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EXHIBIT 10.11
AMENDED AND RESTATED
SEVERANCE PROTECTION AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT made as of the 29th day of October,
1998, by and between General Semiconductor, Inc. (the "Corporation"), and Xxxxxx
X. Xxxxxxxx (the "Executive"), hereby amends and restates the Stay Incentive and
Severance Protection Agreement between the Corporation and the Executive, dated
July 28, 1997.
WHEREAS, the Board of Directors of the Corporation (the "Board")
recognizes that the possibility of a Change in Control (as hereinafter defined)
exists and that the threat or the occurrence of a Change in Control can result
in significant distraction of the Corporation's key management personnel because
of the uncertainties inherent in such a situation;
WHEREAS, the Board has determined that it is essential and in the best
interest of the Corporation and its stockholders for the Corporation to retain
the services of the Executive in the event of a threat or occurrence of a Change
in Control and to ensure the Executive's continued dedication and efforts in
such event without undue concern for the Executive's personal financial and
employment security; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Corporation, particularly in the event of a threat or the occurrence of a
Change in Control, the Corporation desires to enter into this Agreement with the
Executive to provide the Executive with certain benefits in the event the
Executive's employment is terminated under circumstances described herein.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. Term of Agreement. This Agreement shall commence as of October 23,
1998, and shall continue in effect until December 31, 1999, (the "Term");
provided, however, that on January 1, 1999, and on each January 1 thereafter,
the Term shall automatically be extended for one (1) year unless either the
Executive or the Corporation shall have given written notice to the other at
least ninety (90) days prior thereto that the Term shall not be so extended;
provided, further, however, that following the occurrence of a Change in
Control, the Term shall not expire prior to the expiration of twenty-four (24)
months after such occurrence.
2. Termination of Employment. If, during the Term, the Executive's
employment with the Corporation and its Affiliates shall be terminated within
twenty-four (24) months following a Change in Control, the Executive shall be
entitled to the following compensation and benefits:
(a) If the Executive's employment with the Corporation and its
Affiliates shall be terminated (1) by the Corporation for Cause or Disability,
or (2) by reason of the Executive's death, the Corporation shall pay to the
Executive his Accrued Compensation. In addition to the foregoing, if the
Executive's employment is terminated by the Corporation for Disability or by
reason of the Executive's death, the Corporation shall pay to the Executive or
his beneficiaries a Pro Rata Bonus. The Executive's entitlement to any other
compensation or benefits shall be determined in accordance with the
Corporation's employee benefits plans and other applicable programs and
practices then in effect.
(b) If the Executive's employment with the Corporation and its
Affiliates shall be terminated (1) by the Corporation for other than Cause,
Disability or the Executive's death, (2) by the Executive for any reason, the
Executive shall be entitled to the following:
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(1) the Corporation shall pay the Executive all
Accrued Compensation and a Pro Rata Bonus;
(2) the Corporation shall pay the Executive as
severance pay and in lieu of any further compensation for periods subsequent to
the Termination Date, an amount equal to two and one-half (2 and 1/2) times the
sum of (A) the Executive's Base Amount and (B) the Executive's Bonus Amount;
(3) for thirty (30) months after such termination
(the "Continuation Period"), the Corporation shall at its expense continue on
behalf of the Executive and his dependents and beneficiaries the life insurance,
disability, medical, dental and hospitalization coverages and benefits provided
to the Executive immediately prior to the Change in Control or, if greater, the
coverages and benefits provided at any time thereafter. The coverages and
benefits (including deductibles and costs) provided in this Section 2(b)(3)
during the Continuation Period shall be no less favorable to the Executive and
his dependents and beneficiaries, than the most favorable of such coverages and
benefits referred to above. The Corporation's obligation hereunder with respect
to the foregoing coverages and benefits shall be reduced to the extent that the
Executive obtains any such coverages and benefits pursuant to a subsequent
employer's benefit plans, in which case the Corporation may reduce any of the
coverages or benefits it is required to provide the Executive hereunder so long
as the aggregate coverages and benefits of the combined benefit plans is no less
favorable to the Executive than the coverages and benefits required to be
provided hereunder. This Section 2(b)(3) shall not be interpreted so as to limit
any benefits to which the Executive, his dependents or beneficiaries may be
entitled under any of the Corporation's employee benefit plans, programs or
practices following the Executive's termination of employment, including without
limitation, retiree medical and life insurance benefits;
(4) the Corporation shall pay or reimburse the
Executive for the costs, fees and expenses of outplacement assistance services
(not to exceed twenty-five (25%) of the sum of (A) the Executive's Base Amount
and (B) the Executive's Bonus Amount) provided by any outplacement agency
selected by the Executive;
(5) the Corporation shall pay or reimburse the
Executive up to $2,000 for tax and financial planning services in respect of the
calendar year in which the payments provided for in Section 2(b)(2) are paid to
the Executive; and
(6) the Corporation shall pay or reimburse the
Executive for the cost of relocation (in accordance with the Corporation's
relocation policy) to the Executive's place of residence immediately prior to
any relocation the Executive made for purposes of employment by the Corporation
after July 1, 1995.
(c) If the Executive's employment is terminated by the
Corporation without Cause (1) within six (6) months prior to a Change in Control
or (2) at any time prior to the date of a Change in Control but the Executive
reasonably demonstrates that such termination (A) was at the request of a third
party who has indicated an intention or taken steps reasonably calculated to
effect a Change in Control (a "Third Party") and who effectuates a Change in
Control or (B) otherwise arose in connection with, or in anticipation of, a
Change in Control which has been threatened or proposed and which actually
occurs, such termination shall be deemed to have occurred after a Change in
Control, provided a Change in Control shall actually have occurred.
(d) (1) Effect of Section 280G of the Internal Revenue Code.
Except as provided in Section 2(d)(2), in the event it shall be determined that
any payment (other than the payment provided for in this Section 2(d)) or
distribution of any type to or for the benefit of the Executive, by the
Corporation, any Affiliate of the Corporation, any Person who acquires ownership
or effective control of the Corporation or ownership of a substantial portion of
the Corporation's assets (within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations
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thereunder) or any Affiliate of such Person, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (the "Payments"), is or will be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest and penalties, are
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any income tax,
employment tax or Excise Tax, imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.
(2) Notwithstanding Section 2(d)(1) or any other
provision of this Agreement to the contrary, in the event that the Payments
(other than the payment provided for in this Section 2(d)) exceed by less than
$10,000 an amount where no Payment to be made or benefit to be provided to the
Executive would be subject to an Excise Tax, the Executive will not be entitled
to a Gross-Up Payment and the Payments shall be reduced (but not below zero) to
the extent necessary so that no Payment to be made or benefit to be provided to
the Executive shall be subject to the Excise Tax. Unless the Executive shall
have given prior written notice specifying a different order to the Corporation
to effectuate the foregoing, the Corporation shall reduce or eliminate the
Payments, by first reducing or eliminating the portion of the Payments which are
not payable in cash and then by reducing or eliminating cash payments, in each
case in reverse order beginning with payments or benefits which are to be paid
the farthest in time from the "Determination" (as defined below). Any notice
given by the Executive pursuant to the preceding sentence shall take precedence
over the provisions of any other plan, arrangement or agreement governing the
Executive's rights and entitlements to any benefits or compensation.
(3) The determination of whether the Payments shall
be reduced pursuant to this Agreement and the amount of such reduction, all
mathematical determinations, and all determinations as to whether any of the
Payments are "parachute payments" (within the meaning of Section 280G of the
Code), that are required to be made under this Section 2(d), including
determinations as to whether a Gross-Up Payment is required, the amount of such
Gross-Up Payment and amounts relevant to the last sentence of this Section
2(d)(3), shall be made by an independent accounting firm selected by the
Executive from among the five (5) largest accounting firms in the United States
(the "Accounting Firm"), which shall provide its determination (the
"Determination"), together with detailed supporting calculations regarding the
amount of any Gross-Up Payment and any other relevant matter, both to the
Corporation and the Executive by no later than ten (10) days following the
Termination Date, if applicable, or such earlier time as is requested by the
Corporation or the Executive (if the Executive reasonably believes that any of
the Payments may be subject to the Excise Tax). If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive and the Corporation with an opinion reasonably acceptable to the
Executive and the Corporation that no Excise Tax is payable (including the
reasons therefor) and that the Executive has substantial authority not to report
any Excise Tax on his federal income tax return. If a Gross-Up Payment is
determined to be payable, it shall be paid to the Executive within twenty (20)
days after the Determination (and all accompanying calculations and other
material supporting the Determination) is delivered to the Corporation by the
Accounting Firm. Any determination by the Accounting Firm shall be binding upon
the Corporation and the Executive, absent manifest error. As a result of
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments not made by the Corporation should have been made
("Underpayment"), or that Gross-Up Payments will have been made by the
Corporation which should not have been made ("Overpayments"). In either such
event, the Accounting Firm shall determine the amount of the Underpayment or
Overpayment that has occurred. In the case of an Underpayment, the amount of
such Underpayment (together with any interest and penalties payable by the
Executive as a result of such Underpayment) shall be promptly paid by the
Corporation to or for the benefit of the Executive. In the case of an
Overpayment, the Executive shall, at the direction and expense of the
Corporation, take such steps as are reasonably necessary (including the filing
of returns and claims for refund), follow reasonable instructions from, and
procedures established by, the Corporation, and otherwise reasonably cooperate
with the Corporation to correct such Overpayment,
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provided, however, that (i) the Executive shall not in any event be obligated to
return to the Corporation an amount greater than the net after-tax portion of
the Overpayment that he has retained or has recovered as a refund from the
applicable taxing authorities and (ii) if a Gross-Up Payment is determined to be
payable, this provision shall be interpreted in a manner consistent with an
intent to make the Executive whole, on an after-tax basis, from the application
of the Excise Tax, it being understood that the correction of an Overpayment may
result in the Executive repaying to the Corporation an amount which is less than
the Overpayment. The cost of all such determinations made pursuant to this
Section 2(d) shall be paid by the Corporation.
(e) The amounts provided for in Sections 2(a) and 2(b)(1) and
(2) shall be paid in a single lump sum cash payment within ten (10) days after
the Executive's Termination Date (or earlier, if required by applicable law).
(f) The Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any subsequent employment
except as provided in Section 2(b)(3).
(g) The severance pay and benefits provided for in this
Section 2 shall be in lieu of any other severance pay to which the Executive may
be entitled under the Corporation's Severance Plan or any other plan, agreement
or arrangement of the Corporation or any of its Affiliates.
3. Notice of Termination. Following a Change in Control, any intended
termination of the Executive's employment by the Corporation shall be
communicated by a Notice of Termination from the Corporation to the Executive,
and any intended termination of the Executive's employment by the Executive
shall be communicated by a Notice of Termination from the Executive to the
Corporation.
4. Fees and Expenses. The Corporation shall pay all legal fees and
related expenses (including the costs of experts, evidence and counsel) incurred
by the Executive as they become due as a result of (a) the termination of the
Executive's employment by the Corporation or by the Executive (including all
such fees and expenses, if any, incurred in contesting, defending or disputing
the basis for any such termination of employment), (b) the Executive's hearing
before the Board of Directors of the Corporation as contemplated in Section 13.6
of this Agreement or (c) the Executive seeking to obtain or enforce any right or
benefit provided by this Agreement or by any other plan or arrangement
maintained by the Corporation under which the Executive is or may be entitled to
receive benefits.
5. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including any Notice of
Termination) shall be in writing, shall be signed by the Executive if to the
Corporation or by a duly authorized officer of the Corporation if to the
Executive, and shall be deemed to have been duly given when personally delivered
or sent by certified mail, return receipt requested, postage prepaid, addressed
to the respective addresses last given by each party to the other, provided that
all notices to the Corporation shall be directed to the attention of the Board
with a copy to the Secretary of the Corporation. All notices and communications
shall be deemed to have been received on the date of delivery thereof or on the
third business day after the mailing thereof, except that notice of change of
address shall be effective only upon receipt.
6. Nature of Rights. Except as provided in Section 2(g), nothing in
this Agreement shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan or program provided
by the Corporation or any Affiliate of the Corporation and for which the
Executive may qualify, nor shall anything herein limit or reduce such rights as
the Executive may have under any other agreements with the Corporation or any
Affiliate of the Corporation. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan or program of the
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Corporation or any Affiliate of the Corporation shall be payable in accordance
with such plan or program, except as explicitly modified by this Agreement.
7. Settlement of Claims. The Corporation's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, defense, recoupment, or other right which
the Corporation may have against the Executive or others.
8. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and the Corporation. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by any party which are not expressly set
forth in this Agreement.
9. Successors; Binding Agreement.
(a) This Agreement shall be binding upon and shall inure to
the benefit of the Corporation and its respective Successors and Assigns. The
Corporation shall require its respective Successors and Assigns to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform it if no such
succession or assignment had taken place.
(b) Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal personal representative.
10. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York without giving
effect to the conflict of laws principles thereof. Any action brought by any
party to this Agreement shall be brought and maintained in a court of competent
jurisdiction in the State of New York.
11. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto, and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto,
with respect to the subject matter hereof, including without limitation, the
Stay Incentive and Severance Protection Agreement, dated July 28, 1997, between
the Executive and the Corporation.
13. Definitions.
13.1. Accrued Compensation. For purposes of this Agreement,
"Accrued Compensation" shall mean all amounts of compensation for services
rendered to the Corporation or any of its Affiliates that have been earned or
accrued through the Termination Date but that have not been paid as of the
Termination Date including (a) base salary, (b) reimbursement for reasonable and
necessary business expenses incurred by the Executive on behalf of the
Corporation or of its Affiliates of the Corporation during the period ending on
the Termination Date, (c) vacation pay and (d) bonuses and
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incentive compensation; provided, however, that Accrued Compensation shall not
include any amounts described in clause (a) or clause (d) that have been
deferred pursuant to any salary reduction or deferred compensation elections
made by the Executive.
13.2. Affiliate. For purposes of this Agreement, "Affiliate"
means, with respect to any Person, any entity, directly or indirectly,
controlled by, controlling or under common control with such Person.
13.3. Base Amount. For purposes of this Agreement, "Base
Amount" shall mean the Executive's annual base salary at the rate in effect as
of the date of a Change in Control or, if greater, at any time thereafter,
determined without regard to any salary reduction or deferred compensation
elections made by the Executive.
13.4. "Beneficial Owner," "Beneficially Owned" and
"Beneficially Owning" shall have the meanings applicable under Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
13.5. Bonus Amount. For purposes of this Agreement, "Bonus
Amount" shall mean the target annual bonus payable to the Executive under the
Incentive Plan in respect of the fiscal year of the Corporation during which the
Termination Date occurs or, if greater, the target annual bonus payable to the
Executive under the Incentive Plan in respect of the fiscal year of the
Corporation during which the Change in Control occurs.
13.6. Cause. For purposes of this Agreement, a termination of
employment is for "Cause" if the Executive has been convicted of a felony or the
termination is evidenced by a resolution adopted in good faith by two-thirds of
the Board of Directors of the Corporation that the Executive:
(a) intentionally and continually failed
substantially to perform his reasonably assigned duties with the Corporation and
its Affiliates (other than a failure resulting from the Executive's incapacity
due to physical or mental illness or from the assignment to the Executive of
duties inconsistent with those he performs as of a Change in Control) which
failure continued for a period of at least thirty (30) days after a written
notice of demand for substantial performance, signed by a duly authorized
officer of the Corporation, has been delivered to the Executive specifying the
manner in which the Executive has failed substantially to perform, or
(b) intentionally engaged in conduct which is
demonstrably and materially injurious to the Corporation and its Affiliates;
provided, however, that no termination of the Executive's employment shall be
for Cause as set forth in this Section 13.6(b) until (1) there shall have been
delivered to the Executive a copy of a written notice, signed by a duly
authorized officer of the Corporation, setting forth that the Executive was
guilty of the conduct set forth in this Section 13.6(b) and specifying the
particulars thereof in detail, and (2) the Executive shall have been provided an
opportunity to be heard in person by the Board of Directors of the Corporation
(with the assistance of the Executive's counsel if the Executive so desires).
No act, nor failure to act, on the Executive's part,
shall be considered "intentional" unless the Executive has acted, or failed to
act, with a lack of good faith and with a lack of reasonable belief that the
Executive's action or failure to act was in the best interest of the Corporation
and its Affiliates. Notwithstanding anything contained in this Agreement to the
contrary, no failure to perform by the Executive after a Notice of Termination
is given to the Corporation by the Executive shall constitute Cause for purposes
of this Agreement.
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13.7. Change in Control. "Change in Control" shall mean any of
the following:
(a) the acquisition by any Person, other than
Instrument Partners or Forstmann Little & Co. Subordinated Debt and Equity
Management Buyout Partnership-IV or any of their Affiliates (collectively, the
"Forstmann Little Companies") of Beneficial Ownership of Voting Securities
which, when added to the Voting Securities then Beneficially Owned by such
Person, would result in such Person Beneficially Owning (1) 33% or more of the
combined Voting Power of the Corporation's then outstanding Voting Securities
and (2) a number of Voting Securities greater than the aggregate number of
Voting Securities then Beneficially Owned by the Forstmann Little Companies;
provided, however, that for purposes of this paragraph (a), a Person shall not
be deemed to have made an acquisition of Voting Securities if such Person: (A)
acquires Voting Securities as a result of a stock split, stock dividend or other
corporate restructuring in which all stockholders of the class of such Voting
Securities are treated on a pro rata basis; (B) acquires the Voting Securities
directly from the Corporation; (C) becomes the Beneficial Owner of 33% or more
of the combined Voting Power of the Corporation's then outstanding Voting
Securities solely as a result of the acquisition of Voting Securities by the
Corporation or any Subsidiary which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares Beneficially Owned by
such Person, provided that if (x) a Person would own at least such percentage as
a result of the acquisition by the Corporation or any Subsidiary and (y) after
such acquisition by the Corporation or any Subsidiary, such Person acquires
Voting Securities, then an acquisition of Voting Securities shall have occurred;
(D) is the Corporation or any corporation or other Person of which a majority of
its voting power or its equity securities or equity interest is owned directly
or indirectly by the Corporation (a "Controlled Entity"); or (E) acquires Voting
Securities in connection with a "Non-Control Transaction" (as defined in
paragraph (c) below); or
(b) the individuals who, as of the Effective Date,
are members of the Board (the "Incumbent Board") cease for any reason to
constitute at least two-thirds of the Board; provided, however, that if either
the election of any new director or the nomination for election of any new
director by the Corporation's stockholders was approved by a vote of at least
two-thirds of the Incumbent Board prior to such election or nomination, such new
director shall be considered as a member of the Incumbent Board; provided
further, however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a
"Proxy Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(c) approval by stockholders of the Corporation of:
(1) a merger, consolidation or
reorganization involving the Corporation (a "Business Combination"), unless
(A) the stockholders of the
Corporation, immediately before the Business Combination, own, directly or
indirectly immediately following the Business Combination, at least a majority
of the combined voting power of the outstanding voting securities of the
corporation resulting from the Business Combination (the "Surviving
Corporation") in substantially the same proportion as their ownership of the
Voting Securities immediately before the Business Combination, and
(B) the individuals who were
members of the Incumbent Board immediately prior to the execution of the
agreement providing for the Business Combination constitute at least a majority
of the members of the Board of Directors of the Surviving Corporation, and
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(C) no Person (other than the
Corporation or any Controlled Entity, a trustee or other fiduciary holding
securities under one or more employee benefit plans or arrangements (or any
trust forming a part thereof) maintained by the Corporation, the Surviving
Corporation or any Controlled Entity, or any Person who, immediately prior to
the Business Combination, had Beneficial Ownership of 33% or more of the then
outstanding Voting Securities) has Beneficial Ownership of 33% or more of the
combined voting power of the Surviving Corporation's then outstanding voting
securities (a Business Combination satisfying the conditions of clauses (A), (B)
and (C) of this subparagraph (1) shall be referred to as a "Non-Control
Transaction");
(2) a complete liquidation or dissolution of
the Corporation; or
(3) the sale or other disposition of all or
substantially all of the assets of the Corporation (other than a transfer to a
Controlled Entity).
Notwithstanding the foregoing, a Change of Control shall not
be deemed to occur solely because 33% or more of the then outstanding Voting
Securities is Beneficially Owned by (x) a trustee or other fiduciary holding
securities under one or more employee benefit plans or arrangements (or any
trust forming a part thereof) maintained by the Corporation or any Controlled
Entity or (y) any corporation which, immediately prior to its acquisition of
such interest, is owned directly or indirectly by the stockholders of the
Corporation in the same proportion as their ownership of stock in the
Corporation immediately prior to such acquisition.
13.8. Corporation. For purposes of this Agreement, all
references to the Corporation shall include its Successors and Assigns.
13.9. Disability. For purposes of this Agreement, "Disability"
shall mean a physical or mental infirmity which impairs the Executive's ability
to substantially perform his duties with the Corporation for six (6) consecutive
months, and within the time period set forth in a Notice of Termination given to
the Executive (which time period shall not be less than thirty (30) days), the
Executive shall not have returned to full-time performance of his duties;
provided, however, that if the Corporation's Long Term Disability Plan, or any
successor plan (the "Disability Plan"), is then in effect, the Executive shall
not be deemed disabled for purposes of this Agreement unless the Executive is
also eligible for "Total Disability" (as defined in the Disability Plan)
benefits (or similar benefits in the event of a successor plan) under the
Disability Plan.
13.10. Incentive Plan. For purposes of this Agreement,
"Incentive Plan" shall mean the General Semiconductor, Inc. Annual Incentive
Plan, or any successor annual incentive plan, maintained by the Corporation.
13.11. Notice of Termination. For purposes of this Agreement,
following a Change in Control, "Notice of Termination" shall mean a written
notice of termination of the Executive's employment, signed by the Executive if
to the Corporation or by a duly authorized officer of the Corporation if to the
Executive, which indicates the specific termination provision in this Agreement,
if any, relied upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
13.12. Person. For purposes of this Agreement, "Person" shall
mean a person within the meaning of Sections 13(d) and 14(d) of the Exchange
Act.
13.13. Pro Rata Bonus. For purposes of this Agreement, "Pro
Rata Bonus" shall mean the Bonus Amount multiplied by a fraction of the
numerator of which is the number of days in the
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year in which an Executive's Termination Date occurs through the termination
date and the denominator of which is 365.
13.14. Subsidiary. For purposes of this Agreement,
"Subsidiary" shall mean a corporation as defined in Section 424(f) (or a
successor provision to such section) of the Internal Revenue Code of 1986, as
amended, and regulations and rulings thereunder, with the Corporation being
treated as the employer corporation for purposes of this definition.
13.15. Successors and Assigns. For purposes of this Agreement,
"Successors and Assigns" shall mean, with respect to the Corporation or the
Corporation, a corporation or other entity acquiring all or substantially all
the assets and business of the Corporation or the Corporation, as the case may
be (including this Agreement) whether by operation of law or otherwise.
13.16. Termination Date. For purposes of this Agreement,
"Termination Date" shall mean (a) in the case of the Executive's death, his date
of death, (b) if the Executive's employment is terminated for Disability, thirty
(30) days after Notice of Termination is given (provided that the Executive
shall not have returned to the performance of his duties on a full-time basis
during such thirty (30) day period) and (c) if the Executive's employment is
terminated for any other reason, the date specified in the Notice of Termination
(which, in the case of a termination for Cause shall not be less than thirty
(30) days, and in the case of a termination by the Executive shall not be more
than sixty (60) days, from the date such Notice of Termination is given);
provided, however, that if within thirty (30) days after any Notice of
Termination is given the party receiving such Notice of Termination in good
faith notifies the other party that a dispute exists concerning the basis for
the termination, the Termination Date shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties, or by the
final judgment, order or decree of a court of competent jurisdiction (the time
for appeal therefrom having expired and no appeal having been taken).
Notwithstanding the pendency of any such dispute, the Corporation shall continue
to pay the Executive his Base Amount and continue the Executive as a participant
in all compensation, incentive, bonus, pension, profit sharing, medical,
hospitalization, dental, life insurance and disability benefit plans in which he
was participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this Section 13.17 whether or
not the dispute is resolved in favor of the Corporation, and the Executive shall
not be obligated to repay to the Corporation any amounts paid or benefits
provided pursuant to this sentence.
13.17. Voting Power. For purposes of this Agreement, "Voting
Power" shall mean the combined voting power of the then outstanding Voting
Securities.
13.18. Voting Securities. For purposes of this Agreement,
"Voting Securities" shall mean, with respect to with respect to General
Semiconductor, Inc. or any Subsidiary, any securities issued by General
Semiconductor, Inc. or such Subsidiary, respectively, which generally entitle
the holder thereof to vote for the election of directors of General
Semiconductor, Inc.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by their duly authorized officers and the Executive has executed this
Agreement as of the day and year first above written.
GENERAL SEMICONDUCTOR, INC.
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Xxxxxx X. Xxxxxx
Chief Financial Officer
By: /s/ XXXXXX X. XXXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxxx
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