Exhibit 10.9
ZILOG
EMPLOYMENT AGREEMENT
This Agreement is made by and between ZiLOG, Inc., a Delaware
corporation (hereinafter "ZiLOG") and Xxxxxxx Xxxxxx (hereinafter
"Burger"), whereby ZiLOG and Burger agree that Burger accepts
employment as Senior Vice President of Sales of ZiLOG, under the
following terms and conditions:
1. Term. ZiLOG and Burger agree that Burger will be Senior Vice
President of Sales of ZiLOG for a period of twenty-four (24)
months, commencing on your date of hire. This Agreement may be
extended upon written agreement of ZiLOG and Burger. If during
the term of this Agreement a "Change in Control" of ZiLOG
occurs, the term of this Agreement will be extended for a period
of twenty four (24) months commencing on the earlier of the
effective date of the Change in Control or the date this
Agreement would otherwise expire; provided, however, in the case
of a Change in Control that is subject to an agreement that is
executed before the date this Agreement would otherwise expire
but becomes effective on a closing date that will occur after the
date this Agreement would otherwise expire, there will be no such
automatic twenty-four month extension if the closing date does
not occur within six (6) months after the date this Agreement
would otherwise expire. Under these circumstances the term of
this Agreement shall be extended six (6) months from the date it
would otherwise expire.
For the purposes of this Agreement, "Change in Control" shall
mean the occurrence of any of the following events:
(i) A change in the composition of the board of directors of
ZiLOG, Inc., as a result of which fewer than two-thirds of
the incumbent directors are directors who either:
(a) had been directors of ZiLOG, Inc. twenty-four (24)
months prior to such change; or
(b) were elected, or nominated for election, to the board
of directors of ZiLOG, Inc. with the affirmative
votes of at least a majority of the directors who had
been directors of ZiLOG, inc. twenty-four (24) months
prior to such change and who were still in office at
the time of the election or nomination;
(ii) any "person" (as such term is used in sections 13(d) and
14(d) of the Exchange Act) other than ZiLOG, Inc. (or its
designee), by the acquisition or aggregation of securities
is or becomes the beneficial owner, directly or indirectly
of securities of ZiLOG, Inc. representing twenty percent
(20%) or more of the combined voting power of ZiLOG,
Inc.'s then outstanding securities ordinarily (and apart
from rights accruing under special circumstances) having
the right to vote at elections of directors;
(iii) the sale of all or substantially all of the assets of
ZiLOG, Inc. to a third party who is not an affiliate
(including a parent or subsidiary) of ZiLOG, Inc., or;
(iv) any acquisition of stock, tender offer, merger,
consolidation, sale, reorganization, dissolution or other
such event or series of events, which in the opinion of a
majority of the members of the board of ZiLOG, Inc. (as
reflected in a written resolution of the board of ZiLOG,
inc.) has resulted in a change of control of ZiLOG, Inc.
2. Extent of Services. Burger shall devote his entire time,
attention and energies to his position as Senior Vice President
of Sales of ZiLOG and shall not, during the term of this
Employment Agreement, be engaged in any other business activity,
except as set forth below, whether or not such business activity
is pursued for gain, profit or other pecuniary advantage;
provided, that Burger may engage in: 1) personal investment
activities: or 2) service on Boards of Directors of other
companies; consistent with ZiLOG's Conflict of Interest policy;
or 3) advisory and community activities that do not affect his
time commitment to ZiLOG.
3. Compensation.
A. Salary. For each month of employment, ZiLOG will pay, or
cause to be paid, to Burger the sum of at least $18,750.00
as base salary. Such sum will be paid in monthly
installments or such other normal periodic payment schedule
as ZiLOG may establish for its executives. Burger's salary
will be reviewed periodically in accordance with
established salary review procedures and adjustments to his
salary, if any, will be based upon such reviews.
B. Employee Performance Incentive Plan and Executive Bonus
Plan. Burger will be eligible to receive Awards and
Payouts in accordance with the terms of the ZiLOG Employee
Performance Incentive Plan (hereinafter "EPIP"), and the
EPIP Executive Bonus Plan (hereinafter "Executive Bonus")
as such plans may be modified from time to time and as
modified by this Agreement.
C. ZiLOG Employee Stock Option Plan. ZiLOG has provided to
Burger stock options under the 1998 Long Term Incentive
Plan (hereinafter "EOSIP"), a copy of such plan being
attached hereto. Vesting will continue in accordance with
the plan provisions during the term of this Agreement.
4. Benefits. As an employee of ZiLOG, Burger will be entitled to
such benefits as ZiLOG normally provides its executives. In
addition, ZiLOG will provide Burger with Directors and officers
(D&O) insurance in an amount deemed appropriate by the Company
for his level of responsibility.
5. Company Policies. Burger agrees to be bound by all ZiLOG
published Company Policies applicable to its employees including
but not limited to Business Ethics, Conflict of interest,
Proprietary Information and Antitrust Compliance, and he agrees
to sign any such reasonable documents as ZiLOG requests
evidencing such agreement.
6. Termination of Employment. ZiLOG reserves the right to terminate
the employment of Burger at any time during the term of this
Agreement, for any reason or for no reason, with or without
cause, by giving Burger at least thirty (30) days written notice
of such termination or compensation in lieu of notice; and Burger
may terminate his employment by giving at least thirty (30) days
written notice to ZiLOG. ZiLOG reserves the right to accelerate
any deferred resignation date given it by Burger, and any such
acceleration of such date will not alter the character of such
termination from voluntary to involuntary.
7. Payment Upon Termination. Notwithstanding any other provisions
of this Agreement to the contrary, ZiLOG's obligations to Burger,
if his employment with ZiLOG is terminated prior to the end of
this Agreement, shall be as follows:
A. If Burger voluntarily resigns his employment for 1) other
than Good Reason (as defined in paragraph 7.B. below) or 2)
other than Retirement (as defined in Paragraph 7.C. below)
or 3) other than the sale, merger or change in ownership of
ZiLOG (as defined in paragraph 7.G. below) prior to the
termination date of this Agreement, he will be entitled to:
(1) base salary then due and owing for services previously
performed, (2) payouts under EPIP which become payable to
Burger pursuant to the terms of EPIP prior to the effective
date of resignation, and (3) payouts under the Executive
Bonus which become payable to Burger pursuant to the terms of
the Executive Bonus prior to the effective date of
resignation. Upon payment of the foregoing items, ZiLOG will
have no further obligation to Burger.
B. If Burger voluntarily resigns his employment for Good
Reason, as defined herein, prior to the termination date of
this Agreement, he will be entitled to the benefits
provided in Paragraph 7.D. below. Good Reason, as used
herein, shall mean:
(i) a reduction in Burger's authority, responsibility or
status as Senior Vice President of Sales such that
Burger ceases to be an "officer" as that term is
defined in the regulations under Section 16 of the
Securities Exchange Act of 1934;
(ii) a reduction in Burger's base salary other than in
connection with a general reduction applicable to the
Senior Vice Presidents of ZiLOG who are members of
the Executive Committee;
(iii) a reduction in form and effect or cessation of any
benefit or compensation plan, except EPIP, the
Executive Bonus, the Deferred Compensation Plan, or
those that may occur for the ZiLOG employee group in
general in accord with a general policy change;
(iv) a requirement to relocate, except for the office
relocations that would not increase Burger's one-way
commute distance by more than 20 miles;
(v) any material breach of this Agreement on the part of
ZiLOG not fully remedied by ZiLOG within sixty (60)
days after written notice by Burger of such breach.
C. If Burger retires as defined in PM60-05 prior to the
termination date of this Agreement, he will be entitled to
the following at the effective date of retirement: (1)
base salary then due and owing for services previously
performed, (2) payouts under EPIP for Awards made prior to
the effective date of the retirement, and 3) payouts under
the Executive Bonus for Awards made prior to the effective
date of the retirement. EPIP and Executive Bonus Awards
may also be granted at ZiLOG's sole discretion for the year
in which the retirement occurs, prorated to the date of the
retirement. Payouts for all Awards will be made at the
same time and on the same schedule as those for active
employees. Upon the payment of the foregoing items, ZiLOG
will have no further obligation to Burger.
D. If ZiLOG terminates Burger's employment during the term of
this Agreement other than for 1) Cause or Detrimental
Activity as defined in 7.E. below, or 2) the sale, merger
or change in ownership of ZiLOG (as defined in paragraph
7.G. below) he will be entitled to receive the following:
(1) the then current base salary for the period remaining
in this Agreement, (2) payouts under EPIP for Awards made
prior to the effective date of termination of employment
which payouts are payable to Burger pursuant to the terms
of EPIP prior to expiration of the term of this Agreement,
and (3) payouts under the Executive Bonus for Awards made
prior to the effective date of termination of employment
which payouts are payable to Burger pursuant to the terms
of the Executive Bonus prior to expiration of the term of
this Agreement. Burger will not be eligible for Awards
under EPIP or the Executive Bonus made after the date on
which his employment at ZiLOG ceased or for payouts made on
any Awards after the expiration date of this Agreement.
Vesting of stock options granted under EOSIP will continue
for the period remaining in the Agreement. Upon the
payment of the foregoing items, ZiLOG will have no further
obligation to Burger.
E. If ZiLOG terminates Burger during the term of this
Agreement for Cause, or for Detrimental Activity as defined
herein, ZiLOG will have no further monetary obligation to
Burger other than: (1) any base salary then due and owing
for services previously performed, 2) payouts under EPIP
which become payable to Burger pursuant to the terms of
EPIP prior to the effective date of termination, and (3)
payouts under the Executive Bonus which become payable to
Burger pursuant to the terms of the Executive Bonus prior
to the effective date of termination. Cause or Detrimental
Activity shall be a willful violation of a major company
policy, conviction of any criminal or civil law involving
moral turpitude, willful misconduct which results in a
material reduction in Burger's effectiveness in the
performance of his duties, or willful and reckless
disregard for the best interests of the Company.
F. If Burger ceases to be an employee of ZiLOG during the term
of this Agreement because of total and permanent disability
or death, ZiLOG's obligations to Burger or his
beneficiaries will be limited solely to: (1) any base
salary then due and owing for services previously
performed, (2) payouts in accordance with the terms of
EPIP, (3) payouts in accordance with the terms of the
Executive Bonus and 4) any benefits including EOSIP
benefits normally provided by ZiLOG it its employees due to
or on account of total and permanent disability or death.
G. If Burger leaves his employment, either voluntarily for
Good Reason or involuntarily for reasons other than for
Cause or Detrimental Activity, following the effective date
of a Change in Control prior to the termination date of
this Agreement, he will be entitled to receive the
following: (1) the then current base salary for the period
remaining in this Agreement, payable in a cash lump sum not
more than five (5) business days following the date of
leaving employment, (2) payouts under EPIP for Awards made
prior to the effective date of termination of employment,
and (3) payouts under the Executive Bonus for Awards made
prior to the effective date of termination of employment.
EPIP and Executive Bonuses shall also be awarded for the
year in which the termination of employment occurs and
shall be calculated in accordance with the terms of such
arrangements assuming the date of Burger's termination is
the last day of ZiLOG's fiscal year and based on ZiLOG's
financial performance for the portion of such fiscal year
that includes calculated financials for ZiLOG as a separate
entity. All of the above EPIP and Executive Bonus Awards
shall be paid in a cash lump sum within five (5) business
days of the date of Burger's termination of employment.
All outstanding unvested stock options whether granted
under EOSIP or otherwise will continue to vest for the
period of time remaining in the Agreement (the
"Continuation Period"). Regardless of the provisions of
EOSIP or any other plans or agreements, the Continuation
Period shall be counted as employment with ZiLOG for
purposes of vesting under all options and for purposes of
determining the expiration date of any stock options held
by Burger when his employment terminates. During the
remaining term of this Agreement Burger (and, where
applicable, his dependents) shall be entitled to continue
participation in the group insurance plans maintained by
ZiLOG, including life, disability and health insurance
programs, as if he were still an employee of ZiLOG. To the
extend that ZiLOG finds it impossible to cover Burger under
its group insurance policies during such period,
H. ZiLOG shall provide Burger with individual policies which
offer at least the same level of coverage and which impose
not more than the same costs on him as if he were still an
employee of ZiLOG. The foregoing notwithstanding, in the
event that Burger becomes eligible for comparable group
insurance coverage in connection with new employment, the
coverage provided by ZiLOG under this paragraph shall
terminate immediately. Any group health continuation
coverage that ZiLOG is otherwise required to offer under
the Consolidated Omnibus Budget Reconciliation Act of 1986
("COBRA") shall be offered when coverage under this
paragraph terminates.
Except as provided in the paragraph immediately following,
upon payment of the foregoing items, ZiLOG will have no
further obligation to Burger.
In the event that it is determined that any payment or
distribution of any type to or for the benefit of Burger
made by ZiLOG, any of its affiliates, by any person who
acquires ownership or effective control of ZiLOG or
ownership of a substantial portion of ZiLOG's assets
(within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended, and the regulations thereunder
(the "Code") or by any affiliate of such person, whether
paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (the "Total
Payments"), would be subject to the excise tax imposed by
section 4999 of the Code or any interest or penalties with
respect to such excise tax (such excise tax, together with
any such interest or penalties, are collectively referred
to as the "Excise Tax"), then Burger shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an
amount that shall fund the payment by Burger of any Excise
Tax on the Total Payments as well as all income taxes
imposed on the Gross-Up Payment, any Excise Tax imposed on
the Gross-Up Payment and any interest or penalties imposed
with respect to taxes on the Gross-Up Payment or any Excise
Tax.
All mathematical determinations and all determinations of
whether any of the total Payments are "parachute payments"
(within the meaning of Section 280G of the Code) that are
required to be made hereunder, including all determinations
of whether a Gross-Up Payment is required and of the amount
of such Gross-Up Payment, shall be made by the independent
auditors retained by ZiLOG most recently prior to the
Change In Control (the "Auditors"), who shall provide
their determination (the "Determination"), together with
detailed supporting calculations regarding the amount of
any Gross-Up Payment and any other relevant matters, both
to ZiLOG and to Burger within seven (7) business days of
Burger's termination date, if applicable, or such earlier
time as is requested by ZiLOG or by Burger (if Burger
reasonably believes that any of the Total Payments may be
subject to the Excise Tax). If the Auditors determine that
no Excise Tax is payable by Burger, it shall furnish Burger
with a written statement that such Auditors have concluded
that no Excise Tax is payable (including the reasons
therefor) and that Burger has substantial authority not to
report any Excise Tax on his federal income tax return. If
a Gross-Up Payment is determined to be payable, it shall be
paid to Burger within five (5) business days after the
Determination is delivered to ZiLOG or Burger. Any
determination by the Auditors shall be binding upon ZiLOG
and Burger, absent manifest error.
As a result of uncertainty in the application of Section
4999 of the Code at the time of the initial determination
by the Auditors hereunder, it is possible that Gross-Up
Payments not made by ZiLOG should have been made
("Underpayments") or that Gross-Up Payments will have been
made by ZiLOG which should not have been made
("Overpayments"). In either event, the Auditors shall
determine the amount of the Underpayment or Overpayment
that has occurred. In the case of an Underpayment, the
amount of such Underpayment shall promptly be paid by ZiLOG
to or for the benefit or Burger. In the case of an
Overpayment, the employee shall, at the direction and
expense of ZiLOG, take such steps as are reasonably
necessary (including the filing of returns and claims for
refund), follow reasonable instructions from, and
procedures established by, ZiLOG and otherwise reasonably
cooperate with ZiLOG to correct such Overpayment; provided,
however, that (a) Burger shall in no event be obligated to
return to ZiLOG an amount greater than the net after-tax
portion of the Overpayment that Burger has retained or has
recovered as a refund from the applicable taxing
authorities, and (b) this provision shall be interpreted in
a manner consistent with the intent of this excise tax
restoration provision which is to make Burger whole, on an
after-tax basis, for the application of the Excise Tax, it
being understood that the correction of an Overpayment may
result in Burger's repaying to ZiLOG an amount which is
less than the Overpayment.
8. Burger Representations. Burger represents to ZiLOG that to the
best of his knowledge he is under no obligation to any employer
or third party which would preclude his full, complete and
unfettered discharge of his duties under this Agreement.
9. Notices. Any notices required to be given hereunder shall be in
writing, and if by ZiLOG shall be addressed to Burger as
indicated in ZiLOG's personnel records or such other address as
Burger shall specify in writing, and if by Burger to ZiLOG at:
ZiLOG, Inc.
Xxxxx 000
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
ATTENTION: Senior Vice President, Human Resources and Administration
Such addresses may be changed by written notice from either ZiLOG
or Burger, to the other.
10. Amendment. This Agreement may be amended only in writing, signed
by both parties hereto.
11. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon ZiLOG, its successors and assigns.
Burger may not assign, transfer, pledge or hypothecate any of his
rights or obligations hereunder, Awards or payouts under EPIP or
the Executive Bonus or other compensation to which he may be
entitled hereunder. ZiLOG will require any successor (whether
direct or indirect, by purchase, merger, consolidation,
liquidation or otherwise) to all or substantially all of the
business and/or assets of ZiLOG to assume expressly and agree, in
substance and form satisfactory to Burger, to perform this
Agreement in the same manner and to the same extent ZiLOG would
be required to perform it if no succession had taken place.
12. Waiver of Breach. The waiver by ZiLOG or by Burger of a breach
of any provision of this Agreement by the other party shall not
operate or be construed as a waiver of any subsequent breach by
the other party.
13. Severability. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or
enforceability of any other provision hereof.
14. Entire Agreement. This entire Agreement consists of this
document, together with the following documents:
A. EPIP, to be attached as Exhibit I when finalized;
B. Executive Bonus, to be attached as Exhibit II when finalized;
C. ZiLOG 1998 Executive Officer Stock Incentive Plan, attached as Exhibit III
D. Employee Proprietary Rights and Non-Disclosure Agreement, attached as
Exhibit IV;
E. Conflict of Interest Statement, attached as Exhibit V;
F. Policy on Business Ethics, attached as Exhibit VI; and
G. PM60-05, attached as Exhibit VII.
15. Governing Law. This Employment Agreement shall be governed by
the laws of the State of California, without regard to conflict
of laws principles.
Executed effective November 20, 1998
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(DATE)
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxxx Xxxxxx Xxxxxx X. Xxxxxx
Dated: November 20, 1998 Dated: November 20, 1988
