Sample Business Contracts

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2006 Success Sharing Plan

Objectives

Eligibility/Administrative Guidelines

•

Includes all full-time employees and certain part-time employees (see second bullet) not on the following plans:

•

Part-time employees must be employed for twelve months prior to payout date

•

Employees hired in first half are eligible for the second half bonus while those hired in the second half are not eligible for a bonus

•

Employees on performance improvement plan at anytime during the 6 month period are not eligible

•

Employees must be actively on payroll at the time of payment to receive an award

•: All awards calculated on the employee's base salary at the end of the award period

	2005	2006
Funding Components	50% Revenue 50% Operating Income	50% Bookings 50% Operating Income
Corporate Performance Funding	1H Revenue <92.5% = 0% 92.5 – 99% = 50% > or = 100% = 100%*	*Bookings* <90% = 0% 90 – 99% = 50% > or = 100% = 100%*
	*Operating Income* <95% = 0% 95 – 99% = 50% > or = 100% = 100%*	*Operating Income* <95% = 0% 95 – 99% = 50% > or = 100% = 100%
	2H Revenue and Operating Income <95% = 0% 95 – 99% = 50% > or = 100% = 100%*
Employee Bonus Percent	Director: 4-12% Manager: 3-9% Employee: 2-6%	Director: 4-12% Manager: 3-9% Employee: 2-6%
Individual Payout	50% Corporate performance paid out based on employee's bonus percent	50% Corporate performance paid out based on employee's bonus percent
	50% Individual performance paid out based on employee's bonus percent adjustable by managers based on employees performance	50% Individual performance paid out based on employee's bonus percent adjustable by managers based on employees performance
Timing	Halves—50% 1H and 50% 2H—stand alone	Halves—50% 1H and 50% 2H—year-to-date
	*Discretionary accelerators for over achievement in both operating income and revenue achievement	*Discretionary accelerators for over achievement in both operating income and revenue achievement

Payout Example

Assumptions:

•: 1H Corporate attainment is 100% = 100% funding/payout
•: Employee A is an individual contributor with an annual salary of $35,000 and is an average performer
•: Employee B is also an individual contributor with an annual salary of $35,000 and is a top performer

Employee A

Employee B