Eligible compensation refers to the specific types of earnings that qualify for consideration under a contractual agreement, often determining the basis for calculating benefits or contributions, such as in retirement or bonus plans. It typically includes regular wages but may exclude bonuses, overtime, or other irregular payments, with the exact definition varying depending on the terms outlined in the contract.
Section 2.17“Eligible Compensation” means, in general, for Plan Years beginning on or after January 1, 2024, the amount of an Eligible Employee’s Base Salary that exceeds the limit under Code Section 401(a)(17) for the applicable Plan Year.
For Plan Years prior to January 1, 2024, Eligible Compensation means, in general, the amount of an Eligible Employee’s Base Salary plus Bonus Compensation that exceeds the limit under Code Section 401(a)(17) for the applicable Plan Year, provided that the following shall apply:
(a)Bonus Compensation and Timing of Enrollment. With respect to Contributory Eligible Employees, in the event that, as of the last day of the applicable Enrollment Period, (i) there is less than six months before the end of the performance period for which Bonus Compensation is earned or (ii) the amount of Bonus Compensation has become readily ascertainable, Eligible Compensation means the amount of a Contributory Eligible Employee’s Base Salary that, when added to the Contributory Eligible Employee’s Bonus Compensation paid during the applicable Plan Year, has exceeded the Code Section 401(a)(17) limit for the applicable Plan Year.
(b)Initial Plan Year. For Contributory Eligible Employees, Eligible Compensation for the initial Plan Year shall relate only to Base Salary paid during the initial Plan Year that exceeds the limit under Code Section 401(a)(17). For Non-Contributory Eligible Employees, Eligible Compensation for the initial Plan Year shall relate to Base Salary plus Bonus Compensation paid during the entire 2017 calendar year that exceeds the limit under Code Section 401(a)(17), but, for the avoidance of doubt, only Eligible Compensation paid during the applicable calendar quarter shall be considered for purposes of determining the Non-Contributory Stable Value Benefit under Section 6.01.
(c)Participation for Partial Plan Years. For a New Contributory Participant who commences participation pursuant to Section 3.03, Eligible Compensation for such Plan Year shall relate only to Base Salary plus Bonus Compensation (subject to subsection (a) above) that is paid after the date such participation commences that exceeds the limit under Code Section 401(a)(17).
A Non-Employee Director may irrevocably elect for any calendar year to defer receipt of a designated percentage (up to 100%) of the cash compensation payable to the Non-Employee Director for service as a Director for such calendar year, including annual and other retainers, meeting fees and fees for serving on Board committees (“Eligible Compensation”); provided, however, that Eligible Compensation does not include any amounts paid to reimburse travel, educational or other expenses, or any compensation, benefits or awards payable under the Company’s 2018 Long Term Incentive Plan or any other Company equity-based compensation plan.
Eligible Compensation deferred under the Plan by a Non-Employee Director shall be credited to a bookkeeping account established under this Plan. For purposes of this Plan, the account established for the Eligible Compensation deferred by a Non-Employee Director shall be referred to as the Non-Employee Director’s “Account.” The Eligible Compensation deferred by a Non-Employee Director will be credited to his or her Account effective as of the last day of the calendar quarter to which such compensation relates, except that in the event of the occurrence of a Payment Event Date (as defined in Section 9(a) below) during a calendar quarter for which the Non-Employee Director has deferred all or a portion of his or her Eligible Compensation, any compensation deferred by the Non-Employee Director for the calendar quarter in which such Payment Event Date occurs will be credited to his or her Account effective as of such Payment Event Date.
ELIGIBLE COMPENSATION means retainer and/or meeting fees for services as a director, as established by the Board from time to time, which may be payable in cash or Shares.
Eligible Compensation: Eligible compensation for a salaried Participant is the annualized compensation calculated based on the employee’s salary (without social and fringe benefits), prorated for the number of days eligible for the fiscal year. Eligible compensation for an hourly paid Participant is the rate of hourly pay multiplied by the Participant’s scheduled and performed weekly hours during the fiscal year.
Incentive Target Percentage: Each Participant will have a STIP incentive target expressed as a percentage of eligible compensation. For example, a Participant with eligible compensation of $50,000 and an incentive target percentage of 10% has an annual incentive target of $5,000 ($50,000 x 10%).
Example: Following is a hypothetical example: Eligible compensation = $50,000 STIP Incentive Target Percentage = 10% Performance Goal = Target revenue of $100 million Maximum level of achievement = $150 million Achievement Level (revenue is above Target at $105 million) = 110% achievement The payout percentage is linear and results are interpolated for payouts between the threshold, target and maximum achievement levels compared to actual results Result: $50,000 x 10% x 110% = $5,500 STIP payment
Effective as of December 31, 2013, the Plan was amended to provide that participants could elect to defer annual incentive compensation, if any (“Special Eligible Compensation”). However, such deferrals did not increase the amount of Matching Contributions, which continued to be limited to 5 percent of Eligible Compensation, effectively base salary. Effective for deferrals made after December 31, 2014, the Plan was further amended to provide that variable compensation was part of the definition of Eligible Compensation and that Matching Contributions would be limited to 5 percent of the sum of Eligible Compensation and Special Eligible Compensation for match eligible participants.
1.34 “Eligible Compensation” means, except as otherwise provided herein, (i) the regular base salary actually paid for services rendered while an Eligible Employee by each Participating Company for each pay period during a Plan Year, (ii) salary reduction contributions made pursuant to Sections 401(k), 125 or, effective April 1, 2000, Section 132(f) of the Code, or reductions for amounts under any other deferred compensation program, and (iii) job differential during such period. For all purposes under this Plan, amounts under Section 125 of the Code include any amounts not available to a Participant in cash in lieu of group health coverage because the Participant is unable to certify that he or she has other health coverage. An amount will be treated as an amount under Section 125 of the Code only if the Corporation does not request or collect information regarding the Participant’s other health coverage as part of the enrollment process for the health plan. (For avoidance of doubt, the term “regular base salary” includes regularly scheduled hourly wages, exclusive of overtime wages.)
(a) Notwithstanding the above, “Eligible Compensation” shall not include the following: (i) pay for overtime, cost of living allowances and post allowances for foreign service, severance pay, fees, retainers, reimbursements, prizes or similar payments, payments made in response to natural disasters, pandemics, or other similar events (unless otherwise identified as eligible), or any awards of equity, (ii) amounts representing repayment of salary advances, (iii) any contributions specified in Sections 4.4, 4.5 and 4.12. (iv) any contributions or benefits under the Retirement Plan or any other benefit plan, program or arrangement of a Participating Company,
(b) “Eligible Compensation” shall include the following: (i) In the event that a governmental disability benefit (whether paid directly to the individual or to the Participating Company) is supplemented by a Participating Company under a wage continuation plan, “Eligible Compensation” shall include the total of such governmental disability benefit and Participating Company supplement up to the amount of regular basic compensation, provided that, for the avoidance of doubt, the foregoing shall include workers compensation payments pursuant to a state workers compensation program, provided further that effective August 1, 2008, the foregoing shall include governmental payments pursuant to a state paid disability leave program. Notwithstanding the foregoing, if the laws or the regulations of a State mandated short-term disability fund provide that no contributions can be deducted from payments attributable to such fund, then Eligible Compensation shall not include short-term disability payments attributable to such fund. (ii) If, after performing Qualified Military Service, an Employee becomes reemployed with a Participating Company under USERRA, then, to the extent required by USERRA, “Eligible Compensation” shall include effective January 1, 2014, those components of “rate of pay” as defined by USERRA regulations (not excluded from the definition of Eligible Compensation), such Employee would have received but for such Qualified Military Service. (iii) Regular base salary shall include variable compensation paid periodically during the Plan Year under certain non-annual incentive plans and certain annual incentive plans aside from those designated as Special Eligible Compensation. It shall also include draws, commissions and production overrides. (c) In determining the amount of “Eligible Compensation” for a particular pay period, Pre-Tax Contributions (or pre-tax Catch-up Contributions) under this Plan shall first reduce “Eligible Compensation” prior to any other deductions or deferrals (other than a deferral under Sections 125 or 132(f) of the Code).
You may elect to defer a portion of your compensation at a rate up to 100% of that portion of your base annual salary which exceeds $36,000 and which has not yet been earned by and paid to you in the calendar year for which your Deferral Agreement is effective (your “Eligible Compensation”). Your election must be made pursuant to the terms and conditions of the Guerrilla RF, Inc. Voluntary Deferred Compensation Program (the “Program”), which is attached hereto as Exhibit A. For the avoidance of doubt, your election must be effective only for deferrals of Eligible Compensation which you have not yet earned. It cannot be retroactive.
1.12 “Eligible Compensation” means Regular Base Salary or Bonus Compensation that is paid by the Company or an Affiliate.
Eligible Compensation means the total compensation paid with respect to a Plan Year to a Participant meeting the definition of “Compensation” as set forth in the Qualified Savings Plan, but (a) modified by disregarding the IRS Compensation Limit in such definition and (b) including a Participant’s contributions to this Plan.
1.7ELIGIBLE COMPENSATION. “Eligible Compensation” of a Participant for any Plan Year means base pay plus any variable pay (including annual incentive (AIP), sales commissions and management objective, but excluding any portion of such variable pay that is payable in the form of restricted stock units, performance units, performance shares and any other long-term incentive compensation unless expressly included by the Committee) earned by the Participant during such Plan Year (whether paid during or following such Plan Year). Eligible Compensation does not include incentives, awards, foreign service premiums and allowances, income arising from stock options, separation pay, employer contributions to employee benefit plans, reimbursements or payments in lieu thereof, or lump sum payouts of a Participant’s unused vacation benefits.
Eligible compensation refers to the types or amounts of an employee’s earnings that are considered when calculating benefits, contributions, or bonuses, particularly within retirement plans, insurance policies, or compensation agreements. This term often defines what earnings qualify for inclusion under specific guidelines or plans. Eligible compensation can include base salary, commissions, bonuses, overtime pay, and other types of earnings, depending on the policy or legal framework in place.
The concept of eligible compensation is vital when dealing with employment contracts, benefits packages, or retirement plans. You should utilize eligible compensation to:
When drafting a document or agreement that includes eligible compensation, it’s essential to be clear, precise, and thorough. Here are some guidelines for writing eligible compensation:
Define the Term Clearly:
Include a specific definition of what constitutes eligible compensation within the contract or policy.
Example: “Eligible compensation includes base salary, commissions, overtime pay, and bonuses.”
State the Purpose:
Explain why eligible compensation is considered and how it affects the calculations or decisions.
Example: “Eligible compensation will be used to determine the annual contribution limits to the employee’s 401(k) plan.”
Include Exceptions or Exclusions:
Clearly state any earnings that are not regarded as part of the eligible compensation.
Example: “Eligible compensation does not include fringe benefits, relocation expense reimbursements, or stock options.”
Specify Calculation Methods:
If applicable, detail how eligible compensation will be calculated.
Certain types of contracts and policies frequently include terms regarding eligible compensation, such as:
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Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
The "Entire Contract" clause stipulates that the contract represents the complete and final agreement between the parties involved, superseding any prior agreements or understandings. It clarifies that any amendments to the contract must be agreed upon in writing and signed by all parties to be valid.
The "Errors and Omissions" clause provides protection for parties against unintentional mistakes or oversights that might occur in the documentation or execution of a contract. It typically allows for corrections to be made without penalizing the responsible party, thereby ensuring the contract remains fair and accurate.
An exclusivity clause is a contractual provision that restricts one party from engaging in certain activities or dealings with other parties outside the agreement. Typically used to secure a commitment, it ensures that the party provides services, products, or rights solely to the other contracting party, often to maintain competitive advantage or preserve confidentiality.
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