|

Brazilian companies are required under Brazilian law to compensate
employees, in addition to their salary and benefits, with
profit sharing. We have developed an employee profit sharing
model that ties the distribution of these incentives to key
performance indicators such as revenue growth, cost containment,
customer satisfaction and quality of work. We have worked
with labor unions and have carefully communicated these goals
to achieve their support. The 2000 employee profit share distribution
was R$36.8 million but could have been as high as R$42 million
had we not experienced the significant increase in bad debt.
In 1999, while the profit sharing policy was still being developed,
we distributed R$36.0 million to such account. For 1998, the
policy was a relic from the pre-privatization era, and we
paid R$24 million based on previously existed guidelines.
|