Executive bonus plan clause samples

There are five proposals expected to be submitted for shareholder approval at the Annual Meeting, two of which are advisory in nature. The first proposal concerns the election of directors. The second proposal concerns ratifying the appointment of PricewaterhouseCoopers LLP, as the Company’s independent registered public accounting firm. The third proposal concerns the advisory vote on executive compensation. The fourth proposal concerns the advisory vote on the frequency of future advisory votes on executive compensation. The fifth proposal concerns approval of the Executive Bonus Plan. These proposals are more fully described below.

Our officers (including our officers who are “covered employees” as defined in Section 162(m)) who are selected by the Compensation Committee are eligible to participate in the Executive Bonus Plan. In its discretion, the Compensation Committee may add participants to, or remove participants from, the Executive Bonus Plan at any time during a performance period or otherwise, except that no participant may be added after the 90th day after the beginning of an annual performance period (or otherwise at a time that is not consistent with regulations under Section 162(m)).

The Board or Compensation Committee may at any time amend, modify or terminate the Executive Bonus Plan. Any such amendment, modification, or termination, unless required by law, will become effective in the next performance period. In addition, no amendment that would require shareholder approval will become effective without the approval of the shareholders.

Cash bonus awards for each of our NEOs, with the exception of Mr.Söderlund, were funded under the Executive Bonus Plan. Cash bonuses payable under the Executive Bonus Plan are intended to qualify as tax deductible “performance-based compensation” under Section162(m) of the Internal Revenue Code. Mr.Söderlund’s cash bonus award was funded under the EA Bonus Plan as he resides in Sweden, and his compensation is not subject to Section162(m). At the beginning of each fiscal year, the Compensation Committee selects the Executive Bonus Plan participants and the Section16 officer participants of the EA Bonus Plan, performance period, performance measures, and the formula used to determine maximum bonus funding. In fiscal 2016, all of our NEOs, with the exception of Mr.Söderlund, were selected to participate in this Executive Bonus Plan. The Compensation Committee approved Mr.Söderlund’s participation in the EA Bonus Plan. For all NEOs, including Mr.Söderlund, the Compensation Committee selected non-GAAP net income as the performance measure because the level of profitability is a key business focus in any year. The performance period was established as fiscal 2016, and the formula to determine the maximum bonus funding for each NEO was the lower of: (1)300% of their annual base salary or (2)0.5% of our fiscal 2016 non-GAAP net income for each NEO other than our CEO, for whom the maximum was 1% of our fiscal 2016 non-GAAP net income. For fiscal 2016, the Company reported non-GAAP net income of $1.018 billion which resulted in a maximum bonus award funding of 300% of annual base salary for each of our NEOs.(2) The Compensation Committee then exercised its discretion to reduce actual bonus awards for each individual based on the Company’s overall financial performance, the terms of the Executive Bonus Plan and EA Bonus Plan, target bonus award and individual performance against strategic and operational objectives, as discussed in “Our NEOs’ Fiscal 2016 Compensation” above.

Our stockholders are requested to approve the amendments to the Executive Bonus Plan. However, if the Executive Bonus Plan amendments are not approved by stockholders, the terms of the originally approved Executive Bonus Plan will continue to apply to the fiscal 2017 bonus payments.

The Board of Directors recommends the re-approval of the material terms of the performance goals under the Executive Bonus Plan for the purpose of preserving its ability to deduct compensation earned by participants under the Executive Bonus Plan. To enable performance-based compensation paid under the Executive Bonus Plan to constitute “qualified performance-based” compensation within the meaning of Section162(m) of the Code, the stockholders of the Company are required to re-approve the material terms of the performance goals every five years.

discretion to reduce the size of the awards payable under the Senior Executive Bonus Plan. The Compensation Committee may not increase payments under the Senior Executive Bonus Plan beyond the Gross EBITDA limits. The Compensation Committee also may adjust awards established pursuant to the EICP, provided that the awards as so adjusted do not exceed the parameters permitted by the Senior Executive Bonus Plan. For information about the overall structure and its impact on the tax deductibility of our compensation see “Tax and Accounting Considerations” below.

If the Senior Executive Bonus Plan is not approved by our stockholders, we will not grant any awards under the Senior Executive Bonus Plan. However, we may otherwise grant annual cash or stock bonuses to the executive officers who would have been eligible to participate in the Senior Executive Bonus Plan. In that event, these bonuses would not qualify as performance-based compensation under Section 162(m) of the Code, and, accordingly, all or a portion of the bonuses might not be deductible by the Company for federal income tax purposes.

Although a portion of the 2017 bonus was paid in the form of fully vested RSUs, these equity awards were not considered to be equity compensation from the company’s perspective as they were essentially cash-equivalent payments made pursuant to the Executive Bonus Plan. Further, although the grants that relate to the 2016 Executive Bonus Plan are reported in the “2017 Grants of Plan-Based Awards” table that follows this Compensation Discussion and Analysis, the value of those awards is not included in 2017 total compensation for our named executive officers as it was more appropriately included in 2016 total compensation.

Each of our named executive officers was eligible to participate in the 2017 Executive Bonus Plan. Mr.Glaser had a target bonus opportunity equal to 100% of his annual cash base salary and each of the other executives had a target bonus opportunity equal to 75% of his or her annual base salary. The Compensation Committee reviewed the targets and deemed them appropriate based on internal equity considerations and the desire to emphasize teamwork to achieve the company’s performance objectives.

2018 Annual Executive Bonus Plan. In accordance with the terms of the 2018 Annual Executive Bonus Plan, you will be eligible to receive a performance-based 2018 annual cash bonus at the same time as other executives of the Company subject to the Compensation Committee’s certification of achievement of the performance metrics under the 2018 Annual Executive Bonus Plan (the “2018 Bonus”).

Executive Bonus Plan. Bogota Savings Bank adopted the Executive Bonus Plan for its executive officers who are approved annually by the Board of Directors. The Named Executive Officers are participants in the Executive Bonus Plan. The Executive Bonus Plan is designed to provide participants with incentives and motivation to increase Bogota Savings Bank’s profitability and growth while maintaining its safety and soundness. The Executive Bonus Plan provides annual incentive awards to participants based on overall bank-wide, department and/or individual performance goals established annually, which are determined by using performance history, peer data, market data and the Compensation Committee’s judgment based on previous experience and projected market conditions.

I have received and reviewed the terms of the 2020 Executive Bonus Plan. I understand and agree that this Plan does not create a contract of employment.

Although the 2018 bonus was paid in the form of fully vested RSUs, these equity awards were not considered to be equity compensation from the company’s perspective as they were essentially cash-equivalent payments made pursuant to the Executive Bonus Plan. Further, although the grants that relate to the 2017 Executive Bonus Plan are reported in the “2018 Grants of Plan-Based Awards” table that follows this Compensation Discussion and Analysis, the value of those awards is not included in 2018 total compensation for our named executive officers as it was more appropriately included in 2017 total compensation.

SVP, Chief Financial Officer and Treasurer (Ms. Thomas left the company in May 2017) Pay for Performance.Our Compensation Committee supports a pay-for-performance philosophy, with the goal of having a substantial part of our executive compensation program consisting of performance-based compensation. This is reflected in our annual performance-based incentive bonus plan, which we also refer to as our Executive Bonus Plan, which provides eligible executives the opportunity to earn a bonus upon achieving pre-established performance objectives, all of which are weighted toward financial and strategic objectives of our businesses. In 2016, all of our named executive officers participated in the Executive Bonus Plan. Moreover, in a continuing effort to more closely align the interests of executives and shareholders and to conserve cash, the Compensation Committee determined that any payouts under the plan would be paid 50% in cash and 50% in the form of fully vested restricted stock units.

(1) Represents the number of shares vesting (including shares withheld to cover taxes) multiplied by the fair market value of RealNetworks’ common stock on the vesting date. For Mr.Patrizio, the stock award disclosed was granted as restricted stock units in connection with his recruitment to RealNetworks. For all other executives, the stock award disclosed was granted as restricted stock units in lieu of cash as the bonus payout approved pursuant to the 2015 Executive Bonus Plan. Mr.Parham’s stock awards also include a restricted stock unit award, 1,250 shares of which vested on March24, 2016 and 1,250 shares of which vested on September24, 2016.

All of our named executive officers were granted annual cash incentive awards for fiscal 2018 under the Senior Executive Bonus Plan.“See “Personal Performance Assessment and Specific Compensation Actions for the Named Executives” below for more information on fiscal 2017 awards and payments and fiscal 2018 awards.

(1) Represents performance metrics under the Management Bonus Plan, which is referenced by the Compensation Committee as a basis for payments under the Senior Executive Bonus Plan. The performance metrics above are intended to incentivize executives to achieve results consistent with the Company’s long-term framework for its financial performance which consists of mid to high single digit growth in adjusted operating income or adjusted EBIT, 3% to 5% organic or adjusted sales growth, and low double digit percentage growth in adjusted EPS.

(2) The amounts represent the threshold, target, and maximum payouts under the Management Bonus Plan for the 2017 performance period which serves as the basis for the annual cash incentive payments under the Senior Executive Bonus Plan in which Messrs. Foss, Bramlage, Reynolds and Kroeker and Ms.McKee participated in 2017. With regard to Mr.Foss, the maximum shown is the maximum allowed under the Senior Executive Bonus Plan. The maximum bonuses under the Senior Executive Bonus Plan for fiscal 2017 as a percentage of the aggregate bonus amount under the Senior Executive Bonus Plan are: for Mr.Foss, 54%; for Mr.Bramlage, 14%; and for each of Messrs. Reynolds and Kroeker and Ms.McKee, 11%.

In fiscal 2017, all of our named executive officers participated in the Senior Executive Bonus Plan. Under the Senior Executive Bonus Plan, the Compensation Committee approved in November 2016 the establishment of a bonus pool that was funded based on 1.86% of adjusted EBIT. For purposes of the Senior Executive Bonus Plan and the formula used to determine the bonus pool approved by the Compensation Committee, adjusted EBIT is income from both continuing and discontinued operations before income taxes, if any, and before interest expense and other financing costs, in each case as shown in our audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended September29, 2017. In addition, adjusted EBIT for purposes of the pool excluded incremental customer relationship amortization and incremental depreciation that resulted from the 2007 going private transaction (the “2007 Transaction”) and share-based compensation expense. These adjustments were made to normalize the adjusted EBIT number so that it does not reflect certain non-operational items.

Our board of directors adopted the Executive Incentive Compensation Plan, or the Executive Bonus Plan. Our Executive Bonus Plan will allow our compensation committee to provide incentive awards to employees selected by our compensation committee, including our Named Executive Officers.

Under our Executive Bonus Plan, our compensation committee determines the performance goals (if any) applicable to any award or portion of an award and may choose the performance goals from a wide range of possible metrics as set forth in the Executive Bonus Plan. The performance goals may differ from participant to participant and from award to award.

(1) Based upon the closing sale price of our common stock as reported on the NASDAQ Global Select Market on the date of grant. (2) Amounts represent the grant date fair value of the equity awards, calculated in accordance with FASB ASC Topic 718 without regard to estimated forfeitures. See Note10 of the notes to our audited consolidated financial statements for a discussion of assumptions made in determining the grant date fair value. (3) Corresponds to the date on which our compensation committee set the target bonus amounts payable to each of our named executive officers pursuant to our 2015 executive bonus plan. (4) Represents awards granted under our 2011 Equity Incentive Plan. (5) Mr.McPhail became eligible to participate in our 2015 executive bonus plan on his hire date, May7, 2015. The estimated future payout amounts Mr.McPhail was eligible to earn are based on his salary, pro-rated by month, from May to December 2015. (6) Based on conversion of Singapore Dollars (SGD) to US Dollars (USD) at a rate of 1 SGD to 0.7101 USD, the average conversion rate for the period beginning December1, 2015 to December31, 2015. (7) The target amounts shown in this column reflect our annual incentive plan awards provided under our 2015 executive bonus plan. The maximum amounts in this column reflect the greatest payouts that could be made if pre-established maximum performance levels were met or exceeded. Actual 2015 executive bonus plan payouts are reflected in the non-equity incentive plan compensation column of the Summary Compensation Table.

• In light of the COVID-19 pandemic and its impact on our business (mostly in the second half of fiscal 2020), the Committee assessed performance under the 2020 Executive Bonus Plan over two semi-annual performance periods, rather than a single performance period consisting of fiscal 2020 (which had been the original intention). The Committee maintained revenue and non-GAAP operating income as the applicable metrics to determine funding of the 2020 Executive Bonus Plan. The Committee did not change the total annual incentive compensation target for any participant in the 2020 Executive Bonus Plan and preserved all other terms of the plan, including the Committee’s discretion to adjust final bonus amounts.

The Committee considered making an annual incentive compensation payment to Mr.Yeaman under the 2020 Executive Bonus Plan. The Committee believed that Mr.Yeaman showed strong and effective leadership throughout fiscal 2020. In particular, under Mr.Yeaman’s leadership, we achieved what we believe to be solid levels of revenue and non-GAAP operating income for fiscal 2020 despite a challenging and uncertain business environment resulting from the COVID-19 pandemic. The Committee considered that these results, although below the goals established by the Committee pre-pandemic, represented a significant achievement by Mr.Yeaman under the circumstances.

At the beginning of the fiscal year, we set a fiscal year target for corporate revenues for purposes of our executive bonus plan.Each executive can earn a bonus of up to 10% of his or her salary earned during the fiscal year in question if actual revenues exceed a predetermined percentage of the target revenues.The amount of the bonus depends on the amount by which actual revenues varied from target revenues. To achieve the maximum bonus for the revenues goal, actual revenues must be 101.5% or more of the target revenues. In addition, if actual revenues are less than 99.5% of target revenues, then no bonus would be earned on account of the revenues goal. The executive bonus plan for fiscal 2020 included potential adjustments to actual revenues to take into account the impact of any deterioration of the Canadian dollar to U.S. dollar exchange rate from 0.75 U.S. dollars to 1.0 Canadian dollar.

At the beginning of the fiscal year, we also set a fiscal year target for consolidated diluted earnings per share (EPS) for purposes of our executive bonus plan.Each executive can earn a bonus of up to 20% of his or her salary earned during the fiscal year in question if actual EPS exceed a predetermined percentage of the target EPS.In addition, the executive bonus plan for fiscal 2020 included potential adjustments to actual EPS to take into account Company costs and expenses in excess of $1.0 million associated with claims, litigation, regulatory or environmental matters, certain expensed costs in excess of expected amounts with respect to our initiative to update our customer relationship management (CRM) systems, asset impairment, changes in generally accepted accounting principles impacting operating income, losses, costs or expenses arising from natural catastrophes or similar events and the net effect of changes in our weighted average shares outstanding. The amount of the bonus depends on the amount by which actual EPS, subject to potential adjustment, varied from target EPS. To achieve the maximum bonus for the EPS goal, the actual EPS, subject to potential adjustment, must equal or exceed 104% of the target EPS. In addition, if actual EPS, subject to potential adjustment, is less than 96% of target EPS, then no bonus would be earned on account of the EPS goal.

In establishing our targeted bonus opportunities under the executive bonus plan, we consider the incentives that we want to provide to our executives and our historical practices.For fiscal 2020, we established the following corporate financial goals under our executive bonus plan.With respect to revenues, target revenues were set at $1.870billion.Our actual revenues for fiscal 2020 were $1.804billion and our adjusted revenues under the executive bonus plan were $1.805 billion. As a result, based on the percentage achievement levels, the named executive officers did not earn a cash bonus on account of the revenues goal for fiscal 2020.