[ON LOGO]
Exhibit 10.57
ON Semiconductor Corporation
5005 E. McDowell Rd.
Phoenix, Arizona 85008
VIA FACSIMILE: 408.378.5167
AND FEDERAL EXPRESS DELIVERY
March 14, 2003
Donald Colvin
115 Los Petios
Los Gatos, CA 95032
Dear Donald:
We are pleased to extend you an offer of employment to join ON Semiconductor.
Employment refers to your employment by ON Semiconductor Corporation
("Company"), its primary operating company, Semiconductor Components Industries,
LLC ("SCI, LLC") or any of their subsidiaries (collectively "ON Semi").
This letter ("Offer Letter") confirms our offer of employment to you and sets
forth the terms and conditions of that offer. Your offer and this Offer Letter
are contingent upon: (1) successful completion of a urinalysis drug test (i.e.,
negative test result) in accordance with SCI, LLC's policy on applicant drug
testing; (2) successful background investigation and verification of salary and
all other information you have submitted to us; (3) providing proof of identity
and employment authorization to work in the United States; and (4) approval of
the Company's Board of Directors.
POSITION
Initially, you will serve as the Company's Senior Financial Director. Upon the
resignation of the Company's current Chief Financial Officer, which will be
effective April 2, 2003, your title will be changed to and you will serve the
Company as the Senior Vice President and Chief Financial Officer of ON Semi,
with direct responsibility for the finance departments of these entities.
Additionally, you will have such other titles as ON Semi may determine are
customary for your position and responsibilities within the corporate
organizational structure of ON Semi.
BASE SALARY AND VARIABLE PAY BONUS
You will be paid a base salary of $12,307.69 bi-weekly, which equates to
$320,000 annually
For 2003 and beyond, you will be eligible for a variable pay bonus based on your
individual and company performance of ON Semi under a bonus plan for ON Semi as
may be in effect from
Donald Colvin Letter
March 14, 2003
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time to time ("Bonus"). At your position, your total annual performance Bonus
payout is currently "targeted" to be 60% of your actual base salary earned in
the applicable calendar year ("Target Amount"). This is a target percentage
only. Under the Bonus plan, your Bonus could be zero and your actual bonus
amount could be lower or higher than the Target Amount depending on several
factors. Further, any Bonus would be subject to additional terms and conditions
as set forth in the plan document approved by the Board of Directors of the
Company or its designee, which plan is subject to amendment from time to time
and termination at any time. Notwithstanding the above, in the event that the
amount of your Bonus earned under the Bonus plan for the calendar year 2003 is
less than 50% of your Target Amount for 2003, on or about the date that final
Bonus amounts are paid in 2004 with respect to the calendar year 2003, SCI, LLC
will pay you a special additional bonus equal to the difference between the
amount actually earned under the Bonus plan for 2003 and 50% of the Target
Amount.
STOCK OPTION
On or after the commencement date of employment, we will request approval by the
Company's Board of a stock option grant (the "Options") to you for the purchase
of 600,000 shares of the Company's common stock at an exercise price equal to
the "Fair Market Value" of our stock as of the grant date, as determined under
our 2000 Stock Incentive Plan ("Plan"). We expect that the Options will
generally vest in 25% increments over a four (4) year period beginning on the
first anniversary of the grant date, subject to your continued employment by ON
Semi on each such date that a portion of the Options are to become exercisable.
The Options will be subject to additional terms and conditions under the Plan as
well as in a separate stock option agreement. In the event that your employment
with ON Semi is terminated by the Company without Cause (as defined below) or by
you for Good Reason (as defined below) within the two-year period following a
Change of Control (as defined in the Plan), the Options will become immediately
exercisable.
CERTAIN OTHER BENEFITS
SCI, LLC will reimburse you for your reasonable relocation expenses for the
relocation of you and your immediate family to the Phoenix metropolitan area,
including reimbursing you for temporary housing expenses for you for up to three
(3) months following your employment commencement date with ON Semi, in
accordance with our existing relocation policy applicable to our senior
executives.
Further, SCI, LLC will provide you with an executive car allowance of $1,200 per
month. In addition to your base salary, SCI, LLC offers a comprehensive benefits
package, which includes medical, dental, vision and life insurance coverage.
Once eligible, you may also participate in the ON Semi 401(k) Savings Plan,
which may include an employer match pursuant to the 401(k) Savings Plan.
During your employment by ON Semi, you are entitled to three (3) weeks of paid
vacation time for the calendar year 2003 and four (4) weeks paid vacation time
in each subsequent year.
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March 14, 2003
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Additionally, ON Semi has an executive deferred compensation plan, which allows
you to defer certain compensation tax free under the terms of this plan. You
will also be eligible to enroll in the ON Semi Employee Stock Purchase Plan
("ESPP"). Participation in the ESPP will provide you with an opportunity to
share in increases in the Company's stock price, as well as enjoy a discount on
the initial purchase price. Details of these plans will be explained when you
commence employment with ON Semi.
ON Semi reserves the right to amend or terminate the above-described plans and
policies at any time and from time to time.
AGREEMENT TO PURCHASE STOCK
You will, within sixty (60) days of the date of commencement of employment,
excluding any days that may form part of a blackout period during which you are
not permitted by Company policy or applicable law to purchase equity securities
of the Company, purchase in the aggregate that number of shares of common stock
of the Company that results from dividing $100,000 by the Fair Market Value (as
defined in the Plan) on each date of purchase of a share of common stock of the
Company, with any fractional number of shares that results from such division
being rounded up to the nearest whole number of shares of common stock. You
will, in the Company's sole discretion, purchase such shares of common stock of
the Company on the open market or directly from the Company.
TERMINATION TERMS
In the event your employment with ON Semi is terminated by the Company without
Cause (as defined below) or by you for Good Reason (as defined below), you will
receive the payments and benefits set forth below; provided, however that the
payments and benefits provided herein are subject to and conditioned upon: (1)
your executing a valid and effective general release and waiver (in the form
reasonably acceptable to ON Semi), waiving all claims you may have against ON
Semi, its successors, assigns, affiliates, executives, officers, employees,
members, partners, shareholders and directors; (2) your execution of a severance
agreement at the time of termination that includes, among other provisions,
covenants by you with regard to confidentiality, nondisparagement, and
nonsolicitation/interference/noncompete; and (3) your compliance with the terms
and conditions of this Offer Letter.
1. SCI, LLC shall pay severance payments equal to one (1) year of your annual
base salary in effect immediately prior to your date of termination.
Following the effective date of your termination, the severance payments
will be paid to you ratably in equal installments over the one (1) year
period subsequent to your date of termination in accordance with SCI,
LLC's normal payroll practices ("Severance Period"). Notwithstanding the
foregoing, you will be required to mitigate any damages that you may incur
as a result of a termination of your employment by the Company without
Cause or by you for Good Reason by seeking employment comparable in terms
of compensation, position and location
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March 14, 2003
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to your employment hereunder. Subject to paragraph 3 below, any amounts
that you earn pursuant to such employment during the Severance Period
shall offset and reduce the amount of severance paid to you by SCI, LLC
under this Offer Letter. For purposes of these three paragraphs,
"employment" shall mean any activity for which you are compensated as a
result of the rendering of services, whether such services are rendered as
a common law employee, a partner, sole proprietor, independent contractor
or otherwise. You will be required to provide such evidence as ON Semi may
reasonably require regarding the amount of such earnings.
2. During the Severance Period, SCI, LLC will pay for any continuation of
medical benefits for you and your family for which you are eligible
pursuant to a valid COBRA election. The foregoing notwithstanding, in the
event that you become eligible for medical benefits in connection with new
employment during the Severance Period, the coverage provided by SCI, LLC
under this subsection shall terminate immediately. You agree that you will
notify ON Semi promptly of your subsequent employment and eligibility for
benefits.
3. In the event that during the Severance Period and while SCI, LLC is still
obligated to pay the severance payments in paragraph 1 above, you commence
employment with an employer who is located outside of the Phoenix
metropolitan area and you are required to and actually do relocate to such
other location, SCI, LLC will continue to make severance payments to you
in an amount equal to 50% of the rate of the severance payment being paid
to you immediately prior to the commencement of your new employment as
provided in paragraph 1 above, provided, however, that in no event shall
any severance payments be due and payable to you after the Severance
Period.
For purposes of this Offer Letter, the term "Cause" shall mean your: (a) breach
of any material provision of this Offer Letter; (b) gross negligence in
connection with the performance of your duties, obligations or responsibilities
to ON Semi, or willful failure to perform your duties, obligations or
responsibilities to ON Semi to the best of your ability; (c) breach of your
fiduciary duty to ON Semi; (d) engaging in any misconduct, fraud or dishonesty
involving the business of ON Semi, or any other activity otherwise determined to
be materially detrimental or injurious to the ON Semi's reputation; or (e)
commission of a felony or a crime involving moral turpitude, each as determined
by the Compensation Committee of the Board and the Chief Executive Officer in
their discretion. For purposes of this Offer Letter, the term "Good Reason"
shall mean: (i) a material breach of this Offer Letter by On Semi or (ii) a
material diminution of your duties and responsibilities as described in this
Offer Letter, provided that in either case you notify On Semi within thirty (30)
days after the event or events which you believe constitute Good Reason and
describe in such notice in reasonable detail such event or events and provide On
Semi a reasonable time to cure such breach or diminution (not to exceed thirty
(30) days).
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March 14, 2003
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You understand and agree that neither the granting of any benefits set forth in
this Offer Letter, nor this Offer Letter shall constitute or be evidence of any
agreement or understanding, either expressed or implied, on the part of ON Semi
to employ you for any definite period of time. You are an "at-will" employee,
which means that you or ON Semi may terminate the employment relationship at any
time and for any reason, with or without notice and with or without Good Reason
or Cause.
Notwithstanding your at-will status, if you fail to commence employment,
voluntarily terminate your employment with ON Semi, or are terminated for Cause,
you will not be entitled to start/continue the benefits set forth above,
including, without limitation, each of the benefits listed under "Certain Other
Benefits" of this Offer Letter. ON Semi is under no obligation to authorize,
pay, or reimburse you for any expenses associated with your benefits or this
Offer Letter until we receive a signed Offer Letter from you.
CODE OF BUSINESS CONDUCT AND DRUG TEST
Enclosed is a copy of ON Semi's Code of Business Conduct ("Code"), which
explains ON Semi's principles in this important subject area and the importance
of adhering to the highest standards of business conduct. We expect every ON
Semi employee to follow these principles and to read and understand the contents
of this booklet. When you report to work, you will be required to sign a
certificate indicating that you have read and understand the Code and that you
commit to follow the guidelines contained in the booklet. You will also be asked
to disclose any potential issues that you may have that pertain to these
guidelines. We will be discussing the subject matter in greater detail in your
orientation session.
ON Semi is committed to providing a drug-free workplace. Therefore, all
prospective employees are required to undergo a drug test before becoming an ON
Semi employee. By accepting this employment offer you agree to participate in a
pre-employment drug-screening test and understand that employment is contingent
upon successfully passing such a test. If you require further information,
please notify me so that we can address any issues or concerns you may have. In
order to allow sufficient time for processing; please complete the
drug-screening test within 10 days of acceptance of this offer.
OTHER
By signing this Offer Letter, you acknowledge that your acceptance of this offer
and future performance of services hereunder will not violate any other
agreement or obligation that you may have with any of your current or former
employers or other third parties. You agree that you will not use or disclose
any confidential or proprietary information of any former employer in connection
with the services performed hereunder for ON Semi.
As used in this Offer Letter, commencement date shall mean the first day you
render compensable services to ON Semi. You further agree and acknowledge that
this Offer Letter contains all of the terms of our offer of employment with ON
Semi, and that you have not relied
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March 14, 2003
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on any oral or written representations that are not explicitly set forth in this
Offer Letter in deciding whether to accept this offer. Your commencement date
will be no later than March 17, 2003.
OFFER ACCEPTANCE
Please indicate your acceptance of this offer by signing below and returning
this letter to the undersigned. A second copy of this letter is provided for
your personal files.
We are confident ON Semi can offer you a challenging and rewarding job
opportunity, and we look forward to you joining our team.
Very truly yours,
SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC
By: /s/ Keith D. Jackson
------------------------------------
Its: President and Chief Executive Officer
I hereby accept this Offer Letter and its conditions and terms:
/s/ DONALD COLVIN Dated: March 14, 2003
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Donald Colvin