Exhibit 10.9
NATIONAL DENTEX CORPORATION
LABORATORY
INCENTIVE COMPENSATION
PLAN
MAY 17, 2001
NATIONAL DENTEX CORPORATION
LABORATORY INCENTIVE COMPENSATION PLAN
OBJECTIVE:
To motivate individual performance and group teamwork directed toward superior
results in terms of:
- Increased sales volume,
- Maximum profit contribution through efficient operation and
management, and
- Career path development and job satisfaction for the laboratory's
personnel.
ELIGIBLE INDIVIDUALS:
Laboratory Presidents, supervisory management, and other designated key
employees.
INCENTIVE COMPENSATION POOL:
A pool will be created, consisting of 30% (or other % designated by the Company)
of that portion of the operating income of the laboratory, which exceeds a
"base" equal to 9 1/2% of net revenues exclusive of inter-company sales.
Operating income is defined as income before Division and corporate allocations.
Example:
Total Sales $1,005,000
Less: Inter-company sales 5,000
----------
Net Sales 1,000,000
----------
Operating Income 200,000
Less: Base (9 1/2% of net sales) 95,000
----------
Excess 105,000
Pool (30% of excess) $ 31,500
==========
DISTRIBUTION OF THE POOL:
FIXED PERCENTAGE PORTION:
Fixed shares, stated as a percent of the pool, are to be determined at the start
of the year and each designated participant is to be informed so that he or she
can work toward a visible goal.
LABORATORY PRESIDENTS:
Laboratory Presidents will be assigned between 10% and 25% of the pool as agreed
upon by the Laboratory President and Group Manager with approval of the Company
President. This percent will be arrived at considering the size of the
laboratory and its organization.
The Laboratory President's earned bonus will be 25% held back for further review
and thus only 75% will be distributed quarterly (see Distribution schedule
below).
The distribution of the held back portion of the Laboratory President's earned
bonus will be based on criteria other than financial, such as:
- Laboratory revenue growth,
- Market size, penetration, and competition,
- Personnel stability and development,
- Accuracy and timeliness in Corporate planning process,
- Involvement in Corporate programs, i.e. materials purchasing, accounts
receivable and inventory controls, asset management, recruiting,
training, and new product introduction and promotion.
Any Laboratory President's portion unpaid will revert to the Company. It will
not be available for distribution within the laboratory.
SUPERVISORY MANAGEMENT AND OTHER KEY EMPLOYEES:
All other fixed percentages, not more than 90% of the pool (including the
Laboratory President's %) shall be assigned to key personnel at the beginning of
each year, based on their overall contribution and responsibility levels. These
percentages may be changed during the year to reflect organizational or
operational changes, but only with the approval of the Laboratory President,
Group Manager, and Company President.
These other fixed participants earned bonus will be 25% held back for further
review and thus only 75% will be distributed quarterly (see Distribution
Schedule below).
The Laboratory President will make recommendations regarding the distribution of
the held back portion to the Group Manager, with final approval by the Company
President.
Any other fixed participant's portion unpaid will revert to the Discretionary
Pool for distribution to personnel within the laboratory.
DISCRETIONARY PORTION:
The remaining portion of the pool (at least 10%) will be reserved for the
discretionary distribution of the Laboratory President with the approval of the
Group Manager.
These awards will be to employees not otherwise designated in the Plan who make
exceptional contributions to the success of the laboratory.
None of this amount may be used to supplement the share of any individual
already receiving a fixed percentage distribution.
ADMINISTRATIVE PROVISIONS:
Shares will be calculated annually on the basis of the full years audited
operating results, and distributed promptly once these have been determined.
Quarterly progress payments will be paid, to be applied toward the annual
operating results according to the Distribution Schedule below. These
distributions will be made on the payroll following the 45th day after the end
of each quarter.
Eligibility of a participant to receive a full, or partial share requires
continuous employment with National Dentex Corporation. Promotion, transfer
within the Company, or retirement does not terminate eligibility. Distribution
to any participant in these categories is prorated to that portion of the year
he is employed in a position covered by the Plan.
In the event an individual terminates or has given notice of termination and
therefore forfeits participation, any earned and or unpaid shares will revert to
the Company.
Any deviation from the Plan requires the approval of the Company President.
This Plan may be revoked or revised by the Company, at any time, and does not
constitute a legally binding commitment or right of employment.
DISTRIBUTION SCHEDULE
Distribution (on or about)
Eligible ----------------------------------------------------------------
Participant Share Approval May 15 Aug 15 Nov l5 Feb 15
- ----------- --------- ---------- ---------- ---------- ---------- -------------------------
FIXED PORTION:
Laboratory %assigned Group 75% of 75% of 75% of 100% of and 25% of
President Manager Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4 Qtr. 1- 3
and earned earned earned earned earned
Company
President
Supervisor or other %assigned Laboratory 75% of 75% of 75% of 100% of and 25% of
Key Employee President, Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4 Qtr. 1- 3
Group earned earned earned earned earned
Manager
and
Company
President
DISCRETIONARY PORTION:
Other $ award Laboratory 75% 75% 75% 100% and 25%
Employees President of of of of of
and Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4 Qtr. 1-3
Group earned earned earned earned earned
Manager is is is is is
available available available available available
to to to to to
distribute distribute distribute distribute distribute