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EXHIBIT 10.2
PROMISSORY NOTE
$1,469,000.00 Phoenix, AZ
6.62% Interest July 21, 2000
James Thorburn and his spouse, Jacqueline Thorburn (collectively referred
to as "Thorburn") for value received, hereby promise to pay to the order of
Semiconductor Components Industries, LLC ("SCI, LLC"), at its offices located at
5005 East McDowell Rd., Phoenix, AZ 85008, or such other place as the holder
hereof may designate by notice to Thorburn, the principal amount of ONE MILLION
FOUR HUNDRED SIXTY-NINE THOUSAND DOLLARS ($1,469,000.00) ("Principal Amount"),
plus interest of 6.62 percent per annum, compounded annually ("Interest")
(Interest payable hereunder shall be computed on the basis of actual days
elapsed and a year of 360 days), in lawful money of the United States, in the
manner set forth in Section 1 hereof.
1. Payment/Prepayment.
(a) This Note may be prepaid at any time, in whole or in part,
without penalty or premium. Each partial prepayment shall be applied first to
the Interest and then to the Principal Amount. This Note is a full recourse note
secured by the Property (as defined in Section 2 below).
(b) This Note will be funded by the date of the closing of the
purchase of the Property (as defined below) (the "Loan Date"). Unless paid
sooner, the Principal Amount plus Interest shall be due and payable to SCI, LLC
on the earlier of (x) the fifth anniversary of the Loan Date or (y) no later
than 90 days after the termination of Thorburn's employment with SCI, LLC, or
its Parent (as such term is defined in Thorburn's Employment Agreement with SCI,
LLC) or subsidiaries for any reason. In the event Thorburn is actively employed
with SCI, LLC, or its Parent or subsidiaries on the fifth anniversary of the
Loan Date, the Board of Directors of SCG Holding Corporation (the "Board") may
consider (1) forgiving up to 50% of the Principal Amount and/or Interest if SCG
Holding Corporation ("Holding") achieves the established Market Share Target
(described in Appendix I hereto) for the five-year period ended on the last day
of the fiscal quarter immediately preceding the fifth anniversary of the Loan
Date, and (2) forgiving up to 50% of the Principal Amount and/or Interest if
Holding achieves the established Gross Margin Percentage Target (described in
Appendix I hereto) for the five year period ended on the last day of the fiscal
quarter immediately preceding the fifth anniversary of the Loan Date. The Board
shall notify Thorburn of its determination no later than five days before the
fifth anniversary of the Loan Date. For the avoidance of doubt, it is in the
sole and absolute discretion of the Board to forgive any part of the Principal
Amount or Interest if either or both of the foregoing targets are achieved.
(c) Prior to the fifth anniversary of the Loan Date, in the event
Thorburn's employment is terminated due to Thorburn's death or Disability (as
such term is defined in Thorburn's Employment Agreement with SCI, LLC), the
Board, in its sole and absolute
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discretion, may consider at the time of the termination event by death or
Disability forgiving all or any portion of the Principal Amount and/or accrued
Interest.
2. Acknowledgement.
Thorburn acknowledges and confirms that (i) SCI, LLC has loaned
Thorburn the Principal Amount of the Note for the sole purpose of Thorburn
purchasing a primary residence located at 8635 N. 65th Street, Paradise Valley,
Arizona (the "Property"); (ii) he will use the proceeds of the Note solely for
such purpose; and (iii) SCI, LLC shall have the right to withhold any amounts
otherwise payable to Thorburn (including, without limitation, bonuses and
severance pay, but excluding his "Base Salary" as that term is defined in
Thorburn's Employment Agreement with SCI, LLC) and apply such amounts to satisfy
Thorburn's obligations hereunder.
3. Event of Acceleration.
(a) The holder of this Note, by written notice to Thorburn, may declare
the entire outstanding Principal Amount plus Interest immediately due and
payable in the event that Thorburn breaches any of the terms of the Note, the
deed of trust (a form of which is attached hereto) ("Acceleration Event"), in
which event the maturity of the then unpaid balance of the Note shall be
accelerated and shall become immediately due and payable.
(b) In the event that Thorburn breaches any of the terms of the Note or
the deed of trust, and so long as such default remains uncured, at the option of
the holder hereof upon acceleration of maturity, the unpaid principal sum hereof
shall bear interest at an interest rate equal to the stated interest rate for
this Note plus two percent (2%) per annum. At such time as a judgment is
obtained for any amounts loaned under this Note or any document or instrument
securing this Note, interest shall continue to accrue on the amount of judgment
at a rate of interest equal to the stated interest rate for this Note plus two
percent (2%) per annum.
4. Security Interest.
As collateral security for the full and timely payment of all amounts due
under the Note, Thorburn hereby agrees to grant SCI, LLC a security interest in
the Property by executing the deed of trust and Thorburn also agrees to execute
any and all additional documents necessary to provide such security interest.
5. Miscellaneous.
(a) Time is of the essence of payment. The undersigned agree to pay a late
charge not to exceed an amount equal to the stated interest rate of this Note
plus two percent (2%) of any payment which is not paid within five (5) days of
the date due to cover the extra expense of handling past due payments.
(b) Thorburn shall pay all costs and expenses incurred by the holder in
connection with the collection of the Note, including reasonable attorneys'
fees.
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(c) Except as provided above, the makers, endorsers, and guarantors of
this Note jointly and severally waive diligence, demand, presentment for
payment, protest, notice of non-payment and of protest, notice of default,
notice of acceleration, and all other notices or demands of any kind. They
jointly and severally consent, without notice to them and without release of
their liability, to extensions and accommodations given by the holder of this
Note, to release modifications and exchanges of any security, and to releases,
in whole or in part, of any other maker, endorser, or guarantor. They each agree
to make payment without the prior resort by the holder to any security or
against any other maker, endorser, or guarantor.
(d) The undersigned hereby agree to pay the contracted rate of interest,
which includes interest at the rate set forth herein and all costs and fees
associated with obtaining this credit accommodation to the extent any such costs
and fees are deemed interest under applicable law.
(e) This Note shall be governed by and construed in accordance with the
laws of the State of Arizona applicable to agreements made and to be performed
therein without regard to the principles of conflicts of law, and cannot be
changed orally.
(f) No delay or failure on the part of the holder of this Note to exercise
any power or right given under this Note, including, but not limited to, the
right to accelerate the amounts due, shall operate as a waiver of the power or
right and no right or remedy of the holder shall be deemed abridged or modified
by any course of conduct. All rights and remedies existing hereunder are
cumulative and not exclusive of each other or any rights or remedies otherwise
available.
(g) All notices and other communications hereunder shall be in writing and
shall be deemed given when delivered personally, three days after being mailed
by registered mail, return receipt requested, or the following day if sent by
overnight courier service, to SCI, LLC, attention: ON Semiconductor, General
Counsel, Law Department (M/D A700), at the address set forth at the beginning of
this Note and to Thorburn at 5005 East McDowell Rd., Phoenix, AZ 85008, or such
other address as either party may specify by notice given pursuant hereto.
(h) To the extent permitted by applicable law, Thorburn hereby waives all
benefits that might accrue by virtue of any present or future moratorium laws
exempting any of the Property, or any other property, real or personal, or any
part of the proceeds arising from any sale of any such property, from
attachment, levy, or sale under execution, or providing for any stay of
execution to be issued on any judgment recovered on this Note (excepting only
any stay of execution).
(i) If any term or provision of this Note or the application thereof to
any circumstance shall, to any extent, be invalid, illegal or unenforceable,
such term or such provisions shall be ineffective to the extent of such
invalidity, illegality or unenforceability without invalidating or rendering
unenforceable any remaining terms and provisions hereof or thereof or the
application of such term or provision to circumstances other than those as to
which it is held invalid, illegal or unenforceable.
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(j) This Note shall not be transferable by Thorburn; however, SCI, LLC may
transfer the Note to any other person or entity without Thorburn's consent.
/s/ JAMES THORBURN
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James Thorburn
/s/ JACQUELINE THORBURN BY JAMES
THORBURN, ATTORNEY IN FACT
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Jacqueline Thorburn
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APPENDIX I
1. MARKET SHARE TARGET: 9%
2. GROSS MARGIN PERCENTAGE TARGET: 43.5%
"Market Share" and "Gross Margin Percentage" shall be determined in
accordance with the manner in which Holding, in its sole discretion, calculates
and presents the Market Share and Gross Margin Percentage to the Holding Board;
provided, however, that to the extent applicable, Market Share and Gross Margin
Percentage shall be determined in accordance with generally acceptable
accounting principles consistently applied.
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