Safety

Integrity

Quality-Value-Profit

Aim & Purpose

Values

Our Credo with Guidelines

Leadership

Culture

Order of Importance

Strategy

Tactics

Methods and Goals

Policy

Procedures

Our Metrics

Incentives

Innovation

Partnerships

Additional benefits targeted are:

• Growing CleanAir
• Working smarter not harder
• Encourage new team formation
• Inclusive instead of exclusive
• Encouraging new talent
• Growing new business leaders

The significant changes for year 2004 are:

P & P should be open to all employees who meet the requirements listed in Appendix A.

Some of the requirement in  Appendix A have been modified and clairified.

New applicants for P & P must sponsored by a present P&P member and must be approved by a panel of board members

Applicants not accepted will be presented with a written summary of why.

Dollar target amounts shall be ajusted for inflation every year in March.

Percentage targets will be review by the board, adjusted as necessary and approved every year.

The QIP requirements will be review by the board, adjusted as necessary and approved every year.

Prior changes:

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 any CleanAir employee 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 other CleanAir profit sharing program.

You will receive the following Profit Sharing⁷ increases or decreases which will be recalculated each quarter and then paid starting on the 15^th of the following month.

• Sales will be for service and value added. Major cost of pass through and internal purchases will be backed out by accounting. For example, we will reduce CleanAir Express sales by the cost of manufacturing supplies, source sales by the cost of dioxin analysis.
• Each team can display their Quality System, Innovation System and Partnering System on their Intranet Site. The Winner of last quarter's QIP award will assess level of commitment and the performance again the plan or system and select a QIP award winner.
• At the option of the CleanAir board the increase in Base may be paid in CleanAir stock for one quarter.
• The Base adjustment will become effective for the next pay run after your election. Accounting will not back calculate.
• Transfer from one team to another will be transitioned 1^st quarter 100% old /0% new, 2^nd quarter 75%/25%, 3^rd 50%/50%, 4^th, 25%/75%.
• New venture or new startup team will be transitioned over 2 years.
• A/F, IT, MC, and TC teams can elect their profit and sales be calculated as the sum of all the other teams data.
• The cost of the entire program will be funded by team 90 so as not to cause ripples in team data.
• If the company trailing 12 months profit as a percent of sales exceeds 11%, and if the CEO and CFO both concur, all teams will be awarded the QIP Audit Team 1%.
• If the company trailing 12 months profit as a percent of sales exceeds 12%, and if the CEO and CFO both concur, all teams will be awarded the QIP Award Winner 1%.
• If the company trailing 12 months profit as a percent of sales exceeds 13%, and if the CEO and CFO both concur, all teams will be awarded the Innovation System 1%.
• If the company trailing 12 months profit as a percent of sales exceeds 14%, and if the CEO and CFO both concur, all teams will be awarded the Partnership System 1%.
• If the company trailing 12 months profit as a percent of sales exceeds 15 %, and if the CEO and CFO both concur, all teams will be awarded the Quality System 1%.

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)

• Lives the CleanAir Leadership Model
• Believes in CleanAir highest value and 10x price target as evident by actions.
• Understands profit and value constraints and works to maximize through put.
• EET is more than 2x PTO and everyone knows it.
• Frequently takes customer to lunch, dinner or out after work.
• Frequently works at home on weekends or evenings.
• Has developed new CleanAir software, products or service ideas.
• Has taken risks such as starting or joining a new CleanAir venture, market or group.
• Has a perfect attendance record and sets a great example for the CleanAir work ethic.
• Has taken related course work on own time and applied new knowledge or skills at CleanAir.
• Is recognized as a world leader by peers.

Application to the Pain & profit Sharing program shall be made in writing to the board by a sponsor.  Applicants may be asked to meet with the board or a board committee to describe level of interest.

Q - How often would target amounts be changed and who would make that decision?

A - I suggest using 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 last September 30 were $10.000,000 then the 15% increase would require the 4 quarters ending this September 30 sales to be $11,500,000.
 
 
 
 

Brenton Berridge

Clean Air Engineering

Bill:

I've looked over the proposed Profit and Pain Sharing plan for CleanAir Leaders. 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