Exhibit 10.2


 


GT SOLAR INTERNATIONAL, INC.


 


SECTION 162(m) PERFORMANCE
INCENTIVE PLAN


 


Section 1.  Purpose


 


The purpose of this GT Solar International, Inc. Section 162(m) Performance
Incentive Plan is to provide a means of determining both annual and long-term
incentive compensation for certain of the Company’s executive officers in a
manner that qualifies as “performance-based compensation” within the meaning of
Section 162(m) of the Internal Revenue Code.


 


Section 2.  Definitions


 


The following capitalized words as used herein shall have the following
meanings:


 


(a)   “Award” means any
award granted under the Plan to an Eligible Employee by the Committee subject
to such terms and conditions as the Committee may establish under the terms of
the Plan.


 


(b)   “Board” means the
Board of Directors of the Company.


 


(c)   “Cash-Based Award”
means any Award denominated by reference to a dollar amount.


 


(d)   “Committee” means the
Compensation Committee of the Board (or such other committee of the Board that
the Board shall designate from time to time) or any subcommittee thereof
consisting of two or more directors each of whom is an “outside director”
within the meaning of Section 162(m).


 


(e)   “Common Shares” means
the Company’s common stock, par value $0.01 per share, or any security issued
by the Company or any successor in exchange or in substitution therefor.


 


(f)    “Company” means GT
Solar International, Inc., a Delaware corporation.


 


(g)   “Eligible Employee”
means any employee or executive officer of the Company or any of its
subsidiaries who is or, in the opinion of the Committee, may become a “covered
employee” within the meaning of Section 162(m).


 


(h)   “Fair Market Value”
of a Common Share as of a given date shall have the same meaning as applies
under the Share Incentive Plan.


 


(i)    “GAAP” means
accounting principles generally accepted in the United States of America from
time to time.


 


(j)    “Participant” means
an Eligible Employee granted an Award under the Plan.


 


(k)   “Performance Criteria”
shall have the meaning set forth in Section 4(b)
hereof.


 


(l)    “Performance Goals”
shall have the meaning set forth in Section 4(c)
hereof.


 


(m)  “Performance Period”
means a period determined by the Committee of not more than five years over
which the Performance Goals set forth in the Award are to be achieved.


 


(n)   “Plan” means this GT
Solar International, Inc. Section 162(m) Performance Incentive Plan, as it may
be amended from time to time.


 


(o)   “Section 162(m)”
means Section 162(m) of the Internal Revenue Code of 1986 (the “Code”), as amended from time to time, and
any regulations promulgated thereunder.


 


(p)   “Section 409A” shall
mean Section 409A of the Code and the treasury regulations and other official
guidance promulgated thereunder.


 


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(q)   “Share-Based Award”
means any Award denominated by reference to a number of Common Shares.


 


(r)    “Share Incentive Plan”
means the Company’s 2008 Equity Incentive Plan, as it may be amended and
restated from time to time.


 


(s)   “Treasury Regulation”
means the U.S. Department of Treasury regulations promulgated under the Code,
as amended, including any successor provisions thereto.


 


Section 3. 
Administration of the Plan


 


(a)   Committee Members.  The Plan shall be administered by the
Committee. The Committee shall have such powers and authority as may be
necessary or appropriate for the Committee to carry out its functions as
described in the Plan. No member of the Committee shall be liable for any
action or determination made in good faith by the Committee with respect to the
Plan or any Award thereunder.


 


(b)   Discretionary Authority.  Subject to the express limitations of the
Plan, the Committee shall have authority in its discretion to determine the
Eligible Employees to whom, and the time or times at which, Awards may be
granted, whether an Award will be a Cash-Based Award or a Share-Based Award,
the Performance Period, the Performance Criteria and the Performance Goals, and
all other terms of the Award. The Committee shall also have discretionary
authority to interpret the Plan, to make all factual determinations under the
Plan, and to make all other determinations necessary or advisable for the
administration of the Plan. The Committee may prescribe, amend, and rescind rules
and regulations relating to the Plan. All interpretations, determinations, and
actions by the Committee shall be final, conclusive, and binding upon all
parties.


 


(c)   Delegation of Authority.  The Committee may delegate, to any
appropriate officer or employee of the Company, responsibility for certain
ministerial functions (but not the exercise of discretion) under this Plan.


 


Section 4.  Awards


 


(a)   Grant of Awards.  The Committee may grant to any Eligible
Employee Cash-Based Awards and/or Share-Based Awards under the Plan with
respect to one or more Performance Periods under the Plan. Performance Periods
may run consecutively and/or concurrently, as determined by the Committee.
Before the 90th day of the Performance Period (or no later than such earlier or
later date as may be the applicable deadline for the establishment of
performance goals permitting the compensation payable to such Eligible Employee
for such year hereunder to qualify as “qualified performance-based compensation”
under Treasury Regulation Section 1.162-27(e)) (the “Determination Date”), the
Committee will determine the type of Award, the duration of the Performance
Period, the Performance Criteria, the applicable Performance Goals relating to
the Performance Criteria, and the amount and terms of payment to be made upon
achievement of the Performance Goals.


 


(b)   Performance Criteria.  For purposes of Awards granted under the
Plan, the “Performance Criteria” shall be one or any combination of the
following, for the Company or any identified subsidiary or business unit, as
determined by the Committee no later than the Determination Date: net earnings;
net income; operating income, including adjusted operating income; earnings
before interest and taxes; earnings before interest, taxes, depreciation, and
amortization; cash flow; return on equity; return on net assets employed;
earnings per share; revenue growth; cash flow from operations; return on
assets; earnings per share from continuing operations; net asset turnover;
capital expenditures; inventory measures, including inventory turnover; working
capital; bookings; gross or operating margin; return on total assets; return on
invested capital; return on investment; return on revenue; market share;
economic value added; cost of capital; expense reduction levels; stock price
performance;


 


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productivity;
customer satisfaction; employee satisfaction; consolidated pre-tax earnings;
net or gross revenues and total shareholder return for the applicable
performance period; book value per share; net cash position; accounts
receivable measures; shipments; total shareholder return; sale of all or any
portion of the Company; acquisition of a business or businesses; development of
new products; creation of intellectual property, including but not limited to
patents, copyrights, and trade secrets. Each of the Performance Criteria shall
be applied and interpreted in accordance with GAAP or such other objective
measure as established by the Committee at the time of the Award.


 


(c)   Performance Goals.  For purposes of Awards granted under the
Plan, the “Performance Goals” shall be the levels of achievement relating to
the Performance Criteria selected by the Committee for the Award. The
Performance Goals shall be expressed as an objective formula or standard that
precludes discretion to increase the amount of compensation payable that would
otherwise be due upon attainment of the goal. The Performance Goals may be
applied on an absolute basis or relative to an identified index or peer group,
as specified by the Committee. The Performance Goals may be applied by the
Committee after excluding charges for restructurings, discontinued operations,
extraordinary items, and other unusual or non-recurring items, and the
cumulative effects of accounting changes, each as determined in accordance with
GAAP, or such other objective measure established by the Committee, provided
the adjustments are specified at the time the Award is established.


 


(d)   Maximum Awards.  The maximum amount that may become payable to
any one Participant during any one calendar year under all Cash-Based Awards is
limited to $5,000,000. The maximum number of Common Shares that may be subject
to all Share-Based Awards granted to any one Participant during any one
calendar year shall be limited to 1,000,000 Common Shares.


 


(e)   Negative Discretion.  Notwithstanding anything else contained in
the Plan to the contrary, the Committee shall have the right, in its
discretion, (i) to reduce or eliminate the amount otherwise payable to any
Participant under an Award and (ii) to establish rules or procedures that have
the effect of limiting the amount payable to any Participant to an amount that
is less than the maximum amount otherwise payable under an Award. The Committee
shall not have discretion to increase the amount that is otherwise payable to
any Participant under an Award. No provision of this Plan shall preclude the
Committee from exercising negative discretion with respect to any Award
hereunder, within the meaning of Treasury Regulation Section 1.162-27(e)(2)(iii)(A).


 


Section 5.  Payment of
Awards


 


(a)   Certification.  Following the conclusion of the Performance
Period of an Award, the Committee shall certify in writing whether the
Performance Goals for that Performance Period have been achieved, or certify
the degree of achievement, if applicable.


 


(b)   Payment.  Upon certification of the Performance Goals
for an Award, the Committee shall determine the amount of payment to the
Participant pursuant to the Award, if any. Upon certification of the
Performance Goals for a Share-Based Award, the Committee shall determine the
number of Common Shares payable to the Participant pursuant to the Award, if
any. Notwithstanding the foregoing, both Cash-Based Awards and Share-Based
Awards may be paid in any combination of cash or Common Shares as determined by
the Committee in its discretion, based upon the Fair Market Value of the Common
Shares at the time of payment. Unless otherwise determined by the Committee at
the time an Award is granted, if the Participant’s employment with the Company
terminates for any reason prior to the date such Award is paid, the Participant
shall forfeit such Award and shall have no further rights thereunder.


 


(c)  Share Restrictions.  Any Common Shares payable in respect of an
Award shall be subject to such terms, conditions, restrictions and/or
limitations as the Committee shall determine in its discretion. Any Common
Shares that become payable under an Award shall be paid from the Common Shares 


 


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authorized
under the Company’s Share Incentive Plan, and shall be subject to the terms and
conditions of such plan.


 


(d)   Employment Requirement.  In the event of the termination of employment
of a Participant with the Company or a subsidiary before the payment of an
Award, the Award shall be forfeited and automatically be cancelled without
further action of the Company or the Committee, subject to such conditions as
may be approved by the Committee for certain circumstances of termination of
employment, such as death or disability, if approved by the Committee in its
sole discretion.


 


(e)   Tax.  Any payment under this Plan shall be subject
to applicable federal, state or local income and employment taxes and any other
amounts that the Company is required by law to deduct and withhold from such
payment. Any provision of this Plan to the contrary notwithstanding, (a) awards
under this Plan are intended to qualify as “qualified performance-based
compensation” under Treasury Regulation Section 1.162-27(e) and (b) any
provision of the Plan that would prevent an award under the Plan from so
qualifying shall be administered, interpreted and construed to carry out such
intention and any provision that cannot be so administered, interpreted and
construed shall to that extent be disregarded.


 


Section 6.  General
Provisions


 


(a)   Effective Date.  Subject to the approval of the Company’s
shareholders, the Plan shall be effective with respect to Performance Periods
beginning on or after January 1, 2010.


 


(b)   Amendment and
Termination.  The Company may, from
time to time, by action of the Board, amend, suspend or terminate any or all of
the provisions of the Plan. Notwithstanding the foregoing, no amendment will be
effective without shareholder approval if such approval is required to satisfy
the requirements of Section 162(m). To the extent necessary for purposes of Section
162(m), this Plan shall be resubmitted to shareholders for their reapproval
with respect to awards payable for the taxable years of the Company commencing
on and after 5th anniversary of initial shareholder approval.


 


(c)   Other Compensation.  Nothing contained in the Plan shall prohibit
the Company or any subsidiary from establishing other additional incentive
compensation arrangements for one or more employees of the Company or from
paying compensation outside of the terms of the Plan, whether or not such
compensation qualifies as performance-based compensation under Section 162(m).


 


(d)   No Right to Employment.  Nothing in the Plan shall be deemed to give
any Participant the right to remain employed by the Company or any subsidiary
or to limit, in any way, the right of the Company or any subsidiary to
terminate, or to change the terms, of a Participant’s employment at any time.


 


(e)   Governing Law.  The Plan shall be governed by and construed
in accordance with the laws of Delaware, without regard to choice-of-law rules.


 


(f)    Section 409A.  Although the Company makes no guarantee with
respect to the tax treatment of payments hereunder and shall not be responsible
in any event with regard to non-compliance with Section 409A, the Plan is
intended to either comply with, or be exempt from, the requirements of Section 409A.
To the extent that the Plan is not exempt from the requirements of Section 409A,
the Plan is intended to comply with the requirements of Section 409A and shall
be limited, construed and interpreted in accordance with such intent.
Accordingly, the Company reserves the right to amend the provisions of the Plan
at any time and in any manner without the consent of Participants solely to
comply with the requirements of Section 409A and to avoid the imposition of the
additional tax, interest or income inclusion under Section 409A on any payment
to be made hereunder. Notwithstanding the foregoing, in no event whatsoever
shall the Company be liable for any additional tax, interest, income inclusion
or other penalty that may be imposed on a Participant by Section 409A (or any
similar state or local law) or for damages for failing to comply with Section 409A
(or any similar state or local law).


 


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