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EXHIBIT 10.65
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered into as
of
February 28, 2004 between Thomas A. Beaver (the "EXECUTIVE") and
Fairchild
Semiconductor Corporation, a Delaware corporation (the
"COMPANY").
For ease of reference, this Agreement is divided into the
following
parts, which begin on the pages indicated:
PART 1-- TERM,
DUTIES AND SCOPE, COMPENSATION AND BENEFITS DURING EMPLOYMENT
(Sections 1-4, beginning on page 2)
-
Salary
- EFIP
Bonus
- DSUs
- Options
and Other Equity Awards
- Other
Benefits
PART 2--
COMPENSATION AND BENEFITS IN CASE OF ACTUAL OR CONSTRUCTIVE
TERMINATION (Sections 5-6, beginning on page 4)
-
Termination
PART 3--
COMPENSATION AND BENEFITS IN CASE OF A CHANGE IN CONTROL
(Section 7, beginning on page 5)
PART 4--
CONFIDENTIALITY AND NON-DISCLOSURE, FORFEITURE, INTELLECTUAL
PROPERTY, NON-COMPETITION AND NON-SOLICITATION, REMEDIES,
SUCCESSORS,
MISCELLANEOUS PROVISIONS, SIGNATURE PAGE
(Sections 8-14, beginning on page 7)
-
Confidentiality and Non-Disclosure
-
Forfeiture in Case of Certain Events
-
Non-Competition and Non-Solicitation
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TERMS
For
good and valuable consideration, the adequacy and receipt of which
are
hereby acknowledged, the Company and the Executive, intending to be
legally
bound, agree as follows:
PART 1 TERM OF EMPLOYMENT, DUTIES AND SCOPE, COMPENSATION AND
BENEFITS DURING
EMPLOYMENT
SECTION 1. TERM OF AGREEMENT
(a) Term. Unless
sooner terminated as provided in this Agreement, the term of
this
Agreement will begin on the effective date of this Agreement and
will
end
on the second anniversary thereof (the "INITIAL TERM"). The term
of
this
Agreement will be automatically extended for one or more
successive
one-year periods (each a "RENEWAL TERM") unless the Company or
the
Executive gives the other written notice of non-renewal at least
six months
before the end of the Initial Term or the applicable Renewal Term,
provided
that
any such notice by the Company prior to the end of the Initial
Term
will
constitute "Good Reason" hereunder. The Initial Term and any
Renewal
Term
are collectively referred to as the "TERM."
(b) Termination of
Employment or Resignation. Subject to the other terms of
this
Agreement, including those in Part 2, either the Company or the
Executive may terminate the Executive's employment with the Company
at any
time
and for any reason or no reason upon written notice to the
other
party.
SECTION 2. DUTIES AND SCOPE OF EMPLOYMENT
(a) Position. The
Company will employ the Executive (or, if the Company is not
the
Executive's employer, the Company will cause its appropriate
subsidiary
to
employ the Executive) during the Term in the position of Executive
Vice
President, Worldwide Sales and Marketing, reporting directly to the
Chief
Executive Officer. The Executive will be given duties,
responsibilities and
authorities that are appropriate to this position.
(b) Obligations.
During the Term, the Executive will devote the Executive's
full
business efforts and time to the business and affairs of the
Company
as
needed to carry out his duties and responsibilities. The foregoing
shall
not
preclude the Executive from engaging in appropriate civic,
charitable,
religious or other non-profit activities or from devoting a
reasonable
amount of time to private investments or from serving on the boards
of
directors of other entities, provided that those activities do
not
interfere or conflict with the Executive's duties or
responsibilities to
the
Company.
SECTION 3. BASE COMPENSATION
During the Term, the Company will pay the Executive, as
compensation for
services, a base salary at the annual rate of at least $315,000.
Salary
increases will be considered after the first anniversary of this
Agreement, or
sooner in the discretion of the Chief Executive Officer, on a basis
consistent
with Company policies.
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SECTION 4. OTHER BENEFITS AND COMPENSATION
(a) EFIP. During the
Term the Executive will be enrolled in the Enhanced
Fairchild Incentive Plan (EFIP), at a targeted participation level
of 60%.
With
respect to the 2004 measurement period, the Company shall pay
the
Executive a minimum EFIP bonus equal to that which would be paid at
the
100%
target level assuming the Executive would have been employed for
the
entire measurement period (or $189,000), regardless of whether the
Company
achieves its 100% target goal for that period and regardless of
whether
other EFIP participants receive an EFIP bonus for such period. If
the
Company exceeds the 100% target goal for that period, additional
payments
may
be made to the Executive in accordance with the plan. The
Executive
shall be solely responsible for all income and other taxes based on
EFIP
bonus payments, and the Company will make all appropriate
withholdings
relating to such taxes.
(b) DSUs. The Company
shall grant the Executive 20,000 deferred stock units
("DSUS"), subject to the applicable Company plan governing such
award and
an
award agreement under such plan not inconsistent with the terms of
this
paragraph. The grant date of this grant of deferred stock units
will be on
or
about the effective date of this Agreement. This grant will vest in
25%
increments on the first four anniversaries of the grant date. The
Executive
will
be solely responsible for any taxes associated with the
receipt,
vesting, or delivery of shares or cash under, this grant, and the
Company
will
make appropriate withholdings from any distributions of shares or
cash
thereunder.
(c) Options and Other
Equity Awards. The Executive will be eligible to receive
a
grant of options to purchase up to 35,000 shares of the Common
Stock of
the
Company's parent, Fairchild Semiconductor International, Inc., as
part
of
the general grant of equity awards to officers and key employees of
the
Company in 2004, subject to the applicable Company plan governing
such
award and an award agreement under such plan not inconsistent with
the
terms of this paragraph, and subject, further, to the receipt
of
stockholder approval of amendments to such plan at the 2004 annual
meeting
of
stockholders. This grant, if made, will vest in 25% increments on
the
first four anniversaries of the grant date. The Executive will be
solely
responsible for any taxes associated with the receipt, vesting, or
delivery
of
shares or cash under this grant, and the Company will make
appropriate
withholdings from any distributions of shares or cash thereunder.
In
addition, the Executive will be eligible to receive grants of
options, DSUs
and
other awards under and subject to the Company's Stock Plan and
other
equity compensation plans at times and levels consistent with
the
Executive's authority and responsibility under applicable Company
policies
and
practices, subject to the receipt of stockholder approval as
necessary.
In
the aggregate all such grants shall be made, or be subject to
such
terms, so that the Executive shall receive the benefit of full
vesting upon
his
retirement upon or after attaining age 65. The Executive shall have
up
to
five years, or the remainder of the term of the award grant,
whichever
is
less, to exercise vested equity awards after the effective date of
such
retirement. All such grants shall be evidenced by customary
award
agreements under the applicable plans, containing terms not
inconsistent
with
the terms of this paragraph.
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(d) Sign-On Bonus. The
Company shall pay the Executive a one-time recruitment
bonus equal to $100,000 after the payment of income and other taxes
based
on
the Executive's receipt of such bonus, which taxes shall be paid by
the
Company. Half of this bonus will be paid promptly following the
effective
date
of this Agreement and the remainder will be paid promptly
following
September 1, 2004.
(e) Vacation. The
Executive will be entitled to four weeks of vacation per
year, accrued and taken in accordance with applicable Company
policies.
(f) Relocation and
Other Benefits. The Executive will be entitled to
participate in all of the Company's other benefit plans in
accordance with
their eligibility and other terms and applicable Company policies
as
amended from time to time, including relocation, medical and
dental
insurance, vision care, supplemental life insurance, short- and
long-term
disability insurance, the Fairchild Semiconductor Personal
Retirement and
Savings (401(k)) Plan, and the Fairchild Semiconductor Employee
Stock
Purchase Plan.
PART 2 COMPENSATION AND BENEFITS IN CASE OF TERMINATION WITHOUT
CAUSE OR FOR
GOOD
REASON
SECTION 5. TERMINATIONS AND RELATED DEFINITIONS
Part 2 of the Agreement, consisting of Sections 5 and 6, describes
the benefits
and compensation, if any, payable in case of certain terminations
of employment.
In this Agreement,
(a) "CAUSE" means (1)
a willful failure by the Executive to substantially
perform the Executive's duties under this Agreement, other than a
failure
resulting from the Executive's complete or partial incapacity due
to
physical or mental illness or impairment, (2) a willful act by
the
Executive that constitutes gross misconduct and that is
materially
injurious to the Company, (3) a willful breach by the Executive of
a
material provision of this Agreement (including Sections 8 and 10)
or (4) a
material and willful violation of a federal or state law or
regulation
applicable to the business of the Company that is materially
and
demonstrably injurious to the Company, provided that no act, or
failure to
act,
by the Executive shall be considered "willful" unless committed
without good faith and without a reasonable belief that the act or
omission
was
in the Company's best interest; and provided, further, that, if
the
failure, act, breach or other basis for finding Cause under this
Agreement
is
capable of being cured, then no finding of Cause shall be made
unless
the
Executive has failed to cure such failure, act, breach or other
basis
within 30 days after receiving written notice thereof from the
Company and
(b) "GOOD REASON"
means any of the following or as otherwise provided in this
Agreement: (1) a reduction in the Executive's base salary other
than as
part
of a broader executive pay reduction, (2) a reduction in the
Executive's incentive compensation (EFIP) target other than as part
of a
broader executive reduction, (3) a material change in the
employment
benefits available to the Executive, if such change does not
similarly
affect all employees of the Company eligible for such benefits, or
(4) a
material reduction in the
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Executive's duties, responsibilities or authority, including but
not
limited to modifying the Executive's direct supervisor specified in
Section
2(a)
other than to include the Board of Directors or the Chairman of
the
Board of Directors.
SECTION 6. TERMINATION BY COMPANY WITHOUT CAUSE OR BY EXECUTIVE FOR
GOOD REASON
(a) Severance. If,
during the Term, the Company terminates the Executive's
employment for any reason other than Cause (including as a result
of the
Executive's death or disability), or if the Executive terminates
his
employment for Good Reason, then, provided the Executive (or his
legal
representative, if applicable) executes the release of claims
described in
Section 6(b), the Company will pay the Executive, in a lump sum or,
at the
Company's option, in installments over 12 months following the
effective
date
of such termination, an amount equal to two times the Executive's
base
salary in effect on such termination date. The Executive will
be
responsible for all taxes relating to such payments and the Company
will
make
all required withholdings of all such taxes. In addition, for a
period
of
one year following such termination, the Company shall provide
continued
medical and dental insurance benefits, for the benefit of the
Executive and
his
eligible dependents, on the same terms and conditions as available
to
executives of the Company in comparable positions (viewing the
Executive
for
this purpose as if he had remained employed by the Company
following
such
termination). At the time of such termination, the Company shall
pay
the
Executive in cash for all accrued and unused vacation time.
(b) Release of Claims.
As a condition to the receipt of the payments and
benefits described in Section 6(a), the Executive (or his legal
representative, if applicable) shall be required to execute a
release of
all
claims arising out of the Executive's employment or the
termination
thereof, including any claim of discrimination under U.S. state or
federal
law
or any non-U.S. law, but excluding claims for indemnification from
the
Company under any indemnification agreement with the Company,
its
certificate of incorporation or bylaws (or equivalent
organizing
instruments), or claims under applicable directors' and
officers'
insurance. If the Executive executes such a release, then the
Company shall
release the Executive from all claims arising out of the
Executive's
employment with the Company, other than any claims arising (before
or after
termination) under Sections 8 or 10 of this Agreement.
(c) Conditions to
Receipt of Payments. Without limiting the Company's other
rights or remedies in the even of the Executive's breach of any
provision
of
this Agreement, the obligation of the Company to provide the
payments
described in this Section 6 shall cease if the Executive breaches
any of
the
provisions of Section 8 or 10.
PART 3 COMPENSATION AND BENEFITS IN CASE OF A CHANGE IN CONTROL
SECTION 7. CHANGE IN CONTROL
(a) Payment. In the
event of a Change in Control, if the Executive's employment
is
terminated by the Company other than for Cause (including as a
result of
the
Executive's
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death or disability), or by the Executive for Good Reason, in
either case
within the time period beginning six months before the Change in
Control
and
ending 12 months after the Change in Control, the cash payment
under
Section 6(a) will be paid in a lump sum within 14 days after the
date of
such
termination. Any obligation of the Company under this Section 7
will
survive any termination of this Agreement.
(b) Definition. A
"CHANGE IN CONTROL" means the happening of any of the
following events (for purposes of this Section 7 only, the
"COMPANY" means
Fairchild Semiconductor International, Inc., a Delaware
corporation, and
not
any of its subsidiaries):
(1)
An acquisition by any
individual, entity or g
