Exhibit 10.3

 

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First Advantage Corporation (FADV)

Senior Executive Annual Incentive Program

Program Term Sheet/Summary — Fiscal Year 2005

 

The Annual Incentive Program provides incentive compensation based on goal
achievement. If performance hurdles are achieved or exceeded, bonus payments
will result; however, if performance hurdles are not met, no bonuses will be
paid. The Compensation Committee of the Board of Directors has formally approved
this program and reserves the right to interpret and possibly amend aspects of
this Bonus Program.

 

1. AWARD OPPORTUNITIES

 

Your FY2005 Target Bonus Award Opportunity will be based on a percentage of your
Base Salary paid in FY2005. Your Target Award Opportunity for FY2005 is
expressed below; more or less than Target may ultimately be earned:

 

Executive Name

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Target Award Opportunity
(% of Base Salary)

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John Long

  100%

John Lamson

  100%

Akshaya Mehta

  100%

 

If, at the conclusion of the Performance Period, you do not have 12 months of
continuous service, your Award Opportunity shall be prorated for the number of
full months worked through the end of the Performance Period divided by 12.

 

2. PERFORMANCE TIME PERIOD

 

The Performance Period will be the 12-month Fiscal Year and shall commence at
the beginning of the Fiscal Year, or January 1, and shall conclude at the end of
the Fiscal Year, or December 31.

 

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3. PERFORMANCE MEASURES — SELECTION AND WEIGHTING

 

A combination of Financial and Non-Financial (i.e., Individual MBOs) Performance
Measures will be utilized. For Financial Performance Measures, the selection and
weighting for FY2005 are set forth below:

 

     Performance Measure #1

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  Performance Measure #2

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  Performance Measure #3

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  Total
Weight
(A+B+C)

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Executive Name

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   Measure

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   Weight (A)

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  Measure

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   Weight (B)

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  Measure

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   Weight (C)

--------------------------------------------------------------------------------

 

John Long

John Lamson

Akshaya Mehta

   EPS    66 2/3%   Strategic MBOs    33 1/3%   <none>    <none>   100%

Evan Barnett

   Business Unit
Pre-Tax Profit    50%   EPS    25%   Strategic
MBOs    25%   100%

 

For Non-Financial Performance Measures/MBOs, a qualitative assessment after
completion of the Fiscal Year will need to be made. In these cases, an
assessment of the performance relative to the goals established at the beginning
of the year will need to be made. The Chairman of the Board will make this
assessment for the CEO’s Non-Financial Performance Measures and the CEO will
assess all other Participants’ performance against their Non-Financial Measures.

 

In addition, bonus awards calculated above may be subject to a Compensation
Committee Performance Modifier that can adjust calculated awards +/- 25%.

 

4. PERFORMANCE GOAL HURDLES FOR FY2005

 

The Financial portion of the total bonus opportunity will pay out based on the
level of Performance Goal achievement for each Performance Measure specified for
each eligible Participant. For FY2005, the Performance Goals are as follows:

 

Performance Hurdle

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Award Payout
(as a % of Target)

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% of Targeted
Goal that Must
be Achieved

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Threshold

  25%   85%

Target

  100%   100%

Maximum

  150%   115%

 

Table Notes: Mathematical equal-distant interpolation shall be used to determine
payments between performance hurdles.

 

5. TERMINATION PROVISIONS

 

In the event of your Termination of employment, the Compensation Committee
shall, in its sole discretion, determine the amount, timing, and form or any
Bonus Payments payable. For FY2005, it is the Compensation Committee’s intention
to pay Bonuses in following manner, depending upon the type of Termination:

 

Type of
Termination

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Treatment of
Award

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How Determine
Payout?

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Timing of Award

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Form of Award

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Voluntary Quit or Resignation

  Award is 100% forfeited.   n/a   n/a   n/a

 

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Qualified Reduction in Force/Layoff

  Prorated Award opportunity equal to the # of full months worked in Fiscal
Year.   Payout based on actual, full-year performance achievement.   Prorated
Award will be paid at regularly scheduled payment date.   In cash.

Qualified Retirement

         

Qualified Disability

           

Death

    Payout at Target.   Immediate payout.    

Change-in-Control

  Full 100% of Award Opportunity.   Higher of (1) Target
or (2) Actual
Performance to-date.   Immediate payout.    

 

Note: The Compensation Committee shall have full authority to determine and
interpret the type of Termination applicable to each individual Participant.

 

6. OTHER CONSIDERATIONS

 

  •   Participants must be currently employed by the Company and in “good
standing” (per Human Resources Department) on the date of actual bonus
disbursement.

 

  •   In the event of a salary adjustment during the Performance Period, Award
Opportunity shall be prorated based on the proportion of time spent at the
corresponding salaries and targeted bonus levels.

 

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