Document:

2005 Management and Sales Incentive Plans

 Exhibit 10.31 
 

 
 Executive, Management and Sales Incentive Plan 
 (US and Canada) 
 Innophos, Inc. 
 Effective 1/1/05 

 Innophos Executive, Management and Sales Incentive Plan 
 Purpose 
 The Executive, Management and Sales
Incentive Plan (“the Plan”) is designed to promote the interests of Innophos (“the Corporation”) by providing senior executives, managers and sales persons with incentives and rewards commensurate with the achievement of the
business and their personal achievement of business objectives. 
 Participation and Eligibility 
 Executives, managers, sales persons and other key contributors of Innophos Inc. and Innophos Canada Inc. will be eligible to participate in the plan upon timely
nomination and proper approval. 
 If a person is hired or promoted during the year, the job will have the same target incentive as was previously associated
with the position. Adding a participant or changing a participant’s target incentive during a calendar year requires the approval of the group VP, the CEO and the VP of Human Resources. 
 The following chart outlines the bonus target guidelines: 
  

			
	 Salary Grade
	  	 Target Incentive
 % of Base Salary

	 Leadership Team
	  	Determined by Board of Directors
	 Other Senior Managers
	  	25% - 35%
	 Salary Grade E
	  	20% - 25%
	 Salary Grade F [1,3]
	  	 15% - 20%
 (Sales 25%)

	 Salary Grade G [2,3]
	  	 10% - 15%
 (Sales 25%) [4]

  

	[1]	Individuals in grade F are not automatically participants in the management incentive program. 

  

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 Innophos Executive, Management and Sales Incentive Plan 
  

 It is recommended that first year level F participants (other than sales) enter the plan with a target incentive of
10%. An increase to bring the participant to the guideline target should be considered in the following year. 
  

	[2]	Individuals in grade G may be nominated for participation in the management incentive program. 

  

	[3]	Those individuals in grades F and G who are in the program should meet these criteria: 

  

	•	 	high performers or high potentials, 

  

	•	 	manage an area having substantial impact on the business (a market area, a stand-alone production unit, etc.), 

  

	•	 	functional experts 

  

	[4]	Sales positions below grade G have a target of 15%. 

 Note: New hires to
the sales organization at any level may have target incentive set at a lower percentage in the first year. 
 Guidelines for Changes

 General: 
 All changes,
additions or deletions to the management and sales incentive program must be approved by the group VP, the CEO and the VP of Human Resources. 
 New
Participants: 
  

	1.	No new participants will be added in the last five months of the bonus year. Nominations received in the last five months of the year will be considered for participation in the
following year. 

  

	2.	Targets will be pro-rated based on the number of months of participation for new hires and new entrants. 

 Base Salary and Payment :  
 The annual base salary on December 31 is to
be used for calculating management and sales incentives. Bonuses will be paid annually upon completion of the audited financial results. Management has the discretion to pay bonuses or portions thereof more frequently than annually. All bonuses are
subject to withholding taxes in accordance with the requirements of the relevant taxing authorities. 
 Basis of the formula :
 
 The formula for bonuses is made up of common and personal components. These have different weights depending on the type of management position (see
below.) In general the bonus is calculated in this manner: Base salary (on 12/31) X Target % X (common results + personal results). 
 Full
achievement is assumed to equal 1.0 in both the common and personal factors. Only target achievement levels will be set at the beginning of a bonus 

  

 3 

 Innophos Executive, Management and Sales Incentive Plan 
  

 
term. Scores in relationship to target will be determined by management within the guidelines that follow. Actual scores may be as low as 0 or as high as
3.0. 
  

	 	•	 	Common results are measured by EBITDA performance against targets set by management and approved annually by the Compensation Committee of the Board of Directors. The C factor
results must be verified by the Chief Financial Officer and based upon audited financial statements. 

  

	 	•	 	The weight of the C factor in the bonus formula will be 70% of the overall bonus target for members of the Innophos Leadership Team. It will be 50% of the overall bonus target for
all other sales and management incentive participants. The EBITDA target will be approved by the Compensation Committee of the Board of Directors on an annual basis. 

  

	 	•	 	Personal factor (“P factor”) targets will be proposed by the participating employee and approved by his/her manager or by the Compensation Committee of the Board of
Directors in the case of the CEO. The P targets should be aggressive but attainable. 

  

	 	•	 	Measurement of P factor results is the responsibility of each manager and participant and must be verified by the VP of that group. In the case of the Leadership Team, the P factor
results must be approved by the Compensation Committee of the Board. P factor results may range from 0 to 2.0. 

  

	 	•	 	Management has the responsibility and discretion to adjust P factor results giving consideration to changes in the business environment and observation of the individual’s
behavior in performing the job. 

  

	 	•	 	The weight of the P factor in the bonus formula will be 30% of the overall bonus target for members of the Innophos Leadership Team. It will be 50% of the overall bonus target for
all other sales and management incentive participants. 

 Bonus targets: 
 In the event that a management or sales incentive target is changed during the year, the most recent target will be used for the bonus calculation. 
 Administrative Procedures 
 To request the addition of
a participant or change a current participant’s target percentage during the plan year, the appropriate approval authority should: 
  

	•	 	document the request in writing; 

  

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 Innophos Executive, Management and Sales Incentive Plan 
  

	•	 	include all relevant information (name, title, target incentive percentage, effective date, rationale); and 

  

	•	 	forward this request to the group VP and the VP Human Resources. 

 Example Calculation 
 Employee Mary Doe holds a management position with salary grade E. She earned $110,000 as annual base salary on 12/31.
She is a management incentive participant at the 20% target level. The C factor for her bonus is weighted 50% and the P factor is also weighted 50%. The performance target for EBITDA is set at $93.5M. Within the P factor Mary has two goals. Goal A
has a performance target of $200K cost savings. Goal B has a performance target of 10% reduction in lost days. Each goal has a value of 50% of the P factor (or 25% of the overall target.) 
 The EBITDA results are $105M for the year- greatly exceeding the projected target of $93.5M; therefore the C score is determined to be 2.2. Mary’s performance in
her personal goals is $250K of cost savings and an 8% reduction in lost days. At management’s discretion, considering Mary’s overall performance, the final P score is set at 1.25. Reminder: Each factor is only 50% of the overall score,
i.e. the final scores are would be these: C = 1.1 and P = 0.625. 
 Mary’s Bonus Calculation 
 $110,000 (Base Salary) X .20 (Target) X (1.1 (C)+ 0.625 (P)) = $37,950 gross amount of management incentive payment 
 Plan Administration and Related Matters 
 Awards will
be paid as soon as administratively possible after the annual audit has been completed. (Management has the discretion to pay bonuses or portions thereof more frequently than annually. All bonuses are subject to withholding taxes in accordance with
the requirements of the relevant taxing authorities.) 
  

	1.	TERMINATION OF EMPLOYMENT 

  

	 	•	 	If a participant ceases his or her employment with Innophos at any time prior to the distribution of the awards, the employee forfeits any award under the MICP plan, unless the
employee terminates due to retirement, death or disability. To qualify for bonus payment after retirement, the participant must reach age 55 and give formal written notification of his or her voluntary departure no less than ninety (90) days
prior to his or her last day worked. 

  

	 	•	 	 If a participant transfers out of an eligible position or leaves the Company due to involuntary termination (except for cause), he or she may be 

  

 5 

 Innophos Executive, Management and Sales Incentive Plan 
  

	 	 
eligible for a pro-rated payment. However, participants who resign or are terminated for cause will not be eligible for an incentive payment.

  

	 	•	 	Participants who are on extended disability leave or on an approved leave of absence during the year may receive prorated awards based upon the time actually worked during
the plan year. Disability pay and benefits are not bonus eligible compensation. 

  

	2.	FUNDING 

 No funds need be set aside or reserved for
payment of any Participant under the Plan, and any obligation by the Corporation to a Participant under the Plan shall be unfunded and shall be paid from the general assets and general funds of the Corporation. However, the Corporation, for
accounting purposes, will budget and accrue, on the books of the Corporation, an amount sufficient to cover the estimated expense for the fiscal year. 
  

	3.	NOT AN EXCLUSIVE METHOD OF INCENTIVE 

 This Plan
shall not be deemed an exclusive method of providing incentive compensation for employees of the Corporation, nor shall it preclude the Corporation from authorizing or approving other forms of incentive compensation. 
  

	4.	NO RIGHT TO CONTINUED PARTICIPATION 

 Participation
in the Plan by an employee in any plan year shall not be held or construed to confer upon the employee the right to participate in the Plan in any subsequent fiscal year or plan semester. 
  

	5.	NO RIGHT TO CONTINUED EMPLOYMENT 

 Neither the
establishment of the Plan, the participation by an employee in the Plan nor the payment of any award hereunder or any other action pursuant to the Plan shall be held or construed to confer upon any Participant the right to continue in the employ of
the Corporation or affect any right which the Corporation may have to terminate at will the employment of any such Participant. 
  

	6.	RELATIONSHIP TO OTHER PLANS 

 Participation and
payments under the Plan shall not affect or be affected by participation or payments under any other plan of the Corporation, except as otherwise specifically provided by the Corporation. 
  

 6 

 Innophos Executive, Management and Sales Incentive Plan 
  

	7.	NON-TRANSFERABILITY OF FUNDS 

 Except as otherwise
provided by the Plan, no amount payable at any time under the Plan shall be subject to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge, or encumbrance of any kind. Nor shall it in any manner be subject
to the debts or liabilities of any person. Any attempt to so alienate or subject any such amount shall be void. 
  

	8.	AMENDMENT OF THE PLAN 

 The CEO with the group VP
and the VP of Human Resources (“The Committee”) may amend or terminate this Plan at any time. No amendment or termination shall affect the right of a Participant to payment of any amounts which have been determined prior to such amendment
or termination, but the Committee may amend or terminate the rights of any Participant under the Plan at any time prior to the calculation of the award to be paid for any plan semester. 
  

	9.	EFFECTIVE DATE 

 The Plan document shall be
effective as of January 1, 2005, and shall continue in effect until terminated or modified. 
 ____________________________________________________--

  

 7Consulting agreement with George Boyadjieff

 EXHIBIT 10.54 
 CONSULTING AGREEMENT 
 THIS CONSULTING AGREEMENT (this “Agreement”) dated as of June 9, 2005 is
by and between Power Efficiency Corporation, a Delaware corporation (the “Company”), with an address of 3900 Paradise Road, Suite 283, Las Vegas, NV 89109 and George Boyadjieff (the “Consultant” and, together with the Company,
the “Parties”), with an address of 18772 Colony Circle, Villa, CA 92861. 
 WHEREAS the Company desires to engage the Consultant to perform
consulting services (as defined below) on the terms and conditions as set for in this Agreement; and 
 WHEREAS the Consultant desires to render these
services and is willing to accept such engagement on the terms and conditions as set forth in this Agreement; and 
 NOW THEREFORE, in consideration of the
mutual representations, covenants and agreements herein set forth, the parties hereto have agreed and do hereby agree as follows: 
  

	1.	Subject to the terms hereof, the Company hereby engages the Consultant as a consultant to the Company. Consultant agrees to use its best efforts to perform the Services (as defined
below). 

  

	2.	The Consultant will act as Technical and Marketing Advisor to the Company. 

  

	3.	Assist in hiring a technical staff and /or an outside company(s) to digitize the current products. 

  

	4.	Overseeing the work of the technical staff and/or outside company(s). 

  

	5.	Assisting in developing the Oil Field market for current and future products 

  

	6.	Define and assist in the development of enhancements for the current products such as a pump-off controller and other applications as determined from time to time.

  

	7.	The term (Term) of the agreement is for 24 months from the date of this agreement. 

  

	8.	Each party will have a right to cancel this agreement on a 90 day notice in writing. 

  

	9.	The Consultant will receive as compensation the following: 

  

	 	a.	Four hundred thousand (400,000) non qualified options in the company at market. One hundred thousand (100,000) options will vest ninety days from the date of this
Agreement. 

  

	 	b.	The remainder of the options will vest equally each quarter during the Term of this contract unless the contract is terminated before the end of the Term as described in paragraph 8
above. At the time of termination the vesting process shall cease. 

  

	 	c.	All reasonable out of pocket expenses will be reimbursed by the company. 

  

	10.	In the event that the company’s annual sales of digitally controller products reaches $5,000,000.00 for any fiscal year during the next 5 fiscal years, the company agrees to
pay Consultant a one time $100,000 cash performance bonus. 

  

	11.	The Consultant will devote approximately 5 days per month. It is understood that this is not an employment or full time Consulting Agreement. 

  

	12.	Consultant will be available to the CEO, CFO and other Senior Management for consultations on a reasonable basis. 

  

	13.	Confidentially.  

  

	 	a.	 “Confidential Information” means all information disclosed by the Company under this Agreement that should reasonably be understood by the Consultant,
because of legends or other markings, the circumstances of disclosure or the nature of the information itself, to be proprietary and confidential to the Company, an affiliate of the Company or a third party, and includes information relating to the
Company’s business, including, 

	 	 
without limitation, business plans, proposals, forecasts, financial data, customer and prospect lists and information, personnel data, contract information,
properties, methods of operation, software (including, without limitation, source code, specifications, data, works-in-process, alpha and beta versions, design documents and documentation), trade secrets, inventions, discoveries, know-how, and other
intellectual property. “Confidential Information” includes confidential information that was disclosed by the Company to the Consultant prior to the date hereof as well as information currently provided and to be provided during the term
of this Agreement. Confidential Information may be disclosed in written or other tangible form (including as recorded on magnetic, optical or other storage media) or by electronic, oral visual or other means. 

  

	 	b.	The Consultant shall use the Company’s Confidential Information only for the purposes of fulfilling the terms of this Agreement and only during the Term of this Agreement. The
Consultant shall not use the Company’s Confidential Information in any way that is competitive with or otherwise detrimental to the Company. 

  

	 	c.	The restrictions of this Agreement on the use and disclosure of Confidential Information shall not apply to information that the Consultant can prove: (i) was publicly known at
the time of the Company’s communication thereof to the Consultant; (ii) becomes publicly known through no action or fault of the Consultant subsequent to the time of the Company’s communication thereof to the Consultant;
(iii) was in the Consultant’s possession free of any obligation of confidence at the time of the Company’s communication thereof to the Consultant; (iv) is developed by the Consultant independently of and without reference to any
of the Company’s Confidential Information or other information that the Company disclosed in confidence to any third party; (v) is rightfully obtained by the Consultant from third parties authorized to make such disclosure without
restriction; or (vi) is identified by the Company in writing as no longer proprietary or confidential. 

  

	 	d.	In the event that the Consultant is required by law, regulation, or court order to disclose any of the Company’s Confidential Information, the Consultant shall promptly notify
the Company in writing prior to making any such disclosure order to facilitate the Company’s obtaining a protective order or other appropriate remedy from the proper authority. The Consultant agrees to cooperate with the Company in seeking such
order or other remedy. The Consultant further agrees that if the Company is not successful in precluding the requesting legal body from requiring the disclosure of the Confidential Information, it will furnish only that portion of the Confidential
Information which is legally required, will promptly provide the Company with a copy of the Information so furnished, and will exercise all reasonable efforts to obtain reliable assurances that the receiving party will accord it confidential
treatment. 

  

	 	e.	All Confidential Information, including information contained in computer software or stored in memory or on storage media, is and shall remain the sole and exclusive property of
the Company. All such information in tangible form shall be returned to the Company or destroyed promptly upon the Company’s written request at any time or upon the termination or expiration of this Agreement, and shall not thereafter be
retained in any form by the Consultant, its affiliates, or by any employees or independent contractors of the Consultant or its affiliates. 

  

	14.	Non Competition. The Consultant shall not during the Term of this Agreement and for a period of one (1) year immediately following the termination or expiration of its
engagement with the Company, either directly or indirectly sell products competitive to the Company, solicit or take away, or attempt to call on, solicit or take away any of the customers during the course of the Consultant’s engagement with
the Company, either for the benefit of the Consultant or for any other person, firm, or corporation. 

  

	15.	Acknowledgment of Remedies. The Consultant acknowledges and agrees that, because of the unique and extraordinary nature of the Services, and breach or threatened breach of
this Agreement will cause irreparable injury and incalculable harm to the Company, and the Company shall, accordingly, be entitled to injunctive and other equitable relief for such breach or threatened breach and that resort by the Company to such
injunctive or other equitable relief shall not be deemed to waive or to limit in any respect any right or remedy which the Company may have with respect to such breach or threatened breach. The Company and the Consultant agree that any such action
for injunctive or equitable relief shall be heard in a state or federal court situated in Nevada, and each of the parties hereto hereby agrees to accept service of process by registered mail and to otherwise consent to the jurisdiction of such
courts. 

  

	16.	Notices. All notices, requests, consents and other communications required or permitted to be given hereunder, shall be in writing and shall be deemed to have been duly given
if delivered personally or sent by prepaid telegram, or mailed first class, postage prepaid, by registered or certified mail to the parties at their respective addresses hereinabove set forth or to such other addresses as either party shall
designate by notice in writing to the other in accordance herewith. 

	17.	Governing Law. This Agreement shall be governed in all respects and for all purposes by the laws of the State of Nevada and the Courts of the State of Nevada shall have
exclusive jurisdiction to enforce any order or award obtained in arbitration. 

  

	18.	Arbitration. Except with respect to any proceeding brought under Section 13 hereof, any controversy, claim, or dispute between the parties, directly or indirectly,
concerning this Agreement or the breach hereof, or the subject matter hereof, Including questions concerning the scope and applicability of this arbitration clause, shall be finally settled by arbitration in Nevada pursuant to the rules then
applying of the American Arbitration Association. 

  

	19.	Entire Agreement. This Agreement, together with the Exhibits attached hereto and all Written Approvals agreed to by the Parties pursuant to this Agreement, sets forth the
entire agreement and understanding of the parties relating to the subject matter hereof, and supersedes all prior agreements, arrangements and understandings, written or oral, relating to the subject matter hereof, including but not limited to, the
Prior Agreement. No representation, promise, or inducement has been made by any party that is not embodied in this Agreement, and no party shall be bound by or liable for any alleged representation, promise or inducement not so set forth. If any
provision of this Agreement shall be declared void or against public policy, such provision shall be deemed severed from this Agreement and the remaining provisions shall remain in full force and effect and unmodified. 

  

	20.	Assignability. The Consultant may not assign or transfer any or all rights under this Agreement without written authorization from the Company. The Company may assign its
rights, together with its obligations, hereunder in connection with any sale, transfer or other disposition of all or substantially all of its business or assets; and in such event the rights and obligations of such corporation hereunder shall be
binding on its successors or assigns, whether by merger, consolidation or acquisition of all or substantially all of the business or assets. 

  

	21.	Amendment. This Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may be waived only by a written instrument
executed by all of the parties hereto who are thereby affected, or in the case of a waiver, by the party waiving compliance. No waiver by either party of the breach of any term or covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement. 

  

	22.	Survival. The right and obligations under Sections 17 through 22 shall survive and continue after any expiration or termination of this Agreement and shall bind the parties
and their legal representatives, successors, heirs and assigns. 

  

	23.	Counterparts. This Agreement may be executed in several counterparts each of which shall be deemed an original by when taken together shall constitute one and the same
instrument. 

  

							
		 	  
	 		 	  

		 	Steven Strasser, Chairman and CEO	 		 	Date
		 	Power Efficiency Corporation	 		 	
				
		 	  
	 		 	  

		 	George Boyadjieff	 		 	Date

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