Profit Equity Model

The Profit Equity model was implemented to ensure each employee is being compensated in relation to the amount of work contributed to a project, instead of on an hourly wage. Most all of the profit earned is distributed to the contractors who were involved in the products creation.

Each design project has a project manager who determines the percent of work each employee contributed to the project by analyzing data received from the employees themselves; the determined percentages assigned to employees collectively add to 100%. After the finished product or service has been released, each employee will receive a portion of the net income from sales respective to the percent of work contributed after initial capital has been repaid.

This allows the company to operate efficiently and flexibly. If employees are overwhelmed with academia or other projects, they can reduce the amount of time in which they contribute to one of IDC's projects and simply earn a lower percentage of the product's profit. Unlike IDC's competitors, this business model allows IDC to maintain an extremely low overhead making it easier to penetrate unexplored markets.

The following graph displays the percentage that is distributed to IDC’s contractors or maintained by the company as projects increase or decrease in profitability.

The legal description of the Profit Equity system in our contracts is contained below for reference and questions:

3.1 Profit Equity.  The Contractor’s compensation shall be determined using Profit Equity, as described in this Agreement.

A. Profit Equity shall serve as a tool to help the project manager calculate a Contractor’s contribution to a project.

B. Point System.

(i) All projects will have a beginning balance of Profit Equity points to award per project. Project Managers will be responsible for adhering to this set balance to the best of their abilities under the direction of the Executive Board.

(ii) The Executive Board must approve any modifications to the original Profit Equity point allocation or subsequent revisions.

(iii) The Project Manager will define a list of project deliverables and assign a set amount of Profit Equity points for each. These defined deliverables will be approved by the Executive Board, and outlined in the Project Charter.

(iv) If portions of the deliverables are incomplete this may justify an adjustment in the allocated Profit Equity for that particular task/portion of the project for the Contractor.

(v) Should portions of the project deliverables be changed after the start of a project, their assigned Profit Equity points shall be adjusted accordingly by the Project Manager to accommodate for any increase or decrease in the work required to complete the deliverable.

C. Profit Equity only pertains to the Contractor’s share of profits generated by the project that the Contractor contributed to and does not in any way ensure that Contractor will make money, only that if, and only if, the project becomes profitable that the profits are distributed in proportion to the most current Profit Equity point allocation and project contributions.

D. Upon completion of the project or other project phases as determined by the Project Charter, the Contractor’s Profit Equity points will be totaled, evaluated by the Project Manager, approved by the Executive Board, and then allocated in a formal notification to each of the involved parties.

E. Profit Equity for the Contractor is only valid as long as their contribution to the project is in use. In the event of reduction of Profit Equity allocation(s), the Company must provide proper written notification to Contractor including reasons for reduction.

F. Contractor agrees that Profit Equity allocations and compensation in general are considered to be confidential and will uphold this confidentiality. Discussion of these matters is to be considered a breach of contract with the exception of relevant tax collection and government agencies and relevant company agents, specifically in the cases of Contractor to Project Manager and Contractor to Executive Board communication.

G. Not all project profit is eligible for distribution as profit equity. As described in the attached Exhibit B (the “Overhead Valuation Breakdown”), a project’s overhead percentage will be determined based on the total net profit over all time for a project.