Document:

EXHIBIT 10.2

 

HELEN OF TROY LIMITED

PERFORMANCE RESTRICTED STOCK UNIT AGREEMENT

 

FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Helen of Troy Limited (the “Company”), a Bermuda company, hereby grants to Julien Mininberg, the Chief Executive Officer of the Company (the “Holder”), Restricted Stock Units (“RSUs”), each such RSU contingently entitling the Holder to acquire one common share, par value $0.10 per share of the Company (the “Shares”), which are subject to certain restrictions and to a risk of forfeiture upon the terms set forth in this restricted stock unit agreement (this “RSU Agreement”) and the associated grant award information (the “Grant Information”) maintained on the website of the stock brokerage or such other financial services firm as may be designated by the Company (the “Designated Broker”) (collectively, this RSU Agreement and the Grant Information shall be referred to as the “Agreement”):

 

WHEREAS, the Company has established and maintains the Helen of Troy Limited 2008 Stock Incentive Plan (as amended from time to time, the “Plan”); and

 

WHEREAS, Helen of Troy Nevada Corporation, a Nevada corporation and a wholly owned subsidiary of the Company (“HoT Nevada”), and the Holder have entered into an Employment Agreement dated January 14, 2014 (as amended, restated and modified from time to time, the “Employment Agreement”); and

 

WHEREAS, in accordance with the terms of the Employment Agreement, the Holder has been granted the following award under the Plan (the “Award”) in connection with his retention as an employee and as compensation for services to be rendered.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto agree as follows:

 

1.              Defined Terms; Plan.  Terms used but not defined herein shall have the same meaning ascribed to such terms in the Plan.  This Agreement and the grant herein are subject to the terms and conditions herein and the terms and conditions of the applicable provisions of the Plan and the Employment Agreement, the terms of which are incorporated herein by reference.  For purposes of this Agreement:

 

(a)                                 “Acquisitions” means any acquisition of the stock or the operating, income or revenue producing assets of any entity whether through a merger, consolidation, combination, asset purchase or similar transaction.

 

(b)                                 “Adjusted EPS” means, with respect to any period, the quotient of (i) the Adjusted Income, divided by (ii) the weighted average number of the Shares outstanding on a diluted basis.

 

(c)                                  “Adjusted Income” means, for the Performance Period, the sum of (i) the consolidated net income (or loss) of the Company, determined on a consolidated basis in accordance with GAAP plus (ii) to the extent included in clause (i) above, the after tax impact of the Adjustment Amount, as determined on a consolidated basis in accordance with GAAP and as reported in the Annual Report; provided that there shall be excluded from Adjusted Income the income (or deficit) of any entity accrued prior to the date it becomes a subsidiary or is merged into or consolidated with the Company or any of its subsidiaries.

 

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(d)                                 “Adjustment Amount” means an amount equal to any asset impairment charges (including asset impairment charges relating to goodwill or other intangible assets) incurred by the Company and its subsidiaries, restructuring charges, total gains and losses from Dispositions, costs and expenses incurred in connection with Acquisitions and Dispositions, litigation charges (including in connection with settlements of litigation but excluding product liability litigation charges and settlements), non-market based currency devaluations and chief executive officer succession costs.

 

(e)                                  “Annual Report” means the Company’s annual report on Form 10-K (or if no such annual report has been filed prior to the date of the certification of the Award pursuant to Section 3 and the Plan, as determined by the Committee based on consolidated financial statements of the Company).

 

(f)                                   “Base Period Adjusted EPS” means the Adjusted EPS for the fiscal year ended February 28, 2015 of $4.88.

 

(g)                                  “Cash Flow Productivity” means, for each fiscal year within the Performance Period, when expressed as a percentage, is equal to the quotient of (i) the sum of (A) the net cash provided by operating activities (if any) of the Company, minus (B) capital and intangible asset expenditures, plus (C) pre-tax cash items included in the Adjustment Amount, in each case, as set forth on the Company’s consolidated statement of cash flows reported in the Annual Report and as determined on a consolidated basis in accordance with GAAP, divided by (ii) the Adjusted Income; provided that for purposes of calculating the amount of the capital and intangible asset expenditures in clause (i)(B) above, if the Company incurs capital expenditures for the purchase or construction of a new facility in any such fiscal year (excluding capital expenditures arising solely from the purchase of a facility in connection with an Acquisition), then the total capital and intangible asset expenditures shall not exceed $20 million in such fiscal year of expenditure for purposes of the calculation of Cash Flow Productivity.

 

(h)                                 “Closing Average Share Value” means the average of the daily closing prices per share of the Shares or a Group Company’s common stock, as the case may be, as reported on the Stock Exchange for the 20 Trading Days immediately prior to and including February 28, 2018.

 

(i)                                     “Cumulative Adjusted EPS” means the sum of the Adjusted EPS for each fiscal year during the Performance Period.

 

(j)                                    “Dispositions” means any divestiture of the stock or the operating, income or revenue producing assets of the Company or any subsidiary or other entity consolidated or combined with or included in the financial statements of the Company and its subsidiaries whether through a merger, consolidation, combination, asset sale, spin-off or similar transaction.

 

(k)                                 “GAAP” means generally accepted accounting principles used and applied in the United States of America.

 

(l)                                     “Group Companies” means those companies in the peer group of companies set forth on Exhibit B; provided that the Group Companies may be changed by the Committee as follows: (i) in the event of a merger, acquisition, business combination transaction or sale of all or substantially all of the assets of a Group Company with, to or by another Group Company, or with, to or by an entity that is not a Group Company, in each case where the Group Company is the surviving or acquiring entity and remains publically traded, the surviving or acquiring entity shall remain a Group Company; (ii) in the event of a merger, acquisition, business combination transaction or sale of all or substantially all of the assets of a Group Company with, to or by another entity that is not a Group Company, or “going private transaction,” where the Group Company is not the surviving or acquiring entity or is otherwise no longer 

 

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publicly traded, the company shall no longer be a Group Company; (iii) in the event of a bankruptcy of a Group Company, such company shall remain a Group Company and its stock price will continue to be tracked for purposes of the Relative TSR calculation; and (iv) if a Group Company liquidates or otherwise ceases to conduct substantial business operations, it will remain a Group Company and its stock price will be reduced to zero for the remainder of the Performance Period.  The Company shall rely on press releases, public filings, website postings, and other reasonably reliable information available regarding a Group Company in making a determination that any of the changes described in clauses (i) through (iv) above has occurred.

 

(m)                             “Opening Average Share Value” means the average of the daily closing prices per share of the Shares or a Group Company’s common stock, as the case may be, as reported on the Stock Exchange for the 20 Trading Days immediately prior to and including March 1, 2015.

 

(n)                                 “Performance Goals” means the Relative TSR, the Cumulative Adjusted EPS and the Cash Flow Productivity.

 

(o)                                 “Performance Period” means the three (3) fiscal year period commencing on March 1, 2015 and ending on February 28, 2018.

 

(p)                                 “Relative TSR” means the Company’s TSR for the Performance Period relative to the Group Companies’ TSR as calculated in accordance with the terms and conditions of Exhibit A.

 

(q)                                 “Stock Exchange” means a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended, or if not so reported, as otherwise reported by the principal exchange or over-the-counter market on which such shares are trading, if any, or as reported on any composite index which includes such principal exchange.

 

(r)                                    “Trading Day” means any day during which the Shares and the Group Company’s common stock, as the case may be, is quoted or traded on a Stock Exchange.

 

(s)                                   “TSR” means the number calculated by dividing (i) the Closing Average Share Value minus the Opening Average Share Value (in each case adjusted to take into consideration the cumulative amount of dividends per share for the Performance Period, assuming reinvestment, as of the of applicable ex-dividend date, of all cash dividends and other cash distributions (excluding cash distributions resulting from share repurchases or redemptions by the Company) paid to shareholders) by (ii) the Opening Average Share Value.

 

2.              Grant. The Holder is hereby granted a target award of 19,577 performance-based RSUs (“Target Award”) pursuant to the Plan, each such RSU contingently entitling the Holder to acquire one Share, subject to adjustment as set forth in this Agreement and subject to certain restrictions and a risk of forfeiture as set forth in this Agreement, the Plan and the Employment Agreement (if applicable).  The RSUs are granted as of March 1, 2015 (the “Grant Date”).

 

3.              Vesting of Award.  Subject to the Holder’s continued Service with the Company and the terms and conditions of this Agreement, the Employment Agreement and the Plan, the RSUs shall be settled by transferring to the Holder a number of Shares based on the Target Award (as adjusted pursuant this Agreement and the Plan) if, and only to the extent that, the Performance Goals are achieved during the Performance Period in accordance with Exhibit A.  The Committee shall certify after the completion of the Performance Period, whether and to what extent the Performance Goals have been met. The actual number of RSUs that shall vest and the Shares to be issued to the Holder will pursuant to the terms and 

 

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conditions of this Agreement vary depending upon the attainment of the Performance Goals, and will be between 0% and 200% of the Target Award.

 

4.              Effect of Termination of Service; Effect on Unvested RSUs.  Subject to Section 9 below and the other terms and conditions of this Agreement and notwithstanding Section 3 above, upon a Termination of Service for any reason prior to the end of the Performance Period, all unvested RSUs shall be immediately forfeited.

 

5.              Issuance of Shares; Certificates. If the Holder’s RSUs vest under the terms of this Agreement or the Employment Agreement, the Holder shall be issued a number of Shares equal to the number of RSUs which have vested, without payment therefor, as full consideration for the vested RSUs.  Except as otherwise provided in Sections 15 and 23 of this Agreement, upon the vesting of the RSUs, the Company shall deliver or cause to be delivered certificates representing the Shares or other evidence (which may include a book entry by the Company’s transfer agent) of the Shares so issued in the name of the Holder to the brokerage firm designated by the Company to maintain the brokerage account established for the Holder on or before the expiration of thirty (30) days following the date of the Committee’s certification or determination of the attainment of the Performance Goals for the Performance Period (but not later than the last day of the calendar year in which such RSUs vest).  No fractional Shares shall be issued under this Agreement.

 

6.              No Rights of a Shareholder. Until such time as the RSUs vest, the Holder shall not have any of the rights of a shareholder, including, without limitation, the right to vote Shares and the right to receive dividends thereon.

 

7.              Nontransferability.  Prior to vesting, the RSUs shall not be transferable by the Holder otherwise than by will or by the laws of descent and distribution.  Notwithstanding anything to the contrary herein, the Committee, in its sole discretion, shall have the authority to waive the requirements of this Section 7 and Section 21 of the Plan or any part hereof or thereof that is not required under the rules promulgated under any law, rule or regulation applicable to the Company.

 

8.              Transfer of Shares.  Upon the vesting of the RSUs and the delivery of vested Shares hereunder, such vested Shares or any interest therein may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws or any other applicable laws or regulations and the terms and conditions of this Agreement and the Plan.

 

9.              Effect of Change of Control.  Notwithstanding anything in this Agreement, the Employment Agreement or the Plan to the contrary, in the event a Change of Control occurs prior to vesting of the RSUs, the vesting of the RSUs shall not be accelerated by reason of such Change of Control.

 

10.       Confidentiality.

 

(a)         During the period that Holder provides Services or engages in any other activity with or for the Company and for a one year period thereafter, Holder shall treat and safeguard as confidential and secret all Confidential Information received by Holder at any time. Without the prior written consent of the Company, except as required by law, Holder will not disclose or reveal any Confidential Information to any third party whatsoever or use the same in any manner except in connection with the businesses of the Company and its Subsidiaries. In the event that Holder is requested or required (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or other process) to disclose (i) any Confidential Information or (ii) any information relating to his or her opinion, 

 

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judgment or recommendations concerning the Company or its Subsidiaries as developed from the Confidential Information, Holder will provide the Company with prompt written notice of any such request or requirement so that the Company may seek an appropriate protective order or waive compliance with the provisions contained herein. If, failing the entry of a protective order or the receipt of a waiver hereunder, Holder is, in the reasonable opinion of his or her counsel, compelled to disclose Confidential Information, Holder shall disclose only that portion and will exercise best efforts to obtain assurances that confidential treatment will be accorded such Confidential Information.

 

(b)         Holder acknowledges that remedies at law for any breach by him or her of Section 10(a)  may be inadequate and that the damages resulting from any such breach are not readily susceptible to being measured in monetary terms. Accordingly, Holder acknowledges that upon his or her violation of any provision of Section 10(a), the Company will be entitled to immediate injunctive relief and may obtain an order restraining any threatened or future breach. Holder further agrees, subject to the proviso at the end of this sentence, that if he or she violates any provisions of Section 10(a) , Holder shall immediately forfeit any rights under this Agreement and shall return any Shares held by Holder received upon the vesting of Shares underlying the Award granted under this Agreement, together with any proceeds from sales of any Shares received upon the vesting of Shares underlying the Award. Nothing in this Section 10 will be deemed to limit, in any way, the remedies at law or in equity of the Company, for a breach by Holder of any of the provisions of Section 10(a).

 

(c)          If any provision or part of any provision of Section 10 is held for any reason to be unenforceable, (i) the remainder of this Section 10 shall nevertheless remain in full force and effect and (ii) such provision or part shall be deemed to be amended in such manner as to render such provision enforceable.

 

11.       Electronic Delivery.  The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means.  The Holder hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.  The Holder hereby agrees that all on-line acknowledgements shall have the same force and effect as a written signature.

 

12.       Lock Up Agreement.  The Holder agrees that upon request of the Company or the underwriters managing any underwritten offering of the Company’s securities, the Holder shall agree in writing that for a period of time (not to exceed 180 days) from the effective date of any registration of securities of the Company, the Holder will not sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Shares received on account of RSUs that may vest during such period of time, without the prior written consent of the Company or such underwriters, as the case may be.

 

13.       Expenses of Issuance of Shares.  The issuance of certificates or other evidence representing the Shares, in whole or in part, shall be without charge to the Holder.  The Company shall pay, and indemnify the Holder from and against any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) or by reason of the issuance of Shares hereunder.

 

14.       Clawback Policy.  The Award granted pursuant to this Agreement shall be subject to (a) Section 304 of the Sarbanes Oxley Act of 2002 and (b) to the extent required under the rules and/or regulations issued pursuant to the Dodd-Frank Act of 2010, any clawback policy adopted by the Company pursuant to such rules and/or regulations.

 

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15.       Timing of Payments and Compliance with Deferred Compensation Rules.  Notwithstanding any other provision of the Plan or Agreement, if the Holder becomes entitled to a delivery of the Shares underlying his RSUs by reason of his “separation from service” (as determined in accordance with Section 409A of the Code at a time when the Holder is a “specified employee,” then to the extent necessary to avoid a prohibited distribution under Code Section 409A(a)(2), the delivery of such Shares will be delayed until the earlier of the first day of the seventh month following the Holder’s separation from service or the date of the Holder’s death.

 

16.       References. References herein to rights and obligations of the Holder shall apply, where appropriate, to the Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Agreement.

 

17.       Notices.  Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given (a) when delivered if delivered in person, (b) three days after being sent by registered or certified mail, return receipt requested, postage prepaid, (c) one day after being sent for next business day delivery, fees prepaid, via a reputable nationwide overnight courier service, (d) on the date of confirmation of receipt of transmission by facsimile or (e) on the date of the notice being sent by e-mail at the e-mail address in the records of the Company, in each case to the intended recipient as set forth below (or to such other address, facsimile number, email address or individual as a party may designate by notice to the other parties, except that notices of change of address shall be effective only upon receipt at the address last on the records of the Company or any Subsidiary):

 

If to the Company:

 

Helen of Troy Limited

One Helen of Troy Plaza

El Paso, TX 79912

Attn.: General Counsel

 

If to the Holder:

 

Julien Mininberg

c/o Helen of Troy L.P.

One Helen of Troy Plaza

El Paso, TX 79912

 

18.       Governing Law.  This Agreement and all claims or disputes arising hereunder or related to this Agreement, the transactions contemplated hereby or the conduct of any person in connection herewith shall be governed by and construed in accordance with the laws of the State of Texas applicable to contracts made and to be performed in the State of Texas without regard to conflict of laws principles.

 

19.       Code Section 409A and Code Section 457A.  This Agreement and the benefits provided hereunder are intended to comply with, or be exempt from, to the extent applicable, with Code Section 409A and the Treasury Regulations and other guidance promulgated or issued thereunder and Code Section 457A and the Treasury Regulations and other guidance promulgated or issued thereunder (the “Deferred Compensation Rules”), and the provisions of this Agreement shall be interpreted and construed consistent with this intent.  If Holder, the Company or HoT Nevada believes, that the Agreement does not so comply with the Deferred Compensation Rules, it shall promptly advise the others and shall negotiate reasonably and in good faith to amend the terms of the Agreement such that it complies with the Deferred Compensation Rules, as applicable, (with the most limited possible economic effect on the Holder, the Company and HoT Nevada).  Notwithstanding the foregoing, in the event the Agreement is found not to 

 

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comply with the Deferred Compensation Rules, neither the Company nor HoT Nevada shall be required to assume any increased economic burden in connection therewith.

 

20.       Entire Agreement.  This Agreement, the Employment Agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this Agreement, the Employment Agreement and the Plan.

 

21.       Counterparts.  This Agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

 

22.       Conflict.  To the extent the provisions of this Agreement conflict with the terms and conditions of the Employment Agreement, the terms and conditions of the Employment Agreement shall control, provided that such Employment Agreement is in effect at the time of such conflict.

 

23.       Compliance with Legal Requirements.  Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing Shares pursuant to the vesting or settlement of the Award, unless and until the Committee has determined, with advice of counsel, that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the Shares are listed or traded.   The Committee shall have the right to require the Holder to comply with any timing or other restrictions with respect to the settlement of the Award, including a window-period limitation.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the undersigned is deemed to have executed this Agreement as of the Grant Date and the Holder is deemed to have executed this Agreement as of the date of his or her acceptance of the grant on the Designated Broker’s website.

 

 

	
 
    	
HELEN OF TROY   LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Timothy F. Meeker
    
	
 
    	
 
    	
Name:
    	
Timothy F. Meeker
    
	
 
    	
 
    	
Title:
    	
Director, Chairman of   the Board
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HOLDER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Julien Mininberg
    
	
 
    	
Julien Mininberg,   individually
    

 

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Exhibit A

 

Performance-Based Restricted Stock Unit Award

Performance-Based Requirements

 

The RSUs will be earned subject to the following performance-based requirements:

 

1.              Fifty percent (50%) of the Target Award will be earned based on the achievement of a positive Cumulative Adjusted EPS.  The actual number of RSUs that will be earned by Holder with respect to Cumulative Adjusted EPS shall be:

 

	
Performance
   Level
    	
 
    	
Cumulative Adjusted EPS
   Achievement
    	
 
    	
Vesting Percentage
   of Target Award(1)
    	
 
    
	
Maximum
    	
 
    	
$16.54
    	
 
    	
200
    	
%
    
	
Target
    	
 
    	
$16.06
    	
 
    	
100
    	
%
    
	
Threshold
    	
 
    	
$15.58
    	
 
    	
50
    	
%
    
	
Below Threshold
    	
 
    	
Less than $15.58
    	
 
    	
0
    	
%
    

 

2.              Twenty-Five percent (25%) of the Target Award will be earned based on the achievement of a positive Cash Flow Productivity.  The actual number of RSUs that will be earned by Holder with respect to Cash Flow Productivity shall be:

 

	
Performance
   Level
    	
 
    	
Cash Flow Productivity
   Achievement
    	
 
    	
Vesting Percentage
   of Target Award(1)
    	
 
    
	
Maximum
    	
 
    	
90.0%
    	
 
    	
200
    	
%
    
	
Target
    	
 
    	
80.0%
    	
 
    	
100
    	
%
    
	
Threshold
    	
 
    	
70.0%
    	
 
    	
50
    	
%
    
	
Below Threshold
    	
 
    	
Less than 70.0%
    	
 
    	
0
    	
%
    

 

3.              Twenty-Five percent (25%) of the Target Award will be earned based on the achievement of Relative TSR.  The actual number of RSUs that will be earned by Holder with respect to Relative TSR shall be:

 

	
Performance
   Level
    	
 
    	
Relative TSR
   Ranking
    	
 
    	
Vesting Percentage
   of Target Award(1)
    	
 
    
	
Maximum
    	
 
    	
75.0 percentile
    	
 
    	
200
    	
%
    
	
Target
    	
 
    	
50.0 percentile
    	
 
    	
100
    	
%
    
	
Threshold
    	
 
    	
35.0 percentile
    	
 
    	
50
    	
%
    
	
Below Threshold
    	
 
    	
Less than 35.0 percentile
    	
 
    	
0
    	
%
    

 

(1)         Straight line interpolation will apply to vesting percentages between the ones shown.

 

For purposes of determining the Company’s Relative TSR percentile ranking, the TSR for the Performance Period of each company in Group Companies shall be ranked from highest to lowest according to their respective TSRs.  After this ranking, the percentile performance of the Company will be determined using the following formula and definitions in Microsoft Excel:

 

A-1

 

PERCENTRANK.INC (array,x,[significance])

 

Array: The array of TSR values for the Group Companies for the Performance Period.

 

X: The Company’s TSR for the Performance Period.

 

Significance (optional): A value that identifies the number of significant digits for the returned percentage value. If omitted, PERCENTRANK.INC uses three digits (0.xxx).

 

A-2

 

Exhibit B

 

Group Companies

 

	
Jarden Corp.
    	
 
    	
Lifetime Brands Inc.
    
	
Newell Rubbermaid Inc.
    	
 
    	
Tempur Sealy International Inc.
    
	
Clorox Co. (The)
    	
 
    	
Revlon Inc.
    
	
Coty Inc.
    	
 
    	
Elizabeth Arden Inc.
    
	
Spectrum Brands Holdings Inc.
    	
 
    	
NACCO Industries Inc.
    
	
Church & Dwight Co. Inc.
    	
 
    	
Libbey Inc.
    
	
Tupperware Brands Corp.
    	
 
    	
 
    
	
Nu Skin Enterprises Inc.
    	
 
    	
 
    

 

B-1EX-10.1

 Exhibit 10.1 

SEPARATION AGREEMENT 
  

 
 This Separation Agreement (“Agreement”) is made by and between Heung Kyu Kim
(“Executive”) and MagnaChip Semiconductor, Ltd. (the “Company”) (collectively, the “Parties”): 
  

 
 WHEREAS, Executive entered into a service arrangement with the Company pursuant to the offer letter dated
as of July 1, 2007; 
  
 

 
 WHEREAS, Executive’s service arrangement will terminate effective [June 30], 2015 (the
“Separation Date”), and whereby Executive voluntarily resigned, effective as of May 26, 2015 pursuant to that certain resignation letter dated as of May 26, 2015, from all positions with the Company’s parent company,
MagnaChip Semiconductor Corporation (“MX”), and each of MX’s direct and indirect subsidiaries (collectively, “MagnaChip”); 
  

 
 WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges,
actions, petitions and demands that Executive has or may have against the Company, including, but not limited to, any and all claims arising or in any way related to Executive’s service arrangement with or separation from the Company; and 

 
 

 
 WHEREAS, this Agreement will become effective on the Separation Date. 

 
 

 
 NOW THEREFORE, in consideration of the promises made herein, the Parties hereby agree as follows: 

 
 

 
 1. Consideration. As consideration for the release of claims and all other covenants made herein,
the Parties agree that the Executive shall receive a payment of KRW 316,620,000 (the “Separation Payment”). The Company shall pay Executive the Separation Payment as well as the unused-leave cash within fourteen
(14) business days of the Separation Date. 
  
 

 

  
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 2. Benefits. 

(a) Executive’s health insurance benefits cease on the Separation Date. Executive’s participation in all other benefits and
incidents of service arrangement cease on the Separation Date. Executive ceases accruing service arrangement benefits, including, but not limited to, vacation time and paid time off, as of the Separation Date. 

(b) Each vested stock option granted to Executive pursuant to the MX’s 2009 Common Unit Plan or its 2011 Equity Incentive Plan (the
“Plans”) that remains outstanding and unexercised as of the Separation Date, as set forth on Exhibit A (collectively, the “Outstanding Options”), shall remain exercisable through the earliest to occur of
(a) the date that is [24] months after the Separation Date, (b) a Change in Control (as defined in the Plans) or (c) the expiration of the original term of the Outstanding Options (in each case, to the extent not exercised prior to
such date), at which time any then-unexercised Outstanding Options shall expire and terminate and Executive shall have no further rights with respect to such expired and terminated Outstanding Options. Except as otherwise amended by this Agreement,
the Outstanding Options continue to be governed by the original terms set forth in the applicable option agreements and the Plans. 
  

 
  
 

 
  
 

 
 3. Payment of Salary, Accrued Vacation and Expense Reimbursements. Executive acknowledges and
represents that the Company has paid all salary, wages, bonuses, annual incentives, deferred compensation, accrued vacation and paid time off, commissions, expense reimbursements, stock, stock options, housing allowances, relocation costs, vesting,
interest, severance and separation benefits, and any and all other benefits due to Executive as of the Separation Date. 
  
 

 

  
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 4. Confidential Information. 

(a) Executive will hold in strictest confidence and will not disclose, use, lecture upon, or publish any of Proprietary Information (as
defined below) of the Company, MagnaChip and third parties. Executive hereby assigns to the Company any rights that Executive may have or acquire in Proprietary Information and recognizes that all Proprietary Information shall be the sole property
of the Company and its assigns. For purposes of this Agreement, the term “Proprietary Information” shall mean any and all confidential and/or proprietary knowledge, data or information of the Company. By way of illustration but not
limitation, “Proprietary Information” includes (i) trade secrets, inventions, mask works, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvements, discoveries,
developments, designs and techniques; (ii) information regarding plans for research, development, new products, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and
customers; and (iii) information regarding the skills and compensation of other employees of the Company. 
 (b) Executive shall return
all of the Company’s property and all of the Proprietary Information in the Executive’s possession to the Company. By signing this Agreement, Executive represents and declares that Executive has returned all Company property and
Proprietary Information in the Executive’s possession to the Company. 
 (c) Executive understands, in addition, that the Company has
received and in the future will receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on the Company’s part to maintain the confidentiality of such information and
Executive shall keep the confidentiality of such Third Party Information. Executive will hold Third Party Information in the strictest confidence and will not disclose to anyone other than Company personnel who need to know such information in
connection with their work for the Company. 
 (d) Executive acknowledges that the United States securities laws (as well as applicable laws
of other jurisdictions) prohibit any person who has material, non-public information about a company from using such information in purchasing or selling securities of that company, or from communicating such information to third parties under
circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. Executive acknowledges that Proprietary Information disclosed by the Company may constitute such material, non-public information.

  
 

 
  
 

 

  
 3 

 

 
  
 

 
  
 

 
 5. Release of Claims. Executive agrees that the foregoing consideration represents settlement in
full of all outstanding obligations owed to Executive by the Company, MagnaChip and all of their respective officers, managers, members, supervisors, members of their board of directors, agents and employees, investors, shareholders, administrators,
affiliates, divisions, subsidiaries, predecessors, successors, and assigns (collectives, the “Affiliates”). Executive, on Executive’s own behalf, and on behalf of Executive’s respective heirs, family members, executors,
agents, and assigns, hereby fully and forever releases the Company, MagnaChip and Affiliates (the “Releasees”), from, and agrees not to sue concerning, any claim, duty, obligation or cause of action relating to any matters of any
kind, whether presently known or unknown, suspected or unsuspected, that Executive may possess arising from any omissions, acts or facts that have occurred up until and including the Separation Date including, without limitation: 

(a) any and all claims relating to or arising from Executive’s service arrangement relationship with the Company and the separation of
that relationship, including claims related to salary, wages, bonuses, annual incentives, deferred compensation, accrued vacation and paid time off, commissions, expense reimbursements, stock, stock options, housing allowances, relocation costs,
vesting, interest, severance and separation benefits, and any and all other benefits due to Executive; 
 (b) any and all claims relating
to, or arising from, Executive’s right to purchase, or actual purchase of equity of the Company and MagnaChip, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable
state corporate law, and securities fraud under any state or federal law; 
 (c) any and all claims under the law of any jurisdiction
including, but not limited to, wrongful discharge of employment, constructive discharge from employment, termination in violation of public policy, discrimination, harassment, retaliation, breach of contract, both express and implied, breach of a
covenant of good faith and fair dealing, both express and implied, promissory estoppel, negligent or intentional infliction of emotional distress, negligent or intentional misrepresentation, 

  
 4 

 
negligent or intentional interference with contract or prospective economic advantage, unfair business practices, defamation, libel, slander, negligence, personal injury, assault, battery,
invasion of privacy, false imprisonment, conversion, workers’ compensation and disability benefits; 
 (d) any and all claims for
violation of any national, federal, state or municipal constitution, law, regulation or statute; 
 (e) any and all claims arising out of
any other laws and regulations relating to service arrangement or discrimination; 
 (f) any claim for any loss, cost, damage, or expense
arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Executive as a result of this Agreement; and 

(g) any and all claims for attorneys’ fees and costs. 

The Company and Executive agree that the release set forth in this Section shall be and remain in effect in all respects as a complete general
release as to the matters released. This release does not extend to any obligations incurred under this Agreement, nor to any claims that, by statute, may not be waived. 
  

 
  
 

 
  
 

 
  
 

 

  
 5 

 

 
  
 

 
  
 

 
  
      

 
  
 

 
 6. No Pending or Future Lawsuits. Executive represents that Executive has no lawsuits, claims, or
actions pending in Executive’s name or on behalf of any other person or entity against the Company or any other Releasee. Executive also represents that Executive will not, and does not intend to bring any claims on Executive’s own behalf
or on behalf of any other person or entity against the Company or any other Releasee. 
  
 

 
 7. Application for Service Arrangement. While Company may offer to re-enter into a service
arrangement with Executive, Executive understands and agrees that, as a condition of this Agreement, Executive shall not be entitled to any service arrangement with the Company, and Executive hereby waives any right, or alleged right, of service
arrangement with the Company. 
  
 

 
 8. Confidentiality. The Parties acknowledge that Executive’s agreement to keep the terms and
conditions of this Agreement confidential was a material factor on which all parties relied in entering into this Agreement. Executive agrees to use Executive’s best efforts to maintain in confidence the existence of this Agreement, the
contents and terms of this Agreement, and the consideration for this Agreement (collectively, “Settlement Information”). Executive agrees to take every reasonable precaution to prevent disclosure of any Settlement Information to
third parties, and agrees that there will be no publicity, directly or indirectly, concerning any Settlement Information. Executive agrees to take every precaution to disclose Settlement Information only to those attorneys, accountants, governmental
entities, courts of law and family members who have a reasonable need to know (or as required by applicable law) of such Settlement Information. Executive will not have communication with any 

  
 6 

 
Company employees, partners, customers, unitholders, or any other third party regarding Executive’s separation from the Company without prior consent of Company’s General Counsel or
Director of Human Resources. 
  
 

 
 9. No Cooperation. Executive agrees Executive will not act in any manner that might damage the
business of the Company. Executive agrees that Executive will not encourage, counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third
party against any of the Releasees, unless under a subpoena or other court order to do so. Executive shall inform the Company in writing within three (3) business days of receiving any such subpoena or other court order. 

 
 

 
 10. Non-Disparagement. The Company and Executive agree that neither the Company nor Executive shall
make, or cause or assist any other person to make any statement or other communication which impugns or attacks, or is otherwise critical of, the reputation, business or character of the other, any subsidiary or any of their respective officers,
directors, employees, products or services. Executive also agrees to refrain from any interference with the contracts, relationships and prospective economic advantage of the Releasees. Executive agrees that Executive shall direct all inquiries by
potential future employers to the Company’s General Counsel or Director of Human Resources. 
  
 

 
 11. Non-Solicitation. Executive agrees that for a period of twelve (12) months immediately
following the Separation Date, Executive shall not either directly or indirectly solicit, induce, recruit, or 

  
 7 

 
encourage any of the employees or consultants of the Company or MagnaChip to leave their employment, or attempt to do so, either for Executive or any other person or entity. Executive also agrees
that for a period of twelve (12) months immediately following the Separation Date , Executive shall not either directly or indirectly solicit, induce, or attempt to solicit or induce any customer, client, or supplier (collectively,
“Customer”), or any prospective Customer that is or is planning to be engaged in business relationship with the Company or MagnaChip in the near future, for the purpose of engaging in competition or otherwise interfering in any adverse way
its relationship with the Company or MagnaChip. 
  
 

 
 12. No Knowledge of Wrongdoing. Executive represents that Executive has no knowledge of any
wrongdoing involving improper or false claims against a national, federal, or state governmental agency, or any other wrongdoing that involves Executive or other present or former Company employees. 

 
 

 
 13. No Admission of Liability. The Parties understand and acknowledge that this Agreement
constitutes a compromise and settlement of actual or potential disputed claims. No action taken by the Parties hereto, or either of them, either previously or in connection with this Agreement, shall be deemed or construed to be: 

(a) an admission of the truth or falsity of any claims made or any potential claims; or 

(b) an acknowledgment or admission by either Party of any fault or liability whatsoever to the other Party or to any third party. 

 
 

 
  
 

 
  
 

 

  
 8 

 14. Indemnification. Executive agrees to indemnify and hold harmless the Company from and
against any and all loss, costs, damages or expenses, including, without limitation, attorneys’ fees or expenses incurred by the Company arising out of the breach of this Agreement by Executive, or from any false representation made herein by
Executive, or from any action or proceeding which may be commenced, prosecuted or threatened by Executive or for Executive’s benefit, upon Executive’s initiative, or with Executive’s aid or approval, contrary to the provisions of this
Agreement. Executive further agrees that in any such action or proceeding, this Agreement may be pled by the Company as a complete defense, or may be asserted by way of counterclaim or cross-claim. In the event that Executive incurs an
indemnification obligation under this Agreement, Executive acknowledges and agrees that Company may in its discretion pursue remedies available to the Company at equity and at law. 

 
 

 
 15. Best Effort Assistance and Cooperation. Executive acknowledges the continuation of
Executive’s obligations to assist Company after the Separate Date. Upon request of the Company or MagnaChip after the Separation Date, Executive agrees to put best efforts to provide the Company and MagnaChip with assistance with respect to any
disputes, claims, complaints, grievances, charges, actions, petitions and demands that the Company, MagnaChip, or Affiliates is a part of, or involved in. To that end, Executive will execute, verify and deliver such documents and perform such other
acts (including appearances as a witness) as the Company may request. However, the Company agrees to bear all reasonable actual costs and fees in which Executive incur from providing the Company with such assistance. 

 
 

 
 16. Costs. The Parties shall each bear their own costs, expert fees, attorneys’ fees and other
fees incurred in connection with this Agreement, except as provided herein. 
  
 

 
 17. Tax Consequences. The Company makes no representations or warranties with respect to the tax
consequences of the payment of any sums to Executive under the terms of this Agreement. 

  
 9 

 
Executive agrees and understands that Executive is responsible for payment, if any, of national or local taxes on the sums paid hereunder by the Company and any penalties or assessments thereon;
provided, however, that the Company shall withhold from the Separation Payment and any benefits due hereunder any taxes, charges, or other assessments of any kind required under law to be withheld by the Company. Executive further agrees to
indemnify and hold the Company harmless from any claims, demands, deficiencies, penalties, assessments, executions, judgments, or recoveries by any government agency against the Company for any amounts claimed due on account of Executive’s
failure to pay national or local taxes or damages sustained by the Company by reason of any such claims, including reasonable attorneys’ fees. 
  

 
 18. Dispute Resolution. The Parties agree that any and all disputes arising out of the terms of this
Agreement, their interpretation, and any of the matters herein released, shall be finally resolved by arbitration. Such arbitration proceedings shall take place in Seoul in accordance with the applicable rules of arbitration of the International
Chamber of Commerce by one or more arbitrators appointed in accordance with such rules, but the proceedings shall be conducted in English language. The Parties agree that the prevailing party in any arbitration shall be entitled to injunctive relief
in any court of competent jurisdiction to enforce the arbitration award. The Parties agree that the prevailing Party in any arbitration shall be awarded its reasonable attorneys’ fees and costs unless contrary to applicable law. The Parties
hereby agree to waive their right to have any dispute between them resolved in a court of law by a judge or jury. This Section will not prevent either Party from seeking injunctive relief (or any other provisional remedy) from any court having
jurisdiction over the Parties and the subject matter of their dispute upon such grounds permitted by the applicable law without waiving the right to compel arbitration. 
  

 
 19. Authority. The Company represents and warrants that the undersigned has the authority to act on
behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement. Executive represents and warrants that Executive has the capacity to act on Executive’s own behalf and on behalf of
all who might claim through Executive to bind them to the terms and conditions of this Agreement. Each Party represents and warrants that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the
claims or causes of action released herein. 
  
 

 

  
 10 

 20. No Representations. Each Party represents that it has had the opportunity to consult
with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement. In entering into this Agreement, neither Party has relied upon any representations or statements made by the other Party hereto which
are not specifically set forth in this Agreement. 
  
 

 
 21. Severability. In the event that any provision, or any portion thereof, becomes or is declared by
a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision or portion of said provision. The invalid or unenforceable term or provision shall be deemed
replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision. 
  

 
 22. Entire Agreement. This Agreement represents the entire agreement and understanding between the
Company and Executive concerning the subject matter of this Agreement and Executive’s relationship with the Company, and supersedes and replaces any and all prior agreements and understandings between the Parties concerning the subject matter
of this Agreement and Executive’s relationship with the Company. 
  
 

 
 23. No Waiver. The failure of the Company to insist upon the performance of any of the terms and
conditions in this Agreement, or the failure to prosecute any breach of any of the terms and conditions of this Agreement, shall not be construed thereafter as a waiver of any such terms or conditions. This entire Agreement shall remain in full
force and effect as if no such forbearance or failure of performance had occurred. 
  
 

 

  
 11 

 24. No Oral Modification. This Agreement may only be amended in a writing signed by
Executive and the Chief Executive Officer or other duly authorized officer of the Company. No waiver by either Party at any time of any breach by the other Party, or compliance with, any condition or provision of this Agreement to be performed by
such other Party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 
  

 
 25. Governing Law. This Agreement shall be construed, interpreted, governed, and enforced in
accordance with the laws of the Republic of Korea, without regard to choice of law provisions. Executive hereby consents to personal and exclusive jurisdiction and venue in the Republic of Korea. 

 
 

 
 26. Counterparts. This Agreement may be executed in counterparts and by facsimile, and each
counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned. 
  

 
 27. Interpretation. This Agreement will be prepared in the English and Korean languages. For
purposes of interpretation or resolving ambiguities or discrepancies, the English version will control and prevail over the Korean version and any other translation. 
  

 
 28. Voluntary Execution of Agreement. This Agreement is executed voluntarily and without any duress
or undue influence on the part or behalf of the Parties, with the full intent of releasing all claims. Executive acknowledges that Executive: 

(a) has read this Agreement; 

(b) has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of Executive’s own choice or
that Executive has voluntarily declined to seek such counsel; 

  
 12 

 (c) understands the terms and consequences of this Agreement and of the releases it contains; and

 (d) is fully aware of the legal and binding effect of this Agreement. 

 
 

 
  
   

 
  
 

 
  
 

 
  
   

 
 29. Breach. Executive acknowledges and agrees that any breach of any provision of this Agreement
shall constitute a material breach of this Agreement and shall entitle the Company immediately to recover and/or cease the consideration payments provided to Executive under this Agreement. 

 
 

 
 [Signature Page Follows] 

  
 13 

 IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the Separation Date. 

 
 

 
  

			
	COMPANY

:
	MagnaChip Semiconductor, Ltd.
	

		
	By:	 	 /s/ Young-Joon Kim

		 	Young-Joon Kim

		 	Representative Director

	
	EXECUTIVE

:
	
	 /s/ Heung Kyu Kim

	Heung Kyu Kim

  
 14 

 EXHIBIT A

 
 OUTSTANDING OPTIONS

 
  

																	
	 Grant Date

	  	Number of
Shares
Granted

	 	  	Exercise Price
per Share

	 	  	Number of
Shares
Exercised

	 	  	Number of
Vesting Shares
Outstanding

	 
	 December 8, 2009

	  	 	70,000	  	  	$	5.88	  	  	 	0	  	  	 	70,000	  
	 January 15, 2012

	  	 	95,000	  	  	$	7.75	  	  	 	0	  	  	 	95,000	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total

	  	 	16,5000	  	  				  	 	0	  	  	 	16,5000	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  
 15

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