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Sample Business Contracts

Home: Sample Business Contracts:

2007 Success Sharing Plan

Objectives

•: Provide strong incentives to achieve revenue and operating income plans
•: Allow employees to share in the company's results
•: Provide managers with the ability to award top performers

Eligibility/Administrative Guidelines

•

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

•: Commission
•: Account Management
•: Business Development
•: Consulting
•: Sales Support

•

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

		2006		2007
Funding Components		50% Booking 50% Operating Income		50% Bookings 50% Operating Income
Corporate Performance Funding		*Revenue* <95% = 0% 95 – 99% = 50% > or = 100% = 100%*		*Bookings* <95% = 0% 95 – 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%*
Employee Bonus Percent		Director: 8% Manager: 6% Employee: 4%		Director: 10% Manager: 6% Employee: 4%
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

		Corporate Component			Individual Component			Total
Annual Target		$	700.00		$	700.00		$	1,400 (35000*.04)
1H Target		$	350.00		$	350.00		$	700.00
1H Payout		$	350.00		$	175.00 (25% of pool)		$	525.00

Employee B

		Corporate Component			Individual Component			Total
Annual Target		$	700.00		$	700.00		$	1,400 (35000*.04)
1H Target		$	350.00		$	350.00		$	700.00
1H Payout		$	350.00		$	525.00 (75% of pool)		$	875.00