UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 30, 2008
ZEBRA TECHNOLOGIES CORPORATION
(Exact Name of Registrant as Specified in Charter)
Registrants telephone number, including area code: 847-634-6700
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13c-4(c))
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Amendments to Employment Agreements with Executive Officers
On December 30, 2008, Zebra Technologies Corporation (the Company) entered into amendments to the employment agreements with each of its executive officers, including the following executive officers of the Company (the Executives): Anders Gustafsson, Hugh K. Gagnier, Philip Gerskovich, Michael C. Smiley and Michael H. Terzich. The amendments were approved by the Companys Compensation Committee of the Board of Directors.
The Second Amendment to Employment Agreement between Mr. Gustafsson and the Company clarified that his vacation accrues pro rata during the year. It also conformed his employment agreement to requirements under Section 409A of the Internal Revenue Code of 1986, as amended (the Code) and the regulations thereunder (such Section and regulations, 409A), including adding new provisions regarding the timing and amount of tax gross up payments to Mr. Gustafsson in the event his compensation is subject to an excise tax under Section 4999 of the Code and designating certain severance payments as separate payments under the short-term deferral rules under 409A.
The amendments to the employment agreements of the other Executives made the same revisions as the amendment to Mr. Gustafssons employment agreement made.
Due to Mr. Gagniers employment being based in California, the amendment to his employment agreement contained additional provisions that the other amendments did not. The amendment to his employment agreement reduced the length of the noncompetition and nonsolicitation restrictions in his employment agreement from twenty-four months after termination of employment to twelve months after such termination and made other changes to such restrictions. It also conformed to the California Labor Code the employment agreements provisions regarding the ownership and assignment of certain intellectual property created by Mr. Gagnier as an employee and changed the employment agreements governing law from Illinois to California.
The above descriptions of the amendments to the Executives employment agreements are qualified in their entirety by reference to the complete texts of such amendments or form of amendment, copies of which are attached hereto as Exhibit 10.1 (Second Amendment to Employment Agreement Mr. Gustafsson), Exhibit 10.2 (Amendment No. 1 to Employment Agreement Mr. Gagnier) and Exhibit 10.3 (Form of Amendment No. 1 to Employment Agreement all
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits | ||
Exhibit Number |
Description of Exhibits |
|
10.1 | Second Amendment to Employment Agreement by and between the Company and Anders Gustafsson dated December 30, 2008. | |
10.2 | Amendment No. 1 to Employment Agreement by and between the Company and Hugh K. Gagnier dated December 30, 2008. | |
10.3 | Form of Amendment No. 1 to Employment Agreement by and between the Company and each executive officer other than Messrs. Gustafsson and Gagnier and each dated December 30, 2008. |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ZEBRA TECHNOLOGIES CORPORATION | ||||||
Date: December 30, 2008 | By: | /s/ Anders Gustafsson | ||||
Anders Gustafsson | ||||||
Chief Executive Officer |
3
EXHIBIT INDEX
Exhibit Number | Description of Exhibits | |
10.1 | Second Amendment to Employment Agreement by and between the Company and Anders Gustafsson dated December 30, 2008. | |
10.2 | Amendment No. 1 to Employment Agreement by and between the Company and Hugh K. Gagnier dated December 30, 2008. | |
10.3 | Form of Amendment No. 1 to Employment Agreement by and between the Company and each executive officer other than Messrs. Gustafsson and Gagnier and each dated December 30, 2008. |
4
Exhibit 10.1
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
THIS SECOND AMENDMENT TO EMPLOYMENT AGREEMENT (this Amendment) is dated December 30, 2008 and amends that certain Employment Agreement dated September 4, 2007, as amended by First Amendment to Employment Agreement dated November 16, 2007 (as amended, the Employment Agreement), by and between ZEBRA TECHNOLOGIES CORPORATION (the Employer) and ANDERS GUSTAFSSON (the Executive).
1. | Section 4E(1) is hereby deleted in its entirety and replaced with the following (the underlined language being added): |
include the Executive in any life insurance, disability insurance, medical, dental or health insurance, vacation (of four (4) weeks accrued pro rata in each calendar year, which shall in all instances cease accruing beyond a cap of four (4) weeks of accrued but unused vacation, until said accrued but unused vacation bank drops below a four (4) weeks total), savings, pension and retirement plans and other benefit plans or programs (including, if applicable, any excess benefit or supplemental executive retirement plans) maintained by the Employer for the benefit of its executive officers; and
2. | The first sentence of Section 7B(3) is hereby deleted in its entirety and replaced with the following (the underlined language being added): |
Notwithstanding the foregoing, if the Executive is a specified employee as such term is defined under Section 409A of the Code and the regulations and guidance promulgated thereunder, any payments described in this Paragraph 7B or Paragraph 7C to the extent applicable shall be delayed for a period of six (6) months following the Executives separation of employment to the extent and up to an amount necessary to ensure such payments are not subject to the penalties and interest under Section 409A of the Code.
3. | A new section 7B(4) is hereby added to read as follows: |
Each installment of Base Salary and Bonus paid under Section 7B is designated as a separate payment for purposes of the short-term deferral rules under Treasury Regulation Section 1.409A-1(b)(4)(i)(F) and the exemption for involuntary terminations under separation pay plans under Treasury Regulation Section 1.409A-1(b)(9)(iii). As a result, the following payments are intended to be exempt from Section 409A of the Internal Revenue Code: (1) payments that are made on or before the 15th day of the third month of the calendar year following the calendar year in which the Executive terminates employment, and (2) subsequent payments made on or before the last day of the second calendar year following the year of the Executives termination that do not exceed the lesser of two times the Executives annual rate of pay in the year prior to the Executives termination or two times the limit under Section 401(a)(17) of the Internal Revenue Code then in effect.
4. | Section 7C is hereby deleted in its entirety and replaced with the following (the underlined language being added): |
C. Excise Tax . If it shall be determined that any payment to the Executive
1
pursuant to this Agreement or any other payment or benefit from the Employer, any affiliate, any shareholder of the Employer or any other person would be subject to the excise tax imposed by Section 4999 of the Code because such payment equals or exceeds three times the Base Amount (as defined under Section 280G of the Code) by an amount in excess of ten percent (10%) of such three times the Base Amount, then the Executive shall receive a Tax Gross-Up Payment (as defined below) with respect to all such excise taxes. Tax Gross-Up Payment means an amount payable to the Executive such that, after payment of Taxes (as defined below) on such amount there remains a balance sufficient to pay the Taxes being reimbursed. Taxes means the incremental United States federal, state and local income, excise and other taxes payable by the Executive with respect to any applicable item of income. Any Tax Gross-Up Payment shall be paid no later than the end of Executives taxable year following the taxable year in which Executive remits such Taxes to the applicable taxing authority. If it shall be determined that any payment to the Executive pursuant to this Agreement or any other payment or benefit from the Employer, any affiliate, any shareholder of the Employer or any other person would be subject to the excise tax imposed by Section 4999 of the Code because such payment exceeds three times the Base Amount by an amount equal to ten percent (10%) or less of such three times the Base Amount, then the amount of any payments hereunder which shall be paid to the Executive shall be reduced to an amount equal to one dollar less than three times the Base Amount. In the event that the amount of payments to be reduced is payable over more than one taxable year of Executive, the payments to be made the furthest from the date on which the reduction is made shall be reduced first until the payment limit is reached.
5. | The first sentence in Section 8D is hereby deleted in its entirety and replaced with the following (the underlined language being added): |
In the event that the Executive breaches any of the restrictions in this Paragraph 8, he shall forfeit all of the applicable payments and benefits under this Agreement, including but not limited to such payments and benefits pursuant to Paragraph 7 (except those contained in Paragraph 7A or as otherwise prohibited by law) , and the Employer shall have the right to recapture and seek repayment of any such applicable payments and benefits under this Agreement.
6. | Defined terms not otherwise defined in this Amendment shall have the meanings ascribed to them in the Employment Agreement. |
7. | All other provisions of the Employment Agreement shall remain unchanged. |
ZEBRA TECHNOLOGIES CORPORATION
By: |
/s/ Joanne Townsend |
By: |
/s/ Anders Gustafsson |
|||||
Joanne Townsend, VP Human Resources | Anders Gustafsson |
2
Exhibit 10.2
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this Amendment) is dated December 30, 2008 and amends that certain Employment Agreement (the Employment Agreement) dated December 12, 2007 by and between ZEBRA TECHNOLOGIES CORPORATION (the Employer) and HUGH K. GAGNIER (the Executive).
1. | Section 4D(1) is hereby deleted in its entirety and replaced with the following (the underlined language being added): |
include the Executive in any life insurance, disability insurance, medical, dental or health insurance, vacation (of four (4) weeks accrued pro rata in each calendar year, which shall in all instances cease accruing beyond a cap of four (4) weeks of accrued but unused vacation, until said accrued but unused vacation bank drops below a four (4) weeks total), savings, pension and retirement plans and other benefit plans or programs (including, if applicable, any excess benefit or supplemental executive retirement plans) maintained by the Employer for the benefit of its executive officers; and
2. | The first sentence of Section 7B(3) is hereby deleted in its entirety and replaced with the following (the underlined language being added): |
Notwithstanding the foregoing, if the Executive is a specified employee as such term is defined under Section 409A of the Code and the regulations and guidance promulgated thereunder, any payments described in this Paragraph 7B or Paragraph 7C to the extent applicable shall be delayed for a period of six (6) months following the Executives separation of employment to the extent and up to an amount necessary to ensure such payments are not subject to the penalties and interest under Section 409A of the Code.
3. | A new section 7B(4) is hereby added to read as follows: |
Each installment of Base Salary and Bonus paid under Section 7B is designated as a separate payment for purposes of the short-term deferral rules under Treasury Regulation Section 1.409A-1(b)(4)(i)(F) and the exemption for involuntary terminations under separation pay plans under Treasury Regulation Section 1.409A-1(b)(9)(iii). As a result, the following payments are intended to be exempt from Section 409A of the Internal Revenue Code: (1) payments that are made on or before the 15 th day of the third month of the calendar year following the calendar year in which the Executive terminates employment, and (2) subsequent payments made on or before the last day of the second calendar year following the year of the Executives termination that do not exceed the lesser of two times the Executives annual rate of pay in the year prior to the Executives termination or two times the limit under Section 401(a)(17) of the Internal Revenue Code then in effect.
4. | Section 7C is hereby deleted in its entirety and replaced with the following (the underlined language being added): |
C. Excise Tax . If it shall be determined that any payment to the Executive pursuant to this Agreement or any other payment or benefit from the Employer, any
1
affiliate, any shareholder of the Employer or any other person would be subject to the excise tax imposed by Section 4999 of the Code because such payment equals or exceeds three times the Base Amount (as defined under Section 280G of the Code) by an amount in excess of ten percent (10%) of such three times the Base Amount, then the Executive shall receive a Tax Gross-Up Payment (as defined below) with respect to all such excise taxes. Tax Gross-Up Payment means an amount payable to the Executive such that, after payment of Taxes (as defined below) on such amount there remains a balance sufficient to pay the Taxes being reimbursed. Taxes means the incremental United States federal, state and local income, excise and other taxes payable by the Executive with respect to any applicable item of income. Any Tax Gross-Up Payment shall be paid no later than the end of Executives taxable year following the taxable year in which Executive remits such Taxes to the applicable taxing authority. If it shall be determined that any payment to the Executive pursuant to this Agreement or any other payment or benefit from the Employer, any affiliate, any shareholder of the Employer or any other person would be subject to the excise tax imposed by Section 4999 of the Code because such payment exceeds three times the Base Amount by an amount equal to ten percent (10%) or less of such three times the Base Amount, then the amount of any payments hereunder which shall be paid to the Executive shall be reduced to an amount equal to one dollar less than three times the Base Amount. In the event that the amount of payments to be reduced is payable over more than one taxable year of Executive, the payments to be made the furthest from the date on which the reduction is made shall be reduced first until the payment limit is reached.
5. |
Section 8B is hereby deleted in its entirety and replaced with the following (the
underlined
language being added and the
|
B.
Noncompetition and
Nonsolicitation
.
While employed by the Employer and for a period of twenty-four (24) consecutive months following the date of termination of employment for any reason, the
In consideration for the
compensation and benefits granted by the Employer to Executive under this Agreement, and in further consideration of Executives continued employment by the Employer, Executive hereby agrees that during the term of this Agreement and for a
period ending twelve (12) months after his termination of employment with the Employer as Executive under this Agreement,
Executive will not directly or indirectly:
(1)
Contact, solicit, interfere with or
divert any of the Employers customers;
accept employment or engage in a competing business, or engage in any activity that may result in the disclosure
by disclosing
, divulging
or otherwise use of
, using or
relying on
Confidential Information
, proprietary information or trade secrets
acquired during
Executives
his
employment with the Employer; and
(2)
Solicit any person who is employed by
the Employer for the purpose of encouraging that employee to join
the
Executive as a partner, agent, employee
, contractor
or otherwise in any business activity
which is competitive with the Employer
.
In the event of any breach of this subparagraph B, the Executive agrees that the twenty-four (24) month
restricted period shall be tolled during the time of such breach.
2
6. | The second sentence of Section 8D is hereby deleted in its entirety and replaced with the following (the underlined language being added): |
In the event that the Executive breaches any of the restrictions in this Paragraph 8, he shall forfeit all of the applicable payments and benefits under this Agreement, including but not limited to such payments and benefits pursuant to Paragraph 7 (except those contained in Paragraph 7A or as otherwise prohibited by law), and the Employer shall have the right to recapture and seek repayment of any such applicable payments and benefits under this Agreement.
7. | The following is hereby added to the end of Section 8E(1): |
Executive recognizes that this Agreement does not require assignment of any Invention which qualifies fully for protection under Section 2870 of the California Labor Code, which provides as follows:
(i) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employers equipment, supplies, facilities, or trade secret information except for those inventions that either:
(a) Relate at the time of conception or reduction to practice of the invention to the employers business, or actual or demonstrably anticipated research or development of the employer; or
(b) Result from any work performed by the employee for the employer.
(ii) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (i), the provision is against the public policy of this state and is unenforceable.
8. | Section 17 is hereby deleted in its entirety replaced with the following: |
Governing Law; Choice of Forum. This Agreement shall be interpreted and construed in accordance with the laws of the State of California, without regard to its, or any other States, choice of law principles. The Employer has offices in California and Executive understands and acknowledges the Companys desire and need to defend any litigation against it in California. Accordingly, the parties agree that any claim of any type brought by Executive against the Employer or any of its employees or agents must be maintained only in a court sitting in California. Executive further understands and acknowledges that in the event the Employer initiates litigation against Executive, the Employer may need to prosecute such litigation in Executives forum state, in California, or in such other state where Executive is subject to personal jurisdiction. Accordingly, the parties agree that the Employer can pursue any claim against Executive in any forum in which Executive is subject to personal jurisdiction. Executive specifically consents to personal jurisdiction in California.
9. |
Defined terms not otherwise defined in this Amendment shall have the meanings ascribed |
3
to them in the Employment Agreement. |
10. | All other provisions of the Employment Agreement shall remain unchanged. |
ZEBRA TECHNOLOGIES CORPORATION
By: |
/s/ Joanne Townsend |
By: |
/s/ Hugh K. Gagnier |
|||||
Joanne Townsend, Vice President, HR |
Hugh K. Gagnier |
4
Exhibit 10.3
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this Amendment) is dated December 30, 2008 and amends that certain Employment Agreement (the Employment Agreement) dated [DATE] by and between ZEBRA TECHNOLOGIES CORPORATION (the Employer) and [NAME] (the Executive).
1. | Section 4D(1) is hereby deleted in its entirety and replaced with the following (the underlined language being added): |
include the Executive in any life insurance, disability insurance, medical, dental or health insurance, vacation (of four (4) weeks accrued pro rata in each calendar year, which shall in all instances cease accruing beyond a cap of four (4) weeks of accrued but unused vacation, until said accrued but unused vacation bank drops below a four (4) weeks total), savings, pension and retirement plans and other benefit plans or programs (including, if applicable, any excess benefit or supplemental executive retirement plans) maintained by the Employer for the benefit of its executive officers; and
2. | The first sentence of Section 7B(3) is hereby deleted in its entirety and replaced with the following (the underlined language being added): |
Notwithstanding the foregoing, if the Executive is a specified employee as such term is defined under Section 409A of the Code and the regulations and guidance promulgated thereunder, any payments described in this Paragraph 7B or Paragraph 7C to the extent applicable shall be delayed for a period of six (6) months following the Executives separation of employment to the extent and up to an amount necessary to ensure such payments are not subject to the penalties and interest under Section 409A of the Code.
3. | A new section 7B(4) is hereby added to read as follows: |
Each installment of Base Salary and Bonus paid under Section 7B is designated as a separate payment for purposes of the short-term deferral rules under Treasury Regulation Section 1.409A-1(b)(4)(i)(F) and the exemption for involuntary terminations under separation pay plans under Treasury Regulation Section 1.409A-1(b)(9)(iii). As a result, the following payments are intended to be exempt from Section 409A of the Internal Revenue Code: (1) payments that are made on or before the 15 th day of the third month of the calendar year following the calendar year in which the Executive terminates employment, and (2) subsequent payments made on or before the last day of the second calendar year following the year of the Executives termination that do not exceed the lesser of two times the Executives annual rate of pay in the year prior to the Executives termination or two times the limit under Section 401(a)(17) of the Internal Revenue Code then in effect.
4. | Section 7C is hereby deleted in its entirety and replaced with the following (the underlined language being added): |
C. Excise Tax . If it shall be determined that any payment to the Executive pursuant to this Agreement or any other payment or benefit from the Employer, any
1
affiliate, any shareholder of the Employer or any other person would be subject to the excise tax imposed by Section 4999 of the Code because such payment equals or exceeds three times the Base Amount (as defined under Section 280G of the Code) by an amount in excess of ten percent (10%) of such three times the Base Amount, then the Executive shall receive a Tax Gross-Up Payment (as defined below) with respect to all such excise taxes. Tax Gross-Up Payment means an amount payable to the Executive such that, after payment of Taxes (as defined below) on such amount there remains a balance sufficient to pay the Taxes being reimbursed. Taxes means the incremental United States federal, state and local income, excise and other taxes payable by the Executive with respect to any applicable item of income. Any Tax Gross-Up Payment shall be paid no later than the end of Executives taxable year following the taxable year in which Executive remits such Taxes to the applicable taxing authority. If it shall be determined that any payment to the Executive pursuant to this Agreement or any other payment or benefit from the Employer, any affiliate, any shareholder of the Employer or any other person would be subject to the excise tax imposed by Section 4999 of the Code because such payment exceeds three times the Base Amount by an amount equal to ten percent (10%) or less of such three times the Base Amount, then the amount of any payments hereunder which shall be paid to the Executive shall be reduced to an amount equal to one dollar less than three times the Base Amount. In the event that the amount of payments to be reduced is payable over more than one taxable year of Executive, the payments to be made the furthest from the date on which the reduction is made shall be reduced first until the payment limit is reached.
5. | The first sentence in Section 8D is hereby deleted in its entirety and replaced with the following (the underlined language being added): |
In the event that the Executive breaches any of the restrictions in this Paragraph 8, he shall forfeit all of the applicable payments and benefits under this Agreement, including but not limited to such payments and benefits pursuant to Paragraph 7 (except those contained in Paragraph 7A or as otherwise prohibited by law) , and the Employer shall have the right to recapture and seek repayment of any such applicable payments and benefits under this Agreement.
6. | Defined terms not otherwise defined in this Amendment shall have the meanings ascribed to them in the Employment Agreement. |
7. | All other provisions of the Employment Agreement shall remain unchanged. |
ZEBRA TECHNOLOGIES CORPORATION
By: |
|
By: |
|
|||||
[NAME AND TITLE] | [NAME] |
2