Exhibit 10.03
[Beyer Employment
Agreement]
This agreement (the
“Employment Agreement”) completely supersedes and
replaces that certain employment agreement by and between you and
Intersil dated May 10, 2002 (the “ Prior
Agreement ”), effective as of January 1, 2006 (the
“ Effective Date ”).
1. Positions; Term
.
(a) You will continue to be employed
by Intersil as its President and Chief Executive Officer until
December 31, 2008, unless sooner terminated in accordance with
Section 7 hereof (the “ Initial Term ”).
The Initial Term will be automatically extended for successive one
year periods beginning January 1, 2009 unless either party
gives six (6) months prior written notice of non-renewal to
the other party, or unless your employment is otherwise terminated
(the Initial Term and any such extensions being your “
Term of Employment ”).
(b) During the Term of Employment,
you will have overall responsibility for the management of Intersil
and will report directly to the Board of Directors of Intersil (the
“ Board ”). During your Term of Employment, you
will also be nominated for election to the Board. You will be
expected to devote your full working time and attention to the
business of Intersil and its subsidiaries, and you will not render
services to any other business without the prior approval of the
Board or, directly or indirectly, engage or participate in any
business that is competitive in any manner with the business of
Intersil or its subsidiaries. You will also be expected to comply
with and be bound by Intersil’s operating policies,
procedures and practices that are from time to time in effect
during your Term of Employment. Your principal location of
employment will be at Intersil’s offices in Milpitas,
California. Notwithstanding the foregoing, if you and Intersil
mutually agree to change or reduce your duties, including, without
limitation any change due to the hiring of a President to assume
some of your duties, you and Intersil agree to negotiate a new
agreement with Intersil.
2. Base Salary . During the
Term of Employment, your initial base salary will be $550,000 per
year, payable in accordance with Intersil’s normal payroll
practices with such payroll deductions and withholdings as are
required by law. During your Term of Employment, your base salary
will be reviewed on an annual basis by the Compensation Committee
of the Board and may be increased from time to time, in the sole
discretion of the Board, but in no event shall your base salary be
reduced below the initial salary amount set forth herein. Your base
salary as adjusted shall be referred to herein as your “
Base Salary .”
3. Bonus . You will be
eligible to receive a target annual bonus of up to $600,000, to be
determined on an annual basis by and at the sole discretion of the
Board (the “ Target Bonus ”).
4. Equity Compensation
.
(a) Stock Options. Pursuant
to a separate award agreement, and subject to the terms of
Intersil’s 1999 Equity Compensation Plan, as amended and
restated May 1, 2005 (the “ Stock Plan ”)
except as specifically provided hereunder, the Compensation
Committee of the Board shall grant you on the first business day
following April 1, 2006 (the “ Initial Grant Date
”) an option to purchase 62,500 shares of the Class A
Common Stock of Intersil (“ Common Stock ”) at
an exercise price equal to the closing price of the Common Stock as
quoted on the NASDAQ on the Initial Grant Date and you will be
granted options to purchase 62,500 shares of Common Stock on the
first business day following July 1,
2006, October 1, 2006 and January 1, 2007, at an
exercise price equal to the closing price on the
applicable
grant date (collectively, the options granted
hereunder are referred to as the “ New Options
”). The New Options shall vest over a three year period as
follows: one-third of all of the New Options (regardless of the
date granted) will vest on the first anniversary of the Initial
Grant Date, the remaining portion of the New Options shall vest in
equal quarterly installments over the next eight calendar
quarters.
(b) Performance Shares .
Pursuant to a separate award, and subject to the terms of the Stock
Plan and the applicable award agreement thereunder, you will be
granted 100,000 performance-based deferred stock units (“
DSUs ”) (the “ Performance Shares
”) on January 1, 2006 (the “Grant Date”).
The number of Performance Shares ultimately earned shall be
determined at the conclusion of a three-year performance period
based upon Intersil’s revenue growth and Intersil’s
growth operating income, with such performance goals to be
determined by the Compensation Committee of the Board; provided,
however, if Intersil outperforms members of its peer group as
determined by the Compensation Committee, you will be eligible to
receive up to 200% of the total number of Performance Shares
initially granted on the Grant Date on the third anniversary of the
Grant Date; and, provided, further, that you have not had a
Voluntary Termination or been Terminated for Cause. Provided that
the Term of Employment has not expired, you will be eligible to
receive another grant of performance-based DSUs in 2007.
5. Other Benefits . You will
be eligible for the normal vacation, health insurance, 401(k),
employee stock purchase plan, financial planning, executive
physical and other benefits offered to all Intersil senior
executives of similar rank and status.
6. Employment and Termination
. Your Term of Employment may be terminated by you or by Intersil
at any time for any reason as follows:
(a) You may terminate your
employment upon written notice to the Board at any time in your
discretion without reason ( “Voluntary
Termination” ); provided that you give Intersil 60 days
written notice. The Board in its sole discretion may waive the
60-day notice provision and in such event your Voluntary
Termination shall be effective on an earlier date determined by the
Board.
(b) During the Term of Employment,
you may terminate your employment upon written notice to the Board
at any time in your discretion because of (i) any material and
substantial diminution of your duties and authorities (other than a
diminution agreed to by you, including under Section 1(b)),
(ii) a demotion from the office of Chief Executive Officer
and/or President (other than a change in office or title agreed to
by you, including under Section 1(b)), (iii) removal from
your position as a Director of Intersil (other than for a reason
that would constitute a Termination for Cause as set forth below),
or (iv) any failure by Intersil to comply with the terms of
this Employment Agreement, which failure is not cured within 30
days from the date you send written notice to Intersil of such
non-compliance (“ Involuntary Termination
”).
(c) Intersil may terminate your
employment upon written notice to you at any time following a
determination by the Board that there is “Cause” for
such termination ( “Termination for Cause” ).
“ Cause ” means (i) your conviction of a
felony which constitutes a crime involving moral turpitude and
results in material harm to Intersil or any of its affiliates;
(ii) a judicial determination that you have
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committed fraud, misappropriation or
embezzlement against Intersil or any affiliate thereof; or
(iii) your willful or gross and repeated misconduct in the
performance of your duties in each instance so as to cause material
harm to Intersil or any of its affiliates; which is not cured
within 30 days from the date Intersil sends you written notice of
such willful or gross and repeated misconduct.
(d) Intersil may terminate your
employment upon written notice to you at any time in the sole
discretion of the Board without a determination that there is Cause
for such termination ( “Termination without
Cause” ); and
(e) Your employment will
automatically terminate upon your death or upon your disability as
determined by the Board ( “Termination for Death or
Disability” ); provided that “disability”
shall mean your complete inability to perform your job
responsibilities for a period of 180 consecutive days or 180 days
in the aggregate in any 12 month period.
In no event shall the expiration of
the Term of Employment (giving effect to any extensions thereof),
by virtue of either party’s having given notice of
non-renewal pursuant to Section 1(a) hereof, constitute
Termination without Cause, an Involuntary Termination or
Termination for Death or Disability; provided, however, that in the
event Intersil gives you written notice of its intention not to
renew the Term of Employment and you remain employed with Intersil
through the expiration of the Term of Employment, upon the
expiration of the Term of Employment (x) your unvested options
and deferred stock units (“ DSUs ”) shall fully
vest, and (b) your unvested Performance Shares shall vest to
the extent the applicable performance levels are achieved as of the
expiration of the Term of Employment. Upon any termination or
expiration of your employment with Intersil, if requested by
Intersil, you shall resign from the Board.
7. Separation Benefits . Upon
termination of your employment with Intersil for any reason during
the Term of Employment, you will receive payment for all unpaid
salary and vacation accrued to the date of your termination of
employment; and your benefits will be continued under
Intersil’s then existing benefit plans and policies for so
long as provided under the terms of such plans and policies and as
required by applicable law. Subject to your compliance with
Sections 10 and 11, under certain circumstances, you will also be
entitled to receive severance benefits as set forth below, but you
will not be entitled to any other compensation, award or damages
with respect to your employment or termination (except to the
extent you are entitled to benefits under your Executive Change in
Control Severance Benefits Agreement with Intersil dated
May 10, 2002, as amended (the “ Severance Benefits
Agreement ”), in lieu of any benefits provided below, in
the event of a Covered Termination (as defined in the Severance
Benefits Agreement)).
(a) In the event of your Voluntary
Termination or Termination for Cause during the Term of Employment,
you will not be entitled to any cash severance benefits, additional
vesting of shares of restricted stock, DSUs, options or other
equity compensation or post-termination death or medical benefits
as described in Section 7(b).
(b) Subject to your compliance with
Sections 10 and 11, in the event of your Involuntary Termination or
Termination without Cause during the Term of Employment, you will
be: (i) entitled to continuance of your Base Salary for a
period of two years (less applicable deductions and
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withholdings) payable in accordance with
Intersil’s normal payroll practices; (ii) entitled to
the payment of one-half of your full Target Bonus (without regard
to satisfaction of any target performance objectives) with respect
to each of the subsequent four semi-annual bonus payment periods
payable at the same time such bonus is payable to other senior
executives of Intersil; (iii) with respect to stock options
and DSUs granted to you by Intersil (A) on or after 2006
(“ Post-2005 Awards ”), entitled to acceleration
of vesting in an amount equal to the amount that would have vested
over the eighteen (18) month period commencing on the date of
your termination (but in no event shall any such award of Post-2005
Awards be less than 50% vested upon an Involuntary Termination or
Termination without Cause), with such Post-2005 Awards exercisable
in accordance with the terms of such grants, (B) between the
commencement date of the Prior Agreement and the December 31,
2005 ( “Prior Agreement Awards” ), entitled to
full acceleration of vesting on all of your Prior Agreement Awards
and you will have twenty-four (24) months from your
termination date (or the remaining term of the applicable award
grant if shorter than 24 months) to exercise such outst
