EXHIBIT 10.33
Execution Copy
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT (this "Agreement"), dated as of March 16,
2001, between Intersil Holding Corporation, a Delaware corporation (the
"Company"), and Daniel J. Heneghan ("Executive").
Background
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The Company wishes to retain the services of Executive to assist
in the management of the Company.
Terms
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In consideration of the premises and of the mutual covenants
herein contained, the parties agree as follows:
1. Position. During the term of his employment with the Company
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hereunder, Executive shall serve as Vice President and Chief Financial Officer
of the Company and Intersil Corporation, a wholly-owned subsidiary of the
Company ("Intersil").
Executive shall diligently devote his entire business skill, time
and effort to his employment hereunder; provided, however, that he shall be
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entitled annually to at least four weeks vacation and sick leave pursuant to
policies adopted by the Company from time to time for senior executive officers
of the Company. Notwithstanding the foregoing, and provided that such activities
do not interfere with the fulfillment of Executive's obligations hereunder,
Executive may (a) serve as a director, trustee, officer or volunteer for one or
more charitable or non-profit entities and as a director of not more than two
for profit business corporations so long as such entities are not, directly or
indirectly in competition with the Company, any subsidiary of the Company, or
any entity directly or indirectly controlled by the Company or any such
subsidiary (an "Affiliate"); and (b) acquire solely as an investment any
securities so long as (i) he remains a passive investor in such entity and (ii)
such entity is not, directly or indirectly, in competition with the Company or
any Affiliate; provided, however, that the foregoing clause (ii) shall not
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prohibit Executive from acquiring as an investment up to five percent (5%) of
any issuer's outstanding publicly traded securities.
Unless he consents in writing, Executive will not be required to
relocate to a place of employment more than twenty (20) miles from Irvine,
California.
2. Term of Employment. Executive's term of employment by the
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Company under this Agreement shall begin as of the date hereof and shall
continue for a period of 36 months (the "Employment Term") (the termination date
being hereafter referred to as the "Normal Termination Date") and shall continue
for successive additional 12 month periods thereafter (each continued term, the
"Extended Employment Term") unless (x) written notice is given by either party
to the other at least ninety (90) days prior to the then current termination
date that it or he does not wish to renew this agreement, or (y) sooner
terminated as hereinafter provided. Notwithstanding any provisions to the
contrary herein, it is expressly agreed that Executive may in his sole
discretion resign and terminate the Employment Term or the Extended Employment
Term at any time upon ninety (90) days advance written notice to the Company.
3. Compensation. As compensation for the services contemplated
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hereby, Executive shall receive during the Employment Term and each Extended
Employment Term a base salary equal to $300,000 per annum to be paid
semi-monthly in equal installments. Such salary rate shall be subject to annual
merit increase reviews by the Board of Directors (such salary as adjusted from
time to time being the "Base Salary"); it being understood that the Board of
Directors shall in good faith consider appropriate increases in the compensation
of the Executive if the duties and responsibilities of the Executive are
substantially expanded (other than through a Change in Control as defined in
Section 12(b)).
4. Bonus. In addition to the compensation provided to Executive
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in Section 3 hereof, Executive shall receive, during the Employment Term and
each Extended Employment Term, at the discretion of the Board of Directors, and
subject to annual review, an annual performance bonus based on individual
criteria and/or executive incentive programs to be determined from time to time
by the Board of Directors (the "Performance Bonus").
5. Employment Benefits. Executive shall be entitled to
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participate, during the Employment Term and each Extended Employment Term, in
all medical benefit plans, hospitalization plans, group life insurance, long
term disability or other employee welfare benefit plans (collectively, the
"Group Insurance Plans") and any pension plans (including any supplemental
employee retirement plans) and any plan for the reimbursement of legal,
financial and medical expenses that may be provided by the Company or its
subsidiaries to senior executive officers from time to time during the
Employment Term or Extended Employment Term, as the case may be. Whenever
Executive or Executive's spouse or dependents are entitled to participate in
Group Insurance Plans pursuant to the terms of this Agreement, the terms of such
participation (including costs) shall be at least as favorable to Executive and
Executive's spouse and dependents as those at the time afforded to the Company's
senior executive officers.
6. Expenses.
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(a) The Company shall pay or reimburse Executive for any
expenses reasonably incurred by him in furtherance of his duties hereunder,
including, but not limited to, reasonable expenses for traveling, meals and
hotel accommodations, and business related entertainment upon submission by him
of appropriate documentation thereof, all so prepared in compliance with such
policies and procedures relating thereto as the Company may from time to time
adopt.
(b) The Company shall reimburse Executive for legal fees and
expenses incurred by Executive in connection with the negotiation and execution
of this Agreement and related matters in an amount not to exceed $8,500.
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(c) The Company shall pay, at the Executive's direction, or
reimburse the Executive for up to $5,000 per year of the Employment Term and
Extended Employment Term for tax and estate planning expenses incurred by the
Executive.
7. Termination.
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(a) Termination by Company for Cause or Without Cause. The
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Company may terminate this Agreement and (except as provided below, including,
without limitation, in this Section 7 and Section 12) all of the Company's
obligations hereunder, either for "Cause" or "Without Cause." Such termination
shall be effected by notice thereof delivered by the Company to Executive, and
shall be effective as of the date of such notice. In the event that Executive is
terminated by the Company for Cause, Executive shall be entitled to receive all
Base Salary earned and accrued to the date of termination, but all other rights
of Executive hereunder shall terminate as of the effective date of Executive's
termination, except as otherwise provided by law.
In the event that Executive is terminated by the Company Without
Cause, the Company shall pay to the Executive following the date of the
employment termination and ratably spread over the succeeding twenty-four (24)
months (the "Continuation Period"), in accordance with standard payroll
procedures, an aggregate amount equal to the following: (i) two (2) times the
Executive's Base Salary in effect on the date of the employment termination,
(ii) two (2) times the Executive's target Performance Bonus for the year in
which he was terminated and (iii) Executive shall also be fully vested in all
stock options granted pursuant to any Company stock option plan and shall have
the full option term to exercise such fully vested options, and Executive and
his spouse and dependents shall be entitled to continue to participate in the
Group Insurance Plans during the Continuation Period. As a condition to the
receipt of the payments and benefits described in this Section 7(a) and under
Section 12, the Executive shall be required to execute a release of all claims
arising out of the Executive's employment or the termination thereof including,
but not limited to, any claim of discrimination under state or federal law, but
excluding claims for indemnification from the Company under any indemnification
agreement with the Company, its certificate of incorporation and by-laws or
applicable law or claims for directors and officers' insurance coverage. The
obligation of the Company to provide the payments and benefits described in this
Section 7(a) and under Section 12 shall cease, and all unexercised stock options
shall terminate, at such time as the Executive materially breaches any of the
provisions of Sections 8 or 9.
As used herein, (i) "Cause" means (A) Executive's conviction of a
felony which constitutes a crime involving moral turpitude and results in harm
to the Company or any of its Affiliates; or (B) a judicial determination that
Executive has committed fraud, misappropriation or embezzlement against any
person; or (C) Executive's failure to comply with the material terms of this
Agreement and/or Executive's willful or gross and repeated neglect of duties
hereunder, or willful or gross and repeated misconduct in the performance of
such duties, in each instance so as to cause material harm to the Company or any
of its Affiliates, determined in good faith by its Board of Directors and after
written notice to Executive by the Board of Directors specifying the
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manner in which the Board of Directors believes that such failure, neglect or
misconduct has occurred; and the failure by Executive to cure such failure,
neglect or misconduct within thirty (30) days after written notice from the
Board of Directors and, if requested by Executive within such 30-day period,
after Executive has had the opportunity to meet and discuss such failure with
such Board of Directors, and (ii) "Without Cause" means any termination of
Executive's employment other than for Cause, resignation (other than resignation
upon a Demotion or Company Default as defined below), Total Disability or death,
and shall include Executive's resignation in connection with (y) a material and
substantial diminution of Executive's duties and authorities hereunder, as
compared with his duties and authorities as of the date hereof or a demotion
from the office of Chief Financial Officer (individually or collectively, a
"Demotion") and (z) any material failure by the Company to comply with the terms
of this Agreement after written notice by Executive to the Board of Directors
specifying the manner in which Executive believes that such failure has
occurred, and the failure by the Company to cure such failure within thirty (30)
days after such written notice from Executive (a "Company Default"). Executive
may resign in the event of a Demotion or Company Default.
Upon any termination or expiration of Executive's employment, the
Company shall promptly pay to Executive all accrued vacation pay, including
without limitation, any vacation pay attributable to unused vacation time
accrued prior to the date of this Agreement to the extent required by the
Company's policies as then in effect.
(b) Resignation of Executive. In the event that Executive
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resigns during the Employment Term or any Extended Employment Term, Executive
shall be entitled to receive all Base Salary earned and accrued to the date of
termination and a pro rata portion of any Performance Bonus or other incentive
compensation for (and based on the results of) the year in which such
termination occurs, but (except in the case of resignation due to a Company
Default, Total Disability or following a Demotion) all other rights of Executive
hereunder shall terminate as of the date of Executive's termination, except as
otherwise provided in Section 12 or by law.
(c) Executive's Total Disability. In the event that Executive
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is terminated by the Company or Executive resigns due to Executive's Total
Disability, Executive shall be entitled to receive all Base Salary earned and
accrued to the date of termination or resignation plus Base Salary for a period
of 12 months following the date of termination or resignation as and when the
same would otherwise have been payable had Executive not been terminated or not
resigned, and a pro rata portion of any Performance Bonus for the year in which
Executive is terminated which shall be payable at the time such bonus would have
otherwise been payable had Executive not been terminated or not resigned, and
Executive and his spouse and dependents shall be entitled to continue to
participate in the Group Insurance Plans for a period of 12 months following the
date of termination or resignation (such term, the "Disability Continuation
Period"), but all other rights of Executive hereunder shall terminate as of the
date of Executive's termination or resignation, except as otherwise provided by
law.
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As used herein, "Total Disability" shall mean any physical or
mental ailment or incapacity as determined by a licensed physician agreed to by
the Company and Executive (or, in the event that Executive and the Company
cannot so agree, by a licensed physician agreed upon by a physician selected by
Executive and a physician selected by the Company), which prevents Executive
from performing the duties incident to Executive's employment hereunder which
has continued for a period of either (i) ninety (90) consecutive days in any
12-month period or (ii) one hundred eighty (180) total days in any 12-month
period, and which is expected to be of permanent duration. Executive shall
permit such physician to examine Executive from time to time prior to
Executive's being determined to be Totally Disabled, as reasonably requested by
the Company, to determine whether Executive has suffered a Total Disability
hereunder.
(d) Death. In the event that Executive dies during the
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Employment Term or any Extended Employment Term, Executive's estate shall be
entitled to receive all Base Salary earned and accrued to the date of death plus
Base Salary for a period of 12 months following the date of death as and when
the same would otherwise have been payable had Executive not died, and a pro
rata portion of any Performance Bonus for the year in which Executive is
terminated which shall be payable at the time such bonus would have otherwise
been payable had Executive not died, and his spouse and dependents shall be
entitled to participate in the Group Insurance Plans for a period of 12 months
following the date of Executive's death, as well as any other benefits payable
under any then current life insurance policy provided to Executive pursuant to
Section 5 hereof, but all other rights of Executive hereunder shall terminate,
except as otherwise provided by law.
(e) Treatment of Options and Restricted Stock. If Executive's
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employment hereunder is terminated for any reason, Executive's rights and
obligations with respect to any outstanding restricted stock or option grants
shall be as set forth in the applicable grant document and plan governing such
grant except as expressly modified by this Agreement.
(f) Non-Renewal. In no event shall the expiration of the
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Employment Term or Extended Employment Term, by virtue of either party's having
given notice of non-renewal pursuant to Section 2, constitute termination of the
Executive Without Cause.
8. Protection of Confidential Information.
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(a) Covenant. Executive acknowledges that his employment by
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the Company will, throughout the term of this Agreement, bring him into close
contact with many confidential affairs of the Company and its Affiliates,
including information concerning the Company's finances and operating results,
its markets, key personnel, operational methods and other business affairs and
methods, technical data, computer software and other proprietary intellectual
property, other information not readily available to the public, and plans for
future developments relating thereto. Executive further acknowledges that the
services to be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character. In recognition of the foregoing,
Executive covenants and agrees that he will:
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(i) keep secret all confidential matters of the Company
and its Affiliates known to him which are not otherwise in the public domain and
will not intentionally disclose them to anyone outside of the Company and its
Affiliates, wherever located, either during or after the term of this Agreement
except with the Company's prior written consent.
(ii) promptly disclose to the Company, and that the
Company will own all right, title and interest in, all inventions, computer
software and other intellectual property (the "Intellectual Property") which he
conceives or develops during the course of his employment (excluding that which
he conceives or develops without the use of the time, resources or facilities of
the Company or its Affiliates and which does not relate to the past, present or
prospective activities of the Company or its Affiliates), will affix appropriate
legends and copyright notices indicating the Company's ownership of all
Intellectual Property and all underlying documentation, and will execute such
further assignments and other documents as the Company considers necessary to
vest, perfect, patent, maintain or defend the Company's right, title and
interest in the Intellectual Property; and
(iii) deliver promptly to the Company on termination of
his employment by the Company, or at any other time the Company may so request,
all memoranda, notes, records, reports, computer discs and other documents (and
all copies thereof) relating to the business of the Company or its Affiliates
which he obtained or developed while employed by, or otherwise serving or acting
on behalf of, the Company or its Affiliates and which he may then possess or
have under his control or relating to the Intellectual Property; provided,
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however, that in the event of any dispute between the Company and Executive in
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relation to the termination of his employment by the Company, Executive may
retain copies of the foregoing to be used solely in connection with any
arbitration or judicial proceeding to resolve such dispute; provided further,
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however, Executive shall immediately upon the resolution of such dispute deliver
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all such retained copies to the Company.
(b) Covenant. During the Employment Term, any Extended
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Employment Term, any Continuation Period or Disability Continuation Period and
any Restriction Period, Executive will not (i), directly or indirectly, engage
in any activity in competition with the Company or its Affiliates or (ii) plan,
or otherwise take, any preliminary steps, either alone or in concert with
others, to set up or engage in any semiconductor manufacturing or designing in
competition with the Company or its Affiliates. During the Employment Term, any
Extended Employment Term and any Continuation Period or Disability Continuation
Period, and upon termination of the Employment Term or any Extended Employment
Term, during the Restriction Period (as defined in Section 9(a)), Executive will
not, either directly or indirectly, either alone or in concert with others,
solicit or entice any employee of or consultant to the Company or its Affiliates
to leave the Company or its Affiliates to work for anyone in competition with
the Company or its Affiliates or solicit, entice or in any way divert any
customer or supplier to do business with any business entity in competition with
the Company or its Affiliates. In the event of termination of the Employment
Term or any Extended Employment Term, during the Restriction Period, Executive
will not accept any employment or engage in any activities competitive with the
Company or its Affiliates, if the loyal and complete
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fulfillment of the duties of the competitive employment or activities would
inherently call upon Executive to reveal Propriety Information to which
Executive had access or learned during his Employment. As used herein,
"Proprietary Information" shall mean information generally unavailable to the
public that has been created, discovered, developed, or otherwise become known
to the Company or any of its subsidiaries or in which property rights have been
assigned or otherwise conveyed to the Company or any of its subsidiaries, which
information has material economic value or potential material economic value to
the business in which the Company or any of its subsidiaries is or will be
engaged. Proprietary Information shall include, but not be limited to trade
secrets, processes, formulas, data, know-how, negative know-how, improvements,
discoveries, developments, designs, inventions, techniques, all technical data,
customer and supplier lists, and any modifications or enhancements thereto,
programs, and information (whether or not necessarily in writing) which has
actual or potential economic value to the Company or any of its subsidiaries.
(c) Specific Remedy. If Executive commits a breach of any of
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the provisions of Section 8, the Company and its Affiliates shall have the right
and remedy to have such provisions specifically enforced by any court having
equity jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and its
Affiliates and that money damages will not provide an adequate remedy to the
Company and its Affiliates.
(d) The restrictions set forth in this Section 8 will in no
event preclude Executive from working in the semiconductor industry and making
use of his general knowledge of such industry after expiration or termination of
the Employment Term, and any Extended Employment Term, Continuation Period or
Disability Continuation Period so long as Executive does not use or disclose any
information of the Company in violation of this Section 8.
9. Covenant Not to Compete.
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(a) Covenant. During the Employment Term, any Extended
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Employment Term and any Continuation Period or Disability Continuation Period,
and upon termination of the Employment Term or any Extended Employment Term,
during the Restriction Period, Executive will not (i) directly or indirectly,
engage in, represent in any way, be connected with, become employed by or have
any interest in any business or activity competing in any manner with any
businesses carried on by the Company or its Affiliates (other than an Affiliate
that became an Affiliate only at the time of Executive's termination) during the
Employment Term and any Extended Employment Term and at the time of Executive's
termination, or (ii) solicit, employ, retain as a consultant, interfere with or
attempt to entice away from the Company or its Affiliates to work in competition
with the Company or its Affiliates any individual who is, has agreed to be or
within six months of such solicitation, employment, retention, interference or
enticement has been, employed or retained by the Company or any of its
Affiliates in a senior executive capacity. As used herein, in the event that
there is no Continuation Period or Disability Continuation Period, "Restriction
Period" means one year following the date of termination of the Employment Term
or Extended Employment Term, as
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the case may be provided that there will be no Restriction Period if Executive's
employment with the Company terminates following a notice of non-renewal by the
Company pursuant to Section 2.
(b) Specific Remedy. If Executive commits a breach of the
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provisions of paragraph 9(a), the Company and its Affiliates shall have the
right and remedy to have such provisions specifically enforced by any court
having equity jurisdiction, it being acknowledged and agreed that any such
breach or threatened breach will cause irreparable injury to the Company and its
Affiliates and that money damages will not provide an adequate remedy to the
Company and its Affiliates.
(c) Certain Definitions. For purposes of applying Sections 8
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and 9, during any Continuation Period, Disability Continuation Period or
Restriction Period, "in competition with", "competitive with" or "competing"
shall mean the provision of products or services to customers or markets
intended to address the same needs as those products or services provided by the
Company or its Affiliates at the time of Executive's termination.
For purposes of applying Sections 8 and 9 to any Continuation
Period or Disability Continuation Period or Restriction Period, "Affiliates" of
the Company shall (i) be determined as of the earlier of the date of termination
of Executive's employment with the Company or Executive's notice of resignation
to the Company and (ii) include any subsidiary of the Company, or any entity
directly or indirectly controlled by the Company or any such subsidiary as of
such date.
(d) Default on Obligations. In the event that the Company
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defaults on the making of any severance payment required to be made by Section 7
or 12, Executive may give the Company notice of such default and of his
intention to terminate the provisions of Sections 8(b) and 9(a) if such default
has not been cured within sixty (60) days. If the Company fails to cure such
default within such sixty-day period Executive's obligations under Sections 8(b)
and 9(a) shall terminate and the Company's obligations under Sections 7 and 12
shall terminate, effective as of the end of such sixty-day period.
(e) Supercede Prior Provisions. The provisions of any other
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agreements between the parties concerning non-competition, non-solicitation and
confidentiality obligations of Executive, including without limitation those
contained in the Securities Purchase and Holders Agreement dated August 13, 1999
are hereby modified, amended, superceded and replaced by the provisions of
Sections 8 and 9 hereof.
10. Right of Indemnification. The Company hereby agrees to
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indemnify the Executive as Vice President, Chief Financial Officer and
representative of the Company and its affiliates to the fullest extent permitted
under the laws of the State of Delaware, as the same now exist or may hereafter
be amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
provided by the laws of the State of Delaware prior to such amendment), in the
event the
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Executive is made a party or is threatened to be made a party to, or is involved
in or called as a witness in, any action, suit or proceeding, whether civil,
criminal, administrative or investigative, and any appeal therefrom. The Company
agrees that such indemnification shall cover all expenses incurred by the
Executive (including, but not limited to, attorneys' fees and expenses) and all
liabilities and losses incurred by the Executive in connection therewith. The
right of indemnification contained herein shall survive the termination of this
Agreement. In addition to the foregoing rights of indemnification, Executive
shall be entitled to any greater or extended indemnification rights granted by
the Company to any of its other officers, directors or agents in their capacity
as such.
11. Independence, Severability and Non-Exclusivity. Each of the
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rights and remedies enumerated in paragraphs 8(c) and 9(b) shall be independent
of the others and shall be severally enforceable and all of such rights and
remedies shall be in addition to and not in lieu of any other rights and
remedies available to the Company or its Affiliates under the law or in equity.
If any of the provisions contained in paragraph 8(a), 8(b) or 9(a) or if any of
the rights or remedies enumerated in paragraph 8(c) or 9(b) is hereafter
construed to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants, or rights or remedies, which shall be
given full effect without regard to the invalid portions. If any of the
provisions contained in paragraph 8(a), 8(b) or 9(a) is held to be unenforceable
because of the duration of such provision or the area covered thereby, the
parties agree that the court making such determination shall have the power to
reduce the duration and/or area of such provision and in its reduced form such
provision shall then be enforceable.
12. Change in Control. (a) In the event of a Change in Control,
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and if Executive's employment is terminated within the time period beginning six
(6) months before the Change in Control and ending twelve (12) months after the
Change in Control, by the Company Without Cause, the cash severance payment
under the second paragraph of Section 7 (a) will be paid to the Executive in a
lump sum within fourteen (14) days of the later of such Change in Control or
such termination. If (i) Executive is employed by the Company at the time of a
Change in Control or (ii) his employment with the Company was terminated no more
than six (6) months before the Change in Control by the Company Without Cause,
Executive's stock options shall vest upon a Change in Control and Executive
shall have the full option term to exercise such stock options. If a Change of
Control occurs within three (3) months before or after the end of the Employment
Term or an Extended Employment Term, such Employment Term or Extended Employment
Term shall, at Executive's option, automatically be extended an additional
twelve (12) months from its expiration date. For purposes of this Section 12,
termination of employment Without Cause shall include without limitation any
Demotion or any termination by Executive due to a Demotion or Company Default.
(b) As used herein, (x) prior to the repayment, repurchase,
reduction or defeasance of all of the outstanding Senior Subordinated Notes
issued by the Company under the Indenture, dated August 13, 1999 between the
Company and United States Trust Company of New York, as Trustee, as amended from
time to time (the "Indenture"), "Change in Control" shall have the meaning set
forth in the Indenture and (y) after the repayment, redemption or
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defeasance of all of the outstanding Senior Subordinated Notes issued by the
Company under the Indenture, "Change in Control" shall mean:
(i) the sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or more transactions, of
all or substantially all of the assets of the Company or its affiliates to any
person or group (as defined in Section 13(d)(iii) of the Securities Exchange Act
of 1934);
(ii) The consummation of any transaction or
transactions (including, without limitation, any merger or consolidation) the
result of which is that any person or group (as defined in Section 13(d)(iii) of
the Securities Exchange Act of 1934), other than Citicorp Venture Capital Ltd.
("CVC"), CCT Partners VI, LP ("CCT") and their affiliates, becomes the
beneficial owner, directly or indirectly, of more (A) than 50% of the voting
stock of the Company or (B) of the common stock of the Company than CVC, CCT and
their affiliates; or
(iii) The adoption of a plan relating to the
liquidation or dissolution of the Company.
(c) Parachute Payments.
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(i) Tax Restoration Payment. In the event it is
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determined that any payment, benefit or distribution made under Section 12(a) of
this Agreement to or for the benefit of the Executive by the Company, any person
who acquires ownership or effective control of the Company, or ownership of a
substantial portion of the assets of the Company (within the meaning of section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations thereunder) or any affiliate of such person (the "Total Payments")
would be subject to the excise tax imposed by section 4999 of the Code or any
interest or penalties with respect to such excise tax (such excise tax, together
with any such interest and penalties, are collectively referred to as, the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Tax Restoration Payment") in an amount such that, after payment by
the Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax, imposed upon the Tax
Restoration Payment, the Executive retains an amount of the Tax Restoration
Payment equal to the Excise Tax imposed upon the Total Payments.
(ii) Determination by Accountant. All mathematical
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determinations and determinations as to whether any of the Total Payments are
"parachute payments" (within the meaning of section 280G of the Code), in each
case which determinations are required to be made under this Section 12,
including whether a Tax Restoration Payment is required, the amount of such Tax
Restoration Payment, and amounts relevant to the last sentence of this Section
12, shall be made by an independent accounting firm selected by the Executive
from amount the largest five accounting firms in the United States (the
"Accounting Firm"). The Accounting Firm shall provide to the Company and to the
Executive its determination (the "Determination"), together with detailed
supporting calculations regarding the amount of any
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Tax Restoration Payment and any other relevant matter, within ten (10) days
after termination of the Executive's employment, if applicable, or at such
earlier time following termination of employment as is requested by the
Executive (if the Executive reasonably believes that any of the Total Payments
may be subject to the Excise Tax). If the Accounting Firm determines that no
Excise Tax is payable by the Executive, it shall furnish the Executive with a
written statement that such Accounting Firm has concluded that no Excise Tax is
payable (including the reasons therefor) and that the Executive has substantial
authority not to report any Excise Tax on the Executive's federal income tax
return. If a Tax Restoration Payment is determined to be payable, it shall be
paid to the Executive within ten (10) days after the Determination is delivered
to the Company or the Executive. Any determination by the Accounting Firm shall
be binding upon the Company and the Executive, absent manifest error.
As a result of uncertainty in the application of section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Tax Restoration Payments not made by the Company and members of
the Company should have been made ("Underpayment"), or that Tax Restoration
Payments will have been made by the Company and members of the Company that
should not have been made ("Overpayments"). In either such event, the Accounting
Firm shall determine the amount of the Underpayment or Overpayment that has
occurred. In the case of an Underpayment, the Company promptly shall pay, or
cause to be paid, the amount of such Underpayment to or for the benefit of the
Executive. In the case of an Overpayment, the Executive shall, at the direction
and expense of the Company, take such steps as are reasonably necessary
(including the filing of returns and claims for refund), follow reasonable
instructions from, and procedures established by, the Company, and otherwise
reasonably cooperate with the Company to correct such Overpayment; provided,
however, that (1) Executive shall not in any event be obligated to return to the
Company an amount greater than the net after-tax portion of the Overpayment that
he has retained or recovered as a refund from the applicable taxing authorities
and (2) this provision shall be interpreted in a manner consistent with the
intent of Section 12(c), which is to make the Executive whole, on an after-tax
basis, from the application of the Excise Tax, it being understood that the
correction of an Overpayment may result in the Executive repaying to the Company
an amount that is less than the Overpayment.
13. Assignment of Executive Benefits; Successors and Assigns.
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Absent the prior written consent of the Company, and subject to the laws of
descent and distribution, Executive shall have no right to exchange, convert,
encumber or dispose of the rights of Executive to receive benefits and payments
under this Agreement, which payments, benefits and rights thereto are
non-assignable and non-transferable. This Agreement shall inure to the benefit
of and shall be binding upon the Company and Executive and, subject to the
preceding sentence, their respective heirs, executors, personal representatives,
successors and assigns. Nothing in this paragraph 13, however, shall prevent
Executive from making assignments or transfers for purposes of personal estate
planning.
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14. Notices. All notices hereunder shall be given in writing by
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personal delivery or by registered or certified mail addressed to the Company at
its principal place of business and to Executive at his residence address as
then listed in the Company's records.
15. Arbitration. Except as otherwise provided in Section 12(c)
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and in the enforcement of Sections 8 and 9, any controversy or claim arising out
of or relating to this Agreement, or any breach thereof, shall be settled by
arbitration in accordance with the rules of the American Arbitration Association
and judgment upon such award rendered by the arbitrators(s) may be entered in
any court having jurisdiction thereof. The arbitration shall be held in Dallas,
Texas unless another location shall be mutually agreed to by the parties at the
time of arbitration. In any dispute between the parties as to which Executive is
sustained on the claim(s) by or against him, the Company shall pay all legal
fees and other related expenses incurred by Executive in connection with the
dispute over such claim(s). If more than one claim is involved in any dispute
and if Executive is sustained as to one or more of such claims but not as to all
of such claims, there shall be a reasonable allocation of applicable expenses.
The Company will reimburse Executive for those legal expenses and other related
expenses determined by the arbitrator(s) or by the consent of the parties to be
allocable to the claim or claims as to which Executive is upheld.
16. General.
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(a) Governing Law. This Agreement shall be governed by, and
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construed and enforced in accordance with, the laws of the State of New York,
without giving effect to conflicts of laws principles thereof which might refer
such interpretations to the laws of a different state or jurisdiction.
(b) Captions. The section headings contained herein are for
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reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
(c) Entire Agreement. This Agreement sets forth the entire
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agreement and understanding of the parties relating to the subject matter
hereof, and supersedes all prior agreements,
arrangements and understandings, written or oral, between the parties.
(d) No Other Representations. No representation, promise or
------------------------
inducement has been made by any party hereto that is not embodied in this
Agreement, and no party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth.
(e) Amendments; Waivers. This Agreement may be amended,
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modified, superseded, cancelled, renewed or extended, and the terms or covenants
hereof may be waived, only by a written instrument executed by all of the
parties hereto, or in the case of a waiver, by the party waiving compliance. The
failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect the right of such party at a later
time to enforce the same. No waiver by any party of the breach of any term or
covenant
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contained in this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such breach, or a waiver of the breach of any other term or
covenant contained in this Agreement.
(f) Consent to Jurisdiction. The Company and Executive agree
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that any legal action or proceeding with respect to this Agreement or any
agreement, certificate or other instrument entered into in contemplation of the
transactions contemplated by this Agreement, or any matters arising out of or in
connection this Agreement or such other agreement, certificate or instrument,
and any action for the enforcement of any judgment in respect thereof, may be
brought in the state or federal courts located in Dallas, Texas. By execution
and delivery of this Agreement, each of the Company and Executive irrevocably
consent to service of process out of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, or by recognized express carrier or delivery
service, to the applicable party at his or its address referred to herein. The
Company and Executive hereby irrevocably waive any objection which he or it may
now or hereafter have to the laying of venue of any of the aforementioned
actions or proceedings arising out of or in connection with this Agreement, or
any related agreement, certificate or instrument referred to above, brought in
the courts referred to above and hereby further irrevocably waive and agree, to
the fullest extent permitted by applicable law, not to plead or claim in any
such court that any such action or proceeding brought in any such court has been
brought in any inconvenient forum. Nothing herein shall affect the right of any
party to serve process in any other manner permitted by law.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement the date first written above.
INTERSIL HOLDING CORPORATION
By: /s/ Gregory L. Williams
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Name: Gregory L. Williams
Title: President and Chief Executive Officer
/s/ Daniel J. Heneghan
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Daniel J. Heneghan
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