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Exhibit 10.39
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
This Amendment No. 1 to Employment Agreement (this "Amendment") is made
and entered into as of May 31, 2000, by and between Xxxxxx Co., a Pennsylvania
corporation (the "Company"), and Xxxxxx X. Xxxxxxxxxx ("Executive").
WHEREAS, the Company and Executive desire to enter into this
Amendment to amend certain terms of the Employment Agreement (the "Agreement").
NOW THEREFORE, the Company and Executive agree as follows:
1. AMENDMENT TO PERFORMANCE BASED COMPENSATION.
Section 3.2 of the Agreement shall be amended by deleting the first
paragraph and chart and replacing with the following:
In addition to the Base Salary provided for in Section 3.1 hereof,
commencing for the fiscal year 2000, Executive shall be eligible to
receive an annual cash bonus (prorated based on service) earned during
the calendar year in an amount equal to 70% of the Base Salary in
effect at the end of such calendar year based upon the extent to which
Xxxxxx Holding Co. (PA), Inc.'s ("Holdings") consolidated Earnings
Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as
defined in EXHIBIT 1 hereto, equals or exceeds the percentages of
target annual EBITDA with respect to such fiscal year in accordance
with the attached Exhibit 3.
2. REMAINING PROVISIONS.
All provisions of the Agreement not otherwise amended by this Amendment
shall remain in full force and effect.
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first above written.
XXXXXX CO., a Pennsylvania
Corporation
By: _____________________
Name: Xxxxxx X. Xxxxxx
Title: President and CEO
EXECUTIVE
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Xxxxxx X. Xxxxxxxxxx
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EXHIBIT 3
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XXXXXX PERCS
VARIABLE PAY BONUS COMPENSATION SYSTEM
EMPLOYEE SUMMARY
OBJECTIVE
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The objective of the Xxxxxx Variable Pay Bonus Compensation System is to
motivate associates to achieve exceptional EBITDA performance by providing
substantial financial rewards when such performance is attained.
ELIGIBILITY
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Participating associates shall be approved by the Board of Directors each year.
Participants must hold a position which impacts profitability and strategy,
generally Job Grade 12 and above or currently participating in the Company's
variable pay bonus program. Individuals impacting profitability, in lower
grades, may also be considered.
To be eligible a participant must be employed, designated and otherwise eligible
by June 30th and remain a participant for a minimum of six (6) months. Awards
generally will be prorated for participants who do not participate for a full
year.
At any time during the year, the Board may also designate new participants in
its sole discretion.
Only Board approved associates of the Company or its subsidiaries will be
eligible to participate in the Plan. Once a participant ceases to be an
employee, whether voluntarily or involuntarily, he or she shall automatically
cease to be a participant in the Plan, and shall cease to be entitled to receive
an award unless the participant retires, dies or becomes permanently disabled,
as noted herein. Participants must be employed by the Company at the time the
bonus is paid, unless the participant has retired, becomes permanently disabled
or is deceased (in which case, payment shall be made to the participants
estate).
An associate's participation in the Plan in any prior year(s) does not give the
associate the right to be a participant in the Plan in the current year or in
any subsequent year.
No associate shall be a participant in the Plan during any year in which he or
she is a participant in any other annual incentive plan of the Company or any of
its subsidiaries.
ADMINISTRATION
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The Board shall determine whether awards will be granted. The Board will also
determine which participants will receive an award and the amount of each award,
in its sole discretion. Due consideration will be given to the award guidelines,
performance against financial objectives, individual participant performance
against objectives, the recommendations of the Chief Executive Officer and the
appropriate Executive and Management Leadership Team representative(s) and such
other factors as the Board may deem appropriate, in its sole discretion.
Payments will be made in cash as soon as practical after audited financial
results are available, normally by March 15th of each year, to participants who
are regular full-time employees on the date of payment. Federal, State and/or
local taxes or other similar payments required by law will
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be withheld with respect to such payments, but no 401(k) or other similar
deductions will be made.
The Board will make bonus payments at a level commensurate with the
Corporation's overall performance, including adjustments consistent with past
bonus and current stock option plans (i.e. accrued costs for acquisitions,
extraordinary expenditures, unbudgeted gains/losses arising from a change in
accounting, etc.) as follows:
EBITDA PERFORMANCE POOL & INDIVIDUAL
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TO TARGET % OF TARGET BONUS
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110% 130%
105% 115%
100% 100%
95% 75%
90% 50%
less than 90% 0%
The bonus is calculated by multiplying 50% times the individuals EBITDA Target
bonus percent, times the individuals bonus percent to get the EBITDA portion of
the bonus percentage. Then the Personal Performance Factor ("PPF") portion is
calculated by multiplying 50% times the individuals EBITDA Target bonus percent,
times the individuals bonus percent times their PPF rating. Finally, the two (2)
percentages are added together to get the final bonus percentage.
Under this format, it is possible for individuals to earn awards greater or less
than the formula, however, there shall be a calculated fixed bonus pool for each
year and a cap on each individual target bonus of 150% of the participant's
target bonus percent. In the event that the sum of all individual bonus's exceed
the fixed bonus pool, each individual bonus will be proportionately reduced so
that the total pay out does not exceed the fixed bonus pool. However, additional
funding can be attained if business exceeds budgeted EBITDA and the Company
makes significant progress against strategic objectives as determined by the
Board of Directors.
No person shall have any claim or right to be granted an award under the Plan.
The decisions to pay or not to pay an award, the amount of the award to be paid,
and to whom an award will be paid, shall be made by the Board, in its sole
discretion. The Board may pay an award even when the results would not otherwise
call for an award payment. Likewise, the Board may elect not to pay awards even
when minimum objectives are met.
Any exceptions to the Plan must be approved in writing by the Chief Executive
Officer based on approval of the Board.
Nothing in the Plan or in any action taken hereunder shall affect the Company's
right to terminate at any time and for any reason the employment of any employee
who is a participant in the Plan.
The Plan may be amended, suspended, terminated or reinstated in whole or in part
by the Board of Directors.
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XXXXXX PERCS VARIABLE PAY BONUS COMPENSATION SYSTEM
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KEY COMPONENTS
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Core Funding Pool
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Total dollars calculated by summing the total of each individual's
particular target bonus percent multiplied by their base salary
multiplied by EBITDA adjustment factor as indicated in the 2000 EBITDA
Target chart below. Under this format, it is possible for individuals
to earn awards greater or less than the formula; however, there shall
be a calculated fixed bonus pool for each year. In the event that the
sum of all individual bonus's exceed the fixed bonus pool, each
individual bonus will be proportionately reduced so that the total pay
out does not exceed the fixed bonus pool.
2000 EBITDA TARGET
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$ (in millions) % of Target EBITDA Adjustment Factor Potential Total
% of Target Bonus Additional
Funding
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less than $67.05 less than 90% 0% 0 0%
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$67.05 90% 50% 0 50%
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$70.775 95% 75% 0 75%
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$74.5 100% 100% 20% 120%
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$78.225 105% 115% 20% 135%
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$81.95 110% 130% 20% 150%
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Potential Additional Funding - Strategic Objectives
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Additional plan funding can be attained if business exceeds budgeted
EBITDA and makes significant progress against strategic objectives as
determined by the Board of Directors.
Strategic Objectives are identified separately.
The Board of Directors, in its sole discretion, can approve additional
funding up to 20% for exceptional financial performance and significant
progress against strategic objectives. Therefore, the total pool could
be funded at 150% of target (130% maximum based upon EBITDA results and
an additional 20% based on significant progress of strategic
objectives).
The decisions to pay or not to pay an award, the amount of the award to
be paid, and to whom an award will be paid, shall be made by the Board,
in its sole discretion. The Board may pay an award even when the
results would not otherwise call for an award payment. Likewise, the
Board may elect not to pay awards even when minimum objectives are met.
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ADMINISTRATION
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Each individual participant in the program will be evaluated and performance
rated to reflect their own attainment of individual goals on a measure of 0 -
1.5 measured in 1/10th increments.
Example:
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Personal Performance
Factor/Modifier
(PPF) Description
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0 Did not attain any individual goals
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.5 Attained some individual goals
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.8 Attained most individual goals
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1.0 Attained all individual goals
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1.2 Exceeded individual goals
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1.5 Outstanding performance, greatly exceeded all individual goals
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Individual bonus payout has two (2) components:
1. 50% of individual's target bonus is based upon Enterprise
Financial Results (EBITDA) which may be adjusted consistent with
past bonus and current stock option plans (i.e. accrued costs for
acquisitions, extraordinary expenditures, unbudgeted gains/losses
arising from a change in accounting, etc.).
2. 50% of individual's bonus is based upon personal factors.
Therefore, a bonus can be "0" if the Company does not meet minimum EBITDA target
(if EBITDA is less than 90%) or up to a maximum of 1.5 times the individual
target if the Company achieves 110% of EBITDA Target and the individual receives
a 1.5 personal performance factor/modifier.
EXAMPLES:
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Individual Salary Bonus Percent
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1. $ 50,000 10%
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2. $ 75,000 15%
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3. $125,000 20%
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4. $175,000 50%
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5. $250,000 70%
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6. $300,000 95%
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To calculate the bonus amount, take 75% times the individuals EBITDA Target
bonus percent, times the individuals bonus % to get the EBITDA portion of the
bonus % and for the PPF portion, multiply 25% times the individuals EBITDA
Target bonus percent, times the individuals bonus % times their PPF rating. Add
these two (2) percentages together to get the final bonus percentage. See
examples below
FOR THE FOLLOWING EXAMPLES, ASSUME THAT THE TOTAL BONUS POOL HAS ADEQUATE
FUNDING EXCEPT FOR EXAMPLE #4.
1) Individual #1 above, assuming the Company reaches 95% of EBITDA and the
individuals PPF = .5
EBITDA PPF
Bonus = 50% (75% x 10%) + 50% (75% x 10% x .5)
3.75% + 1.875%
Total Bonus Percentage = 5.625%
[5.625% x $50,000]
Bonus = $2,812.50
2) Individual #2 above, assuming the Company reached 90% of EBITDA and the
individuals PPF = .9
EBITDA PPF
Bonus = 50% (50% x 15%) + 50% (50% x 15% x .9)
3.75% + 3.375%
Total Bonus Percentage = 7.125%
[7.125% x $75,000]
Bonus = $5,343.75
3) Individual #3 above, assuming the Company reached 110% of EBITDA and the
individuals PPF = 0
EBITDA PPF
Bonus = 50% (130% x 20%) + 50% (130% x 20% x 0)
13.0% + 0%
Total Bonus Percentage = 13.0%
[13.0% x $125,000]
Bonus = $16,250.00
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4) Individual #4 above, assuming the Company reached 100% of EBITDA and the
individuals PPF = 1.5
EBITDA PPF
Bonus = 50% (100% x 50%) + 50% (100% x 50% x 1.5)
25% + 37.5%
Total Bonus Percentage = 56.25
[62.5% x $175,000]
Total of all bonuses = 110% of total authorized bonus pool, therefore
bonuses must be proportionately reduced by pro-rata. (Ex. If pool =
$1,425,647 and total bonuses = $1,568,212, would need to reduce
each individual by 10%)
Bonus = $109,375 less proportionate reduction of $10,937.50
Total Final Bonus = $98,437.50
5) Individual #5 above, assuming the Company reached 100% of EBITDA, plus
additional 20% and the individuals PPF = 1.3
EBITDA PPF
Bonus = 50% (120% x 70%) + 50% (120% x 70% x 1.3)
42% + 54.6%
Total Bonus Percentage = 96.6%
[96.6% x $250,000]
Bonus = $241,500
6) Individual #5 above, assuming the Company reached 110% of EBITDA, plus
additional 20% and the individuals PPF = 1.5
EBITDA PPF
Bonus = 50% (150% x 95%) + 50% (150% x 95% x 1.5)
71.25% + 106.875%
Total Bonus Percentage = 178.125%
[Maximum of 142.5% (150% OF 95% TARGET BONUS) x $300,000]
Bonus = $427,500
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ACTUAL EBITDA $ (less than) $67.05M $67.05M $70.775M $74.5M
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ACTUAL EBITDA % OF TARGET (less than) 90% 90% 95% 100%
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% OF TARGET BONUS % FOR INDIVIDUAL 0% 50% 75% 100%
& POOL
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TARGET BONUS % OF BASE SALARY Minimum % Maximum % Minimum % Maximum % Minimum % Maximum %
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10% 0 2.50% 6.25% 3.75% 9.38% 5.00% 12.50%
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15% 0 3.75% 9.38% 5.63% 14.06% 7.50% 18.75%
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20% 0 5.00% 12.50% 7.50% 18.75% 10.00% 25.00%
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25% 0 6.25% 15.63% 9.38% 23.44% 12.50% 31.25%
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30% 0 7.50% 18.75% 11.25% 28.13% 15.00% 37.50%
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35% 0 8.75% 21.88% 13.13% 32.81% 17.50% 43.75%
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40% 0 10.00% 25.00% 15.00% 37.50% 20.00% 50.00%
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45% 0 11.25% 28.13% 16.88% 42.19% 22.50% 56.25%
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50% 0 12.50% 31.25% 18.75% 46.88% 25.00% 62.50%
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55% 0 13.75% 34.38% 20.63% 51.56% 27.50% 68.75%
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60% 0 15.00% 37.50% 22.50% 56.25% 30.00% 75.00%
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65% 0 16.25% 40.63% 24.38% 60.94% 32.50% 81.25%
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70% 0 17.50% 43.75% 26.25% 65.63% 35.00% 87.50%
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75% 0 18.75% 46.88% 28.13% 70.31% 37.50% 93.75%
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80% 0 20.00% 50.00% 30.00% 75.00% 40.00% 100.00%
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85% 0 21.25% 53.13% 31.88% 79.69% 42.50% 106.25%
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90% 0 22.50% 56.25% 33.75% 84.38% 45.00% 112.50%
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95% 0 23.75% 59.38% 35.63% 89.06% 47.50% 118.75%
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100% 0 25.00% 62.50% 37.50% 93.75% 50.00% 125.00%
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ACTUAL EBITDA $ $78.225M $81.95M
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ACTUAL EBITDA % OF TARGET 105% 110%
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% OF TARGET BONUS % FOR INDIVIDUAL 115% 130%
& POOL
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TARGET BONUS % OF BASE SALARY Minimum % Maximum % Minimum % Maximum %
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10% 5.75% 14.38% 6.50% 15.00%
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15% 8.63% 21.56% 9.75% 22.50%
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20% 11.50% 28.75% 13.00% 30.00%
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25% 14.38% 35.94% 16.25% 37.50%
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30% 17.25% 43.13% 19.50% 45.00%
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35% 20.13% 50.31% 22.75% 52.50%
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40% 23.00% 57.50% 26.00% 60.00%
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45% 25.88% 64.69% 29.25% 67.50%
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50% 28.75% 71.88% 32.50% 75.00%
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55% 31.63% 79.06% 35.75% 82.50%
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60% 34.50% 86.25% 39.00% 90.00%
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65% 37.38% 93.44% 42.25% 97.50%
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70% 40.25% 100.63% 45.50% 105.00%
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75% 43.13% 107.81% 48.75% 112.50%
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80% 46.00% 115.00% 52.00% 120.00%
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85% 48.88% 122.19% 55.25% 127.50%
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90% 51.75% 129.38% 58.50% 135.00%
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95% 54.63% 136.56% 61.75% 142.50%
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100% 57.50% 143.75% 65.00% 150.00%
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Note: Maximum percentage is capped to 150% of target bonus percent. This chart
does not show any calculations for the potential additional 20% funding.
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Personal Performance Objectives
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Bonus Participant Name: Supervisor: ______________________
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Key Performance Objectives Weight Measurement of Success
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1. %
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2. %
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3. %
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4. %
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5. %
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6. %
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7. %
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TOTAL 100%
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ESTABLISHING KEY PERFORMANCE OBJECTIVES:
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1 This is general guidance for performance
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________________________________ _______ rating. You can use any number between
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Participant Date 0 - 1.5 in 1/10ths.
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________________________________ _______ 0 - Did not attain any individual goals
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Supervisor Date .5 - Attained some individual goals
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.8 - Attained most individual goals
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________________________________ _______ 1.0 - Attained all individual goals
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Executive Leadership Team Date 1.2 - Exceeded individual goals
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Representative 1.5 - Outstanding performance, greatly
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exceeded all individual goals
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CEO Date 2 Personal Performance Factor/Modifier =
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Performance Rating x Percentage Weight
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Personal Performance Objectives
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Bonus Participant Name:
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Key Performance Objectives Results Rating(1)PPF(2)
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1.
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2.
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3.
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4.
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5.
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6.
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7.
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TOTAL
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ESTABLISHING KEY PERFORMANCE OBJECTIVES: RESULTS:
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________________________________ _______ ________________________________ _______
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Participant Date Participant Date
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________________________________ _______ ________________________________ _______
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Supervisor Date Supervisor Date
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________________________________ _______ ________________________________ _______
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Executive Leadership Team Date Executive Leadership Team Date
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Representative Representative
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CEO Date CEO Date
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