Ongoing Cost Reduction definition
Ongoing Cost Reduction or “OCR” means the universe of cost reductions minus the “Incremental Cost Reductions” or “ICR” (as defined in Section 11.9.1 of the MCMSA). The parties acknowledge that they have arrived at the concepts of OCR and ICR by assigning cost reductions that Nortel Networks generally would have been able to achieve through its own efforts, and/or through Nortel Networks existing supply chain, had it retained the Transferred Business to the OCR category and cost reduction that Nortel Networks generally would not have been thus able to achieve to the ICR category. Flextronics commits to the cost reduction to the Prices as set out in Exhibit 6 of the MRSA. The implementation is set out in Exhibit 7 of the MRSA. Nortel Networks is responsible for generating the plan for the OCR for Year One. OCR cannot be used to fulfill the Committed ICR %. If Flextronics achieves more than the quarterly take-down in any given quarter, it is not obligated to pass through the cost reduction in the current quarter, or the quarter following, but will provide 100% of the reduction in the current quarter plus two. The implementation of this method would be the 1st day of the quarter following the full quarter of share. The Parties will enter into a supplement to the Joint CR Commit and Pricing Agreement (as defined in Exhibit 17-1 of the MCMSA) to reflect this incremental cost reduction.
Ongoing Cost Reduction or “OCR” means the universe of cost reductions minus the “Incremental Cost Reductions” or “ICR” (as defined in Section 11.9.1). The Parties acknowledge that they have arrived at the concepts of OCR and ICR by assigning cost reduction that Nortel Networks generally would have been able to achieve through its own efforts, had it retained the Transferred Business, to the OCR category and cost reduction that Nortel Networks generally would not have been thus able to achieve to the ICR category. OCR cannot be used to fulfill the Committed ICR %, as set out below Flextronics commits to the cost reduction to Prices as set out in the applicable VSHA. The implementation is set out in Exhibit 17-1. Nortel Networks is responsible for generating the plan for the OCRs for Year One.