Exhibit 10.6

 

GT SOLAR INCORPORATED

 

MANAGEMENT INCENTIVE PROGRAM

 

FY 2009

 

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GT SOLAR INCORPORATED

 

MANAGEMENT INCENTIVE PROGRAM

 

FY 2009

 

1.                                      FISCAL YEAR 2008

 

The FY 2009 Management Incentive Program (the “Program”) of GT Solar
Incorporated (the “Company”) shall commence on April 1, 2008, and continue
through and including March 31, 2009 (“FY 2009”).

 

2.                                      ADMINISTRATION

 

The Program shall be administered by the Executive Management Team (the
“Executive Team”).  Subject to the provisions of the Program, the Executive Team
may establish from time to time such regulations, provisions, procedures and
conditions of the Program which, in its opinion, may be advisable in the
administration of the Program.  No member of the Executive Team shall be liable
for any action or determination made in good faith with respect to the
administration of the Program, eligibility under the Program or the bonuses
awarded under the Program.

 

3.                                      ELIGIBILITY

 

The Executive Team shall determine, in its sole discretion, any and all
employees of the Company that will be eligible to participate in the Program
(each, a “Participant”; collectively, the “Participants”).  Participants will be
eligible to participate in the Program only upon execution of a participant
agreement with the Company as set forth in Exhibit A hereto (a “Participant
Agreement”).  Each Participant Agreement shall be subject to the terms and
conditions of the Program and may contain additional terms and conditions (which
may vary from Participant to Participant).  Unless otherwise specified in such
Participant Agreement, the date on which Participant is deemed to be a
participant in the Program (the “Participation Date”) shall be the date on which
the individual started employment with the Company during FY 2009.

 

As soon as practicable after the Participation Date and from time to time
thereafter, members of senior management, in consultation with the Executive
Team, shall adopt in writing certain goals and objectives to be achieved by
Participant over the course of FY 2009.  Such goals and objectives may vary
among Participants.

 

4.                                      OPERATING INCOME

 

“Operating Income” for any period means, on a consolidated basis, GAAP net
income, plus interest expense net of interest income, plus taxes, plus
depreciation, plus amortization, for such period.

 

Operating Income for any period shall be derived from the audited consolidated
financial statements of the Company and its subsidiaries covering such period,
and shall be subject

 

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to the review and approval of the Executive Team, whose determination of such
Operating Income calculation shall be final and binding.

 

For FY 2009, the Company’s target Operating Income shall be $184,476,000 (the
“Target Operating Income”).  Please note this figure is Company Confidential and
not to be disclosed externally.

 

5.                                      BONUS PAYMENTS

 

A.                                    Determination Date

 

The amount, if any, to be paid to each Participant under the Program (the “Bonus
Payment”) shall be determined by the Executive Team after the conclusion of FY
2009 following the receipt of the Company’s audited financial statements by its
independent accountants (the “Determination Date”).  Bonus Payments shall be
disbursed in the calendar year in which the FY 2009 ends as soon as
administratively practicable after the Determination Date.  All amounts earned
under the Program reflect gross dollar amounts and are, therefore, subject to
applicable withholding and taxation.

 

B.                                    Bonus Calculation

 

Each Participant’s Bonus Payment, if any, shall be determined in the following
manner:

 

(i)                                    Target Bonus

 

The Participant Agreement for each Participant will specify such Participant’s
“Target Bonus” (which will be based upon a percentage of Participant’s base
salary).  Adjustments to base salary during the course of FY 2009, or partial
year participation due to a start date during the plan year, shall result in a
corresponding adjustment to target bonus eligibility on a pro-rated basis.

 

(ii)                                Bonus Funding

 

The “Bonus Funding” for each Participant shall be determined by multiplying the
Target Bonus by a Bonus Funding Factor calculated as set forth below. 
Notwithstanding anything in this Program to the contrary, in no event shall a
Participant’s Bonus Funding Factor exceed 2.

 

(a)          If the Company’s Operating Income for FY 2009 is equal to the
Target Operating Income, the Bonus Funding Factor shall equal 1.

 

(b)         In the event that the Company’s FY 2009 Target Operating Income is
greater than the Target Operating Income, the Company shall increase the Bonus
Funding Factor for each Participant by 0.05 for each one percent (1%) the actual
FY 2009 Operating Income is above the Target Operating Income (using linear
interpolation to determine the applicable Bonus Funding for any intermediate
increase).  The maximum Bonus Funding Factor available to any Participant shall
be equal to 2.

 

(c)          In the event that the Company’s actual FY 2009 Operating Income is
less than the Target Operating Income, the Company shall decrease the Bonus

 

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Funding Factor for each Participant by 0.02 for each one percent (1%) the actual
FY 2009 Operating Income is below the Target Operating Income (using linear
interpolation to determine the applicable Bonus Funding for any intermediate
decrease).  No Bonus Funding will be available if the Company’s FY 2009
Operating Income is $138,357,000 or less.

 

The following table illustrates the percentage of the Target Bonus available to
each Participant as Bonus Funding at various Operating Income benchmarks for FY
2009:

 

Bonus Funding Calculation

 

Operating Income for FY
2009
(Millions)

 

Percentage of the Target Bonus
Available as Bonus Funding

 

 

 

 

 

20% Over

 

200

%

 

 

 

 

15% Over

 

175

%

 

 

 

 

10% Over

 

150

%

 

 

 

 

5% Over

 

125

%

 

 

 

 

Target

 

100

%

 

 

 

 

5% Under

 

90

%

 

 

 

 

10% Under

 

80

%

 

 

 

 

15% Under

 

70

%

 

 

 

 

20% Under

 

60

%

 

 

 

 

25% Under

 

50

%

 

 

 

 

< 25% Under

 

0

%

 

(iii)  Performance Achievement Percentage and Bonus Payment

 

The Bonus Payment, if any, shall be calculated by multiplying the Bonus Funding
available to each Participant by such Participant’s “Performance Achievement
Percentage.”  Such Performance Achievement Percentage shall be expressed as a
percentage ranging from 0% to 100% and may vary among Participants.  The
Executive Team shall determine the Performance Achievement Percentage applicable
to each Participant after consultation with such other members of senior
management as the Executive Team may choose (such members, the “Evaluation
Group”).  Although the specific objectives and their relative weight

 

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in determining each Participant’s Performance Achievement Percentage will be
determined by the Executive Team (after consultation with the Evaluation Group)
and will vary for each Participant (and the composition of the Evaluation Group
may vary among Participants), the following is intended to provide general
guidance regarding the competencies that may be considered in assigning a
Performance Achievement Percentage:

 

1.                                       ACHIEVING CORPORATE GOALS AND
OBJECTIVES SPECIFIED FOR FY 2009.

 

2.                                       DEVELOPING AND EXECUTING PLANS AND
FUNCTIONAL GOALS THAT DIRECTLY AND/OR INDIRECTLY INFLUENCE THE ORGANIZATION’S
ABILITY TO ACHIEVE ITS FINANCIAL GOALS FOR FY 2009.

 

3.                                       DELIVERING HIGHLY EFFECTIVE MANAGEMENT
OF OPERATIONS THROUGH LEADERSHIP OF TEAMS, TIMELY COMMUNICATION AND THE
DEPLOYMENT OF BUSINESS PROCESSES AND SYSTEMS THAT ANTICIPATE AND PREPARE THE
ORGANIZATION FOR GROWTH.

 

4.                                       CONTRIBUTING TO AN ORGANIZATIONAL
CULTURE WHERE PEOPLE CAN GROW AND CONTRIBUTE.  ACTIVELY SUPPORTING A CULTURE
THAT VALUES SAFETY, OPERATIONAL EXCELLENCE, INITIATIVE, INNOVATION, TEAMWORK AND
QUALITY IN EVERYTHING WE DO.

 

5.                                       WORKING AS A PRODUCTIVE AND VITAL
MEMBER OF THE MANAGEMENT TEAM.  BUILDING PRODUCTIVE COLLABORATIVE RELATIONSHIPS
WITH PEERS TO MEET ORGANIZATIONAL CHALLENGES TOGETHER AS A TEAM.  BEING
RESPONSIVE TO THE NEEDS OF OTHER TEAM MEMBERS AND CULTIVATING A SERVICE
MENTALITY INTERNALLY WITHIN THE LINE OF AUTHORITY.

 

6.                                       ACHIEVEMENT OF FUNCTIONAL FINANCIAL
MEASUREMENTS.

 

The Executive Team, after consultation with the Evaluation Group, shall
determine each Participant’s Performance Achievement Percentage at its sole
discretion and using such criteria as it deems reasonable for each Participant
with reference to each Participant’s specific functional objectives.

 

C.                                    Pro-rata Bonus Payments

 

In the event that the Participation Date of a Participant occurs after the
commencement of FY 2009, such Participant shall be eligible for a pro-rated
Bonus Payment calculated based on the number of days such Participant was
employed by the Company during FY 2009.  Unless otherwise provided in a written
agreement between the Company and Participant, no Participant shall be entitled
to receive a Bonus Payment if, prior to March 31, 2008, such Participant’s
employment with the Company is terminated for any reason.

 

6.                                      AUTHORITY

 

The Executive Team shall have final authority to make all determinations
specified in or permitted or deemed necessary under the Program.

 

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7.                                      MISCELLANEOUS

 

A.                                    ASSIGNMENT AND TRANSFER

 

No Bonus Payment or any rights or interests therein shall be assignable or
transferable by a Participant.

 

B.                                    NO GUARANTEE OF EMPLOYMENT / NO EQUITY
RIGHTS

 

Nothing contained in the Program shall be construed to create or imply a
guarantee of employment for any period of time.  Unless otherwise provided in a
written agreement between Participant and the Company, employment with the
Company is considered to be at-will and may be terminated at any time by
Participant or the Company.

 

C.                                    WITHHOLDING

 

The Company shall have the power and the right to deduct or withhold, or require
a Participant to remit to the Company, an amount sufficient to satisfy any
federal, state, local and foreign taxes of any kind (including, but not limited
to, the Participant’s FICA and SDI obligations) which the Executive Team, in its
sole discretion, deems necessary to be withheld or remitted to comply with the
Internal Revenue Code of 1986, as amended, and/or any other applicable law,
rule or regulation with respect to any Bonus Payment. Subject to applicable law,
each Participant agrees that the Company may satisfy withholding obligations
from any source of funds available to the Company and otherwise payable to
Participant, including salary payments.

 

D.                                    GOVERNING LAW

 

All questions pertaining to the validity, construction and administration of the
Program and any Participant’s Participant Agreement shall be determined in
accordance with the laws of the State of New Hampshire.

 

E.                                      AMENDMENT AND TERMINATION OF PROGRAM

 

The Executive Team shall have the right in its sole discretion to amend the
Program at any time and from time to time; provided that no such amendment shall
materially and adversely affect the rights of any Participant without the
consent of such Participant.

 

F.                                      SEVERABILITY

 

The invalidity or unenforceability of any provisions of the Program in any
jurisdiction shall not affect the validity, legality or enforceability of the
remainder of the Program in such jurisdiction or the validity, legality or
enforceability of any provision of the Program in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder shall be
enforceable to the fullest extent permitted by law.

 

*   *   *   *   *

 

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EXHIBIT A

 

GT SOLAR INCORPORATED

 

PARTICIPANT AGREEMENT TO THE
MANAGEMENT INCENTIVE PROGRAM

 

Participant Agreement made as of April 1, 2008 (this “Agreement”) between GT
Solar Incorporated (the “Company”), and             (“Participant”). 
Capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the FY 2009 Management Incentive Program (the “Program”).

 

1.                                       RIGHT TO PARTICIPATE.  THE COMPANY
HEREBY GRANTS TO PARTICIPANT THE RIGHT TO PARTICIPATE IN THE PROGRAM PURSUANT TO
THE TERMS AND CONDITIONS THERETO.

 

2.                                       PARTICIPANT ACKNOWLEDGMENT.  ATTACHED
HERETO AS EXHIBIT A IS A COPY OF THE PROGRAM.  PARTICIPANT HEREBY ACKNOWLEDGES
RECEIPT OF A COPY OF THE PROGRAM AND AGREES TO BE BOUND BY ALL TERMS AND
PROVISIONS THEREOF.

 

3.                                       PARTICIPATION DATE.  PARTICIPANT’S
PARTICIPATION DATE SHALL BE APRIL 1, 2008.

 

TARGET BONUS.  FOR PURPOSES OF THE PROGRAM, PARTICIPANT’S TARGET BONUS SHALL
EQUAL $        (REPRESENTING         %) OF PARTICIPANT’S BASE SALARY DURING FY
2009.

 

IF THE COMPANY’S OPERATING INCOME FOR FY 2009 IS HIGHER OR LOWER THAN THE TARGET
OPERATING INCOME, THE BONUS FUNDING WOULD INCREASE OR DECREASE RESPECTIVELY
ACCORDING TO THE PROGRAM AS ILLUSTRATED ON THE FOLLOWING TABLE:

 

Operating Income for
FY 2009 (Millions)

 

Percentage of the
Target Bonus

 

Bonus Funding
Available to
Participant

 

 

 

 

 

 

 

20% Over

 

200

%

$

 

 

 

 

 

 

 

 

15% Over

 

175

%

$

 

 

 

 

 

 

 

 

10% Over

 

150

%

$

 

 

 

 

 

 

 

 

5% Over

 

125

%

$

 

 

 

 

 

 

 

 

Target

 

100

%

$

 

 

 

 

 

 

 

 

5% Under

 

90

%

$

 

 

 

 

 

 

 

 

10% Under

 

80

%

$

 

 

 

 

 

 

 

 

15% Under

 

70

%

$

 

 

 

 

 

 

 

 

20% Under

 

60

%

$

 

 

 

 

 

 

 

 

25% Under

 

50

%

$

 

 

 

 

 

 

 

 

<20% Under

 

0

%

$

 

 

 

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Note:  Actual target bonus may be pro-rated due to any salary adjustments or
partial year participation due to start date during the plan year.

 

4.                                       INDIVIDUAL GOAL ACHIEVEMENT. 
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE BONUS PAYMENT, IF ANY, WILL BE
SUBJECT TO PARTICIPANT ACHIEVING CERTAIN INDIVIDUAL GOALS AND STANDARDS
IDENTIFIED BY THE EXECUTIVE TEAM.  THE CRITERIA USED IN ASSESSING INDIVIDUAL
PERFORMANCE, THE WEIGHT TO BE ASSIGNED SUCH CRITERIA AND SUCH PARTICIPANT’S
PERFORMANCE ACHIEVEMENT PERCENTAGE SHALL BE DETERMINED BY THE EXECUTIVE TEAM IN
ITS SOLE DISCRETION.  THE BONUS PAYMENT, IF ANY, WILL BE CALCULATED IN
ACCORDANCE WITH THE PROGRAM.

 

5.                                       BINDING EFFECT.  THIS AGREEMENT SHALL
BE BINDING UPON AND INURE TO THE BENEFIT OF ANY SUCCESSORS TO THE COMPANY AND
ALL PERSONS LAWFULLY CLAIMING UNDER PARTICIPANT.

 

6.                                       COMPLETE AGREEMENT.  THIS AGREEMENT,
THOSE DOCUMENTS EXPRESSLY REFERRED TO HEREIN AND OTHER DOCUMENTS OF EVEN DATE
HEREWITH EMBODY THE COMPLETE AGREEMENT AND UNDERSTANDING AMONG THE PARTIES AND
SUPERSEDE AND PREEMPT ANY PRIOR UNDERSTANDINGS, AGREEMENTS OR REPRESENTATIONS BY
OR AMONG THE PARTIES, WRITTEN OR ORAL, WHICH MAY HAVE RELATED TO THE SUBJECT
MATTER HEREOF IN ANY WAY.

 

7.                                       FUTURE INCENTIVE BONUS PLANS.  THE
COMPANY MAY IN THE FUTURE ADOPT ONE OR MORE INCENTIVE PLANS OR PROGRAMS, WITH
REGARD TO WHICH THE EXECUTIVE TEAM SHALL RETAIN THE EXCLUSIVE RIGHT IN ITS SOLE
DISCRETION TO DETERMINE THE APPLICABLE TERMS AND TO IDENTIFY THE PERSONS
ELIGIBLE TO PARTICIPATE.  NOTHING IN THIS AGREEMENT SHALL BE UNDERSTOOD TO GRANT
OR GUARANTEE PARTICIPANT A RIGHT TO PARTICIPATE IN ANY SUCH PLAN OR PROGRAM.

 

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IN WITNESS WHEREOF, the Company and Participant have executed this Agreement as
of the date first above written.

 

 

GT SOLAR INCORPORATED

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

PARTICIPANT

 

 

 

 

 

 

 

 

 

Participant Name

 

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