EXHIBIT 10.3
[FAIRCHILD SEMICONDUCTOR LOGO]
DEFERRED STOCK UNIT AGREEMENT
PARTICIPANT: Mark Thompson EMPLOYEE ID: ____________ GLOBAL ID: ____________
DATE OF GRANT: December 1, 2004
NUMBER OF DEFERRED STOCK UNITS GRANTED: 50,000
THIS AGREEMENT, effective as of the Date of Grant set forth above, is between
Fairchild Semiconductor International, Inc., a Delaware corporation (the
"Company", "we", "our" or "us") and the Participant named above ("you" or
"yours"). This Agreement sets forth the terms and conditions governing the grant
of the Deferred Stock Units ("Units") specified above, and is made under and
granted in accordance with the Employment Agreement entered into between you and
Fairchild Semiconductor Corporation on the effective date hereof, as such
Employment Agreement may be amended or restated from time to time (the
"Employment Agreement"). Capitalized terms used and not defined in this
Agreement shall have the meanings given to them in the Fairchild Semiconductor
Stock Plan (the "Plan"). This Agreement consists of this document, any related
Settlement Election Form, the Employment Agreement and the Plan, it being
understood and agreed that the grant of Units is not made under the Plan but
shall be governed as if made under the Plan. Any conflict between the terms of
the Employment Agreement and the Plan shall be resolved in favor of the
Employment Agreement, read without reference to the Plan.
You and the Company agree as follows:
1. APPLICATION OF This Agreement and your rights under this Agreement are
PLAN; subject to all the terms and conditions of the Plan, as it
ADMINISTRATION may be amended from time to time, as well as to such rules
and regulations as the Committee may adopt. It is expressly
understood that the Committee that administers the Plan is
authorized to administer, construe and make all
determinations necessary or appropriate to the
administration of Units awarded under this Agreement, all
of which shall be binding upon you to the extent permitted
by the Plan and not inconsistent with the Employment
Agreement.
2.VESTING Subject to accelerated vesting as specified in the
Employment Agreement, the Units will vest (becoming "Vested
Units") on the following Vesting Dates if you are employed
by or in the service of the Company or an Affiliate on
those dates:
Percentage Vested
(including portion that
Vesting Date vested the preceding year)
1st Anniversary of Grant Date............ 25%
2nd Anniversary of Grant Date............ 50%
3rd Anniversary of Grant Date............ 75%
4th Anniversary of Grant Date............ 100%
provided that your Units will vest upon a Change In Control
(as defined under Section 409A of the Internal Revenue
Code) as if such event also constituted a Change in Control
under the terms of the Employment Agreement, but any
accelerated vesting as a result of a Change in Control
shall not be recognized as a Settlement Date or other
distributable event except to the extent permitted under
that Code Section and specified in your Settlement Election
Form.
3. RIGHTS AS You will not be entitled to any privileges of ownership of
STOCKHOLDER the shares of Common Stock underlying your Units(the
"Shares") unless and until Shares are actually delivered to
you under this Agreement.
4. DIVIDENDS You will be credited with additional Deferred Stock Units
having a value equal to declared dividends, if any, with
record dates that occur prior to the settlement of any
Units as if such Units had been actual Shares, based on the
Fair Market Value of a Share on the applicable dividend
payment date. Any such additional Deferred Stock Units
shall be considered Units under this Agreement and shall
also be credited with additional Deferred Stock Units as
dividends, if any, are declared, and shall be subject to
the same restrictions and conditions as Units with respect
to which they were credited. Notwithstanding the foregoing,
no such additional Deferred Stock Units will be credited
with respect to any dividend in connection with which Units
are adjusted pursuant to Section 3(c) of the Plan.
5. SETTLEMENT OF (a) Time of Settlement. Each Vested Unit will be settled by
UNITS the delivery of one Share to you or, in the event of
your death, to your designated beneficiary, promptly
following the date or dates (any such date, the
"Settlement Date") you have elected on the attached
Settlement Election Form. You may change the Settlement
Election Date one time only, and only to a later date,
as provided in the Settlement Election Form.
(b) Termination Prior to Settlement Date. If your
employment or service with the Company is terminated
prior to any Settlement Date, your Units will be
treated as specified in the Settlement Election Form.
6. TRANSFERABILITY Your Units are not transferable, whether voluntarily or
involuntarily, by operation of law or otherwise, except as
provided in the Plan. Any assignment, pledge, transfer, or
other disposition, voluntary or involuntary, of your Units
made, or any attachment, execution, garnishment, or lien
issued against or placed upon the Units, other than as so
permitted, shall be void.
7. TAXES (a) Social Security and Medicare Taxes. You may be subject
to Social Security tax, and you will be subject to
Medicare tax on the date or dates your Units become
Vested Units under Section 2 above, based on the Fair
Market Value of the Shares underlying the Units that
vest. The Company will pay such taxes on your behalf,
including any income, Social Security and Medicare
taxes attributable to the Company's payment of such
taxes. Payments on your behalf will be reflected in
your compensation for federal, state and local income
tax purposes.
(b) Income Taxes. You will be subject to U.S. federal
income tax on the Settlement Date, based on the Fair
Market Value of Shares received in settlement of Vested
Units. YOU WILL BE SOLELY RESPONSIBLE FOR THE PAYMENT
OF ALL SUCH INCOME TAXES, AS WELL AS FOR ANY OTHER
STATE, LOCAL OR NON-U.S. TAXES THAT MAY BE RELATED TO
YOUR RECEIPT OF THE SHARES. Not later than 90 days
before any scheduled Settlement Date, you must arrange
with the Company for the timely payment of all
withholding taxes the Company is obligated to collect
from you and remit to U.S. and other applicable tax
authorities.
(c) Tax Impact. The explanation of tax consequences above
is based on current tax law and is subject to change.
You are encouraged to consult a personal tax or
financial advisor concerning the tax effect of this
Agreement (and your Settlement Election rights) on your
particular situation. The Company does not guarantee
the tax results described above and will not be liable
for any different tax effect on you.
8. MISCELLANEOUS (a) This Agreement shall not confer upon you any right to
continue as an employee, or otherwise in the service,
of the Company or any Affiliate, nor shall this
Agreement interfere in any way with the Company's or
such Affiliate's right to terminate your employment or
service at any time.
(b) Without limiting the generality of Section 1 above,
with the approval of the Board, and subject to the
terms of the Plan, the Committee may terminate, amend,
or modify the Plan; provided, however, that no such
termination, amendment, or modification of the Plan may
in any way adversely affect your rights under this
Agreement without your consent.
(c) This Agreement will be subject to all applicable laws,
rules, and regulations, and to such approvals by any
governmental agencies or stock exchanges as may be
required.
(d) To the extent not preempted by U.S. federal law, this
Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
(e) Section 409A of the Internal Revenue Code, as enacted
in the American Jobs Creation Act of 2004 and amended
thereafter, is hereby incorporated into this Agreement
together with applicable regulations to be promulgated
under that statute. The parties intend to operate this
Agreement in compliance with that statute
notwithstanding any provisions of this Agreement, the
Plan, or any related Settlement Election Form to the
contrary, and will amend this Agreement as necessary to
comply with that statute, all to the extent necessary
to avoid adverse or unintended tax effects for you, the
Company or both.
9. SIGNATURES By the signatures below, the Participant and the authorized
representative of the Company acknowledge agreement to this
Deferred Stock Unit Agreement as of the Grant Date
specified above.
FAIRCHILD SEMICONDUCTOR
PARTICIPANT: INTERNATIONAL, INC.
/s/ Mark Thompson /s/ Kirk P. Pond
----------------- ----------------
Mark Thompson Kirk P. Pond
Chairman, President and CEO
TO ACCEPT YOUR DSU GRANT:
1. Sign BOTH copies of this Deferred Stock Unit Agreement;
2. Sign the BOTH copies of the Settlement Election Form;
3. Retain one copy of each for your records;
4. Return one copy of each in the enclosed envelope.
[FAIRCHILD SEMICONDUCTOR LOGO]
DEFERRED STOCK UNIT SETTLEMENT ELECTION FORM
This Settlement Election Form relates to the following grant of Deferred Stock
Units:
PARTICIPANT: Mark Thompson EMPLOYEE ID: ____________ GLOBAL ID: ____________
DATE OF GRANT: December 1, 2004
NUMBER OF DEFERRED STOCK UNITS GRANTED: 50,000
1. SETTLEMENT CHECK ONLY ONE OPTION:
ELECTION _____ SPECIFIED DATE. Subject to Sections 2 and 3 below, I
elect to have all Vested Units that I may hold under the
Deferred Stock Unit Award Agreement to which this election
relates settled by delivery of Shares to me on
____________________, which date is at least one year
following the Grant Date of such Units. If the date
specified occurs before the last scheduled Vesting Date
under this grant, then Units that vest after such specified
date will be settled promptly following any such subsequent
Vesting Date(s).
__X__ VESTING DATES. Subject to Sections 2 and 3 below, I
elect to have Vested Units that I may hold under the
Deferred Stock Unit Award Agreement to which this election
relates settled by delivery of Shares to me promptly
following each date or dates on which vesting of Units
occurs.
2. AUTOMATIC I hereby acknowledge and agree that (a) if my employment is
SETTLEMENT UPON terminated for any reason other than Cause, Death or
EARLIER Disability (as defined under Section 409A of the Internal
TERMINATION Revenue Code), any Vested Units will be settled on the
first anniversary of my termination date, (b) if my
employment is terminated for Cause, all units will be
immediately forfeited, and (c) if my employment is
terminated for Death or Disability (as defined under
Section 409A of the Internal Revenue Code), any Vested
Units will be settled following my termination date.
3. ONE-TIME I understand that, once, but only once, I can change my
CHANGE OF election to a Settlement Date that is at least 5 years
ELECTION PERMITTED later than the date indicated in Section 1 above by filing
a new Settlement Election Form with the Company at any time
on or before the day (the "Change Deadline Day") that falls
one year before the earliest Settlement Date that would
occur based on my election in Section 1. I understand that
I cannot change my election after the Change Deadline Day,
that a change in my election will not take effect until one
year after it is made, and that I cannot change my election
more than once. If the Change Deadline Day falls on a day
that is not a business day for the Company, then the last
day to change the election in Section 1 will be the last
business day to occur before the Change Deadline Day. Any
new Settlement Election Form will revoke the previously
filed Settlement Election Form, except that, if any
Settlement Date purportedly elected on the new form does
not comply with the above timing rules, then such new form
will have no effect and the previously elected Settlement
Date shall continue to apply.
4. SIGNATURE PARTICIPANT: DATED AS OF:
/s/ Mark Thompson December 1, 2004
---------------------
Mark Thompson
TO ACCEPT YOUR DSU GRANT:
1. Sign BOTH copies of the Deferred Stock Unit Agreement;
2. Sign the BOTH copies of this Settlement Election Form;
3. Retain one copy of each for your records;
4. Return one copy of each in the enclosed envelope.