SETTLEMENT AGREEMENT
Exhibit
99.2
EXECUTION VERSION
This
Settlement Agreement (this “Agreement”) is made
and entered into as of November 25, 2009, by and among Phoenix Technologies Ltd.
(the “Company”
or “Phoenix
Technologies”) and the entities and natural persons listed on
Exhibit A hereto (collectively, the “Ramius Group”) (each
of the Company and the Ramius Group, a “Party” to this
Agreement, and collectively, the “Parties”).
RECITALS:
WHEREAS,
the Company and the Ramius Group have engaged in various discussions and
communications concerning the Company’s business, financial performance and
strategic plans; and
WHEREAS,
the Ramius Group duly submitted a nomination letter to the Company on
November 9, 2009 (the “Nomination Letter”)
nominating four (4) individuals as director candidates for election to the
Company’s board of directors (the “Board”) at the 2010
annual meeting of shareholders of the Company (including any adjournment or
postponement thereof, the “2010 Annual
Meeting”);
WHEREAS,
the Company and the members of the Ramius Group have determined (i) that
the interests of the Company and its stockholders would be best served at this
time by, among other things, avoiding an election contest and the expense and
disruption that may result therefrom and (ii) to come to an agreement with
respect to the composition of the Board, certain matters related to the 2010
Annual Meeting and certain other matters, as provided in this
Agreement.
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound hereby, agree as follows:
1. Board Matters; Board
Appointments; 2010 Annual Meeting; Committee Appointments; 2011 Annual
Meeting.
(a) Upon
execution of this Agreement, the Company shall take all necessary actions to
(i) increase the size of the Board from five (5) to ten
(10) members and (ii) appoint Xxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, Xxxxxx
Xxxxxx, Xxxxxxx Xxxxx and Xxxxxxx Xxxxxx (the “New Appointees”) to
fill the vacancies on the Board created by increasing its size to ten (10)
members.
(b) Upon
execution of this Agreement, the Ramius Group hereby withdraws its Nomination
Letter for the election of four (4) directors at the 2010 Annual
Meeting.
(c) Upon
execution of this Agreement, the Company will take all action necessary in
furtherance of the appointment of Messrs. Xxxxxx, Xxxxx and Xxxxxx to the
Nominating and Corporate Governance Committee of the Board. The directors
serving on the Nominating and Corporate Governance Committee prior to the
execution of this Agreement will remain members of the Nominating and Corporate
Governance Committee upon the execution of this Agreement.
(d) The
Company hereby confirms that effective as of the execution of this Agreement
Xxxxxxx Xxxxx has resigned as chairman of the Board. Xx. Xxxxx will remain
a member of the Board following his resignation as chairman. Upon execution of
this Agreement, in accordance with the Company’s bylaws, the Company shall take
all action necessary in furtherance of the appointment of Xx. Xxxxx as the
chairman of the Board.
(e) The
Company agrees that it shall take no action at any time prior to the final
certification of the results of the 2010 Annual Meeting to (i) remove
Xx. Xxxxx as chairman of the Board or (ii) remove Messrs. Xxxxxx,
Xxxxx and Xxxxxx as members of the Nominating and Corporate Governance
Committee.
(f) The
Company agrees that it will use its commercially reasonable efforts to hold the
2010 Annual Meeting by February 1, 2010, but in any event no later than
February 15, 2010. The Company agrees that prior to the time that it mails
its definitive proxy statement for the 2010 Annual Meeting, the Company shall
take all necessary actions to (i) decrease the size of the Board from ten
(10) to nine (9) members effective as of the 2010 Annual Meeting and
(ii) nominate the New Appointees for election to the Board at the 2010
Annual Meeting together with four (4) existing directors for inclusion in
the Company’s slate of nominees (the “2010 Nominees”) with
terms expiring at the Company’s 2011 annual shareholder meeting (the “2011 Annual
Meeting”). The Company shall take no other action to increase or decrease
the size of the Board prior to the final certification of the results of the
2010 Annual Meeting.
(g) The
Company agrees that it will recommend, support and solicit proxies for the
election of the New Appointees in the same manner as for the Company’s other
2010 Nominees up for election at the 2010 Annual Meeting.
(h) If
any New Appointee leaves the Board (whether by resignation or otherwise) before
the conclusion of the 2010 Annual Meeting, the Ramius Group will be entitled to
recommend to the Nominating and Corporate Governance Committee replacement
director(s) (each of whom will be deemed a New Appointee for purposes of this
Agreement) who will qualify as “independent” pursuant to NASDAQ listing
standards. The Nominating and Corporate Governance Committee will not
unreasonably withhold acceptance of any replacement director(s) recommended by
the Ramius Group. In the event the Nominating and Corporate Governance Committee
does not accept a replacement director(s) recommended by the Ramius Group, the
Ramius Group will have the right to recommend additional replacement director(s)
for consideration by the Nominating and Corporate Governance Committee. The
Company will cause the Board to appoint such replacement director(s) to the
Board no later than five (5) business days after the Nominating and
Corporate Governance Committee’s recommendation of such replacement
director(s).
(i) The
parties hereto acknowledge that the only matters that may be presented by the
Company for consideration at the 2010 Annual Meeting include (i) the
election of the 2010 Nominees, (ii) the ratification of the Company’s
independent registered public accounting firm, (iii) an amendment to the
Company’s 2007 Equity Incentive Plan (the “2007 Plan”) to increase the number of
shares issuable under the Plan by 1,500,000 shares of Common Stock and
(iv) any proposals submitted by stockholders pursuant to Rule 14a-8
for inclusion in the Company’s proxy materials for the 2010 Annual
Meeting.
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(j) At
the 2010 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 affiliates
in favor of the election to the Board of the 2010 Nominees. The Ramius Group
shall cause to be executed proxies for the 2010 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 affiliates in favor of the
election of the 2010 Nominees to the Board. The Ramius Group shall not withdraw
or modify any such proxies. From the date hereof through the 2010 Annual
Meeting, neither the Company, the Ramius Group nor any member of the Ramius
Group shall directly or indirectly make any statements or engage in any
activities in opposition to the election of the 2010 Nominees at the 2010 Annual
Meeting or enter into any agreement, understanding or arrangement with the
purpose or effect to cause or further any of the foregoing.
(k) Neither
the Ramius Group nor any member of the Ramius Group shall (i) nominate any
person for election at the 2010 Annual Meeting or (ii) submit any proposal
for consideration at, or bring any other business before, the 2010 Annual
Meeting, directly or indirectly. The Ramius Group shall not enter into any
agreement, understanding or arrangement with the purpose or effect to cause or
further any of the foregoing or otherwise engage in any activities with the
purpose or effect to cause or further any of the foregoing.
2. Representations and
Warranties of the Company.
The
Company represents and warrants to the Ramius Group that (a) the Company
has the corporate power and authority to execute the Agreement and to bind it
thereto, (b) this Agreement has been duly and validly authorized, executed
and delivered by the Company, constitutes a valid and binding obligation and
agreement of the Company, and is enforceable against the Company in accordance
with its terms, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws generally affecting the rights of creditors and subject to general
equity principles and (c) the execution, delivery and performance of this
Agreement by the Company does not and will not violate or conflict with
(i) any law, rule, regulation, order, judgment or decree applicable to it,
or (ii) result in any breach or violation of or constitute a default (or an
event which with notice or lapse of time or both could become a default) under
or pursuant to, or result in the loss of a material benefit under, or give any
right of termination, amendment, acceleration or cancellation of, any
organizational document, agreement, contract, commitment, understanding or
arrangement to which the Company is a party or by which it is
bound.
3. Representations and
Warranties of the Ramius Group.
The
Ramius Group shall cause its Affiliates to comply with the terms of this
Agreement. The Ramius Group represents and warrants to the Company that
(a) this Agreement has been duly authorized, executed and delivered by the
Ramius Group, and is a valid and binding obligation of the Ramius Group,
enforceable against the Ramius Group in accordance with its terms, except as
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws generally
affecting the rights of creditors and subject to general equity principles,
(b) the execution of this Agreement, the consummation of any of the
transactions contemplated hereby, and the fulfillment of the terms hereof, in
each case in accordance with the terms hereof, will not conflict with, or result
in a breach or violation of the organizational documents of the Ramius Group as
currently in effect and (c) the execution, delivery and performance of
this Agreement by each member of the Ramius Group does not and will not violate
or conflict with (i) any law, rule, regulation, order, judgment or decree
applicable to it, or (ii) result in any breach or violation of or
constitute a default (or an event which with notice or lapse of time or both
could become a default) under or pursuant to, or result in the loss of a
material benefit under, or give any right of termination, amendment,
acceleration or cancellation of, any organizational document, agreement,
contract, commitment, understanding or arrangement to which such member is a
party or by which it is bound.
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4. Press
Release.
Promptly
following the execution of this Agreement, the Company and the Ramius Group
shall jointly issue a mutually agreeable press release (the “Mutual Press
Release”) announcing the terms of this Agreement, in the form attached
hereto as Exhibit B. Prior to the issuance of the Mutual Press Release,
neither the Company nor Ramius shall issue any press release or public
announcement regarding this Agreement without the prior written consent of the
other party.
5. Ramius Group
Ownership.
Through
the conclusion of the 2010 Annual Meeting, the Ramius Group agrees to maintain
beneficial ownership of at least 90% of the number of shares of Common Stock
beneficially owned in the aggregate by the members of the Ramius Group as of the
date of this Agreement. Messrs. Fuller, Terino, Xxxxx and Little shall not
be deemed to be members of the Ramius Group solely for the purposes of this
Section 5.
Following the conclusion of the 2010 Annual Meeting, if at any time the Ramius
Group’s aggregate beneficial ownership of Common Stock decreases to less than
2.5% of the Company’s then outstanding shares of Common Stock, then
Xx. Xxxxx shall promptly resign from the Board.
6. Specific
Performance.
Each of
the members of the Ramius Group, on the one hand, and the Company, on the other
hand, acknowledges and agrees that irreparable injury to the other party hereto
would occur in the event any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached and
that such injury would not be adequately compensable in damages. It is
accordingly agreed that the members of the Ramius Group or any of them, on the
one hand, and the Company, on the other hand (the “Moving Party”), shall
each be entitled to specific enforcement of, and injunctive relief to prevent
any violation of, the terms hereof, and the other party hereto will not take
action, directly or indirectly, in opposition to the Moving Party seeking such
relief on the grounds that any other remedy or relief is available at law or in
equity.
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7. Expenses.
The
Company shall reimburse the Ramius Group for its reasonable, documented
out-of-pocket fees and expenses (including legal expenses) incurred in
connection with the matters related to the 2010 Annual Meeting and the
negotiation and execution of this Agreement, provided that such reimbursement
shall not exceed $15,000 in the aggregate.
8. Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated. It is hereby stipulated and declared to be the intention of the
parties that the parties would have executed the remaining terms, provisions,
covenants and restrictions without including any of such which may be hereafter
declared invalid, void or unenforceable. In addition, the parties agree to use
their best efforts to agree upon and substitute a valid and enforceable term,
provision, covenant or restriction for any of such that is held invalid, void or
enforceable by a court of competent jurisdiction.
9. Notices.
Any
notices, consents, determinations, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) business day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
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If
to the Company:
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Phoenix
Technologies Ltd.
000
Xxxxxx Xxxxx Xxxx
Xxxxxxxx,
Xxxxxxxxxx
Attention:
General Counsel
Facsimile:
(000) 000-0000
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With
a copy to:
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Cooley
Godward Kronish LLP
Five
Palo Alto Square
0000
Xx Xxxxxx Xxxx
Xxxx
Xxxx, XX 00000-0000
Attention:
Xxxxx Xxxxxx, Esq.
Facsimile:
(000) 000-0000
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5
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If
to the Ramius Group or any member of the Ramius Group:
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Ramius
Value and Opportunity Master Fund Ltd
c/o
RCG Starboard Advisors, LLC
000
Xxxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx
X. Xxxxx
Xxxx
X. Xxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
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With
a copy to:
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Xxxxxx
Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
Park
Avenue Tower
00
Xxxx 00xx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxxx Xxxxxxx, Esq.
Facsimile:
(000) 000-0000
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10. Applicable
Law.
This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Delaware without reference to the conflict of laws
principles thereof. Each of the Parties hereto irrevocably agrees that any legal
action or proceeding with respect to this Agreement and the rights and
obligations arising hereunder, or for recognition and enforcement of any
judgment in respect of this Agreement and the rights and obligations arising
hereunder brought by the other party hereto or its successors or assigns, shall
be brought and determined exclusively in the Delaware Court of Chancery and any
state appellate court therefrom within the State of Delaware (or, if the
Delaware Court of Chancery declines to accept jurisdiction over a particular
matter, any state or federal court within the State of Delaware). Each of the
Parties hereto hereby irrevocably submits with regard to any such action or
proceeding for itself and in respect of its property, generally and
unconditionally, to the personal jurisdiction of the aforesaid courts and agrees
that it will not bring any action relating to this Agreement in any court other
than the aforesaid courts. Each of the parties hereto hereby irrevocably waives,
and agrees not to assert in any action or proceeding with respect to this
Agreement, (i) any claim that it is not personally subject to the
jurisdiction of the above-named courts for any reason, (ii) any claim that
it or its property is exempt or immune from jurisdiction of any such court or
from any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise) and (iii) to the fullest
extent permitted by applicable legal requirements, any claim that (A) the
suit, action or proceeding in such court is brought in an inconvenient forum,
(B) the venue of such suit, action or proceeding is improper or
(C) this Agreement, or the subject matter hereof, may not be enforced in or
by such courts.
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11. Counterparts. This
Agreement may be executed in one or more counterparts which together shall
constitute a single agreement.
12. Entire Agreement; Amendment
and Waiver; Successors and Assigns.
This
Agreement contains the entire understanding of the parties hereto with respect
to its subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings between the parties other
than those expressly set forth herein. No modifications of this Agreement can be
made except in writing signed by an authorized representative of each the
Company and the Ramius Group. No failure on the part of any party to exercise,
and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of such right,
power or remedy by such party preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law. The
terms and conditions of this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the parties hereto and their respective
successors, heirs, executors, legal representatives, and permitted assigns. No
party shall assign this Agreement or any rights or obligations hereunder
without, with respect to any member of the Ramius Group, the prior written
consent of the Company, and with respect to the Company, the prior written
consent of the Ramius Group.
13. Mutual
Non-Disparagement.
Each of
the Parties covenants and agrees that none of it or its respective subsidiaries,
affiliates, successors, assigns, officers, employees or directors shall in any
way disparage, attempt to discredit, or otherwise call into disrepute, the other
Parties or such other Parties’ subsidiaries, affiliates, successors, assigns,
officers (including any current officer of a Party or a Parties’ subsidiaries
who no longer serves in such capacity following the execution of this
Agreement), directors (including any current director of a Party or a Parties’
subsidiaries who no longer serves in such capacity following the execution of
this Agreement), employees, stockholders, agents, attorneys or representatives,
or any of their products or services, in any manner that would damage the
business or reputation of such other Parties, their products or services or
their subsidiaries, affiliates, successors, assigns, officers (or former
officers), directors (or former directors), employees, agents, attorneys or
representatives.
[The
remainder of this page intentionally left blank]
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IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly
authorized signatories of the parties as of the date hereof.
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PHOENIX
TECHNOLOGIES LTD.
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By:
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/s/
Xxxxxxx Xxxxx
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Name:
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Xxxxxxx
Xxxxx
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Title:
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President
& CEO
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THE
RAMIUS GROUP:
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RAMIUS
VALUE AND OPPORTUNITY MASTER FUND LTD
By:
RCG Starboard Advisors, LLC,
its investment manager RCG
PB, LTD
By:
Ramius Advisors, LLC,
its investment advisor RAMIUS
ENTERPRISE MASTER FUND LTD
By:
Ramius Advisors, LLC,
its investment advisor RCG
STARBOARD ADVISORS, LLC
By:
Ramius LLC,
its sole member |
RAMIUS
ADVISORS, LLC
By:
Ramius LLC,
its sole member By:
Xxxxx Group, Inc.,
its sole member XXXXX
GROUP, INC.
RCG
HOLDINGS LLC
By:
C4S & Co., L.L.C.,
as managing member C4S
& CO., L.L.C.
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By:
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/s/
Xxxxxxx X. Xxxxxxx
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Name:
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Xxxxxxx
X. Xxxxxxx
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Title:
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Authorized
Signatory
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/s/
Xxxxxxx X. Xxxxxxx
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XXXXXXX
X. XXXXXXX
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Individually
and as attorney-in-fact for Xxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxxxx X.
Xxxxxxx,
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/s/
Xxxxxxx X. Xxxxx
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XXXXXXX
X. XXXXX
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/s/
Xxxx X. Xxxxxx
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XXXX
X. XXXXXX
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/s/
Xxxxxx Xxxxxx
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XXXXXX
XXXXXX
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/s/
Xxxxxxx Xxxxxx
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XXXXXXX
XXXXXX
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8
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/s/
Xxxxxxx Xxxxx
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XXXXXXX
XXXXX
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SCHEDULE
A
The Ramius
Group
RAMIUS
VALUE AND OPPORTUNITY MASTER FUND LTD
RCG PB,
LTD
RAMIUS
ENTERPRISE MASTER FUND LTD
RAMIUS
ADVISORS, LLC
RCG
STARBOARD ADVISORS, LLC
XXXXX
GROUP, INC.
RCG
HOLDINGS LLC
C4S &
CO., L.L.C.
XXXXX X.
XXXXX
XXXXXX X.
XXXXX
XXXXXX X.
XXXXXXX
XXXXXXX
X. XXXXXXX
XXXX X.
XXXXXX
XXXXXXX
X. XXXXX
XXXXXX
XXXXXX
XXXXXXX
XXXXXX
XXXXXXX
XXXXX
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EXHIBIT
B
Phoenix
Technologies Adds Five Directors to Newly Created Board Seats
Reaches
Agreement with Largest Shareholder
Milpitas,
CA – (BusinessWire – November 25, 2009) – Phoenix Technologies Ltd.
(NASDAQ: PTEC), a global leader in core systems firmware, security solutions and
instant-on operating systems environments, today announced that it has reached
an agreement with RCG Starboard Advisors, LLC, a subsidiary of Ramius LLC, and
certain of its affiliates (collectively, the “Ramius Group”) regarding the
composition of the company’s Board of Directors. Under the terms of the
agreement, the company will immediately expand its board to include ten members,
adding Xxxxxxx X. Xxxxx, Xxxx X. Xxxxxx, Xxxxxx Xxxxxx, Xxxxxxx Xxxxx, and
Xxxxxxx Xxxxxx as new directors. Xx. Xxxxx will become Chairman of the
Board of Directors. As part of the settlement agreement, one existing director
will not stand for re-election at the 2010 Annual Meeting, at which time the
Board will be reduced to nine members. The annual meeting will be held no later
than February 15, 2010.
Xxxxx
Xxxxx, Phoenix’s CEO stated, “We are pleased we were able to reach an agreement
with Ramius which enables us to work together with our new Board members to
build value for all of our shareholders, customers, and employees. We welcome
Xxxx and the new board members and look forward to working with them as we
continue to evolve our business plan.”
Xxxx
Xxxxx, representing the Ramius Group, stated, “We are excited to have the
opportunity to work with the Phoenix Technologies Board and executive team in
their efforts to continue serving their customers with world class products and
maximizing shareholder value.”
About Phoenix Technologies
Ltd.
Phoenix
Technologies Ltd. (Nasdaq: PTEC), the leader in PC 3.0(TM) products, services
and embedded technologies, pioneers open standards and delivers innovative
solutions that enable the PC industry’s top system builders and specifiers to
differentiate their systems, reduce time-to-market and increase their revenues.
The Company’s flagship products and services — SecureCore Xxxxx, Embedded BIOS,
Phoenix Freeze, FailSafe, HyperSpace, and xXxxxxxx.xxx — are revolutionizing the
PC user experience by delivering unprecedented performance, security,
reliability, continuity, and ease-of-use. The Company established industry
leadership and created the PC clone industry with its original BIOS product in
1983. Phoenix has over 210 technology patents issued and pending, and has
shipped firmware in over one billion systems. Phoenix is headquartered in
Milpitas, California with offices worldwide. For more information, visit xxxx://xxx.xxxxxxx.xxx.
Phoenix,
Phoenix Technologies, Phoenix SecureCore, SecureCore Xxxxx, Embedded BIOS,
Phoenix Freeze, FailSafe, HyperSpace, PC 3.0, xXxxxxxx.xxx and the Phoenix
Technologies logo are trademarks and/or registered trademarks of Phoenix
Technologies Ltd. All other marks are the marks of their respective
owners.
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About Ramius LLC
Ramius
LLC is an investment advisor that manages assets in a variety of alternative
investment strategies. Ramius LLC is headquartered in New York with offices
located in London, Luxembourg, Tokyo, Hong Kong and Munich.
Investor
Relations Contacts:
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Phoenix
Technologies Ltd.
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Xxxxxxx
Xxxxxx
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Chief
Operating Officer and Chief Financial
Officer
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Tel.
x0 000 000 0000
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xxxxxxxx_xxxxxxxxx@xxxxxxx.xxx
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The
Xxxxxxxx Group, Investor Relations
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Xxxxxxx
XxXxxxx or Xxxxxx Xxxxxxx
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Tel.
x0 000 000 0000
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xxxxxxx@xxxxxxxxxxxxxxxx.xxx
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