Exhibit 10.36
 
EMPLOYMENT AGREEMENT
 
This Employment Agreement (the “Employment Agreement”) is entered into as of
September 25, 2006 (the “Date of this Employment Agreement”) by and between Shu
Li, an individual (“Executive”) and Jazz Semiconductor, Inc., a Delaware
corporation (the “Company”). Executive and the Company are hereinafter
collectively referred to as the “Parties”, each as a “Party”.
 
A. Whereas, Acquicor Technology Inc., a Delaware corporation (the “Parent”), Joy
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent (the “Merger Sub”), the Company and the stockholders’ representative
named therein are entering into that certain Agreement and Plan of Merger (the
“Merger Agreement”) dated as of the date hereof pursuant to which the Company
will become a wholly-owned subsidiary of Parent (the “Merger”);
 
B. Whereas, Executive is a key employee of the Company, and is intimately
familiar with the Company’s operations, plans, trade secrets, proprietary
information, business activities and operations;
 
C. Whereas, Executive’s past experience and skills make Executive singularly
qualified to render special, unique, unusual and extraordinary services to the
Company, and Executive will receive significant consideration and other benefits
from the consummation of the Merger Agreement;
 
D. Whereas, as an inducement to, and in consideration of, the Parent’s agreement
to enter into the Merger Agreement, Executive has offered to continue to serve
as an employee of the Company after the date the Merger closes pursuant to the
Merger Agreement (the “Effective Date”) and to provide personal services in
exchange for certain compensation and benefits; and
 
E. Whereas, the Parent would not enter into the Merger Agreement but for
Executive’s agreement to enter into this Employment Agreement and to provide
continuing employment services to the Company pursuant to the terms and
conditions set forth herein;
 
Now, Therefore, in consideration of the mutual promises and covenants contained
herein, the Parties agree as follows:
 
1.  Condition Precedent. Executive’s employment with the Company pursuant to
this Employment Agreement shall commence immediately on the Effective Date. If
Executive’s employment with the Company ends for any reason prior to the
Effective Date, or the Merger is not consummated for any reason, the Employment
Agreement shall be deemed null and void, and the offer of employment contained
herein shall not be binding upon the Company, the Parent or any other person or
entity.
 
2.  Employment by the Company.
 
2.1  Job Title and Responsibilities. The Company shall employ Executive in the
position of Chief Executive Officer and President (“CEO”) and Executive hereby
accepts such employment on the terms set forth herein. Executive shall report
directly to the Chief Executive Officer of Parent (the “Parent CEO”), and shall
perform all duties customarily associated with Executive’s job title and all
such other duties as may be reasonably assigned to Executive. Executive shall
perform his duties from the Company’s corporate headquarters in Newport Beach,
California or from such other location that Executive and the Company may agree
upon. Executive will devote his best efforts and substantially all of his
professional time and attention to the business of the Company, subject to
reasonable vacation or sick leave allowed by Company policy or as otherwise
permitted by the Company. The Company reserves the right to change Executive’s
job title, duties, reporting relationship and work location from time to time,
as it deems necessary, subject to the terms and conditions set forth herein.
 

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2.2  Company Employment Policies. Executive agrees to abide by all Company
employment policies and procedures in effect from time to time that are
applicable to management level employees of the Company, and to sign and
acknowledge receipt of any such written policies or procedures as requested by
the Company from time to time. Except for the Company’s at-will employment
policy (described below), the Company may modify, revoke, suspend or terminate
its policies and procedures at any time, with or without notice.
 
3.  Compensation and Benefits.
 
3.1  Salary. Executive shall receive for services rendered hereunder a base
salary paid at the rate of $422,923 per year, less required payroll deductions
and withholdings (the “Base Salary”), paid on the Company’s customary payroll
payment dates. The Company reserves the right to modify Executive’s compensation
at other times, subject to all other terms and conditions set forth in this
Employment Agreement.
 
3.2  Annual Performance Bonus. Executive shall be eligible to earn annual bonus
compensation (the “Bonus”) as a participant in the Company's current 2006
Employee Quarterly Performance Bonus Program and in any annual bonus plan that
may hereafter be established by the Company for the Executive or its executive
team generally. The prerequisites for Executive’s earning of any Bonus in a 2007
plan and in any plan hereafter established, as well as the amount of any bonus
that may be awarded, shall be determined by the terms and conditions of the
applicable bonus plan and/or by the Parent's Board of Directors (the “Board”) in
its discretion. To the extent that the amount of Executive’s Bonus is based
on Executive’s achievement of certain Company and personal performance and
business objectives (the “Performance Objectives”), the Performance Objectives
shall be approved by the Parent CEO for the relevant Bonus year. It shall be
Executive’s responsibility to obtain written approval of the Performance
Objectives before the start of the applicable Bonus year. The Parent CEO, after
consulting with the Board, will determine, in his sole discretion, to what
extent Executive achieved the Performance Objectives, and the amount of the
Bonus earned as a result, if any. Executive must remain employed with the
Company through the end of the accounting quarter in order to be eligible to
earn a Bonus for that quarter. No pro-rated or partial Bonus may be earned or
paid. Executive shall not be eligible to earn any other bonus or incentive
compensation from the Company except as expressly authorized in a writing signed
by the Parent CEO.
 
3.3  Stock Options/Equity.  Executive may be awarded stock options or other
equity awards (collectively, the “Equity Awards”) pursuant to terms of the
Company’s governing equity incentive plan (the “Plan”) as determined by the
Compensation Committee of the Board in its sole discretion. The exercisability,
vesting and other terms and conditions governing the Equity Awards will be
governed solely by the Plan and separate written agreements governing such
Equity Awards, and not by this Employment Agreement.
 
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3.4  Expense Reimbursements. Executive will be reimbursed by the Company for all
reasonable, documented business expenses incurred in the course of performing
his duties hereunder, in accordance with the Company’s governing expense
reimbursement policies and procedures, in effect from time to time. When
traveling on Company business, Executive shall be entitled to business class or
first class airline travel.
 
3.5  Company Benefits Package. Executive will continue to be eligible to
participate in the Company’s standard employee benefits package (including group
medical, dental and vision insurance coverage, paid holiday, vacation and sick
leave, and 401(k) plan participation) on the terms and conditions applicable to
such benefit plans, as may be in effect from time to time. Executive and the
Company each hereby represent that as of the Date of this Employment Agreement,
Executive has a balance of 100.28 hours of accrued, unused vacation time, and
that Executive will continue to accrue additional vacation after the Effective
Date at his then-current accrual rate (i.e., 4.62 hours per pay period) in
accordance with the Company’s vacation policies and procedures in effect from
time to time, up to a maximum accrued balance of 1.75 times Executive’s annual
vacation accrual rate. For purposes of determining Executive’s eligibility
and/or rights under any applicable Company benefit plan, Executive will be
credited as providing employment services effective as of his start date as
reflected in the Company’s records (i.e, January 24, 2000). The Company reserves
the right to suspend, modify or terminate employee benefits at any time, in its
sole discretion.
 
4.  Proprietary Information, Rights and Duties.
 
4.1  Employee Confidential Information and Inventions Agreement. As a condition
of employment, Executive must sign the Employee Confidential Information and
Inventions Assignment Agreement (the “Confidential Information Agreement”),
attached hereto as Exhibit A.
 
4.2  Exclusive Property. Executive agrees that all Company-related business
procured by Executive, and all Company-related business opportunities and plans
made known to Executive while employed by the Company, are and shall remain the
permanent and exclusive property of the Company.
 
5.     Outside Activities During Employment.
 
5.1  Activities. Except with the prior written consent of the Board and as
otherwise provided below, Executive will not during his employment with the
Company undertake or engage in any other employment, occupation or business
enterprise. Executive may engage in civic and not-for-profit activities so long
as such activities do not materially interfere with the performance of his
duties hereunder. Subject to the limitations of Sections 5.2 and 5.3 of this
Employment Agreement and with the prior written consent of the Board, Executive
may serve as a director of other corporations and may devote a reasonable amount
of his time to other types of business or public activities not expressly
mentioned in this Section.
 
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5.2  Investments and Interests. During Executive’s employment with the Company,
Executive agrees not to acquire, assume or participate in, directly or
indirectly, any position, investment or interest known by his to be adverse or
antagonistic to the Company, its business or prospects, financial or otherwise.
 
5.3  Non-Competition. During Executive’s employment with the Company, except on
behalf of the Company, Executive will not directly or indirectly, whether as an
officer, director, stockholder, partner, proprietor, associate, representative,
consultant, or in any capacity whatsoever engage in, become financially
interested in, be employed by or have any business connection with any other
person, corporation, firm, partnership or other entity whatsoever known by his
to compete directly with the Company, anywhere in the world, in any line of
business engaged in (or planned to be engaged in) by the Company; provided,
however, that the Executive may purchase or otherwise acquire up to (but not
more than) one percent (1%) of any class of securities of any enterprise (but
without participating in the activities of such enterprise) if such securities
are listed on any national or regional securities exchange or have been
registered under Section 12(g) of the Securities Exchange Act of 1934, as
amended.
 
6.  Termination/Severance Benefits.
 
6.1  At-Will Employment. Executive’s relationship with the Company is at-will.
Accordingly, both the Company and Executive may terminate the employment
relationship at any time, with or without Cause or good reason, and with or
without advance notice. Upon termination of Executive’s employment for any
reason (the “Termination Date”), the Company will pay Executive all accrued but
unpaid base salary, accrued but unpaid bonuses, unpaid expense reimbursements
and accrued but unused vacation earned through the Termination Date, less
applicable withholdings and deductions, in accordance with applicable law.
Except as expressly provided in Section 6.2 and 6.3 of this Employment
Agreement, Executive shall not be entitled to receive any additional
compensation (including Base Salary, Bonuses, incentive compensation, or
equity), severance, or benefits from the Company after the Termination Date,
with the exception of any vested right Executive may have under the express
terms of a written ERISA-qualified benefit plan (e.g., 401(K) account). To the
extent Executive is governed by any severance plan, program or policy which the
Company has in effect now or may adopt in the future, Executive shall be
entitled to receive only the greater of the severance benefits available to him
under any such plan, program or policy, or under this Employment Agreement.
 
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6.2  Severance Benefits.
 
(a)  Benefits. If, within one (1) year after the Effective Date, Executive’s
employment with the Company is terminated without Cause or Executive resigns his
employment for any or no reason (each a “Covered Termination”), the Company
shall pay Executive, as severance, an amount equal to two (2) times the sum of
(i) Executive’s annualized Base Salary in effect as of the Effective Date (i.e.,
$845,846), plus (ii) an amount equal to the total bonus compensation paid to
Executive during the twelve (12) month period immediately preceding the
Termination Date(the “Severance Payment”). The Severance Payment shall be
subject to payroll withholding and deduction. (For purposes of calculating the
Severance Payment, the Parties acknowledge and agree that, during the twelve
(12) month period immediately prior to Date of this Employment Agreement,
Executive received the bonus compensation set forth in Exhibit B hereto.) To the
extent provided by the federal COBRA law or, if applicable, state insurance laws
(collectively, “COBRA”) and by the Company’s then-current group health insurance
policies, provided Executive timely elects continued health insurance coverage
pursuant to the governing COBRA laws and the terms of the applicable health
insurance plans, as a further severance benefit, the Company will pay directly
to the applicable insurance carrier all COBRA premiums necessary to continue
Executive’s health insurance coverage as of the Termination Date (including
dependent coverage, if applicable) in effect for eighteen (18) months after the
Termination Date (the “COBRA Reimbursement”). In addition, the Company shall, at
the end of such eighteen (18) month period, pay directly to Executive a lump sum
equal to six (6) times the then most recent monthly COBRA premium paid by
Company to the applicable insurance carrier (the “Additional Health
Reimbursement”). The COBRA Reimbursement and the Additional Health Reimbursement
shall be reported for tax purposes as earnings. The Additional Health
Reimbursement shall be subject to payroll withholding and deduction. The
Executive shall at his discretion be allowed to receive the Severance Payment
shall be paid in a lump sum or as salary and benefits continuation in bi-weekly
installments. If the Executive chooses to be paid in a lump sum, such amount,
less applicable withholdings and deductions, will be paid within ten (10)
business days after Executive provides the Company with an effective Release, as
required under Section 6.2(d) below. If the Executive chooses to be paid in
salary continuation, then the Severance Payment, less applicable withholdings
and deductions, will be paid in bi-weekly installments over the applicable 52
week or 104 week period after the Executive provides the Company with an
effective Release, as required under Section 6.2(d) below.
 
(b)  Cause. For purposes of this Employment Agreement, “Cause” to terminate
Executive’s employment shall mean any of the following: (i) Executive’s
conviction of, a guilty plea with respect to, or a plea of nolo contendere to, a
charge that Executive has committed a felony under the laws of the United States
or of any state; (ii) willful and material breach of Executive’s obligations
under any written agreement between Executive and the Company, including without
limitation this Employment Agreement and the Confidential Information Agreement;
(iii) Executive’s willful misconduct, material failure or refusal to perform his
job duties, or gross neglect of his duties, provided that such unsatisfactory
performance, if reasonably susceptible of cure, has not been cured within thirty
(30) days following Executive’s receipt of written notice from the Company
specifying the particulars of the conduct constituting Cause; and (iv)
Executive’s engagement in any activity that constitutes a material conflict of
interest with the Company, the Parent or any of their affiliated entities.
Termination of Executive’s employment because of Executive’s death or certified
disability (which disability renders Executive unable to perform the essential
duties of his position with or without reasonable accommodation for sixty (60)
consecutive days or a total of one hundred and twenty (120) days in any twelve
(12) month period) shall not constitute “Cause” for termination under this
Employment Agreement. No act, nor failure to act, on the Executive’s part, shall
be considered “willful” unless he has acted or failed to act, with an absence of
good faith and without a reasonable belief that his action or failure to take
action was in the best interests of the Company.
 
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(c)  Release And Other Requirements. Executive must provide the Company with an
effective general release of claims in substantially the form attached hereto as
Exhibit B (the “Release”) as a precondition to receiving the Severance Payment
or COBRA Reimbursement (together, the “Severance Benefits”). Executive further
understands and agrees that, if Executive materially breaches his obligations
under the Confidential Information Agreement or that certain Noncompetition
Agreement entered into by the Executive on behalf of the Company, the Parent and
certain other Indemnitees on the date hereof (the “Noncompetition Agreement”),
and such material breach, if reasonably susceptible of cure, has not been cured
within thirty (30) days following Executive’s receipt of written notice from the
Company specifying the particulars of the conduct constituting a material breach
of either such agreement, then in addition (and without prejudice) to all other
remedies and relief available to the Company; (i) Executive shall be eligible to
receive only $100.00 of total Severance Benefits available under this Employment
Agreement, (ii) Executive’s entitlement to all other severance benefits,
including any unpaid balance of Severance Benefits, shall immediately terminate;
(iii) if the Severance Benefits have already been paid to Executive, Executive
agrees to immediately remit to the Company the gross amount of all Severance
Benefits paid or otherwise provided to him except for $100.00; and (iv)
Executive’s Release shall remain in full force and effect, notwithstanding the
reduction in Severance Benefits. No breach by Executive of the Confidential
Information Agreement shall be considered “material” for purposes of the
immediately preceding sentence unless it is reasonably foreseeable that the
breach could result in material competitive harm to the Company or Executive has
acted or failed to act, either intentionally or with an absence of good faith or
with substantial lack of concern for his compliance with Confidential
Information Agreement.
 
6.3  Deferred Compensation. Because of the uncertainty of the application of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), to
payment of the Severance Benefits, Executive and the Company hereby agree that
if any Severance Benefits are subject to the provisions of Section 409A of the
Code by reason of this Employment Agreement, or any part thereof, being
considered a “nonqualified deferred compensation plan” pursuant to Section 409A
of the Code, then such payments shall be made in accordance with, and this
Employment Agreement shall be amended to comply with, Section 409A of the Code,
including, without limitation, any necessary delay of six (6) months applicable
to payment of deferred compensation to a “specified employee” (as defined in
Section 409A(2)(B)(i) of the Code) upon separation from service.
 
7.  Dispute Resolution. 
 
7.1  Mandatory Arbitration. To ensure the rapid and economical resolution of
disputes that may arise in connection with Executive’s employment with the
Company, Executive and the Company agree that any and all disputes, claims, or
causes of action, in law or equity, arising from or relating to the enforcement,
breach, performance, execution or interpretation of this Employment Agreement,
Executive’s employment, or the termination of that employment, shall be
resolved, to the fullest extent permitted by law, by final, binding and
confidential arbitration conducted in Newport Beach, California by a single
arbitrator with JAMS (formerly known as “Judicial Arbitration and Mediation
Services”), or its successor, under the then-applicable JAMS’ arbitration rules.
Executive acknowledges that by agreeing to this arbitration procedure, both
Executive and the Company are waiving the right to resolve any such dispute
through a trial by jury or judge or administrative proceeding. The arbitrator
shall: (a) have the authority to compel adequate discovery for the resolution of
the dispute and to award such relief as would otherwise be permitted by law; and
(b) issue a written arbitration decision including the arbitrator’s essential
findings and conclusions and a statement of the award. The arbitrator shall be
authorized to determine if an issue is subject to this arbitration obligation,
and to award any or all remedies that Executive or the Company would be entitled
to seek in a court of law. To the extent permitted by applicable law, the
Company shall reimburse the Executive for all legal costs and expenses
reasonably incurred (and documented in invoices) in connection with any dispute
under this Agreement, so long as the Executive substantially prevails in such
dispute. The Company shall pay all JAMS’ arbitration fees.
 
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7.2  Limitations. Nothing in this Section 7 shall or is intended to prevent
either Executive or the Company from obtaining injunctive relief in court to
prevent irreparable harm pending the conclusion of any arbitration held pursuant
to this Section.
 
8.  General Provisions.
 
8.1  Notices. Any notices provided hereunder must be in writing and shall be
deemed to be received upon the earlier of personal delivery (including, personal
delivery by facsimile transmission), delivery by express delivery service (e.g.
Federal Express), or the third day after mailing by first class mail, to the
Company at its primary office location and to Executive at most current home
address as listed on the Company payroll (which address may be changed by
written notice).
 
8.2  Severability. Whenever possible, each provision of this Employment
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Employment Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but such invalid,
illegal or unenforceable provision will be reformed, construed and enforced in
such jurisdiction so as to render it valid, legal, and enforceable consistent
with the intent of the parties insofar as possible.
 
8.3  Waiver. Any waiver of any right hereunder must be in evidenced in a writing
signed by the waiving party to be effective, and any such waiver shall not be
construed to be a waiver of any preceding or succeeding breach of the same or
any other provision of this Employment Agreement.
 
8.4  Entire Agreement. This Employment Agreement, together with the Confidential
Information Agreement, the Noncompetition Agreement, constitutes the entire
agreement between Executive and the Company regarding the subject matter hereof
and it supersedes any and all prior agreements, promises, representations or
understandings, written or otherwise, between Executive and the Company with
regard to this subject matter. This Employment Agreement is entered into without
reliance on any agreement, or promise, or representation, other than those
expressly contained or incorporated herein, and it cannot be modified or amended
except in a writing signed by Executive and a duly authorized representative of
the Board.
 
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8.5  Headings and Construction. The headings of the sections hereof are inserted
for convenience only and shall not be deemed to constitute a part hereof or to
affect the meaning thereof. Any ambiguities in this Employment Agreement shall
not be construed against either Party as the drafter.
 
8.6  Successors and Assigns. This Employment Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive, the Company and their
respective successors, assigns, heirs, executors and administrators, except that
Executive may not assign any of his duties hereunder and he may not assign any
of his rights hereunder without the written consent of the Company.
 
8.7  Governing Law. All questions concerning the construction, validity and
interpretation of this Employment Agreement shall be governed by the law of the
State of California as applied to contracts made and to be performed entirely
within California.
 
8.8  Counterparts. This Employment Agreement may be executed in separate
counterparts, which shall be taken together and shall constitute one agreement.
Facsimile and PDF signatures shall be as effective as originals.
 
In Witness Whereof, the parties enter into this Employment Agreement as of the
Effective Date (as defined above).
 
Jazz Semiconductor, Inc.

By: /s/ Carolyn Follis                                   
 
Print Name: Carolyn Follis                         
 
Title: General Counsel                                

 
/s/ Shu
Li                                                                                         
      
Shu Li
 
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Exhibit A
 

EMPLOYEE CONFIDENTIAL INFORMATION AND INVENTIONS ASSIGNMENT AGREEMENT
 
(CEO)
 
In consideration of my employment or continued employment by Jazz Semiconductor,
Inc., a Delaware corporation (“Company”), and the compensation paid to me now
and during my employment with the Company, I agree to the terms of this
Agreement as follows:
 
1.  Confidential Information Protections.
 
1.1  Nondisclosure; Recognition of Company’s Rights. At all times during and
after my employment, I will hold in confidence and will not disclose, use,
lecture upon, or publish any of Company’s Confidential Information (defined
below), except as may be required in connection with my work for Company, or as
expressly authorized by the Company’s Board of Directors (the “Board”), or the
Chief Executive Officer (the “CEO”) of Company (if I am no longer employed with
the Company at the time such authorization is requested). I will obtain written
approval from the Board or the CEO (as applicable) before publishing or
submitting for publication any material (written, oral, or otherwise) that
relates to my work at Company and/or incorporates any Confidential Information.
I hereby assign to Company any rights I may have or acquire in any and all
Confidential Information and recognize that all Confidential Information shall
be the sole and exclusive property of Company and its assigns.
 
1.2  Confidential Information. The term “Confidential Information” shall mean
any and all confidential knowledge, data or information related to Company’s
business or its actual or demonstrably anticipated research or development,
including without limitation (a) trade secrets, inventions, ideas, processes,
computer source and object code, data, formulae, programs, other works of
authorship, know-how, improvements, discoveries, developments, designs, and
techniques; (b) information regarding products, services, plans for research and
development, marketing and business plans, budgets, financial statements,
contracts, prices, suppliers, and customers; (c) information regarding the
skills and compensation of Company’s employees, contractors, and any other
service providers of Company; and (d) the existence of any business discussions,
negotiations, or agreements between Company and any third party. Notwithstanding
the forgoing, “Confidential Information” shall not include any of the forgoing
items which has become publicly known and made generally available other than
through my violation of this Agreement.
 
1.3  Third Party Information. I understand that Company has received and in the
future will receive from third parties confidential or proprietary information
(“Third Party Information”) subject to a duty on Company’s part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. During and after the term of my employment, I will, in accordance with
and subject to the terms and limitations of the Company’s duties to maintain the
confidentiality of such information and to use it only for certain limited
purposes, hold Third Party Information in strict confidence and will not
disclose to anyone (other than Company personnel who need to know such
information in connection with their work for Company) or use, Third Party
Information, except in connection with my work for Company or unless expressly
authorized by an officer of Company in writing.
 
1.4  No Improper Use of Information of Prior Employers and Others. I represent
that my employment by Company does not and will not breach any agreement with
any former employer, including any noncompete agreement or any agreement to keep
in confidence or refrain from using information acquired by me prior to my
employment by Company. I further represent that I have not entered into, and
will not enter into, any agreement, either written or oral, in conflict with my
obligations under this Agreement. During my employment by Company, I will not
improperly make use of, or disclose, any information or trade secrets of any
former employer or other third party, nor will I bring onto the premises of
Company or use any unpublished documents or any property belonging to any former
employer or other third party, in violation of any lawful agreements with that
former employer or third party. I will use in the performance of my duties only
information that is generally known and used by persons with training and
experience comparable to my own, is common knowledge in the industry or
otherwise legally in the public domain, or is otherwise provided or developed by
Company.
 
2.  Inventions.
 
2.1  Inventions and Intellectual Property Rights. As used in this Agreement, the
term “Invention” means any ideas, concepts, information, materials, processes,
data, programs, know-how, improvements, discoveries, developments, designs,
artwork, formulae, other copyrightable works, and techniques and all
Intellectual Property Rights in any of the items listed above. The term
“Intellectual Property Rights” means all trade secrets, copyrights, trademarks,
mask work rights, patents and other intellectual property rights recognized by
the laws of any jurisdiction or country. Nothing in this Agreement shall
prohibit me from (i) disclosing information and documents when required by law,
subpoena or court order, (ii) disclosing information and documents to any
attorney or tax adviser for the purpose of securing legal or tax advice; (iii)
disclosing my post-employment restrictions in this Agreement in confidence to
any potential new employer, or (iv) retaining, at any time, my personal
correspondence and documents relating only to my own person benefits,
entitlements and obligations.
 
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2.2  Prior Inventions. I have disclosed on Exhibit A a complete list of all
Inventions that (a) I have, or I have caused to be, alone or jointly with
others, conceived, developed, or reduced to practice prior to the commencement
of my employment by Company; (b) in which I have an ownership interest or which
I have a license to use; (c) and that I wish to have excluded from the scope of
this Agreement (collectively referred to as “Prior Inventions”). If no Prior
Inventions are listed in Exhibit A, I warrant that there are no Prior
Inventions. I agree that I will not incorporate, or permit to be incorporated,
Prior Inventions in any Company Inventions (defined below) without Company’s
prior written consent. If, in the course of my employment with Company, I
incorporate a Prior Invention into a Company process, machine or other work, I
hereby grant Company a non-exclusive, perpetual, fully-paid and royalty-free,
irrevocable and worldwide license, with rights to sublicense through multiple
levels of sublicensees, to reproduce, make derivative works of, distribute,
publicly perform, and publicly display in any form or medium, whether now known
or later developed, make, have made, use, sell, import, offer for sale, and
exercise any and all present or future rights in, such Prior Invention.
 
  Assignment of Company Inventions. Inventions assigned to the Company or to a
third party as directed by the Company pursuant to the section titled
“Government or Third Party” are referred to in this Agreement as “Company
Inventions.” Subject to the section titled “Government or Third Party” and
except for Inventions that I can prove qualify fully under the provisions of
California Labor Code section 2870 and I have set forth in Exhibit A, I hereby
assign and agree to assign in the future (when any such Inventions or
Intellectual Property Rights are first reduced to practice or first fixed in a
tangible medium, as applicable) to Company all my right, title, and interest in
and to any and all Inventions (and all Intellectual Property Rights with respect
thereto) made, conceived, reduced to practice, or learned by me, either alone or
with others, during the period of my employment by Company.
 
2.3  Government or Third Party. I agree that, as directed by the Company, I will
assign to a third party, including without limitation the United States, all my
right, title, and interest in and to any particular Company Invention.
 
2.4  Enforcement of Intellectual Property Rights and Assistance. During and
after the period of my employment, I will assist Company in every proper way to
obtain and enforce United States and foreign Intellectual Property Rights
relating to Company Inventions in all countries. If the Company is unable to
secure my signature on any document needed in connection with such purposes, I
hereby irrevocably designate and appoint Company and its duly authorized
officers and agents as my agent and attorney in fact, which appointment is
coupled with an interest, to act on my behalf to execute and file any such
documents and to do all other lawfully permitted acts to further such purposes
with the same legal force and effect as if executed by me.
 
2.5  Incorporation of Software Code. I agree that I will not incorporate into
any Company software or otherwise deliver to Company any software code licensed
under the GNU General Public License or Lesser General Public License or any
other license that, by its terms, requires or conditions the use or distribution
of such code on the disclosure, licensing, or distribution of any source code
owned or licensed by Company.
 
3.  Records. I agree to keep and maintain adequate and current records (in the
form of notes, sketches, drawings and in any other form that is required by the
Company) of all Inventions made by me during the period of my employment by the
Company, which records shall be available to, and remain the sole property of,
the Company at all times.
 
4.  Additional Activities. I agree that during the term of my employment by
Company, I will not directly or indirectly, without Company’s express written
consent: (a) engage in any employment or business activity that is competitive
with, or would otherwise conflict with my employment by, Company; or (b) solicit
or attempt to solicit any employee, independent contractor, consultant or
customer of Company to terminate his, her or its relationship with Company in
order to become an employee, consultant, independent contractor, or customer to
or for any other person or entity.
 
5.  Return of Company Property. Upon termination of my employment or upon
Company’s request at any other time, I will deliver to Company all of Company’s
property, equipment, and documents, together with all copies thereof, and any
other material containing or disclosing any Inventions, Third Party Information
or Confidential Information and certify in writing that I have fully complied
with the foregoing obligation. I agree that I will not copy, delete, or alter
any information contained upon my Company computer or Company equipment before I
return it to Company. In addition, if I have used any personal computer, server,
or e-mail system to receive, store, review, prepare or transmit any Company
information, including but not limited to, Confidential Information, I agree to
provide the Company with a computer-useable copy of all such Confidential
Information and then permanently delete and expunge such Confidential
Information from those systems; and I agree to provide the Company access to my
system as reasonably requested to verify that the necessary copying and/or
deletion is completed. I further agree that any property situated on Company’s
premises and owned by Company is subject to inspection by Company’s personnel at
any time with or without notice. Prior to the termination of my employment or
promptly after termination of my employment, I will cooperate with Company in
attending an exit interview and certify in writing that I have complied with the
requirements of this section.
 
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6.  Notification of New Employer. If I leave the employ of Company, I consent to
the notification of my new employer of my rights and obligations under this
Agreement, by Company providing a copy of this Agreement or otherwise.
 
7.  General Provisions.
 
7.1  Governing Law and Venue. This Agreement and any action related thereto will
be governed and interpreted by and under the laws of the State of California,
without giving effect to any conflicts of laws principles that require the
application of the law of a different state. I expressly consent to personal
jurisdiction and venue in the state and federal courts for the county in which
Company’s principal place of business is located for any lawsuit filed there
against me by Company arising from or related to this Agreement.
 
7.2  Severability. If any provision of this Agreement is, for any reason, held
to be invalid or unenforceable, the other provisions of this Agreement will
remain enforceable and the invalid or unenforceable provision will be deemed
modified so that it is valid and enforceable to the maximum extent permitted by
law.
 
7.3  Survival. This Agreement shall survive the termination of my employment and
the assignment of this Agreement by Company to any successor or other assignee
and be binding upon my heirs and legal representatives.
 
7.4  Employment. I agree and understand that nothing in this Agreement shall
give me any right to continued employment by Company, and it will not interfere
in any way with my right or Company’s right to terminate my employment at any
time, with or without cause and with or without advance notice.
 
7.5  Notices. Each party must deliver all notices or other communications
required or permitted under this Agreement in writing to the other party at the
address listed on the signature page, by courier, by certified or registered
mail (postage prepaid and return receipt requested), or by a
nationally-recognized express mail service. Notice will be effective upon
receipt or refusal of delivery. If delivered by certified or registered mail,
notice will be considered to have been given five (5) business days after it was
mailed, as evidenced by the postmark. If delivered by courier or express mail
service, notice will be considered to have been given on the delivery date
reflected by the courier or express mail service receipt. Each party may change
its address for receipt of notice by giving notice of the change to the other
party.
 
7.6  Injunctive Relief. I acknowledge that, because my services are personal and
unique and because I will have access to the Confidential Information of
Company, any breach of this Agreement by me would cause irreparable injury to
Company for which monetary damages would not be an adequate remedy and,
therefore, will entitle Company to injunctive relief (including specific
performance). The rights and remedies provided to each party in this Agreement
are cumulative and in addition to any other rights and remedies available to
such party at law or in equity.
 
7.7  Waiver. Any waiver or failure to enforce any provision of this Agreement on
one occasion will not be deemed a waiver of that provision or any other
provision on any other occasion.
 
7.8  Export. I agree not to export, directly or indirectly, any U.S. technical
data acquired from Company or any products utilizing such data, to countries
outside the United States, because such export could be in violation of the
United States export laws or regulations.
 
7.9  Entire Agreement. If no other agreement governs nondisclosure and
assignment of inventions during any period in which I was previously employed or
am in the future employed by Company as an independent contractor, the
obligations pursuant to sections of this Agreement titled “Confidential
Information Protections” and “Inventions” shall apply. If any other agreement
governs my nondisclosure of information and assignment of inventions during any
period in which I was previously employed with the Company, this Agreement and
such prior agreements shall be taken together and construed as one agreement;
provided, however, that to the extent any term of any such prior agreement
conflicts or is in consistent with the terms set forth herein, this Agreement
shall control. This Agreement is the final, complete and exclusive agreement of
the parties with respect to the subject matter hereof and supersedes and merges
all prior communications between us with respect to such matters, and is meant
to be consistent with the Noncompetition Agreement between me and the Company.
No modification of or amendment to this Agreement, or any waiver of any rights
under this Agreement, will be effective unless in writing and signed by me and a
duly authorized representative of the Board (if I am an employee of the Company
at the time of such modification) or the CEO of Company (if I am not an employee
at the time of such modification). Any subsequent change or changes in my
duties, salary or compensation will not affect the validity or scope of this
Agreement.
 
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This Agreement shall be effective as of the first day of my employment with
Company.
 

EMPLOYEE:   JAZZ SEMICONDUCTOR, INC.:           I have read, understand, and
Accept this agreement and have been given the opportunity to Review it with
independent legal counsel.   Accepted and agreed:          
/s/ Shu Li 
 
/s/ Carolyn Follis  
(Signature)
 
(Signature)
          By:
Shu Li                                                 
  By:
Carolyn Follis                                   
          Title:
Chief Executive Officer                   
  Title:
General Counsel                              
          Date:
9/26/06                                              
  Date:
9/26/06                                              
          Address:
566 Nyes Place
Laguna Beach, California 92651
  Address:
4321 Jamboree Road
Newport Beach, California 92660

 
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EXHIBIT A OF EMPLOYEE CONFIDENTIAL INFORMATION AND INVENTIONS ASSIGNMENT
AGREEMENT
 
INVENTIONS
 
1. Prior Inventions Disclosure. The following is a complete list of all Prior
Inventions (as provided in Section 2.2 of the attached Employee Confidential
Information and Inventions Assignment Agreement, defined herein as the
“Agreement”):
 
o None
 
o See immediately below:
 

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2. Limited Exclusion Notification.
 
This is to notify you in accordance with Section 2872 of the California Labor
Code that the foregoing Agreement between you and Company does not require you
to assign or offer to assign to Company any Invention that you develop entirely
on your own time without using Company’s equipment, supplies, facilities or
trade secret information, except for those Inventions that either:
 
a. Relate at the time of conception or reduction to practice to Company’s
business, or actual or demonstrably anticipated research or development; or
 
b. Result from any work performed by you for Company.
 
To the extent a provision in the foregoing Agreement purports to require you to
assign an Invention otherwise excluded from the preceding paragraph, the
provision is against the public policy of this state and is unenforceable.
 
This limited exclusion does not apply to any patent or Invention covered by a
contract between Company and the United States or any of its agencies requiring
full title to such patent or Invention to be in the United States.

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Exhibit B
 
Bonus compensation Paid prior to Date of this Employment Agreement
 
Date of Payment
Gross Amount of Bonus Paid
7/27/2006
$73,078.54

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Exhibit C
 
Release of Claims
 
I, _____________, hereby acknowledge and agree that: (a) I have been paid all
accrued salary and other compensation, as well as all accrued unused vacation,
owed to me for my services to Jazz Semiconductor, Inc. (the “Company”) through
and including the date my employment with the Company terminated (the
“Termination Date”); (b) I understand and will abide by all continuing
obligations under my Confidential Information Agreement and Noncompetition
Agreement with the Company (as defined in my Employment Agreement with the
Company dated August __, 2006 (the “Employment Agreement”)); and (c) within
thirty (30) days after Termination Date, I will submit all final documented
expense reimbursement statements reflecting all business expenses incurred by me
through and including the Termination Date, if any, for which I seek
reimbursement.
 
In consideration for the Severance Benefits to be provided to me under the
Employment Agreement to which I would not otherwise be entitled, I hereby
release the Company, Acquicor Technology, Inc., The Carlyle Group, each of such
entities’ parents, subsidiaries, successors, predecessors and affiliates, and
each of such entities’ directors, officers, employees, agents, attorneys,
insurers, affiliates and assigns (individually and collectively, the “Released
Parties”), of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys fees, damages, indemnities and obligations of
every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, arising out of or in any way related to agreements,
events, acts or conduct at any time prior to and including the date I sign this
Release of Claims (the “Release”). This general release includes, but is not
limited to: (a) all claims arising out of or in any way related to my employment
with the Company or the termination of that employment; (b) all claims related
to my compensation or benefits, including salary, bonuses, commissions, vacation
pay, expense reimbursements, severance pay, fringe benefits, stock, stock
options, or any other equity interests in the Company; (c) all claims for breach
of contract, wrongful termination, and breach of the implied covenant of good
faith and fair dealing; (d) all tort claims, including claims for fraud,
defamation, emotional distress, and discharge in violation of public policy; and
(e) all federal, state, and local statutory claims, including claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990 (as amended), the federal Age
Discrimination in Employment Act (as amended), the California Labor Code, and
the California Fair Employment and Housing Act (as amended). Notwithstanding the
foregoing, this release shall not release the Company from: (i) its obligation
(consistent with applicable Company policy) to reimburse me for valid business
expenses that I have incurred on behalf of the Company and that I submit for
reimbursement within thirty (30) days after the Termination Date; (ii) its
obligations to provide me with the Severance Benefits set forth in the
Employment Agreement; or (iii) any obligation to indemnify me pursuant to the
Company’s certificate of incorporation and bylaws, any written indemnification
agreement to which I am a party or applicable law. Further notwithstanding the
foregoing, this release shall not release any of the Released Parties from: (y)
any rights that I may have under the Merger Agreement; or (z) any rights I may
have to seek contribution or indemnification for third party claims. I represent
that I have no lawsuits, claims or actions pending in my name, or on behalf of
any other person or entity, against the Company or any other person or entity
subject to the release granted in this paragraph.
 
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I acknowledge that I am also knowingly and voluntarily waiving and releasing any
rights that I may have under the under the Age Discrimination in Employment Act
of 1967, as amended (the “ADEA”). I acknowledge that the consideration given for
this waiver and release is in addition to anything of value to which I was
already entitled. I further acknowledge that I have been advised by this
writing, as required by the ADEA, that: (a) my waiver and release do not apply
to any rights or claims that may arise after the date I sign this Release; (b) I
have been advised hereby that I should consult with an attorney prior to
executing this Release; (c) I have twenty-one (21) days to consider this Release
(although I may choose to voluntarily sign it earlier); (d) I have seven (7)
days after the date I sign this Release to revoke my agreement to it (by
providing the Company (through its General Counsel) with written notice of such
revocation); and (e) my acceptance of this Release will not be effective until
the date upon which the revocation period has expired, which will be the eighth
day after I sign it (provided I do not earlier revoke my acceptance of it) (the
“Release Effective Date”).
 
I understand that this Release includes a release of all unknown and unsuspected
claims. I acknowledge that I have read and understand Section 1542 of the
California Civil Code, which states: “A general release does not extend to
claims which the creditor does not know or suspect to exist in his or her favor
at the time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.” I hereby waive all
rights and benefits under Section 1542 of the California Civil Code and any law
or legal principle of similar effect in any jurisdiction with regard to this
Release, including my release of unknown and unsuspected claims herein.

This Release, together with the Employment Agreement, the Confidential
Information Agreement, and the Noncompetition Agreement (including the exhibits
thereto) (collectively, the “Agreements”), constitutes the complete, final and
exclusive embodiment of the entire agreement between the Company and me with
regard to the subject matter hereof. I am not relying on any promise or
representation not expressly stated in the Agreements.

Understood and agreed:
 
 
____________________________________
Date:______________________

[Executive]

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