Increase In Operating Profit. Means the increase in Operating Profit for each of the years ending December 31, 2012, 2013, 2014 and 2015 over the greater of (i) the 2011 Operating Profit ($19,881,000) and (ii) Operating Profit of any prior fiscal year (following 2011). The following guidelines apply to this calculation: (i) in the event there is a decrease in a current year (Year X) from the 2011 Operating Profit or the Operating Profit in any prior fiscal year (following 2011), no offset or deduction will be made
... for purposes of calculating Increase In Operating Profit and the determination as to whether there is any increase in Operating Profit in the following year (Year Y) will be made by comparing the Operating Profit of Year Y to the greater of (i) the 2011 Operating Profit and (ii) the Operating Profit of any prior year (following 2011) Operating Profit; (ii) in order to calculate the Increase in Operating Profit following an acquisition, the following shall apply: a. with respect to the year of an acquisition, any earnings or losses attributable to the acquired business will be included in the calculation of Operating Profit commencing as of closing, and a pro rata amount (based on the period from closing to fiscal year end) of historical earnings or losses of the acquired business in the prior fiscal year will be included in the calculation of the prior year Operating Profit amount for purposes of comparison. For example, if an acquisition closes on June 30, 2012, (i) any Operating Profit attributable to the acquired business for the period between July 1 and December 31, 2012 will be included in the calculation of 2012 Operating Profit and (ii) the earnings or losses of the acquired business for the period from July 1 thru December 31, 2011 will be added to the calculation of 2011 Operating Profit for purposes of comparison to 2012 Operating Profit; and b. with respect to the year following an acquisition, a pro rata amount of earnings or losses attributable to the acquired business in the period prior to closing in the year of the acquisition will be included in the calculation of Operating Profit for the year of the acquisition for purposes of comparison. For example, if an acquisition closes on June 30, 2012, the Operating Profit of the earnings or losses of the acquired business for the period January 1 thru June 30, 2010 will be added to the calculation of 2011 Average Operating Profit for purposes of comparison to 2012 Operating Profit. The determination of the prior period net income of any acquired business will be based on the financial information used for acquisition justification, and is also subject to adjustment in the Company's reasonable discretion for acquisition expenses, such as closing bonuses. c. for purposes of calculating Operating Profit in an acquired business, the expenses related to (i) intangible assets acquired by the Company and (ii) the "step-up" in basis of property, plant and equipment acquired by the Company shall be excluded in any such calculation of Operating Profit.
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