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Separation And Release Agreement

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EXHIBIT 10.1


SEPARATION AND RELEASE AGREEMENT


This is a complete and final Agreement between Chris Belden (for yourself, your spouse and anyone acting for you) ("you"), and Freescale Semiconductor, Inc. (for itself, its 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 terms of your separation from Freescale:


1. SEPARATION. You are relieved of all duties and responsibilities effective February 12, 2005 (the "Transition Date"). You tender and Freescale accepts your resignation as a director or officer of Freescale and its subsidiaries and affiliates effective as of the Transition Date. Your employment by Freescale shall continue through July 29, 2005 (the "Separation Date"). Subject to the restrictions in this Agreement, and particularly sections 7, 8, 9, 10 and 11, you are not precluded from accepting employment or providing services to another company during the period between your Transition and Separation Dates. Your separation shall be documented as a termination without cause. At Freescale's request, you shall execute any and all documents reasonably necessary to confirm your resignation as a director and/or officer of Freescale and its subsidiaries and/or affiliates.


2. SEPARATION ALLOWANCE AND INCENTIVE PLANS. Freescale will pay you at your regular base salary rate at regular payroll intervals, less applicable state and federal payroll deductions, between your Transition Date and Separation Date. The total gross amount of these payments is approximately One Hundred Fifty Two Thousand Six Hundred Fifty Three Dollars and Eighty Five cents ($152,653.85)(the "Transition Allowance"). You understand and agree that you are not otherwise entitled to the payments constituting this Transition Allowance, and that this Transition Allowance is sufficient consideration for your obligations under this Agreement. Freescale also will pay you a lump sum Separation Allowance in the amount of Three Hundred Eighty One Thousand Nine Hundred Fifteen Dollars and Fifteen cents ($381,915.15), less applicable state and federal payroll tax deductions, within thirty (30) days after you have signed and not revoked this Agreement. You acknowledge and agree that this Separation Allowance constitutes an amount to which you are not otherwise entitled, and serves as additional consideration for this Agreement. After July 29, 2005 but prior to August 19, 2005 you will sign, return and not revoke Attachment A to this Agreement. You understand and agree that if you fail to sign and return or if you revoke Attachment A you will be required to repay to Freescale this entire Separation Allowance.


Second, you are eligible to receive an incentive payment from Freescale under the Freescale/Motorola Incentive Plan for the 2004 plan year in accordance with the terms of that plan. Freescale will apply an individual performance factor of 1.00 in computing the amount of payment you receive under the plan. You understand that under the terms of this plan Freescale has complete discretion as to whether you receive a payment under this plan and the amount of any such payment. Accordingly, its commitment in this Agreement to apply a performance factor of 1.00 and to make a payment to you under the plan is additional consideration for this Agreement. You understand that you will not receive any payment under the Freescale Incentive Plan for the 2005 plan year.


Third, you are eligible to receive a payment under the 2004 Freescale Special Incentive Plan for the 2004 plan year if Freescale meets certain financial targets under the terms of that plan. Your eligibility to receive any qualifying payment under this plan is not impacted by this Agreement except as follows: if any portion of the payment to you under the plan would have been made in restricted stock units, you will receive a cash payment in lieu of the restricted stock units. Since the restricted stock units you would receive under the terms of the plan would be forfeited upon your separation on July 29, 2005 and would have no value, you understand and agree the payment of cash in lieu of restricted stock units is a payment you are not otherwise entitled to and is additional consideration for this Agreement. You further understand that you are not eligible for and will not receive any payment for the 2005 plan year.


Finally, as part of the separation of Freescale from Motorola, Inc. ("Motorola"), Motorola and Freescale agreed to make certain payments to you as a result of your participation in the Motorola Elected Officer Supplemental Retirement Plan. The payment Freescale agreed to make to you is described in the letter executed by you and attached as Attachment B to this Agreement. This payment is not impacted by this Agreement, and is not additional consideration for your promises and obligations herein.


The Separation Allowance and other payments described in this section include and exceed any pay, bonuses, or any other amounts that are unpaid as of your separation, other than pay for accrued and unused Paid Time Off. You will be paid for any Paid Time Off you have accrued but not used as of your Separation Date. You acknowledge that you will only be paid the amounts specifically identified in this Agreement and will not receive any additional payments from Freescale.


Final v.1.25.05 Belden Separation Agreement


3. BENEFIT AND EQUITY PLANS.


(a) 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 shall be governed by the terms of those plans and agreements except as specifically modified by this Agreement. Unless specifically set forth in this Agreement, Freescale is making no guarantee, warranty or representation in this Agreement regarding any position that may be taken by any administrator or plan regarding the effect of this Agreement upon your rights, benefits or coverage under those plans.


(b) Upon your separation, each of your outstanding Freescale stock option grants (including the Motorola stock option grants converted to Freescale stock options as of Freescale's separation from Motorola) will be accorded the most favorable treatment for which each grant qualifies per the terms of the applicable stock option plans or award documents. Since your separation is a termination without cause, generally this means that you will have twelve (12) months to exercise vested options and that you will forfeit any options or restricted stock or restricted stock units not vested as of your Separation Date.


(c) Benefits coverage under the Freescale Employee Medical Benefits Plan (the "Medical Plan"), as amended from time to time, will be continued at the regular employee contribution rate through July 31, 2005, provided that you comply with all terms and conditions of the Medical Plan, including paying the necessary contributions and provided further, if you are reemployed with another employer and become covered under that employer's medical plan, the medical benefits described herein (if they are not terminated as provided in COBRA, defined below) shall be secondary to those provided under such other plan. After your Separation Date, you may elect to continue medical benefits under the Medical Plan at your own expense, in accordance with COBRA. The COBRA period commences on the first of the month following the Separation Date. As additional consideration for this Agreement, Freescale will pay you the amount of Twenty Seven Thousand Dollars ($27,000.00), less applicable state and federal tax deductions. This payment is provided to help you with payment of COBRA premiums for continuation of your medical benefits.


4. TRANSFER OF EQUIPMENT/OUTPLACEMENT/FINANCIAL PLANNING. Effective on or within thirty business days after your Transition Date, Freescale will transfer to you ownership of your company car, your cellular phone, your pager and your Blackberry PDA. On that date you will assume responsibility for all insurance, maintenance, service and other fees related to this equipment. The parties agree that any fair market value of the car will be calculated as of the Separation Date, and that you are responsible for the payment of income tax due as a result of this transfer. Freescale also will provide senior executive outplacement and career continuation services by a firm to be selected by Freescale for a period of up to one (1) year, and will also provide you with the Freescale Executive Financial Planning benefit for 2005, including tax preparation services for your 2004 tax return, if you elect to participate in either service.


5. NO DISPARAGEMENT. You agree that you will not, directly or indirectly, individually or in concert with others, engage in any conduct or make any statement calculated or likely to have the effect of undermining, disparaging or otherwise reflecting poorly upon Freescale or its good will, products or business opportunities, or in any manner detrimental to Freescale, though you may assist and cooperate with the Equal Employment Opportunity Commission or other government agency and otherwise give truthful and nonmalicious testimony as may be required by law or legal process.


6. COOPERATION/INDEMNIFICATION. From your Separation Date, and for as long thereafter as shall be reasonably necessary, you agree to cooperate fully with Freescale in any investigation, 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 paragraph, 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. Freescale will indemnify you for judgments, fines, penalties, settlement amounts and expenses (including reasonable attorneys fees and expenses) reasonably incurred in defending any actual or threatened action, lawsuit, investigation or other similar proceeding arising out of your employment with Freescale, provided that if the matter is a civil action, you acted in good faith and in a manner you reasonably believed to be in, or not opposed to, the best interests of Freescale and if the matter is a criminal action, and you had no reasonable cause to believe your
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