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Table 2 - Sierra Cybernetics Pricing and Markup Information <br />Technology Specialty W2 Employee Markup Corp -to -Carp Markup Est Hours Until Rate Drops to <br />See Note A below (Type 1 Consultants) Identified Resource Markup <br />See Note B below <br />Proposer Found See Note C below 18% Not Applicable <br />Resource <br />Identified See Note D below 9 °Io Not Applicable <br />Resource <br />Note A — <br />Sierra's basic markup consists of corporate overhead rate +general and administrative rate+ profit. <br />That amounts to 22%. <br />Note B — <br />Because C2C consultants require less overhead, we reduce our basic markup on them from 22% to 18 °%. <br />Note C -- <br />W-2 employees are provided benefits, which costs are additive to our basic markup. We offer W -2 <br />employees three categories of employment (Types 2,3,4) with varying degrees of benefits, with three <br />different markup percentages, in each case, the billing rate to the client Is the same, but the employee <br />can choose a benefit package that best suits their need with a corresponding difference in their <br />underlying pay rate. I.e., selection of lesser benefits results in a higher hourly pay rate, and conversely, <br />to the employee.. We describe this arrangement as being "compensation neutral" so that, at the end of <br />the day, the net value to the employee is targeted to be the same. <br />Type 2 - No benefits. Sierra only withholds payroll taxes and pays the corporate social security, <br />Medicare, and unemployment insurance costs. Total markup on top of pay rate is 33% <br />Type 3 — Limited benefits. Type 2 plus paid leave days plus a stipend toward employee purchase of <br />medical insurance, Total markup on top of pay rate is 41 %. <br />Type 4— Pull benefits. Fully- benefited employee with full taxes withheld, full insurance coverage, full <br />paid leave, and access to Sierra's Cafeteria 125 Plan. Total markup on top of pay rate is 55%. <br />Note D — <br />We currently utilize this "payrolling" program with one of our other clients. The approach is the same as <br />described under Note C, with the benefit percentages being the same, but the overhead plus G &A plus <br />profit amount being only 9 %. So, <br />Type 2 markup = 20% <br />Type 3 markup = 28% <br />Type 2 markup= 42% <br />SIERRA <br />CYBERNETICS Sierra Cybernetics Proprietary Information 8 December 2016 <br />25E -103 <br />