Exhibit 10.1

 

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MagnaChip Semiconductor Corporation

c/o MagnaChip Semiconductor, Ltd.

501, Teheran-ro, Gangnam-gu

Seoul 06168, Korea

March 26, 2020

Via E-mail

Mr. Jonathan W. Kim

 

  Re:

Separation Agreement

Dear Mr. Kim:

This letter agreement (this “Separation Agreement”) confirms our mutual
understanding regarding your resignation from the position of Chief Accounting
Officer effective as of February 28, 2020 and from the position of Executive
Vice President, Chief Financial Officer of MagnaChip Semiconductor Corporation
(“Parent”) and from all other positions with each of Parent’s direct and
indirect subsidiaries (Parent, together with each of its direct and indirect
subsidiaries, the “Company”), effective as of March 27, 2020 (the “Resignation
Date”).

1. Incorporation by Reference. Reference is made to the offer letter agreement
between you and MagnaChip Semiconductor, Ltd. (“MSK”) dated March 8, 2014 (the
“Offer Letter”) and the letter agreement regarding severance terms entered into
by you and the Company as of November 3, 2015 (the “Severance Agreement”).
Except as otherwise provided herein, all terms and conditions contained in the
Offer Letter and the Severance Agreement shall remain in full force and effect.
If any provision contained in the Offer Letter, the Severance Agreement, or any
other written agreement between you and the Company conflicts with any provision
in this Separation Agreement, the provisions contained in this Separation
Agreement shall govern and control. Capitalized terms used herein without
definition shall have the respective meanings assigned to them in the Severance
Agreement. Sections 8 (Cooperation), 9 (Taxes; Section 409A), 11 (General) and
12 (Disputes) of the Severance Agreement are hereby incorporated herein by
reference, and they shall have the same effect herein as in the Severance
Agreement.

2. Severance Benefit. You and the Company agree that your resignation shall not
be deemed to be with “Good Reason” and shall not be deemed a Qualifying
Termination; you are therefore not entitled to receive the Severance Benefit
under the Severance Agreement. The Company is offering, and you have accepted,
the following benefits in exchange for your execution of this Separation
Agreement and the release of claims contained herein and in Exhibit A attached
hereto (the “Release of Claims”):

(a) Separation Payment. The Company shall pay you an amount equal to fifty
thousand U.S. Dollars ($50,000.00). This amount will be paid to you in a lump
sum on the first regular payroll date that is at least fourteen (14) days after
the Effective Date of the Release of Claims.

(b) Option Exercise. As of the Resignation Date, pursuant to the terms of the
Parent’s 2011 Equity Incentive Plan (the “Plan”) and the option agreements dated
as of March 12, 2014, June 12, 2014, September 12, 2014, December 12, 2014,
June 9, 2015 and March 11, 2016, executed by you and Parent (the “Option
Agreements”), you will have vested options to purchase a total of 154,910 shares
of Parent common stock (the “Vested Options”). The parties agree that the Vested
Options shall remain exercisable until two (2) years after the Resignation Date
(March 27, 2022) (the “Extended Exercise Date”), provided that the Release of
Claims has not be revoked. Other

 

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than the Vested Options and 60,196 shares of Parent common stock, you have no
other equity or debt interest in the Company of any kind, including any interest
in stock, stock options, or other form of profit participation. In order to
exercise any portion of the Vested Options, you must tender a properly executed
notice and pay the aggregate exercise price in accordance with the terms of the
Plan and the Option Agreements to the Company prior to the Extended Exercise
Date or you will lose all rights to the Vested Options. The Company shall
provide reasonable assistance to you regarding the exercise of your Vested
Options.

(c) Consulting Arrangement. Immediately after you execute this Separation
Agreement and the Release of Claims, you and the Company will execute a separate
consulting agreement attached as Exhibit B.

3. Release of Claims. The above severance benefits are contingent upon and
subject to (i) your execution and non-revocation of both this Separation
Agreement and the Release of Claims; (ii) your compliance with the restrictive
covenants set forth in the Severance Agreement and in the Confidentiality
Agreement and Proprietary Information and Invention Assignment Agreement
referenced therein, except as superseded herein; (iii) and your compliance with
all other terms of this Separation Agreement and the Release of Claims. In
exchange for the benefits provided herein, you agree to execute the Release of
Claims. You further agree that the receipt of any benefits provided in this
Separation Agreement are conditioned upon your execution and non-revocation of
the Release of Claims and that you are not entitled to any benefits provided
herein absent your agreement to the Release of Claims.

4. Payment of Benefits and Compensation. You agree that, except as otherwise
provided herein, you have been paid all benefits and compensation owed to you by
the Company and are not entitled to any additional severance, wages, salary,
benefits, equity, options, bonuses, incentive compensation, allowances, or other
remuneration from the Company.

5. Statutory Severance and Repatriation Benefits. Whether or not you execute
this Separation Agreement and Release of Claims, you will receive (a) all
statutory severance required by the laws of the Republic of Korea and (b) all
the Repatriation Expense and Repatriation Allowance provided in the Company’s
Expatriate Benefit Policy for similarly situated MagnaChip Executives effective
as of the date hereof.

6. Covenants.

(a) To the fullest extent permitted by applicable law, you agree that for the
12-month period following the Resignation Date, you will not, directly or
indirectly, have any equity or equity-based interest, or work or otherwise
provide services as an employee, contractor, officer, owner, consultant,
partner, director or otherwise, in any business anywhere in the world that
competes with any of the businesses of the Company. Notwithstanding the
foregoing, you shall be permitted to acquire a passive stock or equity interest
in such a business, provided that the stock or other equity interest acquired is
not more than five percent (5%) of the outstanding interest in such business.

(b) To the fullest extent permitted by applicable law, you agree that for the
12-month period following the Resignation Date, you will not, directly or
indirectly, on your own behalf or on behalf of another (i) solicit, induce or
attempt to solicit or induce any employee or consultant of the Company to
terminate their relationship with or leave the employ of the Company, (ii) hire
(or other similar arrangement) any employee who is, or at any time in the
6 months preceding the Resignation Date was, an employee of the Company, or
(iii) induce or attempt to induce any customer, supplier, prospect, or licensee
of the Company to cease doing business with the Company, or in any way interfere
with the relationship between any such customer, supplier, prospect, or
licensee, on the one hand, and the Company, on the other hand.

 

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(c) To the fullest extent permitted by applicable law, you agree that for the
24-month period following the Resignation Date, you will not, directly or
indirectly, on your own behalf or on behalf of another (i) solicit, induce or
attempt to solicit or induce any officer, executive or director of the Company
to terminate their relationship with or leave the employ of the Company or
(ii) hire (or other similar arrangement) any officer, executive or director, who
is, or at any time in the 6 months preceding the Resignation Date was, an
officer, executive or director of the Company.

(d) You recognize and acknowledge that you have access to confidential
information and/or have had or will have material contact with the Company’s
customers, suppliers, licensees, representatives, agents, partners, licensors,
or business relations. You agree that following the Resignation Date in
perpetuity, you shall maintain in confidence and shall not directly, indirectly
or otherwise, use, disseminate, disclose or publish, or use for your benefit or
the benefit of any person, any confidential or proprietary information or trade
secrets of or relating to the Company, including, without limitation,
information with respect to the Company’s operations, processes, products,
inventions, business practices, finances, principals, vendors, suppliers,
customers, potential customers, marketing methods, costs, prices, contractual
relationships, regulatory status, compensation paid to employees or other terms
of employment, or deliver to any person any document, record, notebook, computer
program or similar repository of or containing any such confidential or
proprietary information or trade secrets. Upon your resignation, you shall
promptly deliver to the Company, or at the Company’s request destroy, all
correspondence, drawings, manuals, letters, notes, notebooks, reports, programs,
plans, proposals, financial documents, or any other documents concerning the
Company’s customers, business plans, marketing strategies, products or
processes. You may respond to a lawful and valid subpoena or other legal process
but shall give the Company notice as soon as practicable thereof, and, if
permitted, make reasonably available to the Company and its counsel the
documents and other information sought and, if requested by the Company, shall
reasonably assist such counsel in resisting or otherwise responding to such
process. The Company shall promptly reimburse you for all reasonable fees and
costs associated with your cooperation under this Section, provided that you
submit a written request (with documentation evidencing such fees and costs) for
such reimbursement within 30 days of incurring such fees and costs.

(e) You shall not, at any time following the Resignation Date in perpetuity,
directly or indirectly, knowingly disparage or otherwise make derogatory
statements regarding the Company, or any of its successors, directors or
officers which could reasonably expected to adversely affect the personal or
professional reputation of the Company or any of its successors, directors, or
officers. The foregoing shall not be violated by your truthful responses to
legal process or inquiry by a governmental authority. The Company shall not, and
shall cause its then-current executive officers not to, at any time following
the Resignation Date in perpetuity, directly or indirectly, knowingly disparage
or otherwise make derogatory statements regarding you which could reasonably
expected to adversely affect your personal or professional reputation.

(f) You agree that the results and proceeds of your services for the Company
(including any trade secrets, products, services, processes, know-how, designs,
developments, innovations, analyses, drawings, reports, techniques, formulas,
methods, developmental or experimental work, improvements, discoveries,
inventions, ideas, source and object codes, programs, matters of a literary,
musical, dramatic or otherwise creative nature, writings and other works of
authorship) resulting from services performed for the Company and any works in
progress, whether or not patentable or registrable under copyright or similar
statutes, that were made, developed, conceived or reduced to practice or learned
by you, either alone or jointly with others (collectively, “Inventions”), shall
be works-made-for-hire and the Company (or, if applicable or as directed by the
Company) shall be deemed the sole owner throughout the universe of any and all
trade secret, patent, copyright and other intellectual property rights
(collectively, “Proprietary Rights”) of whatsoever nature therein, whether or
not now or hereafter known, existing, contemplated, recognized or developed,
with the right to use the same in perpetuity in any manner the Company
determines in its sole discretion, without any further payment to you
whatsoever. If, for any reason, any of such results and proceeds shall not
legally be a work-made-for- hire and/or there are any Proprietary Rights which

 

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do not accrue to the Company under the immediately preceding sentence, then you
hereby irrevocably assign and agree to assign any and all of your right, title
and interest thereto, including, without limitation, any and all Proprietary
Rights of whatsoever nature therein, whether or not now or hereafter known,
existing, contemplated, recognized or developed, to the Company (or, if
applicable or as directed by the Company, any of its subsidiaries and
affiliates), and the Company or such subsidiaries and affiliates shall have the
right to use the same in perpetuity throughout the universe in any manner
determined by the Company or such subsidiaries and affiliates without any
further payment to you whatsoever. As to any Invention that you are required to
assign, you shall promptly and fully disclose to the Company all information
known to you concerning such Invention. You hereby waive and quitclaim to the
Company any and all claims, of any nature whatsoever, that you now or may
hereafter have for infringement of any Proprietary Rights assigned hereunder to
the Company.

(g) You agree that, from time to time, as may be requested by the Company and at
the Company’s sole cost and expense, you shall do any and all things that the
Company may reasonably deem useful or desirable to establish or document the
Company’s exclusive ownership throughout the United States of America or any
other country of any and all Proprietary Rights in any such Inventions,
including, without limitation, the execution of appropriate copyright and/or
patent applications or assignments. To the extent you have any Proprietary
Rights in the Inventions that cannot be assigned in the manner described above,
you unconditionally and irrevocably waive the enforcement of such Proprietary
Rights. This Section 6(f) is subject to and shall not be deemed to limit,
restrict or constitute any waiver by the Company of any Proprietary Rights of
ownership to which the Company may be entitled by operation of law by virtue of
your employment with, or service to, the Company. You further agree that, from
time to time, as may be requested by the Company and at the Company’s sole cost
and expense, you shall provide reasonable assistance to the Company to obtain
and from time to time enforce Proprietary Rights relating to Inventions in any
and all countries. To this end, you shall execute, verify and deliver such
documents and perform such other acts (including appearances as a witness) as
the Company may reasonably request for use in applying for, obtaining,
perfecting, evidencing, sustaining, and enforcing such Proprietary Rights and
the assignment thereof. In addition, you shall execute, verify, and deliver
assignments of such Proprietary Rights to the Company or its designees. Your
obligation to assist the Company with respect to Proprietary Rights relating to
such Inventions in any and all countries shall continue beyond your resignation
from the Company. The Company shall promptly reimburse you for all reasonable
fees and costs associated with your cooperation under this Section, provided
that you submit a written request (with documentation evidencing such fees and
costs) for such reimbursement within 30 days of incurring such fees and costs.

(h) In the event that any term of this Section 6 shall be determined by any
court of competent jurisdiction to be unenforceable by reason of its extending
for too great a period of time or over too great a geographical area or by
reason of its being too extensive in any other respect, it will be interpreted
to extend only over the maximum period of time for which it may be enforceable,
over the maximum geographical area as to which it may be enforceable, or to the
maximum extent in all other respects as to which it may be enforceable, all as
determined by such court in such action. You hereby acknowledge that the terms
of this Section 6 are reasonable in terms of duration, scope and area
restrictions and are necessary to protect the goodwill of the Company. You
hereby authorize the Company to inform any future employer or prospective
employer of the existence and terms of this Section 6 without liability for
interference with your employment or prospective employment; provided, that such
information will be only provided in response to a specific question by the
employer or prospective employer regarding any existing covenants between you
and the Company.

(i) The parties to this Separation Agreement intend for the provisions in
Section 6 above to be severable from this Separation Agreement and enforced to
the fullest extent permissible under applicable law. Should any part of the
covenants in Section 6 be found to be unenforceable, it is the intent of the
parties to this Separation Agreement that the remaining provisions of this
Separation Agreement be enforced to the fullest extent of the law to effectuate
the intent of this Section 6.

 

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(j) The parties to this Separation Agreement agree that the provisions of this
Section 6 supersede Sections 4 and 9 of the Proprietary Information and
Invention Assignment Agreement

7. Entire Agreement. This Separation Agreement and the Severance Agreement (and,
except as noted in the Severance Agreement, the Employment Offer Letter, the
Confidentiality Agreement and the Proprietary Information and Invention
Assignment Agreement referenced in the Severance Agreement) constitute the
entire agreement and understanding between you and the Company with respect to
the subject matter hereof and supersede all prior agreements, policies and
understandings (whether written or oral), between you and the Company, relating
to such subject matter (including, without limitation, any oral promise to
retain you as a consultant for any period following your termination of
employment and provide payments or benefits in connection therewith).

8. Choice of Law and Forum. This Separation Agreement shall in all respects be
interpreted, enforced and governed by the law of the State of Delaware, without
regard to conflict of law principles. The Parties agree that any claim or
dispute between them shall be adjudicated exclusively in the State of Delaware
and consent to personal jurisdiction in the State of Delaware and waive and
agree not to assert any objection to such jurisdiction and venue on any grounds.

[Remainder of page internationally left blank, Signature page follows.]

 

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Please confirm your agreement with the foregoing by signing and returning one
copy of this Separation Agreement to the undersigned, whereupon this Separation
Agreement shall become a binding agreement between you and the Company.

 

Very truly yours, MAGNACHIP SEMICONDUCTOR CORPORATION By:  

/s/ Theodore S. Kim

Name:   Theodore S. Kim Title:   Executive Vice President and   General Counsel
MAGNACHIP SEMICONDUCTOR, LTD. By:  

/s/ Theodore S. Kim

Name:   Theodore S. Kim Title:   General Counsel

Accepted and agreed as of

the date first written above:

 

JONATHAN W. KIM By:  

/s/ Jonathan W. Kim

Name:   Jonathan W. Kim

 

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EXHIBIT A

RELEASE OF CLAIMS

As used in this Release of Claims (this “Release”), the term “claims” will
include all claims, covenants, warranties, promises, undertakings, actions,
suits, causes of action, proceedings, obligations, debts, accounts, attorneys’
fees, judgments, losses, and liabilities, of whatsoever kind or nature, in law,
in equity, or otherwise. Capitalized terms used but not defined in this Release
will have the meanings given to them in the Separation Agreement dated March __,
2020, between MagnaChip Semiconductor, Ltd. (the “Company”) and Jonathan W. Kim
(“Kim”) (the “Agreement”).

For and in consideration of the severance benefits to be paid to Kim pursuant to
the Separation Agreement, Kim, for and on behalf of himself and his executors,
heirs, administrators, representatives, and assigns, hereby agrees to release
and forever discharges the Company, its parent, MagnaChip Semiconductor
Corporation, and all of their respective predecessors, successors, and past,
current, and future parent entities, affiliates, subsidiary entities, investors,
directors, shareholders, members, officers, general or limited partners,
employees, attorneys, agents, and representatives, and the employee benefit
plans in which Kim is or has been a participant by virtue of his employment with
or service to the Company (collectively, the “Company Releasees”), from any and
all claims that Kim has or may have had against the Company Releasees based on
any events or circumstances arising or occurring on or prior to the date of
execution of this Release and arising directly or indirectly out of, relating
to, or in any other way involving in any manner whatsoever Kim’s employment by
or service to the Company or the termination thereof, including without
limitation any and all claims arising under national, federal, provincial,
state, or local laws relating to employment, including without limitation claims
of wrongful discharge, breach of express or implied contract, fraud,
misrepresentation, defamation, intentional infliction of emotional distress,
whistleblowing, or liability in tort, and claims of any kind that may be brought
in any court or administrative agency, and any related claims for attorneys’
fees and costs, including, without limitation, claims under Title VII of the
Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000, et seq.; the Americans
with Disabilities Act, as amended, 42 U.S.C. § 12101 et seq.; the Rehabilitation
Act of 1973, as amended, 29 U.S.C. § 701 et seq.; the Civil Rights Act of 1866,
and the Civil Rights Act of 1991; 42 U.S.C. § 1981, et seq.; the Age
Discrimination in Employment Act, as amended, 29 U.S.C. § 621, et seq. (the
“ADEA”); the Equal Pay Act, as amended, 29 U.S.C. § 206(d); regulations of the
Office of Federal Contract Compliance, 41 C.F.R. § 60, et seq.; the Family and
Medical Leave Act, as amended, 29 U.S.C. § 2601 et seq.; the Fair Labor
Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq.; the Employee
Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.; and any
similar national, provincial, state, or local laws of the United States, the
Republic of Korea or any other jurisdiction. Kim agrees further that this
Release may be pleaded as a full defense to any action, suit, arbitration, or
other proceeding covered by the terms hereof that is or may be initiated,
prosecuted, or maintained by Kim or his descendants, dependents, heirs,
executors, administrators, or assigns. By signing this Release, Kim acknowledges
that he intends to waive and release all rights known or unknown that he may
have against the Company Releasees under these and any other laws.

Kim acknowledges that it is his intent to release all known and unknown claims,
and that he is aware of and understands the provisions of California Civil Code
Section 1542 which provides:

A general release does not extend to claims that the creditor or releasing party
does not know or suspect to exist in his or her favor at the time of executing
the release and that, if known by him or her, would have materially affected his
or her settlement with the debtor or released party.

After being fully informed of his rights under the above statute, Kim expressly
waives any and all rights, benefits and protections of the statute and any
similar state law.

 

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Kim acknowledges and agrees that as of the date he executes this Release, he has
no knowledge of any facts or circumstances that give rise or could give rise to
any claims under any of the laws listed in the preceding paragraph and that he
has not filed any claim against any of the Company Releasees before any local,
state, federal, or foreign agency, court, arbitrator, mediator, arbitration or
mediation panel, or other body (each individually a “Proceeding”). Kim
(i) acknowledges that he will not initiate or cause to be initiated on his
behalf any Proceeding and will not participate in any Proceeding, in each case,
except as required by law; and (ii) waives any right to benefit in any manner
from any relief (whether monetary or otherwise) arising out of any Proceeding,
including any Proceeding conducted by the Equal Employment Opportunity
Commission (“EEOC”). Further, Kim understands that, by executing this Release,
he will be limiting the availability of certain remedies and ability to pursue
certain claims that he may have against the Company and Company Releasees.

By executing this Release, Kim specifically releases all claims relating to his
employment and its termination under ADEA, a federal statute that, among other
things, prohibits discrimination on the basis of age in employment and employee
benefit plans.

Kim acknowledges that he has been given at least 21 days in which to consider
this Release; that the Company has advised him to consult with an attorney of
his choice before signing this Release; and that he has had sufficient time to
consider the terms of this Release. Kim represents and acknowledges that, if he
executes this Release before 21 days have elapsed, he does so knowingly,
voluntarily, and upon the advice and with the approval of legal counsel (if
any), and voluntarily waives any remaining consideration period.

Notwithstanding the generality of the foregoing, this Release does not release
(i) claims to enforce the terms of the Separation Agreement, (ii) claims for
indemnification arising under any applicable indemnification obligation of the
Company or (iii) claims that cannot be waived by law. Further, nothing in this
Release shall prevent Kim from (a) initiating or causing to be initiated on his
behalf any claim against the Company before any local, state, or federal agency,
court, or other body challenging the validity of the waiver of claims under the
ADEA (but no other portion of such waiver) or (b) initiating or participating in
an investigation or proceeding conducted by the EEOC.

Kim understands that after executing this Release, he may revoke it within 7
days after its execution, and that this Release will not become effective and
enforceable unless the 7-day revocation period passes and Kim does not revoke
the Release in writing. Kim understands that this Release may not be revoked
after the 7-day revocation period has passed and that any revocation of this
Release must be made in writing and delivered to the Company at its principal
place of business within the 7-day period. This Release will become effective,
irrevocable and binding on the 8th day after its execution (“Effective Date”),
so long as Kim has not timely revoked it as set forth above.

Kim hereby agrees to waive any and all claims to re-employment with the Company
or any of its affiliates and affirmatively agrees not to seek further employment
with the Company or any of its affiliates.

The provisions of this Release will be binding upon Kim’s heirs, executors,
administrators, legal representatives, and assigns. If any provision of this
Release will be held by any court of competent jurisdiction to be illegal, void,
or unenforceable, such provision will be of no force or effect. The illegality
or unenforceability of such provision, however, will have no effect upon and
will not impair the enforceability of any other provision of this Release.

 

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This Release will be governed in accordance with the laws of the State of
Delaware, without reference to the principles of conflicts of law. Any dispute
or claim arising out of or relating to this Release or claim of breach hereof
will be brought exclusively in the United States District Court for the District
of Delaware to the extent that federal jurisdiction exists, and in the Delaware
Chancery Court to the extent that federal jurisdiction does not exist. By
execution of this Release, Kim acknowledges that he is waiving any right to
trial by jury in connection with any suit, action, or proceeding under or in
connection with this Release.

 

 

 

Jonathan W. Kim

 

Date

 

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EXHIBIT B

CONSULTING AGREEMENT