SiliconBeat

Two days before defaulting on $266 million worth of debt obligations, chip-maker Spansion agreed to give its newly hired chief executive, John Kispert, a four-month advance on his $900,000 annual salary, an advance he won’t have to pay back should he quit before four months have elapsed.

He was also guaranteed a $1.75 million bonus contingent upon the company merging with another chip maker, or selling off  its assets. Two caveats: first, the transaction needs to cover all of Spansion’s secured creditors’ claims; and second, no trustee can have been appointed yet “in connection with any bankruptcy proceedings.”

Clearly the possibility of bankruptcy was  on the mind of  Spansion’s board, which assured Kispert that if such a filing comes to pass, the company agrees to “use reasonable efforts to obtain bankruptcy court approval of this letter agreement within 60 days of such filing.”