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Exhibit
10.1
SEPARATION AND RELEASE
AGREEMENT
This SEPARATION AND RELEASE
AGREEMENT (this “Agreement”) is entered into by and
between Freescale Semiconductor, Inc., (the “Company”)
and Michel Mayer (“Executive”) dated as of the 12th day
of February, 2008, and confirms the agreement that has been reached
with the Executive in connection with his resignation from the
Company.
RECITALS
WHEREAS, Executive is
employed by the Company as its Chief Executive Officer pursuant to
an Employment Agreement dated December 1, 2006 (the
“Employment Agreement”); and
WHEREAS , Executive
serves as Chairman of the Board of Directors of the Company (the
“Board”) and as Chairman of the Board of Directors (the
“Parent Board”) of Freescale Holdings GP, Ltd.
(“Parent”), the indirect parent entity of the Company;
and
WHEREAS, in order to
avoid doubts and controversy relating to the nature of
Executive’s separation and the payments and benefits due to
him as a consequence thereof and to resolve amicably any and all
disagreements and matters arising out of or relating in any way to
Executive’s and the Company’s relationship.
NOW, THEREFORE, in
consideration of the premises and the mutual covenants set forth
herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:
1. Resignation of
Employment .
(a) Upon execution of this
Agreement, Executive agrees to resign from employment with the
Company, effective as of May 1, 2008 (the “Date of
Separation”), at which time Executive’s employment with
the Company shall cease. The Company shall continue to pay
Executive at his current rate of base salary and continue all of
his benefits and perquisites through the Date of Separation, in
accordance with the Company’s current payroll and executive
employment practices. Upon a date designated by the Board (the
“Date of Resignation”), which date may be prior to the
Date of Separation, Executive shall resign from his position as
Chief Executive Officer of the Company and as a member of the Board
and the Parent Board, and from his service as a director or
employee of any affiliate or subsidiary of the Company or Parent,
to the extent, if any, he was employed or served in any such
capacity. Between the period beginning on the Date of Resignation
and ending on the Date of Separation, Executive shall serve as an
interim advisor to the Board regarding transition issues. Upon
request of the Company, Executive agrees to execute such documents
and take such action as may be necessary or desirable to effectuate
the foregoing; however, should Executive not execute such
documents, he shall nevertheless be deemed to have resigned from
all such positions and capacities on the date requested by the
Company.
(b) On or about the Date of
Separation, Executive shall return to the Company all Company
property in his possession or use, including, without limitation,
all fax machines, printers, cell phones, credit cards,
building-access cards and keys and other electronic equipment,
except that Executive may keep his laptop computer, provided that
the Company shall disconnect and discontinue such computer’s
connection with the Company’s computer network system, and
provided further that at the Company’s request, Executive
shall return to the Company any software or other data from such
computer, however stored, relating to “Confidential
Information” as defined in Section 10(a) of the
Employment Agreement.
(c) Executive and the Company
acknowledge and agree that on February 8, 2008, they jointly
announced that Executive has elected to leave the Company to pursue
other interests by issuing a press release and that all future
statements or communications by the parties shall be consistent
with that press release.
(d) Other than as set forth
in this Agreement, upon the Date of Separation, Executive shall not
receive any base salary, annual bonus, long term incentive award,
welfare, retirement, perquisite, fringe benefit, or other benefit
plan coverage or coverage under any other practice, policy or
program as may be in effect from time to time, applying to senior
officers or other employees of the Company, or any severance
payment or benefit to be received under any severance benefit
plans, practices, policies or programs, or any vacation or expense
reimbursement; however, Executive shall receive all benefits and
conversion rights, at the applicable time, earned, due or
applicable under the terms of Company benefit or retirement plans.
Without limiting the generality of the foregoing, except as
specifically set forth in this Agreement and except as set forth in
the (i) Investors Agreement by and among Freescale Holdings
L.P., Freescale Holdings (Bermuda) I, Ltd., Freescale Holdings
(Bermuda) II, Ltd., Freescale Holdings (Bermuda) III, Ltd.,
Freescale Acquisition Holdings Corp., Freescale Holdings (Bermuda)
IV, Ltd., Freescale Acquisition Corporation and Certain Freescale
Holdings L.P. Investors and certain stockholders of Freescale
Holdings (Bermuda) I, Ltd. dated as of December 1, 2006 (the
“Investors Agreement”), (ii) the Agreement of
Exempted Limited Partnership of Freescale Holdings L.P., a Cayman
Islands exempted limited partnership, date December 1, 2006,
as amended from time to time (the “Partnership
Agreement”) and (iii) the Registration Rights Agreement
by and among Freescale Holdings L.P. and Certain Freescale Holdings
L.P. Investors, dated as of December 1, 2006 (the
“Registration Rights Agreement”), in each case, solely
with respect to Executive’s Class A Interests (as
defined in the Partnership Agreement) and vested Class B Interests
(as defined in the Partnership Agreement) (“Continuing Equity
Related Rights”), Executive will have no rights under the
Employment Agreement, the Investors Agreement, the Registration
Rights Agreement, the Freescale Holdings L.P. 2006 Interest Plan
(the “Interest Plan”); the Freescale Holdings L.P.
Award Agreement by and between Freescale Holdings L.P., a Cayman
Islands limited partnership and Executive, dated December 1,
2006 (the “Award Agreement”), the Company’s
Senior Officer Change in Control Severance Plan (the “CIC
Severance Plan”) or any other agreement, contract, plan,
practice, policy or program of the Company. The Company shall
repurchase from Executive 5,000 Class A limited partnership
interests of Freescale Holdings L.P., on such terms and conditions
as shall be set forth in a definitive stock repurchase agreement
which shall be executed no later than 15 business days after the
date hereof.
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2. Accrued Payments .
The Company shall pay to Executive $80,006.25 in a lump sum cash
payment by the regular payroll date following the Date of
Separation, as payment for Executive’s vacation or paid time
off or annual leave days, as applicable, accrued but not taken as
of the Date of Separation.
3. Payments and
Benefits .
(a) Following execution of
this Agreement and only if the Release set forth in
Section 6(a) of this Agreement is not revoked pursuant to
Section 6(b), Executive will be entitled to the following
payments and benefits which will be paid or provided to him within
ten (10) days following the Date of Separation:
(i) As of the date of this
Agreement, Executive is vested in 33,331.795 Class B Interests and
as of the Date of Separation, Executive shall become fully vested
in an additional 47,212.433 Class B Interests, which represents a
pro rata portion of any outstanding and unvested Equity Awards (as
such term is defined in the Employment Agreement) held by Executive
as of the Date of Separation that would have vested in 2008 (the
fiscal year in which the Date of Separation occurs), such portion
equal to the number that would have so vested multiplied by a
fraction, the numerator of which is the number of days in such year
through the Date of Separation and the denominator of which is 365,
and that portion of such Equity Awards that would have become
vested on December 1, 2009 ( i.e. , in the one-year
period following fiscal year 2008). Such Class B Interests shall
remain governed in all respects by the applicable terms and
conditions of the Investors Agreement, Partnership Agreement,
Registration Rights Agreement, Interest Plan, and the Award
Agreement. All Class B Interests held by Executive that are not
vested as of the Date of Separation shall be forfeited as of such
date and no payment shall be made with respect thereto.
(ii) The Company shall pay
Executive a cash lump sum of $488,836, which shall represent his
prorated target bonus with respect to 2008, the fiscal year in
which the Date of Separation occurs;
(iii) The Company shall pay
Executive a cash lump sum severance payment of $7,200,000;
and
(iv) In order to assist the
Company in ensuring that the Executive is fully aware of his duties
and obligations under this Agreement, and as set forth in Sections
6(b) and 10 below, Executive has retained counsel and the Company
shall promptly pay Executive’s counsel for reasonable legal
fees and related expenses so incurred.
(b) 2007 Annual Bonus
. The Company shall pay Executive a cash lump sum of $1,462,500,
which shall represent his bonus earned with respect to 2007, at
such time as such bonuses are paid to the Company’s senior
executives generally.
(c) Continuing Welfare
Benefits . If the Release set forth in Section 6(a) of
this Agreement is not revoked pursuant to Section 6(b), the
Company shall, for three (3) years after the Date of
Separation, continue health, medical, life and long-term disability
insurance benefits to Executive and/or Executive’s family at
least equal to those that would have been provided in
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accordance with the health, medical,
life and long-term disability insurance plans, programs, practices
and policies of the Company as in effect on the date hereof;
provided, however, that, if Executive becomes reemployed with
another employer and becomes eligible to receive medical or other
welfare benefits under another employer provided plan, the medical
and other welfare benefits described herein shall be secondary to
those provided under such other plan during such applicable period
of eligibility. If the terms of the applicable plan, program,
practice or policy do not permit the participation of Executive or
Executive’s family, the Company shall take all steps
necessary to continue to provide the benefits described above on
the same after-tax basis as if such benefits were provided under
such plan, program, practice or policy of the Company.
(d) Gross-Up Payment .
The Company shall, at the time and in accordance with
Section 4.3 of the CIC Severance Plan, pay to Executive the
“Gross-Up Payment” as defined in such Section. The
parties’ rights under Section 4.3 of the CIC Severance
Plan are incorporated by reference herein.
(e) Relocation
Expenses . The Company shall pay Execut
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