Exhibit 10.1
CHANGE OF CONTROL
AGREEMENT
This Change of Control
Agreement (the “ Agreement ”) is made and
entered into by and between Jazz Technologies, Inc., a Delaware
corporation (the “Company” ) and
(the “Executive” ), effective as of the
day of
,
2007 ( “Date of this Agreement” ).
The Board of
Directors of the Company (the “Board” ), has
determined that it is in the best interests of the Company and its
shareholders to enter into this Change of Control Agreement to
induce the Executive to remain in the employ of the Company and to
diminish the distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending, potential or
threatened Change of Control (as defined below). The Board
desires to encourage the Executive’s full attention and
dedication to the Company currently and in the event of any
potential, threatened or pending Change of Control. Therefore, in
order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.
Definitions
1.1 Change
of Control. A “Change of Control” means the
occurrence of any of the following events:
(a) The
acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act” )) (a
“Person” ) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or
more (the “ Triggering Percentage ”) of either
(i) the then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock” ) or (ii) the
combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
(the “Outstanding Company Voting Securities” );
provided, however, that for purposes of this subsection (a), the
following acquisitions shall not be counted in calculating whether
a Change of Control has occurred: (i) any acquisition directly from
the Company, including any acquisition by virtue of a conversion
privilege where the security being so converted was itself acquired
directly from the Company exercising the conversion privilege
(provided, however, that an acquisition by virtue of a conversion
privilege where the security being so converted was acquired by the
Person exercising the conversion privilege other than directly from
the Company shall be counted in calculating whether a Change of
Control has occurred), (ii) any acquisition by the Company, (iii)
any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company, or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of subsection (c) of this Section 1.1; and
further provided that, for purposes of this subsection (a),
if a Person acquires beneficial ownership of the Triggering
Percentage and subsequently disposes of sufficient ownership that
such Person no longer has beneficial ownership of the Triggering
Percentage, then from and after the date of such subsequent
disposition, a Change of Control shall no longer be deemed to have
occurred with respect to the initial acquisition by such Person of
beneficial ownership of the Triggering Percentage; or
(b) A change in
the composition of the Board such that the individuals who, as of
the date of this Agreement, constitute the Board (such Board shall
be hereinafter referred to as the “Incumbent Board”)
cease for any reason to constitute at least a majority of the
Board; provided, however, that for purposes of this definition, any
individual who becomes a member of the Board subsequent to the date
of this Agreement whose election, or nomination for election by the
Company’s stockholders, was approved by a
1
vote of at least a
majority of those individuals who are members of the Board and who
were also members of the Incumbent Board (or deemed to be such
pursuant to this provision) shall be considered as though such
individual were a member of the Incumbent Board; and provided
further, however, that any such individual whose initial assumption
of office occurs as a result of or in connection with either an
actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the
Board shall not be so considered as a member of the Incumbent
Board; or
(c) Consummation
of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company or the acquisition of assets of another entity (a
“Business Combination” ), in each case, unless,
following such Business Combination, (i) all or substantially all
of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (ii) no Person
(excluding any employee benefit plan (or related trust) of the
Company or of such corporation resulting from such Business
combination) beneficially owns, directly or indirectly, 20% or
more, of, respectively, the then outstanding share of common stock
of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of
the members of the board of directors of the corporation resulting
from such Business combination were members of the Incumbent Board
at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination;
or
(d) Approval by
the shareholders of the Company of a complete liquidation or
dissolution of the Company.
1.2 “
Cause ” to terminate Executive’s employment
shall mean any of the following: (i) Executive’s
conviction of, or guilty plea with respect to, or a plea of nolo
contendere to, a charge that Executive has committed a felony under
the laws of the United States or of any state; (ii) willful and
material breach of Executive’s obligations under any written
agreement between Executive and the Company; (iii)
Executive’s willful misconduct, material failure or refusal
to perform his job duties, or gross neglect of his duties, provided
that such unsatisfactory performance, if reasonably susceptible of
cure, has not been cured within thirty (30) days following
Executive’s receipt of written notice from the Company
specifying the particulars of the conduct constituting Cause; and
(iv) Executive’s engagement in any activity that constitutes
a material conflict of interest with the Company or any of its
affiliated entities. Termination of Executive’s
employment because of Executive’s death or certified
disability (which disability renders Executive unable to perform
the essential duties of his position with or without reasonable
accommodation for sixty (60) consecutive days or a total of one
hundred and twenty (120) days in any twelve (12) month period)
shall not constitute “Cause” for termination. No
act, nor failure to act, on the Executive’s part, shall be
considered “willful” unless Executive has acted or
failed to act, with an absence of good faith
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and without a
reasonable belief that Executive’s action or failure to take
action was in the best interests of the Company.
1.3 “
Good Reason ” means:
(i) the assignment to
Executive of any duties inconsistent in any respect with
Executive’s position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities, as
in effect immediately prior to a Change-in-Control, excluding for
this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly
after receipt of notice thereof given by Executive;
(ii) any reduction in
Executive’s annual base salary as in effect immediately
before the Change-in-Control,
(iii) the failure to
pay Executive incentive compensation to which Executive is
otherwise entitled at the time at which such awards are usually
paid or as soon thereafter as administratively feasible, unless the
failure to pay the incentive compensation is because of failure to
meet objectives based on quantitative performance;
(iv) the provision to
Executive of an opportunity to earn a target annual bonus or a
target performance award substantially less in amount than
Executive’s target opportunities in effect immediately before
the Change-in-Control for the then current fiscal year of the
Company;
(v) the failure by the
Company to continue in effect any equity incentive plan in which
Executive participated immediately prior to the Change-in-Control,
unless a substantially equivalent alternative compensation
arrangement (embodied in an ongoing substitute or alternative plan)
has been provided to Executive, or the failure by the Company to
continue Executive’s participation in any such equity
incentive plan on substantially the same basis, both in terms of
the amount of benefits provided and the level of Executive’s
participation rela
