Document:

Exhibit

Exhibit 10.1
Fastenal Company                                        
Bonus Program for Executive Officers
Quarterly Incentives
Our executive officers are eligible for cash incentives through individual bonus arrangements based on improvements in the overall financial performance of the company and/or their respective areas of responsibility. The bonus arrangements provide our executive officers with the opportunity to earn a cash bonus for each quarter during a year when we increase our earnings above a predetermined minimum target.
The cash bonuses for all of our named executive officers (as disclosed in our proxy statement) other than our chief financial officer are based on growth in pre-tax earnings of the company and/or the officer's area of responsibility. The compensation committee selected pre-tax earnings as the appropriate metric for calculating cash bonuses for those officers because of the committee's belief that the focus of the named executive officers should be on profitability, which is the primary driver of shareholder value. The cash bonuses for our chief financial officer are based on growth in company-wide net earnings because his responsibilities allow him to affect our entire financial position including our tax position.
The compensation committee believes that no named executive officer should earn a cash bonus for a quarter unless financial performance has improved and therefore sets minimum targets for each quarter that are equal to the earnings achieved for the same quarter in the prior year. The compensation committee requires growth in earnings before any bonuses can be earned due to its belief that growth is achievable with superior effort and will generate the cash necessary to expand the company's operations in accordance with our business plans and increase shareholder value.
The payout percentage used to calculate the amount of each named executive officer's quarterly cash bonus reflects the officer's track record in his current position (i.e., newly promoted executives historically have had to prove themselves in their new positions before earning higher payout percentages) and relative ability to impact profitability.
We do not believe it is necessary for payouts under our executive cash incentive program to be capped, as cash bonus payments to our named executive officers are tied directly to our financial performance so that they increase only if and to the extent the company's profitability grows. We do not base the cash incentives paid to our executive officers on multiple metrics since we believe the current design of our executive bonus arrangements, along with our other controls, adequately mitigates risk and since the use of multiple metrics would not be in furtherance of our goal of keeping our compensation programs simple, understandable, and transparent, and would risk keeping our executives focused on things other than profitability, thereby depriving them of the clear feedback and motivation necessary to improve our bottom line.
2017 Incentive Program
The bonus arrangements for our named executive officers for 2017 were approved by our compensation committee at its last meeting in 2016. Consistent with prior years, the bonuses for 2017 were based on growth in pre-tax earnings or net earnings of the company and/or the officer's area of responsibility. The bonuses for each quarter were determined by applying a payout percentage to the amount by which pre-tax earnings or net earnings exceeded 100% of pre-tax earnings or net earnings for the same quarter in 2016. The compensation committee determined that the bonus formulas for each of the named executive officers for 2017 would remain unchanged from 2016. The committee maintained bonus arrangements consistent with 2016 because the committee believes those arrangements are reasonable and reflective of our business model and culture.
The 2017 cash incentive program described above applied to all of our named executive officers. The specific bonus opportunities for our named executive officers are summarized in the table below. Each named executive officer's cash bonus for each quarter during 2017 was determined by applying the payout percentage listed opposite his name below to the amount by which pre-tax earnings or net earnings of the company and/or the officer's area of responsibility for that quarter exceeded 100% of such earnings in the same quarter of 2016 (the 'minimum target').
	
			
	Name
	Earnings Type
	Payout Percentage

	Mr. Florness
	Company-wide pre-tax earnings
	1.25%

	Mr. Lewis
	Company-wide net earnings
	0.90%

	Mr. Owen
	Company-wide pre-tax earnings
	0.80%

	Mr. Watts (1)
	Pre-tax earnings
	2.40% / 0.35%

	Mr. Miller (2)
	Pre-tax earnings
	1.00% / 0.10%

(1) The bonuses for Mr. Watts were based on growth in U.S. dollar equivalent pre-tax earnings for the geographic areas under his leadership (which are all areas outside of the United States), with the payout percentage applied to that growth of 2.40%, as well as growth in company pre-tax earnings, with the payout percentage applied to that growth of 0.35%.

Exhibit 10.1 (Continued)
(2) The bonuses for Mr. Miller were based on growth in pre-tax earnings for the geographic area under his leadership (which is the East coast of, and Southern and Southwestern areas of, the United States), with the payout percentage applied to that growth of 1.00%, as well as growth in company pre-tax earnings, with the payout percentage applied to that growth of 0.10%.
The following table sets out, for each quarter in 2017, our actual and minimum target pre-tax earnings and net earnings on a company-wide basis for that quarter. (As indicated above, the 'minimum target' amount in 2017 was 100% of such earnings in the same quarter of 2016.)
	
					
	2017
	Actual
Pre-tax Earnings
($)
	Minimum Target
Pre-tax Earnings
($)
	Actual
Net Earnings
($)
	Minimum Target
Net Earnings
($)

	First quarter
	210,893,000
	199,851,000
	134,159,000
	126,227,000

	Second quarter
	235,366,000
	207,817,000
	148,917,000
	131,521,000

	Third quarter
	225,992,000
	201,239,000
	143,103,000
	126,925,000

	Fourth quarter (1)
	200,830,000
	180,822,000
	152,422,000
	114,805,000

(1)The fourth quarter 2017 bonus for Mr. Lewis was modified to give effect to the unanticipated positive impact of the Tax Act, on net earnings, the basis of his bonus for the quarter. Mr. Lewis' bonus was calculated on proforma net earnings of $128 million (without giving effect to approximately $24.4 million of discrete tax items due to the Tax Act) for the fourth quarter of 2017.
During 2017, the approximate percentage of the actual and minimum target pre-tax earnings of the company attributable to our operations in the geographic area under Mr. Miller's leadership was 40%, and outside the United States (under Mr. Watts' leadership) was 13%.
2018 Incentive Program
The bonus arrangements for our named executive officers for 2018 were approved by our compensation committee at its last meeting in 2017. Consistent with prior years, the bonuses for 2018 will be based on growth in pre-tax earnings or net earnings of the company and/or the officer's area of responsibility. The bonuses for each quarter will be determined by applying a payout percentage to the amount by which pre-tax earnings or net earnings exceeded 100% of pre-tax earnings or net earnings for the same quarter in 2017. The compensation committee determined that the bonus formulas for each of the named executive officers for 2018 will remain unchanged from 2017, including the use of proforma net earnings amounts in the case of Mr. Lewis' bonus to remove the effect of discrete items due to the Tax Act. The committee maintained bonus arrangements consistent with 2017 because the committee believes those arrangements are reasonable and reflective of our business model and culture.Top One Business Centre Room L

Office Lease Agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Top One Business Centre Office Lease
Agreement

 

The Leasing
Agreement is made 

 

Between
Top One Business Centre Limited (hereinafter referred to as
"Landlord")

 

And WU,
HSIU-CHUAN (hereinafter referred to as "Tenant")

 

Tenant’s Guarantor: (hereinafter
referred to as "Guarantor")

 

The Landlord shall let and the Tenant shall take the
Premises for the Term and at the Rent as more particularly described in this agreement and both parties agree to observe and perform
the terms and conditions as follow:

ARTICLE 1: The location of the premise: Rm. 1L, 9F.,
No.910, Sec. 2,Taiwan Blvd., Xitun Dist., Taichung City 407, Taiwan (R.O.C.)

ARTICLE 2:
Both the Landlord and the Tenant agreed the lease term will be: 0.5 year. The leased premise is for office purpose only.

2017.12.1 -2018.5.31. 6 months in
total.

ARTICLE 3: Rental (Included the specified time to use
air-conditioner) monthly rental: NT$9,500(included tax, two sets of office table
and chairs and movable-cupboard), the tenant should pay the rental without any excuse for delay. Charges for water, public internet
expense and

management fee shall be the responsibilities of the
Landlord.

ARTICLE 4: The rental shall be due and payable before
the fifth day of each calendar month and pay one-month rental each time.

Section 1. Bank Transfer

The Tenant shall pay the rental before the fifth
day of each calendar month and provide the transfer slip or print the payment proof to the Landlord, except the first month rental
which shall be paid upon the signed agreement to the Landlord (Cash or a demand cheque or transfer to the financial institution
that the Landlord required)

Section 2. Cheque

The Tenant shall give 12 cheques for a year’s
rental to the landlord, except for the first month which should be a demand cheque, other cheque will be cashed on the fifth day
of each calendar month. Please Make check payable to Top One Business Centre Limited.

Section 3. Transfer Account

Top One Business Centre Limited

(Bank Code: 006) Taiwan Cooperative
Bank Situn Branch

Account Number: 1173-717-227951

After the Landlord received
the rental, a receipt will be sent to the Tenant.

ARTICLE 5: On the signing of this Agreement, the Tenant
shall pay the Landlord a deposit (the “Deposit”) in an amount of NT$18,000, equivalent to the sum of two month’s
rental. (Cash or a demand cheque or completed bank transfer)

ARTICLE 6: Upon expiry of the Agreement, the Tenant
shall immediately vacate, re-convey the Premises to the Landlord in the condition which the Premises were first conveyed to the
tenant and return the premises to the Landlord without any excuse for delay or any claims, except the Landlord would like to continually
rent out this premise. If the Tenant fails to vacate and return the premises on time, the Tenant shall pay the Landlord the proportion
of the Rental due and payable as of the date of the termination to the sum of five months’ rental. The Tenant and the Guarantor
shall not have any objection.

ARTICLE 7: If the Tenant moved out during the leasing
term, the Tenant shall not ask the Landlord to repay or compensation for removal and return the premises in the condition which
the Premises were first conveyed. The Tenant shall not have any objection.

ARTICLE 8: The Tenant shall not assign, transfer, or
sublease any of his rights to or interest in or obligations under this Agreement without the prior written approval of the Landlord.

ARTICLE 9: The Landlord shall not damage or revamp the
leased premise, including the indoor and the outdoor area, including the ceiling, floor, wall, lamp, curtain, furniture and all
electrical appliance.

Unless otherwise approved by the Landlord in advance,
no improvement or construction of the Premises shall be made by the Tenant. The Tenant shall clean all the things in the premises
and re-convey to the landlord in the condition which the Premises were first conveyed to the tenant.

When the equipment breaks down, the Tenant should tell
the Landlord immediately and follow the Landlord’s instruction to handle and shall not take down or remove by your own. If
the Tenant breaches, he should pay the book value of that equipment to the Landlord.

If the reason is do not have schedule maintenance through
professional judgement, the landlord can ask the Tenant for the maintenance record. If the Tenant could not provide it or the breakdown
is caused by the Tenant, The Tenant should pay for the repair fees.

ARTICLE 10: Tenant shall use the leased premises for
the purposes of conducting the business activities of illegal usage (such as illegal financial business, Telemarketing, gambling,
network computer room or harmful activities) and no storage of any dangerous articles that affect public safety is allowed. If
there is any violation of public safety, the Tenant shall take all the responsibilities.

ARTICLE 11: The Tenant shall maintain the premises as
a good administrator. In the event of breaching of this rule, the Tenant shall indemnify for any damage done to the premises, except
for the natural disasters. If the premise need to make improvements because of natural factors, the Landlord shall pay for it.

ARTICLE 12: The Tenant shall follow the tenant’s
instruction. Pets are not permitted in the leased area. In the event of breaching of this rule, the Tenant shall indemnify to the
Landlord’s loss. If the Landlord is suspected of litigation, the fees that including litigation costs and counsel fee should
be paid by the Tenant.

ARTICLE 13: Charges for water, management fee and electricity,
shall be the responsibilities of the Landlord. Sales tax, electricity, internet fee, postage, fax, printing and copy fee shall
be responsible of the Tenant. The Tenant agreed to pay the Landlord electricity, fax, printing and copy fee. (the calculation way
will be followed the user instruction.)

When the agreement is expired or terminated, the Tenant
agreed to pay all the outstanding payment to the Landlord and let the Landlord to deduct it from the deposit.

When the Tenant has moved out and there be any remains
(such as equipment, tool, documents, food, rubbish), the remains will be regarded as waste and disposed by the Landlord and the
related handling fee will be paid by the Tenant. The Tenant shall not have any objection.

In the event of breaching of any rule or damage the
premise, the Tenant does not correct it before the deadline set by the Landlord and make the Landlord suffered any loss, the Tenant
should compensate the Landlord.

ARTICLE 14: In the event of any party breach of any
of his obligations under this Agreement, the Landlord has the right to get back the premise and would not be responsible any loss
of the Tenant.

ARTICLE 15: In the event of the Tenant’s breach
of any of his obligations under this Agreement, including, without limitation, the Tenant’s failure to pay Rentals for two
calendar months during the Term, the Landlord can terminate the agreement and the Tenant will automatically give up all the deposit
as a penalty payment.

ARTICLE 16: When one party wants to terminate the agreement
before the expiry of agreement, it can only be effective after getting the other party’s consent. If the Tenant wants to
move out and terminate the agreement, the Tenant shall pay 2month’s rental to the Landlord as indemnify with no objection.

ARTICLE 17: Other particulars

Section 1: The Tenant shall agree to observe and
perform the terms and conditions before signed this lease agreement.

Section 2: Both parties agree that any and all
disputes arising from this Agreement shall be finally adjudicated upon by the Taichung District Court shall be the court of competent
jurisdiction for the first instance.

Section 3: The equipment list and equipment price
list that were signed when the Tenant moved in shall be the standard list that the Tenant needs to return when the expiry of the
agreement.

Section 4: The Tenant shall inform the Landlord
before the expiry of the Term by notice to this effect one month before. No notice received will mean the Tenant agreed to renew.

Section 5: This lease agreement does not include
company incorporation and registry service. If the Tenant finds the Landlord to provide company incorporation service and paid
the corresponding expense, the Landlord shall assist on the application. If the Tenant does not have the qualification to apply,
the Landlord would not refund the amount that received from the Tenant.

Section 6: Both the Landlord and Tenant agreed
the electricity fee, fax fee, copy and printing fee will increase if the price level or electricity price increased. After the
lease agreement is expired or terminated, the Landlord and Tenant shall adjust the agreed rental if both want to renew the agreement.

Section 7: This agreement is in duplicate; each
contracting party shall retain one copy. The agreement executed on the date upon signed by both parties.

Section 8: If there is any conflict between the
English version and the Chinese version in this Agreement, the Chinese version shall prevail.

 

Contract Person:

The Landlord: Top One Business Centre Limited 

Signing with a stamp:/s/ Top One Business Centre
Limited

Company number: 60250234

Tel: 04-23161966

Contact person: Kuo Hsien Kai 0939700930

 

The Tenant:

Signing with a stamp: /s/WU, HSIU-CHUAN

ID card number: 58127815

Permanent address: Rm. 3, 9F., No.910, Sec. 2, Taiwan
Blvd., Xitun Dist., Taichung City 407, Taiwan (R.O.C.)

Tel: 0987255588 Email: Line:

Contact Person ID (attached the front and back copy):

 

The Guarantor:

Signing with a stamp:

ID card number:

Permanent address:

Tel: Date:

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