Exhibit 10.22
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of October 27, 1999 (the "Agreement"), between
Semiconductor Components Industries, LLC (the "Company"), with offices at 0000
Xxxx XxXxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, and Xxxxx Xxxxxxxx (the
"Executive").
1. Employment, Duties and Agreements.
(a) The Company hereby agrees to employ the Executive as its Chief
Financial Officer and the Executive hereby accepts such position and agrees to
serve the Company in such capacity during the employment period fixed by Section
3 hereof (the "Employment Period"). The Executive shall report to the President
of the Company or his designee and shall have such duties and responsibilities
as the President or his designee may reasonably determine from time to time as
are consistent with Executive's position as Chief Financial Officer. During the
Employment Period, the Executive shall be subject to, and shall act in
accordance with, the instructions and directions of the President or his
designee and all applicable policies and rules of the Company. The Executive's
principal work location shall be Phoenix, Arizona, provided that the Executive
shall be required to travel as required in order to perform his duties and
responsibilities hereunder.
(b) During the Employment Period, excluding any periods of vacation
and sick leave to which the Executive is entitled, the Executive shall devote
his full working time, energy and attention to the performance of his duties and
responsibilities hereunder and shall faithfully and diligently endeavor to
promote the business and best interests of the Company.
(c) During the Employment Period, the Executive may not, without the
prior written consent of the Company, directly or indirectly, operate,
participate in the management, operations or control of, or act as an executive,
officer, consultant, agent or representative of, any type of business or service
(other than as an executive of the Company), provided that it shall not be a
violation of the foregoing for the Executive to manage his personal, financial
and legal affairs so long as such activities do not interfere with the
performance of his duties and responsibilities to the Company as provided
hereunder.
2. Compensation.
(a) As compensation for the agreements made by the Executive herein
and the performance by the Executive of his obligations hereunder, during the
Employment Period, the Company shall pay the Executive, pursuant to the
Company's normal and customary payroll procedures, a base salary at the rate of
$250,000 per annum, (the "Base Salary"). The Board of Directors of the Company
(the "Board") shall review the Executive's Base Salary from time to time.
(b) In addition to the Base Salary, during the Employment Period,
the Executive shall be eligible to participate in the executive bonus program
established and approved by the Board (the "Program") and, pursuant to the
Program, the Executive may earn an annual bonus (the "Annual Bonus") up to a
maximum of 100% of Base Salary based on the achievement of annual performance
objectives as
set forth in the Program, provided that with respect to fiscal year 1999, the
Executive shall be entitled to receive a pro-rata portion of the Annual Bonus
based on the portion of such year that this Agreement is in effect and
determined in accordance with the Program, including the achievement of the
applicable performance objectives for such year.
(c) As soon as practicable after the first anniversary of the
Effective Date (as defined herein), the Company will pay the Executive $150,000
(the "Special Bonus"), provided the Executive is still actively employed by the
Company on such first anniversary.
(d) As soon as practicable after the date hereof, the Company shall
cause SCG Holding Corporation (the "Parent") to grant the Executive an option
(the "Option") to purchase 650,000 shares of common stock of the Parent at an
exercise price of $1.00 per share. The Option shall be subject to and governed
by the SCG Holding Corporation 1999 Founders Stock Option Plan (the "Option
Plan") and shall be evidenced by a stock option grant agreement as provided
under the Option Plan. Approximately 8.4 percent of the Option shall become
exercisable on the Grant Date (as defined in the stock option grant agreement);
an additional 8.3 percent of the Option shall become exercisable six months
following the Grant Date; an additional 8.3 percent of the Option shall become
exercisable on the first anniversary of the Grant Date; and on each six-month
anniversary following the first one-year anniversary of the Grant Date, an
additional 12.5 percent of the Option shall become exercisable until 100% of the
Option is fully vested and exercisable; provided that the Executive is still
employed by the Company on each such date that a portion of the Option is to
become exercisable. Notwithstanding the foregoing, in the event of a Change in
Control (as defined in Section 6 below) during the Employment Period and under
the circumstances described in Section 5(a), the Option shall become immediately
exercisable. The Option, or portion thereof, that has not become exercisable
shall automatically expire on the Date of Termination (as defined in Section 4
below). The Option, or portion thereof, that has become exercisable as of the
Date of Termination shall expire on the earlier of (i) ninety (90) days after
the date the Executive's Employment is terminated for any reason other than
Cause, death or Disability; (ii) one year after the date the Executive's
employment is terminated by reason of death or Disability; (iii) the
commencement of business on the date the Executive's employment is terminated
for Cause; or (iv) the tenth anniversary of the Grant Date.
(e) During the Employment Period: (i) except as specifically
provided herein, the Executive shall be entitled to participate in all savings
and retirement plans, practices, policies and programs of the Company which are
made available generally to other executive officers of the Company, and (ii)
except as specifically provided herein, the Executive and/or the Executive's
family, as the case may be, shall be eligible for participation in, and shall
receive all benefits under, all welfare benefit plans, practices, policies and
programs provided by the Company which are made available generally to other
executive officers of the Company (for the avoidance of doubt, such plans,
practices, policies or programs shall not include any plan, practice, policy or
program which provides benefits in the nature of severance or continuation pay).
(f) The Company shall provide the Executive with a car allowance not
to exceed $1,200 per month.
(g) The Company shall reimburse the Executive for all reasonable
business expenses upon the presentation of statements of such expenses in
accordance with the Company's policies and procedures now in force or as such
policies and procedures may be modified with respect to all senior executive
officers of the Company.
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3. Employment Period.
The Employment Period has commenced on August 4, 1999 (the
"Effective Date") and shall terminate on the third anniversary of the Effective
Date (the "Scheduled Termination Date"). Notwithstanding the foregoing, the
Executive's employment hereunder may be terminated during the Employment Period
prior to the Scheduled Termination Date upon the earliest to occur of the
following events (at which time the Employment Period shall be terminated):
(a) Death. The Executive's employment hereunder shall terminate upon
his death.
(b) Disability. The Company shall be entitled to terminate the
Executive's employment hereunder for "Disability" if, as a result of the
Executive's incapacity due to physical or mental illness or injury, the
Executive shall have been unable to perform his duties hereunder for a period of
ninety (90) consecutive days, and within thirty (30) days after Notice of
Termination (as defined in Section 4 below) for Disability is given following
such 90-day period, the Executive shall not have returned to the performance of
his duties on a full-time basis.
(c) Cause. The Company may terminate the Executive's employment
hereunder for Cause. For purposes of this Agreement, the term "Cause" shall
mean: (i) a material breach by the Executive of this Agreement; (ii) the failure
by the Executive to reasonably and substantially perform his duties hereunder
(other than as a result of physical or mental illness or injury); (iii) the
Executive's willful misconduct or gross negligence which is materially injurious
to the Company; or (iv) the commission by the Executive of a felony or other
serious crime involving moral turpitude. In the case of clauses (i) and (ii)
above, the Company shall provide notice to the Executive indicating in
reasonable detail the events or circumstances that it believes constitute Cause
hereunder and, if such breach or failure is reasonably susceptible to cure,
provide the Executive with a reasonable period of time (not to exceed thirty
days) to cure such breach or failure. If, subsequent to the Executive's
termination of employment hereunder for other than Cause, it is determined in
good faith by the Board that the Executive's employment could have been
terminated for Cause, the Executive's employment shall, at the election of the
Board, be deemed to have been terminated for Cause retroactively to the date the
events giving rise to Cause occurred.
(d) Without Cause. The Company may terminate the Executive's
employment hereunder during the Employment Period without Cause.
(e) Voluntarily. The Executive may voluntarily terminate his
employment hereunder (other than for Good Reason), provided that the Executive
provides the Company with notice of his intent to terminate his employment at
least three months in advance of the Date of Termination (as defined in Section
4 below).
(f) For Good Reason. The Executive may terminate his employment
hereunder for Good Reason and any such termination shall be deemed a termination
by the Company without Cause. For purposes of this Agreement, "Good Reason"
shall mean (i) a material breach of this Agreement by the Company, (ii) a
material diminution of the Executive's duties and responsibilities hereunder, or
(iii) the Executive elects to terminate his employment within one year after a
Change in Control (as defined below); provided that in either (i) or (ii) above,
the Executive shall notify the Company within thirty (30) days after the event
or events which the Executive believes constitute Good Reason hereunder and
shall describe in such notice in reasonable detail such event or events and
provide the Company a reasonable time to cure such breach or diminution (not to
exceed thirty (30) days).
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4. Termination Procedure.
(a) Notice of Termination. Any termination of the Executive's
employment by the Company or by the Executive during the Employment Period
(other than a termination on account of the death of Executive) shall be
communicated by written "Notice of Termination" to the other party hereto in
accordance with Section 12(a).
(b) Date of Termination. "Date of Termination" shall mean (i) if the
Executive's employment is terminated by his death, the date of his death, (ii)
if the Executive's employment is terminated pursuant to Section 3(b), thirty
(30) days after Notice of Termination, provided that the Executive shall not
have returned to the performance of his duties hereunder on a full-time basis
within such thirty (30) day period, (iii) if the Executive voluntarily
terminates his employment, the date specified in the notice given pursuant to
Section 3(e) herein which shall not be less than three months after the Notice
of Termination, (iv) if the Executive terminates his employment for Good Reason
pursuant to Section 3(f) herein, thirty (30) days after Notice of Termination,
and (v) if the Executive's employment is terminated for any other reason, the
date on which a Notice of Termination is given or any later date (within thirty
(30) days, or any alternative time period agreed upon by the parties, after the
giving of such notice) set forth in such Notice of Termination.
5. Termination Payments.
(a) Without Cause. In the event of the termination of the
Executive's employment during the Employment Period by the Company without Cause
(including a deemed termination without Cause as provided in Section 3(f)
herein), in addition to the Executive's accrued but unused vacation and Base
Salary through the Date of Termination (to the extent not theretofore paid), all
shares underlying the Option shall become immediately exercisable, and the
Executive shall be entitled to a lump-sum payment, payable within thirty (30)
days after the Date of Termination equal to the product of (A) either (i) three,
if the Date of Termination is on or before September 1, 2001, or (ii) two, if
the Date of Termination is after September 1, 2001 and prior to the Scheduled
Termination Date; and (B) the sum of (i) the highest rate of the Executive's
annualized Base Salary in effect at any time up to and including the Date of
Termination and (ii) the Annual Bonus earned by the Executive in the year
immediately preceding the Date of Termination; provided that the payments and
benefits provided herein are subject to and conditioned upon the Executive
executing a valid general release and waiver (in the form reasonably acceptable
to the Company), waiving all claims the Executive may have against the Company,
its successors, assigns, affiliates, executives, officers and directors, and
such payments and benefits are subject to and conditioned upon the Executive's
compliance with the Restrictive Covenants provided in Sections 8 and 9 hereof.
Except as provided in this Section 5(a) and Sections 2(d), 6 and 9(c), to the
extent applicable, the Company shall have no additional obligations under this
Agreement.
(b) Disability or Death. If the Executive's employment is terminated
during the Employment Period as a result of the Executive's death or Disability,
the Company shall pay the Executive or the Executive's estate, as the case may
be, within thirty (30) days following the Date of Termination: (i) the
Executive's accrued but unused vacation; (ii) his accrued but unpaid Base
Salary; (iii) any Annual Bonus earned by the Executive in respect of the
Company's fiscal year ending immediately prior to the Date of Termination; and
(iv) an amount equal to the product of (A) the Annual Bonus earned by the
Executive in the year immediately preceding the Date of Termination and (B) a
fraction, the numerator of which is the number of days in the Company's fiscal
year in which the Date of Termination occurs which are prior to the Date of
Termination and the denominator of which is 365. Except as
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provided in this Section 5(b) and in Sections 2(d), 6 and 9(c), to the extent
applicable, the Company shall have no additional obligations under this
Agreement.
(c) Cause or Voluntarily other than for Good Reason. If the
Executive's employment is terminated during the Employment Period by the Company
for Cause or voluntarily by the Executive for other than Good Reason, the
Company shall pay the Executive within thirty (30) days following the Date of
Termination: (i) the Executive's accrued but unused vacation through the Date of
Termination; and (ii) his accrued but unpaid Base Salary through the Date of
Termination. Except as provided in this Section 5(c) and in Sections 2(d), 6 and
9(c), to the extent applicable, the Company shall have no additional obligations
under this Agreement.
6. Employment Termination in Connection with a Change in Control.
(a) In the event the Company terminates the Executive's employment
without Cause (including a deemed termination without Cause as provided in
Section 3(f) herein) within two years following a Change in Control (as defined
below), then, in addition to all other benefits provided to the Executive under
the provisions of this Agreement, the Company shall provide the Executive with
continuation of medical benefits for the greater of (A) two years after the Date
of Termination or (B) the remainder of the Employment Period. These benefits
shall be provided to the Executive at the same cost, and at the same coverage
level, as in effect as of the Executive's Date of Termination. However, in the
event the cost and/or level of coverage shall change for all employees of the
Company, the cost and/or coverage level, likewise, shall change for the
Executive in a corresponding manner.
(b) For purposes of this Agreement, a "Change in Control" shall mean
the occurrence of any of the following events: (i) any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions, directly
or indirectly) of all or substantially all of the assets of the Company or the
Parent to any Person (as defined below) or group of related persons for purposes
of Section 13(d) of the Securities Exchange Act of 1934 (a "Group"), together
with any affiliates thereof (other than to TPG Semiconductor Holdings, LLC, TPG
Partners II, L.P. or any of their affiliates, including without limitation the
Parent (collectively referred to herein as "TPG II"), unless the transfer to TPG
II is part of a larger transaction which would otherwise cause a Change in
Control to occur); (ii) the approval by the holders of capital stock of the
Company or the Parent of any plan or proposal for the liquidation or dissolution
of the Company or the Parent; (iii) any Person or Group (other than TPG II)
shall become the owner, directly or indirectly, beneficially or of record, of
shares representing more of the aggregate voting power of the issued and
outstanding stock entitled to vote in the election of directors (the "Voting
Stock") of the Parent than TPG II owns, directly or indirectly, beneficially or
of record; (iv) the replacement of a majority of the Board or of the board of
directors of Parent over a two-year period from the directors who constituted
such board at the beginning of such period, and such replacement shall not have
been approved by a vote of at least a majority of the Board or of the board of
Parent, as applicable, then still in office who either were members of such
board at the beginning of such two-year period or whose election as a member of
such board was previously so approved or who were nominated by, or designees of,
TPG II; (v) any Person or Group other than TPG II shall have acquired the power
to elect a majority of the members of the Board or the board of directors of the
Parent; or (vi) a merger or consolidation of the Parent with another entity in
which holders of the common stock of the Parent immediately prior to the
consummation of the transaction hold, directly or indirectly, immediately
following the consummation of the transaction less than 50% of the common equity
interest in the surviving corporation in such transaction. Notwithstanding the
foregoing, in no event shall a Change in Control be deemed to occur as a result
of an initial public offering of the Parent's common stock.
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(c) For purposes of this Section 6, the term "Person" shall mean any
individual, partnership, corporation, limited liability company, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
7. Legal Fees.
In the event of any contest or dispute between the Company and the
Executive with respect to this Agreement or the Executive's employment
hereunder, each of the parties shall be responsible for their respective legal
fees and expenses.
8. Non-Solicitation.
During the Employment Period and for two (2) years thereafter, the
Executive hereby agrees not to, directly or indirectly, solicit or assist any
other person or entity in soliciting any employee of the Company or any of their
subsidiaries to perform services for any entity (other than the Company or their
subsidiaries), or attempt to induce any such employee to leave the employ of the
Company or their subsidiaries.
9.Confidentiality: Non-Disclosure: Non-Disparagement.
(a) The Executive hereby agrees that, during the Employment Period
and thereafter, he will hold in strict confidence any proprietary or
Confidential Information related to the Company and its affiliates. For purposes
of this Agreement, the term "Confidential Information" shall mean all
information of the Company or any of its affiliates (in whatever form) which is
not generally known to the public, including without limitation any inventions,
processes, methods of distribution, customer lists or customers' or trade
secrets.
(b) The Executive hereby agrees that, upon the termination of the
Employment Period, he shall not take, without the prior written consent of the
Company, any drawing, blueprint, specification or other document (in whatever
form) of the Company or its affiliates, which is of a confidential nature
relating to the Company or its affiliates, or, without limitation, relating to
its or their methods of distribution, or any description of any formulas or
secret processes and will return any such information (in whatever form) then in
his possession.
(c) In the Event the Executive's employment hereunder is terminated
pursuant to Section 3(d), 3(e) or 3(f) hereof, the Executive and the Company
shall mutually agree on the time, method and content of any public announcement
regarding the Executive's termination of employment hereunder and neither the
Executive nor the Company shall make any public statements which are
inconsistent with the information mutually agreed upon by the Company and the
Executive and the parties hereto shall cooperate with each other in refuting any
public statements made by other persons, which are inconsistent with the
information mutually agreed upon between the Executive and Company as described
above.
(d) The Executive hereby agrees not to defame or disparage the
Company, its affiliates and their officers, directors, members or executives,
and the Company hereby agrees that it shall not disparage or defame the
Executive through any official statement of the Company, provided that, in the
event the Executive's employment is terminated for Cause, the Company shall be
permitted, in its discretion, to disclose the facts and circumstances
surrounding such termination. The Executive hereby agrees to cooperate with the
Company in refuting any defamatory or disparaging remarks by any third party
made in respect of the Company or its affiliates or their directors, members,
officers or executives.
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10. Injunctive Relief
It is impossible to measure in money the damages that will accrue to
the Company in the event that the Executive breaches any of the restrictive
covenants provided in Sections 8 and 9 hereof. In the event that the Executive
breaches any such restrictive covenant, the Company shall be entitled to an
injunction restraining the Executive from violating such restrictive covenant
(without posting any bond). If the Company shall institute any action or
proceeding to enforce any such restrictive covenant, the Executive hereby waives
the claim or defense that the Company has an adequate remedy at law and agrees
not to assert in any such action or proceeding the claim or defense that the
Company has an adequate remedy at law. The foregoing shall not prejudice the
Company's right to require the Executive to account for and pay over to the
Company, and the Executive hereby agrees to account for and pay over, the
compensation, profits, monies, accruals or other benefits derived or received by
the Executive as a result of any transaction constituting a breach of any of the
restrictive covenants provided in Sections 8 and 9 hereof
11. Representations.
(a) The parties hereto hereby represent that they each have the
authority to enter into this Agreement, and the Executive hereby represents to
the Company that the execution of, and performance of duties under, this
Agreement shall not constitute a breach of or otherwise violate any other
agreement to which the Executive is a party.
(b) The Executive hereby represents to the Company that he will not
utilize or disclose any confidential information obtained by the Executive in
connection with his former employment with respect to his duties and
responsibilities hereunder.
12. Miscellaneous.
(a) Any notice or other communication required or permitted under
this Agreement shall be effective only if it is in writing and shall be deemed
to be given when delivered personally or four days after it is mailed by
registered or certified mail, postage prepaid, return receipt requested or one
day after it is sent by a reputable overnight courier service and, in each case,
addressed as follows (or if it is sent through any other method agreed upon by
the parties):
If to the Company:
Semiconductor Components Industries, LLC
0000 Xxxx XxXxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Board of Directors and Secretary
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with a copy to:
Xxxx Xxxx
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
If to the Executive:
Xxxxx Xxxxxxxx
Semiconductor Components Industries, LLC
0000 Xxxx XxXxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
With a copy to:
K. Xxxxx Xxxxxxx
Xxxxxxx & Xxxxxxx P.L.C.
Xxx Xxxx Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
or to such other address as any party hereto may designate by notice to the
others.
(b) This Agreement shall constitute the entire agreement among the
parties hereto with respect to the Executive's employment hereunder, and
supersedes and is in full substitution for any and all prior understandings or
agreements with respect to the Executive's employment (it being understood that
any stock options granted to the Executive shall be governed by the relevant
option plan and related stock option grant agreement and any other related
documents).
(c) This Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party or parties against whom or which
enforcement of such waiver is sought. The failure of any party hereto at any
time to require the performance by any other party hereto of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by any party hereto of a breach of any
provision hereof be taken or held to be a waiver of any succeeding breach of
such provision or a waiver of the provision itself or a waiver of any other
provision of this Agreement.
(d) The parties hereto acknowledge and agree that each party has
reviewed and negotiated the terms and provisions of this Agreement and has had
the opportunity to contribute to its revision. Accordingly, the rule of
construction to the effect that ambiguities are resolved against the drafting
party shall not be employed in the interpretation of this Agreement. Rather, the
terms of this Agreement shall be construed fairly as to both parties hereto and
not in favor or against either party.
(e) (i) This Agreement is binding on and is for the benefit of the
parties hereto and their respective successors, assigns, heirs, executors,
administrators and other legal representatives. Neither this Agreement nor any
right or obligation hereunder may be assigned by the Executive.
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(ii) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume this
Agreement in the same manner and to the same extent that the Company would have
been required to perform it if no such succession had taken place. As used in
the Agreement, "the Company" shall mean both the Company as defined above and
any such successor that assumes this Agreement, by operation of law or
otherwise.
(f) Any provision of this Agreement (or portion thereof) which is
deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction and subject to this Section, be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions thereof in such jurisdiction or rendering that or any other
provisions of this Agreement invalid, illegal, or unenforceable in any other
jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable
because its scope is considered excessive, such covenant shall be modified so
that the scope of the covenant is reduced only to the minimum extent necessary
to render the modified covenant valid, legal and enforceable. No waiver of any
provision or violation of this Agreement by Company shall be implied by
Company's forbearance or failure to take action.
(g) The Company may withhold from any amounts payable to the
Executive hereunder all federal, state, city or other taxes that the Company may
reasonably determine are required to be withheld pursuant to any applicable law
or regulation, (it being understood, that the Executive shall be responsible for
payment of all taxes in respect of the payments and benefits provided herein).
(h) The payments and other consideration to the Executive under this
Agreement shall be made without any right to offset.
(i) This Agreement shall be governed by and construed in accordance
with the laws of the State of Arizona without reference to its principles of
conflicts of law. The parties hereto hereby agree that any dispute, claim or
cause of action related to this Agreement or the Executive's employment
hereunder shall be commenced in Maricopa County, Arizona, and the parties hereby
submit to the exclusive jurisdiction of such courts and waive any claim of forum
non conveniens.
(j) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument. A facsimile of a signature shall be deemed to be and have the
effect of an original signature.
(k) The headings in this Agreement are inserted for convenience of
reference only and shall not be a part of or control or affect the meaning of
any provision hereof
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
Semiconductor Components Industries, LLC
________________________________________
Name:
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Title:
________________________________________
Xxxxx Xxxxxxxx
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC
/s/ Xxxxx Xxxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Vice President - HR
/s/ Xxxxx Xxxxxxxx
----------------------------------------
Xxxxx Xxxxxxxx
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