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Ramius Capital Submits Revised Offer to Acquire Outstanding Shares of Phoenix Technologies for $5.25 in Cash

NEW YORK, Jan 16, 2007 (BUSINESS WIRE) -- Admiral Advisors, LLC, a subsidiary of Ramius Capital Group, L.L.C. (together, "Ramius") today announced that it has submitted a revised offer to acquire for $5.25, in cash, all of the outstanding shares of Phoenix Technologies Ltd. ("Phoenix" or the "Company") (NASDAQ: PTEC) that it does not already own.

In a letter delivered to Phoenix's Board of Directors and filed with the U.S. Securities and Exchange Commission ("SEC") in an amendment to its Schedule 13D, Ramius, Phoenix's largest shareholder, stated that it remains seriously committed to purchasing the outstanding capital stock of Phoenix and that Phoenix shareholders will benefit from an immediate all-cash transaction that offers an attractive premium.

Ramius Executive Managing Director Jeffrey C. Smith, stated in the letter: "While we respect Woody, his new team, and the hardworking employees of the Company, we believe Phoenix faces a difficult and risky operational turnaround. We believe that Phoenix should not attempt this turnaround as a public company. History has shown that this board of directors (the "Board"), when faced with the pressures of being a public company, has responded with poor business decisions that have had disastrous consequences for Phoenix and its stockholders."

Smith continued, "Given the Company's poor track record, we believe that this Board should not be trusted to evaluate acquisition opportunities, growth investments, and product expansions while overseeing a turnaround plan in the public spotlight."

The non-binding offer is not subject to financing, but is subject to a number of other conditions including the completion of due diligence, and represents a 13.4% premium to Phoenix's closing share price on January 12, 2007.

In addition, Starboard Value and Opportunity Master Fund Ltd., an affiliate of Ramius, today filed preliminary proxy materials with the SEC seeking to elect an alternate slate of candidates to the Board of Directors of Phoenix. The nominees identified in Starboard's preliminary proxy materials look to replace the two current Class II directors whose terms will expire at the 2007 Annual Meeting of Shareholders, which has been scheduled for February 14, 2007. Ramius stated that the proposed nominees, John Mutch and Philip Moyer, subject to their fiduciary duties, are committed to facilitating the negotiation of a mutually beneficial transaction.

About Ramius Capital Group, L.L.C.

Ramius Capital Group is a registered investment advisor that manages assets of approximately $7.9 billion in a variety of alternative investment strategies. Ramius Capital Group is headquartered in New York with offices located in London, Tokyo, Hong Kong, Munich, and Vienna. CERTAIN INFORMATION CONCERNING THE PARTICIPANTS

Starboard Value and Opportunity Master Fund Ltd., an affiliate of Ramius Capital Group, L.L.C. ("Ramius Capital"), together with the other participants named herein, has made a preliminary filing with the Securities and Exchange Commission ("SEC") of a proxy statement and an accompanying proxy card to be used to solicit votes for the election of its nominees at the 2007 annual meeting of stockholders of Phoenix Technologies Ltd., a Delaware corporation (the "Company").

RAMIUS CAPITAL ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THE PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY SOLICITOR, INNISFREE M&A INCORPORATED, AT ITS TOLL-FREE NUMBER: (877) 800-5185.

The participants in the proxy solicitation are Starboard Value and Opportunity Master Fund Ltd., a Cayman Islands exempted company ("Starboard"), Parche, LLC, a Delaware limited liability company ("Parche"), Admiral Advisors, LLC, a Delaware limited liability company, Ramius Capital Group, L.L.C., a Delaware limited liability company ("Ramius Capital"), C4S & Co., L.L.C., a Delaware limited liability company ("C4S"), Peter A. Cohen, Morgan B. Stark, Thomas W. Strauss, Jeffrey M. Solomon, John Mutch, Philip Moyer and Jeffrey C. Smith (the "Participants").

Starboard beneficially owns 2,774,471 shares of Common Stock of the Company. Parche beneficially owns 528,470 shares of Common Stock of the Company. As the investment manager of Starboard and the managing member of Parche, Admiral Advisors may be deemed to beneficially own the 2,774,471 shares of Common Stock of the Company owned by Starboard and the 528,470 shares of Common Stock of the Company owned by Parche. As the sole member of Admiral Advisors, Ramius Capital may be deemed to beneficially own the 2,774,471 shares of Common Stock of the Company owned by Starboard and the 528,470 shares of Common Stock of the Company owned by Parche. As the managing member of Ramius Capital, C4S may be deemed to beneficially own the 2,774,471 shares of Common Stock of the Company owned by Starboard and the 528,470 shares of Common Stock of the Company owned by Parche.

As the managing members of C4S, each of Mr. Cohen, Mr. Stark, Mr. Strauss and Mr. Solomon may be deemed to beneficially own the 2,774,471 shares of Common Stock of the Company owned by Starboard and the 528,470 shares of Common Stock of the Company owned by Parche.

Mr. Mutch beneficially owns 200,000 shares of Common Stock of the Company.

Mr. Moyer does not beneficially own any shares of Common Stock of the Company.

Mr. Smith does not beneficially own any shares of Common Stock of the Company.

The full text of the letter follows:

January 16, 2007

Board of Directors
Phoenix Technologies Ltd.
915 Murphy Ranch Road
Milpitas, CA 95035

Dear Board Members,

As you know, Admiral Advisors, LLC, a subsidiary of Ramius Capital
Group, L.L.C. (together, "Ramius"), remains seriously committed to
purchasing the outstanding capital stock of Phoenix Technologies Ltd.
("Phoenix" or the "Company"). Therefore, we are resubmitting our
revised offer to purchase for $5.25 per share, in cash, all of the
outstanding shares of Phoenix that we do not already own. We have
structured our offer to promptly bring value and liquidity to all of
the Company's shareholders on the terms and conditions set forth
below.

While we respect Woody, his new team, and the hardworking employees of
the Company, we believe Phoenix faces a difficult and risky
operational turnaround. We believe that Phoenix should not attempt
this turnaround as a public company. History has shown that this board
of directors (the "Board"), when faced with the pressures of being a
public company, has responded with poor business decisions that have
had disastrous consequences for Phoenix and its stockholders. We
believe our $5.25 all-cash offer for all of the outstanding shares is
in the best interest of the Company's shareholders.

In addition, we believe that Phoenix is too small to bear the costs
and to handle the demands associated with operating as a public
company. The market demands that public companies demonstrate revenue
growth, and we believe that this expectation will pressure the Company
to gain scale - potentially through acquisitions - and to drive
top-line growth. Phoenix's Board has already shown its susceptibility
to these pressures, as evidenced by its willingness to allow
management to diversify into an enterprise software business,
organically build the enterprise sales channel, and sell products on a
fully paid-up license basis. These decisions temporarily increased
revenue, but proved to be major mistakes ultimately damaging the core
business and resulting in significant destruction of shareholder
value.

Executing a turnaround is difficult. Executing a turnaround in the
public spotlight is even more challenging. In a public turnaround,
management will disclose elements of its strategic plan, which, we
believe will likely put the Company at a competitive disadvantage and
possibly interfere with its effectiveness.

Ramius is the Company's largest shareholder. Given the Company's poor
track record, we believe that this Board should not be trusted to
evaluate acquisition opportunities, growth investments, and product
expansions while overseeing a turnaround plan in the public spotlight.

We are committed to our $5.25 all-cash offer and are ready, willing
and able to immediately enter into negotiations for a definitive
acquisition agreement. The shareholders deserve to receive a full and
fair price for their shares now.

Our $5.25 all-cash offer is full and fair and represents a premium of
approximately 13.4% over the January 12, 2007 closing price of $4.63
per share, and a premium of approximately 31.3% over the June 22, 2006
closing price of $4.00, which was the closing price of the stock the
day after the Company announced the shift in its Core System Software
pricing strategy. Given the Board's refusal, to date, to negotiate
with us in good faith, we have decided to disclose our offer publicly
and to proceed with our plans to elect an alternate slate of board
members at the Company's annual meeting of stockholders. While we
believe it would be in everyone's best interest to expeditiously
complete this transaction on a friendly basis, our candidates, subject
to their fiduciary duties, are committed to facilitating the
negotiation of a mutually beneficial transaction. We also reserve the
right to make an offer directly to the Company's shareholders if this
Board continues to ignore the best interests of its shareholders.

Transaction Terms

Based upon our review of the materials made available, Admiral
Advisors, LLC, a subsidiary of Ramius Capital Group, L.L.C. proposes,
through a merger with an appropriate newly formed acquisition entity
(the "Purchaser"), to acquire the Company (the "Transaction") on the
following terms:

1. Purchase Price: $5.25 per share in cash.

2. Closing Conditions: The Transaction is subject to the following
      limited conditions:

             (a) approval by the board of directors of the Company and
                 stockholders pursuant to the requirements of
                 applicable law;

             (b) receipt of any material governmental and third party
                 approvals (including expiration of all applicable
                 waiting periods under Hart-Scott Rodino, to the
                 extent required);

             (c) completion of customary confirmatory business,
                 accounting, financial, environmental and legal due
                 diligence;

             (d) the waiver of any Company anti-takeover provisions
                 including redemption of the Company's shareholder
                 rights plan and waiver of Delaware General Corporate
                 Law Section 203; and

             (e) the negotiation and execution of a mutually
                 satisfactory definitive merger agreement and the
                 receipt of disclosure schedules related thereto in a
                 form reasonably acceptable to us.

3. Funding Sources: The Purchaser has sufficient committed capital to
      finance the Transaction. The Transaction is not subject to
      financing.

4. Timing: The Purchaser is committed to allocating a sufficient
      amount of resources and is confident that it will be able to
      close the Transaction on an expedited basis. We require no
      external approvals.

5. Conduct of Business: We expect that the Company will continue to
      operate in the ordinary course of business and consistent with
      past practices and that there will be no material adverse change
      to the Company's financial condition or results of operation.

6. Due Diligence: The proposed Transaction is subject to completion to
      our satisfaction of customary confirmatory business, accounting,
      financial, environmental, and legal due diligence. With the full
      cooperation of the Company and based upon information known to
      us, we would expect to complete this process in no more than
      four weeks, if not earlier. Our required due diligence will be
      limited to confirmation of information generally known to us on
      the assumption that there is no material and adverse information
      that the Company has not publicly disclosed.

7. Non-Binding Statement of Intent: This proposal is a statement of
      intention only. A legally binding obligation with respect to the
      proposed Transaction will arise only upon execution and delivery
      of definitive agreements (acceptable to the Company and us), and
      then only on the terms and conditions contained therein. We are
      committed to immediately negotiating and executing a definitive
      merger agreement.

8. Management: We are receptive to discussions with senior management
      about their future involvement in the business. We intend to
      speak with senior management regarding their participation in
      this Transaction, and would encourage and welcome their
      participation, although their participation is not a condition
      to closing the Transaction. We are committed to preserving the
      relationship of the Company with its employees.

We look forward to working with you to successfully and expeditiously
complete this transaction.


                                   Very truly yours,


                                   Jeffrey C. Smith
                                   Executive Managing Director

SOURCE: Ramius Capital Group, L.L.C.

Media & Shareholders:
Sard Verbinnen & Co.
Dan Gagnier or Renee Soto, 212-687-8080

Copyright Business Wire 2007

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