Exhibit 10.38b
SEPARATION AGREEMENT
This SEPARATION AGREEMENT (this "Agreement") made as of March
31, 2003, by and among ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the "Executive"), ON Semiconductor
Corporation and Semiconductor Components Industries, L.L.C. (collectively, the
"Company").
WHEREAS, the Company engaged the Executive to be Senior Vice
President, Chief Financial Officer and Treasurer of the Company pursuant to a
Letter Agreement among the Executive and the Company dated February 15, 2002
(the "Letter Agreement"); and
WHEREAS, the Executive's employment with the Company shall
terminate effective as of April 2, 2003, in accordance with this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and promises contained herein and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Company and the
Executive hereby agree as follows:
1. Termination of Employment
The parties hereto agree that the Executive's employment
with the Company and its affiliates shall terminate effective April 2, 2003 (the
"Termination Date"). The Executive hereby resigns effective as of the
Termination Date from all other positions, offices or other affiliations that he
holds in connection with the Company and its affiliates. The Executive shall
execute any forms of resignation or other documents reasonably requested by the
Company in order to carry out the provisions of this Agreement.
2. Termination Payments and Other Benefits
(a) Pursuant to the Letter Agreement, the Company shall pay
the Executive US$ 360,000 (the "Severance Payment"), payable over a twelve-month
period in accordance with the Company's customary payroll practices, commencing
no later than thirty days after the Effective Date of this Agreement.
(b) The Company shall (i) pay the Executive any Base Salary
accrued but not yet paid through the Termination Date and any accrued but unused
vacation, (ii) reimburse the Executive for any reasonable business expenses
incurred on or prior to the Termination Date and properly substantiated within
thirty days after the Termination Date in accordance with the Company's
customary expense reimbursement procedures, (iii) permit the Executive to retain
the Company computer (after the Company has removed all Company information from
such computer) that he currently uses and shall permit the transfer of such
cellular telephone number (but no cellular telephone service shall be provided
by the Company) to the Executive, and (iv) provide the Executive with
outplacement services from vendors designated by the Company for a period of
ninety days commencing on the Effective Date of this Agreement, not to exceed
$3,000.
(c) If the Executive elects continuation of health insurance
benefits as provided under Section 4980B of the Internal Revenue Code of 1986
and Section 601 of the Employee Retirement Income Security Act of 1974, as
amended (which provisions are commonly
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known as "COBRA"), the Company shall pay the cost of such COBRA benefits for a
period not to exceed twelve months.
(d) All payments and benefits provided in Sections 2(a), 2(b)
and 2(c) shall be referred to herein as the "Termination Payments". The
Termination Payments shall be reduced by any required tax withholdings. The
Termination Payments 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. The Executive acknowledges that, except for the
Termination Payments, he is not entitled to any payment in the nature of
severance or termination pay from the Company.
3. General Release and Waiver
(a) In consideration of payment of the Termination Payments
provided herein, the Executive hereby releases, remises and acquits the Company
and all of its affiliates, and their respective officers, directors,
shareholders, members, family members, agents, employees, consultants,
independent contractors, attorneys, advisers, successors and assigns
(collectively, the "Releasees"), jointly and severally, from any and all claims,
known or unknown, which the Executive or the Executive's heirs, successors or
assigns have or may have against any of such parties arising on or prior to the
date this Agreement is signed by the Executive and any and all liability which
any of such parties may have to the Executive, 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. ss. 1981, as well as any state or local laws,
including without limitation the Arizona Civil Rights Act and the Arizona
Employment Protection Act, or any other national, state, or local law and any
workers' compensation or disability claims under any such laws. This General
Release and Waiver relates to any and all claims, including without limitation
claims arising from and during the Executive's relationship with the Company,
any stock option, equity-based or other incentive plans, or as a result of the
termination of such relationship and the cancellation of any such stock options
or equity awards. The Executive further agrees that the Executive will not file
or permit to be filed on the Executive's behalf any such claim. Notwithstanding
the preceding sentence or any other provision of this Agreement, this release is
not intended to interfere with the Executive's right to file a charge with the
Equal Employment Opportunity Commission or any state human rights commission in
connection with any claim he believes he may have against the Company. However,
by executing this Agreement, the Executive hereby waives the right to recover in
any proceeding the Executive may bring before the Equal Employment Opportunity
Commission or any state human rights commission or in any proceeding brought by
the Equal Employment Opportunity Commission or any state human rights commission
on the Executive's 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 General Release and
Waiver shall not apply to any obligation of the Company pursuant to this
Agreement.
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(b) The Executive expressly understands and agrees that the
General Release and Waiver set forth in Section 3(a) above fully and finally
releases and forever resolves the claims released and discharged therein,
including those which may be unknown, unanticipated and/or unsuspected. The
Executive further acknowledges that he is aware that he may hereafter discover
facts in addition to or different from those which he now knows or believes to
exist with respect to the subject matter of this Agreement, but that it is his
intention to hereby fully, finally and forever settle and release all of the
claims, known or unknown, anticipated or unanticipated, suspected or
unsuspected, which now exist, may exist or heretofore have existed between or
among himself and the Releasees.
(c) The Executive acknowledges that the Termination Payments
the Executive is receiving in connection with the foregoing release is in
addition to anything of value to which the Executive already is entitled from
the Company.
4. Restrictive Covenants
(a) The Executive shall not, directly or indirectly, solicit
or hire or assist any other person or entity in soliciting or hiring any
employee of the Company or any of its affiliates to perform services for any
entity (other than the Company or its affiliates), or attempt to induce any such
employee to leave the employ of the Company or its affiliates for a period of
two years after the Termination Date.
(a) The Executive shall 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 and the Company agree that the Company would
likely suffer significant harm from the Executive's competing with the Company
for some period of time after the Termination Date. Accordingly, for the
one-year period following the Termination Date, the Executive shall not,
directly or indirectly, become employed by, engage in business with, serve as an
agent or consultant to, become a partner, member, principal, stockholder or
other owner (other than a holder of less than 1% of the outstanding voting
shares of any publicly held company) of, or otherwise perform services for
(whether or not for compensation) any Person. For purposes of this Section 4(b),
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 that is engaged in, or
otherwise competes or has a reasonable potential for competing with the Business
(as defined herein), anywhere in which the Company or its affiliates engage in
or intend to engage in the Business or where the Company or its affiliates'
customers are located. For purposes of this Agreement, the "Business" shall mean
the design, marketing and sale of power semiconductors or other products
currently offered by the Company or its affiliates for use in electronic
products, appliances and automobiles, and such other businesses in which the
Company currently engages.
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(c) The Executive 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 on or prior to the Termination Date will return
any such information (in whatever form) then in his possession.
(d) The Executive hereby agrees not to defame or disparage the
Company, its affiliates and their officers, directors, members or executives.
The Executive shall 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.
(e) The Company hereby agrees that it will use its reasonable
efforts to ensure that its respective senior executive officers shall not make
official statements that disparage or defame the Executive.
(f) 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 this Section 4. 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 this Section 4.
5. Post-Termination Cooperation
The Executive agrees to cooperate with the Company and the
Company's independent accountants, including certifying the Company's financial
information and signing appropriate regulatory filings related to the period
prior to and including the Termination Date, and to cooperate with any
securities law obligations relating to such financial information or reports. In
addition, the Executive agrees to cooperate with the Company and its advisers
and provide reasonable assistance from time to time in connection with any claim
made against or by the Company or any of its affiliates.
6. Certain Forfeitures in Event of Breach
The Executive acknowledges and agrees that, notwithstanding
any other provision of this Agreement, in the event the Executive materially
breaches any of his obligations under this Agreement, including without
limitation the Restrictive Covenants provided in Section 4 of this Agreement,
the Executive will forfeit his right to receive the Termination Payments
provided by Section 2 of this Agreement to the extent not theretofore paid to
him as of the date of such
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breach and, if already made as of the time of breach, the Executive agrees that
he will reimburse the Company, immediately, for the amount of such payment.
7. No Admission
This Agreement does not constitute an admission of liability
or wrongdoing of any kind by the Company or its affiliates or by the Executive.
8. Heirs and Assigns
The terms of this Agreement shall be binding on the parties
hereto and their respective successors and assigns. In the event of the
Executive's death prior to the date any of the payments provided hereunder
become due and payable, such amounts shall be paid to the Executive's
beneficiaries or estate, as applicable, to the extent they would otherwise have
been payable to the Executive.
9. General Provisions
(a) This constitutes the entire understanding of the Company
and the Executive with respect to the subject matter hereof and supersedes 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 of the Company or the Executive 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) 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. All actions and proceedings relating directly or
indirectly to this Agreement 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; provided that notwithstanding the foregoing,
the Company may commence an action related to, or seek enforcement of, the
Restrictive Covenants provided in Section 4 of this Agreement in any
jurisdiction.
(c) The parties hereto acknowledge and agree that each party
has reviewed 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. The headings in this Agreement are inserted for
convenience of reference only and shall not be part of or control or affect the
meaning of any provision hereof. Terms used in the singular shall include the
plural and terms used in one gender shall include the other, in each case, as
the context requires.
(d) 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
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constitute but one and the same Agreement. A facsimile of a signature shall be
deemed to be and have the affect of an original signature.
(e) All obligations of the Company to indemnify the Executive
pursuant to the Company's charter, by-laws or other related documents or under
any applicable law shall remain in full force and effect, except as they may be
amended from time to time with respect to the Company's officers and directors
generally.
10. Knowing and Voluntary Waiver
The Executive acknowledges that, by the Executive's free and
voluntary act of signing below, the Executive agrees to all of the terms of this
Agreement and intends to be legally bound thereby.
The Executive understands that he may consider whether to
agree to the terms contained herein for a period of twenty-one days. The
Executive acknowledges that he received this Agreement on March 31, 2003, and
has had an opportunity to review and consider the terms contained in this
Agreement. However, the Termination Payments provided herein shall not commence
until this Agreement is executed and returned to the Company, and becomes
effective on the Effective Date as provided below. The Executive acknowledges
that he has been advised to consult with an attorney prior to executing this
Agreement.
This Agreement will become effective, enforceable and
irrevocable on the eighth day after the date on which it is executed by the
Executive, provided it is not revoked by the Executive as provided below (the
"Effective Date").
The Executive may revoke his agreement to accept the terms
hereof by delivering a letter within seven days after he has executed this
Agreement addressed to the Company at its corporate offices to the attention of
▇▇▇▇▇ ▇▇▇▇, with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Cleary, Gottlieb, ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, specifying his intention to
revoke his agreement. If the Executive exercises his right to revoke hereunder,
he shall forfeit his right to receive any of the Termination Payments and
benefits provided for herein, and to the extent such payments have already been
made, the Executive agrees that he will immediately reimburse the Company for
the amounts of such payment.
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ON SEMICONDUCTOR CORPORATION &
SEMICONDUCTOR COMPONENTS
INDUSTRIES, L.L.C.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President and Secretary
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Acknowledgment
STATE OF ARIZONA)
ss:
COUNTY OF MARICOPA)
On the 2nd day of April, 2003, before me personally came ▇▇▇▇
▇▇▇▇▇▇▇▇▇ the Executive who, being by me duly sworn, did depose and say that he
resides at MARICOPA COUNTY; and did acknowledge and represent that he has had an
opportunity to consult with attorneys and other advisers of his choosing
regarding the Separation Agreement attached hereto, that he has reviewed all of
the terms of the Separation Agreement and that he fully understands all of its
provisions, including, without limitation, the general release and waiver set
forth therein.
/s/ ▇▇▇▇▇ ▇. ▇▇▇
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Notary Public
Date: April 2, 2003