Exhibit 10.1
SEPARATION AND RELEASE
AGREEMENT
This Separation and Release
Agreement (the “ Agreement ”) is the mutual,
complete and final agreement between Paul Grimme (for yourself,
your spouse and anyone acting for you) (“ you
”), and Freescale Semiconductor, Inc. (for itself, its
parents, subsidiaries and affiliates and anyone acting for
Freescale) (“ Freescale ”) that resolves all
matters between you and Freescale. Except where otherwise
specified, this Agreement supersedes and nullifies all prior and
concurrent communications, acknowledgements and agreements between
you and Freescale, including any prior versions of this Agreement.
This Agreement has been individually negotiated and is not part of
a group incentive or other termination program. In consideration
for the payments and benefits provided under this Agreement, you
and Freescale agree to the following:
1. SEPARATION . You resigned
from your employment with Freescale effective September 5,
2008 (the “ Separation Date ”). You claim that
your separation from employment entitles you to receive benefits
under the Freescale Semiconductor, Inc. Officer Change in Control
Severance Plan (the “ CIC Plan ”). Freescale
disagrees with you conclusion and has denied your claim for
benefits under the CIC Plan. To resolve this dispute, Freescale and
you have entered into this Agreement, and the Consulting Services
Agreement executed contemporaneously with this
Agreement.
2. SEPARATION ALLOWANCE
.
Freescale will pay you $1,225,000
(One Million Two Hundred Twenty-Five Thousand Dollars) (less
applicable taxes and withholding (the “ Separation
Allowance ”) if you sign and do not revoke this
Agreement. This payment will be made to you on or before
December 30, 2008, provided you sign and do not revoke this
Agreement.
3. BENEFIT AND EQUITY PLANS
.
The effect of your separation and
this Agreement upon your participation in, or coverage under, any
of Freescale’s benefit or compensation plans and any
applicable stock option plans, award documents or restricted stock
or restricted stock unit agreements will be governed by the terms
of those plans and agreements except as specifically modified by
this Agreement. Freescale is making no guarantee, warranty or
representation in this Agreement regarding any position that may be
taken by any administrator regarding the effect of this Agreement
upon your rights, benefits or coverage under those
plans.
The Freescale Holdings Nonqualified
Stock Option Agreements between you and Freescale dated
December 1, 2006 (collectively the “ NQ
Agreements ”) will be modified as follows: Under
Section 3(a)(iii) of the NQ Agreements, the period within
which you can exercise all or part of your vested stock options
will be extended to November 30, 2010 or ten business days
after Freescale communicates its 2010 annual valuation.
You will receive continued benefits
as described and subject to the limitations in Section 4.2(b)
of the CIC Plan, but you understand and agree that your benefits
will continue under that section for a period not to exceed 2.5
years beginning September 6, 2008.
4. CONSULTING SERVICES
AGREEMENT . Contemporaneous with the execution of this
Agreement, you and Freescale will enter into the Consulting
Services Agreement attached as Exhibit A.
5. NO DISPARAGEMENT . You
agree that you will not, directly or indirectly make, or cause to
be made, any statement, observation or opinion, disparaging the
business, goodwill or reputation of Freescale. Neither Freescale
nor any director or officer of Freescale will directly or
indirectly make, or cause to be made, any statement, observation or
opinion, disparaging your reputation.
6. COOPERATION AND MATERIAL REPRESENTATIONS
REGARDING VIOLATIONS OF LAW OR POLICIES OF FREESCALE . From
your Separation Date, and for as long thereafter as will be
reasonably necessary, you agree to cooperate fully with Freescale,
taking into account any new employment obligations, in any
investigation, negotiation, litigation or other action arising out
of transactions in which you were involved or of which you had
knowledge during your employment by Freescale. If you incur any
business expenses in the course of performing your obligations
under this section, you will be reimbursed for the full amount of
all reasonable expenses upon your submission of adequate receipts
confirming that such expenses actually were incurred.
You represent and warrant that as of
the time of your execution of this Agreement you are aware of no
matters (other than matters that have previously been reported to
Freescale) attributable to Freescale or any of its employees,
agents, contractors, directors, Board of Director members, or
officers involving: (a) unlawful practices or conduct;
(b) instances of financial misconduct or improper financial
reporting; or (c) a material violation of any Freescale
policy, including but not limited to any policy relating to
integrity, honesty, or ethical conduct. You acknowledge that these
representations must be true and correct as of the time of your
execution of this Agreement, and that your representations here are
material to this Agreement and to Freescale.
7. RETURN OF FREESCALE
PROPERTY . You further agree, pursuant to your obligations to
Freescale under the provisions of your Assignment and
Confidentiality Agreement, the Freescale Code of Business Conduct
and Ethics, and the Freescale SOP entitled Information
Classification and Protection (iCAP) to return to Freescale any
Freescale property and confidential and/or proprietary information,
if any, that is still your possession, including but not limited to
information stored electronically on computer hard drives or
disks.
8. PROTECTION OF CONFIDENTIAL
INFORMATION AND TRADE SECRETS . You agree to maintain the
confidentiality of Freescale’s confidential or proprietary
information and trade secrets in accordance with agreements
previously signed by you and with the law applicable to you as an
officer of Freescale, including but not limited to state trade
secret protection statutes and your common law fiduciary duty and
duty of loyalty, except as otherwise required by law or in any
judicial or administrative process with subpoena power. Nothing in
this Agreement is intended to prohibit you from disclosing
information about Freescale, its customers, successors or assigns,
or its affiliated entities, or about its or their products,
services or business opportunities that is not confidential or
proprietary. You will give Freescale reasonable advance written
notice of your intent to disclose any potentially confidential
information obtained by you as a result of your employment by
Freescale. You agree to keep the terms of this Agreement
confidential, unless required by law to disclose this information.
You may provide this Agreement to your attorney, banker or
financial advisor, to anyone preparing your tax returns, or to a
prospective employer (with economic terms deleted). You may also
disclose the terms of this Agreement to your spouse, but if you do
so you are responsible for ensuring that he likewise abides by the
confidentiality requirements of this section, and that any
violation by him of these requirements will be treated as a
violation of this section by you.
9. NON-COMPETITION/NO
SOLICITATION . By signing this Agreement, you acknowledge the
continuing applicability of the restrictive covenants that are part
of the NQ Agreements and other equity agreements provided to you by
Freescale in accordance with their terms.
10. BREACH OF AGREEMENT
.
You acknowledge that
Freescale’s agreement to make the payment set forth in
Section 2 above is conditioned upon your faithful performance
of your obligations under this Agreement, and you agree to repay to
Freescale the $1,225,000 received from Freescale under
Section 2 if you breach any of your material obligations under
this Agreement including but not limited to your obligations in
Section 9 above; provided, however, that as to your
obligations under Section 9, your restricted activity is
limited to
2
(1) those business entities listed
on Schedule A to this Agreement (a “ Schedule A
Competitor ”);
(2) any successor to a Schedule A
Competitor, whether by acquisition of substantially all of its
assets or more than 50% of its outstanding voting stock, or by
merger (where you are then employed by the business formerly owned
by the Schedule A Competitor, but not if you were already employed
by a business entity that is not a Schedule A Competitor but
becomes such by reason of the acquisition or merger);
(3) any business entity that is not
a Schedule A Competitor but has been in business for at least three
consecutive years, but first beginning in the microcontroller
business in December, 2006 or after, and has generated more than
$250 million in annual revenues from its microcontroller business;
and
(4) any business entity that is not
a Schedule A Competitor but has total annual revenues of $2 billion
or more, and enters the microcontroller business in December, 2008
or after.
No forfeiture shall occur unless and
until Freescale notifies you in writing that it reasonably believes
that a violation has occurred, with specific details, and you fail
to cure or otherwise resolve the violation or alleged violation
within 20 (twenty) business days of receiving written notice.
Further, nothing in this section will preclude you from contesting
forfeiture.
11. NON-ADMISSION/GENERAL
RELEASE . You, for yourself, your spouse, your agents,
attorneys, heirs, administrators, executors and assigns, and anyone
acting or claiming on your or their joint or several behalf, hereby
waive, release and forever discharge Freescale,
