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Change In Organization Structure

February 23, 2007

Last Revised:  May 23, 2012 4:50 PM

This page was originally published as a new Company Policy.

Company Policies that had been published on Lucid Minds are now used as "Advices" and not as Official Company Policy.

Official Company Policy is now replaced by Vibrant Life Executive Directives, proposed by ED, Clifford Woods, approved by Karl Loren, and when approved, published by Mr. Woods.

Thus the original information on this page is no longer valid but remains in place with the text "struck out."

In fact, this page contains a reference to making Vibrant Life the "property" of a group of people, or an Executive Council.

None of the persons in that group are any longer associated with Vibrant Life in any way, nor is there any remainder of "ownership" connected with any of them, nor with any "Executive Council." There is no Executive Council in existence at the time of this writing, but there may be, under the administration of ED, Clifford Woods.

The remainder of this page is left in place, but all the text from here to the bottom, the text in the original sections, is "struck out" to further indicate the non binding nature of the information on this page. There is however inserted on this page a new section, shown in RED. That section makes it clear that Mr. Clifford Woods is the Executive Director of Vibrant Life.

This Company, Vibrant Life, has been organized as an enterprise with a typical "for profit" structure ever since its formation many decades ago.

Effective with the date of this Company Policy Letter, February 23, 2007, the basic structure of this enterprise is officially changed.

Founders Karl Loren and Jean Ross leave around October 17, 2007, on a trip. Further changes in the Executive Council have been made in recognition of their expected absence.

This Company Policy outlines the basic philosophy of these changes but subsequent company policies will announce more specific details.

There is hereby formed an Executive Council consisting of the senior executives in the Company. As of the date of this Company Policy those executives include:

Mark Warkentin Vice President, Deputy ED.

Kimberly Withey, Vice President, Production, Division Four.

Steven Archibald, Marketing I/T, Division Two

These categories of structure, called Divisions, are based on the terminology and Policies within the Hubbard Management System.

Effective for the date of this Company Policy members of the executive Council become owners of the enterprise and are no longer classified as employees.

The formal and legal detail of how this ownership change takes place will be described in a further Company Policy. Generally, however, the change initially involves forming a separate joint venture with each of the members of the executive Council. A joint venture is the type of legal structure which can evolve to a situation where it actually has a tax ID number and files an IRS Form 1065 to declare its income and tax obligations. The structure can be further delineated by forming a limited liability company, LLC, which also files an IRS form 1065 as a legal entity. The legal structure of an LLC makes provision for the equivalent of limited partners and will be the final legal structure of Vibrant Life.

Additionally, in view of the temporary absence of Karl and Jean, the following special responsibilities are assigned.

Mark has also been added as a signatory on the Payroll account (replacing Dennis Schliewe who has resigned) and the Cal Nat Disbursements checking account. Most bills will continue to be paid electronically by Karl and Jean from their remote lap top. Mark will also be the person to make any needed deposits into various bank accounts while Jean is not at home to do this. Kimberly has been hatted to do these deposits of checks she receives at the warehouse.

Within this new legal structure the two original Founders of the company, Loren C. and Bonnie J. Troescher,retain their titles as Founders. As the original Founders Loren and Bonnie were also the legal owners and Vibrant Life has operated for many years as a partnership.

Bonnie Troescher has held the title and position within Vibrant Life as the Flag Banking Officer, FBO,as that term is used and defined within the Hubbard Management System. Bonnie Troescher also uses the professional name of Jean Ross and is often referred to by that name in many web pages published by Vibrant Life.

Using the name of Jean Ross on many web pages Bonnie Troescher has also been given the informal title of Friend of Goodwill within Vibrant Life.

Loren C. Troescher uses the professional name of Karl Loren and it is under the name Karl Loren that the many pages published by vibrant life are created. Karl Loren also uses the informal title of Speaker for Life.

Loren C. Troescher, using his professional name, Karl Loren, has been and continues to be the Executive Director of Vibrant Life.

within this new Company structure the members of the Executive Council are classified as owners and are "members" of the LLC who have the equivalent of a limited partnership position and are not classified as though a general partner who might have authority and legal power to obligate the entire partnership and every other general partner. The LLC method of organization gives the advantages of a limited liability partnership in a somewhat different form.

Thus this new organization structure still includes Karl Loren as Executive Director who has the formal and legal authority for an Executive Director as that term is described within the Hubbard Management System.

This Company Policy also officially announces the adoption of an incentive pay system (also called a proportional pay plan or "unit" plan) whereby the newly established ownership of the Company receives profit shares based on an incentive pay system structure.

Profit shares generally will be distributed on a weekly basis depending on the gross income of the Company for that week. The percentage of the gross income allocated for profit share payments will include provision for recognition of the personal statistics of each separate owner. Weekly profit distribution checks will be prepared at the same time as payroll checks are prepared for those staff members who are not part of the incentive pay system. Since there is no withholding on this type of cash distribution, it will be vital for each such owner to arrange for a savings account or other way to accumulate funds for the payment of taxes on his profit distributions. His tax payment would consist, usually, of an Individual Form 1040 to which he would attach the annual Schedule K he would receive from he Company.

Failure to file and handle an executive's tax obligations would be grounds for suspension of status as an owner and executive.

Thus as the income and profits of the Company increase each of the owners should realize an increase of their weekly profit distributions. However because the percentage of gross income allocated to the profit sharing system depends also on personal statistics any one individual owner can receive more or less of a profit distribution based on his personal performance and based on objective statistics.

With this new system each member of the Executive Council should see himself and operate as an owner of the Company.

The full details of this new incentive pay system structure will be further outlined in Company Policy. Although the further description of this incentive pay system structure awaits further Company Policy the hallmark of the incentive pay system is that a percentage of the gross income of the company is allocated to pay profit shares to the owners and owners of this Company do not and will not receive a salary or other type of remuneration subject to withholding taxes. They receive instead shares of profit as would be reported to the IRS on a Schedule K as that term is used within IRS form 1065.

This change of organizational structure has been announced in part because of past experience which showed that the lack of such an incentive pay system gave rise to executives who did not take responsibility for the Company as if they were owners. One destructive initial situation developed which is described at this link.

The first written Policy covering an incentive pay system is here.

The link most immediately above this line should be read to understand the most likely final details of the incentive pay system. The actual final incentive pay system will be described more formally in these Company Policies.

One other important factor that relates to the new organizational changes is the role of Clifford Woods relative to Loren C. and Bonnie J. Troescher as well as to Vibrant Life. Acknowledging that both Loren and Bonnie are elders, it has seemed only prudent to arrange their personal affairs and that has been done with a living trust. Clifford Woods is the trustee of that living trust. In the event of the sudden death of both Loren and Bonnie prior to the time when a new Executive Director has been chosen by Loren or Bonnie to replace Loren as ED, Clifford Woods as a part of the agreement between him and the legal owners of Vibrant Life, assumes total ownership and responsibility for the operation of the Company.

Revision on September 12, 2009::

Mr. Clifford Woods has been named as the Executive Director of Vibrant Life. Per the Living Trust Indenture, Mr. Woods is named as the person to inherit any part of the ownership interests in Vibrant Life at the death of the last surviving of Loren or Bonnie, that portion of ownership then held by Loren or Bonnie.

As soon as a new Executive Director has been selected and appointed by the current Executive Director, Karl Loren (or his wife, Bonnie, in the event of Loren's death and her survival), Clifford Woods would no longer assume that level of control, ownership or responsibility as trustee of the living trust. A further part of this agreement is that in the event of the sudden death of Loren, leaving Bonnie in a position of the sole owner of Vibrant Life, Clifford Woods has agreed to take responsibility of management and secure a standard of living for Bonnie in keeping with the activities of the estate.

Quotes from L. Ron Hubbard are copyright 1994 © by the L. Ron Hubbard Library. All rights reserved.