An executive bonus plan clause outlines the terms and conditions under which company executives are eligible to receive additional compensation beyond their regular salary, typically linked to performance metrics or company goals. This clause ensures alignment between executive incentives and organizational objectives, motivating leadership to achieve strategic targets.
OBJECTIVES: The objectives of this Omnicell, Inc. Executive Bonus Plan (“Executive Bonus Plan”), effective for performance periods commencing on or after January 1, 2024, are to: 1) Drive earnings predictability and revenue growth; 2) Drive execution of operating plan and strategic objectives; and 3) Motivate and inspire Executives (as defined below) to contribute at peak performance levels.
BONUS FUNDING: The Executive Bonus Plan will fund based on the extent to which the Company achieves Corporate Financial Target(s) approved by the Compensation Committee of the Board of Directors (the “Committee”) for the applicable performance period. The Corporate Financial Targets may have a threshold, target and maximum funding range set at the beginning of the applicable performance period that, upon attainment, will determine the percentage of funding for such performance period. Performance periods and the terms for such performance period may be set on an annual or quarterly basis or such other basis as determined by the Committee.
PAYMENT SCHEDULE AND FORM: An Executive’s bonus under the Executive Bonus Plan will typically be paid on a quarterly basis after the Committee has determined the achievement level of the Corporate Financial Target(s) for the applicable performance period. The Committee may determine, at its discretion, whether the bonus for a particular performance period is paid in cash, equity or any combination thereof. Unless subject to a deferral election under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), any bonus payable under the Executive Bonus Plan shall be paid as soon as practicable following the conclusion of the applicable performance period, but in any event no later than two and a half months following the conclusion of the fiscal year in which the bonus was earned, and each payment under the Executive Bonus Plan will be treated as a separate payment for purposes of Section 409A of the Code.
DIRECTION AND ADMINISTRATION •The Committee may adjust the percentage weightings, including Bonus Funding or Individual Incentive Target, within the Executive Bonus Plan to redirect behavior based on changes in the economic environment, immediate needs of the Company, changes in long-term strategies and individual career growth and development throughout the fiscal year. The Committee may alter the incentive payout (including by eliminating the incentive payout) based on achievement of publicly announced targets, product milestones, strategic goals, cross functional teamwork and collaboration, unforeseen changes in the economy and/or geopolitical climate, and any other factors deemed relevant by the Committee. •The Committee reserves the right to make changes to or terminate the Executive Bonus Plan at any time. •Prior to payment, no award under the Executive Bonus Plan shall be transferable other than by will, the laws of descent and distribution. Any attempt to transfer or otherwise dispose of an award shall be null and void. •The Company shall deduct from all payments made under the Executive Bonus Plan to an Executive (or, in the event of the Executive’s death, to the Executive’s beneficiary or estate, as applicable) any Federal, state or local taxes required by law to be withheld with respect to such payments. Participants shall be solely responsible for all other taxes associated with the amounts payable under an award or the Executive Bonus Plan. •This Executive Bonus Plan shall be unfunded and constitutes an unvested promise by the Company to make payments in accordance with the terms of the Executive Bonus Plan. The Company shall not have any obligation to establish any separate fund or trust or other segregation of assets to provide for payments under the Executive Bonus Plan. To the extent any person acquires any rights to receive payments hereunder from the Company, such rights shall be no greater than those of an unsecured creditor. •The provisions of the Executive Bonus Plan shall not give any Executive any right to be retained in the employment of the Company. In the absence of any specific agreement to the contrary, the Executive Bonus Plan shall not affect any right of the Company, or of any affiliate of the Company, to terminate, with or without cause, any Executive’s employment at any time. The Executive Bonus Plan shall not replace any contract of employment between the Company and any Executive, but shall be considered a supplement thereto. The Executive Bonus Plan is in addition to, and not in lieu of, any other employee benefit plan or program in which any Executive may be or become eligible to participate by reason of employment with the Company. •The Executive Bonus Plan and all rights and Awards hereunder shall be construed in accordance with and governed by the laws of the State of Delaware without giving effect to principles of conflicts of laws. •The amounts paid under this Executive Bonus Plan are subject to forfeiture, recovery by the Company or other action pursuant to the terms of the award or any clawback or recoupment policy which the Company may adopt from time to time, including without limitation the Omnicell, Inc. Policy on Recoupment of Incentive Compensation, or as otherwise required by law.
On August 2, 2023, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Near Intelligence, Inc. (the “Company”) approved the terms of the Executive Annual Incentive Plan (the “Executive Bonus Plan”). The Executive Bonus Plan, which will be administered by the Committee, is effective for fiscal years beginning January 1, 2023, and will remain in effect until terminated by the Committee or the Board. The purpose of the Executive Bonus Plan is to advance the interests of the Company and its stockholders by (i) providing certain employees of the Company and its subsidiaries with incentive compensation which is tied to the achievement of pre-established and objective performance goals, (ii) identifying and rewarding superior performance and providing competitive compensation to attract, motivate, and retain employees who have outstanding skills and abilities and who achieve superior performance, and (iii) fostering accountability and teamwork throughout the Company.
The Executive Bonus Plan provides for a payment of incentive compensation to officers and other eligible employees who are selected by the Committee for certain specified performance periods. Prior to or as soon as administratively practicable after the beginning of a performance period, the Committee shall approve (i) the business unit performance goals, (ii) the Company performance goals, (iii) the threshold achievement, target achievement and maximum achievement levels for the business unit performance goals and Company performance goals, (iv) with respect to each participant, the incentive compensation to be paid for achievement of the threshold achievement, target achievement and maximum achievement levels and the relative weighting of each performance goal in determining the participant’s incentive compensation and (v) a schedule setting forth the payout opportunity for threshold achievement, target achievement and maximum achievement levels.
Pursuant to the Executive Bonus Plan, the performance criteria for individual performance goals, business unit performance goals and Company performance goals shall be related to the achievement of certain financial and operating objectives, which may consist of one or more criteria selected by the Committee from time to time, including, but not limited to: cash flow, sales, cost reductions, revenues, customer growth, earnings before interest, taxes, depreciation and amortization (“EBITDA”), gross margin, earnings per share (whether on a pre-tax, after-tax, operational or other basis), operating earnings, capital expenditures, expenses or expense levels, public offerings or similar extraordinary business transactions, price of the Company’s common stock, equity or stockholders’ equity, return on capital compared to cost of capital, total market value, stockholder value, total return to stockholders or such other objective criteria determined by the Committee.
The Executive Bonus Plan, which is for executives designated as Executive Vice President or higher on January 1, 2024, will create a bonus pool which will be funded based on the Corporation’s net income performance and awards will be allocated to each participant based upon individual performance and contribution to the Corporation’s success. Target incentive levels are based upon the participating executive’s position. The maximum incentive payment will be 150% of target for each participant. Performance goals will be established by the Committee. Performance results will be based on GAAP earnings consistent with publicly released results. Executive Bonus Plan awards, which may be made to an executive in cash and/or equity, are intended to be performance-based awards granted under, and subject to the requirements of, Section 10 of the Washington Trust Bancorp, Inc. 2022 Long Term Incentive Plan. The Corporation intends that the Executive Bonus Plan and all payments under the plan will be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). The foregoing description of the Executive Bonus Plan is not complete and is qualified in its entirety by reference to Executive Bonus Plan, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
This 2024 Executive Bonus Plan (“Plan”) specifies the terms and conditions under which eligible executive employees of PubMatic, Inc. and/or its subsidiaries (“Company” or “PubMatic”) may receive bonuses from the Company and how the Plan will be administered. This Plan states how bonuses are calculated, but it does not change your target bonus. Please read this entire document carefully, as important aspects of the Plan and your potential bonus are detailed in this document.
On April 12, 2023, the Company entered into an employment agreement (the “Employment Agreement”) with Ms. Derby. The Employment Agreement provides that Ms. Derby will receive an annual base salary of $650,000 that may be increased annually at the sole discretion of the Compensation Committee of the Board and will participate in the Company’s executive bonus plan (the “Executive Bonus Plan”) with a target bonus percentage of 100% of her annual base salary. Pursuant to the Employment Agreement, on the Effective Date, Ms. Derby will receive a grant of 417,320 shares of restricted stock (the “Restricted Stock Award”) under the Company’s 2016 Stock Incentive Plan, as amended (the “2016 Plan”), which is equivalent to 450,000 shares of restricted stock less the pro rata portion through the Effective Date of the 49,020 shares of restricted stock which were granted to Ms. Derby in January 2023 as a director, with 34% of the shares under the Restricted Stock Award vesting on May 1, 2024 and 33% of the shares vesting on each of January 15, 2025 and January 15, 2026.
Company: The threshold pre-tax income goal must be achieved for the Executive Bonus Plan to be activated. After this requirement is achieved, a bonus will be paid based on the achievement of personal and department goals and the performance evaluation. The bonus will be paid on an individual basis as a percentage of the participant’s annual salary. The plan allows for a bonus range of 0% to 65%.
The Executive Bonus Plan for 2022 will focus first on meeting a minimum Corporate profit threshold, and thereafter meeting personal goals and department goals.
Amendments to Executive Bonus Plan On May 19, 2021, the Compensation Committee (the “Committee”) of the Board of the Company amended the Electronic Arts Inc. Executive Bonus Plan (the “Executive Bonus Plan”) to update certain provisions relating to Section 162(m) of the Internal Revenue Code, as amended. Specifically, the Committee amended the Executive Bonus Plan to: (1) reduce the maximum bonus payable under the Executive Bonus Plan to 200% of the target bonus from 300% of the target bonus and to eliminate the $5,000,000 annual bonus cap, (2) expand the list of performance goals that may be selected by the Committee to include any objective measure specified by the Committee in its discretion, and (3) permit adjustments to the bonus formula for individual performance considerations. All other material terms of the Executive Bonus Plan remain unchanged. The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Executive Bonus Plan, a copy of which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.
Executive Bonus Plan In 2008, our stockholders approved the original Executive Bonus Plan for our executive officers. In 2011, our stockholders approved the Amended and Restated Executive Bonus Plan, and in 2013, our stockholders approved an amendment to the Amended and Restated Executive Bonus Plan. We also administer a substantially similar executive bonus plan for our Chief Financial Officer. Annual cash bonuses are intended to compensate our executives for the achievement of company-wide net income and expense leverage goals. Cash bonuses are set as a percentage of the executive officer’s base salary, with higher-ranked executives typically being compensated at a higher percentage of base salary. However, our success is dependent on the ability of our management group to integrate and work together to meet common company wide goals. Accordingly, executives are not assigned specific individual goals but instead are collectively responsible for meeting company wide goals. In 2021, we established bonus targets and made awards under (i) the Amended and Restated Executive Bonus Plan to our Chief Executive Officer and our Chief Administrative Officer and (ii) the Executive Non-Equity Bonus Plan for our Chief Financial Officer.
Our subcommittee that administers the Executive Bonus Plans (the “Subcommittee”) develops corporate goals that, if achieved, will result in improved operating performance. In 2021, our target bonus percentages were 100% of base salary for our Chief Executive Officer and Chief Financial Officer and 75% for our Chief Administrative Officer. In addition, our compensation program also provides incentives for our executives to reach beyond our target corporate goals. If our executives perform above expectations, they may be entitled to receive additional bonus amounts that can result in a total annual bonus of up to 170% of base salary. Proportionally lower bonuses are provided for achievement levels between 90% and 100% of respective company-wide targets, and no bonuses are earned by any executive where less than 90% of the respective company-wide target factor is achieved. In February 2021, our Subcommittee approved a consolidated net income goal of $72.8 million for 2021, reflecting our growth target for the year and an expense leverage goal to limit 2021 consolidated SG&A expenses as a percentage of net sales at 10.34%.
Pursuant to the Employment Agreement, Mr. Hauch will participate in the Company's Executive Bonus Plan (the "Executive Bonus Plan") with a target percentage of 100% of his annual base salary, and any restricted stock or other equity incentive plans applicable to executive employees, as determined by the Compensation Committee. The Employment Agreement also provides that Mr. Hauch will receive a cash sign on bonus of $120,000 in lieu of any payments for costs or expenses of his relocation and reimbursement for temporary lodging expenses incurred through the earlier of (i) his relocation or (ii) June 15, 2021.
An Executive Bonus Plan is a compensation strategy designed to provide additional financial incentives to executives and key employees beyond their regular salary. These plans often involve bonuses that are linked to performance metrics or company objectives, offering a way to align the interests of executives with those of the company and its stakeholders. The bonuses can be delivered in various forms, such as cash, stock options, or other forms of deferred compensation.
You should consider using an Executive Bonus Plan in situations where you want to:
Writing an Executive Bonus Plan involves several key steps:
A sample outline might look like this:
Executive Bonus Plan Outline
- Introduction
- Purpose of the Plan
- Eligibility
- Participating Positions
- Performance Metrics
- Measurement Criteria
- Bonus Calculation
- Structure and Payment
- Terms and Conditions
- Eligibility for bonuses
- Legal and Tax Considerations
- Approval and Amendments
Executive Bonus Plans are commonly found in:
By including such plans in these contracts, companies ensure clarity and enforceability in the provision of agreed-upon bonuses.
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The clause "Exhibits attached hereto" refers to supplementary documents that are attached to the primary contract and are considered an integral part of it. These exhibits provide additional details, specifications, or terms that are referenced in and incorporated by the main contract document.
The "Extension of Agreement" clause stipulates that the existing contract may be prolonged beyond its original end date under certain agreed-upon conditions, which can include mutual consent, automatic renewal, or fulfillment of specific criteria. This clause ensures continuity in the business relationship, avoiding disruptions while providing an opportunity to renegotiate terms if needed.
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