sec document
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(A) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(A)
(Amendment No. )(1)
Phoenix Technologies Ltd.
-------------------------
(Name of Issuer)
Common Stock, $.001 Par Value
-----------------------------
(Title of Class of Securities)
719153108
---------
(CUSIP Number)
STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
(212) 451-2300
--------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 5, 2006
------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box / /.
NOTE. Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. SEE Rule 13d-7 for
other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 27 Pages)
----------------
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, SEE the
NOTES).
----------------------- -----------------------
CUSIP No. 719153108 13D Page 2 of 27 Pages
----------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,300,219
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,300,219
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,300,219
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
----------------------- -----------------------
CUSIP No. 719153108 13D Page 3 of 27 Pages
----------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PARCHE, LLC 20-0870632
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 247,653
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
247,653
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
247,653
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than 1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
----------------------- -----------------------
CUSIP No. 719153108 13D Page 4 of 27 Pages
----------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
ADMIRAL ADVISORS, LLC 37-1484525
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,547,872
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,547,872
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,547,872
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IA, OO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
----------------------- -----------------------
CUSIP No. 719153108 13D Page 5 of 27 Pages
----------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
RAMIUS CAPITAL GROUP, L.L.C. 13-3937658
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,547,872
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,547,872
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,547,872
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IA, OO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
----------------------- -----------------------
CUSIP No. 719153108 13D Page 6 of 27 Pages
----------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
C4S & CO., L.L.C. 13-3946794
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,547,872
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,547,872
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,547,872
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
----------------------- -----------------------
CUSIP No. 719153108 13D Page 7 of 27 Pages
----------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PETER A. COHEN
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY - 0 -
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 1,547,872
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
- 0 -
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,547,872
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,547,872
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
----------------------- -----------------------
CUSIP No. 719153108 13D Page 8 of 27 Pages
----------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
MORGAN B. STARK
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY - 0 -
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 1,547,872
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
- 0 -
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,547,872
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,547,872
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
----------------------- -----------------------
CUSIP No. 719153108 13D Page 9 of 27 Pages
----------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JEFFREY M. SOLOMON
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY - 0 -
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 1,547,872
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
- 0 -
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,547,872
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,547,872
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
----------------------- -----------------------
CUSIP No. 719153108 13D Page 10 of 27 Pages
----------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
THOMAS W. STRAUSS
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY - 0 -
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 1,547,872
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
- 0 -
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,547,872
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,547,872
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
----------------------- -----------------------
CUSIP No. 719153108 13D Page 11 of 27 Pages
----------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JOHN MUTCH
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 100,000
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
100,000
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
100,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than 1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
----------------------- -----------------------
CUSIP No. 719153108 13D Page 12 of 27 Pages
----------------------- -----------------------
The following constitutes the Schedule 13D filed by the undersigned
(the "Schedule 13D").
Item 1. SECURITY AND ISSUER.
This statement relates to shares of the Common Stock, $.001
par value (the "Shares"), of Phoenix Technologies Ltd. (the "Issuer"). The
address of the principal executive offices of the Issuer is 915 Murphy Ranch
Road, Milpitas, California 95035.
Item 2. IDENTITY AND BACKGROUND.
(a) This statement is filed by:
(i) Starboard Value and Opportunity Master Fund Ltd., a
Cayman Islands exempted company ("Starboard"), with
respect to the Shares directly and beneficially owned
by it;
(ii) Parche, LLC, a Delaware limited liability company
("Parche"), with respect to the Shares directly and
beneficially owned by it;
(iii) Admiral Advisors, LLC, a Delaware limited liability
company ("Admiral Advisors"), who serves as the
investment manager of Starboard and the managing
member of Parche;
(iv) Ramius Capital Group, L.L.C., a Delaware limited
liability company ("Ramius"), who serves as the sole
member of Admiral Advisors;
(v) C4S & Co., L.L.C., a Delaware limited liability
company ("C4S"), who serves as managing member of
Ramius;
(vi) Peter A. Cohen ("Mr. Cohen"), who serves as one of
the managing members of C4S;
(vii) Morgan B. Stark ("Mr. Stark"), who serves as one of
the managing members of C4S;
(viii) Thomas W. Strauss ("Mr. Strauss"), who serves as one
of the managing members of C4S;
(ix) Jeffrey M. Solomon ("Mr. Solomon"), who serves as one
of the managing members of C4S; and
(x) John Mutch ("Mr. Mutch"), who serves as the managing
partner of MV Advisors LLC.
----------------------- -----------------------
CUSIP No. 719153108 13D Page 13 of 27 Pages
----------------------- -----------------------
Each of the foregoing is referred to as a "Reporting Person"
and collectively as the "Reporting Persons." As of June 14, 2006, the Reporting
Persons were the beneficial owners of, in the aggregate, 1,647,872 Shares,
representing approximately 6.5% of the Shares presently outstanding. Each of the
Reporting Persons is party to that certain Joint Filing Agreement, as further
described in Item 6. Accordingly, the Reporting Persons are hereby filing a
joint Schedule 13D.
(b) The address of the principal office of each of Parche,
Admiral Advisors, Ramius, C4S, Mr. Cohen, Mr. Stark, Mr. Strauss and Mr. Solomon
is 666 Third Avenue, 26th Floor, New York, New York 10017.
The address of the principal office of Starboard is c/o Citco
Fund Services (Cayman Islands) Limited, Corporate Center, West Bay Road, Grand
Cayman, Cayman Islands, British West Indies. The executive officers and
directors of Starboard and their principal occupations and business addresses
are set forth on Schedule B and incorporated by reference in this Item 2.
The address of the principal office of Mr. Mutch is 420
Stevens Avenue, Suite 270, Solana Beach, CA 92075.
(c) The principal business of each of Starboard and Parche is
serving as a private investment fund. Each of Starboard and Parche has been
formed for the purpose of making equity investments and, on occasion, taking an
active role in the management of portfolio companies in order to enhance
shareholder value. The principal business of Admiral Advisors is acting as
investment manager of Starboard and managing member of Parche. Ramius is engaged
in money management and investment advisory services for third parties and
proprietary accounts. C4S serves as managing member of Ramius. Mr. Cohen, Mr.
Strauss, Mr. Stark and Mr. Solomon serve as co-managing members of C4S.
The principal occupation of Mr. Mutch is serving as the
managing partner of MV Advisors LLC.
(d) No Reporting Person has, during the last five years, been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) No Reporting Person has, during the last five years, been
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Messrs. Cohen, Stark, Strauss, Solomon and Mutch are
citizens of the United States of America.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The Shares purchased by Starboard and Parche were purchased
with the working capital of such entities (which may, at any given time, include
margin loans made by brokerage firms in the ordinary course of business) in open
----------------------- -----------------------
CUSIP No. 719153108 13D Page 14 of 27 Pages
----------------------- -----------------------
market purchases, except as otherwise noted, as set forth in Schedule A, which
is incorporated by reference herein. The aggregate purchase cost of the
1,547,872 Shares beneficially owned in the aggregate by Starboard and Parche is
approximately $8,748,105.40, excluding brokerage commissions. The Shares
purchased by Mr. Mutch were purchased with personal funds. The aggregate
purchase cost of the 100,000 Shares owned by Mr. Mutch is approximately
$542,000, excluding brokerage commissions.
Certain Shares reported in the Statement as owned by Parche
were acquired in private transactions with various transferors for which Ramius
or an affiliate serves as the investment manager, the managing member or the
managing member of the investment manager. Ramius is the sole member of Admiral
Advisors, which is the managing member of Parche. Parche acquired from such
transferors an aggregate of 182,156 Shares on June 6, 2006 at a per Share price
of $5.5200, equal to the last reported sales price on the Nasdaq National Market
on the date the transaction was completed, or an aggregate of $1,005,501.12. The
total of 182,156 Shares transferred to Parche were initially acquired by the
transferors for an aggregate of $1,036,326.05 (excluding commissions and other
execution related costs). Such transferors had, within the 60 days prior to the
filing of the Statement, effected the following transactions in the Shares:
05/11/06 purchased 8,000 Shares at a price per Share of $5.2474; 05/11/06
purchased 8,000 Shares at a price per Share of $5.2497; 05/12/06 purchased 5,280
Shares at a price per Share of $5.2483; 05/12/06 purchased 6,128 Shares at a
price per Share of $5.2292; 05/15/06 purchased 6,400 Shares at a price per Share
of $5.2875; 05/15/06 purchased 26,832 Shares at a price per Share of $6.1694;
05/15/06 purchased 6,160 Shares at a price per Share of $5.2883; 05/16/06
purchased 5,152 Shares at a price per Share of $5.4610; 05/17/06 purchased 4,800
Shares at a price per Share of $5.4790; 05/18/06 purchased 4,272 Shares at a
price per Share of $5.6225; 05/19/06 purchased 4,000 Shares at a price per Share
of $5.8289; 05/22/06 purchased 1,504 Shares at a price per Share of $5.4995;
05/23/06 purchased 4,144 Shares at a price per Share of $5.4763; 05/24/06
purchased 5,664 Shares at a price per Share of $5.4223; 05/25/06 purchased 731
Shares at a price per Share of $5.5000; 05/30/06 purchased 9,952 Shares at a
price per Share of $5.7617; 05/31/06 purchased 1,355 Shares at a price per Share
of $5.7500; 05/31/06 purchased 3,200 Shares at a price per Share of $5.7825;
06/01/06 purchased 1,600 Shares at a price per Share of $5.7600; 06/01/06
purchased 1,014 Shares at a price per Share of $5.7500; and 06/01/06 purchased
1,600 Shares at a price per Share of $5.7700.
All purchases of Shares referenced above were funded by
working capital, which may, at any given time, include margin loans made by
brokerage firms in the ordinary course of business. The Reporting Persons do not
believe that the information contained in this paragraph is called for by the
Items of Schedule 13D and are disclosing it for supplemental informational
purposes only.
Item 4. PURPOSE OF TRANSACTION.
The Reporting Persons purchased the Shares based on the
Reporting Persons' belief that the Shares, when purchased, were undervalued and
represented an attractive investment opportunity. Depending upon overall market
conditions, other investment opportunities available to the Reporting Persons,
and the availability of Shares at prices that would make the purchase of
additional Shares desirable, the Reporting Persons may, in their respective
discretion, endeavor to increase their position in the Issuer through, among
other things, the purchase of Shares on the open market or in private
----------------------- -----------------------
CUSIP No. 719153108 13D Page 15 of 27 Pages
----------------------- -----------------------
transactions or otherwise, on such terms and at such times as the Reporting
Persons may deem advisable.
On June 15, 2006, Admiral Advisors, a subsidiary of Ramius,
delivered a letter to the lead independent director of the Board of Directors of
the Issuer expressing its belief that the market price of the Issuer's shares
fails to reflect the value embedded in the Issuer's profitable BIOS business, as
well as several of the Issuer's applications, and urging the Board of Directors
to immediately hire an interim chief executive officer and an investment banking
firm to assist the Board in exploring all strategic alternatives to maximize
stockholder value. Ramius also expressed concerns with the Issuer's recent poor
performance and execution, lack of leadership, strategic direction and concerns
that the Issuer lacks scale, brand recognition and the distribution channels
necessary to effectively compete as a standalone company in the enterprise
software market. The letter is filed as Exhibit 2 to this Schedule 13D and is
incorporated herein by reference.
No Reporting Person has any present plan or proposal which
would relate to or result in any of the matters set forth in subparagraphs (a) -
(j) of Item 4 of Schedule 13D except as set forth herein or such as would occur
upon completion of any of the actions discussed above. The Reporting Persons
intend to review their investment in the Issuer on a continuing basis and engage
in discussions with management and the Board of Directors of the Issuer
concerning the business, operations and future plans of the Issuer. Depending on
various factors including, without limitation, the Issuer's financial position
and investment strategy, the price levels of the Shares, conditions in the
securities markets and general economic and industry conditions, the Reporting
Persons may in the future take such actions with respect to their investment in
the Issuer as they deem appropriate including, without limitation, seeking Board
representation, making proposals to the Issuer concerning changes to the
capitalization, ownership structure or operations of the Issuer, purchasing
additional Shares, selling some or all of their Shares, engaging in short
selling of or any hedging or similar transaction with respect to the Shares or
changing their intention with respect to any and all matters referred to in Item
4.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
The aggregate percentage of Shares reported owned by each
person named herein is based upon 25,341,554 Shares outstanding, which is the
total number of Shares outstanding as reported in the Issuer's Quarterly Report
on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2006.
A. Starboard
(a) As of June 14, 2006, Starboard beneficially owned 1,300,219
Shares.
Percentage: Approximately 5.1%
(b) 1. Sole power to vote or direct vote: 1,300,219
2. Shared power to vote or direct vote: 0
3. Sole power to dispose or direct the disposition: 1,300,219
4. Shared power to dispose or direct the disposition: 0
----------------------- -----------------------
CUSIP No. 719153108 13D Page 16 of 27 Pages
----------------------- -----------------------
(c) The number of Shares acquired by Starboard within the past 60
days is set forth in Schedule A and is incorporated by reference.
B. Parche
(a) As of June 14, 2006, Parche beneficially owned 247,653 Shares.
Percentage: Less than 1%
(b) 1. Sole power to vote or direct vote: 247,653
2. Shared power to vote or direct vote: 0
3. Sole power to dispose or direct the disposition: 247,653
4. Shared power to dispose or direct the disposition: 0
(c) The number of Shares acquired by Parche within the past 60
days is set forth in Schedule A and is incorporated by reference.
C. Admiral Advisors
(a) As of June 14, 2006, as the investment manager of Starboard
and the managing member of Parche, Admiral Advisors may be deemed the beneficial
owner of (i) 1,300,219 Shares owned by Starboard and (ii) 247,653 Shares owned
by Parche.
Percentage: Approximately 6.1%
(b) 1. Sole power to vote or direct vote: 1,547,872
2. Shared power to vote or direct vote: 0
3. Sole power to dispose or direct the disposition: 1,547,872
4. Shared power to dispose or direct the disposition: 0
(c) Admiral Advisors did not enter into any transactions in the
Shares in the past 60 days. The transactions in the Shares in the past 60 days
on behalf of Starboard and Parche, which, except as otherwise noted, were all in
the open market, are set forth in Schedule A, and are incorporated by reference.
D. Ramius
(a) As of June 14, 2006, as the sole member of Admiral Advisors,
Ramius may be deemed the beneficial owner of (i) 1,300,219 Shares owned by
Starboard and (ii) 247,653 Shares owned by Parche.
Percentage: Approximately 6.1%
(b) 1. Sole power to vote or direct vote: 1,547,872
2. Shared power to vote or direct vote: 0
3. Sole power to dispose or direct the disposition: 1,547,872
4. Shared power to dispose or direct the disposition: 0
----------------------- -----------------------
CUSIP No. 719153108 13D Page 17 of 27 Pages
----------------------- -----------------------
(c) Ramius did not enter into any transactions in the Shares in
the past 60 days. The transactions in the Shares in the past 60 days on behalf
of Starboard and Parche are set forth in Schedule A, and are incorporated herein
by reference.
E. C4S
(a) As of June 14, 2006, as the managing member of Ramius, C4S
may be deemed the beneficial owner of (i) 1,300,219 Shares owned by Starboard
and (ii) 247,653 Shares owned by Parche.
Percentage: Approximately 6.1%
(b) 1. Sole power to vote or direct vote: 1,547,872
2. Shared power to vote or direct vote: 0
3. Sole power to dispose or direct the disposition: 1,547,872
4. Shared power to dispose or direct the disposition: 0
(c) C4S did not enter into any transactions in the Shares in the
past 60 days. The transactions in the Shares in the past 60 days on behalf of
Starboard and Parche are set forth in Schedule A and are incorporated by
reference.
F. Mr. Cohen, Mr. Stark, Mr. Strauss and Mr. Solomon
(a) As of June 14, 2006, as the managing members of C4S, each of
Mr. Cohen, Mr. Stark, Mr. Strauss and Mr. Solomon may be deemed the beneficial
owner of (i) 1,300,219 shares owned by Starboard and (ii) 247,653 Shares owned
by Parche. Each of Messrs. Cohen, Stark, Solomon and Strauss share voting and
dispositive power with respect to the Shares owned by Starboard and Parche by
virtue of their shared authority to vote and dispose of such Shares. Messrs.
Cohen, Stark, Solomon and Strauss disclaim beneficial ownership of such Shares.
Percentage: Approximately 6.1%
(b) 1. Sole power to vote or direct vote: 0
2. Shared power to vote or direct vote: 1,547,872
3. Sole power to dispose or direct the disposition: 0
4. Shared power to dispose or direct the disposition: 1,547,872
(c) None of Mr. Cohen, Mr. Stark, Mr. Strauss or Mr.
Solomon have entered into any transactions in the
Shares in the past 60 days. The transactions in the
Common Stock in the past 60 days on behalf of
Starboard and Parche are set forth in Schedule A and
are incorporated by reference.
G. Mr. Mutch
(a) As of June 14, 2006, Mr. Mutch beneficially owned 100,000
Shares.
----------------------- -----------------------
CUSIP No. 719153108 13D Page 18 of 27 Pages
----------------------- -----------------------
Percentage: Less than 1%
(b) 1. Sole power to vote or direct vote: 100,000
2. Shared power to vote or direct vote: 0
3. Sole power to dispose or direct the disposition: 100,000
4. Shared power to dispose or direct the disposition: 0
(c) The number of Shares acquired by Mr. Mutch within the past 60
days is set forth in Schedule A and is incorporated by reference.
(d) No person other than the Reporting Persons is known to have
the right to receive, or the power to direct the receipt of dividends from, or
proceeds from the sale of, such shares of the Common Stock.
(e) Not applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
On June 15, 2006, Starboard, Parche, Admiral Advisors, Ramius,
C4S, Mr. Cohen, Mr. Solomon, Mr. Stark, Mr. Strauss and Mr. Mutch entered into a
Joint Filing Agreement (the "Joint Filing Agreement") in which the parties
agreed to the joint filing on behalf of each of them of statements on Schedule
13D with respect to the securities of the Issuer to the extent required by
applicable law. The Joint Filing Agreement is attached as an exhibit hereto and
is incorporated herein by reference.
Other than as described herein, there are no contracts,
arrangements, understandings or relationships among the Reporting Persons, or
between the Reporting Persons and any other person, with respect to the
securities of the Issuer that are required to be reported in this Schedule 13D.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Joint Filing Agreement by and among Starboard, Parche,
Admiral Advisors, Ramius, C4S, Mr. Cohen, Mr. Solomon, Mr.
Stark, Mr. Strauss and Mr. Mutch, dated June 15, 2006.
2. Letter from Admiral Advisors to the Board of Directors of
the Issuer, dated June 15, 2006.
3. Power of Attorney for Peter A. Cohen, Morgan B. Stark,
Thomas W. Strauss and Jeffrey M. Solomon, dated March 11,
2005.
----------------------- -----------------------
CUSIP No. 719153108 13D Page 19 of 27 Pages
----------------------- -----------------------
SIGNATURES
----------
After reasonable inquiry and to the best of his knowledge and
belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: June 15, 2006
STARBOARD VALUE AND ADMIRAL ADVISORS, LLC
OPPORTUNITY MASTER FUND LTD. By: Ramius Capital Group, L.L.C.,
its managing member
PARCHE, LLC
By: Admiral Advisors, LLC, RAMIUS CAPITAL GROUP, L.L.C.
its managing member By: C4S & Co., L.L.C.,
as managing member
C4S & CO., L.L.C.
By: /s/ Jeffrey M. Solomon
------------------------------------
Name: Jeffrey M. Solomon
Title: Authorized Signatory
JEFFREY M. SOLOMON
/s/ JEFFREY M. SOLOMON
----------------------------------------
Individually and as attorney-in-fact for
Peter A. Cohen, Morgan B. Stark and
Thomas W. Strauss
/s/ JOHN MUTCH
----------------------------------------
JOHN MUTCH
----------------------- -----------------------
CUSIP No. 719153108 13D Page 20 of 27 Pages
----------------------- -----------------------
SCHEDULE A
----------
Transactions in the Shares During the Past 60 Days
--------------------------------------------------
Shares of Common Stock Price Per Date of
Purchased Share($) Purchase
STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD.
------------------------------------------------
42,000 5.2474 5/11/06
42,000 5.2497 5/11/06
27,720 5.2483 5/12/06
32,172 5.2292 5/12/06
140,868 6.1694 5/15/06
32,340 5.2883 5/15/06
33,600 5.2875 5/15/06
27,048 5.4610 5/16/06
25,200 5.4790 5/17/06
22,428 5.6225 5/18/06
21,000 5.8289 5/19/06
7,896 5.4995 5/22/06
21,756 5.4763 5/23/06
29,736 5.4223 5/24/06
3,836 5.5000 5/25/06
52,248 5.7617 5/30/06
7,115 5.7500 5/31/06
16,800 5.7825 5/31/06
8,400 5.7600 6/01/06
5,325 5.7500 6/01/06
8,400 5.7700 6/01/06
12,432 5.7454 6/02/06
51,820 5.7500 6/05/06
46,200 5.5806 6/05/06
63,355 5.4857 6/06/06
7,171 5.6398 6/07/06
----------------------- -----------------------
CUSIP No. 719153108 13D Page 21 of 27 Pages
----------------------- -----------------------
25,200 5.5867 6/07/06
19,271 5.5876 6/08/06
3,780 5.6433 6/09/06
25,378 5.6387 6/12/06
16,800 5.6500 6/12/06
51,912 5.6846 6/13/06
20,412 5.6498 6/14/06
12,600 5.6800 6/14/06
PARCHE, LLC
-----------
9,870 5.7500 6/05/06
8,800 5.5806 6/05/06
12,068 5.4857 6/06/06
182,156* 5.5200 6/06/06
12,068 5.4857 6/06/06
4,800 5.5867 6/07/06
1,366 5.6398 6/07/06
3,671 5.5876 6/08/06
720 5.6433 6/09/06
4,834 5.6387 6/12/06
3,200 5.6500 6/12/06
9,888 5.6846 6/13/06
3,880 5.6498 6/14/06
2,400 5.6800 6/14/06
JOHN MUTCH
----------
55,000 5.2400 5/31/06
45,000 5.6400 6/05/06
----------------
* Shares were acquired in private transactions with various transferors for
which Ramius Capital Group, L.L.C. or an affiliate serves as the investment
manager, the managing member or the managing member of the investment manager.
----------------------- -----------------------
CUSIP No. 719153108 13D Page 22 of 27 Pages
----------------------- -----------------------
SCHEDULE B
----------
DIRECTORS AND OFFICERS OF STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD.
Name and Position Principal Occupation Principal Business Address
----------------- -------------------- --------------------------
Mark Mitchell Managing Director of 666 Third Avenue
Director Ramius Capital Group, 26th Floor
L.L.C. New York, New York 10017
Jeffrey M. Solomon Managing Member of C4S & 666 Third Avenue
Director Co., L.L.C., which is the 26th Floor
Managing Member of Ramius New York, New York 10017
Capital Group, L.L.C.
CFS Company Ltd. Nominee Company registered c/o Citco Fund Services
Director with Cayman Islands (Cayman Islands) Limited
Monetary Authority and is Corporate Center
affiliated with West Bay Road
Administrator of the Fund Grand Cayman, Cayman
Islands
British West Indies
CSS Corporation Ltd. Affiliate of the c/o Citco Fund Services
Secretary Administrator of the Fund (Cayman Islands) Limited
Corporate Center
West Bay Road
Grand Cayman, Cayman
Islands
British West Indies
----------------------- -----------------------
CUSIP No. 719153108 13D Page 23 of 27 Pages
----------------------- -----------------------
EXHIBIT INDEX
-------------
Exhibit Page
------- ----
1. Joint Filing Agreement by and among Starboard,
Parche, Admiral Advisors, Ramius, C4S, Mr.
Cohen, Mr. Solomon, Mr. Stark, Mr. Strauss and
John Mutch, dated June 15, 2006. 24
2. Letter from Admiral Advisors to the Board of
Directors of the Issuer, dated June 15, 2006. 25 to 26
3. Power of Attorney for Peter A. Cohen, Morgan
B. Stark, Thomas W. Strauss and Jeffrey M.
Solomon, dated March 11, 2005. 27
----------------------- -----------------------
CUSIP No. 719153108 13D Page 24 of 27 Pages
----------------------- -----------------------
JOINT FILING AGREEMENT
----------------------
In accordance with Rule 13d-1(k)(1)(iii) under the Securities
Exchange Act of 1934, as amended, the persons named below agree to the joint
filing on behalf of each of them of a Statement on Schedule 13D dated June 15,
2006 (including amendments thereto) with respect to the Common Stock of Phoenix
Technologies Ltd. This Joint Filing Agreement shall be filed as an Exhibit to
such Statement.
Dated: June 15, 2006
STARBOARD VALUE AND ADMIRAL ADVISORS, LLC
OPPORTUNITY MASTER FUND LTD. By: Ramius Capital Group, L.L.C.,
its managing member
PARCHE, LLC
By: Admiral Advisors, LLC, RAMIUS CAPITAL GROUP, L.L.C.
its managing member By: C4S & Co., L.L.C.,
as managing member
C4S & CO., L.L.C.
By: /s/ Jeffrey M. Solomon
------------------------------------
Name: Jeffrey M. Solomon
Title: Authorized Signatory
JEFFREY M. SOLOMON
/s/ JEFFREY M. SOLOMON
----------------------------------------
Individually and as attorney-in-fact for
Peter A. Cohen, Morgan B. Stark and
Thomas W. Strauss
/s/ JOHN MUTCH
----------------------------------------
JOHN MUTCH
----------------------- -----------------------
CUSIP No. 719153108 13D Page 25 of 27 Pages
----------------------- -----------------------
June 15, 2006
Mr. Anthony P. Morris
Phoenix Technologies Ltd.
Lead Independent Director
915 Murphy Ranch Road
Milpitas, CA 95035
CC: Board of Directors
Interim Operating Committee
Dear Mr. Morris:
Admiral Advisors, LLC, a subsidiary of Ramius Capital Group, LLC, represents a
group of investors (the "Ramius Group") who beneficially own approximately 6.5%
of the outstanding common stock of Phoenix Technologies Ltd. ("PTEC" or the
"Company"). The Ramius Group believes that the market price of PTEC's shares
fails to reflect the value embedded in the very profitable BIOS business, as
well as several of the Company's applications including the Phoenix Trusted
Security Suite and the Phoenix Recover Pro product family. We urge you and the
other Board members to immediately hire an interim CEO, as well as a reputable
investment bank to assist the Board in exploring all strategic alternatives to
maximize shareholder value.
Beginning with the third quarter of 2005, the Company missed its quarterly
guidance for four consecutive quarters, reporting losses in three of those
quarters. The Company's former CFO has recently resigned, and now, the Company's
CEO, who presumably was an architect of the misguided shift in the distribution
channel strategy, abruptly resigned last month. PTEC's share price appears to
reflect the Company's struggles, with the share price down 10% YTD and down 45%
from its high in 2005. We believe the Company's shares are undervalued,
especially considering that PTEC has a gross margin of over 80%. At a price of
$5.56 per share as of June 14, 2006, with approximately $3.00 per share in cash
according to the Company's March 31, 2006 balance sheet, PTEC is trading at 0.8x
LTM sales, and just 0.9x LTM gross profit.
However, the lack of leadership and direction at the Company is of grave concern
to us. We are concerned that PTEC lacks scale, brand recognition, and the
distribution channels necessary to effectively compete in the enterprise
software market. The Company has spent significant financial and human capital
to develop its enterprise applications, but has been unable to generate the
revenue necessary to cover the infrastructure investment and earn its cost of
capital.
We believe the immediate priority for the Board should be to address the
leadership vacuum at the Company by promptly hiring an interim CEO. During this
critical transition period, PTEC must have a clear leader who would be
responsible for securing the value of the business, stabilizing the operations
of the business, helping the Board to assess the viability of its current
----------------------- -----------------------
CUSIP No. 719153108 13D Page 26 of 27 Pages
----------------------- -----------------------
business strategy, and working with the Board to explore all available strategic
alternatives.
Given the significant change in senior management, now is the perfect
opportunity for the Board to reconsider the strategic direction of PTEC. The
Board should not repeat the mistakes of the past and needs to remain cognizant
of sunk costs. Strategic options that should be explored to maximize shareholder
value include, but are not limited to:
o Scale back the Company's products to BIOS alone and maximize
cash flow;
o Selectively continue with the profitable Applications products
in addition to BIOS;
o Continue with all the existing product lines;
o In conjunction with the above alternatives, return cash to
shareholders; or
o Pursue a sale of the Company.
We are sympathetic to the challenge of analyzing these and any other viable
options while working to find and hire the best possible CEO. It would be nearly
impossible for even the most qualified of Boards to adequately explore all
alternatives and successfully choose the correct path without competent advice.
We therefore urge you, in addition to hiring an interim CEO, to immediately hire
a reputable investment bank to help the Board to analyze which alternative will
best maximize value for all shareholders.
We have made numerous attempts to set up a meeting or a teleconference with you,
as the lead independent director, to discuss our concerns and to offer our
assistance at this critical juncture. You have denied our requests, instead
referring us to David Eichler, the Company CFO who has been on the job for only
seven weeks and who, we believe, is not yet familiar enough with the Company to
participate in a meaningful dialogue with us.
As one of your largest shareholders, we are trying, and will continue to try, to
help. Our partner, MV Advisors LLC, has assisted us in identifying several
candidates who we believe are qualified to fill the interim and potentially
full-time CEO role. We expect and hope that the Board will consider them for the
position. We look forward to having a constructive dialogue with you for the
benefit of all shareholders.
Best regards,
/s/ Jeffrey C. Smith
Jeffrey C. Smith
Managing Director
----------------------- -----------------------
CUSIP No. 719153108 13D Page 27 of 27 Pages
----------------------- -----------------------
POWER OF ATTORNEY
The undersigned hereby appoints Peter A. Cohen, Morgan B. Stark, Thomas W.
Strauss and Jeffrey M. Solomon, or any of them, his true and lawful attorney-in
fact and agent to execute and file with the Securities and Exchange Commission
any Schedule 13D, Schedule 13G, any amendments thereto and any related
documentation which may be required to be filed in his individual capacity as a
result of the undersigned's beneficial ownership of, or participation in a group
with respect to, securities directly or indirectly beneficially owned by Ramius
Capital Group, LLC or any of its affiliates, and granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing which he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof. The authority of Peter A. Cohen, Morgan B. Stark,
Thomas W. Strauss and Jeffrey M. Solomon, or any of them, under this Power of
Attorney shall continue with respect to the undersigned until the undersigned is
no longer required to file Schedule 13Ds or Schedule 13Gs unless revoked earlier
in writing.
Date: March 11, 2005
/s/ Peter A. Cohen
---------------------------------------
Peter A. Cohen
/s/ Morgan B. Stark
---------------------------------------
Morgan B. Stark
/s/ Jeffrey M. Solomon
---------------------------------------
Jeffrey M. Solomon
/s/ Thomas W. Strauss
---------------------------------------
Thomas W. Strauss