Sample Business Contracts

Severance Agreement - Phoenix Technologies Ltd. and Linda V. Moore

Sponsored Links

                               SEVERANCE AGREEMENT

This Severance Agreement (the "Agreement") is made and entered into effective as
of January 4, 2001, by and between Linda V. Moore (the "Executive") and Phoenix
Technologies Ltd., a Delaware corporation (the "Company").


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


    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
        as Vice President, General Counsel and Secretary. 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
        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
        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
            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
            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 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.

        (a) Termination Not for Cause. If the Company terminates Executive's
            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

            (i) Severance Payments.

                (1) Guaranteed Severance Payments. Subject to Executive entering
                    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
                    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


            (ii)  Medical Benefits. The Company, at the Company's sole expense,
                  shall 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 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 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 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


    6.  Covenants Not to Compete and Not to Solicit.

        (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

        (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
        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 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 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 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
            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

        (e) Change in Control. "Change in Control" means the occurrence of any
            of 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

    8.  Successors.

        (a) Company's Successors. Any successor to the Company (whether direct
            or 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 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.

        (a) General. Notices and all other communications contemplated by this
            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
            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

    10. Arbitration.

        (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 Clara 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.


    11. Miscellaneous Provisions.

        (a) Waiver. No provision of this Agreement shall be modified, waived or
            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 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
            performance of this Agreement shall be governed by the internal
            substantive laws but not the choice of law rules of the State of

        (d) Severability. The invalidity or unenforceability of any provision 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 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 will
            be subject to withholding of applicable income and employment taxes.

        (g) Counterparts. This Agreement may be executed in counterparts, 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.


----------------------------------        --------------------------------------
By: Albert E. Sisto                       Linda V. Moore
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

COMPANY:                            PHOENIX TECHNOLOGIES LTD.

                                    By:    Albert E. Sisto
                                    Title: President and CEO

EXECUTIVE:                          Linda V. Moore