Employment Agreement - Phoenix Technologies Ltd. and Gayn B. Winters
July 6, 1995
Dr. Gayn B. Winters
57 Madison Road
Wellesley, Massachusetts 02181
Dear Gayn,
I am very pleased to offer you the position of Vice President, Engineering and
Chief Technical Officer, reporting to me. Your office will be in our Southern
California development center in Irvine. Your employment with Phoenix should
commence as soon as possible; our current understanding is that your start date
will be August 7, 1995. This letter will confirm the employment terms that we
have discussed over the last several days.
1. CASH COMPENSATION
Your base salary will be $160,000 per annum. You will be eligible to receive an
incentive bonus of $35,000 per annum, upon achievement of goals. These goals
will be in part set by you and me, but will also include Phoenix performance
factors, all in conformance with guidelines established for executive management
by Phoenix's Board of Directors and its Compensation Committee. However, for
the first twelve months of your employment, Phoenix will guarantee the full
incentive compensation on a quarterly basis.
In addition, you will be given a special bonus on each of the first through
fifth anniversaries of the date of the relocation loan referred to in item 3.B
below. The amount of each bonus will be the same as the principal payment due
from you on that anniversary date under the relocation loan. Each such bonus
will be payable only if you are an employee of Phoenix on the applicable
anniversary date. Phoenix will have the right to apply such bonus against any
amounts due under the relocation loan.
2. STOCK OPTIONS
You will be recommended to the Compensation Committee of the Board for a grant
of options to purchase 75,000 shares of Phoenix common stock. The exercise
price will be the price of Phoenix stock on the date you first become an
employee of the Company. The options will vest as follows:
A. Options covering 50,000 shares will vest 25% on the first anniversary of
your employment with the Company and the balance will vest in 12 equal
installments each three months thereafter;
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B. Options covering the other 25,000 shares will vest on the seventh
anniversary of your employment with the Company, but may vest earlier as
follows:
i. If certain performance criteria to be agreed upon for your first year
of employment are achieved, options covering 10,000 shares will vest in 16 equal
installments every three months, with the first installment vesting three months
after the first anniversary of your employment;
ii. If certain performance criteria to be agreed upon for your second year
of employment are achieved, options covering 10,000 shares will vest in 16 equal
installments every three months, with the first installment vesting three months
after the second anniversary of your employment;
iii. If certain performance criteria to be agreed upon for your third year
of employment are achieved, options covering 5,000 shares will vest in 16 equal
installments every three months, with the first installment vesting three months
after the third anniversary of your employment.
If the performance criteria are either not agreed on or not met for any
particular year of employment, then the options covering the shares for that
year of employment will not vest until the seventh anniversary of your
employment start date.
3. RELOCATION ASSISTANCE
In an effort to ease the relocation costs and the cost of living differential
between Southern California and Massachusetts, Phoenix will provide the
following relocation assistance:
A. Phoenix will reimburse you for the reasonable cost of moving your household
goods, which includes one sailboat, to Southern California and for the
reasonable real estate commissions due upon the sale of your home in Wellesley,
provided such sale occurs while you are a Phoenix employee. Phoenix will pay
for the cost of up to two househunting trips to the Southern California area by
you and your companion. The Company will also provide a temporary living
allowance for a period not to exceed 120 days if your new residence in Southern
California is unavailable for immediate occupancy. All travel and moving
arrangements will be made through Phoenix; we have an arrangement with an
excellent nationwide moving company which will help control costs. You, of
course, will exercise great care to minimize the relocation costs for which
Phoenix has agreed to reimburse, which would include negotiating the real estate
commissions with your agent. Your relocation activity should be coordinated
with Kathy Newman.
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B. In addition, Phoenix will loan you $200,000 effective on your first day of
employment with the Company. The loan will be evidenced by a promissory note
acceptable to you and Phoenix. The loan will be secured by a mortgage on your
Wellesley home until it is sold and then on your California home and/or on such
other property as you and Phoenix may agree. Unless otherwise agreed to by you,
Phoenix will not record any mortgage with respect to your Wellesley home. The
mortgages will be subordinated to any mortgages to your primary mortgagors on
your Wellesley or California residences. Repayment to Phoenix will be made in
five equal annual installments of $40,000 on each of the first five
anniversaries of your employment start date. If you resign voluntarily from
Phoenix, or if your employment with Phoenix is terminated for cause, you will be
required to repay the then remaining principal balance in full within 30 days of
your employment termination.
4. TERMINATION
Your employment with Phoenix is "at-will". This letter is not intended to
create any promise of continued employment with Phoenix. If, however, your
employment with the Company is terminated other than for cause or other than
voluntarily, Phoenix will provide you with continuation of your then current
monthly base salary until the earlier to occur of the date you secure other
similar level full-time employment or the first anniversary of your employment
termination date. You agree that you will actively and vigorously seek new
employment in the event of any such termination of employment with Phoenix. For
purposes of this agreement termination which is for cause means termination for
reasons of (i) any violation of the Company's policies regarding creation of an
offensive workplace or sexual harassment, (ii) commission of a felony, (iii)
commission of an act of fraud or deceit in the performance of duties on behalf
of the Company or any affiliate of the Company, (iv) violation of federal or
state securities laws with respect to the Company's securities, (v) violation of
the Employee Invention Assignment and Proprietary Agreement signed as
contemplated below or (vi) the continuing failure to perform assigned duties
(other than failure due to mental or physical incapacity) after written notice
thereof.
5. MISCELLANEOUS
You will also be eligible to participate in our employee benefit programs
including medical, dental, life, and short and long term disability insurance.
You will be eligible to participate in our 401(k) program after six months of
employment and in our employee stock purchase plan.
Upon your employment, you will be asked to sign a standard Employee Invention
Assignment and Proprietary Agreement agreeing to hold in confidence any
proprietary information received as an employee of the Company and to assign to
the Company any inventions that you make while employed by the Company. We wish
to impress upon you that we do not wish to bring with you any confidential or
proprietary material of any former employer or to violate any other obligation
to your former employers. If you
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would like clarification regarding this policy, please contact Scott Neely, Vice
President and General Counsel at (408) 452-6571.
Gayn, I am truly looking forward to working with you. I think that we can make
Phoenix enormously successful and an exciting place to work. If I have captured
all of the points that we discussed and if you agree with the terms of this
letter, please sign and return a copy of it to me.
This offer will expire on July 16, 1995 at 6:00 p.m. (PDT) unless your written
acceptance is received by Phoenix by that time.
Best regards,
/s/ Jack Kay
Jack Kay
President and COO
Acknowledgment:
I accept this offer of employment stated in this letter and expect to commence
employment on or before August 7, 1995
By: /s/ Gayn B. Winters Date: July 7, 1995
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Gayn B. Winters