TRISTAR AEROSPACE CO. EXECUTIVE AND KEY EMPLOYEE INCENTIVE PLAN 1. PURPOSE AND
TERM OF PLAN. The purpose of the TriStar Aerospace Co. Executive and Key
Employee Incentive Plan (the "Plan") is to provide a cash incentive award with
respect to each fiscal year (each, a "Performance Period") of ...
TRISTAR AEROSPACE CO.
EXECUTIVE AND KEY EMPLOYEE INCENTIVE PLAN
1. PURPOSE AND TERM OF PLAN.
The purpose of the TriStar Aerospace Co. Executive and Key Employee
Incentive Plan (the "Plan") is to provide a cash incentive award with
respect to each fiscal year (each, a "Performance Period") of TriStar
Aerospace Co., a Delaware corporation (the "Company"), in order to
motivate certain executive officers and key employees of the Company
and its operating subsidiaries (each, a "subsidiary") to put forth the
maximum efforts towards the growth, profitability and success of the
Company and its subsidiaries and to encourage such individuals to
remain in the employee of the Company or the applicable subsidiary.
The Plan shall be effective as of April 1, 1998 and shall continue
until such time as the Board of Directors shall amend such Plan.
2. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by a committee (the "Committee"), which
shall be the Board of Directors of the Company (the "Board") or a
committee of the Board selected to administer the Company's 1998 Stock
Option Plan (the "Compensation Committee"). The Committee shall have
all the powers vested in it by the terms of the Plan, such powers to
include authority within the limitations described herein, to select the
persons to be granted awards under the Plan, to determine the time when
awards will be granted, to determine whether objectives and conditions
for earning awards have been met, to determine whether awards will be
paid at the end of the performance period or at any time thereafter, and
to determine whether an award or payment of an award should be reduced
The Committee also shall have full power and authority to administer
and interpret the Plan and to adopt such rules, regulations,
agreements, guidelines and instruments for the administration of the
Plan and for the conduct of its business as the Committee deems
necessary or advisable. The Committee's interpretations of the Plan,
and all actions taken and determinations made by the Committee pursuant
to the powers vested in and hereunder, shall be conclusive and binding
on all parties concerned, including the Company, its stockholders and
any person receiving an award under the Plan.
The Committee may delegate all or a portion of its power and authority
under the Plan to such officers or other employees of the Company or
any of its subsidiaries as it shall determine; provided, however, that
no delegation shall be made regarding selection of executive officers
or key employees of the Company who shall be granted awards in the
Plan, the amount and timing thereof, or the objectives and conditions
The Committee, in its discretion may grant awards to such executive
officers and key employees, based upon the recommendation of the chief
executive officer, as the Committee shall determine from time to time.
Executive officers and other key employees who are granted awards under
the Plan are referred to herein as "Participants." The Committee may
grant such awards for each Performance Period which equal no more than
the percent of each Participants base salary as set forth below:
PARTICIPANT PERCENTAGE OF BASE SALARY
Executive Officer 70%
Director/Regional Vice President 30%
Manager (1st level) 20%
Manager (2nd level) 15%
Other, exempt employees 10%
The number of Participants and identification of Participants which
qualify for the above classifications shall be determined by the
Committee, in its discretion, based upon the recommendation of the
chief executive officer.
(a) GRANTING OF AWARDS. The Company may inform each Participant by
letter (which letters need not be identical) of their participation in
the Plan with respect to a Performance Period. Such letter shall be in
such form as the Committee may from time to time approve and which
shall contain the terms and conditions, as determined by the Committee,
of a Participants potential award (expressed as a percentage of his/her
salary as described above in Section 3 of the Plan, as of the beginning
of the performance period) and the related performance targets;
provided, however, that in the event of any conflict between the
provisions of the Plan and any such award letters, the provisions of
the Plan shall prevail.
(b) PERFORMANCE TARGETS. With respect to each Performance Period, the
Committee, in its discretion, shall determine based upon the
recommendation of the chief executive officer, whether the Company has
met certain performance targets for each Performance Period. Such
performance targets shall be approved by the Committee, and may include
the following two elements, each of which shall represent 50% of the
total award to be paid to each Participant:
(i) CORPORATE PROFIT. Fifty percent (50%) of the award to be
granted by the Committee as described in Section 3 of this Plan
shall be based upon the Company achieving certain goals with
regard to the profit of the Company. Such performance target
shall include the following two components: (1) earnings and net
income and (2) inventory turns. The earnings and net income
component of such performance target shall represent 30% of the
total award to be paid to each Participant. The
inventory turns component of such performance target shall
represent 20% of the total award to be paid to each Participant.
If the Company meets 110% of its performance target with regard
to corporate profit, the Participant shall be entitled to receive
fifty percent (50%) of the total incentive award as determined by
the Committee. If the Company meets 100% of its performance
target with regard to corporate profit, the Participant shall be
entitled to receive forty percent (40%) of the total incentive
award as determined by the Committee. If the Company meets 95%
of its performance target with regard to corporate profit, the
Participant shall be entitled to receive thirty percent (30%) of
the total incentive award as determined by the Committee.
(ii) PERSONAL GOAL ACHIEVEMENT BY EACH PARTICIPANT. Fifty
percent (50%) of the award to be granted by the Committee as
described in Section 3 of this Plan shall be based upon the
Participant achieving certain goals known as "Personal Goal
Achievement." The Personal Goal Achievement shall be based upon
the following two components: (1) objective and measurable goals
determined by each Participant's supervisor and approved by the
executive officers; and (2) the Personal Goal Achievement of all
employees which directly report to such Participant. Thirty five
percent (35%) of each Participant's award shall be based upon the
first component of the Personal Goal Achievement set forth in (1)
above. Fifteen percent (15%) of each Participant's award shall
be based upon the second component of the Personal Goal
Achievement set forth in (2) above. If any Participant does not
have employees that directly report to such Participant, fifty
percent (50%) of such Participant's award shall be based upon
the first component of the Personal Goal Achievement.
(c) PAYMENT OF AWARDS. Awards for a Performance Period shall be
payable in cash to Participants who are employed at the time that the
Committee determines, in its sole discretion, shall be paid by the
Company. Quarterly advance payments may be made which equal one-half
(1/2) of that portion of an award based upon the Company's achievement
of the performance targets set forth in Section 3(b)(i) of the Plan
with regard to corporate profit during the first three quarters of
each Performance Period. At the end of each Performance Period, the
Committee shall determine the total Incentive attributable for the
Performance Period, less any quarterly payments made to such
Participants as described above, to determine the amount of Incentive
to be paid for each such Performance Period to each Participant.
5. TERMINATION OF EMPLOYMENT.
Subject to any written agreement between the Company and a Participant
(other than any award letter under the Plan), if the Participant's
employment with the Company or any subsidiary is terminated for any
reason, either by the Company, the subsidiary, or by the Participant,
before the Participant receives his or her award payout as determined
accordance with Section 4 above, the Participant shall immediately
forfeit such award; provided, however, that the Committee, in its sole
discretion, may elect on behalf of the Company to pay to such
Participant all or part of the award payout with respect to the
Performance Period that the Participant would have received had the
Participant's employment not been terminated.
6. MISCELLANEOUS PROVISIONS.
(a) GUIDELINES. The Committee may adopt from time to time written
guidelines or other policies for its implementation of the Plan.
(b) WITHHOLDING TAXES. The Company (or the relevant subsidiary) shall
have the right to deduct from all awards or payouts hereunder any
federal, state, local or foreign taxes required by law to be withheld
with respect to such awards or payouts.
(c) NO RIGHTS TO AWARDS. Except as set forth herein, no executive
officer, key employee or other person shall have any claim or right to
be granted an award under the Plan. Neither the Plan nor any action
taken hereunder shall be construed as giving any employee any right to
be retained in the employee of the Company, any subsidiary, or any of
their respective division or affiliates.
(d) COSTS AND EXPENSES. The costs and expenses of administering the
Plan shall be borne by the Company and shall not be charged to any
award or to any employee receiving an award.
(e) FUNDING OF PLAN. The Plan shall be unfunded, the Company shall
not be required to establish any specific or separate fund or to make
any other segregation of assets to assure the payment of any award
under the Plan.
7. AMENDMENT AND TERMINATION.
The Committee may at any time terminate the Plan, or may from time to
time amend the Plan in whole or in part, but no such action shall
adversely affect any rights or obligations with respect to any awards
or payouts thereto made under the Plan.