Exhibit 10.2
SEPARATION AND RELEASE
AGREEMENT
This SEPARATION AND RELEASE
AGREEMENT (this “Agreement”) is entered into by and
between Freescale Semiconductor, Inc., (the “Company”)
and Sandeep Chennakeshu (“Executive”) dated as of the
9th day of December, 2008, and confirms the agreement that has been
reached with the Executive in connection with his resignation from
the Company. The Company and Executive are sometimes referred to in
this Agreement as a “Party” and collectively as the
“Parties”.
RECITALS
WHEREAS, Executive is employed by the Company as its
Senior Vice President and Chief Development Officer pursuant to an
Employment Agreement dated December 1, 2006 (the
“Employment Agreement”); 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 of his separation
from employment 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, the parties
wish to enter into an agreement;
NOW, THEREFORE,
for good and valuable consideration,
the receipt and sufficiency of which are acknowledged, the Parties
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 December 19, 2008 (the “Date of
Separation”), at which time Executive’s employment with
the Company will cease. The Company will 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. On or prior to the Date of Separation, Executive will
resign from his service as a director or employee of any affiliate
or subsidiary of the Company, to the extent, if any, he was
employed or served in any such capacity. 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
will nevertheless be deemed to have resigned from all such
positions and capacities as of his Date of Separation.
(b) On or within three working days
after the Date of Separation, Executive will return to the Company
all Company property in his possession or use, including, without
limitation, all computers, printers, cell phones, credit cards,
building-access cards and keys and other electronic equipment.
Executive will be allowed to transfer his cell phone SIM card to a
personal account in order to retain his telephone
number.
(c) Other than as set forth in this
Agreement, upon the Date of Separation, Executive will 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
(except for those expenses incurred on or before the Date of
Separation); however, Executive will receive all benefits and
conversion rights, at the applicable time, earned, due or
applicable under the terms of Company benefit or retirement plans.
Notwithstanding the foregoing, Executive shall receive an annual
bonus for 2008, if any, which shall be paid when paid to other
senior vice presidents generally but Executive understands that
bonus performance metrics for 2008 may not be met in which case
Executive will not be paid a bonus (except to the extent that a
substitute or partial bonus is provided to other senior vice
presidents, who are not subject to a written contractual agreement
with the Company providing entitlement to a bonus
payment).
(d) Without limiting the generality
of paragraph (d), 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, dated 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 and vested Class B
Interests (as defined in the Partnership Agreement)
(“Continuing Equity Related Rights”), and except as the
Continuing Equity Related Rights are modified by the terms of this
Agreement, 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 Freescale Semiconductor, Inc.
Officer Change in Control Severance Plan (the “CIC Severance
Plan”) or any other agreement, contract, plan, practice,
policy or program of the Company.
2. Accrued Payments . The
Company will pay to Executive $54,307 (Fifty Four Thousand Three
Hundred and Seven Dollars) in a lump sum cash payment (less
applicable taxes and withholding) by the regular payroll date
within thirty (30) days following the Date of Separation, as
payment for Executive’s paid time off accrued but not taken
as of the Date of Separation.
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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 thirty (30) days
following the Date of Separation:
(i) As of the date of the Date of
Separation, Executive is vested in 15,237.39 Class B Interests.
These Class B Interests will 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, except as the Continuing Equity
Related Rights are modified by the terms of this Agreement. All
Class B Interests held by Executive that are not vested as of the
Date of Separation will be forfeited as of such date and no payment
will be made with respect thereto.
(ii) The Company will pay Executive
a cash lump sum severance payment of $1,200,000 (One Million Two
Hundred Thousand Dollars) (less applicable taxes and withholding).
and
(b) 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 will, for one (1) year after the Date of Separation,
continue health medical, disability, and life insurance benefits to
Executive and Executive’s family at least equal to those that
would have been provided in accordance with the health, medical,
disability, and life insurance plans, programs, practices and
policies of the Company, as elected by the Executive, on the same
terms as are currently in effect on the date of this Agreement
(Executive’s current share being equal to $217.07/month);
provided, however, that, if Executive becomes reemployed with
another employer and becomes eligible to receive reasonably
comparable health, medical, disability, or life insurance benefits
under another employer provided plan, then only as to any such
benefits that are comparable, the health and medical benefits
described herein will be secondary to those provided under such
other plan during such applicable period of eligibility and
disability or life insurance shall cease. If the terms of the
applicable plan, program, practice or policy do not permit the
participation of Executive and/or Executive’s family, the
Company will provide the benefits described above on the same
after-tax basis (through insurance or self-insurance) as if such
benefits were provided under such plan, program, practice or policy
of the Company.
(c) Income and Other Taxes.
Except as provided in subparagraph (b) above as to health and
medical benefits, Executive understands and agrees that he is
solely responsible for any and all tax liability incurred as a
result of the payments received under this agreement.
(d) Attorney’s Fees.
Company will pay reasonable attorney’s fees in relation to
the negotiation and preparation of this Agreement.
4. No Other Payments or
Benefits . Executive acknowledges and agrees that, other than
the payments and benefits expressly set forth in this Agreement,
Executive has received all compensation to which he is entitled
from the Company, and he is not entitled to any other payments or
benefits from the Company.
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5. Covenants .
(a) Executive agrees that, except as
otherwise provided in this Section, following the Date of
Separation he will continue to be bound by Sections 10 (a) and
10 (b) of the Employment Agreement, and the corresponding
restrictive covenants contained in Exhibit A to his Award Agreement
and in any other equity award agreements issued to him by the
Company, each of which sets forth obligations regarding
confidential information work product and inventions and provisions
relating to non-solicitation of employees (solely as defined below)
(collectively, the “Obligations”). Company waives and
releases Executive from the “No Competition” or
“Non Competition” provisions contained in these or any
other documents executed between him and the Company as they relate
to Competitive Business as that term is defined in
Section 10(c) of the Employment Agreement, Exhibit A of his
Award Agreement and in any other equity award agreements issued to
him by the Company. Executive may accept employment or become an
officer, agent, partner, director or othe
