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EXHIBIT 10.4
UNITREND, INC.
CASH INCENTIVE PLAN
FY 2000
I. Introduction
A. THE OBJECT OF THE CASH INCENTIVE PLAN is to financially reward
all employees for their contribution to the success of
Unitrend, Inc. and to encourage continuous improvements in
productivity and performance by individual employees and the
Company as a whole.
B. PARTICIPANTS: This plan applies to all full-time employees of
Unitrend, Inc. "Full-Time Employee of Unitrend, Inc." shall
mean the party is paid on a regular basis by Unitrend, Inc.
and the party has executed all valid agreements pertaining to
employment as defined by the Legal Department. "Full-time"
shall mean working at least 35 hours a week and eligible to
participate in full-time employment benefits.
C. EFFECTIVE DATE: The Plan is effective for the Fiscal year,
beginning January 1, 2000 through December 31, 2000.
D. CHANGES IN PLAN: The Company presently has no plan to change
the Cash Incentive Plan during the fiscal year. However, the
Company reserves the right to modify the Cash Incentive Plan
in total or in part, at any time. Any such changes must be in
writing and ratified by a majority of the Board or a Committee
of the Board, as the Board may designate. (Hereinafter,
"Board" shall also include any Committee rightfully designated
by the Board.) The Board reserves the right to interpret the
Plan document as needed.
E. ENTIRE AGREEMENT: This Plan is the entire agreement between
Unitrend, Inc. and its employees regarding the subject matter
of this Plan and supersedes all prior compensation or
incentive plans or any written or verbal representations
regarding the subject matter of this Plan.
II. Bonus Plan Elements
A. BASE SALARY is the annual base salary in effect at the end of
the fiscal year or in the event of hourly employees, the total
gross pay for the year. Base Salary shall not include any
other compensation, including, but not limited to, previous
bonuses paid during the fiscal year, stock options or
reimbursements of any kind.
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B. BONUS BASIS PERCENTAGE is a percentage level of base salary
determined by the employment level, as set forth by the Board.
Level Bonus %
----- -------
Level 6 50%
Level 5 45%
Level 4 40%
Level 3 30%
Level 2 20%
Level 1 10%
C. INDIVIDUAL PERFORMANCE FACTOR is based upon the manager's
evaluation of the performance and contribution for the fiscal
year. (The President shall be evaluated by the Board.) This
factor may range from .9 through 1.3. The assigned factor may
also be a zero resulting in no contribution and therefore, no
bonus. A written performance evaluation, approved in advance
by the Board, is required in conjunction with any assigned
factor of zero.
Employees who are on a Written Warning or have been
reprimanded, in writing, more than once during the year, as
noted in their employment file, are not eligible to receive a
bonus. Any exception to this must be in writing and approved
by the Board.
D. COMPANY PERFORMANCE FACTOR consists of two elements: 50% based
upon achieving an established worldwide Revenue target and 50
% based upon achieving a worldwide Earnings Before Interest
and Tax (EBIT) target per the current plan. 80% of each
objective must be achieved for any bonus to be paid.
Targets are to be set before the end of the first quarter of
the fiscal year in which the Plan applies. All targets are to
be approved by the Board.
REVENUE EBIT CO. PERF. FACTOR MULTIPLIER
------- ---- ---------------- ----------
Less than 80% Less than 80% Less than 80% 0 (no bonus)
80-100% 80-100% 80-100% .8 - 1.0
Greater than 100% Greater than 100% 101%+ 2% for each 1%
over 100%
COMPANY PERFORMANCE FACTOR = (REVENUE + EBIT) / 2
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Example:
Actual Revenue Performance is 110% of goal
Actual EBIT Performance is 120% of goal
Revenue EBIT
------- ----
100% 100%
+20% (10%*2) +40% (20%*2)
--- ---
120% 140%
(120 + 140) / 2 = 130%
Company Performance Factor = 1.30
E. CUSTOMER SATISFACTION FACTOR is based upon achievement of an
overall worldwide customer satisfaction survey score, to be
commissioned or otherwise determined by the Board. The factor
may range from .95 - 1.20.
F. PRORATION FACTOR accounts for the number of calendar days that
the employee was in a bonus-eligible position. For example,
the Proration Factor for an employee who has been on the plan
the entire year will be "1.00." An employee who has been on
the plan for 6 months, will have a factor of ".50." In no case
shall the Proration Factor exceed 1.00.
Employees in the following situations will have a proration
factor less than "1.00":
- Participants in the Plan who transferred to a new
position not governed by the Plan.
- Employees who have been on the Plan less than 12
months (such as new hires).
- Employees who have been on a leave of absence during
the fiscal year. "Leave of Absence" shall mean four
(4) consecutive weeks in which the employee does not
work an average of 35 hours per week but retains
his/her position, excluding paid vacations.
Disability leave, Family Leave Act leave or any other
leave, for whatever purpose, shall be defined as a
Leave of Absence for the purposes of this Plan as
long as it meets the above description.
- Employees who have been on the Plan, terminated their
employment, and returned to a bonus-eligible position
all in the same fiscal year.
Any modification to the above schedule must be
approved by the next-level Manager and ratified by
the Board in advance of the year-end closing date.
G. BONUS FORMULA AND CALCULATION EXAMPLE: Assume a Level 3
participant with a base salary of $40,000 at the 30% level,
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individual performance factor of 1.10, company performance
factor of 110% (1.10), a customer satisfaction factor of 1.05
and a proration factor of .92 reflecting a 4 week Leave of
Absence.
Sample Calculation:
Individual Company Customer
Base Bonus Perform Perform Satisfaction Proration Total
Salary Basis % Factor Factor Factor Factor Bonus
------ ------- ------- ---------- ------------ --------- -----
$40,000 x .30 x 1.10 x 1.30 x 1.05 x .92 = $16,576.56
In this example, the Total Bonus equals 41% of Base Salary.
H. BONUS PAYMENTS: Bonuses will be paid after the close of the
fiscal year, typically in mid-to late February.
All bonuses are subject to tax as compensation, including, but
not limited to, withholding tax (at 28%), state income tax and
city tax as applicable. The Company will withhold taxes owed
on the bonuses awarded under this Plan, however, the employee
is responsible to assure all applicable taxes are paid on
time. The employee agrees, by accepting the bonus under this
Plan, to hold the company harmless and waive any action
against the Company pertaining to liability arising from the
bonus, including tax liability, interest and late fees.
III. PROCEDURES AND PRACTICES
A. PROCEDURE:
1. A list of eligible employees will be sent by Human
Resources to the Board for review at the beginning of
the fiscal year. Additions, deletions, assignments of
employment level or other changes to the list will be
made and the approved list will be returned to Human
Resources.
2. Once the list is confirmed, a copy of the Plan will
be sent to each participant.
3. Each eligible new hire and employees who become
eligible during the fiscal year shall receive a copy
of the Plan.
4. A month before fiscal year end, a list of eligible
employees with all changes made during the year will
again be sent to the Board for final review and
approval.
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B. BUSINESS CONDUCT: It is the established policy of Unitrend,
Inc. to conduct business with the highest standards of
business ethics. Unitrend, Inc. employees may not offer, give,
solicit or receive any payment that could appear to be a
bribe, kickback or other irregular type of payment from anyone
involved in any way with an actual or potential business
transaction. Gifts, favors and entertainment are allowed only
if they are consistent with our business practice, do not
violate any applicable law, are of limited value ($50.00 or
less) and would not embarrass Unitrend if publicly disclosed.
Any violation of this policy will result in a reciprocal
reduction in the employee's bonus for the current bonus
period.
C. TRANSFERS AND TERMINATIONS: Employees who are participants in
the Cash Incentive Plan and who transfer to a new position not
governed by this Plan will be eligible on a pro-rata basis for
the applicable period and paid as defined by the Plan. Any
exception to the Plan must be designated in writing and
approved by the Board.
A participant must be employed as of the last day of the
fiscal year to be eligible for a bonus. If an employee
terminates or is terminated, for any reason, during the fiscal
year, the employee is not eligible for the bonus. This Plan
shall not be construed to create a contract or entitlement to
a bonus of any kind except as determined by this Plan on the
last day of the fiscal year.
D. EMPLOYMENT AT WILL: The employment of all Plan participants at
Unitrend, Inc. is for an indefinite period of time and is
terminable at any time, with or without cause being shown or
advance notice by either party. This Plan shall not be
construed to create a contract of employment for a specified
period of time between Unitrend, Inc. and any Plan
participant.
FY 2000 Cash Incentive Plan
12/8/1999
Approved by the Board on: _December 10, 1999__
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