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EXHIBIT
10.2
ADVANCED MICRO DEVICES,
INC.
EMPLOYMENT
AGREEMENT
This Employment Agreement
(the “ Agreement ”) is effective as of
July 17, 2008 (the “ Effective Date ”), by
and between Derrick Meyer (“ Executive ”) and
Advanced Micro Devices, Inc., a Delaware corporation (the “
Company ”). Certain capitalized terms used in this
Agreement are defined in Section 6 below.
RECITALS
WHEREAS, the Company
desires to employ Executive to provide personal services to the
Company, and wishes to provide Executive with certain compensation
and benefits in return for Executive’s services;
and
WHEREAS, Executive
wishes to be employed by the Company and provide personal services
to the Company in return for certain compensation and
benefits.
AGREEMENT
NOW, THEREFORE, in
consideration of the mutual promises and agreements contained
herein, the parties hereby agree as follows:
1. Duties
.
(a) Position .
From the Effective Date, Executive shall be employed as the
President and Chief Executive Officer of the Company. In such
capacity he shall have overall responsibility for the management of
the Company and report to and be subject to the direction and
control of the Company’s Board of Directors (the “
Board ”). Executive has been appointed as a member of
the Company’s Board of Directors.
(b) Obligations to the
Company . Executive agrees to the best of his ability and
experience that he will at all times loyally and conscientiously
perform all of the duties and obligations required of and from
Executive pursuant to the express and implicit terms hereof. During
the term of Executive’s employment relationship with the
Company, Executive further agrees that he will devote all of his
business time and attention to the business of the Company. Nothing
in this Agreement will prevent Executive from accepting speaking or
presentation engagements in exchange for honoraria or from serving
on boards of charitable organizations so long as such engagements
do not interfere with Executive’s ability to fulfill his
obligations under this Agreement. In addition, with the prior
consent of the Board, Executive shall be permitted to serve on the
boards of directors of up to two (2) for profit entities where
the Board determines that such board memberships are complementary
and useful to the Executive’s performance of services to the
Company and provided that such board service does not substantially
interfere with the Executive’s performance of services to the
Company. To the extent consistent with the terms of this Agreement,
Executive will comply with and be bound by the Company’s
operating policies, procedures and practices from time to time in
effect during the term of Executive’s employment.
2. At-Will
Employment . The Company and Executive acknowledge that
Executive’s employment is and shall continue to be at-will,
as defined under applicable law, and that Executive’s
employment with the Company may be terminated by either party at
any time for any or no reason. If Executive’s employment
terminates for any reason, Executive shall not be entitled to any
payments, benefits, damages, award or compensation other than as
provided in this Agreement. The rights and duties created by this
Section 2 may not be modified in any way except by a written
agreement executed by a duly authorized member of the Board and
Executive.
3. Compensation
. For the duties and services to be performed by Executive
hereunder, the Company shall pay Executive, and Executive agrees to
accept, the compensation described below in this
Section 3.
(a) Salary .
Executive shall receive an annual salary of nine hundred thousand
dollars ($900,000) (as may be adjusted from time to time, the
“ Base Salary ”). Executive’s Base Salary
will be payable pursuant to the Company’s normal payroll
practices. Notwithstanding the foregoing, the Board shall, no less
frequently than annually, review and may adjust Executive’s
Base Salary from time to time.
(b) Annual
Bonus . In addition to the Base Salary, Executive will be
eligible for an annual performance bonus under the terms of the
Company’s Executive Incentive Plan, or a successor or
alternate plan of the Company in a target amount of 200% of the
Base Salary and a maximum amount of 400% of the Base Salary, to be
payable upon achievement of 100% or more of the performance goals
and objectives to be determined by the Board (as may be adjusted
from time to time, the “ Annual Bonus ”).
Notwithstanding the foregoing, the Board shall be entitled to, no
less frequently than annually, review and may adjust
Executive’s Annual Bonus percentage from time to
time.
(c) Promotion Stock
Option . On August 15, 2008, subject to approval by
the Compensation Committee of the Board, Executive shall be granted
a non-qualified stock option to purchase 280,000 shares of the
Company’s common stock (the “ Promotion Stock
Option ”). The Promotion Stock Option shall have a per
share exercise price equal to the fair market value of the
Company’s common stock on the date of grant, and the term of
the Promotion Stock Option shall be seven (7) years, subject
to earlier expiration in the event of the termination of
Executive’s service with the Company. The Promotion Stock
Option shall vest and become exercisable as to one-third
(1/3 rd ) of the shares subject thereto on the first anniversary
of the date of grant, and with respect to 1/36 th of the aggregate shares subject to the
Promotion Stock Option in monthly installments thereafter.
Notwithstanding the foregoing, a portion of the shares subject to
the Promotion Stock Option may vest on an accelerated basis
pursuant to Section 5(a)(iv) or 5(b) below. Except as provided
herein, such Promotion Stock Option will be subject to the
provisions of the Company’s 2004 Equity Incentive Plan and
the applicable form of stock option agreement
thereunder.
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(d) Long Term Incentive
Opportunities . In addition to the Promotion Stock Option,
Executive shall be granted long-term incentive opportunities as
follows:
(i) On August 15, 2008,
subject to approval by the Compensation Committee of the Board,
Executive shall be granted 158,000 restricted stock units (the
“ Long Term RSUs ”) which shall vest in three
(3) substantially equal annual installments from the date of
grant based on Executive’s continued service to the Company
through each such vesting date. Notwithstanding the foregoing, a
portion of the Long Term RSUs may vest on an accelerated basis
pursuant to Section 5(a)(iv) or 5(b) below. Except as provided
herein, such Long Term RSUs will be subject to the provisions of
the Company’s 2004 Equity Incentive Plan and the applicable
form of restricted stock unit agreement thereunder; and
(ii) Subject to approval by
the Compensation Committee of the Board, Executive shall be granted
non-qualified stock options to purchase an aggregate of 316,000
shares of the Company’s common stock, such stock options to
be granted in four (4) equal installments (each, a “
Long Term Stock Option ”) with the first such
installment to be granted on August 15, 2008 (the “
Initial Date of Grant ”) and each remaining
installment to be granted on successive quarterly anniversaries of
the Initial Date of Grant. Each Long Term Stock Option shall have a
per share exercise price equal to the fair market value of the
Company’s common stock on the applicable date of grant, and
the term of each Long Term Stock Option shall be seven
(7) years, subject to earlier expiration in the event of the
termination of Executive’s service with the Company. Each
Long Term Stock Option shall vest and become exercisable as to
one-third (1/3 rd ) of the shares subject thereto on the first anniversary
of the Initial Date of Grant, and with respect to 1/12
th
of the aggregate shares
subject to each Long Term Stock Option on each quarterly
anniversary of the Initial Date of Grant thereafter.
Notwithstanding the foregoing, a portion of the shares subject to
the Long Term Stock Option may vest on an accelerated basis
pursuant to Section 5(a)(iv) or 5(b) below. Except as provided
herein, such Long Term Stock Option will be subject to the
provisions of the Company’s 2004 Equity Incentive Plan and
the applicable form of stock option agreement
thereunder.
(e) Additional
Benefits . Executive shall be eligible to participate in
the Company’s employee benefit plans of general application,
including without limitation, those plans covering medical,
disability and life insurance in accordance with the rules
established for individual participation in any such plan and under
applicable law and on terms no less favorable than those applicable
to the Company’s other senior executive officers. Executive
shall be eligible for vacation and sick leave in accordance with
the policies in effect during the term of this Agreement and will
receive such other benefits as the Company generally provides to
its other senior executive officers.
4. Termination of
Agreement .
(a) Termination
. This Agreement may be terminated upon the occurrence of any of
the following events:
(i) The Company’s
termination of Executive for Cause (as defined in Section 6
below) (“ Termination for Cause ”);
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(ii) Executive’s
Involuntary Termination Without Cause (as defined in Section 6
below), which may occur at any time at the Company’s sole
discretion, for any or no reason;
(iii) Executive’s
Constructive Termination;
(iv) The delivery of a
written notice sent to the Company from Executive stating that
Executive is electing to terminate Executive’s employment
with the Company (other than a Constructive Termination), or the
occurrence of Executive’s death or Disability (each, a
“ Voluntary Termination ”); or
(v) By Executive, at his sole
discretion, should the Compensation Committee of the Board fail to
approve any of the compensation subject to its approval (such as
that set forth in Sections 3(c), 3(d), or 3(e)); provided, that
notwithstanding any provision of this Agreement to the contrary, if
Executive chooses to terminate the Agreement under this provision,
all obligations and duties imposed upon Executive under the
Agreement of any type shall terminate upon the Date of
Termination.
(b) Notice of
Termination . Any purported termination of
Executive’s employment by the Company or by Executive (other
than termination due to Executive’s death, which shall
terminate Executive’s employment automatically) shall be
communicated by a written Notice of Termination to the other party
hereto in accordance with Section 14(c). For purposes of this
Agreement, “ Notice of Termination ” shall mean
a notice that shall indicate the specific termination provision in
this Agreement (if any) relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive’s employment under the
provision so indicated.
(c) Date of
Termination . For purposes of this Agreement, “
Date of Termination ” shall mean (i) if
Executive’s employment is terminated due to Executive’s
death, the date of Executive’s death; or (ii) if
Executive’s employment terminates for any reason other than
death, the date specified in the Notice of Termination.
(d) Board of
Directors . Upon the Date of Termination, Executive shall
immediately resign from the Board of Directors of the Company and
the board of directors or comparable body of every subsidiary,
parent or other affiliated corporation of the Company, and every
committee thereof.
5. Severance
Benefits . Executive shall be entitled to receive severance
benefits upon termination of employment only as set forth in this
Section 5:
(a) Covered
Termination . In the event Executive experiences a Covered
Termination (as defined in Section 6 below), Executive will be
entitled to receive the following severance and other benefits,
provided that Executive first provides the Company with an executed
and effective general release of claims against the Company and its
affiliates in form and substance acceptable to the Company and
complies with his obligations under Section 4(d) of this
Agreement, in each case, within fifty (50) days of such
Covered Termination:
(i) Accrued Base
Salary . The Company shall pay to Executive his full earned
but unpaid Base Salary through the Date of Termination. In addition
the Company shall pay to Executive all other amounts to which
Executive is entitled under any compensation plan or practice of
the Company on the Date of Termination; and
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(ii) Severance
Pay . The Company shall pay to Executive in a single lump
sum that amount calculated by multiplying the Severance Multiplier
(as defined in Section 6) times the sum of
(A) Executive’s Base Salary and (B) the target
amount of Executive’s Annual Bonus, in each case, at the rate
in effect immediately prior to the Date of Termination or, if
higher, the rate in effect six (6) months prior to the Date of
Termination.
(iii) Financial and Tax
Planning . The Company shall reimburse Executive or
pay directly for personal financial planning and tax planning
services up to $4,000 for twelve (12) months following the
Date of Termination. Any such reimbursement shall be made on or
before the last day of the calendar year following the calendar
year in which the expense being reimbursed was incurred.
(iv) Equity
Acceleration . In the event such Covered Termination occurs
prior to or more than twenty-four (24) months after the
consummation of a Change of Control then on the Date of
Termination, all options, restricted stock, restricted stock units
and other equity awards then held by Executive that vest over time
solely upon Executive’s continued service to the Company
(“ Time-Based Awards ”) shall become vested and,
if applicable, exercisable with respect to 100% of the shares
subject thereto, any restrictions thereon shall fully lapse and any
exercise period shall be extended to the earlier of the fifth
(5 th ) anniversary of the Date of Termination or the expiration
date of such Time-Based Award. This Agreement shall serve as an
amendment to all of Executive’s outstanding Time-Based Awards
as of the Effective Date.
(v) Other
Benefits . The Company shall provide for a period of
eighteen (18) months following the Date of Termination, health
and welfare benefits at least comparable to those benefits in
effect on Executive’s Date of Termination, including medical,
dental and life insurance coverage. At the Company’s
election, such comparable health benefits may be provided by
reimbursing Executive for the cost of converting a group policy to
comparable individual coverage, or for the cost of COBRA premiums
for eighteen (18) months. The Company shall also pay Executive
an amount calculated to pay any income taxes due as a result of the
payment by the Company on Executive’s behalf for such welfare
benefits. Such tax payment shall be calculated to place Executive
in the same after-tax position as if no such income had been
imposed and shall be paid to Executive no later than the end of the
calendar year following the calendar year in which such related
taxes are remitted to the appropriate tax authorities.
(b) Change of Control
Equity Acceleration . In the event such Covered Termination
occurs within the twenty-four (24) month period commencing on
the consummation of a Change of Control then on the Date of
Termination, all options, restricted stock, restricted stock units
and other equity awards then held by Executive shall become vested
and, if applicable, exercisable with respect to 100% of the shares
subject thereto, any restrictions thereon shall fully lapse and any
exercise period shall be extended to the earlier of the fifth
(5 th ) anniversary of the Date of Termination or the expiration
date of such award. This Agreement shall serve as an amendment to
all of Executive’s outstanding equity-based awards as of the
Effective Date.
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(c)
Death/Disability . If Executive’s employment
with the Company is terminated as a result of death or Disability,
then Executive shall not be entitled to receive payment of any
severance or other benefits described in this Section 5 other
than those set forth in subsections (a)(i), (a)(iv) and (a)(v) of
this Section 5; provide
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