Common use of Pro-Rated Bonus Clause in Contracts

Pro-Rated Bonus. (i) With respect to a bonus that is intended to qualify as “performance-based compensation” under Section 162(m) of the Code at its time of grant (“Bonus”), such Bonus shall continue pursuant to its terms except as provided herein. Notwithstanding anything in the Bonus agreement to the contrary, to the extent that all or a part of the Bonus becomes payable (x) pursuant to its terms as a result of the achievement of the performance targets or goals applicable to such Bonus award (based on actual results compared to target(s)), or (y) due to a change in control event, a prorated portion thereof (based on the number of days in the performance period that have lapsed through the Executive’s Qualified Termination of Employment date over the total number of days in the performance period) shall be paid to the Executive in a lump sum on or as soon as practical following the end of the performance period, or, if earlier, the date of the change in control event, and in no event later than 2½ months following the end of the performance period or the date of the change in control event, if earlier. (ii) With respect to a bonus that is not intended to be “performance-based compensation” under Section 162(m) of the Code, the Company shall pay the Executive, in lieu of such bonus, an amount equal to the product of (1) his annual base salary (his monthly base salary as determined above multiplied by 12) and (2) his target bonus percentage for the bonus year in which the qualified Termination of Employment occurs or for the immediately preceding bonus year, if a higher target percentage, with such product prorated based on the number of days the Executive was an employee of the Company during the bonus year in which his employment terminated over 365. Such prorated bonus shall be paid on the 60th day after the Qualified Termination of Employment.