Exhibit 10.1(a)
TERMINATION AGREEMENT
TERMINATION AGREEMENT (this "Agreement") made as of January 29, 2002, by
and between Xxxxxxx Xxxxxxxx ("Xxxxxxxx") and Semiconductor Components
Industries, LLC dba ON Semiconductor, a Delaware corporation, and all of its
affiliates (the "Company").
WHEREAS, the Company engaged Xxxxxxxx as its Senior Vice President and
Director of Sales and Marketing pursuant to an employment agreement dated
September 13, 1999 (the "Employment Agreement");
WHEREAS, the Company provided Xxxxxxxx and his spouse a loan in the
principal amount of $1,000,000 (the "Loan") in accordance with a promissory note
dated March 9, 2001 (the "Note"), in connection with Xxxxxxxx'x and his spouse's
residence located at 0000 X. Xxxxxxxx Xxxx, Xxxxxxxx Xxxxxx, Xxxxxxx, and
Xxxxxxxx and his spouse granted the Company a security interest in said property
in the form of a first priority deed of trust (the "Deed of Trust");
WHEREAS, the parties wish to confirm the termination of Xxxxxxxx'x
employment with the Company and set forth their agreement as to the manner in
which Xxxxxxxx'x employment with the Company will be closed out;
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and for other good and valuable consideration, receipt of which is hereby
acknowledged, the Company and Xxxxxxxx agree as follows:
1. CONFIRMATION OF TERMINATION. The Parties hereby now
acknowledge and confirm that the Employment has terminated effective as of
January 28, 2002 (the "Termination Date").
2. TERMINATION PAYMENTS AND OTHER CONSIDERATION.
(a) Pursuant to Section 5(a) of the Employment Agreement, no later
than thirty (30) days after the Effective Date of this Agreement (as defined in
Section 11(c) hereof), the Company shall pay Xxxxxxxx Seven Hundred Thousand
Dollars ($700,000) which represents two times the sum of (x) the highest rate of
Xxxxxxxx'x annualized Base Salary in effect any time up to and including the
Date of Termination (Three Hundred Fifty Thousand Dollars [$350,000]) and (y)
Xxxxxxxx'x Annual Bonus (as defined in Section 2(b) of the Employment Agreement)
earned in respect of Fiscal Year 2001 ($0).
(b) In addition to the cash payment described in Section 2(a) above,
the Company agrees to the following other consideration ("Other Consideration"):
i. For the six (6) month period immediately following the
Termination Date, the Company will pay for continuation of medical
benefits for Xxxxxxxx and his immediate family under the Company's
group medical plan as amended from time to time and for which
Xxxxxxxx is eligible pursuant to a valid COBRA election timely made
by Xxxxxxxx without administrative fees. The foregoing
notwithstanding, in the event that Xxxxxxxx becomes eligible for
comparable
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medical benefits in connection with new employment during the six
(6) month period immediately following the Termination Date, the
coverage provided by the Company under this Subsection 2(b)(i) shall
terminate immediately. Xxxxxxxx agrees that he will notify the
Company promptly of his subsequent employment and eligibility for
benefits.
ii. For the twelve (12) month period immediately following
the Termination Date, the Company will pay for the actual costs
(subject to and up to the maximum amount stated below) incurred by
Xxxxxxxx in order to relocate himself and his immediate family to a
new place of primary residence within the United States. The
foregoing notwithstanding, in the event that Xxxxxxxx is eligible to
receive any relocation benefits in connection with new employment
during the twelve (12) month period immediately following the
Termination Date, the Company's obligation in this Subsection
2(b)(ii) to pay actual relocation costs shall be limited to the
actual amount of relocation not covered by a new employer. The
Company's total obligation to pay for Xxxxxxxx'x actual relocation
costs under this Section shall not exceed Fifteen Thousand Dollars
($15,000).
iii.Pursuant to Section 2(c) of the Employment Agreement and
the SCG Holding Corporation 1999 Founders Stock Option Plan (the
"Option Plan") and the Stock Option Grant Agreement dated September
9, 1999 between Xxxxxxxx and the Company (the "Grant Agreement"),
the Company granted Xxxxxxxx an employee stock option (the "Option")
with respect to Four Hundred Sixty Six Thousand Six Hundred Sixty
Seven (466,667) shares of the Company's common stock (after the
Company's reverse stock split of February 17, 2000). As of the
Termination Date, fifty percent (50%) of the aggregate number of
shares subject to the Option (i.e., Two Hundred Thirty Three
Thousand Three Hundred Thirty Three [233,333]) were exercisable
pursuant to the Option Plan and Grant Agreement. The Company shall
cause an additional twelve and one-half percent (12-1/2%) of the
aggregate number of shares subject to the Option (i.e., Fifty Eight
Thousand Three Hundred Thirty Three [58,333]) to become exercisable
as of the Effective Date of this Agreement. Other than the foregoing
acceleration of exercisability with respect to twelve and one-half
percent (12-1/2%) of the aggregate number of shares subject to the
Option, all other terms and conditions of the Option Plan and the
Grant Agreement shall remain in full force and effect.
(c) The Termination Payments and Other Consideration (described in
Sections 2(a) and 2(b) above) shall be reduced by any required tax withholdings.
The Termination Payments and Other Consideration shall not be taken into account
as compensation and no service credit shall be given after the Termination Date
for purposes of determining the benefits payable under any other plan, program,
agreement or arrangement of the Company. Xxxxxxxx acknowledges that, except for
the Termination Payments and Other Consideration agreed to herein, he is not
entitled to any payment in the nature of severance or termination pay from the
Company.
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3. PROMISSORY NOTE AND DEED OF TRUST.
Pursuant to the terms of the Loan, provided to Xxxxxxxx and his
spouse in accordance with the Note, Xxxxxxxx previously agreed to pay to the
Company the entire amount of Principal Amount (as defined in the Note) plus
Interest (as defined in the Note) due under the Note no later than ninety (90)
days after the Termination Date. Xxxxxxxx and the Company agree to amend the
Note to provide that, notwithstanding Xxxxxxxx'x termination of employment, the
Loan shall remain outstanding for the one hundred fifty (150) days immediately
following the Termination Date. On the last day of such one hundred fifty (150)
day period (or the next business day, if the last day of such one-hundred fifty
(150) day period is not a business day), the entire Principal Amount plus
Interest (to the extent not yet paid) shall become immediately due and payable.
Xxxxxxxx hereby agrees to execute and deliver any documents or other materials
that the Company determines are necessary to evidence the above-described
agreement and to continue without interruption or impairment of the Company's
security interest in the Property (as defined in the Note).
4. GENERAL RELEASE AND WAIVER.
(a) XXXXXXXX HEREBY RELEASES, REMISES AND ACQUITS THE COMPANY AND
ALL OF ITS AFFILIATES, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
MEMBERS, PARTNERS, SHAREHOLDERS, SUCCESSORS AND ASSIGNS (COLLECTIVELY REFERRED
TO HEREIN AS THE "RELEASEES"), JOINTLY AND SEVERALLY, FROM ANY AND ALL CLAIMS,
KNOWN OR UNKNOWN, WHICH XXXXXXXX OR XXXXXXXX'X HEIRS, SUCCESSORS OR ASSIGNS HAVE
OR MAY HAVE AGAINST ANY RELEASEE ARISING ON OR PRIOR TO THE DATE OF THIS
AGREEMENT AND ANY AND ALL LIABILITY WHICH ANY SUCH RELEASEE MAY HAVE TO
XXXXXXXX, WHETHER DENOMINATED CLAIMS, DEMANDS, CAUSES OF ACTION, OBLIGATIONS,
DAMAGES OR LIABILITIES ARISING FROM ANY AND ALL BASES, HOWEVER DENOMINATED,
INCLUDING BUT NOT LIMITED TO THE AGE DISCRIMINATION IN EMPLOYMENT ACT, THE
AMERICANS WITH DISABILITIES ACT OF 1990, THE FAMILY AND MEDICAL LEAVE ACT OF
1993, TITLE VII OF THE UNITED STATES CIVIL RIGHTS ACT OF 1964, 42 U.S.C. Section
1981, THE ARIZONA CIVIL RIGHTS ACT, THE ARIZONA EMPLOYMENT PROTECTION ACT, OR
ANY OTHER FEDERAL, STATE, OR LOCAL LAW AND ANY WORKERS' COMPENSATION OR
DISABILITY CLAIMS UNDER ANY SUCH LAWS. THIS RELEASE INCLUDES BUT IS NOT LIMITED
TO CLAIMS ARISING FROM AND DURING XXXXXXXX'X EMPLOYMENT RELATIONSHIP WITH THE
COMPANY AND ITS AFFILIATES OR AS A RESULT OF THE TERMINATION OF SUCH
RELATIONSHIP. XXXXXXXX FURTHER AGREES THAT XXXXXXXX WILL NOT FILE OR PERMIT TO
BE FILED ON XXXXXXXX'X BEHALF ANY SUCH CLAIM. NOTWITHSTANDING THE PRECEDING
SENTENCE OR ANY OTHER PROVISION OF THIS AGREEMENT, THIS RELEASE IS NOT INTENDED
TO INTERFERE WITH XXXXXXXX'X RIGHT TO FILE A CHARGE WITH THE EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION IN CONNECTION WITH ANY CLAIM HE BELIEVES HE MAY HAVE
AGAINST ANY OF THE RELEASEES. HOWEVER, BY EXECUTING THIS AGREEMENT, XXXXXXXX
HEREBY WAIVES THE RIGHT TO RECOVER IN ANY PROCEEDING ROHLEDER MAY BRING BEFORE
THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION OR ANY STATE HUMAN RIGHTS COMMISSION
OR IN ANY PROCEEDING BROUGHT BY THE
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EQUAL EMPLOYMENT OPPORTUNITY COMMISSION OR ANY STATE HUMAN RIGHTS COMMISSION ON
XXXXXXXX'X BEHALF. THIS RELEASE IS FOR ANY RELIEF, NO MATTER HOW DENOMINATED,
INCLUDING, BUT NOT LIMITED TO, INJUNCTIVE RELIEF, WAGES, BACK PAY, FRONT PAY,
COMPENSATORY DAMAGES, OR PUNITIVE DAMAGES. THIS RELEASE SHALL NOT APPLY TO ANY
OBLIGATION OF THE COMPANY PURSUANT TO THIS AGREEMENT.
(b) XXXXXXXX ACKNOWLEDGES THAT THE TERMINATION PAYMENTS HE IS
RECEIVING PURSUANT TO SECTION 2(a) OF THIS AGREEMENT, AND OTHER CONSIDERATION
DESCRIBED IN SECTION 2(b), IN CONNECTION WITH THE FOREGOING RELEASE ARE IN
ADDITION TO ANYTHING OF VALUE TO WHICH XXXXXXXX ALREADY IS ENTITLED FROM THE
COMPANY.
5. RESTRICTIVE COVENANTS.
Xxxxxxxx hereby acknowledges and agrees that he shall be subject to
the Restrictive Covenants and provisions of Sections 8, 9, and 10 of the
Employment Agreement and such provisions shall remain in full force and effect
as if fully stated herein pursuant to their terms.
6. COMPANY PROPERTY, CONFIDENTIAL OR PROPRIETARY INFORMATION
AND RESIGNATION LETTER.
Xxxxxxxx acknowledges and agrees that he shall return any and all
Company property and confidential or proprietary information (in whatever form)
to the Company on or before the Effective Date. Upon execution of this
Agreement, Xxxxxxxx shall sign and return to the Company a resignation letter in
the form of the letter attached hereto as EXHIBIT 1.
7. ACKNOWLEDGEMENT OF CONDITIONAL PAYMENTS.
Xxxxxxxx acknowledges and agrees that the Termination Payments and
Other Consideration provided in Section 2 hereof are conditioned upon and
subject to Xxxxxxxx complying with his obligations under Section 4, 5 and 6
hereof.
8. NO ADMISSION.
This Agreement does not constitute an admission of liability or
wrongdoing of any kind by the Company or its affiliates.
9. HEIRS AND ASSIGNS.
The terms of this Agreement shall be binding on the parties hereto
and their respective successors and assigns.
10. GENERAL PROVISIONS.
(a) Integration.
This Agreement and the Restrictive Covenants provided in Sections 8,
9, and 10 of the Employment Agreement constitute the entire understanding
between the Company and
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Xxxxxxxx with respect to the subject matter hereof and supersede all prior
understandings, written or oral. The terms of this Agreement may be changed,
modified or discharged only by an instrument in writing signed by the parties
hereto. A failure by the Company or Xxxxxxxx to insist on strict compliance with
any provision of this Agreement shall not be deemed a waiver of such provision
or any other provision hereof. In the event that any provision of this Agreement
is determined to be so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
(b) Choice of Law.
This Agreement shall be construed, enforced and interpreted in
ACCORDANCE with and governed by the laws of the State of ARIZONA.
(c) Construction of Agreement. The parties hereto acknowledge and
agree that each party has reviewed and negotiated the terms and provisions of
this Agreement and has contributed 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.
(d) Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which counterpart, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same Agreement. A
facsimile of a signature shall be deemed to be and have the effect of an
original signature.
11. KNOWING AND VOLUNTARY WAIVER.
(a) Xxxxxxxx acknowledges that, by Xxxxxxxx'x free and voluntary act
of signing below, Xxxxxxxx agrees to all of the terms of this Agreement and
intends to be legally bound thereby.
(b) Xxxxxxxx acknowledges that he has received this Agreement on or
before January 29, 2002, and such Agreement was revised by mutual consent of the
parties on February 20, 2002. Xxxxxxxx understands that he may consider whether
to agree to the terms contained herein for a period of twenty-one (21) days
after the date he has received this Agreement. The parties have mutually agreed
that Xxxxxxxx may execute this Agreement by the close of business on February
22, 2002, to acknowledge his understanding of and agreement with the foregoing.
However, the Termination Payments and Other Consideration provided herein will
be delayed until this Agreement is executed by Xxxxxxxx, returned to the Company
and becomes effective as provided below. Xxxxxxxx acknowledges that he has
consulted with an attorney prior to his execution of this Agreement. (See the
acknowledgement at the end of this Agreement).
(c) This Agreement will become effective, enforceable and
irrevocable on the eighth day after the date on which it is executed by Xxxxxxxx
(the "Effective Date"). During the seven-day period prior to the Effective Date,
Xxxxxxxx may revoke his agreement to accept the terms hereof by indicating in
writing to the Company his intention to revoke. If Xxxxxxxx
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exercises his right to revoke hereunder, he shall not have any right to receive
any of the benefits provided for herein, and to the extent such payments have
already been made, Xxxxxxxx agrees that he will immediately reimburse the
Company for the amounts of such payment; provided that, if Xxxxxxxx exercises
such right to revoke, the Employment Agreement and Note shall govern the parties
rights and obligations, if any, following such revocation. Xxxxxxxx understands
and agrees that the written revocation notice referred to in this paragraph must
be sent to: ON Semiconductor, Attn: Xxxxx Xxxx, General Counsel, Law Department,
MD: A700, 0000 X. XxXxxxxx Xx., Xxxxxxx, XX 00000 and must be received by the
General Counsel at that address before the end of the seventh day after Xxxxxxxx
executes this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
SEMICONDUCTOR COMPONENTS INDUSTRIES,
LLC
By: /s/ Xxxxx Xxxxxx
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Its: CEO
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Date: 02/23/2002
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/s/ Xxxxxxx Xxxxxxxx
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XXXXXXX XXXXXXXX
Date: 02/23/2002
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Acknowledgement
STATE OF ARIZONA )
) ss:
County of Maricopa )
On the 23 day of February, 2002, before me personally came Xxxxxxx
Xxxxxxxx who, being by me duly sworn, did depose and say that he resides at 0000
X. Xxxxxxxx Xx.; and did acknowledge and represent that he has had an
opportunity to consult with attorneys and other advisers of his choosing
regarding the Termination Agreement attached hereto, that he has reviewed all of
the terms of the Termination Agreement and that he fully understands all of its
provisions, including, without limitation, the general release and waiver set
forth therein.
/s/ Xxxx X. Xxxxxxxxx
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Notary Public
Date: 02/23/2002
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Exhibit 1
January 29, 2002
Xx. Xxxxxx X. Xxxx
Vice President, General Counsel and Secretary
ON Semiconductor Corporation
0000 X. XxXxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Dear Xx. Xxxx:
I hereby voluntarily resign from all directorships, board memberships, officer
positions, and committee memberships which I hold with ON Semiconductor
Corporation or with any subsidiary or affiliate of ON Semiconductor Corporation,
effective January 29, 2002. Positions and memberships from which I voluntarily
resign include, but are not limited to, the following:
ON Semiconductor Corporation
Senior Vice President and Director of Sales and Marketing
Semiconductor Components Industries, LLC
Senior Vice President and Director of Sales and Marketing
I also agree to promptly provide any other documents necessary to effectuate the
resignation(s) referred to in this letter.
Sincerely,
/s/ Xxxxxxx Xxxxxxxx
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