The CleanAir System
Profit
and Pain Sharing
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The CleanAir System
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Profit
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Profit and Pain Sharing 2001 Updated 7 February 2001 The purpose of the plan is to reward value creation. Additional benefits targeted are:
The significant changes for the 2nd year are: Teams can elect to form a mega-team or group where the financials are aggregated for these teams and all in the group have the same % increase or decrease. Participation is not optional for team business leaders, they are designated Permanent Members and are responsible for the plan design. Election for participation is optional for others in the plan as of June 30, 2000 while working full time. Additionally anyCleanAiremployee meeting the conditions for application (see Appendix) can apply. Salary adjustments and salary offers for new employee are to be made without consideration of incentive programs. The salary to be use for comparison to market is 95% of Base Salary for those in the P & PS program. Base Salary6.is adjusted up 5% on entry into P $ PS program and down 5% when leaving. On entry into the P & PS program you agree to zero out any present ATO and discontinue participation in the ATO program. You will no longer be eligible for the otherCleanAirprofit sharing program. You will receive the following Profit Sharing7 increases or decreases which will be recalculated each quarter and then paid starting on the 15th of the following month.
APPENDIX A Guidelines for recommending someone for or applying for entry in the Pain & Profit Sharing program. Applicants should have the temperament to accept and live with an unpredictable salary. List of suggestion for qualifiers for entry. (Minimum requirement is 3 or more)
APPENDIX B - FAQ FAQ and Answers Q - How often would target amounts be changed and who would make that decision? A I suggest have an automatic change to the dollar amounts equal to inflation index. This program will be revisited annually by the leadership. Dollar targets were increased 5% for this year. Q - What is meant by the 4-Quarter Sales Increase of 15%? A ? We will compare the sales of the 4 quarters just completed to the year earlier number. For example if the sales for the 4 quarters ending 1998 September 30 were $10.000,000 then the 15% increase would require the 4 quarters ending 1999 September 30 sales to be $11,500,000. Brenton Berridge Clean Air Engineering www.cleanair.com Bill: I've looked over the proposed Profit and Pain Sharing plan forCleanAirLeaders. It looks like a good start, and I would support it in its present form. I would like to see an explicit option to modify the plan at least annually in case there are unforeseen problems with it. I have a few questions concerning implementation and clarification: • Regarding Footnote 1 that describes backing out costs for pass-through and internal purchases, is there a list of specific items that will be backed out for each group, or at least a set of criteria or definition of "major"? A ?Accounting will define this in a procedure to be distributed for comments prior to finalizing. Hopefully it will be large items or line item accounts that will not require a complicated process. • Are adjustments treated as changes to base pay (as opposed to lump sums)? A ? As temporary changes to pay. • Can the pain hammer reduce the adjustment to a negative number? A ? Yes. • Are like-adjustment targets additive? e.g., If 4-Qtr rolling profit is >15%, is the base increase 4% - 2% for meeting the 10% target plus 2% for meeting the 15% target? A ? Yes. • Are there any provisions for backing out of the program once you are in? A ? This program will be revisited annually by the leadership. I hope we can improve it every year if it works or dump it if it is a failure. Jim Wright |
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