and
other benefits (if any) as may be available under the Company's then
existing severance and benefit plans and policies at the time of Executive's
termination or death.
6. Covenants Not to Compete and Not to Solicit.
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(a) Upon the termination of the Executive's employment with the Company
pursuant to Section 5(a) and for a period of eighteen (18) months
thereafter, Executive agrees that he shall not, on his own behalf, or as
owner, manager, advisor, principal, agent, partner, consultant,
director, officer, stockholder, or employee of any business entity, or
otherwise in any territory in which the Company is actively engaged in
business (i) open or operate any business which is in competition with
any business of the Company, (ii) act as an employee, agent, advisor or
consultant or any competitor of the Company, (iii) solicit or accept
business from any of the Company's competitors, (iv) take any action to
or do anything reasonably intended to divert business from the Company
or influence or attempt to influence any existing customers of the
Company to cease doing business with the Company or to alter its
business relationship with the Company, or (v) take any action or do
anything reasonably intended to influence any suppliers of the Company
to cease doing business with the Company or to alter its business
relationship with the Company. Executive further covenants and agrees
that he will not for himself or on behalf of any other person,
partnership, firm, association or corporation in any territory served by
the Company, directly or indirectly solicit or accept business from any
of the Company's existing customers for the purchase or sale of products
or services of a like kind to those sold or provided the Company. The
foregoing covenant shall not be deemed to prohibit Executive from
acquiring an investment not more than one percent (1%) of the capital
stock of a competing business, whose stock is traded on a national
securities exchange or through the automated quotation system of a
registered securities association.
(b) Upon the termination of the Executive's employment with the Company
pursuant to Section 5(a) and for a period of eighteen (18) months
thereafter, Executive agrees that he shall not either directly or
indirectly solicit, induce, attempt to hire, recruit, encourage, take
away, hire any employee of the Company or cause any employee of the
Company to leave his or her employment either for Executive or for any
other entity or person.
(c) 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.
(d) Company will respond within two weeks to any written request by
Executive to exclude a particular company or business entity from the
scope of this Section 6. Company will not unreasonably deny such a
request. The parties agree that a passive financial investment by
Executive in a third party will not constitute competition within the
scope of this Section 6.
7. Definition of Certain Terms. The following terms referred to in the
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Agreement shall have the following meanings for the purposes of this
Agreement only:
(a) Cause. "Cause" shall mean (i) any act of personal dishonesty taken by
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the Executive in connection with his responsibilities as an Executive
and intended to result in substantial personal enrichment of the
Executive, (ii) conviction of a felony that is injurious to the Company,
(iii) a willful act by the Executive which constitutes gross misconduct
and which results in material injury to the Company, and (iv) continued
violations by the Executive of the Executive's obligations under Section
1 of this Agreement that are demonstrably willful and deliberate on the
Executive's part after which describes the basis for the Company's
belief that the Executive has not substantially performed his duties.
(b) Constructive Termination. "Constructive Termination" shall mean any of
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the following: (i) any material reduction in compensation, including
bonus, unless such a reduction is applied to all members of the
Company's executive officers or members of the Chief Executive's staff;
(ii) reduction of Executive's title or (iii) material reduction in
Executive's responsibilities.
(c) Disability. "Disability" shall mean that Executive has been unable to
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perform his duties under this Agreement as the result of his
incapacity due to physical or mental illness, and such inability, at
least ninety (90) days after its commencement, is determined to be total
and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative
(such Agreement as to acceptability not to be unreasonably withheld).
Termination resulting from Disability may only be effected after at
least 30 days' written notice by the Company of its intention to
terminate the Executive's employment. In the event that the Executive
resumes the performance of substantially all of her duties hereunder
before the termination of his employment becomes effective, the notice
of intent to terminate shall automatically be deemed to have been
revoked.
(d) Re-employment. "Re-employment" shall mean that the Executive has
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obtained work for compensation from any single employer or client, or
any group of employers or clients in a cumulative amount greater than
twenty-four (24) hours per week, or one hundred (100) hours per month.
(e) Change in Control. "Change in Control" means the occurrence of any of
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the following:
(i) The consummation of a merger or consolidation of the Company with or
into another entity or any other corporate reorganization, if more
than 50% of the combined voting power of the continuing or surviving
entity's securities outstanding immediately after such merger,
consolidation or other reorganization is owned by persons who were
not stockholders of the Company immediately prior to such merger,
consolidation or other reorganization;
(ii) The sale, transfer or other disposition of all or substantially all
of the Company's assets:
(iii) Any transaction as a result of which any person becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing at least 20% of the total voting power represented by
the Company's then outstanding voting securities. For purposes of
this Paragraph (iii), the term "person" shall have the same meaning
as when used in sections 13(d) and 14(d) of the Exchange Act but
shall exclude:
(A) A trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a subsidiary of the
Company;
(B) A corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportions as their
ownership of the common stock of the Company.
8. Successors.
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(a) Company's Successors. Any successor to the Company (whether direct or
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indirect and whether by purchase. Lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's
business and assets shall 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" shall include any
successor to the Company's business and assets which executes and
delivers the assumption agreement described in this Section or which
becomes bound by the terms of this Agreement by operation of law.
(b) Executive's Successors. The terms of this Agreement and all rights of
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the Executive hereunder shall inure to the benefit of, and be
enforceable by, the Executive's personal or legal representatives,
executors, administrators, successors, heirs, devisees and legatees.
9. Notice.
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(a) General. Notices and all other communications contemplated by this
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Agreement shall be in writing and shall 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 the Executive, mailed notices shall be addressed to him at the
home address that he most recently communicated to the Company in
writing. In the case of the Company, mailed notices shall be addressed
to its corporate headquarters, and all notices shall be directed to the
attention of its Secretary.
(b) Notice of Termination. Any termination by the Company for Cause
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shall be communicated by a notice of termination to the Executive
given in accordance with Section 9(a) of this Agreement. Such notice
shall indicate the specific termination provision in the Agreement
relied upon, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the
provision so indicated, and shall specify the termination date
(which shall be not more than 15 days after the giving of such
notice).
10. Arbitration.
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(a) The Company and Executive agree that any dispute or controversy arising
out of, relating to, or in connection with this Agreement, the
interpretation, validity, construction, performance, breach, or
termination hereof, or any of the matters herein released shall be
settled by binding arbitration to be held in Santa Xxxxx County,
California in accordance with the national Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration
Association (the "Rules"). The arbitrator may grant injunctions or other
relief in such dispute or controversy. The decision of the arbitrator
shall be final, conclusive and binding on the parties to the
arbitration. Judgment may be entered on the arbitrator's decision in any
court having jurisdiction.
(b) The arbitrator(s) shall apply California law to the merits of any
dispute or claim, without reference to conflicts of law rules. Executive
hereby consents to the personal jurisdiction of the state and federal
courts located in California for any action or proceeding arising from
or relating to this Agreement or relating to any arbitration in which
the Parties are participants.
(c) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES
ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, THE INTERPRETATION, VALIDITY,
CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF, OR ANY OF THE
MATTERS HEREIN TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE
CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO
THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THIS SEVERANCE
AGREEMENT AND RELEASE OF ALL CLAIMS.
11. Miscellaneous Provisions.
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(a) Waiver. No provision of this Agreement shall be modified, waived or
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discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Executive and by an authorized officer of the
Company (other than the 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 shall be considered a waiver of any other
condition or provision or of the same condition or provision at another
time.
(b) Whole Agreement. This Agreement constitutes the entire agreement
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of the parties with respect to the subject matter hereof and
supersedes in its entirety any and all prior undertakings and
agreements of the Company and Executive with respect to the
subject matter hereof.
(c) Choice of Law. The validity, interpretation, construction and
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performance of this Agreement shall be governed by the internal
substantive laws but not the choice of law rules of the State of
California.
(d) Severability. The invalidity or unenforceability of any provision
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or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain
in full force and effect.
(e) No Assignment of Benefits. The rights of any person to payments
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or benefits under this Agreement shall not be made subject to
option or assignment, either by voluntary or involuntary
assignment or by operation of law, including (without limitation)
bankruptcy, garnishment, attachment or other creditor's process,
and any action in violation of this Section 11(e) shall be void.
(f) Employment Taxes. All payments made pursuant to this Agreement
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will be subject to withholding of applicable income and
employment taxes.
(g) Counterparts. This Agreement may be executed in counterparts,
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each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
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
first above written.
PHOENIX TECHNOLOGIES LTD. EXECUTIVE
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By : Xxxxxx X. Xxxxx Xxxx X. Xxxxxxx
President and CEO
Exhibit A
In consideration for Executive accepting the benefits under his Severance
Agreement dated January 4, 2001, Executive agrees to release Company of all
claims arising from his employment as set forth below.
Employee hereby forever waives for himself, his attorneys, heirs, executors,
administrators, successors and assigns any claims against Phoenix, including its
subsidiaries, affiliates, insurers, shareholders, officers, directors and
employees (the "Parties Released"), for any action, loss, expense or any damages
arising from any occurrence from the beginning of time until the date of the
signing of this Agreement and arising or in any way resulting from Employee's
employment with Phoenix or the termination thereof. The only exceptions to the
above waiver are claims by Employee under any worker's compensation or
unemployment statutes and any right arising under this Agreement. Employee
represents that he has no current intention to assert any claim on any basis
against the Parties Released. Phoenix releases its claims on intellectual
property created by Employee after the date of execution of this Agreement.
In the event of breach of this Agreement by Phoenix, Employee's exclusive remedy
for such breach shall be limited to the enforcement of the terms of this
Agreement.
COMPANY: PHOENIX TECHNOLOGIES LTD.
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By: Xxxxxx X. Xxxxx
Title: President and CEO
EXECUTIVE: Xxxx X. Xxxxxxx
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Signature
