1
Exhibit 10.39
ON SEMICONDUCTOR
2000 NON-MANUFACTURING INCENTIVE PLAN
1. Purpose. The Purpose of the ON Semiconductor 2000 Non-Manufacturing
Incentive Plan ("Plan") is to provide an annual incentive program for the
Non-Manufacturing employees who are normally not affiliated within a
manufacturing facility of the Company or any subsidiary and who are not on the
Company's Key Contributor Incentive Plan (KCIP). The Plan was effective as of
January 1, 2000 and will terminate on December 31, 2000.
2. Administration. The Plan is administered by the Compensation Committee
of the Company's Board of Directors ("Committee"). The Committee has the
discretion to determine all matters related to the Plan, including but not
limited to, matters related to eligibility, participation, Company and Employee
Goals, award determinations, and any other administrative matter to be
determined under the Plan.
3. Eligibility and Participation.
(a) Eligibility. Regular full-time and part-time employees of the
Company or any subsidiary working 20 hours or more per week in a
non-manufacturing role of the Company that is not eligible for the KCIP are
eligible to participate in the Plan. Any employee of the Company or a subsidiary
who is designated as an on-call, intern, co-op, part-time working less than 20
hours, or any individual designated as a contractor, consultant, or hired via a
temporary staffing agency is not eligible to participate in the Plan.
(b) Participation. From among the eligible employees of the Company or
any subsidiary, the Company will determine those individuals who will
participate in the Plan. The Committee will notify those selected to participate
in the non-manufacturing Plan as soon as practicable after they are determined.
If an employee is determined as eligible, within a non-manufacturing role, to
participate in the Plan, except as provided below, he or she must be actively
employed by the Company or any subsidiary at the time that the amounts are paid
under the Plan to be entitled to receive an award under the Plan.
4. Performance Measures.
An employee's total award under the Plan is computed based on
(i) the employee's base salary, and (ii) whether the Company achieves its
"threshold," "target," or "stretch" EBITDA goal. EBITDA means the Company's
Earnings Before Interest, Taxes, Depreciation, and Amortization and is
determined after December 31, 2000.
(a) Employee's Target Bonus. Under the Plan, an employee's target bonus
amount is determined by the Committee and will generally range from 2% to 10% of
the employee's base salary as of December 31, 2000.
1
2
(b) Company EBITDA Goals.
(i) For former employees of Cherry Semiconductor, the
Company's EBITDA goals for calendar year 2000, including financial results from
the combined Cherry Semiconductor and the Company, are as follows:
EBITDA GOAL COMPANY EBITDA
Threshold $425,000,000
Target $455,000,000
Stretch $535,000,000
(ii) For employees of the Company or any subsidiary, other
than former employees of Cherry Semiconductor, the Company's EBITDA goals for
calendar year 2000, not including financial results from Cherry Semiconductor,
are as follows:
EBITDA GOAL COMPANY EBITDA
Threshold $400,000,000
Target $425,000,000
Stretch $500,000,000
The Committee reserves the right to amend the EBITDA goals in
the event of a future acquisition, disposition, or other significant event
affecting the Company or any subsidiary.
(c) The Employee's individual performance goals are not a factor
in determining the individual employee's award; the entire award is based on the
Company meeting its EBITDA goals as described above.
5. Award Determination.
(a) Non-Manufacturing goals. Each employee has individual goals in
support of the company's EBITDA goals; these specific goals are not a
determining factor in the award.
(b) EBITDA Goals. If the Company does not achieve the Threshold
EBITDA goal, no amounts will be paid under the Plan (either based on Company
performance or the individual's performance). If the Company achieves the
Threshold EBITDA goal, the employee's award will be based on 2% of eligible
earnings. If the Company achieves the Target EBITDA goal, the employee's target
bonus percentage will be 4% of eligible earnings. If the Company achieves the
Stretch EBITDA goal, the employee's award will be based on 10% of eligible
earnings.
The Committee will adjust these percentage on a pro rata basis
if the Company's EBITDA falls in between the Threshold, Target, and Stretch
EBITDA goals.
2
3
6. Transfers, Promotions, New Hires, and Salary Adjustments.
TYPE OF CHANGE EFFECT ON AWARDS
Move into Eligible Position and New Hires Eligible for participation in Plan
if moved in or hired before December
1, 2000. Award prorated on the basis
of months of service in eligible
position.
Move Into Ineligible Position Award prorated at end of Plan Year
on the basis of months of service in
eligible position.
Move Into Another Eligible Position Award prorated on the basis of
months of service in each position
for the varying target bonus
percentages.
Change of Salary No impact. The employee's base
salary on December 31, 2000
determines the employee's target
bonus percentage.
7. Effect of Termination on Award. If an employee terminates employment
with the Company or a subsidiary for any reason prior to December 31, 2000, the
employee will not be entitled to receive an award under the Plan. In addition,
an employee must be an active employee of the Company or any subsidiary as of
the date of payment to receive an award under the Plan; provided, however, if
the employee is on an a Company-approved leave of absence, becomes disabled, or
dies before the date of the payment (but after December 31, 2000), the employee
will be entitled to receive a payment under the Plan. If an employee retires
during the calendar year 2000, the employee will be entitled to receive payment,
prorated on the basis of the months of services during that calendar year.
8. Former Cherry Employees. Former Cherry Semiconductor employees may
receive payouts under his plan on a pro-rated basis on the date of the
acquisition or date of hire, which ever is later.
3