Exhibit 10.24
FAIRCHILD INCENTIVE PROGRAM
Effective March 10, 1997
FAIRCHILD INCENTIVE PROGRAM
TABLE OF CONTENTS
1. Objective and Structure......................................... 1
2. Definitions..................................................... 1
3. Effective Date.................................................. 3
4. Eligibility for Plan Participation.............................. 3
5. Target Awards and Incentive Levels.............................. 4
6. Plan Performance Goals.......................................... 4
7. Calculation and Payment of Awards............................... 5
8. Termination of Employment....................................... 6
9. Deferral of Awards.............................................. 7
10. Interpretations and Rule-Making................................. 8
11. Declaration of Incentives, Amendment, or Discontinuance......... 9
12. Miscellaneous................................................... 9
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FAIRCHILD INCENTIVE PROGRAM
1. Objective and Structure
The Fairchild Incentive Program (the "Plan") is designed to help retain
eligible employees and reward them for contributing to the success and
profitability of the Company. These objectives are accomplished by making
incentive awards under the Plan and providing Participants with a proprietary
interest in the growth and performance of the Company.
The Plan consists of two incentive plans combined in a single Plan
document. One plan is the Employee Incentive Plan (the "Incentive Plan"),
which is a non-ERISA cash bonus plan providing cash awards on an annual basis
to eligible employees based on measures of business performance for the year.
The other plan is a Select Employee Incentive Deferral Plan (the "Deferral
Plan"), primarily set forth in Article 9 below, which is an unfunded plan for
a select group of management or highly compensated employees, and hence is
substantially exempt from ERISA. The Deferral Plan provides an opportunity
for a limited number of management employees to defer receipt of their awards
under the Incentive Plan until termination of their employment or other
distributable event.
2. Definitions
Whenever used in the Plan, unless otherwise indicated, the following
terms shall have the respective meanings set forth below:
Award: The amount, if any, to be paid to a Plan Participant for a
particular Plan Period.
Award Date: The later of sixty (60) days after the end of the Company's
fiscal year, or fifteen (15) days after consolidated financial
statements for the fiscal year are completed and accepted by
the Company. As provided in Section 7, for certain
Participants an additional mid-year Award Date shall apply,
which shall be the later of sixty (60) days after the end
of the Company's second fiscal quarter or fifteen (15) days
after consolidated financial statements for the second fiscal
quarter are completed and accepted by the Company.
Base Salary: The annualized rate of base remuneration received by a
Participant from the Company as of the end of the Plan
Period, excluding all overtime, bonuses, fringe benefits
and extraordinary items.
Company: FSC Semiconductor Corporation ("FSC") or any corporate
successor assign which adopts or assumes the Plan. The term
"Company," as used herein, shall also refer to any subsidiary
or affiliate of FSC which adopts the Plan with the approval of
FSC.
Committee: The Compensation Committee appointed by the Board of Directors
of FSC.
Disability: Inability to perform any services for the Company, combined
with eligibility to receive disability benefits under the
standards used by the Company's long-term disability benefit
plan.
Employee: An individual in the regular full-time or regular part-time
employ of the Company at any time during the Plan Period, not
including interim employees, college co-ops, summer interns, or
contract employees. Members of a collective bargaining unit
shall be considered Employees for purposes of the Plan only if
they satisfy the eligibility conditions of the preceding
sentence and their collective bargaining agreement provides
for their participation in the Plan. In addition, executive
employees who are eligible for the Company's 1997 Executive
Officer Incentive Plan Agreement, or any successor incentive
plan exclusively for Company executives or directors, shall not
be considered Employees under this Plan.
Extraordinary Events that, in the opinion of the Committee, are beyond the
Occurrence: significant influence of Plan Participants or the Company and
cause a significant unintended effect, positive or negative,
on Company operating and financial results.
Incentive The allocation of Participants into groups, by job grade or
Levels: management selection, as set forth in Article 5, for which
a single Target Award level applies within the group but
different Target Award levels may apply to different groups.
Employees of foreign Company locations shall be assigned
Incentive Levels by the Committee by tracking each of those
Employees to the respective job grade listed on Schedule A
which most closely matches the international job grade or
classification of that foreign Employee.
Participant: An Employee who at the time shall be a Participant in
accordance with the provisions of Article 4.
Performance Levels of performance shall be set in accordance with one
Goal: or more financial and strategic goals developed by the
Committee for the Company and, if desired by the
Committee, for any Division, department, or other business
unit or Employee group within the Company. For each goal,
four levels of performance shall be set, as follows:
(i) Threshold - The minimum acceptable level of performance
for which an Award may be earned on a particular Performance
Goal.
(ii) Target - Good performance, usually set at a level equal
to the Strategic Business Plan for financial measures,
reflecting a degree of difficulty which has a reasonable
probability of achievement.
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(iii) Stretch - Better than Target performance and reflecting
a degree of difficulty with only a moderate probability of
achievement.
(iv) Best Expected - Exceptional performance far exceeding
the Target level because of the great degree of difficult and
the limited (10%-20%) probability of achievement.
A Participant's Award shall be determined based on his or her
weighted average level of performance for all goals applicable
to that Participant for the Plan Period, in accordance with
Articles 6 and 7.
Plan Period: The fiscal year of the Company. Because the Plan takes effect
during the fourth quarter of the Company's 1997 fiscal year,
the initial Plan Period shall only take into account
prospective goals and performance for the balance of that
fiscal year.
Retirement: An Employee's permanent termination of employment with the
Company at a time when both (a) and (b) apply: (a) either
(i) age is at least sixty-five (65) or (ii) age is at least
fifty-five (55) and age plus years of service in the employ
of the Company totals sixty-five (65) or more, and (b) the
terminating employee has certified to the Committee that he
or she does not intend to engage in a full-time vocation.
Target Award: The Award, expressed as a percentage of Base Salary, that is
earned by a Participant for achievement of the Target level
of performance.
3. Effective Date
The Plan will be conditioned upon, and effective commencing with, the
closing date of the reorganization of the three Fairchild divisions of
National Semiconductor Corporation (the Discrete, Logic and Memory
divisions) pursuant to the Agreement and Plan of Recapitalization between
Sterling Holding Company, LLC and National Semiconductor Corporation dated
January 31, 1997.
4. Eligibility for Plan Participation
A. All Employees shall participate in the Plan, subject to the further
provisions of this Article 4.
B. Participants will be notified of their participation and Incentive
Level during the first quarter of each Plan Period, or by the end of the first
quarter beginning after their Employee status commences, if later.
C. Newly hired Employees and newly promoted Employees shall be added as
Participants to the Plan during the Plan Period. Participants who are added to
the Plan during the Plan Period will receive a prorated Award based on relative
length of time of participation in the Plan for that Plan Period as an Employee.
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D. A Participant who is no longer an Employee on the last day of the Plan
Period will not be eligible for any Award for that Plan Period, except as
provided in Section 8 below.
5. Target Awards and Incentive Levels
A. Each Participant will be assigned an Incentive Level based upon his or
her job grade. A Target Award level, expressed as a percentage of Base Salary,
shall be assigned to each Incentive Level and that Target Award may vary for
each Incentive Level. The Incentive Levels, and corresponding Target Award
levels, shall be as listed from time to time on attached Schedule A, which is
hereby incorporated as part of the Plan.
B. In the event that a Participant changes positions during the Plan
Period and the change results in a change in Incentive Level, whether due to
promotion or demotion, his Award for the Plan Period will be based on the
Incentive Level attributable to his position as of the close of the Plan
Period, without regard to any other Incentive Levels under which he
participated during the Plan Period.
6. Plan Performance Goals
A. Performance Goals for each Plan Period, and associated weights, will
be established by the Committee from time to time and set forth in attached
Schedule B, which is hereby incorporated as part of the Plan. Participants in
defined business units may have the same Performance Goals, as determined by
the Committee. Each Performance Goal will have a defined Threshold, Target,
and Stretch level of performance. A Best Expected level of performance may
also be specified for one or more Performance Goals, subject to discretion of
the Committee. Performance Goals and their associated weights may change from
one Plan Period to another Plan Period to reflect the Company's operational
and strategic goals.
B. Awards may range between 0% and 200% of Target, except as provided in
Section 7.A(4) below. A scale showing the amount of the Participant's Award
relative to the Target Award at the various performance levels will be
developed for each Performance Goal. Performance Goals and associated Awards
(as a percent of the Target Award) will be set in a straight linear
relationship from Threshold to Target, and from Target to Stretch Performance
Goals, with Awards at the Stretch level being 150% of the Target Award,
Awards at the Target level being 100% of the Target Award, and Awards at the
Threshold level being 50% of the Target Award. The sum of the scoring on the
Performance Goals will determine the total performance level. Awards for
performance levels falling between or beyond the four Performance Goals will
be determined by interpolation or extrapolation on the same straight linear
basis. As a general rule, a Threshold performance level of 50% must be
achieved in order for any Award to be paid, but the Committee has the
discretion to make awards even if the Threshold level of performance is not
met. If performance in excess of the Stretch Performance Goal is achieved,
an award may be paid at the Best Expected Award level, which may be up to
200% of the Target Award, but payment of Awards beyond the Stretch level is
subject to Committee discretion.
C. Under exceptional circumstances, revisions to Performance Goals may be
made by the Committee during the Plan Period if the business environment or key
planning assumptions change significantly from conditions assumed at the start
of the Plan Period. In addition,
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Performance Goals, performance scales, and Awards may be adjusted in the
event the Committee determines there has been an Extraordinary Occurrence
during the Plan Period that (i) affects one or more Performance Goals;
(ii) unreasonably distorts Award calculations; or (iii) results in undue
benefit or detriment to the Plan Participants. Adjustments under the preceding
sentence will be made solely for the purpose of neutralizing the effect of the
Extraordinary Occurrence.
D. In the event that a Participant changes business units during the Plan
Period, the Participant's goals will be changed, if necessary, to reflect that
of the new business unit. The Participant's Award will then be prorated to
reflect both (i) the performance achieved by and Targets assigned to each
business unit the Participant belonged to during the Plan Period and (ii) the
length of time the Participant spent in each business unit during the Plan
Period.
7. Calculation and Payment of Awards
A. The maximum amount available to be paid for Awards for any group of
Participants or Incentive Level for the Plan Period shall be the applicable
Incentive Level times the Base Salary of every Participant in the group, unless
such maximum limit is adjusted by the Committee that Plan Year for that
particular group. Subject to this maximum amount, a Participant's Award will
be calculated as a percentage of Base Salary as follows:
1) The performance of the Participant's group is scored on an
overall basis at the end of the Plan Period, which score
determines what percentage of the Target Award for the group
becomes the Award level for each eligible Participant in the
group for that Plan Period.
2) For exceptional cases, Company management has discretion to
recommend adjustments to individual Awards based on significantly
greater or lesser individual contributions toward the group's
overall performance score, which adjustments shall require the
approval of the Committee. Without the approval of the
Committee, no individual Award may exceed 200% of the
Participant's Target Award amount.
3) Total Awards within the Participant's group may not exceed the
maximum limit set for Awards for that group for the Plan Period.
As a result, Award amounts may be adjusted to ensure conformance
with the maximum limit for the group.
B. Measurement of performance on Performance Goals for Participants will
be scored annually as approved by the President of FSC for each Plan Period
in a range between 0% and 200%, based on actual performance by the group,
Company, business unit or individual whose performance is measured for that
Performance Goal.
C. Awards will be paid in cash on or about the Award Date, except as
provided in Section F below.
D. Awards will reflect the Participant's Base Salary in effect at the end
of the Plan Period. Participants who take an unpaid leave of absence during the
Plan Period will have their
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Awards reduced on a prorata basis to reflect the unpaid leave of absence,
except as otherwise required by applicable law. A Participant on leave of
absence (whether paid or unpaid) on the Award Date will not receive the Award
until he or she returns from the leave of absence.
E. Awards shall be paid, if at all, as of an annual Award Date for
Participants in Grade 7 or above. For Participants in Grade 6 or below,
Awards shall be paid, if at all, on a semi-annual basis applying the
Performance Goals set forth in attached Schedule B for each respective
half of the Company's fiscal year, and such Awards are payable on or
about the corresponding mid-year and year-end Award Dates described
in Section 2.
F. All or any portion of the Award may be deferred under the Deferral
Plan if an eligible Participant makes a voluntary irrevocable election to
defer payment to a future date pursuant to the deferral terms contained in
Article 9.
8. Termination of Employment
A. Except as provided below, if a Participant's employment is terminated
before the end of a Plan Period, then for that Plan Period the Participant
will receive an Award (if any) reduced to reflect performance and Base Salary
for the Participant's actual period of employment as an Employee during that
Plan Period.
B. Unless local law or regulation provides otherwise, payments of Awards
made upon termination of employment by death, or on behalf of a Participant who
dies prior to receiving the Award, shall be made on the Award Date to:
(i) beneficiaries designated by the Participant; if none, then (ii) to a legal
representative of the Participant; if none, then (iii) to the person(s)
entitled thereto as determined by a court of competent jurisdiction. The
written consent of the Participant's spouse shall be required before the
designation of a beneficiary other than that spouse will be valid.
C. Notwithstanding any other provisions of the Plan to the contrary, the
right of a Participant to receive an Award under this Plan shall be forfeited
if the Participant's employment is terminated for cause. For purposes hereof,
the term "cause" shall mean that the Board of Directors of FSC (in the case of
the President or the Chief Financial Officer of FSC) or the President of FSC
(in all other cases) has determined, in its or his reasonable judgment, that
any one or more of the following has occurred:
(i) The Participant shall have committed an act or acts of
dishonesty or criminality that has had or could have an adverse effect on
the Company;
(ii) The Participant shall have committed any act of fraud,
embezzlement or misappropriation of funds;
(iii) The Participant shall have breached, in any material respect,
any of the provisions of any employment or other agreement between the
Participant and the Company;
(iv) A failure by the Participant to take or refrain from taking any
material action, which action Participant is then capable of taking or
refraining from taking, as
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specified in written directions of the Board of Directors or President of
FSC within a reasonable time following receipt by the Participant of such
written direction; or
(v) A failure by the Participant to perform his or her duties as an
employee of the Company as determined by the Board of Directors of FSC,
with the approval of the President of FSC.
A Participant's Award will be forfeited for any of the above reasons
regardless of whether such act is discovered prior to or subsequent to the
Participant's termination of employment or payment of an Award. If an Award
has been paid, such payment shall be repaid to the Company by the Participant.
9. Deferral of Awards
A. Except to the extent prohibited by applicable law and regulations,
an eligible Participant may elect to make an irrevocable election to defer
receipt of all or any portion of any Award in accordance with this Article 9.
Such Notice of Deferral Election must be completed at least thirty (30) days
before the end of the preceding Plan Period. Notices of Deferral Election
are not self-renewing and must be completed for each Plan Period if deferral
is desired for the applicable Plan Period. Only Participants in a grade 9
position or higher shall be eligible to defer an Award under this Article.
Thus, this Article 9 shall apply only to a select group of management or
highly compensated employees and shall constitute a separate, unfunded plan
for them. This separate plan shall be known as the Fairchild Select Employee
Incentive Deferral Plan. It shall consist of this Article 9 and such defined
terms and other provisions of the Fairchild Incentive Program document as are
necessary to understand and implement the operation and administration of
this Deferral Plan, which terms and provisions are incorporated by this
reference. Those provisions include, without limitation, Articles 1 through
4, Sections 7.E. and 8.C., and Articles 10 through 12.
B. For each Participant who elects deferral, the Company will establish
and maintain book entry accounts which will reflect the deferred Award and
any interest credited to the account. Each Participant with a deferred
account under this Article shall have an unsecured claim for benefits from
the Company, in accordance with Section 12.D. below.
C. For deferred Awards, Participant deferred accounts will be credited
each Award Date with interest set at the rate for long-term A-rated corporate
bonds, as reported by the investment banking firm of Salomon Brothers Inc. of
New York City (or such other investment banking firm as the Committee may
specify) during the first week of each calendar year. The interest rate will
be reset at the beginning of each calendar year. Interest will begin to
accrue on the Award Date and will be credited each Award Date until the date
payment is actually made. If a Participant's Award is distributed at any
time other than on an Award Date, the Participant's account will be credited
with interest until the date of distribution.
D. A Participant will become entitled to receive any deferred Award,
plus credited interest thereon, as of the earlier of the Participant's
termination of employment for any reason (including, but not limited to,
Retirement, Disability, sale of the Participant's business unit, or death) or
a date pre-selected at least one year in advance by the Participant. The
account balance
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will be paid in a lump sum in the month following the earlier of the
Participant's termination of employment for any reason or the pre-selected
date, unless installment payments have been elected by the Participant. To
elect installment payments, a Participant who has previously elected to defer
an Award may irrevocably elect (such election to be valid only if made at
least twelve (12) months prior to the Participant's termination of employment
date) to have the balance of the deferred Award, plus credited interest
thereon, paid to the Participant in periodic annual installments over a
period of not more than ten (10) years. Payments shall commence in the month
following the Participant's termination of employment and shall be made
annually by the Company on a day each year that is within thirty (30) days of
the anniversary of the Participant's termination of employment. If a
Participant has requested installment payments and dies either before or
after distribution has begun, the unpaid balance will be paid in a lump sum
in the month following the Participant's death.
E. Payment of part or all of any deferred Awards may be accelerated in
the case of severe hardship, which shall mean an emergency or unexpected
situation in the Participant's financial affairs, including, but not limited
to, illness or accident involving the Participant or any of the Participant's
dependents. All payments in case of hardship must be specifically approved by
the Committee.
F. No Participant may borrow against his or her account.
G. Except to the extent prohibited by applicable law and regulations,
the Participant may designate a beneficiary to receive deferred Awards in the
event of the Participant's death. The Participant's beneficiary may be
changed without the consent of any prior beneficiary, except as follows:
In those jurisdictions where spouses are granted rights by law in a
Participant's earnings, if the Participant is married at the time of
designation, the Participant's spouse must consent to the beneficiary
designation and the Participant's spouse must consent to any change in
beneficiary. If no beneficiary is chosen or the beneficiary does not survive
the Participant, the Award will be paid in accordance with Section 8.C. of the
Plan or as otherwise required by applicable law or regulation.
10. Interpretations and Rule-Making
The Committee shall have the right and power to: (i) interpret the
provisions of the Plan, and resolve questions thereunder, which
interpretations and resolutions shall be final and conclusive; (ii) adopt
such rules and regulations with regard to the administration of the Plan as
it deems necessary in its discretion; and (iii) generally take all action to
equitably administer the operation of the Plan. The President of FSC may
delegate any of his rights and duties under this Plan to one or more other
officers of the Company.
11. Declaration of Incentives, Amendment, or Discontinuance
The Committee, acting within his sole discretion, may: (i) determine,
on or before an Award Date, not to make Awards to any or all Participants
for the related Plan Period; (ii) make any modification or amendment to the
Plan for any or all Participants; or (iii) discontinue the Plan for any or
all Participants. Any amendment or termination of the Plan shall be done by
written action of the Committee, approved by a majority of its members, but
the Plan also may be
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contractually assigned by the Company to, or assumed by, any successor
corporation without the need for action by the Committee.
12. Miscellaneous
A. Except as provided in Section 9.G., no right or interest in the Plan
is transferable or assignable except by will or the laws of descent and
distribution.
B. Participation in this Plan does not guarantee any right to continued
employment, and management reserves the right to dismiss Participants for any
reason whatsoever. Participation in one Plan Period does not guarantee the
Participant the right to participation in any subsequent Plan Period.
C. The Company reserves the right to deduct from all Awards under this
Plan any taxes or other amounts required by law to be withheld with respect to
Award payments. Unless prohibited by applicable law and regulations,
Participants and beneficiaries shall be given the opportunity to choose
whether to have income taxes withheld from their Award payments. Employment
taxes, such as FICA and FUTA, shall be deducted from Participants' deferred
accounts as of the close of each taxable year as and to the extent required
by applicable law and regulations.
D. This Plan constitutes an unfunded Plan of deferred compensation. As
such, any amounts payable hereunder will be paid out of the general corporate
assets of the Company and shall not be transferred into a trust or otherwise
set aside. All accounts under the Plan will be for bookkeeping purposes only
and shall not represent a claim against specific assets of the Company.
The Participant will be considered a general creditor of the Company and the
obligation of the Company is purely contractual and shall not be funded or
secured in any way.
E. Maintenance of financial information relevant to measuring
performance during the Plan Period will be the responsibility of the Chief
Financial Officer of FSC.
F. The provisions of the Plan shall not limit, or restrict, the right
or power of the Company's Board of Directors to adopt such other plans or
programs, or to make salary, bonus, incentive, or other payments, with respect
to compensation of officers or Employees, as in its sole judgment it may deem
proper.
G. No member of the Committee or the Company's Board of Directors, nor
any officer, employee, or agent of the Company, shall have any liability to
any person, firm, or corporation based on or arising out of this Plan.
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IN WITNESS WHEREOF, this Plan, having been first duly adopted, is hereby
executed below on this 10th day of March, 1997, to take effect as provided
herein.
FSC SEMICONDUCTOR
CORPORATION
By: _______________________________
Print Name:
President:
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FAIRCHILD INCENTIVE PROGRAM
Schedule A
Incentive and Target Award Levels (Non-Executive)
------------------------------------------------
Exempt Employee Non-Exempt Employee
Job Grade Target Award Level Target Award Level
--------- ------------------ ------------------
Grade 9 15% 8%
Grade 8 10% 8%
Grade 7 10% 8%
Grade 6 and below 8% 8%
Incentive and Target Award Levels (Executive)
---------------------------------------------
Job Grade Target Level
--------- ------------
3 35%
4A 30%
4 30%
5 20%
6 20%
FAIRCHILD INCENTIVE PROGRAM
Schedule B
Performance Goals
I. For the Plan Period from the closing date to and including the Sunday
nearest preceding or on May 31, 1997 (the "First Plan Period"), the
Participant's incentive Award shall be calculated as follows:
(A) the Participant's Base Salary paid during the First Plan Period,
multiplied by
(B) the Participant's Incentive Level, multiplied by
(C) (i) 0.5, if FSC's EBITDA (as defined in the Securities Purchase and
Holders Agreement to be entered into by National, Sterling
Holding Company, LLC and the Management Investors) for the First
Plan Period equals $33.9 million multiplied by a fraction (the
"First Plan Period Fraction"), the numerator of which equals the
number of days in the First Plan Period and the denominator of
which equals the number of days in the fiscal quarter of the
Company and its predecessor which includes the First Plan Period
(the "Threshold Amount"),
(ii) 1.0, if FSC's EBITDA for the First Plan Period equals $35.4
million multiplied by the First Plan Period Fraction (the "Target
Amount"),
(iii) 1.5, if FSC's EBITDA for the First Plan Period equals $37.9
million multiplied by the First Plan Period Fraction (the
"Stretch Amount"), or
(iv) if FSC's EBITDA for the First Plan Period exceeds the Threshold
Amount but is less than the Target Amount, or exceeds the Target
Amount but is less than the Stretch Amount, such number between
.5 and 1.0 or between 1.0 and 1.5, respectively, as reflects, on
a proportionate basis, the relationship between actual EBITDA for
such period and such benchmarks.
If FSC's EBITDA for the First Period is less than the Threshold Amount or
greater than the Stretch Amount, the Committee may, as contemplated by the
Plan, make Awards, on a case by case basis, based on multipliers of less
than 0.5 or greater than 1.5 (but in no event greater than 2.0),
respectively. For purposes of this provision, the Best Expected Amount for
the First Plan Period shall equal $40.3 million of EBITDA multiplied by the
First Plan Period Fraction.
II. For the Plan Period from the Sunday nearest preceding or on May 31, 1997 to
the Sunday nearest preceding or on May 31, 1998 (the "1998 Fiscal Year"),
the Participant's incentive Award for a Participant in Grade 7 or above
shall be calculated as follows:
(A) the Participant's Base Salary paid during the 1998 Fiscal Year,
multiplied by
(B) the Participant's Incentive Level, multiplied by
(C) (i) 0.5, if FSC's EBITDA (as defined in the Securities Purchase and
Holders Agreement (the "Stockholders Agreement") to be entered
into by National, Sterling Holding Company, LLC and the
Management Investors) for the
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1998 Fiscal Year equals $144.5 million or, in the case of
persons who are Management Investors, as defined in the
Stockholders Agreement, $164.0 million (the "Threshold Amount"),
(ii) 1.0, if FSC's EBITDA for the 1998 Fiscal Year equals $174.2
million (the "Target Amount"),
(iii) 1.5, if FSC's EBITDA for the 1998 Fiscal Year equals $183.7
million (the "Stretch Amount"), or
(iv) if FSC's EBITDA for the 1998 Fiscal Year exceeds the Threshold
Amount but is less than the Target Amount, or exceeds the Target
Amount but is less than the Stretch Amount, such number between
.5 and 1.0 or between 1.0 and 1.5, respectively, as reflects, on
a proportionate basis, the relationship between actual EBITDA for
such period and such benchmarks.
If FSC's EBITDA for the 1998 Fiscal Year is less than the Threshold Amount
or greater than the Stretch Amount, the Committee may, as contemplated by
the Plan, make Awards on a case by case basis, based on multipliers of less
than 0.5 or greater than 1.5 (but in no event greater than 2.0),
respectively. For purposes of this provision, the Best Expected Amount for
the 1998 Fiscal Year shall equal $193.1 million of EBITDA.
III. For the semi-annual Plan Period from the Sunday nearest preceding or on May
31, 1997 to the Sunday nearest preceding or on November 30, 1997 (the
"First 1998 Period"), the incentive Award for a Participant in Grade 6 or
below shall be calculated as follows:
(A) the Participant's Base Salary paid during the First 1998 Period,
multiplied by
(B) the Participant's Incentive Level, multiplied by
(C) (i) 0.5, if FSC's EBITDA for the First 1998 Period equals $72.25
million (the "Threshold Amount"),
(ii) 1.0, if FSC's EBITDA for the First 1998 Period equals $80.1
million (the "Target Amount"),
(iii) 1.5, if FSC's EBITDA for the First 1998 Period equals $84.5
million (the "Stretch Amount"), or
(iv) if FSC's EBITDA for the First 1998 Period exceeds the Threshold
Amount but is less than the Target Amount, or exceeds the Target
Amount but is less than the Stretch Amount, such number between
0.5 and 1.0 or between 1.0 and 1.5, respectively, as reflects, on
a proportionate basis, the relationship between actual EBITDA for
such period and such benchmarks.
If FSC's EBITDA for the First 1998 Period is less than the Threshold Amount
or greater than the Stretch Amount, the Committee may, as contemplated by
the Plan, make Awards on a case by case basis, based on multipliers of less
than 0.5 or greater than 1.5 (but in no event greater than 2.0),
respectively. For purposes of this provision, the Best Expected Amount for
the First 1998 Period shall equal $88.8 million of EBITDA.
IV. For the semi-annual Plan Period from the Sunday nearest preceding or on
November 30, 1997 to the Sunday nearest preceding or on May 31, 1998 (the
"Second 1998 Period"), the incentive Award for a Participant in Grade 6 or
below shall be calculated as follows:
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(A) the Participant's Base Salary paid during the Second 1998 Period,
multiplied by
(B) the Participant's Incentive Level, multiplied by
(C) (i) 0.5, if FSC's EBITDA for the Second 1998 Period equals $72.25
million (the "Threshold Amount"),
(ii) 1.0, if FSC's EBITDA for the Second 1998 Period equals $94.1
million (the "Target Amount"),
(iii) 1.5 if FSC's EBITDA for the Second 1998 Period equals $99.2
million (the "Stretch Amount"), or
(iv) if FSC's EBITDA for the Second 1998 Period exceeds the Threshold
Amount but is less than the Target Amount, or exceeds the Target
Amount but is less than the Stretch Amount, such number between
0.5 and 1.0 or between 1.0 and 1.5, respectively, as reflects, on
a proportionate basis, the relationship between actual EBITDA for
such period and such benchmarks.
If FSC's EBITDA for the Second 1998 Period is less than the Threshold
Amount or greater than the Stretch Amount, the Committee may, as
contemplated by the Plan, make Awards on a case by case basis, based on
multipliers of less than 0.5 or greater than 1.5 (but in no event greater
than 2.0), respectively. For purposes of this provision, the Best Expected
Amount for the Second 1998 Period shall equal $104.3 million of EBITDA.
4