<DESCRIPTION>AMENDED AND RESTATED SHORT-TERM INCENTIVE PLAN
Amended and Restated Short-Term Incentive Plan
Establish and reinforce an entrepreneurial culture which values smart
risk-taking and continuous innovation to maximize operating results and
shareholder value. This executive compensation philosophy is best described as
"high risk, high reward".
B. Short-Term Incentive Plan (STIP)
1. Targets for Economic Profit (EP), Net Operating Profit (NOP)
and Earnings Per Share (EPS) are established annually as part
of the Company's semi-annual planning cycle. Targets must be
achieved after payment of STIP and charges for restricted
stock and stock options.
2. STIP has one funding pool based on:
a. EP and NOP for the two Business Segments (AMI DODUCO and
b. EP and EPS for Technitrol Corporate.
3. Achievement of the targets for EP, NOP and EPS (net of all
bonuses paid) creates one pool for eligible executives. The
amount of the pool is based on business performance, specific
incentive targets for each executive and individual executive
performance. This one incentive pool is created by multiplying
a portion of each executive's base salary by a percentage
designated by Technitrol's Compensation Committee for each
position. The intention of the Compensation Committee is to
award the entire pool, once earned; but it (the Compensation
Committee) retains the discretion to raise or lower the pool
total, as dictated by overall business performance. STIP, if
earned, is paid twice a year as follows:
a. Less than 80% of Target, no STIP Payout.
b. Greater than 80%, but less than 100% of Target, STIP
payout begins at 40% of full STIP and continues ratably
up to 100% of full STIP at 100% of Target.
c. 100% of Target, STIP Payout = 100% of full STIP.
d. Greater than 100% of Target up to 140% of Target, STIP
payout pays ratably up to a maximum of 200% of full
4. Individual performance modifiers of 0-150% of target award can
be applied at the discretion of the Compensation Committee.
The sum of the individual modifiers will not exceed 10% of the
aggregate pool amounts (i.e., 110% of the calculated, earned
5. Targets for EP, NOP and EPS vary semi-annually. Payouts for
the first half of each year are tied to the projections for
that period prepared in the Fall of the preceding year, STIP
awards, if earned, for the second half of each year are tied
to projections prepared in the Spring of the year in question.
6. The Compensation Committee approves the pool total, when
earned and calculated.
7. The CEO recommends to the Committee awards for the corporate
officers and the two Segment presidents. The Compensation
Committee reviews and approves the STIP awards for the CEO and
8. The President of each Segment allocates the pool for his
executives based on their targets and performance, in
consultation with the CEO.