FOURTH AMENDED EXECUTIVE
EMPLOYMENT AGREEMENT
This Fourth
Amended Executive Employment Agreement (the
“Agreement”) is entered into by and between IXYS
Corporation (the “Company”), a Delaware corporation,
and Nathan Zommer (“Executive”), effective as of
August 1, 2009 (the “Effective Date”).
WHEREAS , the Company and the Executive are parties to
that certain Third Amended Executive Employment Agreement effective
as of February 1, 2008, which is modified and superseded by
this Fourth Amended Executive Employment Agreement; and
WHEREAS, the Company desires to continue and extend the
employment of Executive under mutually satisfactory terms and
conditions, and the Executive desires to be employed by the
Company, under the terms and conditions herein.
NOW,
THEREFORE, in
consideration of the mutual covenants and agreements set forth
herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1.
EMPLOYMENT BY THE COMPANY . The Company hereby employs Executive to render
full-time services to the Company as its Chief Executive Officer.
Executive shall have responsibilities, duties and authorities that
are customarily associated with such position, and such duties that
are assigned by the Company’s Board of Directors (the
“Board”). The Executive acknowledges that the Board may
delegate to a committee of the Board any matter referred to in this
Agreement as being for the Board’s determination.
2.
COMPENSATION, VACATION AND BENEFITS .
2.1 The Company agrees to pay Executive an annual
base salary in the amount of $566,000, payable every two weeks.
Notwithstanding the foregoing, with the Executive’s consent,
such salary may be temporarily reduced as part of a salary
reduction program affecting multiple employees. The Executive shall
be considered for an annual performance bonus on such terms and
conditions as the Board shall determine in its sole discretion. The
Executive’s performance, and his base salary and bonus
arrangement will be reviewed by the Board from time to time, as the
Board determines in its sole discretion.
2.2 Executive’s paychecks will be distributed
pursuant to ordinary business practice, and shall be subject to
ordinary payroll deductions and tax withholdings. The Company also
agrees to provide Executive with benefits consistent with Company
policy for senior executives. Details about these benefits are set
forth in the employee handbook and summary plan descriptions,
copies of which have been provided to Executive. Unless the context
otherwise requires, as used in this Agreement,
“benefits” does not include any rights to the
Company’s equity securities (whether stock options,
restricted stock units, stock awards or other).
2.3 In
addition to the benefits provided to Executive pursuant to
subsections 2.1 and 2.2 hereof, the Company shall:
(a) pay, or reimburse Executive, for all reasonable
costs of a yearly medical exam of Executive by a physician of his
choice prior to the 15 th day of the third month following the end of the
applicable fiscal year with respect to which such amount is
payable;
(b) maintain term life insurance (without a buildup
of equity) in the amount of $1,000,000 on the life of the Executive
payable to such beneficiary or beneficiaries as Executive may
designate from time to time;
(c) pay, or reimburse Executive, for the services of
a personal tax and/or investment advisor, not to exceed $2,000 per
year, prior to the 15 th day of the third month following the end of the
applicable fiscal year with respect to which such amount is
payable;
(d) at
the Board’s discretion, either (i) provide Executive
with a car of such make and model as Executive and Board shall
agree is commensurate with Executive’s position with the
Company, including gas, insurance for such car and reasonable
maintenance thereof or (ii) pay Executive a monthly allowance
for a car on an economic basis comparable to (i); provided,
however, that Executive shall at all times (x) comply with all
policies of the Company from time to time in effect with respect to
the maintenance and operation of motor vehicles, and
(y) maintain a valid driver’s license;
(e) provide Executive with up to 10 hours per month
of bill paying and bookkeeping services in connection with the
payment of the personal bills of Executive (but in no event shall
the funds of the Company be used to pay the personal bills of
Executive): and
(f) provide Executive with annual vacation during
each year in an amount equal to the sum of (i) 15 working days
and (ii) 1
/ 2 working
day for each full year of service by the Executive at the Company
after June 1, 2003.
3. EMPLOYEE
HANDBOOK . By signing
this Agreement, Executive acknowledges that he has received and
read the Company’s employee handbook. Executive agrees to
abide by all company policies and procedures. Notwithstanding the
foregoing, if there shall be any conflict between this Agreement
and such employee handbook, the terms of this Agreement shall
govern.
4.
TERMINATION OF EMPLOYMENT .
4.1 AT
WILL. This Agreement does
not provide for a minimum term of employment and Executive may be
terminated by the Company at will.
4.2 COMPANY
INITIATED TERMINATION .
(a) In
the event the Company terminates Executive’s employment
without cause, but not for reasons of Disability or death,
Executive shall receive as severance a one-time payment equal to
one month of his then annual salary multiplied by the number of
calendar years (a fraction of a year shall be paid on a prorated
basis), but not to exceed a total of twelve months, of
Executive’s service with the Company, payable within fifteen
(15) days of such termination or such longer period of time
that Executive has to make effective the release required by this
Section 4.2 (a). In addition, the Company shall pay in
one
2.
lump sum the
amounts payable pursuant to COBRA for Executive’s health
insurance for the twelve calendar months following such
termination. No other benefits or payments shall be provided. The
Company’s obligation to make any payment or provide any
benefit under this Section 4.2 (a) is conditioned upon
the execution and delivery by the Executive of a release in favor
of the Company. For purposes of this Agreement, termination of
Executive’s employment shall mean “separation from
service” within the meaning of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”),
and Section 1.409A-1(h) of the regulations promulgated under
the Code or any successor regulations.
(b) In
the event Executive’s employment is terminated at any time
with cause, all of Executive’s compensation and benefits will
cease immediately, and Executive shall not be entitled to any
severance benefits and all other benefits provided hereunder shall
cease as of such termination. For purposes of this Agreement,
“cause” shall mean (i) conviction of any felony or
any crime involving moral turpitude or dishonesty;
(ii) participation in a fraud or act of dishonesty against the
Company; (iii) willful breach of the Company’s policies;
(iv) intentional damage to the Company’s property; or
(v) breach of this Agreement, the Proprietary Information
Agreement, or any other agreements with the Company including, but
not limited to agreements regarding confidentiality or proprietary
information. Physical or mental disability shall not constitute
“cause”. Failure to accomplish corporate financial and
management goals shall not constitute
“cause”.
(c) In
the event Executive suffers and continues to suffer a disability
that renders him unable to perform the essential functions of his
position, for three months within any six-month period
(“Disability”), the Company shall, for twelve months
commencing at the conclusion of such three-month period of
disability, (i) continue to pay Executive his annual base salary,
(ii) continue to provide Executive’s health insurance
and (ii) maintain life insurance in the manner and in the
amount set forth in Section 2.3(b) hereof. If upon the
conclusion of the twelve-month period, Executive remains unable to
perform the essential functions of the job, or the Company has no
suitable vacant position for him, Executive’s employment
shall be terminated.
4.3
EXECUTIVE INITIATED TERMINATION. Executive may voluntarily terminate his
employment with the Company at any time by giving the Board
60 days written notice. In the event Executive voluntarily
terminates his employment with the Company, all of
Executive’s compensation and benefits will cease as of such
termination date. Executive acknowledges that he will not receive
any severance pay or benefits, except as defined in the Employee
Handbook, and except as specified in this Agreement at
Section 5.2 if applicable, upon such voluntary
termination.
4.4
LIMITATION ON COMPENSATION. Except as expressly provided in Section 4.2
or Section 5.2, Executive will not be entitled to any other
compensation, severance, pay-in-lieu of notice or any such
compensation.
For purposes of
this Agreement, a “Change of Control” shall
mean:
3.
(a) any reorganization, consolidation or merger of
the Company in which the Company is not the surviving corporation
or pursuant to which shares of the Company’s voting stock
would be converted into cash, securities or other property, in
either case other than a merger of the Company in which the holders
of the Company’s voting stock immediately prior to the merger
have the same proportionate ownership of voting stock of the
surviving corporation immediately after the merger;
(b) the sale, exchange or other transfer (in one
transaction or a series of related transactions) to a third party
not affiliated as of the date of this Agreement with the Company of
at least a majority of the voting stock of the Company;
or
(c) the sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company.
For purposes of
this Agreement, “good reason” for voluntary termination
shall mean: (i) reduction of Executive’s rate of salary
compensation as in effect immediately prior to the Change of
Control by more than five percent; (ii) failure to provide a
package of welfare benefit plans which, taken as a whole, provide
substantially similar benefits to those in which Executive is
entitled to participate immediately prior to the Change of Control
(except that employee contributions may be raised to the extent of
any cost increases imposed by third parties) or any action by the
Company which would adversely affect Executive’s
participation or reduce Executive’s benefits under any of
such plans; (iii) change in Executive’s responsibilities,
authority, titles or offices resulting in diminution of position,
excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith which is remedied by the
Company promptly after notice thereof is given by Executive (it
being understood that the fact that the Com
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