EXHIBIT 10.22
ZILOG, INC.
1998 LONG-TERM STOCK INCENTIVE PLAN
RESTRICTED SHARE AGREEMENT
RESTRICTED SHARE AGREEMENT (this "Agreement"), dated as of February 7,
2000, between ZiLOG, Inc. (the "Company") and Xxxxxxx X. Xxxxxxxxx (the
"Participant").
WHEREAS, the Participant is a member of the Board of Directors of the
Company or an affiliate of the Company and in such capacity is hereby
granted the one-time opportunity to purchase shares (the "Restricted
Shares") of common stock of the Company, $0.01 par value per share
("Common Stock"), pursuant to the Company's 1998 Long-Term Stock Incentive
Plan (the "Plan") and subject to the terms and conditions provided herein
and in the Plan;
WHEREAS, Section 12.4 of the Plan requires the Participant to execute this
Agreement if the Participant wishes to purchase the Restricted Shares;
WHEREAS, upon executing this Agreement, the Participant and the Company
desire to have this Agreement apply to the Restricted Shares to be
purchased pursuant to the Plan by the Participant.
NOW THEREFORE, in consideration of the premises hereinafter set forth, and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows.
1. Grant of Restricted Share Award. Pursuant to, and subject to, the
terms and conditions set forth herein (including the payment of the
Purchase Price) and in the Plan, the Company hereby grants to the
Participant an Award (the "Restricted Share Award") under which the
Participant is hereby offered the opportunity to purchase 25,000 shares of
Common Stock of the Company.
2. Grant Date. The Grant Date of the Restricted Share Award is the date
of this Agreement.
3. Purchase Price of Restricted Share. The purchase price for each share
(the "Purchase Price") offered under this Restricted Share Award is $4.00.
The Participant must pay the aggregate Purchase Price by certified check
made out to the Company within thirty days of the date hereof. If the
Company does not receive payment of the Purchase Price in appropriate form
by the close of business on such date, this Restricted Share Award shall
automatically, and without any further action by the Company, expire.
4. Vesting Date. Fifty percent of the Restricted Share Award shall become
vested on each of the first through second anniversaries of the Grant
Date, respectively, provided the Participant's employment with the Company
has not terminated for any reason other than on account of his death or
Disability prior to any such anniversary. In the event the Participant's
employment with the Company terminates on account of his death or
Disability, or after a Change in Control the Participant's employment is
terminated by the Company, any unvested portion of the Restricted Share
Award shall immediately become vested on such date of termination.
Unvested Restricted Shares are subject to specific repurchase rights
provided in Section 7(b) herein which continue after the existence of a
Public Market for the Common Stock. For purposes of this Agreement, the
term "employment" shall mean the performance of services to the Company by
the Participant as a member of the Board of Directors of the Company, and
the term "Disability" shall mean that the Participant is unable to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result
in death or which has lasted, or can be expected to last, for a continuous
period of not less than six months. The Company shall hold the Restricted
Shares in escrow and shall release to the Participant the appropriate
number of Restricted Shares in accordance with this vesting provision.
5. Participant's Acknowledgments and Representations.
(a)The Participant hereby acknowledges and agrees that (i) he is under no
obligation to purchase the Restricted Shares hereunder, (ii) he has
received a copy of and has read and fully understands the Plan and this
Agreement, and (iii) all decisions, determinations and interpretations of
the Committee or the Board of Directors of the Company in respect of the
Plan or this Agreement shall be final, conclusive and binding.
(b) The Participant hereby represents and warrants (i) the Restricted
Shares are being acquired for the Participant's own account, for
investment purposes only and not with a view to or in connection with any
distribution, reoffer, resale, public offering or other disposition
thereof not in compliance with the United States Securities Act of 1933
and the rules and regulations thereunder or any other applicable United
States federal or state securities laws or regulations or any other Non-
U.S. or local law or regulation; (ii) the Participant, either alone or
together with his representatives, possess such expertise, knowledge, and
sophistication in financial and business matters generally, and in the
type of transactions in which the Company or its affiliates proposes to
engage in specifically, that the Participant is capable of evaluating the
merits and risks of his proposed investment; (iii) the Participant has had
access to all of the information with respect to the Restricted Shares
that the Participant deems necessary to make a complete evaluation thereof
and the Participant has had the opportunity to question the Company
concerning such Restricted Shares; (iv) the Participant's decision to
acquire the Restricted Shares for investment has been based solely upon
the evaluation made by the Participant and not on any representations or
statements made by the Company, any of its affiliates or any employee or
agent thereof; and (v) the Participant is aware that (1) the shares of
common stock of the Company are not traded on any securities exchange and
there is no market for the shares of common stock and (2) this Agreement
provides significant restrictions on the Participant's ability to sell,
transfer, assign, mortgage, hypothecate, or otherwise encumber the
Restricted Shares prior to the date such Restricted Shares vest in
accordance with Section 4 herein and prior to existence of a Public Market
(as defined in Section 9 herein).
6. Issuance of Restricted Shares. The Participant acknowledges and agrees
that the certificate for the Restricted Shares shall bear the following
legends (except that the second paragraph of this legend shall not be
required after the Restricted Shares have been registered and except that
the first paragraph of this legend shall not be required after both the
Restricted Shares have become vested pursuant to Section 4 hereof and the
termination of the provisions of Sections 7 and 8 hereof pursuant to
Section 9 hereof):
The shares represented by this certificate are subject to the
terms and conditions of a Restricted Share Agreement dated as
of February 7, 2000 and may not be sold, transferred,
hypothecated, assigned or encumbered, except as may be
permitted by the aforesaid Agreement. A copy of the
Restricted Share Agreement is available through the Secretary
of the Company.
The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares have
been acquired for investment and may not be sold, transferred,
pledged or hypothecated in the absence of an effective
registration statement for the shares under the Securities Act
of 1933 or an opinion of counsel for the Company that
registration is not required under said Act.
Upon the termination of this Agreement, or upon registration of the
Restricted Shares under the Securities Act of 1933, as amended (the
"Securities Act"), the Participant shall have the right to exchange any
Restricted Shares containing the above legend (i) in the case of the
registration of the Restricted Shares, for Restricted Shares legended only
with the first paragraph described above and (ii) in the case of the
termination of this Agreement, for Restricted Shares legended only with
the second paragraph described above.
7. Transfer of Restricted Shares; Call Rights.
(a) The Participant agrees that he will not cause or permit the Restricted
Shares or his interest in the Restricted Shares to be sold, transferred,
hypothecated, assigned or encumbered except as expressly permitted by this
Section 7 or Section 8 hereof; provided, however, that the Restricted
Shares or any such interest may be transferred (i) on the Participant's
death by bequest or inheritance to the Participant's executors,
administrators, testamentary trustees, legatees or beneficiaries, or (ii)
during the Participant's lifetime, to a trust or custodianship created by
the Participant, the beneficiaries of which may include only the
Participant, the Participant's spouse or the Participant's lineal
descendants (by blood or adoption), subject in any such case to the
agreement by each transferee (other than the Company or as otherwise
permitted by the Company) in writing to be bound by the terms of this
Agreement and provided in any such case that no such transfer that would
cause the Company to be required to register the Common Stock under
Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), shall be permitted.
(b) The Company (or its designated assignee) shall have the right, during
the ninety-day period immediately following the termination of the
employment of the Participant with the Company to purchase from the
Participant and the Participant shall sell to the Company (or its
designated assignee), the unvested portion of the Restricted Share Award
at a per share price equal to the lesser of (i) the Participants' Purchase
Price or (ii) the Fair Market Value of a share of Common Stock determined
as of the Valuation Date immediately preceding the date as of which such
repurchase right is exercised.
(c) The Company (or its designated assignee) shall have the right, during
the ninety-day period immediately following the termination of the
employment of the Participant with the Company to purchase from the
Participant, and upon the exercise of such right the Participant shall
sell to the Company (or its designated assignee), all or any portion of
the Restricted Shares which are vested and which are held by the
Participant as of the date as of which such right is exercised at a per
share price equal to the Fair Market Value (as defined in the Plan) of a
share of Common Stock determined as of the Valuation Date (as defined in
the Plan) immediately preceding the date as of which such right is
exercised.
(d) The Company (or its designated assignee) shall exercise the rights
provided in paragraphs (b) and (c) of this Section 7 by delivering to the
Participant a written notice specifying its intent to purchase Restricted
Shares held by the Participant, the date as of which such right is to be
exercised and the number of Restricted Shares to be purchased. Such
purchase and sale shall occur on such date as the Company (or its
designated assignee) shall specify which date shall not be later than
ninety (90) days after the fiscal quarter-end immediately following the
date as of which the Company's right is exercised; provided that the
Company may delay any such payment in the event such payment will result
in the violation of the terms or provisions of, or result in a default or
event of default under, any guarantee, financing or security agreement or
document entered into by the Company or any of its Affiliates and in
effect on such date (hereinafter a "Financing Agreement"). In the event
the payment of the purchase price is delayed as a result of a restriction
imposed by a Financing Agreement as provided above, such payment shall be
made without the application of further conditions or impediments as soon
as practicable after the payment of such purchase price would no longer
result in the violation of the terms or provisions of, or result in a
default or event of default under, any Financing Agreement, and such
payment shall equal the amount that would have been paid to the
Participant if no delay had occurred plus interest for the period from the
date on which the purchase price would have been paid but for the delay in
payment provided herein to the date on which such payment is made (the
"Delay Period"), calculated at an annual rate equal to the average annual
prime rate plus two percent charged during the Delay Period by a
nationally recognized bank designated by the Board.
8. Certain Rights.
(a) Drag Along Rights. If the Majority Stockholder (as defined below)
desires to sell all or substantially all of its shares of Common Stock to
a good faith independent purchaser (a "Purchaser") (other than any other
investment partnership, limited liability company or other entity
established for investment purposes and controlled by the principals of
the Majority Stockholder or any of its affiliates and other than any
employees of the Majority Stockholder hereinafter referred to as a
"Permitted Transferee") and said Purchaser desires to acquire all or
substantially all of the issued and outstanding shares of Common Stock (or
all or substantially all of the assets of the Company) upon such terms and
conditions as agreed to with the Majority Stockholder, the Participant
agrees to sell all of his Restricted Shares to said Purchaser (or to vote
all of his Restricted Shares in favor of any merger or other transaction
which would effect a sale of such shares of Common Stock or assets of the
Company) at the same price per share of Common Stock and pursuant to the
same terms and conditions with respect to payment for the shares of Common
Stock as agreed to by the Majority Stockholder. In such case, the
Majority Stockholder shall give written notice of such sale to the
Participant at least thirty (30) days prior to the consummation of such
sale, setting forth (i) the consideration to be received by the holders of
shares of Common Stock, (ii) the identity of the Purchaser, (iii) any
other material items and conditions of the proposed transfer and (iv) the
date of the proposed transfer.
(b) Tag Along Rights.
(i) Subject to paragraph (iv) of this Section 8(b), if the Majority
Stockholder or its Permitted Transferee proposes to transfer any of its
shares of Common Stock to a Purchaser (other than a Permitted Transferee),
then the Company shall cause the Majority Stockholder or his Permitted
Transferee (hereinafter referred to as a "Selling Stockholder") to give
written notice of such proposed transfer to the Participant (the "Selling
Stockholder's Notice") at least thirty (30) days prior to the consummation
of such proposed transfer, and to provide notice to all other stockholders
of the Company to whom the Majority Stockholder has granted similar "tag-
along" rights (such stockholders together with the Participant, referred
to herein as the "Other Stockholders") setting forth (A) the number of
shares of Common Stock offered, (B) the consideration to be received by
such Selling Stockholder, (C) the identity of the Purchaser, (D) any other
material items and conditions of the proposed transfer and (E) the date of
the proposed transfer.
(ii) Upon delivery of the Selling Stockholder's Notice, the Participant
may elect to sell up to the sum of (A) the Pro Rata Portion (as defined in
Section 8(c)(ii)) and (B) the Excess Pro Rata Portion (as defined in
Section 8(c)(iii)) of the vested portion of his Restricted Shares, at the
same price per share of Common Stock and pursuant to the same terms and
conditions with respect to payment for the shares of Common Stock as
agreed to by the Selling Stockholder, by sending written notice to the
Selling Stockholder within fifteen (15) days after the date of the Selling
Stockholder's Notice, indicating his election to sell up to the sum of the
Pro Rata Portion plus the Excess Pro Rata Portion of his Restricted Shares
in the same transaction. Following such fifteen-day period, the Selling
Stockholder and each Other Stockholder who has served notice on the
Selling Stockholder shall be permitted to sell to the Purchaser on the
terms and conditions set forth in the Selling Stockholder's Notice the sum
of (X) the Pro Rata Portion and (Y) the Excess Pro Rata Portion of its
Restricted Shares.
(iii) Notwithstanding anything to the contrary contained herein, the
provisions of this Section 8(b) shall not apply to any sale or transfer by
the Majority Stockholder of shares of Common Stock unless and until the
Majority Stockholder, after giving effect to the proposed sale or
transfer, shall have sold or transferred in the aggregate (other than to
Permitted Transferees) shares of Common Stock, representing 7.5% of shares
of Common Stock owned by the Majority Stockholder on the date hereof.
(c) Definitions. For purposes of this Section 8, the following
capitalized terms shall have the following meanings:
(i) "Majority Stockholder" shall mean TPG Partners II, L.P., TPG Investors
II, L.P., and TPG Parallel II, L.P.
(ii) "Pro Rata Portion" shall mean, with respect to shares of Common Stock
held by the Participant or Selling Stockholder, as the case may be, a
number equal to the product of (x) the total number of such shares then
owned by the Participant or the Selling Stockholder, as the case may be,
and (y) a fraction, the numerator of which shall be the total number of
such shares proposed to be sold to the Purchaser as set forth in the
Selling Stockholder's Notice, and the denominator of which shall be the
total number of such shares then outstanding (including such shares
proposed to be sold by the Selling Stockholder); provided that, in the
event any of the Other Stockholders (including the Participant) elects to
sell less than his or her Pro Rata Portion, such lesser amount shall be
deemed to be his or her Pro Rata Portion for purposes of this Agreement,
and provided that any fraction of a share resulting from such calculation
shall be disregarded for purposes of determining the Pro Rata Portion.
(iii) "Excess Pro Rata Portion" shall mean, with respect to each Other
Stockholder and the Participant, a whole number equal to the product of
(x) the number of Non-Elected Shares (as defined below) and (y) a
fraction, the numerator of which shall be such Participant's Pro Rata
Portion, and the denominator of which shall be the number of Elected
Shares (as defined below), provided that any fraction of a share resulting
from such calculation shall be disregarded for purposes of determining the
Excess Pro Rata Portion. With respect to the Selling Stockholder, "Excess
Pro Rata Portion" shall mean the excess, if any, of the number of Non-
Elected Shares over the aggregate Excess Pro Rata Portions of the Other
Stockholders (including the Participant.)
(iv) "Elected Shares" shall mean the sum of (x) the aggregate Pro Rata
Portions with respect to the shares of Common Stock of all of the Other
Stockholders (including the Participant) that have elected to exercise in
full their rights to sell their Pro Rata Portion of shares of Common
Stock, and (y) the Selling Stockholder's Pro Rata Portion of shares of
Common Stock.
(v) "Non-Elected Shares" shall mean the excess, if any, of the total
number of shares of Common Stock proposed to be sold to a Purchaser as set
forth in a Selling Stockholder's Notice over the aggregate Pro Rata
Portions with respect to shares of Common Stock of all of the Other
Stockholders (including the Participant) that have elected to exercise
their rights to sell their Pro Rata Portions of Shares of Common Stock.
9. Termination. The transfer restrictions provided in Sections 7 and 8
hereof shall terminate immediately following the existence of a Public
Market for the Common Stock except that the provisions contained in
Section 7 hereof shall continue with respect to each Restricted Share
prior to such shares becoming vested pursuant to Section 4 hereof and
during such period of time, if any, as the Participant is precluded from
selling such Restricted Shares pursuant to Rule 144 of the Securities Act.
For this purpose, a "Public Market" for the Common Stock shall be deemed
to exist if the Common Stock is registered under Section 12(b) or 12(g) of
the Exchange Act and trading regularly occurs in such Common Stock in, on
or through the facilities of securities exchanges and/or inter-dealer
quotation systems in the United States (within the meaning of Section
902(n) of the Securities Act) or any designated offshore securities market
(within the meaning of Rule 902(a) of the Securities Act).
10. Distributions With Respect To Restricted Shares. As used herein, the
term "Restricted Shares" includes securities of any kind whatsoever
distributed with respect to the Common Stock acquired by the Participant
pursuant to the Plan and this Agreement or any such securities resulting
from a stock split or consolidation involving such Common Stock.
11. Amendment; Assignment. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by
a written instrument signed by authorized representatives of the parties
or, in the case of a waiver, by an authorized representative of the party
waiving compliance. No such written instrument shall be effective unless
it expressly recites that it is intended to amend, supersede, cancel,
renew or extend this Agreement or to waive compliance with one or more of
the terms hereof, as the case may be. Except for the Participant's right
to assign his or her rights under Section 7(a) or the Company's right to
assign its rights under Sections 7(b) and 7(c), no party to this Agreement
may assign any of its rights or obligations under this Agreement without
the prior written consent of the other parties hereto.
12. Notices. Each notice and other communication hereunder shall be in
writing and shall be deemed to have been duly given on the date it is
delivered in person, on the next business day if delivered by overnight
mail or other reputable overnight courier, or the third business day if
sent by registered mail, return receipt requested, to the parties as
follows:
If to the Participant, to his most recent address shown on records of the
Company or its Affiliate;
If to the Company:
ZiLOG, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address
shall only be effective upon receipt.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but each of
which together shall constitute one and the same document.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without reference to
its principles of conflicts of law.
15. Binding Effect; Third Party Beneficiary Rights. This Agreement shall
be binding upon, inure to the benefit of, and be enforceable by the heirs,
personal representatives, successors and permitted assigns of the parties
hereto. Nothing expressed or referred to in this Agreement is intended or
shall be construed to give any person other than the parties to this
Agreement, or their respective heirs, personal representatives, successors
or assigns, any legal or equitable rights, remedy or claim under or in
respect of this Agreement or any provision contained herein except that
the Majority Stockholder shall have all the rights, remedies and claims
hereunder as if it were an original signatory hereto.
16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof.
17. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
18. Miscellaneous. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
/s/ Xxxxxxx X. Frieland__
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxx Patten__________
Xxxx Xxxxxx
Chief Financial Officer
ZiLOG, Inc.
