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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
This Agreement is made by and between Zilog, Inc., a California corporation
(hereinafter "Zilog") and Xx. Xxxxx X. Xxxx, Xx. (hereinafter "Sack"), whereby
Zilog and Sack agree that Sack accepts employment as President, Chief Executive
Officer, and Chairman of the Board of Directors of Zilog, under the following
terms and conditions:
1. Term. Zilog and Sack agree that Sack will be President, Chief Executive
Officer, and Chairman of the Board of Zilog for a period of thirteen
(13) months, commencing on February 1, 1997 and ending February 28,
1998. This Agreement may be extended upon written agreement of Zilog
and Sack.
2. Extent of Services. Sack shall devote his entire time, attention and
energies to his position as President, Chief Executive Officer, and
Chairman of the Board of Zilog and shall not, during the term of this
Employment Agreement be engaged in any other business activity whether
or not such business activity is pursued for gain, profit or other
pecuniary advantage; provided, that Sack may engage in personal
investment activities consistent with Zilog's Conflict of Interest
Policy.
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3. Compensation.
A. Salary. For each month of employment, Zilog will pay, or cause
to be paid, to Sack the sum of at least $42,166.00 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. Sack'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.
Sack 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 Sack
stock options under the 1990 Zilog Employee Stock Option Plan
(hereinafter "ZSOP"), and the 1994 Long Term Incentive Plan
(hereinafter "LTIP"), copies of such plans being attached
hereto. Vesting will continue in accordance with the plan
provisions during the term of this Agreement and as modified
by this Agreement.
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4. Benefits. As an employee of Zilog, Sack will be entitled to such
benefits as Zilog normally provides its employees.
5. Company Policies. Sack agrees to be bound by all Zilog 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 documents as Zilog requests
evidencing such agreement.
6. Termination of Employment. Zilog reserves the right to terminate the
employment of Sack at any time during the term of this Agreement, for
any reason or for no reason, with or without cause, by giving Sack at
least thirty (30) days written notice of such termination or
compensation in lieu of notice; and Sack 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 Sack, 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 Sack, if his
employment with Zilog is terminated prior to the end of this Agreement,
shall be as follows:
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A. If Sack 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.D. 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 Sack pursuant
to the terms of EPIP prior to the effective date of resignation, and
(3) Payouts under the Executive Bonus which become payable to Sack
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 Sack.
B. If Sack 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.E. below. Good Reason,
as used herein, shall mean:
(i) assignment to Sack of duties, responsibilities or titles
materially inconsistent with his status as President, Chief
Executive Officer, and Chairman of the Board of Zilog;
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(ii) appointment of a Chairman of the Zilog Board of Directors
other than Sack;
(iii) a reduction in Sack's base salary other than in connection
with a general reduction applicable to the members of the
Zilog Management Committee;
(iv) 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;
(v) a change in Sack's principal work location from the area of
Campbell, California, except for required travel on Zilog's
business to an extent substantially consistent with Sack's
normal business travel obligations and except as might occur
in the event of a relocation of the Zilog Corporate
Headquarters;
(vi) any material breach of this Agreement on the part of Zilog not
fully remedied by Zilog within sixty (60) days after written
notice by Sack of such breach.
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C. If Sack 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 Sack.
D. If Sack leaves his employment, either voluntarily or involuntarily, as
a result of the sale, merger or change in ownership of Zilog 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, (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 Bonus
Awards may also be granted at Zilog's sole discretion for the year in
which the termination occurs.
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Payouts for all Awards will be made at the same time and on the same
schedule as those for active employees. All outstanding unvested stock
options granted under ZSOP and LTIP will fully vest effective the last
date of Sack's active employment. They will be subject to exercise on
the same terms as all other vested options, as provided for under the
"Retirement" provisions of the ZSOP and LTIP. Upon payment of the
following items, Zilog will have no further obligation to Sack.
E. If Zilog terminates Sack's employment during the term of this Agreement
for 1) other than Cause or Detrimental Activity (as defined in 7.F.
below), or 2) other than sale or change in ownership of Zilog (as
defined in Paragraph 7.D. above), 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 Sack 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 Sack pursuant to the terms of the Executive
Bonus prior to expiration of the term of this Agreement. Sack will not
be eligible for Awards under EPIP or the Executive Bonus made after the
date on which his
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employment at Zilog ceased or for Payouts made on any Awards after the
expiration date of this Agreement. Vesting of common stock and stock
options granted under ZSOP and LTIP will continue for the period
remaining in this Agreement. Upon the payment of the foregoing items,
Zilog will have no further obligation to Sack.
F. If Zilog terminates Sack's employment during the term of this Agreement
for Cause, or for Detrimental Activity as defined herein, Zilog will
have no further monetary obligation to Sack other than (1) any base
salary then due and owing for services previously performed, (2)
Payouts under EPIP which become payable to Sack pursuant to the terms
of EPIP prior to the effective date of termination, and (3) Payouts
under the Executive Bonus which become payable to Sack 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 Sack's effectiveness in the performance of his
duties, or willful and reckless disregard for the best interests of the
Company.
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G. If Sack 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 Sack 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 ZSOP and
LTIP benefits normally provided by Zilog to its employees due to
or on account of total and permanent disability or death.
8. New President and CEO. In the event that Zilog hires a new President
and CEO, Sack will retain his position as Chairman of the Board of
Directors of Zilog and will also remain an employee of Zilog. If his
responsibilities become solely those of Chairman of the Board, Sack's
base compensation will be at an amount mutually agreed upon by Sack and
the Board but will not be less than 67% of his then current full time
base rate. If Sack is terminated from the Board as a result of the
sale, merger or change in ownership of Zilog or for any other reason,
all outstanding unvested stock options granted under ZSOP and LTIP will
fully vest effective the last date of Sack's membership on the Board.
They will be subject to exercise on the same terms as all other vested
options, as provided for under the "Retirement" provisions of the ZSOP
and LTIP. Other provisions of this Agreement shall remain in effect
except as modified by this paragraph.
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9. Sack Representations. Sack 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.
10. Notices. Any notices required to be given hereunder shall be in
writing, and if by Zilog shall be addressed to Sack as indicated in
Zilog's personnel records or such other address as Sack shall specify
in writing and if by Sack to Zilog at:
Zilog, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Vice President
Human Resources and Administration
Such addresses may be changed by written notice from either Zilog or
Sack, to the other.
11. Amendment. This Agreement may be amended only in writing, signed by
both parties hereto.
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12. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon Zilog, its successors and assigns. Sack 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.
13. Waiver of Breach. The waiver by Zilog of a breach of any provisions of
this Agreement by Sack shall not operate or be construed as a waiver of
any subsequent breach by Sack.
14. Severability. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any
other provision hereof.
15. Entire Agreement. This entire Agreement consists of this document,
together with the following documents:
A. EPIP, attached as Exhibit I;
B. Executive Bonus, attached as Exhibit II;
C. Zilog Employee Stock Option Plan, attached as Exhibit III;
D. Zilog Employee 1994 Long Term Stock Incentive Plan, attached
as Exhibit IV;
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E. Employee Proprietary Rights and Non-Disclosure Agreement,
attached as Exhibit V;
F. Conflict of Interest Statement, attached as Exhibit VI;
G. Statement addressed to "Human Resources," attached as Exhibit
VII;
H. Policy on Business Ethics, attached as Exhibit VIII; and
I. PM60-05, attached as Exhibit IX.
16. 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 February 1, 1997
By /s/ Xxxxx X. Xxxx By /s/ Xxxxxxx X. Xxxxxxx
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Xxxxx X. Xxxx Xxxxxxx X. Xxxxxxx
Dated: February 12, 1997 Dated: February 3, 1997
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