Exhibit 10.10
ZILOG
EMPLOYMENT AGREEMENT
This Agreement is made by and between ZiLOG, Inc., a Delaware corporation
(hereinafter "ZiLOG") and Xxxxxx Xxxxx (hereinafter "Xxxxx"), whereby ZiLOG and
Xxxxx agree that Xxxxx accepts employment as Senior Vice President and General
Manager Integrated Controls of ZiLOG, under the following terms and conditions:
1. Term. ZiLOG and Xxxxx agree that Xxxxx will be Senior Vice President and
General Manager Integrated Controls 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 Xxxxx. 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. Xxxxx shall devote his entire time, attention and
energies to his position as Senior Vice President and General Manager
Integrated Controls 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 Xxxxx 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 Xxxxx 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. Waser'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. Xxxxx
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 Xxxxx 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, Xxxxx will be entitled to such benefits
as ZiLOG normally provides its executives. In addition, ZiLOG will provide
Xxxxx with Directors and officers (D&O) insurance in an amount deemed
appropriate by the Company for his level of responsibility.
5. Company Policies. Xxxxx 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 Xxxxx at any time during the term of this Agreement, for any
reason or for no reason, with or without cause, by giving Xxxxx at least
thirty (30) days written notice of such termination or compensation in lieu
of notice; and Xxxxx 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 Xxxxx, 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 Xxxxx, if his employment
with ZiLOG is terminated prior to the end of this Agreement, shall be as
follows:
A. If Xxxxx 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 Xxxxx
pursuant to the terms of EPIP prior to the effective date of
resignation, and (3)
payouts under the Executive Bonus which become payable to Xxxxx
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 Xxxxx.
B. If Xxxxx 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 Waser's authority, responsibility or status as
Senior Vice President And General Manager Integrated Controls
such that Xxxxx 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 Waser'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 Waser'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 Xxxxx of such breach.
C. If Xxxxx 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 Xxxxx.
D. If ZiLOG terminates Waser'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 Xxxxx 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 Xxxxx pursuant to the terms of the Executive
Bonus prior to expiration of the term of this Agreement. Xxxxx 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 Xxxxx.
E. If ZiLOG terminates Xxxxx during the term of this Agreement for Cause,
or for Detrimental Activity as defined herein, ZiLOG will have no
further monetary obligation to Xxxxx other than: (1) any base salary
then due and owing for services previously performed, 2) payouts under
EPIP which become payable to Xxxxx pursuant to the terms of EPIP prior
to the effective date of termination, and (3) payouts under the
Executive Bonus which become payable to Xxxxx 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
Waser's effectiveness in the performance of his duties, or willful and
reckless disregard for the best interests of the Company.
F. If Xxxxx 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 Xxxxx 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 Xxxxx 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 Waser'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 Waser'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 Xxxxx when his
employment terminates. During the remaining term of this Agreement
Xxxxx (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 Xxxxx under its group insurance policies during
such period,
H. ZiLOG shall provide Xxxxx 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 Xxxxx 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 Xxxxx.
In the event that it is determined that any payment or distribution of
any type to or for the benefit of Xxxxx 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
Xxxxx shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount that shall fund the payment by Xxxxx 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 Xxxxx within seven (7) business
days of Waser's termination date, if applicable, or such earlier time
as is requested by ZiLOG or by Xxxxx (if Xxxxx 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 Xxxxx, it shall
furnish Xxxxx with a written statement that such Auditors have
concluded that no Excise Tax is payable (including the reasons
therefor) and that Xxxxx 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 Xxxxx within five (5)
business days after the Determination is delivered to ZiLOG or Xxxxx.
Any determination by the Auditors shall be binding upon ZiLOG and
Xxxxx, 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 Xxxxx. 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)
Xxxxx shall in no event be obligated to return to ZiLOG an amount
greater than the net after-tax portion of the Overpayment that Xxxxx
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 Xxxxx 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 Waser's repaying to ZiLOG an amount
which is less than the Overpayment.
8. Xxxxx Representations. Xxxxx 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 Xxxxx as indicated in ZiLOG's personnel
records or such other address as Xxxxx shall specify in writing, and if by
Xxxxx to ZiLOG at:
ZiLOG, Inc.
Xxxxx 000
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
ATTENTION: Senior Vice President, Human Resources
Such addresses may be changed by written notice from either ZiLOG or Xxxxx,
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. Xxxxx 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
Xxxxx, 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 Xxxxx 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 when finalized
B. Executive Bonus Plan, to be attached when finalized
C. ZiLOG 1998 Executive Officer Stock Incentive Plan
D. Employee Proprietary Rights and Non-Disclosure Agreement
E. Conflict of Interest Statement
F. Policy on Business Ethics
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 _February 1, 1999_
(DATE)
By: /s/ Xxxxxx Xxxxx By:_/s/ Xxxxxx X. Mizell_ _
Dated: _February 1, 1999 Dated: _ February 1, 1999_
