Cardinal Ethanol, LLC Employee Bonus Plan Fiscal Year 2012-2013 (Issued 10-1-12)
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Human Resources
- Bonus & Incentive Agreements
EX-10.38 3 a1038-employeebonusplan12x.htm EXHIBIT 10.38 - Employee Bonus Plan 12-13
Cardinal Ethanol, LLC
Employee Bonus Plan
Fiscal Year 2012-2013
(Issued 10-1-12)
The purpose in developing and continuing an Employee Bonus Plan is to reward the employees for their contributions that directly impact the financial results of the Company, reflect a positive safety culture, and to promote teamwork needed to complete desired goals. This year's Plan is again made up of financial and team goals relating to the Company's financial success, safety, and production efficiency.
For the purpose of the Plan, wages are defined as the amount paid during the defined period and limited to regular pay, overtime, holiday, and paid time off (PTO).
Rules of the Plan:
a) | All plan payouts must be approved by the Board of Directors. |
b) | Employee must be employed on the day that the Board approves the payout to be eligible for any bonus payout. |
c) | Employee must be working from October 1, 2012 to September 30, 2013 to be eligible for the full bonus. |
Financial Goal:
a) | Eligibility for the Financial Goal payout portion of the plan begins at $7,500,000 net income. There will be NO payout under the financial goal section if the Company does not meet this minimum income threshold. |
b) | The Financial Goal section is eligible to all employees that meet the eligibility requirements. |
c) | Payout for the Financial Goal will be made prior to December 31, 2013 once the fiscal year end results are calculated and approved. |
Team Goals:
a) | Team Goals are not subject to a minimum net income requirement. |
b) | Payout for the Team Goals will be made quarterly and based on company “Operational Statistics”, Christianson Benchmarking Results and Individual Safety Participation. |
c) | Employee must be employed on the last day of the quarter to receive any payout from the Team Goals. |
d) | Employee does not need to have worked the full quarter to be eligible. Payout will be made once final results are known and have been approved by the Board of Directors. |
e) | Team Goal payout is applicable to all employees that meet the eligibility requirements. |
FY 2011-12 Employee Incentive Plan
Financial Goal - Max Payout 10% of eligible wage.
Minimum required net profit needed for payout $7.5M (Annual Payout) | |
- Payout Level 1............................................................................ | $7,500,000 - $11,999,999 = 5% payout |
- Payout Level 2............................................................................ | $12,000,000 - $19,999,999 = 7.5% payout |
- Payout Level 3............................................................................ | $20,000,000 and above = 10% payout |
Team Goals - Max Payout 10% of eligible wage.
Team Goal #1 - Improved efficiency and production through increased ethanol yield per bushel ground as compared to industry; based on rankings through Benchmarking surveys (Quarterly Payout)
Team Goal #2 - Optimize natural gas usage by reducing BTU/gallon. Achieved Natural Gas Usage number will be based on "Operation Statistics" work papers. (Quarterly Payout)
Team Goal #3 - Improve Safety performance. Increase awareness and maintain safety performance. Near misses will be based on individual reports submitted on time to the EHS Manager. Other Safety criteria are based on individual participation. (Quarterly Payout)
Goal #1 Lead Rankings for Ethanol Yield (Christianson Benchmarking; Geo-East, undenatured, moisture adjusted gallons per bushel ground based on corn at 15%) (4% max payout) | |
1) Ranking outside of the top 42%........................................................ | 0% payout |
2) Ranking in the top 42.00%................................................................ | 1% payout |
3) Ranking in the top 33.33%................................................................ | 2% payout |
4) Ranking in the top 25.00%................................................................ | 3% payout |
5) Ranking in the top 17.00%............................................................... | 4% payout |
Goal #2 Optimize Natural Gas Usage (BTU per Anhydrous Ethanol gallon) (3% max payout) | |
1) Greater than 28,215...................................................... | 0% payout |
2) 28,215 - 28,001............................................................. | 1% payout |
3) 28,000 - 27,501............................................................. | 2% payout |
4) 27,500 or less................................................................ | 3% payout |
Goal #3 Improve Safety Record - Individual Safety Participation; subject to verification and approval by management. (3% max payout) | |
- Near Miss Reporting (Required) | |
1) 2 Near Miss Reports completed................................ | .5% payout |
2) 3 Near Miss Reports completed (required 1 per month) | 1% payout |
Employee Participation (Any combination of 2 - limit of 1% per selection) | |
1) Safety Committee Attendance/Participation (member of guest) | 1% payout |
2) Safety Program Area Audit Complete | 1% payout |
3) Non-Routine Task Pre-work Audit Completed | 1% payout |
4) Lead a Toolbox Talk | 1% payout |
5) LOTO/Confined Space Program Review | 1% payout |
6) Contractor Observation, Review and Evaluation | 1% payout |
Personal Incentive (10% additional opportunity available)
Available to the following positions: Production Manager, ESH MAnager, Maintenance Manager, and Controller.
These positions will be eligible for an additional 10% payout if they meet certain personal goals. These individual goals will be ones the positioned employee will have a direct impact in achieving the best return to the business.
Personal Incentive (10% additional opportunity available)
Production Manager: Personal Goals (annual payout) | |
Safety - Improve ERI Safety Audit Score (based on last audit score prior to yearend) (2%) | |
Ÿ Final Results "Improvement Required" | 0% payout |
Ÿ Final Results "Acceptable Area" | 1% payout |
Ÿ Final Results "Exceptional" | 2% payout |
Production - Improve Ranking of Ethanol Yield (Christianson Benchmarking; Geo-East, undenatured, moisture adjusted gallons per bushel ground based on corn at 15% (3% max payout) | |
Ÿ Ranking outside of the top 42% | 0% payout |
Ÿ Ranking in the top 42.00% | 1% payout |
Ÿ Ranking in the top 33.33% | 1.5%payout |
Ÿ Ranking in the top 25.00% | 2% payout |
Ÿ Ranking in the top 17.00% | 3% payout |
Production - Maximize Corn Oil Production (3%) | |
Ÿ Less than 0.56 pounds per bushel ground | 0% payout |
Ÿ 0.560 - 0.635 pounds per bushel ground | 1% payout |
Ÿ 0.636 - 0.699 pounds per bushel ground | 2% payout |
Ÿ Greater than 0.699 pounds per bushel ground. | 3% payout |
Production - Ethanol Throughput, anhydrous gallons (2%) | |
Ÿ Less than 111.5 M gallons | 0% payout |
Ÿ 111.5M to 113.4 M gallons | 1% payout |
Ÿ 113.5M to 115.4 M gallons | 1.5%payout |
Ÿ Greater than 115.5 M gallons | 2% payout |
EHS Manager: Personal Goals (annual payout) | |
Safety - Improve ERI Safety Audit Scores (based on last audit score prior to yearend) (6%) | |
Ÿ Final Results "Improvement Required" | 0% payout |
Ÿ Final Results "Acceptable Area" | 3% payout |
Ÿ Final Results "Exceptional" | 6% payout |
Environmental Compliance - Maintain Permit Parameters (4%) | |
Ÿ 100% Completion of EHS Compliance Calendar | 1% payout |
- Including additions and updates. | |
Ÿ No ESH violations resulting in fines | 1% payout |
- EPA, IDEM, OSHA, etc. | |
Ÿ Training and PSM in Compliance | 1% payout |
Ÿ Written Monthly EHS Review | 1% payout |
- To include Company policy violations, observation summary, recommended actions, etc. | |
Maintenance Manager: Personal Goals (annual payout) | |
Safety - Improve ERI Safety Audit Score (based on last audit score prior to yearend) (2%) | |
Ÿ Final Results "Improvement Required" | 0% payout |
Ÿ Final Results "Acceptable Area" | 1% payout |
Ÿ Final Results "Exceptional" | 2% payout |
Maintenance - Reduction of supply cost (Based on Christianson Benchmarking for "All Plants - Plant Supplies/Repair/Maintenance") (3%) | |
Ÿ Ranking outside of the top 20 plants | 0% payout |
Ÿ Top 20 Benchmarking rank for all plants | 1% payout |
Ÿ Leader (top 25% ranking for all plants) | 3% payout |
Maintenance - Uptime (lincludes all downtime) (3%) | |
Ÿ Greater than 336 hours downtime | 0% payout |
Ÿ 336 to 313 hours downtime | 1% payout |
Ÿ 312 to 288 hours downtime | 2% payout |
Ÿ Less than 288 hours downtime | 3% payout |
Maintenance - Inventory Accuracy and Count Frequency, Spare Parts (Accuracy based on adjustments per count/inventory units per count with total inventory counted quarterly) (2%) | |
Ÿ Greater than a 2% accuracy error | 0% payout |
Ÿ 1% to 2% accuracy error (min. of 6 counts/quarter) | 1% payout |
Ÿ Less than 1% accuracy error (min. of 9 counts/quarter) | 2% payout |
Controller: Personal Goals (annual payout) | |
Accounting - Close out monthly financials. Close EOM, including CFO's review and correction of any notes made by CFO, within 5 business days after the last day of the month (3%) | |
Ÿ Less than 6 successful closes | 0% payout |
Ÿ 6 - 8 successful closes | 1% payout |
Ÿ 9 - 10 successful closes | 2% payout |
Ÿ Over 10 successful closes | 3% payout |
Tax/K-1 - Completed K-1s by 5:00 p.m. the date of the annual meeting (2%) | |
Ÿ Completion after February 1, 2013 | 0% payout |
Ÿ Completion by February 1, 2013 | 1% payout |
Ÿ Completion by January 25, 2013 | 2% payout |
FY 10-K close for timely SEC filing and bank/Investor Obligations (2%) | |
Ÿ Completion after December 7, 2012 | 0% payout |
Ÿ Completion on or before December 7, 2012 | 2% payout |
Develop and Implement Accounting Roles and Descriptions/Processes. Write-up the primary accounting department roles and responsibilities with complete descriptions and processes (3%) | |
Ÿ Outline of all identified roles not completed | 0% payout |
Ÿ 10 - 12 Written descriptions and processes completed | 1% payout |
Ÿ 13 - 18 Written descriptions and processes completed | 2% payout |
Ÿ 19 - 24 Written descriptions and processes completed | 3% payout |
Personal Incentive (10% additional opportunity available)
Available to the following positions: CEO, CFO, Commodity Manager, and Plant Manager.
These positions will be eligible for an additional 10% payout. 60% of this payout will be tied to the Managers mentioned under item #1 meeting their goals. 40% of this payout will be based on COGS as a percentage of Sales.
"Senior Management" : Goals (annual payout) (CEO, CFO, Commodity Manager, Plant Manager)
Leadership/Management/Coaching - Develop and Support Mid-management (6%)
•Average completion score of mid management incentive award times 60% award value.
Financial - Target COGS as a % of Sales (COGS + unrealized losses = unrealized gains/Revenues) (4%)
ž > 96.3% | 0% payout |
ž 96.29% - 95.0% | 1% payout |
ž 94.99% - 93.00% | 2% payout |
ž < 92.99% | 4% payout |
