Exhibit 10.2
ON SEMICONDUCTOR CORPORATION
SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC
April 25, 2002
Xxxxx Xxxxxx
0000 X. Xxxxxxxxxx
Xxxxxxxx Xxxxxx, XX 00000
Dear Xxxxx:
Given the present difficult industry and the general economic conditions, the
relatively short time remaining on your employment agreement dated as of October
27, 1999 (the "Employment Agreement"), and the Board's satisfaction with your
service as President and Chief Executive Officer, the Board desires to secure an
extension of your period of service to ON Semiconductor Corporation and
Semiconductor Components Industries, L.L.C. (collectively, the "Company"). This
letter agreement ("Letter Agreement") is intended to implement certain
modifications to the Employment Agreement and any stock option grants agreements
that are currently outstanding regarding Company stock options. In addition,
this Letter Agreement delineates certain other understandings between you and
the Company. All defined terms used herein that are not otherwise defined herein
shall have the meanings ascribed to such terms in the Employment Agreement.
I. MODIFICATIONS TO EMPLOYMENT AGREEMENT.
(a) The parties hereto hereby agree to amend Section 2(a) to provide for a
Base Salary of $425,000 per annum.
(b) The opening paragraph of Section 3 shall be deleted in its entirety
and replaced with the following:
The Employment Period has commenced on August 4, 1999 (the
"Effective Date") and shall terminate on April 15, 2004 (the "Scheduled
Termination Date"), unless terminated sooner pursuant to this Section 3,
provided that the Employment Period shall be extended automatically for
successive one-year periods beginning on the Scheduled Termination Date
(and the Scheduled Termination Date shall be the next succeeding
anniversary) unless written notice of an election not to extend the
Employment Period is served by either party on the other party at least
thirty (30) days prior to the date this Agreement would otherwise expire
absent an extension.
(c) Section 5(a) is deleted in its entirety and is replaced with the
following:
(a) Without Cause. In the event of the termination of the Executive
employment during the Employment Period by the Company without Cause under
Section 3(d) (including a deemed termination without Cause as provided in
Section 3(f) herein, except as provided below) of this Employment
Agreement, 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) two and (B) the sum of (x) the
highest rate of the Executive's annualized Base Salary in effect at any time
up to and including the Date of Termination and (y) the higher of (I) the
Annual Bonus paid to the Executive in the year immediately preceding the
year in which the Date of Termination occurs or (II) the Executive Target
Bonus Amount (as defined below) times a fraction, the numerator of which is
the number of calendar quarters in the immediately preceding four full
calendar quarters in which the Company met or surpassed its financial
projections and performance objectives as previously approved by the Board
or its designee in its sole discretion, pursuant to the Company's annual
bonus plan or program in effect during the relevant period, and the
denominator of which is four; provided that the payments and benefits
provided herein are subject to and conditioned upon the Executive executing
a valid and effective 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. For purposes of this
Section 3, "Executive Target Bonus Amount" shall mean seventy-five percent
(75%) times the Executive's Base Salary or such higher amount as is
designated as the "target" bonus amount by the Board or its designee in its
sole discretion, pursuant to the Company's annual bonus plan or program in
effect during the relevant period. Notwithstanding the foregoing, in the
event of a deemed termination without Cause by reason of the Executive's
election to terminate his employment within one year following a Change in
Control as provided in Section 3(f)(iii) hereof, the shares underlying the
Option shall remain subject to the vesting and exercisability provisions in
effect immediately prior to such Change in Control.
(d) In Section 12(a), each occurrence of "Semiconductor Components
Industries, LLC" shall be changed to "ON Semiconductor Corporation."
(e) Except as specifically provided herein, all other terms and conditions
provided in the Employment Agreement shall remain in full force and
effect.
II. STOCK OPTIONS.
(a) Notwithstanding any provision in the Employment Agreement, the SCG
Holding Corporation 1999 Founders Stock Option Plan (the "Founder's Plan")
or the ON Semiconductor Corporation 2000 Stock Incentive Plan (the "2000
SIP" and together with the Founder's Plan, the "Option Plans") (or any
provision in any stock option agreement thereunder in effect between you
and the Company) to the contrary, all stock options that are held by you
as of the date hereof (the "Current Options") shall vest according to
their original terms and shall not accelerate on a change in control (as
defined in the Employment Agreement or in the Option Plans); provided that
in the event your employment is terminated within the two-year period
following a change in control by you for Good Reason (within the meaning
of Section 3(f) of the Employment Agreement (other than by reason of your
election to terminate your employment following a change in control as
provided in Section 3(f)(iii) thereof)) or by the Company without Cause,
the
Current Options shall become immediately exercisable. This Section II(a)
shall constitute consent for purposes of Section 4.13(a) of the Founders
Plan and Section 15.2 of the 2000 SIP.
(b) The provisions of Section II(a) of this Letter Agreement shall apply
equally to each stock option granted to you after the date hereof. In the
event a stock option agreement evidencing any such future stock option
contains a contrary provision, unless such stock option agreement
specifically provides that it is intended to supersede this Letter
Agreement, this Letter Agreement shall control the terms on which such
option may accelerate in the event of a change in control.
(c) Notwithstanding any other provision to the contrary, in the event your
employment terminates (i) on account of the Company terminating your
employment without Cause under Section 3(d) of the Employment Agreement
(including a deemed termination without Cause as provided in Section 3(f)
therein) or (ii) as a result of your death or Disability, all current and
future stock options that are granted to you (to the extent they are or
become exercisable on the date your employment terminates) will remain
fully exercisable until the first to occur of (1) the last day of the two
(2) year period immediately following such termination of employment and
(2) the tenth anniversary of the grant date of such option.
(d) Except as specifically provided herein, all other terms and conditions
of the stock option agreements, the Option Plans and the Employment
Agreement shall remain in full force and effect.
Please acknowledge your agreement to the foregoing by signing in the appropriate
space below. This Letter Agreement shall be effective as of April 15, 2002
provided that it is executed by each of the parties hereto. A facsimile of a
signature shall be deemed to be and have the same force and effect as an
original.
Sincerely,
ON SEMICONDUCTOR CORPORATION &
SEMICONDUCTOR COMPONENTS
INDUSTRIES, LLC
By: /s/ Xxxxxx X. Xxxx
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Its: Vice President and Secretary
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Xxxxxx and acknowledged to as of the first date written above:
/s/ Xxxxx Xxxxxx
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XXXXX XXXXXX
