ex10-2agmt.htm


    
       

      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 

       

      
        
          
          

        

        
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        time
          of the Change of Control, shall immediately become free from restrictions
          (other
          than restrictions required by applicable law or any national securities
          exchange
          upon which any securities of the Company are then listed).

      

       

      5.  Waiver
        and Release Required.  The Change in Control Payments described above
        are expressly conditioned upon Executive's execution of a valid waiver and
        release of any and all claims that Executive may have, or have had, against
        the
        Company and its agents, including but not limited to its officers, directors
        and
        employees, in a form provided by the Company or its successor.

       

      6.  Qualifying
        Termination.  For purposes of this Agreement, a Qualifying Termination
        shall mean Executive's termination by the Company or its successor without
        Cause
        (as defined below) or Executive's resignation of his employment for Good
        Reason
        (as defined below).  Executive's termination or resignation of his
        employment for any other reason, including without limitation, death, Disability
        (defined below), termination for Cause or resignation without Good Reason,
        shall
        not be deemed a Qualifying Termination and Executive shall not be entitled
        to
        the Change in Control Payments described above.

       

      (a)   For
        purposes of this Agreement, "Cause" shall mean one or more of the
        following:  (i) Executive's failure to reasonably and substantially
        perform his employment duties or to observe Company policies in all material
        respects; (ii) Executive's willful misconduct or gross negligence which
        materially injures the Company; or (iii) Executive's conviction or plea of
        nolo
        contendere to a felony or other serious crime involving moral
        turpitude.  In all of the foregoing cases, the Company shall provide
        written notice to Executive indicating in reasonable detail the event or
        circumstances that constitute Cause under this Agreement, and, if such breach
        or
        failure is reasonably susceptible to cure, the Company will provide Executive
        with thirty days to cure such breach or failure prior to termination for
        Cause.

       

      (b)   For
        purposes of this Agreement, "Good Reason" shall be deemed to exist if, without
        the Executive's approval:  (i) the Company or its successor
        materially reduces Executive's duties or responsibilities; or (ii) the
        Company or its successor materially reduces Executive's overall compensation,
        including annual base salary and bonus opportunity; or (iii) Executive's
        principal place of employment is moved more than 50 miles from its location
        on
        the date of this Agreement.  Within 60 days of becoming aware of an
        event or circumstances that constitutes Good Reason under this Agreement,
        Executive shall provide written notice, describing such event or circumstances
        in reasonable detail, to Company and Executive will provide the Company
        with thirty days to cure such diminution prior to termination for Good
        Reason.

       

      (c)   For
        purposes of this Agreement, "Disability" shall mean any illness, disability
        or
        other incapacity that renders Executive physically or mentally unable regularly
        to perform his duties hereunder for a period in excess or sixty (60) consecutive
        days or more than ninety (90) days in any consecutive twelve (12) month
        period.  The Board shall make a good faith determination of whether
        Executive is physically or mentally unable to regularly perform his duties,
        subject to its review and consideration of any physical and/or mental health
        information provided to it by Executive as determined by a physician reasonably
        acceptable to the Company.

       

      
        
          
          

        

        
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       7.  Change
        in Control Protection Period.  For purposes of this Agreement, the
        Change in Control Protection Period shall be the period two (2) months prior
        to
        and twelve (12) months following a Change in Control.

       

       8.  Limitation
        on Payments.  In the event that the Company's tax counsel or certified
        public accounting professional confirms in writing to the Company and Executive
        that payments under this Agreement, together with any other payments to
        Executive from the Company that are "parachute payments" within the meaning
        of
        Section 280G of the Internal Revenue Code of 1986, as amended (the "Code")
        ("Potential Parachute Payments") would otherwise equal or exceed three (3)
        times
        the Executive's "Base Amount" as defined in Section 280G of the Code, then
        notwithstanding anything to the contrary in this Agreement, the payments
        under
        this Agreement shall be reduced to an amount such that the Potential Parachute
        Payments do not exceed 2.99 times the Executive's Base Amount.  Any
        reduction in payments required by this Section 8 shall be applied to such
        payments and benefits under this Agreement as the Company in its sole discretion
        deems necessary, shall be communicated to Executive in writing prior to the
        date
        the first reduced payment or benefit would otherwise be due and shall be
        accompanied by written documentation from the Company's tax counsel or certified
        public accounting professional evidencing that the reduction is the minimum
        amount required to comply with this Section 8.

       

       9.  No
        Right to Continued Employment.  Nothing in this Agreement shall
        guarantee the right of Executive to continued employment by the Company and
        the
        Company retains all rights to terminate Executive's employment at any time
        for
        any reason or for no reason and with or without prior notice.

       

      10.  Binding
        Agreement.  This Agreement is a personal contract and the rights and
        interests of Executive hereunder may not be sold, transferred, assigned,
        pledged, encumbered, or hypothecated by him.  This Agreement shall be
        binding upon and shall inure to the benefit of the Company's successors and
        assigns.

       

      11.  Tax
        Withholding.  The Company may withhold from any amounts payable under
        this Agreement any taxes that are required to be withheld pursuant to any
        applicable law or regulation.

       

      12.  Entire
        Agreement.  This Agreement contains all the understandings between the
        Parties hereto pertaining to the matters referred to herein and supersedes
        all
        undertakings and agreements, whether oral or in writing, previously entered
        into
        by them with respect thereto, provided that it shall not supersede that certain
        Change in Control Agreement, dated as of December 15, 2005, by and between
        the
        Parties, which shall remain in effect until December 14, 2007.  For
        avoidance of doubt, Employee shall not receive payments under Section 3 of
        this
        Agreement.  Executive represents that, in executing this Agreement, he
        does not rely and has not relied upon any representation or statement not
        set
        forth herein made by the Company with regard to the subject matter of this
        Agreement or otherwise.

       

      13.  Amendment
        or Modification.  No provision of this Agreement may be amended or
        waived unless such amendment or waiver is agreed to in writing, signed by
        Executive and by a duly authorized officer of the Company.

       

       

      
        
          
          

        

        
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      14.  Notices.  Any
        notice to be given hereunder shall be in writing and shall be deemed given
        when
        delivered personally, sent by courier or fax or registered or certified mail,
        postage prepaid, return receipt requested, addressed to the party concerned
        at
        the address indicated below or to such other address as such party may
        subsequently give notice of hereunder in writing:

       

      To
        Executive at:

       

      6800
        Santa Teresa Boulevard

      San
        Jose, CA  95119

      To
        the Company at:

       

      ZiLOG,
        Inc.

      U.S.
        Headquarters

      6800
        Santa Teresa Boulevard

      San
        Jose, CA  95119

      Attn:  Legal
        Department

       

      Any
        notice delivered personally or by courier under this Section 13 shall be
        deemed
        given on the date delivered and any notice sent by telecopy or registered
        or
        certified mail, postage prepaid, return receipt requested, shall be deemed
        given
        on the date telecopied or mailed.

       

      15.  Waiver
        of Other Severance Rights.  To the extent that Change in Control
        Payments are made to Executive pursuant to this Agreement, Executive hereby
        expressly waives the right to receive severance payments or severance benefits
        under any other plan or agreement of the Company.

       

      16.  Each
        Party the Drafter.  This Agreement and the provisions contained in it
        shall not be construed or interpreted for or against any party to this Agreement
        because that party drafted or caused that party's legal representative to
        draft
        any of its provisions.

       

      17.  Governing
        Law.  This Agreement will be governed by and construed in accordance
        with the laws of the State of California, without regard to its conflicts
        of
        laws principles.

       

      18.  Headings.  All
        descriptive headings of sections and paragraphs in this Agreement are intended
        solely for convenience, and no provision of this Agreement is to be construed
        by
        reference to the heading of any section or paragraph.

       

      19.  Counterparts.  This
        Agreement may be executed in counterparts, each of which shall be deemed
        an
        original, but all of which together shall constitute one and the same
        instrument.

       

      
        
          
          

        

        
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      IN
        WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
        date
        first written above.

       

      
         

        
          	
                  ZiLOG,
                    INC. 

                	 	
                  EXECUTIVE

                
	 	 	 	 
	 	 	 	 
	
                  By:

                	
                  
                    /s/
                      Darin Billerbeck

                  

                	 	
                  
                    /s/
                      Norman G. Sheridan

                  

                
	
                   

                	Darin
                  Billerbeck	 	
                  Norman
                    G. Sheridan