-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I4ZoNGnYUmHyt8fdI1U3FbscMMogX5+cy2SReZAM1GseC3wdNCqSfRd2iN3ThA7m Bo7cXDG8Z1nfSp0KoemTcw== 0000950135-04-005563.txt : 20041203 0000950135-04-005563.hdr.sgml : 20041203 20041203161122 ACCESSION NUMBER: 0000950135-04-005563 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20041130 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041203 DATE AS OF CHANGE: 20041203 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FAIRCHILD SEMICONDUCTOR INTERNATIONAL INC CENTRAL INDEX KEY: 0001036960 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 043363001 STATE OF INCORPORATION: DE FISCAL YEAR END: 1226 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15181 FILM NUMBER: 041183940 BUSINESS ADDRESS: STREET 1: 82 RUNNING HILL RD CITY: SOUTH PORTLAND STATE: ME ZIP: 04106 BUSINESS PHONE: 2077758100 MAIL ADDRESS: STREET 1: 82 RUNNING HILL RD CITY: SOUTH PORTLAND STATE: ME ZIP: 04106 FORMER COMPANY: FORMER CONFORMED NAME: FSC SEMICONDUCTOR CORP DATE OF NAME CHANGE: 19970424 8-K 1 b52615fse8vk.htm FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC. e8vk
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 30, 2004

FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)
         
Delaware
(State or other jurisdiction of
incorporation or organization) 		  001-15181
(Commission File
Number) 		  04-3363001
(I.R.S. Employer
Identification No.)

82 Running Hill Road
South Portland, Maine 04106
(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (207) 775-8100

Check the appropriate box below if the form 8-k filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

TABLE OF CONTENTS

Item 1.01. Entry into a Material Definitive Agreement
Item 7.01. Regulation FD Disclosure
Item 9.01. Financial Statements and Exhibits
Signature
Ex-10.1 Employment Agreement, dated December 1, 2004
Ex-10.2 Non Qualified Stock Option Agreement
Ex-10.3 Deferred Stock Unit Award Agreement
Ex-99.1 Press release dated November 30, 2004
Ex-99.2 Press release dated December 1, 2004
Ex-99.3 Press release dated December 3, 2004

Table of Contents

Item 1.01. Entry into a Material Definitive Agreement.

     On December 1, 2004 we entered into an employment agreement with Mark Thompson under which we agreed to employ Mr. Thompson as Executive Vice President, Manufacturing and Technology Group, for an initial term of two years, subject to automatic renewals for successive one-year periods unless either we or Mr. Thompson gives notice of non-renewal. The agreement provides for a base salary of at least $500,000 per year, subject to increases at the discretion of our Chief Executive Officer on a basis consistent with our payroll policies. The agreement also provides for a one-time recruitment bonus of $200,000, net of taxes. Mr. Thompson’s annual incentive target amount under our Enhanced Fairchild Incentive Plan is 80% of his base salary (actual bonus amounts range from 0% to 200% of the target amount, depending on whether we achieve or exceed pre-established financial performance goals). The agreement also provides for standard relocation and other employment benefits in accordance with our applicable programs and policies.

     Under the agreement, if Mr. Thompson’s employment is terminated by us for any reason other than “cause,” or by Mr. Thompson for “good reason” (as those terms are defined in the agreement), we will pay him two times his base salary and annual bonus target amount in effect at the time of termination. In addition, if we fail to promote Mr. Thompson to President and CEO and appoint him to our board of directors within 60 days after our existing CEO ceases to serve in those positions, or by December 1, 2005 at the latest, Mr. Thompson could resign for “good reason” and claim the severance benefits described above. In the event of a “change in control” (as defined in the agreement), if Mr. Thompson’s employment is terminated within 6 months before or 12 months after the change in control, then the aforementioned severance payment must be paid in a lump sum within 14 days after the termination. If Mr. Thompson’s employment is terminated within 6 months before the change in control, his deferred stock units and stock options will vest upon the change in control unless the change in control is initiated by us and Mr. Thompson continues in the same or substantially similar position in the successor corporation. The agreement prohibits Mr. Thompson from competing with us during, and for one year after, the term of his employment.

     Equity Awards. Under the agreement, Mr. Thompson also received a grant of options to purchase 200,000 shares of our common stock and an award of 50,000 deferred stock units, each dated December 1, 2004 and vesting over the following four years. These equity awards are not made under any of our stock or option plans, but are granted, administered and interpreted as if they were made under the Fairchild Semiconductor Stock Plan. The equity awards are covered by separate award agreements. The DSU agreement entitles Mr. Thompson to receive a number of shares of our common stock equal to the number of vested units on settlement dates selected by him. Mr. Thompson’s options are non-qualified stock options and have an exercise price of $16.70 per share, reflecting the fair market value of the underlying shares on the grant date. The options have an eight-year term.

     Copies of Mr. Thompson’s employment agreement, non-qualified stock option agreement and DSU agreement are attached hereto as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3 respectively, and are incorporated herein by reference.

 

Table of Contents

Item 7.01. Regulation FD Disclosure.

     On November 30, 2004 we issued a press release announcing our employment of Mr. Thompson. A copy of the press release is included as Exhibit 99.1 to this report and incorporated herein by reference.

     On December 1, 2004 we updated our fourth quarter 2004 outlook. Further information is included in our press release included as Exhibit 99.2 to this report and incorporated herein by reference.

     On December 3, 2004 we issued a press release reporting Mr. Thompson’s equity awards under Section 303A of the New York Stock Exchange Listed Company Manual. A copy of the press release is included as Exhibit 99.3 to this report and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits

c) Exhibits

10.1   Employment Agreement, dated December 1, 2004, between Fairchild Semiconductor Corporation and Mark Thompson.
 
10.2   Non-Qualified Stock Option Agreement, dated December 1, 2004, between Fairchild Semiconductor International, Inc. and Mark Thompson.
 
10.3   Deferred Stock Unit Award Agreement, dated December 1, 2004, between Fairchild Semiconductor International, Inc. and Mark Thompson.
 
99.1   Press release dated November 30, 2004.
 
99.2   Press release dated December 1, 2004.
 
99.3   Press release dated December 3, 2004.

Signature

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

         
      Fairchild Semiconductor International, Inc.
 
        
  Date: December 3, 2004   /s/ Paul D. Delva
     
      Paul D. Delva
      Vice President and General Counsel

 

EX-10.1 2 b52615fsexv10w1.txt EX-10.1 EMPLOYMENT AGREEMENT, DATED DECEMBER 1, 2004 EXHIBIT 10.1 EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered into as of December 1, 2004 between Mark Thompson (the "EXECUTIVE") and Fairchild Semiconductor Corporation, a Delaware corporation (the "COMPANY"). For ease of reference, this Agreement is divided into the following parts: PART 1 -- TERM, DUTIES AND SCOPE, COMPENSATION AND BENEFITS DURING EMPLOYMENT (Sections 1-4) - Position and Duties - Salary - EFIP Bonus - Equity Awards - Other PART 2 -- COMPENSATION AND BENEFITS IN CASE OF ACTUAL OR CONSTRUCTIVE TERMINATION (Sections 5-6) - Termination PART 3 -- COMPENSATION AND BENEFITS IN CASE OF A CHANGE IN CONTROL (Section 7) PART 4 -- CONFIDENTIALITY AND NON-DISCLOSURE, FORFEITURE, INTELLECTUAL PROPERTY, NON-COMPETITION AND NON-SOLICITATION, REMEDIES, SUCCESSORS, MISCELLANEOUS PROVISIONS, SIGNATURE PAGE (Sections 8-14) - Confidentiality and Non-Disclosure - Forfeiture in Case of Certain Events - Non-Competition and Non-Solicitation - Miscellaneous TERMS For good and valuable consideration, the adequacy and receipt of which are hereby acknowledged, the Company and the Executive, intending to be legally bound, agree as follows: PART 1 TERM, DUTIES AND SCOPE, COMPENSATION AND BENEFITS DURING EMPLOYMENT SECTION 1. TERM OF AGREEMENT (a) Term. Unless sooner terminated as provided in this Agreement, the term of this Agreement will begin on the date hereof (the "EFFECTIVE DATE") and will end on the second anniversary of the Effective Date (the "INITIAL TERM"). The term of this Agreement will be automatically extended for one or more successive one-year periods (each a "RENEWAL TERM") unless the Company or the Executive gives the other written notice of non-renewal at least six months before the end of the Initial Term or the applicable Renewal Term, as the case may be. The Initial Term and any Renewal Term are collectively referred to as the "TERM." (b) Termination or Resignation. Subject to the other terms of this Agreement, including those in Part 2, either the Company or the Executive may terminate the Executive's employment with the Company at any time and for any reason or no reason upon written notice to the other party, with effect as of the date specified in such notice. SECTION 2. DUTIES AND SCOPE OF EMPLOYMENT (a) Position. The Company will employ the Executive during the Term in the position of Executive Vice President, Manufacturing and Technology Group, reporting to the Chief Executive Officer. The Executive will be given duties, responsibilities and authorities that are appropriate to this position. In the event the Company promotes the Executive to the positions of President and Chief Executive Officer of the Company, the Company and the Executive shall negotiate competitive compensation, benefits and other employment terms and conditions to be set forth in a written agreement to replace this Agreement in its entirety upon the effectiveness of such a promotion. (b) Obligations. During the term of employment under this Agreement, the Executive shall devote the Executive's full business efforts and time to the business and affairs of the Company as needed to carry out his duties and responsibilities hereunder subject to the overall supervision of the Chief Executive Officer. The foregoing shall not preclude the Executive from engaging in appropriate civic, charitable, religious or other non-profit activities or from devoting a reasonable amount of time to private investments or from serving on the boards of directors of other entities, provided that those activities do not interfere or conflict with the Executive's duties or responsibilities to the Company. SECTION 3. BASE COMPENSATION During the Term, the Company shall pay the Executive, as compensation for services, a base salary of at least $500,000 per year. Salary increases will be considered after the first anniversary 2 of this Agreement, or sooner in the discretion of the Chief Executive Officer, on a basis consistent with Company policies. SECTION 4. OTHER COMPENSATION (a) Recruitment Bonus. The Company shall pay the Executive a one-time recruitment bonus equal to $200,000 on a tax-assisted basis (the "RECRUITMENT BONUS"), provided, that, if (i) the Company terminates the Executive's employment at any time for Cause, (ii) Executive breaches Section 8 (other than a breach with no substantial impact on the Company) following his termination of employment for any reason and, if such breach is capable of cure, Executive has not cured such breach within 30 days of written notice thereof, (iii) Executive breaches Section 10 following his termination of employment for any reason, (iv) there is a finding of the invalidity or unenforceability of Sections 8 or 10, as further provided in and in accordance with Section 11, or (v) within two years after the Effective Date, the Executive terminates his employment for any reason other than Good Reason or his death or Disability, then the Executive shall repay (A) in the case of clauses (i)-(iv), the entire amount of the Recruitment Bonus or (B) in the case of clause (v), a pro rata share of the Recruitment Bonus reflecting the portion of the two-year period he is not employed, to the Company within 10 days after the effective date of such termination or other event. Any such repayment shall include the amount of taxes paid by the Company in respect of the Recruitment Bonus, net of any such taxes recoverable by the Company as a result of such repayment. The Recruitment Bonus will be paid to the Executive in two installments of $100,000 each, the first within 10 days after the Effective Date and the second before January 31, 2005. (b) EFIP. During the Term the Executive will be enrolled in the Enhanced Fairchild Incentive Plan ("EFIP"), at a participation level of at least 80%. By way of example only, if an EFIP bonus is paid at the 100% target level, the Executive would receive a bonus equal to 80% of his earnings during the measurement period. For the 2004 measurement period, if an EFIP bonus is paid at the 100% target level, the Executive will receive a bonus payment reflecting 80% of actual 2004 earnings. For the 2005 measurement period only, the Company shall pay the Executive an EFIP bonus at a minimum 100% target level, based on the Executive's 2005 earnings and EFIP participation level in effect for that year, whether or not such a bonus is paid at that or any other level to any other EFIP participants for 2005. If EFIP bonuses are paid above the 100% target level, the Executive will be eligible for additional payments in accordance with the plan. (c) Equity Awards. (1) Deferred Stock Units and Stock Options. The Executive shall receive a grant of 50,000 deferred stock units ("DSUS") and a grant of options to purchase 200,000 shares of Fairchild Semiconductor International, Inc. ("FSII") common stock, subject to the following terms. The foregoing grants will not be made under any stock or option plan of the Company or FSII, but will be granted, administered and interpreted as if such grants had been made under, and subject to, the 3 Fairchild Semiconductor Stock Plan and standard forms of executive agreements (the "EQUITY AWARD AGREEMENTS") as in effect on the date hereof and as such plan may be amended from time to time (the "PLAN"). The Plan and Equity Award Agreements are hereby incorporated in this Agreement as if fully set forth herein. The grant date for these grants will be the Effective Date. These grants will vest in 25% increments on each of the first four anniversaries of the grant date, if in each case the Executive remains employed by the Company on such anniversary. The Executive will be solely responsible for any taxes associated with the receipt, vesting, exercise or delivery of shares or cash under the foregoing equity awards, and the Company will make appropriate withholdings from any distributions of shares or cash thereunder. (2) No Eligibility for Grants in 2005. A portion of the foregoing equity awards are made in lieu of any that would otherwise be made to the Executive as part of the Company's annual grant program for 2005, and, accordingly, the Executive shall not receive any grants of DSUs or options under such program in 2005. The Executive will be eligible to receive additional equity awards upon promotion or under any other grant or program that the Company may undertake, with respect to the Executive or otherwise, in 2005. (3) Additional Grants After 2005. So long as he is employed by the Company after 2005, the Executive shall receive grants of stock options, DSUs or other equity-based awards, subject to the applicable Company plans governing such awards, covering a number of shares as recommended by independent compensation consultants and determined by the compensation committee of the Company's board of directors. (d) Tax and Financial Planning Assistance. The Executive will be entitled to receive up to $15,000 per year in personal tax and financial planning services at the Company's expense on a tax-assisted basis. (e) Relocation and Other Benefits. The Executive will be entitled to relocation benefits (including the payment of moving expenses, home sale and home purchase assistance) in accordance with applicable Company programs and policies. The Company will provide temporary living arrangements in the Portland, Maine area for the Executive and his family for up to one year at the Company's expense. The Executive will be entitled to participate in Company-paid executive long-term disability and long-term care insurance, and to participate in the Company's health insurance, dental insurance, vision care, short-term disability, basic and supplemental life insurance and personal savings (including 401(k) and 401(k) benefit restoration) plans as well as other benefit plans and fringe benefits and perquisites available to other executives of the Company. To the extent any of the payments, perquisites or benefits under this Section 6(e) are taxable to the Executive, they will be provided on a tax-assisted basis. (f) Paid Vacation. During the Term, the Executive shall be entitled to a minimum of four weeks of paid vacation per calendar year, such vacation to extend for such periods and to 4 be taken at such intervals as shall be appropriate and consistent with the proper performance of the Executive's duties hereunder. (g) Business Expenses and Travel. During the Term, the Executive shall be authorized to incur and shall be reimbursed for all necessary and reasonable travel, entertainment and other business expenses in connection with the Executive's duties hereunder. (h) Legal Fee Reimbursement. In the event of one or more disputes regarding this Agreement, or any other agreement relating to Executive's employment with the Company or its successor, any of which disputes arises on or after the occurrence of a Change in Control (as defined in Section 7 hereof), the Company or its successor shall pay all of Executive's legal fees and expenses associated with such disputes. (i) Indemnification. Executive shall receive indemnification as a corporate officer of the Company to the maximum extent extended to the other officers of the Company. Following the termination of Executive's employment for any reason, the Company agrees to honor the indemnification agreement previously entered into with Executive to the maximum extent permitted by applicable law. PART 2 COMPENSATION AND BENEFITS IN CASE OF TERMINATION WITHOUT CAUSE OR FOR GOOD REASON SECTION 5. TERMINATIONS AND RELATED DEFINITIONS Part 2 of the Agreement, consisting of Sections 5 and 6, describes the benefits and compensation, if any, payable in case of certain terminations of employment. In this Agreement, (a) "CAUSE" means (1) a willful failure by the Executive to substantially perform the Executive's duties under this Agreement, other than a failure resulting from the Executive's complete or partial incapacity due to physical or mental illness or impairment, (2) a willful act by the Executive that constitutes gross misconduct and that is materially injurious to the Company, (3) a willful breach by the Executive of a material provision of this Agreement (including Sections 8 or 10) or (4) a material and willful violation of a federal or state law or regulation applicable to the business of the Company that is materially and demonstrably injurious to the Company, provided that no act, or failure to act, by the Executive shall be considered "willful" unless committed without good faith and without a reasonable belief that the act or omission was in the Company's best interest; and provided, further, that, if the failure, act, breach or other basis for finding Cause under this Agreement is capable of being cured, then no finding of Cause shall be made unless the Executive has failed to cure such failure, act, breach or other basis within 30 days after receiving written notice thereof from the Company; (b) "DISABILITY" means that the Executive, at the time the notice is given, has been unable to perform the Executive's duties under this Agreement for a period of not less than six consecutive months as a result of the Executive's incapacity due to physical or mental illness; and 5 (c) "GOOD REASON" means any of the following or as otherwise provided in this Agreement: (1) a reduction in the Executive's base salary other than as part of a broader executive pay reduction, (2) a reduction in the Executive's EFIP participation level other than as part of a broader executive reduction, (3) a material change in the employment benefits available to the Executive, if such change does not similarly affect all employees of the Company eligible for such benefits, (4) a material reduction in the Executive's duties, responsibilities or authority as then in effect, (5) a requirement to relocate, except for office relocations that would not increase the Executive's one-way commuting distance by more than 35 miles or (6) the Company's failure, for any reason, to promote the Executive to the positions of President and Chief Executive Officer and appoint him to the boards of directors of FSII and the Company by the earlier of (i) 60 days after Kirk P. Pond ceases for any reason to serve in such positions or (ii) December 1, 2005, provided in each case the Executive remains employed by the Company and is willing and available to serve in such capacities on the date in question. SECTION 6. TERMINATION BY COMPANY WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON (a) Severance. If, during the Term, the Company terminates the Executive's employment for any reason other than Cause (including as a result of the Executive's death or Disability), or if the Executive terminates his employment for Good Reason, then, provided the Executive (or his legal representative, if applicable) executes the release of claims described in Section 6(b), and subject to Section 6(c), the Company will pay the Executive, in a lump sum or, at the Company's or the Executive's option, in installments over up to 12 months following the effective date of such termination, an amount equal to two times the sum of (i) the Executive's base salary in effect on such termination date and (ii) the amount of the bonus the Executive would receive under the Company's EFIP program, assuming a 100% payout based on the Executive's base salary and EFIP incentive level in effect immediately prior to such termination (whether or not such a bonus has been or is expected to be paid to other executives or employees of the Company for the fiscal period in which such termination occurs). If EFIP bonuses are later paid to EFIP participants at a level higher than 100% in respect of the last fiscal period during which the Executive had been employed by the Company, then the Company shall pay the Executive two times the difference between the amount that would have been paid to the Executive had the Executive remained employed by the Company, and been entitled to receive such bonus, and the amount determined under clause (ii) above. If at the time of such a termination the EFIP program has been discontinued or replaced, then the amount payable under clause (ii) above shall be the maximum amount that the Executive is entitled to receive under any incentive bonus program in which he is then participating. The Executive will be responsible for all taxes relating to such payments and the Company will make all required withholdings of all such taxes. In addition, the Company shall continue to provide medical benefits for the Executive and his eligible dependents, under COBRA coverage, at the Company's expense for two years following the effective date of such termination. At the time of such termination, the Company shall pay the Executive in cash for all accrued and unused vacation time. 6 (b) Release of Claims. As a condition to the receipt of the payments and benefits described in Section 6(a), the Executive (or his legal representative, if applicable) shall be required to execute a release of all claims arising out of the Executive's employment or the termination thereof, including any claim of discrimination under U.S. state or federal law or any non-U.S. law, but excluding claims for indemnification from the Company under any indemnification agreement with the Company, its certificate of incorporation or bylaws, or claims under applicable directors' and officers' insurance policies. If the Executive executes such a release, then the Company shall release the Executive from all claims arising out of the Executive's employment with the Company, other than any claims arising (before or after termination) under Sections 8 or 10 of this Agreement. (c) Conditions to Receipt of Payments. Without limiting the Company's other rights or remedies in the even of the Executive's breach of any provision of this Agreement, the obligation of the Company to provide the payments described in this Section 6 is subject to the Executive's continuing compliance with Sections 8 and 10 during and after the Term, and also is subject to the related provisions of Section 11. (d) No Mitigation. The Executive shall not be required to mitigate the amount of any payment or benefit contemplated by this Section 6, nor shall any such payment or benefit be reduced by any earnings or benefits that the Executive may receive from any other source; provided that if the Executive becomes employed by another employer following termination of his employment by the Company and such employer provides the Executive with comparable health plan coverage, the Company shall no longer be obligated to provide the continued medical benefits described in Section 6(a). PART 3 COMPENSATION AND BENEFITS IN CASE OF A CHANGE IN CONTROL SECTION 7. CHANGE IN CONTROL (a) Payment. In the event of a Change in Control, if the Executive's employment is terminated by the Company other than for Cause (including as a result of the Executive's death or Disability), or by the Executive for Good Reason (any such termination by the Company or the Executive, a "QUALIFYING TERMINATION"), in either case within the time period beginning six months before the Change in Control and ending 12 months after the Change in Control, the cash payment under Section 6(a) will be paid in a lump sum within 14 days after the date of such termination. Any obligation of the Company under this Section 7 will survive any termination of this Agreement. If the Executive is employed by the Company at the time of a Change in Control or if his employment was terminated in a Qualifying Termination no more than six months before the Change in Control, the Executive's DSUs and stock options shall vest upon a Change in Control unless the Change in Control is initiated by the Company and the Executive continues in the same or substantially similar position in the successor corporation. If a Change in Control occurs within three months before or after the end of the Term, the Term shall automatically be extended an additional 12 months from the expiration date of the prior Term. 7 (b) Definition. A "CHANGE IN CONTROL" means the happening of any of the following events in one transaction or a series of related transactions (for purposes of this Section 7 only, the "COMPANY" means Fairchild Semiconductor International, Inc., a Delaware corporation, and not any of its subsidiaries): (1) An acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")) (any of which, a "PERSON") resulting in such Person having beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then-outstanding shares of common stock of the Company (the "OUTSTANDING COMPANY COMMON STOCK") or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the "OUTSTANDING COMPANY VOTING SECURITIES"); excluding, however, the following: (A) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (D) any acquisition pursuant to a transaction which complies with clauses (i), (ii) and (iii) of Section 7(b)(3); or (2) A change in the composition of the board of directors of the Company (the "BOARD") such that the individuals who, as of the Effective Date, constitute the Board (such Board shall be hereinafter referred to as the "INCUMBENT BOARD") cease for any reason to constitute at least a majority of the Board; provided, however, for purposes of this definition, that any individual who becomes a member of the Board subsequent to the Effective Date, whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board; or (3) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of shares or assets of another company ("CORPORATE TRANSACTION"); excluding, however, such a Corporate Transaction pursuant to which (i) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 50% of, respectively, the 8 outstanding shares of common stock (or equity interests), and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or equivalent governing body, if applicable), as the case may be, of the entity resulting from such Corporate Transaction (including an entity which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (other than the Company, any employee benefit plan (or related trust) of the Company or such entity resulting from such Corporate Transaction) will beneficially own, directly or indirectly, 20% or more of, respectively, the outstanding shares of common stock (or equity interests) of the entity resulting from such Corporate Transaction or the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors (or equivalent governing body, if applicable) except to the extent that such ownership existed prior to the Corporate Transaction, and (iii) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors (or equivalent governing body, if applicable) of the entity resulting from such Corporate Transaction; or (4) The approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. PART 4 CONFIDENTIALITY AND NON-DISCLOSURE, FORFEITURE, INTELLECTUAL PROPERTY, NON-COMPETITION AND NON-SOLICITATION, REMEDIES, SUCCESSORS, MISCELLANEOUS PROVISIONS, SIGNATURE PAGE SECTION 8. CONFIDENTIAL INFORMATION (a) Acknowledgement. The Company and the Executive acknowledge that the services to be performed by the Executive under this Agreement are unique and extraordinary and that, as a result of the Executive's employment, the Executive will be in a relationship of confidence and trust with the Company and will come into possession of Confidential Information (as defined below) that is (1) owned or controlled by the Company, (2) in the possession of the Company and belonging to third parties or (3) conceived, originated, discovered or developed, in whole or in part, by the Executive. "CONFIDENTIAL INFORMATION" means trade secrets and other confidential or proprietary business, technical, personnel or financial information, whether or not the Executive's work product, in written, graphic, oral or other tangible or intangible forms, including specifications, samples, records, data, computer programs, drawings, diagrams, models, customer names, ID's or e-mail addresses, business or marketing plans, studies, analyses, projections and reports, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and software systems and processes. 9 Any Confidential Information that is not readily available to the public shall be considered to be a trade secret and confidential and proprietary, even if it is not specifically marked as such, unless the Company advises the Executive otherwise in writing. (b) Nondisclosure. The Executive agrees that the Executive will not, without the prior written consent of the Company, directly or indirectly, use or disclose Confidential Information to any person, during or after the Executive's employment, except as may be necessary in the ordinary course of performing the Executive's duties under this Agreement. The Executive will keep the Confidential Information in strictest confidence and trust. This Section 8(b) shall apply indefinitely, both during and after the Term. (c) Surrender Upon Termination. The Executive agrees that in the event of the termination of the Executive's employment for any reason, whether before or after the Term, the Executive will immediately deliver to the Company all property belonging to the Company, including documents and materials of any nature pertaining to the Executive's work with the Company, and will not take with the Executive any documents or materials of any description, or any reproduction thereof of any description, containing or pertaining to any Confidential Information. It is understood that the Executive is free to use information that is in the public domain, but not as a result of a breach of this Agreement. (d) Forfeiture in Certain Events. The Company may, in its sole discretion, in the event of (i) any termination of employment of the Executive for Cause, (ii) any breach by the Executive of Sections 8 (other than a breach with no substantial impact on the Company) following his termination of employment for any reason, which breach, if capable of cure, is not cured within 30 days of written notice thereof, (iii) any breach by the Executive of Section 10 following his termination of employment for any reason or (iv) any finding of the invalidity or unenforceability of Sections 8 or 10 as further provided in Section 11, (A) cancel any outstanding award of stock options, restricted stock, deferred stock units or other award granted to the Executive under a Company plan or otherwise (an "AWARD"), in whole or in part, whether or not vested or deferred, such cancellation to be effective as of a date specified in written notice to the Executive, which date shall be no earlier than the date such notice is given, or (B) following the exercise or payment of an Award, the Company may require the Executive to repay to the Company any gain realized or payment received upon the exercise or payment of such Award (with such gain or payment valued as of the date of exercise or payment). Such repayment obligation shall be effective upon notice of demand thereof to Executive, and repayment shall be due and payable to the Company as of a date which is at least 30 days after the Executive receives such notice, which notice may provide for an offset to any future payments owed by the Company or any subsidiary to the Executive if necessary to satisfy the repayment obligation. Any determinations under this paragraph will be made by the Company in good faith and in its sole discretion. This Section 8(d) shall apply during and following the Term of this Agreement, but shall have no application following a Change in Control. 10 SECTION 9. ASSIGNMENT OF RIGHTS OF INTELLECTUAL PROPERTY The Executive will promptly and fully disclose all Intellectual Property to the Company. The Executive hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) the Executive's full right, title and interest in and to all Intellectual Property. The Executive will execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and do such other acts (including the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company and its affiliates to enforce any patents, copyrights or other proprietary rights to the Intellectual Property. "INTELLECTUAL PROPERTY" means inventions, discoveries, developments, methods, processes, compositions, works, concepts and ideas (whether or not patentable or copyrightable or constituting trade secrets) conceived, made, created, developed or reduced to practice by the Executive (whether alone or with others, whether or not during normal businesses hours or on or off Company premises) during the Executive's employment with the Company that relate to any business, venture or activity being conducted or proposed to be conducted by the Company or its subsidiaries at any time during the term of the Executive's employment with the Company. SECTION 10. RESTRICTIONS ON ACTIVITIES OF THE EXECUTIVE (a) Acknowledgments. The Executive agrees that he is being employed under this Agreement in a key management capacity with the Company, that the Company is engaged in a highly competitive business and that the success of the Company's business in the marketplace depends upon its goodwill and reputation for quality and dependability. The Executive further agrees that reasonable limits may be placed on his ability to compete against the Company and its affiliates as provided in this Agreement so as to protect and preserve their legitimate business interests and goodwill. (b) Agreement Not to Compete or Solicit. (1) During the Non-Competition Period (as defined below), the Executive will not engage or participate in, directly or indirectly, as principal, agent, employee, corporation, consultant, investor or partner, or assist in the management of, any business which is Competitive with the Company (as defined below). (2) During the Non-Competition Period, the Executive will not, directly or indirectly, through any other entity, hire or attempt to hire, any officer, director, consultant, executive or employee of the Company or any of its affiliates during his or her engagement with the Company or such affiliate. During the Non-Competition Period, the Executive will not call upon, solicit, divert or attempt to solicit or divert from the Company or any of its affiliates any of their customers or suppliers or potential customers or suppliers of whose names he was aware during his term of employment (other than customers or suppliers or potential customers or suppliers contacted by the Executive solely in connection with a business that is not Competitive with the Company). 11 (3) The "NON-COMPETITION PERIOD" means the period during which Executive is employed by the Company and the following 12 months. (4) A business shall be considered "COMPETITIVE WITH THE COMPANY" if it is engaged in any business, venture or activity in the Restricted Area (as defined below) which competes or plans to compete with any business, venture or activity being conducted or actively and specifically planned to be conducted within the Non-Competition Period (as evidence by the Company's internal written business plans or memoranda) by the Company, or any group, division or affiliate of the Company, at the date the Executive's employment under this Agreement is terminated. (5) The "RESTRICTED AREA" means the United States of America and any other country where the Company, or any group, division or affiliate of the Company, is conducting, or has proposed to conduct within the Non-Competition Period (as evidenced by the Company's internal written business plans or memoranda), any business, venture or activity, at the date the Executive's employment under this Agreement is terminated. (6) Notwithstanding the provisions of this Section 10, the parties agree that (A) ownership of not more than three percent (3%) of the voting stock of any publicly held corporation, or ownership of not more than one percent (1%) of a privately held entity, shall not, in and of themselves, constitute violations of this Section 10 and (B) working as an employee of an entity that has a stand-alone division or business unit which is Competitive with the Company shall not, of itself, constitute a violation of this Section 10 if the Executive is not, in any way (directly or indirectly, as principal, agent, employee, corporation, consultant, advisor, investor or partner), responsible for, compensated with respect to, or involved in the activities of such stand-alone division or business unit and does not (directly or indirectly) provide information or assistance to such stand-alone division or business unit. SECTION 11. REMEDIES It is specifically understood and agreed that any breach of the provisions of Section 8 or 10 of this Agreement would likely result in irreparable injury to the Company and that the remedy at law alone would be an inadequate remedy for such breach, and that in addition to any other remedy it may have, the Company shall be entitled to enforce the specific performance of this Agreement by the Executive and to obtain both temporary and permanent injunctive relief without the necessity of proving actual damages. Without limiting the generality of the foregoing provisions of this Section 11, it is understood and agreed that the payment of the Recruitment Bonus under Section 4(a), the grants of equity awards under Section 4(c) and the Company's promise to provide the severance payments and other benefits described in Section 6(a) are made subject to the condition that (i) the Executive's obligations under Sections 8 and 10 are and will remain specifically enforceable against the Executive in accordance with those sections and (ii) if, in an action by the Company against the Executive for the breach or alleged breach of such sections, a court of competent jurisdiction finds that all or any part of those sections is invalid or 12 unenforceable for any reason, then the Company may, without limiting its other remedies at law or equity, enforce all of the remedies available to it under this Agreement, including without limitation the remedies described in Section 8(d). SECTION 12. SEVERABLE PROVISIONS The provisions of this Agreement are severable and the invalidity of any one or more provisions shall not affect the validity of any other provision. In the event that a court of competent jurisdiction shall determine that any provision of this Agreement or the application thereof is unenforceable in whole or in part because of the duration of scope thereof, the parties hereby agree that such court, in making such determination, shall have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable and that this Agreement in its reduced form shall be valid and enforceable to the fullest extent permitted by law. SECTION 13. SUCCESSORS (a) Company's Successors. The Company will require any successor (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business or assets, by an agreement in substance and form satisfactory to the Executive, to assume this Agreement and to agree expressly to perform this Agreement in the same manner and to the same extent as the Company would be required to perform it in the absence of a succession. The Company's failure to obtain such agreement prior to the effectiveness of a succession shall be a breach of this Agreement and shall entitle the Executive to all of the compensation and benefits to which the Executive would have been entitled under this Agreement if the Company had terminated the Executive's employment for any reason other than Cause, on the date when such succession becomes effective. For all purposes under this Agreement, except as otherwise provided in this Agreement, the term "Company" shall include any successor to the Company's business or assets that executes and delivers the assumption agreement described in this Section 13(a), or that becomes bound by this Agreement by operation of law. (b) Executive's Successors. This Agreement and all rights of the Executive under this Agreement shall inure to the benefit of, and be enforceable by, the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. SECTION 14. GENERAL PROVISIONS (a) Amendment, Waiver. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Executive and by an authorized officer of the Company (other than the Executive). This Agreement and any payments, awards and benefits hereunder are subject to modification in accordance with Section 409A of the Internal Revenue Code of 1986, as amended, as added by the American Jobs Creation Act of 2004, and any rules and regulations relating to such section, as necessary, but only as necessary, to comply with 13 the terms of such section, rules and regulations and to avoid adverse tax effects on either the Company, Executive, or both. No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time. (b) Whole Agreement; Interpretation. No agreements, representations or understandings (whether oral or written and whether express or implied) that are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof. The reference table on the first page and the headings in this Agreement are for convenience of reference only and will not affect the construction or interpretation of this Agreement. The word "or" is used in its non-exclusive sense. Unless otherwise stated, the word "including" should be read to mean "including without limitation" and does not limit the preceding words or terms. All references to "Sections" or other provisions in this Agreement are to the corresponding Sections or provisions in this Agreement. All words in this Agreement will be construed to be of such gender or number as the circumstances require. (c) Notice. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered, mailed by U.S. registered or certified mail, return receipt requested, or sent by a documented overnight courier service. In the case of the Executive, mailed notices shall be addressed to the Executive at the home address maintained in the Company's records. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of the Chairman of the Board of Directors, with a required copy to the attention of the Corporate Secretary. (d) Setoff. The Company may set off against any payments owed to the Executive under this Agreement any debt or obligation of the Executive owed to the Company. (e) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Maine, irrespective of Maine's choice-of-law principles. (f) Arbitration. Except as otherwise provided with respect to the enforcement of Sections 8 and 10, any dispute or controversy arising out of the Executive's employment or the termination thereof, including any claim of discrimination under U.S. (state or federal) or non-U.S. law, shall be settled exclusively by arbitration in Portland, Maine, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction. (g) No Assignment of Benefits. The rights of any person to payments or benefits under this Agreement shall not be made subject to option or assignment, either by voluntary or involuntary assignment or by operation of law, including bankruptcy, garnishment, attachment or other creditor's process, and any action in violation of this Section 14(g) shall be void. 14 (h) Limitation of Remedies. If the Executive's employment terminates for any reason, the Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, including under the severance policies of the Company or any subsidiary. (i) Taxes. Except where specified in this Agreement as "tax assisted", any payment made to the Executive under this Agreement shall be inclusive of any and all federal, state, local and foreign income, Social Security, Medicare, other payroll or any other taxes paid or payable at any time by the Executive as a result of such payment ("TAXES"), and subject to applicable withholding. If in this Agreement an amount is specified as "tax-assisted", then the referenced amount is exclusive of any and all Taxes paid or payable by the Executive as a result of such payment, and all such Taxes (and Taxes on such Tax-reimbursement payments) shall be paid by the Company. (j) Discharge of Responsibility. The payments and other benefits under this Agreement, when made in accordance with the terms of this Agreement, shall fully discharge all responsibilities of the Company to the Executive that existed at the time of termination of the Executive's employment. IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written. The Executive has consulted, or has had the opportunity to consult, with counsel (who is other than the Company's counsel) prior to execution of this Agreement. EXECUTIVE /s/ Mark Thompson ----------------------------------------------- Mark Thompson FAIRCHILD SEMICONDUCTOR CORPORATION By /s/ Kirk P. Pond ---------------------------------------- Its Chairman, CEO & President 15 EX-10.2 3 b52615fsexv10w2.txt EX-10.2 NON QUALIFIED STOCK OPTION AGREEMENT EXHIBIT 10.2 [FAIRCHILD SEMICONDUCTOR LOGO] NON-QUALIFIED STOCK OPTION AGREEMENT This is a Non-Qualified Stock Option Agreement dated December 1, 2004 (the "Grant Date") between Fairchild Semiconductor International, Inc. (the "Company") and Mark Thompson, a salaried employee of the Company or one of its subsidiaries ("you" or the "Optionee"). This option grant is made under and granted in accordance with the Employment Agreement entered into between you and Fairchild Semiconductor Corporation on the date hereof, as such Employment Agreement may be amended or restated from time to time (the "Employment Agreement"). Capitalized terms used and not defined in this Agreement shall have the meanings given to them in the Fairchild Semiconductor Stock Plan (the "Plan"). This option agreement consists of this document, the Employment Agreement and the Plan. Any conflict between the terms of the Plan and the terms of the Employment Agreement will be resolved in favor of the Employment Agreement, read without reference to the Plan. OPTION GRANT; The Company grants you the option to purchase up to 200,000 EXERCISE PRICE shares of the Company's Common Stock at an exercise price of $16.70 per share. OPTION TERM; The term of your option is 8 years plus one day from the Grant VESTING Date. Your option terminates at the end of the term and cannot be exercised after the term. You can exercise your option only to the extent it has vested. Subject to accelerated vesting as specified in the Employment Agreement, your option will vest in increments, as follows: Percentage Vested (including portion that Vesting Date vested the preceding year) 1st Anniversary of Grant Date ..................... 25% 2nd Anniversary of Grant Date...................... 50% 3rd Anniversary of Grant Date...................... 75% 4th Anniversary of Grant Date...................... 100% provided that your option will vest upon a Change In Control (as defined in the Employment Agreement) in accordance with the terms of the Employment Agreement. TERMINATION OF You must remain an employee of the Company or an Affiliate to EMPLOYMENT be able to exercise your option, except as follows, or as otherwise provided in your Employment Agreement: Retirement, Disability or death. If your employment terminates because of your Retirement or Disability (as those terms are defined in the Plan) or your death, then you (or your estate) will have five years from your termination date to exercise your option, unless the option term ends earlier, in which case you (or your estate) will have until the end of the term to exercise. In addition, if your employment terminates because of your Retirement or Disability and you die within the five-year exercise period, your estate will have at least one year after your death to exercise, unless the option term ends earlier, in which case your estate will have until the end of the term to exercise. Termination by the Company. If your employment is terminated for Cause (as defined in the Employment Agreement), your option will be terminated, whether or not vested, and you may have to repay any gains on prior exercised options as provided in Section 8(d) and Section 11 of the Employment Agreement. If your employment is terminated by the Company not for Cause and not as a result of your Retirement, Disability or death, or if you voluntarily terminate for Good Reason (as defined in your Employment Agreement) then you (or your estate) will have 90 days from your termination date to exercise your option, unless the option term ends earlier, in which case you (or your estate) will have until the end of the term to exercise. All other cases. If your employment terminates because you quit, or for any other reason other than those stated above, you (or your estate, if you die within the period) will have 30 days from your termination date to exercise your option, unless the option term ends earlier, in which case you (or your estate) will have until the end of the term to exercise. Regardless of the cause of your termination, you (or your estate) can exercise your option only to the extent it is vested on your termination date. NON- Your option is not transferable except by will or the laws of TRANSFERABILITY decent and distribution. During your lifetime only you can exercise your option. This option shall not be subject to attachment or similar process. Any attempted sale, pledge, assignment, transfer or other disposition of your option contrary to the provisions of this agreement, or the levy of any attachment or similar process upon your option, shall be null and void without effect. 1 MISCELLANEOUS Nothing in this agreement gives you the right to remain employed by the Company or any subsidiary. This agreement shall be governed by the laws of the State of Maine, without regard to conflicts of laws principles. The section and paragraph headings in this agreement are for convenience of reference only and shall not affect the construction or interpretation of this agreement. SIGNATURES Your signature and the signature of an authorized officer of the Company below indicate your and the Company's agreement to the terms of this Non-Qualified Stock Option Agreement as of the Grant Date. FAIRCHILD SEMICONDUCTOR OPTIONEE: INTERNATIONAL, INC. /s/ Mark Thompson /s/ Kirk P. Pond ----------------------- ----------------- Mark Thompson Kirk P. Pond SSN/Global ID: ________ Chairman, President and CEO EX-10.3 4 b52615fsexv10w3.txt EX-10.3 DEFERRED STOCK UNIT AWARD AGREEMENT EXHIBIT 10.3 [FAIRCHILD SEMICONDUCTOR LOGO] DEFERRED STOCK UNIT AGREEMENT PARTICIPANT: Mark Thompson EMPLOYEE ID: ____________ GLOBAL ID: ____________ DATE OF GRANT: December 1, 2004 NUMBER OF DEFERRED STOCK UNITS GRANTED: 50,000 THIS AGREEMENT, effective as of the Date of Grant set forth above, is between Fairchild Semiconductor International, Inc., a Delaware corporation (the "Company", "we", "our" or "us") and the Participant named above ("you" or "yours"). This Agreement sets forth the terms and conditions governing the grant of the Deferred Stock Units ("Units") specified above, and is made under and granted in accordance with the Employment Agreement entered into between you and Fairchild Semiconductor Corporation on the effective date hereof, as such Employment Agreement may be amended or restated from time to time (the "Employment Agreement"). Capitalized terms used and not defined in this Agreement shall have the meanings given to them in the Fairchild Semiconductor Stock Plan (the "Plan"). This Agreement consists of this document, any related Settlement Election Form, the Employment Agreement and the Plan, it being understood and agreed that the grant of Units is not made under the Plan but shall be governed as if made under the Plan. Any conflict between the terms of the Employment Agreement and the Plan shall be resolved in favor of the Employment Agreement, read without reference to the Plan. You and the Company agree as follows: 1. APPLICATION OF This Agreement and your rights under this Agreement are PLAN; subject to all the terms and conditions of the Plan, as it ADMINISTRATION may be amended from time to time, as well as to such rules and regulations as the Committee may adopt. It is expressly understood that the Committee that administers the Plan is authorized to administer, construe and make all determinations necessary or appropriate to the administration of Units awarded under this Agreement, all of which shall be binding upon you to the extent permitted by the Plan and not inconsistent with the Employment Agreement. 2.VESTING Subject to accelerated vesting as specified in the Employment Agreement, the Units will vest (becoming "Vested Units") on the following Vesting Dates if you are employed by or in the service of the Company or an Affiliate on those dates: Percentage Vested (including portion that Vesting Date vested the preceding year) 1st Anniversary of Grant Date............ 25% 2nd Anniversary of Grant Date............ 50% 3rd Anniversary of Grant Date............ 75% 4th Anniversary of Grant Date............ 100% provided that your Units will vest upon a Change In Control (as defined under Section 409A of the Internal Revenue Code) as if such event also constituted a Change in Control under the terms of the Employment Agreement, but any accelerated vesting as a result of a Change in Control shall not be recognized as a Settlement Date or other distributable event except to the extent permitted under that Code Section and specified in your Settlement Election Form. 3. RIGHTS AS You will not be entitled to any privileges of ownership of STOCKHOLDER the shares of Common Stock underlying your Units(the "Shares") unless and until Shares are actually delivered to you under this Agreement. 4. DIVIDENDS You will be credited with additional Deferred Stock Units having a value equal to declared dividends, if any, with record dates that occur prior to the settlement of any Units as if such Units had been actual Shares, based on the Fair Market Value of a Share on the applicable dividend payment date. Any such additional Deferred Stock Units shall be considered Units under this Agreement and shall also be credited with additional Deferred Stock Units as dividends, if any, are declared, and shall be subject to the same restrictions and conditions as Units with respect to which they were credited. Notwithstanding the foregoing, no such additional Deferred Stock Units will be credited with respect to any dividend in connection with which Units are adjusted pursuant to Section 3(c) of the Plan. 5. SETTLEMENT OF (a) Time of Settlement. Each Vested Unit will be settled by UNITS the delivery of one Share to you or, in the event of your death, to your designated beneficiary, promptly following the date or dates (any such date, the "Settlement Date") you have elected on the attached Settlement Election Form. You may change the Settlement Election Date one time only, and only to a later date, as provided in the Settlement Election Form. (b) Termination Prior to Settlement Date. If your employment or service with the Company is terminated prior to any Settlement Date, your Units will be treated as specified in the Settlement Election Form. 6. TRANSFERABILITY Your Units are not transferable, whether voluntarily or involuntarily, by operation of law or otherwise, except as provided in the Plan. Any assignment, pledge, transfer, or other disposition, voluntary or involuntary, of your Units made, or any attachment, execution, garnishment, or lien issued against or placed upon the Units, other than as so permitted, shall be void. 7. TAXES (a) Social Security and Medicare Taxes. You may be subject to Social Security tax, and you will be subject to Medicare tax on the date or dates your Units become Vested Units under Section 2 above, based on the Fair Market Value of the Shares underlying the Units that vest. The Company will pay such taxes on your behalf, including any income, Social Security and Medicare taxes attributable to the Company's payment of such taxes. Payments on your behalf will be reflected in your compensation for federal, state and local income tax purposes. (b) Income Taxes. You will be subject to U.S. federal income tax on the Settlement Date, based on the Fair Market Value of Shares received in settlement of Vested Units. YOU WILL BE SOLELY RESPONSIBLE FOR THE PAYMENT OF ALL SUCH INCOME TAXES, AS WELL AS FOR ANY OTHER STATE, LOCAL OR NON-U.S. TAXES THAT MAY BE RELATED TO YOUR RECEIPT OF THE SHARES. Not later than 90 days before any scheduled Settlement Date, you must arrange with the Company for the timely payment of all withholding taxes the Company is obligated to collect from you and remit to U.S. and other applicable tax authorities. (c) Tax Impact. The explanation of tax consequences above is based on current tax law and is subject to change. You are encouraged to consult a personal tax or financial advisor concerning the tax effect of this Agreement (and your Settlement Election rights) on your particular situation. The Company does not guarantee the tax results described above and will not be liable for any different tax effect on you. 8. MISCELLANEOUS (a) This Agreement shall not confer upon you any right to continue as an employee, or otherwise in the service, of the Company or any Affiliate, nor shall this Agreement interfere in any way with the Company's or such Affiliate's right to terminate your employment or service at any time. (b) Without limiting the generality of Section 1 above, with the approval of the Board, and subject to the terms of the Plan, the Committee may terminate, amend, or modify the Plan; provided, however, that no such termination, amendment, or modification of the Plan may in any way adversely affect your rights under this Agreement without your consent. (c) This Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or stock exchanges as may be required. (d) To the extent not preempted by U.S. federal law, this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware. (e) Section 409A of the Internal Revenue Code, as enacted in the American Jobs Creation Act of 2004 and amended thereafter, is hereby incorporated into this Agreement together with applicable regulations to be promulgated under that statute. The parties intend to operate this Agreement in compliance with that statute notwithstanding any provisions of this Agreement, the Plan, or any related Settlement Election Form to the contrary, and will amend this Agreement as necessary to comply with that statute, all to the extent necessary to avoid adverse or unintended tax effects for you, the Company or both. 9. SIGNATURES By the signatures below, the Participant and the authorized representative of the Company acknowledge agreement to this Deferred Stock Unit Agreement as of the Grant Date specified above. FAIRCHILD SEMICONDUCTOR PARTICIPANT: INTERNATIONAL, INC. /s/ Mark Thompson /s/ Kirk P. Pond ----------------- ---------------- Mark Thompson Kirk P. Pond Chairman, President and CEO TO ACCEPT YOUR DSU GRANT: 1. Sign BOTH copies of this Deferred Stock Unit Agreement; 2. Sign the BOTH copies of the Settlement Election Form; 3. Retain one copy of each for your records; 4. Return one copy of each in the enclosed envelope. [FAIRCHILD SEMICONDUCTOR LOGO] DEFERRED STOCK UNIT SETTLEMENT ELECTION FORM This Settlement Election Form relates to the following grant of Deferred Stock Units: PARTICIPANT: Mark Thompson EMPLOYEE ID: ____________ GLOBAL ID: ____________ DATE OF GRANT: December 1, 2004 NUMBER OF DEFERRED STOCK UNITS GRANTED: 50,000 1. SETTLEMENT CHECK ONLY ONE OPTION: ELECTION _____ SPECIFIED DATE. Subject to Sections 2 and 3 below, I elect to have all Vested Units that I may hold under the Deferred Stock Unit Award Agreement to which this election relates settled by delivery of Shares to me on ____________________, which date is at least one year following the Grant Date of such Units. If the date specified occurs before the last scheduled Vesting Date under this grant, then Units that vest after such specified date will be settled promptly following any such subsequent Vesting Date(s). __X__ VESTING DATES. Subject to Sections 2 and 3 below, I elect to have Vested Units that I may hold under the Deferred Stock Unit Award Agreement to which this election relates settled by delivery of Shares to me promptly following each date or dates on which vesting of Units occurs. 2. AUTOMATIC I hereby acknowledge and agree that (a) if my employment is SETTLEMENT UPON terminated for any reason other than Cause, Death or EARLIER Disability (as defined under Section 409A of the Internal TERMINATION Revenue Code), any Vested Units will be settled on the first anniversary of my termination date, (b) if my employment is terminated for Cause, all units will be immediately forfeited, and (c) if my employment is terminated for Death or Disability (as defined under Section 409A of the Internal Revenue Code), any Vested Units will be settled following my termination date. 3. ONE-TIME I understand that, once, but only once, I can change my CHANGE OF election to a Settlement Date that is at least 5 years ELECTION PERMITTED later than the date indicated in Section 1 above by filing a new Settlement Election Form with the Company at any time on or before the day (the "Change Deadline Day") that falls one year before the earliest Settlement Date that would occur based on my election in Section 1. I understand that I cannot change my election after the Change Deadline Day, that a change in my election will not take effect until one year after it is made, and that I cannot change my election more than once. If the Change Deadline Day falls on a day that is not a business day for the Company, then the last day to change the election in Section 1 will be the last business day to occur before the Change Deadline Day. Any new Settlement Election Form will revoke the previously filed Settlement Election Form, except that, if any Settlement Date purportedly elected on the new form does not comply with the above timing rules, then such new form will have no effect and the previously elected Settlement Date shall continue to apply. 4. SIGNATURE PARTICIPANT: DATED AS OF: /s/ Mark Thompson December 1, 2004 --------------------- Mark Thompson TO ACCEPT YOUR DSU GRANT: 1. Sign BOTH copies of the Deferred Stock Unit Agreement; 2. Sign the BOTH copies of this Settlement Election Form; 3. Retain one copy of each for your records; 4. Return one copy of each in the enclosed envelope. EX-99.1 5 b52615fsexv99w1.txt EX-99.1 PRESS RELEASE DATED NOVEMBER 30, 2004 EXHIBIT 99.1 FOR IMMEDIATE RELEASE www.fairchildsemi.com NOVEMBER 30, 2004 Corporate Communications: Fran Harrison 207-775-8576 fran.harrison@fairchildsemi.com Public Relations Firm: Barbara Ewen CHEN PR 781-466-8282 bewen@chenpr.com NEWS RELEASE FAIRCHILD SEMICONDUCTOR NAMES MARK THOMPSON EXECUTIVE VICE PRESIDENT, MANUFACTURING AND TECHNOLOGY GROUP - PREVIOUSLY VICE PRESIDENT AND GENERAL MANAGER OF TYCO ELECTRONICS POWER COMPONENTS DIVISION - MOST RECENTLY PRESIDENT AND CEO OF BIG BEAR NETWORKS South Portland, Maine - Fairchild Semiconductor (NYSE: FCS) today named Mark Thompson executive vice president, Manufacturing and Technology Group, a new position in the company. Thompson will be responsible for all manufacturing, technology and quality initiatives at Fairchild, reporting directly to Kirk Pond, the company's president, CEO and chairman of the Board. "Fairchild is extremely fortunate to attract a person with Mark's record of success in a variety of areas critical to Fairchild's future growth and development. Throughout his career, he has delivered exemplary financial results. In more than twenty years with Raychem and Tyco, Mark successfully and profitably ran and grew businesses that demanded efficient, high volume global manufacturing and utmost quality. His experience and success developing products and technologies will be critical to Fairchild as we strive to move the company to its next level of growth as The Power Franchise(R)," said Pond. "Mark has proven his financial competence and business acumen by running (more) FAIRCHILD SEMICONDUCTOR NAMES MARK THOMPSON EXECUTIVE VICE PRESIDENT, MANUFACTURING AND TECHNOLOGY GROUP PAGE 2 complete technology businesses and raising significant capital from some of the most highly regarded names in the venture industry, then successfully moving a start-up forward during one of the worst business cycles for emerging companies in two decades. I have great confidence in the role Mark will play in Fairchild's future." Thompson previously served as vice president and general manager of Tyco Electronics Power Components Division and, prior to its acquisition by Tyco, as vice president of Raychem Electronics OEM Group. Most recently, Thompson served as CEO of Big Bear Networks, which designs and manufactures highly integrated, opto-electronic interface solutions for next generation networks. Thompson will continue to serve on the Board of Directors of Big Bear Networks. Thompson holds a Ph.D. from the University of North Carolina and a bachelor's degree from State University of New York. He will be located at the company's corporate headquarters in South Portland, Maine. In seven years, Fairchild Semiconductor has transformed itself from a standard components company into the leading global supplier of power analog and power discrete technologies that optimize system power in almost every conceivable electronic application. As The Power Franchise, Fairchild offers the broadest portfolio of products that minimize, convert, manage and distribute power. With revenues currently running at $1.6 billion annually, Fairchild generates 77% of its annual revenues from its global power business and commands twice the market share of any competitor in the fast growing Asia Pacific region. ABOUT FAIRCHILD SEMICONDUCTOR: Fairchild Semiconductor (NYSE: FCS) is the leading global supplier of high performance power products critical to today's leading electronic applications in the computing, communications, consumer, industrial and automotive segments. As The Power Franchise(R), Fairchild offers the industry's broadest portfolio of components that optimize system power through minimization, conversion, management and distribution functions. Fairchild's 9,000 employees design, manufacture and market power, analog & mixed signal, interface, logic, and optoelectronics products from its headquarters in South Portland , Maine , USA and numerous locations around the world. Please contact us on the web at www.fairchildsemi.com. # # # EX-99.2 6 b52615fsexv99w2.txt EX-99.2 PRESS RELEASE DATED DECEMBER 1, 2004 EXHIBIT 99.2 FOR IMMEDIATE RELEASE www.fairchildsemi.com DECEMBER 1, 2004 Investor Relations: Dan Janson 207-775-8660 investor@fairchildsemi.com Corporate Communications: Fran Harrison 207-775-8576 fran.harrison@fairchildsemi.com Public Relations Firm: Barbara Ewen CHEN PR 781-466-8282 bewen@chenpr.com NEWS RELEASE FAIRCHILD SEMICONDUCTOR SEES SALES TRENDING TO HIGHER END OF GUIDANCE RANGE South Portland, Maine - Fairchild Semiconductor (NYSE: FCS), the leading supplier of high performance products that optimize system power, today announced that order rates have improved as expected, and the company now anticipates fourth quarter sales to trend more positively towards the higher end of the previous guidance of down 5 to 10% sequentially. The company further expects that gross margins will be at the lower end of the previously guided range of approximately 26% to 28%, influenced by moderate pricing pressure and continued efforts to adjust factory loadings to reduce distribution inventories. "Bookings improved during the first half of this quarter," said Kirk Pond, Fairchild's president, CEO and chairman of the Board. "Order rates increased from the third quarter levels but are still below the unsustainably high booking rates we experienced in the first half of this year. We're seeing improved demand from our distribution customers as they steadily reduce inventories in the channel. "Regarding end market demand, we've seen the greatest strength in products serving the consumer, computing and power supply markets. Order rates for the other end markets are as expected," stated Pond. "We continue to enjoy strong demand for our high power switches and power conversion products which benefit from this strength in the consumer and computing markets. (more) FAIRCHILD SEMICONDUCTOR SEES SALES TRENDING TO HIGHER END OF GUIDANCE RANGE PAGE 2 "Fairchild has also seen a significant improvement in demand from Asia and especially China," said Pond. "Demand in the other regions also improved throughout the quarter as expected. "During the fourth quarter, pricing pressure has been greatest on standard components and products with higher availability," said Pond. "We've seen a return to a more normal pricing environment for our recent 2005 contracts. "We continue to win new designs and grow our power business with a variety of exciting new products," stated Pond. "We won key designs for major display and appliance applications which continue to drive our fast growing power conversion product line. A major European customer has designed into their latest cell phone platform a number of our new power management solutions, including our integrated power regulator and power switch products. We also won key designs with our advanced power modules, including another win at a major Japanese appliance manufacturer. Our new products continue to drive the strong growth of The Power Franchise(R)." Fairchild expects to report its fourth quarter financial results before the market opens on January 25, 2005. SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS: Some of the paragraphs above contain forward-looking statements that are based on management's assumptions and expectations and that involve risk and uncertainty. Forward-looking statements usually, but do not always, contain forward-looking terminology such as "we believe," "we expect," or "we anticipate," or refer to management's expectations about Fairchild's future performance. Many factors could cause actual results to differ materially from those expressed in forward-looking statements. Among these factors are the following: changes in overall global or regional economic conditions; changes in demand for our products; changes in inventories at our customers and distributors; technological and product development risks, including the risks of failing to maintain the right to use some technologies or failing to adequately protect our own intellectual property against misappropriation or infringement; availability of manufacturing capacity; the risk of production delays; availability of raw materials; competitors' actions; loss of key customers, including but not limited to distributors; the inability to attract and retain key management and other employees; order cancellations or reduced bookings; changes in manufacturing yields or output; risks related to warranty and product liability claims; risks inherent in doing business internationally; regulatory risks and significant litigation. These and other risk factors are discussed in the company's quarterly and annual reports filed with the Securities and Exchange Commission (SEC) and are available at the Investor Relations section of Fairchild Semiconductor's web site at investor.fairchildsemi.com or the SEC's web site at www.sec.gov. ABOUT FAIRCHILD SEMICONDUCTOR: Fairchild Semiconductor (NYSE: FCS) is the leading global supplier of high performance power products critical to today's leading electronic applications in the computing, communications, consumer, industrial and automotive segments. As The Power Franchise(R), Fairchild offers the industry's broadest portfolio of components that optimize system power through minimization, conversion, management and distribution functions. Fairchild's 9,000 employees design, manufacture and market power, analog & mixed signal, interface, logic, and optoelectronics products from its headquarters in South Portland, Maine, USA and numerous locations around the world. Please contact us on the web at www.fairchildsemi.com. # # # EX-99.3 7 b52615fsexv99w3.txt EX-99.3 PRESS RELEASE DATED DECEMBER 3, 2004 EXHIBIT 99.3 FOR IMMEDIATE RELEASE www.fairchildsemi.com DECEMBER 3, 2004 Corporate Communications: Fran Harrison 207-775-8576 fran.harrison@fairchildsemi.com Public Relations Firm: Barbara Ewen CHEN PR 781-466-8282 bewen@chenpr.com NEWS RELEASE FAIRCHILD SEMICONDUCTOR REPORTS EQUITY AWARDS UNDER NYSE SECTION 303A South Portland, Maine- Fairchild Semiconductor (NYSE:FCS), the leading global supplier of high performance products that optimize system power, today announced that Mark Thompson, its new executive vice president, Manufacturing and Technology Group, was granted options to purchase 200,000 shares of common stock and 50,000 deferred stock units on December 1, 2004. The options and DSUs vest over the next four years. The options will have an 8-year term and an exercise price equal to $16.70, the fair market value of the underlying shares on the grant date. Vested DSUs will be settled in shares of Fairchild common stock on a future settlement date selected by Thompson at the time of the grant. Mr. Thompson's option and DSU grants are intended to meet the employment inducement award exemption provided under Section 303A.08 of the New York Stock Exchange Listed Company Manual. ABOUT FAIRCHILD SEMICONDUCTOR: Fairchild Semiconductor (NYSE: FCS) is the leading global supplier of high performance power products critical to today's leading electronic applications in the computing, communications, consumer, industrial and automotive segments. As The Power Franchise(R), Fairchild offers the industry's broadest portfolio of components that optimize system power through minimization, conversion, management and distribution functions. Fairchild's 9,000 employees design, manufacture and market power, analog & mixed signal, interface, logic, and optoelectronics products from its headquarters in South Portland , Maine , USA and numerous locations around the world. Please contact us on the web at www.fairchildsemi.com. # # # -----END PRIVACY-ENHANCED MESSAGE-----