<PAGE>
Ex-10.42
EXECUTIVE COMMITTEE EMPLOYMENT AGREEMENT
THIS EXECUTIVE
COMMITTEE EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered
into as of April 1, 2003 between Laurenz
Schmidt (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
PART 2-- COMPENSATION AND BENEFITS IN CASE
OF ACTUAL OR CONSTRUCTIVE TERMINATION
(Sections 5-6,
beginning on page 3)
-
Termination
PART 3-- COMPENSATION AND BENEFITS IN CASE
OF A CHANGE IN CONTROL
(Section 7, beginning on page 4)
- Change in
Control
PART 4-- TRADE SECRETS, INTELLECTUAL
PROPERTY, NON-COMPETITION, REMEDIES,
SEVERABILITY, SUCCESSORS, MISCELLANEOUS PROVISIONS, SIGNATURE
PAGE
(Sections 8-14, beginning on page 6)
-
Non-Compete
-
Confidentiality
- Forfeiture in
Case of Certain Events
<PAGE>
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 EMPLOYMENT
(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 30 days
before the end
of the Initial Term or the applicable Renewal Term. The
Initial Term and
any Renewal Term are collectively referred to as the
"Term."
(b) Termination 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 of
Operations, reporting to the Chief Operating 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 $300,000. 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.
2
<PAGE>
SECTION 4. OTHER COMPENSATION
EFIP. During the Term the Executive will be
enrolled in the Enhanced Fairchild
Incentive Plan (EFIP), at a new targeted
participation level of 60%. While
bonuses under this program are never
guaranteed, typically, if the company meets
its EBITDA goals, participants receive 100%
of the targeted payout. If the
company exceeds those goals, participants
can receive up to 200% of the targeted
payout.
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.
Part 3 of the Agreement, consisting of
Section 7, describes benefits and
compensation, if any, payable in case of a
Change in Control.
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
(b) "GOOD REASON" means any of the
following: (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 your duties, responsibilities
or
authority.
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 24 months following the effective
date of such
3
<PAGE>
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.
(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.
(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
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 group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of
1934, as amended (the "EXCHANGE ACT")) (any of which, a "PERSON")
of
beneficial ownership (within the meaning of Rule 13d-3
promulgated
under the Exchange Act) of 25% or more of either (i) the
then-outstanding shares of common stock of the Company (the
"OUTSTANDING COMPANY COMMON STOCK") or (ii) the combined voting
power
of the then-outstanding voting securities of the Company entitled
to
vote generally in the election of directors (the "OUTSTANDING
COMPANY
VOTING SECURITIES"); excluding, however, the following: (A) Any
acquisition directly from the Company, other than an acquisition
by
virtue of the exercise of a conversion privilege unless the
security
being so converted was itself acquired directly
4
<PAGE>
from the Company, (B) Any acquisition by the Company, (C) Any
acquisition by any employee benefit plan (or related trust)
sponsored
or maintained by the Company or any entity controlled by the
Company,
or (D) Any acquisition pursuant to a transaction which complies
with
clauses (i), (ii) and (ii) of Section 7(b)(3); or
(2) A change in the composition of the
board of directors of the Company
(the "BOARD") such that the individuals who, as of the effective
date
of this Agreement, constitute the Board (such Board shall be
hereinafter referred to as the "INCUMBENT BOARD") cease for any
reason
to constitute at least a majority of the Board; provided, however,
for
purposes of this definition, that any individual who becomes a
member
of the Board subsequent to the effective date of this Agreement,
whose
election, or nomination for election by the Company's
shareholders,
was approved by a vote of at least a majority of those individuals
who
are members of the Board and who were also members of the
Incumbent
Board (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the
Incumbent
Board; but, provided further, that any such individual whose
initial
assumption of office occurs as a result of either an actual or
threatened
election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual
or
threatened solicitation of proxies or consents by or on behalf of
a
Person other than the Board shall not be so considered as a member
of
the Incumbent Board; or
(3) Consummation of a reorganization,
merger or consolidation or sale or
other disposition of all or substantially all of the assets of
the
Company
("CORPORATE TRANSACTION"); excluding, however, such a
Corporate Transaction pursuant to which (i) all or substantially
all
of the individuals and entities who are the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding
Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more
than
50% of, respectively, the outstanding shares of common stock, and
the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case
may be, of the corporation resulting from such Corporate
Transaction
(including a
corporation which as a result of such transaction owns
the Company or all or substantially all of the Company's assets
either
directly or through one or more subsidiaries) in substantially
the
same proportions as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Company Common Stock
and
Outstanding Company Voting Securities, as the case may be, (ii)
no
Person (other than the Company, any employee benef
