EMPLOYMENT AGREEMENT

 

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                                                                    EXHIBIT 10.1

 

                              EMPLOYMENT AGREEMENT

 

      EMPLOYMENT AGREEMENT ("AGREEMENT"), dated as of July 26, 2005 (the

"EFFECTIVE DATE") by and between AMIS Holdings, Inc., a Delaware corporation

(the "COMPANY"), and Christine King ("EXECUTIVE").

 

      WHEREAS, the Board and Executive entered into an employment agreement

dated as of August 15, 2001 which was amended and restated as of September 4,

2003 (the "PREVIOUS EMPLOYMENT AGREEMENT") pursuant to which Executive was

employed as the Chief Executive Officer of the Company and as a member of the

Board;

 

      WHEREAS, the Previous Employment Agreement will expire on December 31,

2005;

 

      WHEREAS, the Board and Executive wish to enter into this Agreement, which

supercedes the Previous Employment Agreement;

 

      NOW THEREFORE, in consideration of the foregoing and of the mutual

covenants and agreements of the parties set forth in this Agreement, and of

other good and valuable consideration, the receipt and sufficiency of which are

hereby acknowledged, the parties hereto, intending to be legally bound, agree as

follows:

 

                                    ARTICLE 1

                           POSITION; TERM OF AGREEMENT

 

      Section 1.01 Position. (a) Executive shall continue service as Chief

Executive Officer of the Company. While Executive is employed as Chief Executive

Officer and subject to the Company's fiduciary duties, the Company shall

recommend to the Company's Nominating & Corporate Governance Committee that she

be nominated for re-election as a member of the Board at the expiration of each

of her terms as a Board member.

 

      (b) As Chief Executive Officer, Executive shall have such duties and

authority, consistent with such position as shall be determined from time to

time by the Board.

 

      (c) During the Employment Term Executive will devote substantially all of

Executive's business time to the performance of Executive's duties hereunder and

will not engage in any other business, profession or occupation for compensation

or otherwise which would conflict with the rendition of such services either

directly or indirectly, without the prior written consent of the Board; provided

that nothing herein shall be deemed to preclude Executive, subject to the prior

written consent of the Board, from serving on any business, civic or charitable

board, as long as such activities do not materially interfere with the

performance of Executive's duties hereunder.

 

      Section 1.02 Term. Executive shall be employed by the Company for a period

commencing on the Effective Date and, subject to earlier termination or

extension as provided herein, ending on December 31, 2008 (the "EMPLOYMENT

TERM").

 

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                                     ARTICLE 2

                            COMPENSATION AND BENEFITS

 

      Section 2.01 Base Salary. The Executive's annual base salary (the "BASE

SALARY") currently is $500,000. Effective as of August 1, 2005, the Executive's

Base Salary shall be increased to $550,000 payable in equal monthly installments

or otherwise in accordance with the payroll and personnel practices of the

Company from time to time. Thereafter, the Board shall review the Executive's

Base Salary annually for possible increases in the sole discretion of the Board

with consideration for the Executive's performance and market competitiveness.

 

      Section 2.02 Bonus. Subject to Executive's continued employment as

contemplated hereby, with respect to each fiscal year all or part of which is

contained in the Employment Term, Executive shall be eligible for an annual

bonus, with a target bonus opportunity of 100% of Base Salary based on

attainment of such goals as the Board and Executive may mutually determine.

Specific details of the annual bonus shall be reviewed and approved by the Board

annually, including the "minimum", "targeted", "exceeds", and "maximum"

performance levels and associated bonus amounts.

 

      Section 2.03 Employee Benefits. (a) During the Employment Term Executive

shall be eligible for employee benefits (including fringe benefits, vacation and

health, accident and disability insurance, and retirement plan participation) no

less favorable in the aggregate than those benefits made available generally to

senior executives of the Company.

 

            (b) The Company shall pay for supplemental health care insurance for

Executive with Blue Cross Blue Shield in an amount up to $12,000 per year during

the Employment Term.

 

      Section 2.04 Office; Business and Travel Expenses. Executive's principal

job location shall be at the Company's headquarters in Pocatello, Idaho.

Reasonable travel, entertainment and other business expenses incurred by

Executive in the performance of Executive's duties hereunder shall be reimbursed

by the Company in accordance with Company policies as in effect from time to

time.

 

      Section 2.05 Options. During calendar year 2005, the Company shall grant

to Executive options to purchase 300,000 shares of Company common stock at an

exercise price per share equal to the fair market value of a share of Company

common stock on the date of grant. Such option shall have a 7-year term and

shall become 25% vested on the first anniversary of such grant, with the balance

vesting monthly over the 3-year period following such anniversary, subject to

the Executive's continued employment on the applicable vesting date. Thereafter,

the Board shall consider grants of equity on an annual basis and shall make

decisions with respect thereto in the sole discretion of the Board with

consideration for the Executive's performance and market competitiveness. All

options granted by the Company to the Executive during the

 

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term of this Agreement shall become 100% vested upon a Change in Control.

 

                                    ARTICLE 3

                          CERTAIN TERMINATION BENEFITS

 

      Section 3.01 Certain Events. (a) A "QUALIFYING EVENT" means the

involuntary termination of Executive's employment by the Company, including any

termination as a result of the failure by the Company to cause the Employment

Term under Section 1.02 hereof to be extended past the date set forth therein,

other than (x) for Cause, or (y) by reason of Executive's death or Disability.

 

      (b) Each party hereto shall give to the other party 30 days prior written

notice of such party's intent to terminate Executive's employment with the

Company.

 

      Section 3.02 Right to Certain Benefits. In the event of any termination of

employment during the Employment Term, Executive shall be entitled to receive

from the Company either the relevant Severance Benefits to the extent and as

described in Section 3.03, the relevant Separation Benefits to the extent and as

described in Section 3.04, or the relevant Change of Control Severance Benefits

to the extent and as described in Section 3.05, the case may be. The receipt of

the Severance Benefits or the Change of Control Severance Benefits (other than

Accrued Compensation and Accrued Benefits) shall be conditioned on the

effectiveness of a general release of claims by the Executive in a form

reasonably acceptable to the Company.

 

      Section 3.03 Benefits upon a Qualifying Event Other than a Change of

Control Severance. Executive shall be entitled to the following benefits (the

"SEVERANCE BENEFITS") upon a Qualifying Event other than a Change of Control

Severance:

 

      (a) The Company shall pay Executive as soon as practicable a lump sum, in

cash, equal to Executive's earned but unpaid Base Salary and other vested but

unpaid cash entitlements for the period through and including the date of

termination of Executive's employment, including unused earned vacation pay and

unreimbursed documented business expenses (collectively "ACCRUED COMPENSATION").

In addition, Executive shall be entitled to any other vested benefits earned by

Executive for the period through and including the date of termination of

Executive's employment under any other employee benefit plans and arrangements

maintained by the Company, in accordance with the terms of such plans and

arrangements, except as modified herein (collectively "ACCRUED BENEFITS").

 

      (b) Unless such Qualifying Event is the failure by the Company to cause

the Employment Term under Section 1.02 hereof to be extended past the date set

forth therein (in which case no amounts shall be payable pursuant to this clause

(b)), the Company shall pay Executive a cash payment in an amount equal to the

sum of (x) two times the Base Salary in effect immediately prior to such

Qualifying Event, and (y) two times the Target Bonus Opportunity for the year in

which the Qualifying Event occurs. Said sum shall be paid to the Executive by

the Company in twelve equal monthly installments with the first such payment

being due no later than the 5th day following the date of the effectiveness of

the release and the remaining payments being made

 

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over the next 11 months; provided that the Company may make such payments on a

different schedule to comply with Section 409A of the Code.

 

      (c) All Options shall become 100% vested on the date of such termination

and shall be exercisable by Executive during the 12-month period beginning on

such date.

 

      Section 3.04 Separation Payments. Upon termination of employment other

than upon a Qualifying Event, Executive shall be entitled to the benefits set

forth below (the "SEPARATION BENEFITS"):

 

      (a) The Accrued Compensation;

 

      (b) The Accrued Benefits; and

 

      (c) Other than upon the Company's termination of Executive's employment

for Cause, Executive shall be entitled to exercise, during the 12-month period

beginning on the date of any such termination of employment, the then vested

portion of the Options.

 

      Section 3.05 Change of Control Severance. The Executive shall be entitled

to the following benefits (the "CHANGE OF CONTROL SEVERANCE BENEFITS") upon a

Qualifying Event that occurs at any time within two years after a Change in

Control (a "CHANGE OF CONTROL SEVERANCE"):

 

      (a) The Accrued Compensation;

 

      (b) The Accrued Benefits;

 

      (c) Unless such Qualifying Event is the failure by the Company to cause

the Employment Term under Section 1.02 hereof to be extended past the date set

forth therein (in which case no amounts shall be payable pursuant to this clause

(c)), the Company shall pay Executive a cash payment in an amount equal to the

sum of (x) three times the Base Salary in effect immediately prior to such

Qualifying Event, and (y) three times the Target Bonus Opportunity for the year

in which the Qualifying Event occurs. Said sum shall be paid to the Executive

within 90 days of the date of the Change of Control Severance; provided that the

Company may make such payments on a different schedule to comply with Section

409A of the Code.

 

      (d) All Options shall become 100% vested on the date of such termination

and shall be exercisable by Executive during the 12-month period beginning on

such date.

 

                                    ARTICLE 4

                  CHANGE OF CONTROL, SUCCESSORS AND ASSIGNMENTS

 

      Section 4.01 Change of Control, Successors. Except in the event of a

Change in Control, this Agreement shall not be assignable by the Company without

the written consent of Executive. The Company will require any successor

(whether by reason of a Change in Control,

 

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direct or indirect, by purchase, merger, consolidation, or otherwise) to all or

substantially all of the business and/or assets of the Company to expressly

assume and agree to perform the obligations under this Agreement in the same

manner and to the same extent that the Company would be required to perform it

if no such succession had taken place.

 

      Section 4.02 Assignment by Executive. This Agreement shall inure to the

benefit of and be enforceable by Executive's personal or legal representatives,

executors, administrators, successors, heirs, distributees, devisees, and

legatees. If Executive should die or become disabled while any amount is owed

but unpaid to Executive hereunder, all such amounts, unless otherwise provided

herein, shall be paid to Executive's devisee, legatee, legal guardian or other

designee, or if there is no such designee, to Executive's estate. Executive's

rights hereunder shall not otherwise be assignable.

 

                                    ARTICLE 5

                                   MISCELLANEOUS

 

      Section 5.01 Notices. Any notice required to be delivered hereunder shall

be in writing and shall be addressed

 

      if to the Company, to:

 

            AMIS Holdings, Inc.

            2300 Buckskin Road

             Pocatello, Idaho 83201

      Fax:   208-234-6841

      Attn: Chief Financial Officer

 

      With a copy to:

 

            AMIS Holdings, Inc.

            2300 Buckskin Road

            Pocatello, Idaho 83201

      Fax:   208-234-6935

      Attn: Chairman of the Compensation Committee of the Board of Directors

 

      if to Executive, to Executive's last known address as reflected on the

books and records of the Company; or, in each case, to such other address as

such party may hereafter specify for the purpose by written notice to the other

party hereto. Any such notice shall be deemed received on the date of receipt by

the recipient thereof if received prior to 5:00 p.m. in the place of receipt and

such day is a business day in the place of receipt. Otherwise, any such notice

shall be deemed not to have been received until the next succeeding business day

in the place of receipt.

 

      Section 5.02 Dispute Resolution. (a) Except as provided in Section 5.15,

each of Executive and the Company shall have the right and option to elect (in

lieu of litigation) to have any dispute o