EXHIBIT 10.2
CHANGE IN CONTROL AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT ("Agreement") is made and entered
into on October 10, 2007 by and between ZiLOG, Inc. (the "Company")
and Norman G. Sheridan, the Company's Chief Technology Officer
("Executive") (together the "Parties").
WHEREAS, Executive is currently employed as the Chief Technology
Officer of the Company;
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 foster 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 December 15, 2007,
provided, however, that on each anniversary of December 15, 2007
the Term of the Agreement shall be automatically extended for an
additional one-year period unless prior to such date, either party
notifies the other of its intention not to so extend the Agreement
(the "Term") and provided further, 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) 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 twelve (12) 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
and that would otherwise vest within 12 months of a Qualifying
Termination 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 and
dental benefits for the period of one year from the date of
termination; provided, however, that, if such continuation is not
permitted under the terms of the Company's benefit plans, the
Company shall reimburse the Executive for the costs and any
premiums paid to the Executive for continuation of coverage
required under the Consolidated Omnibus Budget Reconciliation Act
for such one year period; and provided further 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. Notwithstanding the foregoing, the Company shall
not be obligated to provide long-term disability
benefits.
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 but which would otherwise become free of restrictions
under the terms of the award within 12 months from the
