Common use of Gain Sharing Clause in Contracts

Gain Sharing. SNBTS agrees to use reasonable good faith efforts to improve its productivity performance in the manufacture of each Product, so the Product remains competitive in the marketplace. Product improvements may be achieved through a number of ways, including, but not limited to savings achieved through contract pricing, distribution/storage costs, quality/inspection of Products, waste, overage, inventory, manufacturing efficiencies, increased volumes and leveraging from new business opportunities. All ideas that the parties generate but that are not implemented will count toward the overall objective, except for those ideas which are not practical, i.e., create unresolvable regulatory/compliance issues, or ideas not meeting market requirements or pricing. SNBTS agrees to review Product pricing based upon quantified manufacturing efficiencies or other documented savings. Productivity gains shall be a reciprocal process. SNBTS will not accept reduced margin for Products in order for OCD to achieve price reduction. SNBTS will not commit to reduce prices by a certain percentage annually, but will commit to target cost reduction in total product cost. As outlined in the Quality System Agreement, the change control processes of both companies will be followed prior to the implementation of any change to the Products.