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EXHIBIT 10.1
AMENDMENT NO. 1 TO
EMPLOYMENT AGREEMENT
FOR XXXXX XXXXXXXX
WHEREAS, Semiconductor Components Industries, LLC (the "Company") and
Xxxxx Xxxxxxxx (the "Executive") entered into an Employment Agreement dated
November 8, 1999 (the "Agreement");
WHEREAS, the Company and the Executive wish to amend the Agreement to
provide, among other things, for certain payments in lieu of certain relocation
benefits provided in the Agreement, to include a loan for the purchase of a
primary residence located at 0000 X. 00xx Xxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxx, to
provide for a bonus payment in connection with Parent's initial public offering,
and to extend the term of the Agreement (the "Amendment"); and
WHEREAS, all defined terms used herein shall have the meanings set forth
in the Agreement unless specifically defined herein.
NOW, THEREFORE, for mutual consideration the receipt of which is hereby
acknowledged, the Agreement is hereby amended as follows:
1. Section 2 (g) of the Agreement is hereby amended by replacing such
section in its entirety with the following:
(g) On or before ten (10) days after the signing of this Amendment
but in any event by the date of the closing of the purchase of the
Property (as defined below), the Company shall pay the Executive a
one-time lump-sum payment of $531,000, consisting of (i) $400,000 in
respect of the relocation expenses deemed to have been incurred by the
Executive (whether or not the Executive actually sells his residence in
California) and (ii) $131,000 in respect of amounts the Executive would
have received as a housing allowance and travel expenses for the Executive
and the Executive's spouse and children. In addition to the foregoing
payment, on or before thirty (30) days after the signing of this
Amendment, the Company shall pay the Executive an additional payment
("Gross-Up Payment") in an amount sufficient to pay the Executive's
federal, state and local income taxes in respect of the payments provided
for in this Section 2(g)(i) and Section 2(g)(ii) plus the federal, state
and local income taxes to be incurred by the Executive in calendar year
2000 as a result of such payment, determined based on the Executive's
highest marginal federal, state and local income tax rates. The Executive
hereby agrees to cooperate with reasonable requests for information and
documentation in order for the Company to determine the Gross-Up Payment
in respect of the payments provided for in this Section 2(g)(i) and
Section 2(g)(ii).
2. Section 2 of the Agreement is hereby amended by adding the following
section:
(j) On or before ten (10) days after the signing of this Amendment
but in any event by the date of the closing of the purchase of the Property (as
defined below), the Company
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shall pay the Executive a one-time lump-sum bonus payment of $100,000 in
connection with Executive's work on the Parent's initial public offering of its
common stock (the "IPO Bonus"). In addition to the foregoing payment, on or
before thirty (30) days after the signing of this Amendment, the Company shall
pay the Executive a Gross-Up Payment in respect of the payment provided for in
this Section 2(j). The Executive hereby agrees to cooperate with reasonable
requests for information and documentation in order for the Company to determine
the Gross-Up Payment in respect of the payment provided for in this Section
2(j).
3. Section 2 of the Agreement is hereby amended by adding the following
section:
(k)(i) The Company hereby agrees to provide the Executive with a
loan (the "Loan"), secured by a first priority deed of trust lien, in the
amount of $1,469,000 for the purchase of the primary residence located at
0000 X. 00xx Xxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxx (the "Property").
(ii) The Loan will be funded by the date of the closing of the
purchase of the Property (the "Loan Date"). The Loan shall accrue interest
(the "Interest") at a rate determined by the Applicable Federal Rates in
effect for the month in which the Loan is funded, which shall remain fixed
during the term of the Loan and shall be compounded annually. The
principal amount of the Loan plus any accrued Interest shall be due and
payable to the Company on the earlier of (x) the fifth anniversary of the
Loan Date or (y) no later than 90 days after the termination of the
Executive's employment with the Company for any reason. In the event the
Executive is actively employed with the Company on the fifth anniversary
of the Loan Date, the Board of Directors of the Parent ("Parent Board")
may consider (1) forgiving up to 50% of the principal amount of the Loan
and/or accrued Interest if the Parent achieves the established Market
Share Target (described in Appendix I hereto) for the five-year period
ended on the last day of the fiscal quarter immediately preceding the
fifth anniversary of the Loan Date, and (2) forgiving up to 50% of the
principal amount of the Loan and/or accrued Interest if the Parent
achieves the established Gross Margin Percentage Target (described in
Appendix I hereto) for the five year period ended on the last day of the
fiscal quarter immediately preceding the fifth anniversary of the Loan
Date. The Parent Board shall notify the Executive of its determination no
later than five days before the fifth anniversary of the Loan Date. For
the avoidance of doubt, it is in the sole and absolute discretion of the
Parent Board to forgive any part of the principal amount of the Loan
and/or accrued Interest if either or both of the foregoing targets are
achieved.
(iii) The Executive hereby acknowledges and agrees that the Company
and the Company shall have the right to withhold any amounts otherwise
owed or payable to the Executive (including, without limitation, bonuses
and severance pay, but excluding Executive' s Base Salary) and apply such
amounts to the payment of Loan and Interest to the extent such Loan and
Interest shall be due and payable within ninety (90) days of the date of
the payment to the Executive.
(iv) All terms and conditions of the Loan and the first deed of
trust lien will be governed by a separate promissory note and deed of
trust as well as any other documents
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that the Company reasonably requires the Executive to execute and the
Executive hereby agrees to execute any and all such documents at the
request of the Company.
(v) Prior to the fifth anniversary of the Loan Date, in the event of
the Executive's employment is terminated due to the Executive's death or
Disability, the Parent Board, in its sole and absolute discretion, may
consider at the time of the termination event by death or Disability
forgiving all or any portion of the principal amount of the Loan and/or
accrued Interest.
4. Section 3 of the Agreement is hereby amended by deleting the phrase "third
anniversary of the Effective Date" and replacing it with the phrase "fifth
anniversary of the Loan Date (as defined in Section 2 (j))."
5. Except as otherwise specifically provided in this Amendment, all terms and
conditions of the Agreement shall remain in full force and effect. All defined
terms used herein and not otherwise defined herein shall have the meanings
ascribed to such terms in the Agreement.
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IN WITNESS WHEREOF, the Executive and the Company have executed this Amendment
as of the 20th date of July, 2000.
EXECUTIVE: XXXXX XXXXXXXX, IN HIS INDIVIDUAL CAPACITY
By: /s/ XXXXX XXXXXXXX
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Name: Xxxxx Xxxxxxxx
Title: COO
COMPANY: SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC
By: /s/ XXXXX X. XXXXXX
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Name: Xxxxx Xxxxxx
Title: CEO and President
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APPENDIX I
1. MARKET SHARE TARGET: 9%
2. GROSS MARGIN PERCENTAGE TARGET: 43.5%
"Market Share" and "Gross Margin Percentage" shall be determined in
accordance with the manner in which the Parent, in its sole discretion,
calculates and presents the Market Share and Gross Margin Percentage to the
Parent Board; provided, however, that to the extent applicable, Market Share and
Gross Margin Percentage shall be determined in accordance with generally
acceptable accounting principles consistently applied.
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