Exhibit 10.7
POBS Plus -
Incentive System for Senior Management of METTLER TOLEDO
Regulations, valid as of March 14, 2000
1. Objectives and Participants
With this incentive plan our aim is to pursue two main objectives:
o To orient the remuneration of senior managers directly to the
achievement of annual operating plan targets and to give a special
reward for reaching and exceeding the plan.
o To emphasize the responsibility of each participant for the
top-ranking interest of the Group and to promote the attainment of
the overall corporate goals and success of the corporation.
Participation in the POBS Plus incentive scheme is determined by the
Group Management Committee and must be agreed in writing.
Criteria for participation are:
o Key management function which by virtue of its tasks and the
performance of its jobholder can significantly influence and
contribute to the overall success of the entire Group.
o Managers with leadership skills and high professional competence.
2. General Principles
2.1 In addition to the yearly base salary, participants are eligible for a
bonus which is based and calculated on the grade of target achievement.
This bonus is a percentage multiple of the base salary ranging from 0 -
150 %.
2.2 Bonus Scale
o The bonus starts after 90 % target achievement and can go up to
a maximum of 130 % target achievement.
o Within this span, for each point of target achievement, 3.75 % of the
base salary are calculated as bonus.
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Exhibit 10.7
2.3 Targets
All targets in POBS Plus are closely related to the yearly budgets and
business plans.
As a general rule, POBS Plus includes the following target categories
and weighting:
A Group targets 50 %
B Operative unit targets 40 %
C Personal targets 10 %
Target parameters and respective weighting within a category for
typical functions in POBS Plus are established for each business year
in the respective POBS Plus Scheme.
Typical parameters within A and B category and their relative weighting
are:
OPBIT 70 %
OCF 1 30 %
With B category, also sales, inventory turnover, tax savings, interest
payments (for finance / control functions) can be defined.
Each individual target is given a weighting of minimum 5 %. The total
number of targets defined should not exceed 10 and the sum of the
weightings must equal 100 %.
Based on the approved budget of the Group and Operative Units, the POBS
Plus Rules which quantify the actual values and levels of target
achievement per category and parameter are established.
Both, POBS Plus Scheme and Rules are proposed per business year by the
Group Management Committee and they have to be approved by the
Compensation Committee.
3. Target Setting
3.1 The requirements for complete and proper target achievement (100 %)
should be challenging and ambitious, on the other hand they have to be
realistic and attainable. For each participant they should be set in
such a way that they can be fulfilled clearly and to the full extent.
3.2 Personal targets (category C) are agreed at the beginning of each
business year for each participant with his / her supervisor. They need
to be clearly measurable.
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Exhibit 10.7
3.3 For each participant, a POBS Plus Target Achievement Sheet lists per
business year all targets set incl. their weighting and the
corresponding values / levels in line with the corresponding POBS Plus
Rules.
4. Target Assessment
4.1 At the end of the business year, target achievement is assessed by the
superior manager for each participant.
The degree of achievement of each individual target (range 90 % to max.
130 %) is multiplied by the weighting of the individual target to give
a points award for each individual target. The total score for all
targets lies between 90 and 130 points which number also corresponds to
the overall percentage of target achievement.
4.2 Personal targets (C category) are evaluated as follows:
Target Achievement
90 % Target not reached - result unsatisfactory
100 % Target reached, corresponding to the requirements - good result
110 % Clearly more than target achieved, requirements clearly exceeded,
in terms of value, time limits, quality, additional related
success - very good result
120 % Target achievement outstanding, additional major benefits/success
for the company reached, excellent result
130 % Target achievement exceptional, extraordinary additional value
to the company - unique result.
5. Bonus Calculation
The bonus is calculated in a percentage of the yearly base salary and
can vary from 0 to 150 % of this base salary depending on the total sum
of points reached in the target assessment.
Each full point above 90 and up to a maximum of 130 corresponds to a
bonus amount of 3.75 % of the base salary.
"Bonus Formula":
(Target Points - 90 Points) x 3.75 = Bonus in % of base salary
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Exhibit 10.7
Example
- Base Salary: 120'000
- Target Achievement 109.55 % or Points
(109.55 - 90) x 3.75 = 73.3125 % of base salary
- Bonus: 87'975
6. Payment
During the salary year (Jan. 1 - Dec. 31 of the calendar year or April
1 - March 31 of the following year), the annual base salary will be
paid, normally divided in 12 equal monthly installments. The
distribution of this basic amount, however, can vary in certain
countries.
The Company represented by the Group Management Committee can elect to
make a payment on account of the expected bonus in December of the
relevant business year which is calculated on a provisional basis using
projected results. The amount of such payment on account cannot exceed
50 % of the presumable bonus.
The final bonus is calculated as soon as the results of the business
year and the assessment of the target achievement are known. Payment
(or deduction) adjusted by any payment on account is usually made until
April following the end of the business year.
7. Termination of Employment during the Business Year
In case of termination in the first half-year of the business year, the
bonus is paid pro rata on a set 95 % target achievement. In case of
termination of employment in the second half-year, target achievement
is measured at the end of the year (usual procedure) and the bonus
calculated accordingly will be paid pro rata.
8. Accounting Rules for Bonus Payments
Bonus payments are accounted for in the business year to which the
bonus belongs. Appropriate accruals have to be made for this purpose in
the year end closing. Carry over into accounts of the payout year are
not allowed.
For the Group Management Committee:
Peter Burker
Head Human Resources
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