Final Year Bonus Clause Samples
The Final Year Bonus clause establishes the conditions under which an employee is entitled to receive an additional payment at the end of their final year of employment. Typically, this clause outlines eligibility requirements, such as completion of a full year of service or meeting specific performance targets, and details how the bonus amount is calculated—often as a percentage of annual salary or based on company profits. Its core function is to incentivize employees to remain with the company through the end of their contract or to reward long-term service, thereby supporting retention and recognizing employee contributions.
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Final Year Bonus. The Company will pay to Executive a pro rata Annual Bonus for the year in which the termination of employment occurs, which shall be determined based on Executive’s actual Annual Bonus earned for the year in which termination of employment occurs (if any), based on actual performance, multiplied by a fraction, the numerator of which is the number of days in which Executive was employed by Company during the year in which the termination of employment occurs, and the denominator of which is three hundred sixty-five (365). The pro rata Annual Bonus described in this subsection 3(f)(ii) will be paid at the same time and under the same terms and conditions and on the same schedule as bonuses are paid to other executives of the Company, subject to Section 5(b) below.
Final Year Bonus. The Company will pay to Executive a pro rata portion of the annual bonus for fiscal year (the “Final Year Pro Rata Bonus”). The Final Year Pro Rata Bonus shall be calculated and paid in accordance with Section 5(a)(2) of Executive’s Employment Agreement with the Company, dated as of , 2016 (the “Employment Agreement”).
Final Year Bonus. For calendar year 2004, Executive shall receive a final ----------------- year bonus calculated as follows: For the preceding six (6) calendar years, a sum shall be calculated equal to two percent (2%) of Net Profits in excess of one percent (1%) of gross sales calculated for such period (as calculated, the "FINAL YEAR BONUS BASE"). For example: ABC Gross Sales (1998-2003) $10,000,000,000.00 ABC Net Profits: $ 280,000,000.00 Threshold (1% of gross sales) $ 100,000,000.00 Net Profits Over Threshold $ 180,000,000.00 Final Year Bonus Base (2% of Net Profits Over Threshold) $ 3,600,000.00 For his Final Year Bonus, Executive shall be paid the greater of (i) the sum of ten percent (10%) of Net Profits in excess of one (1%) percent of gross sales in calendar year 2004 in excess of the Final Year Bonus Base, or (ii) the Annual Bonus Part A and the Annual Bonus Part B if it had been calculated for calendar year 2004. An illustration follows using the previous example: ABC Gross Sales (2004) $ 2,200,000,000.00 ABC Net Profits $ 100,000,000.00 Threshold (1% of gross sales) (less than)$ 22,000,000.00(greater than) Net Profits over Threshold $ 78,000,000.00 10% of Net Profits Over Threshold $ 7,800,000.00 Final Year Bonus Base $ 3,600,000.00 ------------------ Final Year Bonus $ 4,200,000.00 The Annual Bonus Parts A and B calculated for 2004 would be a maximum of $1,560,000 (2% of $78,000,000). Therefore, in this example, the Final Year Bonus would equal the higher sum of $4,200,000. No bonus will be due for the period from January 1, 2005 to April 30, 2005. The foregoing examples (including the dates and amounts referenced therein) are for illustrative purposes only and are not intended to represent any particular result. The Company makes no representation or warranty with respect to the income earned in the past or projected to be earned at any time, and the Company makes no representation or warranty that Executive will receive any amount of Annual Bonus or Final Year Bonus. The calculations of Net Profits and any bonuses due hereunder shall be made in the reasonable discretion and in accordance with generally accepted accounting principles by the Company's Chief Financial Officer. From time to time, the Company may change its accounting principles and tax status as determined by its Board of Directors.