Under this model, the NOPs are not entitled to any gainshare payment until a minimum level of savings is achieved.

This approach is sometimes used to 'bridge the gap' when the Owner accepts the TOC being set at an amount which it considers may be too high (i.e. where the Owner and NOPs are unable to 'agree' the TOC).

The 'flat spot' will result in the Owner's objectives and the NOPs' objectives not being aligned. This can produce unintended consequences, e.g., Participants will not be driven to reduce costs, and the NOPs may be driven to incur additional and unnecessary costs (e.g. acceleration costs). Therefore, the Owner should exercise some caution in relation to this model.