Exhibit 10.05

ENHANCED FAIRCHILD INCENTIVE PLAN

 

 

Amended and Restated Effective April 1, 2009

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TABLE OF CONTENTS

 

          Page 1.    Objective and Structure    1 2.    Definitions    1 3.   
Effective Date    4 4.    Eligibility for Plan Participation    4    A.   
Eligible Class    4    B.    New Hires    4    C.    Promotions    4    D.   
Ceasing Participation    5 5.    Participation and Target Award Levels    5   
A.    Participation Levels    5    B.    Target Award Levels    5    C.   
Adjustments    5 6.    Calculation and Payment of Awards    6    A.    Factors
   6    B.    Performance Goal    6    C.    Calculation of Awards    6    D.   
Stretch Awards    7    E.    Extraordinary Events    7    F.    Participant
Moves    7    G.    Payment    8 7.    Termination of Employment    8 8.   
Deferral of Awards (DIP)    8    A.    Plan    8

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   B.    Timing    8    C.    Eligibility    9    D.    Deferral Accounts    9
   E.    Investment Return    9    F.    Distribution    9    G.    Hardship   
9    H.    Loans    10    I.    Beneficiaries    10    J.    Status of Plan   
10    K.    Freeze of DIP    10 9.    Interpretations and Rule-Making    10 10.
   Declaration of Incentives, Amendment or Discontinuance    11 11.   
Miscellaneous    11    Schedule A       EFIP Participation and Target Award
Levels   

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ENHANCED FAIRCHILD INCENTIVE PLAN

(As Amended and Restated Effective April 1, 2009)

 

1. Objective and Structure

The Enhanced Fairchild Incentive Plan (the “Plan” or “Enhanced Plan”) is
designed to help retain eligible management 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 is a non-ERISA cash bonus plan providing enhanced cash awards payable
on an annual basis to a select group of eligible employees based on measures of
business performance for that award period. The Enhanced Plan also contains a
deferral feature that enables certain Participants to elect to defer the payment
of all or any portion of their award. The Deferral Plan provides an opportunity
for a limited number of management employees to defer receipt of their awards
under the Plan until termination of their employment or other distributable
event. That deferral feature of the Enhanced Plan is primarily set forth in
Article 8 below, is an unfunded plan for a select group of management or highly
compensated employees, and hence is substantially exempt from ERISA. The two
plans set forth in this document and amended hereafter also may be referred to
respectively by the acronym EFIP and DIP. The Deferral Plan is hereby frozen
effective as of December 27, 2004. It is intended that the EFIP qualify as a
plan of short-term deferrals and that the frozen DIP be grandfathered so that
neither Plan is subject to Code Section 409A.

 

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
Measurement Period. Award Date:    The annual date on which an EFIP Award is due
to be paid. The Award Date shall be 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, but
not later than the fifteenth day of the third month following the Company’s
fiscal year. Company:    Fairchild Semiconductor Corporation (“FSC”) or any
corporate successor or assign which adopts or assumes the Plan. For purposes of
eligibility to participate in the Plan, the term “Company,” as used herein, may
also refer to any subsidiary or affiliate of FSC which adopts the Plan with the
approval of FSC. Committee:    The Plan administrator shall be a committee
consisting of the Executive Vice President and CFO, Senior Vice President, Human
Resources, and the Senior

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   Vice Provident and General Counsel. The Committee shall be responsible for
the administration of the Plan, as provided in Article 9 below, but may delegate
routine administrative or clerical duties to one or more officers or employees
of the Company. The actions, duties and responsibilities of the Committee noted
and called for herein, are subject to the approval and discretion of the Board
of Directors of the Company (the “Board”). Code:    The Internal revenue Code of
1986, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. 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 (or having comparable status in any foreign location of the Company, as
determined by foreign management and approved by the Committee based on
applicable local laws, customs and practices) at any time during the Measurement
Period, not including any non-regular employees. Members of a collective
bargaining unit, if any, 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. Any regular employees in a class that is eligible for a different
incentive plan - including, without limitation: (i) sales, marketing and other
employees who are eligible for the Company’s Sales Incentive Plan (or any
successor plan thereto); (ii) any newly acquired employees who remain subject to
either their prior employer’s incentive or bonus plan or to any special or
transitional incentive or bonus plan assumed or adopted by the Company in
connection with the acquisition of such employees; and (iii) any other group of
one or more employees who the Committee determines either is covered by a
different bonus or incentive plan or arrangement (except for the Company’s Key
Technologist Incentive Award Plan) or shall not be covered by this Plan nor any
other bonus or incentive plan or arrangement - shall not be considered Employees
under this Plan for any Measurement Period during which they fall within any
such exclusion, except to the extent otherwise determined by the Committee or
otherwise specified herein. Employees who are subject to a separate incentive or
bonus pay formula pursuant to a written employment agreement entered into with
their employer and to which the Company or subsidiary becomes obligated also
shall be excluded from eligible Employee status under this Plan for any
Measurement Periods to which that other arrangement applies, the same as if such
Employees were instead covered by another group incentive plan, in accordance
with the preceding rules.

 

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Extraordinary Occurrence:    Events that, in the opinion of the Committee and
with the Chief Executive Officer’s concurrence, are beyond the significant
influence of Plan Participants or the Company and cause a significant unintended
effect, positive or negative, on Company operating and financial results for a
particular Measurement Period. Measurement Period    The period of performance
on which Awards are based. The EFIP and Measurement Period shall be the annual
period corresponding to the fiscal year of the Company. Participant    An
eligible Employee who at the time shall be a Participant in accordance with the
provisions of Article 4. Participation Levels    The allocation of Participants
into groups, by job code level or management selection, as set forth in Article
4 and 5, for which a single Target Award level applies within the group (i.e.,
for that Participation Level). Different Target Award levels may apply to
different groups and within the same job code level at the discretion of the
Chief Executive Officer. Performance Goal   

Levels of performance shall be set in accordance with one or more financial and
strategic goals developed by the Chief Executive Officer (with Board approval)
pursuant to Section 6.B. below for the Company and, if further desired, for any
division, department,, or other business unit or Employee group within the
Company, For each goal up to three levels of performance maybe set, as follows:

 

(i) Threshold - The minimum acceptable level of performance for which an Award
may be earned on a particular Performance Goal; achieving 50% or more of the
Target level of performance,

 

(ii) Target - Achieving 100% of the Target level of performance.

 

(iii) Stretch - Achieving more than 100% of the Target level of performance.

Qualified Earnings:    The measure of compensation used to determine benefit
amounts under this Plan. Qualified Earnings generally consist of certain amounts
paid to the Participant by the Company for services rendered during the
Measurement Period as an Employee of the Company. For purposes of this Plan,
Qualified Earnings shall include base compensation, but shall exclude all
bonuses (including within this exclusion, without limitation, sign-on bonuses,
relocation bonuses, retention bonuses, Key Technologist Incentive Awards, awards
under any other incentive plan in which the Employee is permitted to participate
simultaneously with participation in this Plan, and any other amount payable in
the nature of a bonus), shift differentials, fringe benefits and extraordinary
items. Overtime payments on the Company’s United States payroll shall be
included in Qualified Earnings, but overtime payments on any foreign payroll
shall be excluded. The Committee has the authority and discretion to determine
(i) to what extent the foregoing inclusions and

 

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   exclusions must be altered to comply with local legal requirements in any
particular foreign jurisdiction, and (ii) whether to include or exclude other
items of compensation (such as, but not limited to, equalization pay for
temporary relocation assignments) in determining Qualified Earnings for
Employees in particular jobs or locations based on legal standards and customary
practices applicable to that job or location. Target Award:    The Award,
expressed as a percentage of Qualified Earnings, that is earned by a Participant
for achievement of the Target level of performance.

 

3. Effective Date

The Plan was originally established effective on March 11, 1997, which was 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. This amendment
and complete restatement of the Plan is effective April 1, 2009 and applies to
any Measurement Period which begins on or after that effective date.

 

4. Eligibility for Plan Participation

A. Eligible Class. Only Employees in job code level 36XX or higher shall be
eligible for EFIP. Within that eligible class, employees must be nominated by
the General Manager or Executive Vice President in charge of the Employee’s
business unit and then approved by the Chief Executive Officer, as a condition
for participation in the Plan.

The nomination and approval process shall apply anew for each Measurement
Period. Employees selected for participation for the next Measurement Period
will be notified in written (hard copy or electronic) form. Participants will be
notified of their Participation Level during their initial Measurement Period
and will be notified of subsequent changes in their Participation Level as
appropriate.

B. New Hires. Newly hired Employees who are approved for EFIP participation
shall commence participation in the Plan effective as of the effective date set
by the Chief Executive Officer when their participation was approved.

C. Promotions. Employees who instead participate in the Fairchild Incentive Plan
(“FIP”) or any other Company bonus or incentive plan and are promoted or
otherwise become eligible for EFIP participation during a Measurement Period
shall be subject to the following rules.

1. If the Employee commences EFIP participation before becoming entitled to any
award under any other Company bonus or incentive plan (for example, before the
first semi-annual award date under FIP) for the same period, then that Employee
shall be treated as an EFIP Participant for his or her entire period of
employment as an Employee during that initial Measurement Period. Such
Participant’s EFIP Award, if any, for that initial Measurement Period shall be
based on the Participant’s Qualified Earnings for the entire Measurement Period.

 

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2. If the Employee commences EFIP participation after becoming entitled to an
award under any other Company bonus or incentive for the same period, then any
EFIP Award to which that Participant becomes entitled for that initial
Measurement Period shall be based on the Participant’s Qualified Earnings for
only the period after the end of the other plan’s measurement period, so the
Participant’s Qualified Earnings which were taken into account in making the
award under such other plan shall not be counted towards any EFIP Award.

D. Ceasing Participation. A Participant who ceases to be eligible to continue
participation in EFIP (whether due to a drop in job code level, a change in
employment status, de-selection by the Chief Executive Officer or any other
reason) before the last day of the Measurement Period shall immediately cease
participation and will not be eligible for any EFIP Award for that Measurement
Period. An individual must be both an Employee and a Participant on the last day
of a Measurement Period to be eligible for any EFIP Award for that Measurement
Period.

 

5. Participation and Target Award Levels

A. Participation Levels. Each Participant will be assigned a Participation Level
Typically, the Participant’s job code level will constitute his or her
Participation Level, but the General Manager or Executive Vice President in
charge of the Participant’s business unit or other class of Participants may
(with the approval of the Chief Executive Officer) assign one or more
Participants to a different Participation Level (whether or not represented by a
different job code level) for purposes solely of determining such Participant’s
EFIP Award for a given Measurement Period. Any such assignment under this Plan
of a Participant to a Participation Level that does not match their job code
level shall not constitute a promotion, demotion, transfer or other change in
the individual’s employment status or a change in their job code level for any
other purpose.

B. Target Award Levels. One Target Award level, expressed as a percentage of
Qualified Earnings, shall be assigned to one or more groups or individuals
within each respective Participation Level, although typically a single Target
Award level will be assigned to an entire Participation Level. The Participation
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 this Plan.
However, a Participation Level consisting of one or just a few individuals
specially assigned to it under this paragraph may be memorialized in a written
notice to such individuals without also having to be listed on Schedule A.

C. Adjustments. In the event that a Participant incurs a change in Participation
and/or Target Award level during a Measurement Period (whether due to promotion,
demotion, special assignment under Section 5.A above or other reasons) his or
her EFIP Award for that Measurement Period shall be based on the Participation
Level and Target Award level in effect for that Participant as of the close of
the Measurement Period, without regard to any other levels in which he or she
participated during the Measurement Period, except as provided in Section 6.F
below. If, however, the Participant changes to a position no longer covered by
the Enhanced Plan for the remainder of a Measurement Period, his or her award
for the Measurement Period shall be determined solely under whatever other bonus
or incentive plan, if any, the individual then enters, and no Award will be
payable to that individual under this Plan.

 

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6. Calculation and Payment of Awards

A. Factors. A Participant’s EFIP Award (if any) is measured by four factors.
First, the Participation Level determines what corresponding Target Award level
the Participant is eligible for. Second, the Target Award level is the
percentage of Qualified Earnings that will be used as one of two products to
calculate any EFIP Award. Third, the degree to which the Company’s actual
financial performance for the Measurement Period compares to the Company’s
Performance Goal for that Period produces the other percentage used to calculate
EFIP Awards up to the Target level. Fourth, if Company financial performance
exceeds the Target level of the Performance Goal, then any discretionary EFIP
Award in excess of the Target Award level shall be determined in accordance with
Section 6.D below.

B. Performance Goal. Before each Measurement Period, the Chief Executive Officer
of the Company shall, subject to Board approval, set the Company’s financial
Performance Goal for that Period. The Performance Goal shall be based on the
attainment of specified levels of one or more of the following measures:
earnings per share (EPS), revenues, net profit after tax, gross profit,
operating profit, earnings before interest, taxes, depreciation and amortization
(EBITDA), earnings before interest and taxes (EBIT), various measures of cash
flow, asset quality, stock price performance, unit volume, return on equity,
change in working capital, return on capital or shareholder return. The
Committee may appropriately adjust any evaluation of performance under a
Performance Goal to exclude any of the following events that occurs during a
Measurement Period: (i) asset write-downs, (ii) litigation or claim judgments or
settlements, (iii) the effect of changes in tax law, accounting principles or
other such laws or provisions affecting reported results, (iv) accruals for
reorganization and restructuring programs and the effect of any discontinued
operations reported in the Company’s consolidated statement of operations, and
(v) any extraordinary non-recurring items as described in Accounting Principles
Board Opinion No. 30 and/or in management’s discussion and analysis of financial
condition and results of operations appearing in the Company’s annual report to
stockholders for the applicable year. That Performance Goal serves as the target
level of performance for the Measurement Period.

C. Calculation of Awards. Achievement of 50% to 100% of that Performance Goal
target typically will produce, but does not guarantee, an EFIP Award equal to
the same percentage of the Participant’s Target Award level as the Company’s
financial performance achieved relative to its EBIT target for the Measurement
Period (i.e., multiply the Performance Goal achievement percentage by the Target
Award level percentage to produce the percentage of Qualified Earnings payable
as the EFIP Award). Achievement of less than 50% of the Performance Goal
typically will produce no EFIP Award for the Measurement Period because the
minimum Threshold performance level was not attained. Achievement of more than
100% of the Performance Goal typically, will produce, but does not guarantee, an
EFIP Award of at least 100% of the Participant’s Target Award level, but any
amount in excess of a 100% award shall be determined as provided in Section 6.D.
below. The Committee may, in its discretion from time to time, round the
Performance Goal achievement percentage to the nearest whole percent before
calculating the EFIP Awards for any Measurement Period.

The Chief Executive Officer of the Company has complete discretion whether or
not EFIP Awards will be paid at, all, or at the typical level, for a given
Measurement Period, based on any factors that officer deems relevant, which may
include the Company’s financial position, business objectives and how the
Company’s financial performance for that Measurement Period was achieved (i.e.,
by revenue growth or by cost reduction).

 

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D. Stretch Awards. When performance exceeds 100% of the Target Performance Goal
for a Measurement Period, there is no guarantee that any Award which may be paid
for that Measurement Period will exceed the 100% Target performance award level.
Any additional Award for a Stretch level of performance shall be determined in
accordance with this Section 6.D.

If the Company’s actual financial performance exceeds 100% of the Target
Performance Goal for a given Measurement Period, the Chief Executive Officer
shall determine, in its sole discretion, the amount of any pool of money that
may be made available for any EFIP Awards in excess of the 100% Target Award
level for that Measurement Period. The Chief Executive Officer also shall
allocate that pool, within its sole discretion, among the Company’s various
business units or other classes of Participants. The General Manager or
Executive Vice President responsible for managing a particular business unit
shall then have complete discretion to allocate the pool assigned to that
business unit or class among certain of the EFIP Participants employed within
the business unit or class as a supplemental Award beyond the 100% Target Award
level, using such performance criteria as that manager deems appropriate from
time to time for that business unit or class and the individual Participants
therein. The purpose of these Stretch Awards is to provide a special bonus for a
select group of one or more extraordinary contributors to that business unit’s
success.

E. Extraordinary Events. Under exceptional circumstances, revisions to
Performance Goals may be made by the Chief Executive Officer during the
Measurement Period if the business environment or key planning assumptions
change significantly from conditions assumed or existing at the start of the
Measurement Period. In addition, Performance Goals, pool allocations, and Awards
may be adjusted in the event there has been an Extraordinary Occurrence during
the Measurement 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. All determinations made
by the Chief Executive Officer under this Section 6.E shall be subject to Board
approval.

F. Participant Moves. 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, if any, may
then be adjusted or prorated by the Committee, in its sole discretion, to
reflect such considerations as:

 

  (i) the performance achieved by and Targets assigned to each business unit the
Participant belonged to during the Plan Period,

 

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  (ii) the length of time the Participant spent in each business unit during the
Plan Period; and

 

  (iii) any other facts and circumstances as the Committee deems relevant or
appropriate in that particular case.

G. Payment. Awards, if any, will generally be paid in cash in a single sum on or
about each Award Date for which an Award is declared, subject to deferral rights
under Article 8 below. However, an Award payment may be divided into multiple
partial payments, to be completed within a reasonable time after the Award Date,
in order to accommodate different three periods needed for determining different
portions of the Award or for any other reason deemed appropriate by the
Committee or the Chief Executive Officer. A Participant on approved leave of
absence (whether paid or unpaid) shall be paid his or her Award under the Plan
at the same time and manner as an active Employee, with no deferral of the Award
pending return from the leave, but a Participant who is inactive for reasons
other than approved leave of absence or disability shall not be entitled to
receive an Award unless and until he or she returns to active employment as an
Employee.

Effective on and after January 1, 2005, payment of EFIP Awards shall be made by
the Award Date so as to constitute a short-term deferral for purposes of Code
Section 409A except to the extent such later payment is made as soon as
reasonably practicable and the delay is due to circumstances making timely
payment administratively impracticable for reasons which were not foreseeable,
in accordance with the short-term deferral regulations under Code Section 409A.

 

7. Termination of Employment

Any Participant whose employment as an Employee terminates for any reason before
the close of a Measurement Period, and who remains a non Employee as of the last
day of that Period, shall forfeit eligibility for any EFIP Award for that
Measurement Period.

 

8. Deferral of Awards (DIP)

A. Plan. This separate plan shall be known as the Fairchild Deferred Incentive
Plan (DIP). It shall consist of this Article 8 and such defined terms and other
provisions of the Enhanced Fairchild Incentive Plan (“EFIP”) 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.

B. Timing. 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 8. Such
Notice of Deferral Election must be completed at least thirty (30) days before
the end of the Measurement Period. Notices of Deferral Election are not self
renewing and must be completed for each Measurement Period if deferral is
desired for the applicable Measurement Period. Notwithstanding the foregoing,
for any Measurement Period that begins on or after December 27, 2004, no
Participant deferral elections shall be allowed.

 

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C. Eligibility. Only EFIP Participants on the Company’s United States payroll
and in job code level 39xx or higher shall be eligible to defer an Award under
this Article. Thus, this Article 8 shall apply only to a select group of
management or highly compensated U.S. employees and shall constitute a separate,
unfunded plan for them.

D. Deferral Accounts. For each eligible EFIP Participant who elects a deferral,
the Committee will establish and maintain book entry accounts which will reflect
the deferred Award and any deemed gains or losses credited to the Participant’s
account. Each Participant with a deferral account under this Article shall have
an unsecured claim for benefits from the Company, in accordance with Section 8.J
below.

E. Investment Return. Each Participant’s deferral account shall, be credited
with deemed gains or losses on each Award Date with a rate of return equal to
the net rate of return the account would have earned, had it been invested in
accordance with the Participant’s investment directions. Participants shall be
offered the opportunity to choose how they would want their DIP account to be
invested using the investment fund options available under the Company’s primary
tax-qualified 401(k) plan covering the Company’s U.S. salaried management
employees. The Committee shall determine how often Participants may change their
investment direction and set any other terms and conditions for Participant
investment directions. While the Participant’s investment directions and this
Section 8.E will determine the rate of gain/loss to be credited to that
Participant’s deferral account from time to time, the account shall be a
bookkeeping account and nothing in this Plan shall require that any assets be
set aside for this purpose or actually be invested in accordance with any
Participant’s investment direction. The Committee may designate a default
investment fund (which shall be the same fund used as the default fund under the
applicable 401(k) plan unless otherwise designated by the Committee) to be used
to determine credited gains or losses to the extent a Participant fails to make
a timely or complete investment direction.

F. Distribution. A Participant will become entitled to receive any deferred
Award, plus credited gains or losses 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 more than twelve (12) months in advance by the
Participant. The account balance 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. Payments shall be made in the month following
the Participant’s termination of employment or on the pre-selected payment date,
if applicable. If a Participant dies before distribution has been made, the
unpaid balance will be paid in a lump sum in the month following the
Participant’s death.

G. Hardship. 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.

 

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H. Loans. No Participant may borrow against his or her DIP account.

I. Beneficiaries. Except to the extent prohibited by applicable law and
regulations, the DIP Participant may designate one or more beneficiaries to
receive distribution from the Participant’s deferral account 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: 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
subsequent 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 7.B. of the EFIP or as otherwise required by applicable law or
regulation.

J. Status of Plan. This Deferral 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, unless such trust is a grantor trust that is
reachable by Company creditors in the event of Company insolvency. 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.

Accounts attributable to Awards deferred for Measurement Periods ending on or
before December 27, 2004 are fully vested and intended to be exempt from
Section 409A of the Code, so that statute does not apply to this Deferral Plan.
However in the event that statute does apply in any respect and at any time to
this Plan, the Plan shall be construed and administered to comply with said
Section 409A insofar as necessary to avoid violating that law.

K. Freeze of DIP. Notwithstanding any provision of this Deferral Plan to the
contrary, the Plan shall be frozen as of December 27, 2004. No deferrals shall
be credited to any Participant’s Account from Awards attributable to Measurement
Periods that end after December 27, 2004. Accounts that have balances as of
December 27, 2004 shall continue to be maintained, administered and distributed
in accordance with this Deferral Plan, but no new DIP accounts shall be
established after that date.

 

9. Interpretations and Rule-Making

The Committee shall have the right and power to exercise the following duties,
in its sole discretion:

 

  (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

 

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  (iii) generally take all action to administer the operation of the Plan.

The Chief Executive Officer similarly shall have the right, power and discretion
to exercise duties (i) and (ii) above with respect to such matters as are within
that officer’s decision-making authority under the Plan.

The Committee may delegate any of its rights and duties under this Plan to one
or more officers or employees of the Company, or to an outside service provider,
but Section 11.F. below shall not apply to any such outside service provider.

 

10. Declaration of Incentives, Amendment or Discontinuance

The Committee, with the approval of the Chief Executive Officer, may:

 

  (i) determine, on or before an Award Date, not to make Awards, and to modify
the amount of any Award, to any or all Participants for the related Measurement
Period;

 

  (ii) make any written 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
contractually assigned by the Company to, or assumed by, any successor
corporation without the need for action under this Article 10.

 

11. Miscellaneous

A. Except through beneficiary designations, 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 Company management reserves the right to dismiss Participants
for any reason whatsoever. Participation in the Enhanced Plan or the Deferral
Plan for any Measurement Period does not guarantee the Participant the right to
participation in either or both such Plans for any subsequent Measurement
Period.

C. The Company shall deduct from Awards under this Plan any taxes or other
amounts required by law to be withheld with respect to Award payments, but
Awards deferred under Article 8 shall be considered pre-tax to the extent
allowed by applicable law. 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.

 

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D. Maintenance of financial information relevant to measuring performance during
the Measurement Period will be the responsibility of FCS’s Chief Financial
Officer, or that officer’s designee.

E. 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.

F. No member of the Committee or the Company’s Board of Directors, nor the Chief
Executive Officer, nor any other officer, employee, representative or agent of
the Company, shall have any liability to any person, firm, or corporation board
on or arising out of this Plan.

G. This Program shall be governed by the laws of the State of Maine.

*     *     *     *     *     *     *     *     *     *     *     *     *

 

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IN WITNESS WHEREOF, this amendment and complete restatement of the Enhanced
Fairchild Incentive Program, having been first duly adopted, is hereby executed
below on this 16th day of April 2009, to take effect on April 1, 2009 as
provided herein.

 

FAIRCHILD SEMICONDUCTOR CORPORATION By:  

/s/ Mark S. Thompson

  Mark S. Thompson   Chief Executive Officer ADMINISTRATIVE COMMITTEE By:  

/s/ Mark S. Frey

  Mark S. Frey   Executive Vice President and CFO By:  

/s/ Kevin B. London

  Kevin B. London   Senior Vice President, Human Resources By:  

/s/ Paul D. Delva

  Paul D. Delva   Senior Vice President and General Counsel

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ENHANCED FAIRCHILD INCENTIVE PLAN

Schedule A Effective as of April 1, 2009

EFIP Participation and Target Award Levels

 

Participation Levels

   Typical Target Award Levels*

Job Code Level 36xx

   10%

Job Code Level 37xx

   10-15%

Job Code Level 38xx

   10-15%

Job Code Level 39xx

   15-20%

Executive Job Code Level 41XX

   25%

Executive Job Code Level 42XX

   30%

Executive Job Code Level 43XX

   45-50%

Executive Job Code Level 44XX

   60-80%

Executive Job Code Level 45XX to 47XX

   Variable, determined by the Board

 

  

*  For 100% of EBIT-goal Target level performance.