Exhibit 99.1
CHANGE IN CONTROL AGREEMENT
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THIS CHANGE IN CONTROL AGREEMENT ("Agreement") is made and entered
into on December 15, 2005 by and between ZiLOG, Inc. (the "Company") and [ ]
("Executive") (together the "Parties").
WHEREAS, Executive is currently employed as the [title] of the
Company, pursuant to the terms and conditions of that certain Employment
Agreement, dated , between Executive and the Company (the "Employment
Agreement");
WHEREAS, the Company recognizes that there is a possibility that the
Company may become the subject of a Change in Control (defined below), either
now or at some time in the future;
WHEREAS, the Company believes that it is in the best interests of the
Company and its stockholders to xxxxxx Executive's objectivity in making
decisions with respect to any pending or threatened Change in Control of the
Company and to assure that the Company will have the continued dedication and
availability of Executive as an employee of the Company, notwithstanding the
possibility or occurrence of a Change in Control; and
WHEREAS, with these and other considerations in mind, the Board of
Directors of the Company (the "Board"), acting through its Compensation
Committee, has authorized the Company to enter into this Agreement with
Executive to provide the protections set forth herein.
NOW, THEREFORE, in consideration of the mutual premises, covenants and
agreements herein contained, intending to be legally bound, the Parties agree
as follows:
1. Term of Agreement. This Agreement shall be effective for the
two-year period commencing on the date first written above (the "Term");
provided however, that if a Change in Control (defined below) occurs during the
Term, the Term shall be extended as necessary such that the Agreement expires
no earlier than the date twelve (12) months following the Change in Control.
2. Change in Control. For purposes of this Agreement, a Change in
Control shall mean the first to occur after the date of this agreement of the
following:
(a) a dissolution, liquidation or sale of all or
substantially all of the assets of the Company;
(b) the consummation of a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any other
corporation or other entity, other than a merger or consolidation that results
in the voting securities of the Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity or any parent thereof), in combination with the ownership of any trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or any subsidiary of the Company, at least 50% of the combined voting
power of the securities of the Company or such surviving entity or any parent
thereof outstanding immediately after such merger or consolidation; or
(c) the acquisition by any person, entity or group within the
meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, or
any comparable successor provisions (excluding any employee benefit plan, or
related trust, sponsored or maintained by the Company or any affiliate of the
Company) of the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, or comparable successor
rule) of securities of the Company representing at least 50% of the combined
voting power entitled to vote in the election of directors.
3. Termination in Connection with a Change in Control. In the event
Executive experiences a Qualifying Termination (defined below) anytime during
the Change in Control Protection Period (defined below), Executive shall be
entitled to the following payments and benefits (collectively, the "Change in
Control Payments"), which shall be in addition to any payments to Executive for
earned but unpaid salary and accrued but unused vacation through the date of
termination, as well as any vested benefits to which Executive is entitled in
accordance with the terms of any applicable employee benefit plan:
(a) a lump sum payment equal to eighteen (18) months of
Executive's base salary, at the rate in effect at the time of termination,
payable within thirty (30) days of Executive's termination;
(b) any and all of Executive's Company stock options that are
outstanding at the time of termination and not yet vested shall immediately
become exercisable and the exercise period of any stock option shall continue
for the length of the exercise period specified in the applicable stock option
agreement or plan.
(c) continuation of Executive's Company medical benefits for
the period of one year from the date of termination; provided, however, that
the Company's obligation to provide medical benefits under this section shall
cease prior to the end of one year if Executive becomes eligible for coverage
under another employer's medical plans.
4. Restricted Stock in Connection with a Change of Control. In the
event of a Change in Control, any and all of Executive's Company restricted
stock awards that are outstanding at the time of the Change in Control and not
free from restrictions, shall immediately become free from restrictions (other
than restrictions required by applicable law or any national securities
exchange upon which any securities of the Company are then listed).
5. Waiver and Release Required. The Change in Control Payments
described above are expressly conditioned upon Executive's execution of a valid
waiver and release of any and all claims that Executive may have, or have had,
against the Company and its agents, including but not limited to its officers,
directors and employees, in a form provided by the Company or its successor.
6. Qualifying Termination. For purposes of this Agreement, a
Qualifying Termination shall mean Executive's termination by the Company or its
successor without Cause (as defined below) or Executive's resignation of his
employment for Good Reason (as defined below). Executive's termination or
resignation of his employment for any other reason, including without
limitation, death, Disability (defined below), termination for Cause or
resignation without Good Reason, shall not be deemed a Qualifying Termination
and Executive shall not be entitled to the Change in Control Payments described
above.
(a) For purposes of this Agreement, "Cause" shall mean one or
more of the following: (i) Executive's material breach of the Employment
Agreement; (ii) Executive's failure to reasonably and substantially perform his
employment duties or to observe Company policies in all material respects;
(iii) Executive's willful misconduct or gross negligence which materially
injures the Company; (iv) Executive's conviction or plea of nolo contendere to
a felony or other serious crime involving moral turpitude. In all of the
foregoing cases, the Company shall provide written notice to Executive
indicating in reasonable detail the event or circumstances that constitute
Cause under this Agreement, and, if such breach or failure is reasonably
susceptible to cure, the Company will provide Executive with thirty days to
cure such breach or failure prior to termination for Cause.
(b) For purposes of this Agreement, "Good Reason" shall be
deemed to exist if, without the Executive's approval: (i) the Company or its
successor materially reduces Executive's duties or responsibilities; or (ii)
the Company or its successor materially reduces Executive's overall
compensation, including annual base salary and bonus opportunity; or (iii)
Executive's principal place of employment is moved more than 50 miles from its
location on the date of this Agreement. Within 60 days of becoming aware of an
event or circumstances that constitutes Good Reason under this Agreement,
Executive shall provide written notice, describing such event or circumstances
in reasonable detail, to Company and Executive will provide the Company with
thirty days to cure such diminution prior to termination for Good Reason.
(c) For purposes of this Agreement, "Disability" shall mean
any illness, disability or other incapacity that renders Executive physically
or mentally unable regularly to perform his duties hereunder for a period in
excess or sixty (60) consecutive days or more than ninety (90) days in any
consecutive twelve (12) month period. The Board shall make a good faith
determination of whether Executive is physically or mentally unable to
regularly perform his duties, subject to its review and consideration of any
physical and/or mental health information provided to it by Executive as
determined by a physician reasonably acceptable to the Company.
7. Change in Control Protection Period. For purposes of this
Agreement, the Change in Control Protection Period shall be the period two (2)
months prior to and twelve (12) months following a Change in Control.
8. Limitation on Payments. In the event that the Company's tax counsel
or certified public accounting professional confirms in writing to the Company
and Executive that payments under this Agreement, together with any other
payments to Executive from the Company that are "parachute payments" within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code") ("Potential Parachute Payments") would otherwise exceed three (3) times
the Executive's "Base Amount" as defined in Section 280G of the Code, then
notwithstanding anything to the contrary in this Agreement, the payments under
this Agreement shall be reduced to an amount such that the Potential Parachute
Payments do not exceed 2.99 times the Executive's Base Amount. Any reduction in
payments required by this Section 8 shall be applied to such payments and
benefits under this Agreement as the Company in its sole discretion deems
necessary, shall be communicated to Executive in writing prior to the date the
first reduced payment or benefit would otherwise be due and shall be
accompanied by written documentation from the Company's tax counsel or
certified public accounting professional evidencing that the reduction is the
minimum amount required to comply with this Section 8.
9. No Right to Continued Employment. Nothing in this Agreement shall
guarantee the right of Executive to continued employment by the Company and the
Company retains all rights to terminate Executive's employment at any time for
any reason or for no reason and with or without prior notice, subject to the
terms and conditions of the Employment Agreement.
10. Binding Agreement. This Agreement is a personal contract and the
rights and interests of Executive hereunder may not be sold, transferred,
assigned, pledged, encumbered, or hypothecated by him. This Agreement shall be
binding upon and shall inure to the benefit of the Company's successors and
assigns.
11. Tax Withholding. The Company may withhold from any amounts payable
under this Agreement any taxes that are required to be withheld pursuant to any
applicable law or regulation.
12. Entire Agreement. This Agreement contains all the understandings
between the Parties hereto pertaining to the matters referred to herein and
supersedes all undertakings and agreements, whether oral or in writing,
previously entered into by them with respect thereto, specifically including
Section 5 of the Employment Agreement and, but only to the extent a termination
of Executive occurs during a Change of Control Protection period as defined in
Section 7 of this Agreement, Section 4 of the Employment Agreement; provided,
however that the remainder of the Employment Agreement shall remain in full
force and effect according to its terms. For avoidance of doubt, Employee shall
not receive payments under Sections 4 or 5 of the Employment Agreement and
under Section 3 of this Agreement. Executive represents that, in executing this
Agreement, he does not rely and has not relied upon any representation or
statement not set forth herein made by the Company with regard to the subject
matter of this Agreement or otherwise.
13. Amendment or Modification. No provision of this Agreement may be
amended or waived unless such amendment or waiver is agreed to in writing,
signed by Executive and by a duly authorized officer of the Company.
14. Notices. Any notice to be given hereunder shall be in writing and
shall be deemed given when delivered personally, sent by courier or fax or
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such
other address as such party may subsequently give notice of hereunder in
writing:
To Executive at:
To the Company at:
ZiLOG, Inc.
U.S. Headquarters
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: [ ]
Any notice delivered personally or by courier under this Section 13
shall be deemed given on the date delivered and any notice sent by telecopy or
registered or certified mail, postage prepaid, return receipt requested, shall
be deemed given on the date telecopied or mailed.
15. Waiver of Other Severance Rights. To the extent that Change in
Control Payments are made to Executive pursuant to this Agreement, Executive
hereby expressly waives the right to receive severance payments or severance
benefits under any other plan or agreement of the Company, specifically
including, but not limited to, the Employment Agreement.
16. Each Party the Drafter. This Agreement and the provisions
contained in it shall not be construed or interpreted for or against any party
to this Agreement because that party drafted or caused that party's legal
representative to draft any of its provisions.
17. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of California, without regard to its
conflicts of laws principles.
18. Headings. All descriptive headings of sections and paragraphs in
this Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.
19. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first written above.
ZiLOG, INC. EXECUTIVE
By:
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[name]
