UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
(Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934)
Date of Report (Date of earliest event reported): November 16, 2009
PHOENIX TECHNOLOGIES LTD.
(Exact name of registrant as specified in charter)
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| Delaware
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0-17111
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04-2685985 |
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| (State or other jurisdiction
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(Commission
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(IRS Employer |
| of incorporation)
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File Number)
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Identification No.) |
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| 915 Murphy Ranch Road, Milpitas, California
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95035 |
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| (Address of principal executive offices)
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(Zip Code) |
Registrant’s telephone number, including area code: (408) 570-1000
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425). |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12). |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)). |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)). |
TABLE OF CONTENTS
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Approval of Severance Benefits Agreement
On November 16, 2009, Phoenix Technologies Ltd. (the “Company”) entered into Severance and Change
of Control Agreements (the “Severance Agreements”) with each of Woodson Hobbs, Richard Arnold,
David L. Gibbs, Gaurav Banga and David Deasy (collectively the “Executives”). The Severance
Agreements with Messrs Hobbs, Arnold, Gibbs and Banga amend and restate their previous agreements
with the Company relating to severance and change of control.
The initial term of each Severance Agreement is four years. In the event that the Company
terminates an Executive’s employment for any reason other than cause, death or disability, or the
Executive resigns for good reason, the Company will pay to the Executive salary continuation
benefits equal to such Executive’s then-current base salary during the applicable severance period,
except in the case of Mr. Hobbs, whose severance payment shall be equal to twelve months of his
then-current monthly base salary, and paid in a lump sum on the first payroll date following his
termination. The severance period shall be six months in the case of Messrs. Arnold, Banga and
Deasy, and twelve months in the case of Mr. Gibbs. If the Executive resigns for good reason in
connection with a reduction of his base salary then in effect, then his severance payments shall be
based on his monthly base salary prior to such reduction. In addition, if Mr. Gibbs has not
secured reemployment during such twelve month period, he shall continue to receive such severance
payments for up to an additional six months. Each Executive and the Executive’s eligible
dependents will also receive continuation of health, dental and vision benefits for six months in
the case of Messrs. Arnold, Banga, Deasy and Gibbs and for twelve months in the case of Mr. Hobbs,
following such termination.
The Company will also pay Messrs. Hobbs and Arnold a bonus equal to the number of months of
employment during the fiscal year in which the termination occurs, divided by twelve and multiplied
by the target bonus for such Executive for such fiscal year. If
Messrs. Hobbs or Arnold resigns for good reason in connection with a
reduction of his bonus target then in effect, then his bonus payment
shall be based on his bonus target prior to such reduction.
If the Company terminates an Executive’s employment for any reason other than cause, death or
disability, or the Executive resigns for good reason, within the period beginning two months prior
to (or, in the case of Mr. Hobbs, on the date of signing of a definitive agreement) and ending
twelve months following a change of control of the Company, then in addition to the severance and
benefits described above, 50% of the Executive’s then-unvested stock options and restricted stock
will vest as of the termination date, or 100% in the case of Messrs. Hobbs and Arnold.
If Executive’s employment is terminated as a result of his death or disability, the Executive
and/or the Executive’s eligible dependents will receive continuation of health, dental and vision
benefits during the first six months, in the case of Messrs. Arnold, Banga, Deasy and Gibbs, and
during the first twelve months, in the case of Mr. Hobbs, following such termination.
In the event that the payments under any Severance Agreement constitute “parachute payments” within
the meaning of Section 280G of the Internal Revenue Code (the “Code”) and would subject the
Executive to the excise tax under Section 4999 of the Code, the Executive is entitled to either (i)
the full payments provided under the Severance Agreement, or (ii) such lesser amount which would
result in no portion of such payments being subject to excise tax under Section 4999 of the Code,
whichever of the foregoing amounts, taking into account all applicable income and excise taxes,
would result in a greater after-tax benefit to the Executive.
Each Executive’s right to receive the payments described in his Severance Agreement is subject to
his signing and not revoking a separation and release of claims agreement with the Company within
the time period provided for in the Separation Agreement.
The description in this Item 5.02 of the Severance Agreements is qualified in its entirety by
reference to the full text of the Severance Agreements, copies of which are attached hereto as
Exhibits 10.3, 10.4, 10.5, 10.6 and 10.7 and incorporated herein by reference.
Item 8.01. Other Events
On November 16, 2009, Mr. Deasy joined the Company as Senior Vice President, Direct Sales and
Marketing. In connection with his appointment, and as a material inducement to his joining, Mr.
Deasy was granted a non-qualified stock option to purchase 250,000 shares of common stock of the
Company, par value $0.001 per share, with an exercise price equal to US $2.82, the closing sale
price of the Company’s stock on November 16, 2009, the grant date. Assuming Mr. Deasy remains
actively employed by the Company, the option will vest and become exercisable with respect to 25%
of the total number of shares underlying the option on November 16, 2010, and 1/48th of
the total number of shares underlying the option each month thereafter. The option is subject to
acceleration of vesting upon a change of control of the Company as described in Item 5.02 above.
The option was granted pursuant to a non-shareholder approved inducement equity incentive plan
intended to qualify for the exemption from stockholder approval of equity compensation arrangements
under Rule 5635(c)(4) of the NASDAQ Listing Rules.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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| Exhibit No. |
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Description |
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10.3
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Severance and Change of Control Agreement between Woodson
Hobbs and Phoenix Technologies Ltd., dated
November 16, 2009 |
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10.4
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Severance and Change of Control Agreement between Richard
Arnold and Phoenix Technologies Ltd., dated
November 16, 2009 |
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10.5
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Severance and Change of Control Agreement between David L.
Gibbs and Phoenix Technologies Ltd., dated
November 16, 2009 |
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10.6
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Severance and Change of Control Agreement between Gaurav Banga
and Phoenix Technologies Ltd., dated
November 16, 2009 |
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10.7
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Severance and Change of Control Agreement between David Deasy
and Phoenix Technologies Ltd., dated
November 16, 2009 |