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Tribe To Give Workers A Bonus

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  • Tribe To Give Workers A Bonus

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    Tribe To Give Workers A Bonus

    Oneidas create program similar to stock options to reward employees

    By WILLIAM KATES, Associated Press
    First published: Sunday, January 30, 2005

    VERONA -- The Oneida Indian Nation, which is building an economic empire with
    profits from its Turning Stone casino, has created a kind of stock option for
    its 4,500 employees that is the first of its kind among Indian tribes.

    While it is common for tribes to share profits among its members through
    distribution payments, National Indian Gaming Commission spokesman Shawn Pensoneau
    said doling out performance-based payouts to employees -- especially
    non-Indians -- makes the Oneida program "interestingly unique."

    The 1,000-member tribe employs more than 4,000 non-Indians.

    "It's definitely at the forefront of business thinking in Indian country,"
    said John Carpenter, program coordinator for Northern Arizona University's
    Center of American Indian Economic Development, which provides technical support
    and services to Indian businesses. "Other tribes will be watching closely to see
    if it works."

    The nation wanted to replicate a stock option program but is not a public
    corporation so could not offer shares of stock, said Eric Facer, a Washington,
    D.C., tax attorney hired by the nation to develop the program.

    "It's really like what you would find anywhere in corporate America," Facer
    said. "It's nothing new. The challenge -- and what's different -- is that we
    couldn't offer stock so we had to think up something else."

    So, instead of receiving shares of stock, employees are assigned a percentage
    of the nation's net worth -- called Equity Participation Units -- based on
    their position and performance.

    The EPUs were determined by calculating the total value of all the nation's
    various businesses, estimated at $1 billion. The value was divided among a
    finite pool of 200 million EPUs -- much like a corporation issuing 200 million
    shares of stock.

    So the first issue of credits for fiscal 2003 -- which workers will receive
    next month -- will carry a base value of about $5 a unit. The unit itself has
    no value and cannot be redeemed.

    However, if the nation's value increases, for example, by 10 percent, when
    the 2004 financial picture is completed, then every 2003 unit an employee holds
    grows by 10 percent to $5.50.

    If there is no growth, the employee "has no financial exposure" and loses
    nothing, said Facer.

    Facer estimated that if the Oneida Nation's value continues to increase 8
    percent to 10 percent a year, it will mean an extra $1,000 or so for the typical
    hourly worker who holds onto their units for three years.

    "It's a very exciting idea to be able to earn money without putting anything
    in," said Marie Ames, 60, of Verona, a bingo guest service representative who
    has worked at the casino since shortly after it opened in 1993. "How can you
    go wrong? The longer you work, the better it gets."

    Ames said she planned to use her earnings from the program to help her two
    grandchildren go to college.

    The Oneidas do not release financial figures for their businesses, which also
    include a string of 12 gas station/convenience stores that sell tax-free
    gasoline and cigarettes; a charter airline; Indian Country Today, a national
    newspaper; a video and animation production company; an electronic slot machine
    manufacturing business; three marinas, a campground and an RV park.

    In 2002, it was estimated that Turning Stone alone made $70 million in
    profits. It attracts more than 4 million visitors a year and is just completing a
    $343 million expansion, adding a new 19-story tower hotel, an events center and
    two championship golf courses.

    Nation spokesman Mark Emery said the nation also pays annual employee
    bonuses, worth $4 million last year.

    Employees must wait at least three years to cash in their windfall, which
    means the first payouts will come in 2007. And, workers cannot build their pot
    for more than seven years. After that, payouts occur automatically for the
    expired year.

    Facer said the program is not for the nation's top executives and managers.
    Seventy-percent of the units will be distributed to hourly workers.


    What: Oneida Indian Nation of New YorkWhere: Has purchased nearly 17,000
    acres of former reservation land in Oneida and Madison counties

    Members: 1,000

    Employees: 4,500; less than 10 percent are Indian

    Casino: Turning Stone Casino and Resort, located in Verona, 35 miles east of
    Syracuse; Includes 279-room luxury hotel; 287-room tower hotel, 98-suite
    hotel, 800-seat showroom, 5,100-seat events center, three 18-hole championship golf
    courses and 120,000-square-feet of gaming space

    Other holdings: 12 SavOn gas station/convenience stores; Four Directions Air
    Charter Service; Standing Stone Gaming; Indian Country Today newspaper.

    Source: Oneida Indian Nation
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