Exhibit 10.2
EXECUTIVE RETENTION
AGREEMENT
THIS EXECUTIVE RETENTION AGREEMENT
(this “Agreement”) dated as of March 19, 2009 is
made by and between John W. Hohener (“Executive”) and
MICROSEMI CORPORATION, a Delaware corporation
(“Company”). This Agreement amends and restates in its
entirety that certain Executive Retention Agreement dated
November 10, 2008 between the Company and the Executive (the
“Prior Agreement”).
NOW, THEREFORE, for good and
valuable considerations, receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Term . The term of this
Agreement shall commence on the date hereof. The term of this
Agreement shall be renewed automatically on a daily basis so that
the outstanding term is always two (2) year(s) after the date
on which notice of non-renewal or termination of this Agreement is
given by the Executive to the Company or by the Company to the
Executive. This Agreement relates to Executive’s employment
with the Company, or any subsidiary, successor, assign or affiliate
of the Company, under any written or oral agreement. For purposes
of the following provisions “Date of Termination” means
the effective date of termination of Executive’s employment
with any of the entities described above, after notice and lapse of
the notice period as required herein.
2. Terminations of Employment
.
a. Executive will be entitled to the
applicable benefits described in Section 3 if, during the term
of this Agreement provided in Section 1, Executive’s
employment is terminated in any of the following
circumstances:
(i) Prior to a Change in Control (as
defined below), the Company terminates the Executive’s
employment for any reason other than Cause (as defined
below).
(ii) Upon or following a Change in
Control, the Company terminates the Executive’s employment
for any reason other than for Cause.
(iii) Prior to a Change in Control,
the Executive terminates his employment with the Company upon not
less than five (5) days’ written notice to the Company
given within ninety (90) days following the date on which the
Executive becomes aware of a Good Reason (as defined below) to
terminate his employment.
(iv) Upon or following a Change in
Control, the Executive terminates his employment with the Company
upon not less than five (5) days’ written notice to the
Company given within ninety (90) days following the date on
which the Executive becomes aware of a Good Reason to terminate his
employment.
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b. Good Reason . For purposes
of this Agreement, “Good Reason” means the occurrence
of any of the following events:
(i) any reduction in, or limitation
upon, the compensation, reimbursable expenses or other benefits
provided to Executive, other than (A) as generally effected by
valid public law or regulation or (B) as results from change
in the amount of the incentive compensation pool if not resulting
from changes in the incentive pool formula or allocations and not
resulting from accounting or operational effects of the
acquisition;
(ii) any change in assignment of
Executive’s primary duties to a work location more than 50
miles from the Company’s principal executive office at 2381
Morse Avenue, Irvine, California 92614, without Executive’s
prior written consent;
(iii) any failure by the Company to
obtain the assumption of this Agreement by any successor or assign
of the Company;
(iv) any material breach by the
Company of any provision of this Agreement;
(v) the assignment to Executive,
without his consent, of duties inconsistent with Executive’s
position so as to constitute a diminution of status with the
Company, including an assignment of Executive to a position other
than Chief Financial Officer of the ultimate parent company in the
event the Company is acquired by, or otherwise becomes a subsidiary
of, another company; or
(vi) any action taken by the Board
or a standing Committee of the Board in connection with, or the
formation of a special Committee of the Board for the purpose of,
effecting any of the events listed in subparagraphs
(i) through (v) immediately above.
c. Change of Control . For
purposes of this Agreement, “Change in Control” means
the occurrence of any of the following events:
(i) Any “person” (as
such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the total voting
power represented by the Company’s then outstanding voting
securities;
(ii) Consummation of a merger or
consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at
least fifty-one percent (51%) of the total voting power
represented by the voting securities of the
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Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders
of the Company approving a plan of complete liquidation of the
Company or a consummation of the sale or disposition by the Company
of all or substantially all of the Company’s
assets.
d. Cause . For purposes of
this Agreement, “Cause” means that the Board, based on
the information available to it, reasonably determines that any of
the following events or contingencies exists or has
occurred:
(i) Executive is convicted of, or
pleads guilty or nolo contendre to, a felony (whether or not
involving the Company or any of its affiliates); or
(ii) Executive has committed or
engaged in fraud or other acts of willful misconduct involving the
Company or any of its affiliates; or
(iii) Executive willfully and
repeatedly fails or refuses to perform his duties to the Company
and its affiliates; or
(iv) the willful and material
violation by Executive of any written rule, regulation or policy of
the Company; or
(v) a material breach by Executive
of any provision of this Agreement.
However, no act or failure to act,
on Executive’s part shall be considered “willful”
unless done, or omitted to be done, by Executive not in good faith
and without reasonable belief that Executive’s action or
omission was in the best interest of the Company, and in the case
of clauses (ii) through (v) of the foregoing definition,
there shall be no determination of Cause hereunder unless Executive
shall have received written notice from the Board stating the
nature of the act or omission asserted to constitute Cause and
affording Executive at least ten (10) days to correct such act
or omission.
e. Other Terminations of
Employment . This Agreement does not limit the Company’s
or the Executive’s ability to terminate Executive’s
employment in any other circumstances; provided that the applicable
benefits specified in Section 3 shall be provided only for a
termination of employment described in Section 2(a)
above.
3. Severance Benefits
.
a. Subject to Section 3(c),
Executive shall be entitled to the following severance benefits if
the Executive’s employment terminates in the circumstances
described in Section 2(a)(i) or 2(a)(iii):
(i) Salary . Executive or his
estate shall be entitled to payment, to be received (subject to
Section 3(e) below) during the month following the month in
which Executive’s Separation from Service occurs, of an
amount equal to 1.0 multiplied by Executive’s annualized base
salary as of the Date of Termination.
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(ii) Incentive Compensation .
Executive or his estate will be entitled to receive (subject to
Section 3(e) below) during the month following the month in
which Executive’s Separation from Service occurs, an
incentive compensation payment of 1.0 multiplied by the highest
annual incentive compensation amount paid during any of the
preceding three (3) full plan years. In addition, Executive or
his estate will be entitled to receive a pro-rated share of his
annual incentive compensation amount otherwise payable to Executive
for the period from the beginning of the fiscal year in which the
Date of Termination occurs through the Date of Termination, such
amount to be determined based on such fiscal year and to be paid at
the same time annual incentive compensation payments are paid
generally to the Company’s active executives.
(iii) Car Allowance .
Executive or his estate will be entitled to receive (subject to
Section 3(e) below) during the month following the month in
which Executive’s Separation from Service occurs, an amount
equal to 1.0 times his annual car allowance in effect as of the
Date of Termination.
(iv) Equity Awards . The
restriction or forfeiture period on any restricted stock (which
term shall include for purposes of this Agreement any restricted
stock units) granted by the Company to Executive under all plans
and all stock options and general stock appreciation rights granted
by the Company to Executive shall lapse or accelerate, as the case
may be, and become fully vested and exercisable on the Date of
Termination, and shall remain exercisable for a period of one
(1) year following the Date of Termination, subject to the
latest expiration date specified in the restricted stock or option
agreements.
(v) Medical and Life
Insurance . Payment of premiums for medical, dental and vision
insurance and life insurance by the Company shall continue on and
subject to the terms of this Agreement for a period of one
(1) year following the Date of Termination, subject to
termination under Section 7. To the extent that the payment of
any premiums pursuant to this subparagraph (v) is taxable to
Executive, any such payment shall be paid to Executive on or before
the last day of Executive’s taxable year following the
taxable year in which the related expense was incurred.
Executive’s right to payment of such premiums is not subject
to liquidation or exchange for another benefit and the amount of
such benefits that Executive receives in one taxable year shall not
affect the amount of such benefits that Executive receives in any
other taxable year.
(vi) Retirement Plans; Unvested
Company Contribution . The Executive shall be entitled to
receive, not later than the fifteenth (15th) day following the
Date of Termination (or, if so required under the provisions of the
applicable plan, program or arrangement and/or to comply with
Section 409A of the U.S. Internal Revenue Code of 1986, as
amended (the “Code”), not later than the fifteenth
(15 th
) day following
Executive’s Separation from Service), all benefits payable to
him upon or on account of termination under any of the
Company’s tax-qualified employee benefit plans and any other
plan, program or arrangement relating to deferred compensation,
retirement or other benefits including, without limitation, any
profit sharing, 401(k), employee stock ownership plan, or any plan
established as a supplement to any of the aforementioned plans. The
Company shall also pay Executive, during the month following the
month in which Executive’s Separation from Service occurs, an
amount equal to all unvested Company contributions credited to the
Executive’s account under any tax-qualified
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employee benefit plan maintained by the Company
as of the Date of Termination. In the event that this subparagraph
(vi) should conflict with the provisions of any of the
Company’s tax-qualified employee benefit plans and any other
plan, program or arrangement relating to deferred compensation,
retirement or other benefits including, without limitation, any
profit sharing, 401(k), employee stock ownership plan, or any plan
established as a supplement to any of the aforementioned plans,
then the provisions of the plan shall govern, provided that the
Company’s contribution shall vest pursuant to this
subparagraph (vi) to the maximum extent
permissible.
(vii) Vacation and Sick Leave
. The Company shall also pay Executive, not later than the second
day following the Date of Termination, a pro rata amount of his
base salary under his employment agreement, in effect on the Date
of Termination, for each day of vacation leave which has accrued as
of the Date of Termination, but which is unpaid as of such date, to
which Executive is entitled under the Company’s vacation
leave policy. The Company shall be required to pay for sick leave
days only to the extent that Executive has taken sick leave on or
prior to the Date of Termination to which Executive is entitled
under the Company’s sick leave policy.
(viii) General . Executive or
his estate shall also be entitled to any other amounts then owing
or accrued but unpaid to the Executive pursuant to any plans or
arrangements of the Company.
b. Executive shall be entitled to
the following severance benefits if the Executive’s
employment terminates in the circumstances described in
Section 2(a)(ii) or 2(a)(iv):
(i) Salary . Executive or his
estate shall be entitled to payment, to be received (subject to
Section 3(e) below) not later than the fifteenth
(15th) day following Executive’s Separation from
Service, of an amount equal to 2.0 multiplied by Executive’s
annualized base salary as of the Date of Termination.
(ii) Incentive Compensation .
Executive or his estate will be entitled to receive, not later than
(subject to Section 3(e) below) the fifteenth (15th) day
following Executive’s Separation from Service, an incentive
compensation payment of 2.0 multiplied by the highest annual
incentive compensation amount paid during any of the preceding
three (3) full plan years.
(iii) Car Allowance .
Executive or his estate will be entitled to receive, not later than
(subject to Section 3(e) below) the fifteenth (15th) day
following Executive’s Separation from Service, a lump-sum
amount equal to 2.0 times his annual car allowance in effect as of
the Date of Termination.
(iv) Equity Awards . The
restriction or forfeiture period on any restricted stock granted by
the Company to Executive under all plans and all stock options and
general stock appreciation rights granted by the Company to
Executive shall lapse or accelerate, as the case may be, and become
fully vested and exercisable on the Date of Termination, and shall
remain exercisable for a period of two (2) years following the
Date of Termination, subject to the latest expiration date
specified in the restricted stock or option agreements.
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(v) Medical and Life
Insurance . Payment of premiums for medical, dental and vision
insurance and life insurance by the Company shall continue on and
subject to the terms of this Agreement for a period of two
(2) years following the Date of Termination, subject to
termination under Section 7. To the extent that the payment of
any premiums pursuant to this subparagraph (v) is taxable to
Executive, any such payment shall be paid to Executive on or before
the last day of Executive’s taxable year following the
taxable year in which the related expense was incurred.
Executive’s right to p
