This excerpt taken from the ZBRA 8-K filed Nov 21, 2007.
New Employment Agreements for Certain Executive Officers
On November 16, 2007, the Company entered into an employment agreement (each, an Employment Agreement and, collectively, the Employment Agreements) with the following executive officers of the Company (the Executives), each of whom was identified as a named executive officer in the Companys Definitive Proxy Statement filed with the Securities and Exchange Commission on April 24, 2007: Charles R. Whitchurch, Philip Gerskovich and Veraje Anjargolian. Each Executives Employment Agreement supersedes all previous employment agreements, severance agreements, separation agreements and other arrangements between the Company and him with respect to the subject matter of his Employment Agreement.
Under the Employment Agreements, the Executives are currently entitled to annual base salaries and targeted annual cash bonuses in the following amounts:
The annual base salaries and targeted bonuses reflected in the Executives Employment Agreements are the same respective base salaries and targeted bonuses of the Executives that were in effect prior to the execution of the Employment Agreements. The Executives annual base salaries and targeted bonuses were established by the Compensation Committee in April 2007 in accordance with the Compensation Committees annual review of the Executives respective compensation structures and amounts and were not changed by the Employment Agreements. The Executives annual base salaries will be reviewed at least annually, and may be increased or decreased from time to time by the Company. However, if an Executives annual base salary in effect on the date of his Employment Agreement is decreased in an amount equal to or greater than ten percent (10%) (unless such decrease is applied on a proportionally equal basis to all executive officers of the Company), then the Executive will have
fifteen days to terminate his employment, in which case such termination will be for good reason under his Employment Agreement.
Each Executives target bonus is payable upon the attainment of certain performance measures and in accordance with the Companys annual bonus plan for the relevant fiscal year. Each year, the Compensation Committee determines the Companys annual bonus plan, including the performance measures and each Executives performance goals, in connection with its annual review of the Executives respective compensation structure and amounts. Each Executive will also be eligible to receive various equity grants, as determined in the sole discretion of the Companys Compensation Committee.
Each Executives employment under his Employment Agreement is terminable at any time, subject to certain severance obligations as described below. Each Executives Employment Agreement provides that if he terminates his employment with good reason or the Company terminates his employment without cause and under circumstances other than death or disability as provided in his Employment Agreement, he will be entitled to (i) the continuation of his base salary at the rate then in effect for a period of one year; (ii) a pro-rata portion of his annual performance bonus (the Bonus) for the year in which his employment terminates, if it otherwise would have been earned if he was employed as of the date the annual performance bonuses for such year are paid to senior level executives of the Company, and any such pro-rata portion will be payable at the time annual performance bonuses for such year are paid to senior level executives of the Company, (iii) if not yet paid, any Bonus attributable to the year immediately preceding the year of the employment termination, if it otherwise would have been earned if he was employed as of the date the annual performance bonuses for such year are paid to senior level executives of the Company, and any such Bonus will be payable at the time annual performance bonuses for such year are paid to senior level executives of the Company, (iv) 100% of his targeted bonus for the year in which his employment terminates; (iv) outplacement services not to exceed $32,000, and (vii) the continuation of coverage under the Companys medical and dental insurance plans, as mandated by COBRA, with the Company paying for such coverage at the same rate the Employer pays for health insurance coverage for its active employees under its group health plan and the Executive paying for any employee-paid portion of such coverage, until the earlier of (a) one year after the date of termination, or (b) the Executive becoming eligible for coverage under another group health plan that does not impose preexisting condition limitations on the Executives coverage.
In addition, each Executives Employment Agreement provides that if he terminates his employment with good reason or the Company terminates his employment without cause, and such termination of employment occurs within 120 days immediately preceding or one year immediately following a change in control (as defined under the 2006 Zebra Technologies Corporation Incentive Compensation Plan, and subject to the definition of a change in control under Section 409A of the Internal Revenue Code of 1986, as amended), then instead of receiving continuation of base salary for one year and payment of 100% of his targeted bonus for the year of employment termination, he will receive a severance payment equal to two times his base salary plus two times his targeted bonus for the year of employment termination and such severance payment will be paid within sixty days following the later of the change in control or the termination.
Under the Employment Agreements, if payments to an Executive upon a change in control exceed the applicable threshold under Section 4999 of the Internal Revenue Code of 1986, as amended (the Code), and an excise tax becomes due thereunder, the Executive would be entitled to receive an additional payment so that, after payment by him of all applicable taxes and excise taxes, he retains an amount equal to the amount he would have retained had no excise tax been imposed; provided, however, that if the applicable threshold under Section 4999 of the Code is exceeded by ten percent (10%) or less, the total payments he would be entitled to receive following a change in control will be reduced so that they are $1.00 less than such applicable threshold.
Each Executives Employment Agreement further provides that he will be bound by non-competition and non-solicitation provisions for a period of two years following his termination and by confidentiality provisions at all times during and after the term of the Employment Agreement. It also obligates the Company to maintain directors and officers liability insurance coverage for him and to indemnify him to the extent permitted under the Companys By-Laws and/or Certificate of Incorporation.
The above description of the Employment Agreements is qualified in its entirety by reference to the complete text of such agreements, copies of which are attached hereto as Exhibits 10.2, 10.3, and 10.4.