Annual Cash Bonus (Not Section 162m Compliant)

This legal template is designed to address the topic of an annual cash bonus that does not comply with Section 162m of the United States law. Section 162m refers to a section of the Internal Revenue Code (IRC) that provides guidelines for the deductibility of executive compensation by public companies.

In certain circumstances, a company may choose to grant cash bonuses to its employees that do not meet the specific requirements outlined in Section 162m, thus making them non-compliant. This legal template sets out the terms and conditions under which such annual cash bonuses will be awarded to employees within the framework of US law.

The template may cover various aspects, including eligibility criteria for employees to qualify for the bonus, the calculation methodology, a specified time period for the bonus evaluation, the frequency of bonus distribution, and any applicable performance metrics or other considerations. Additionally, the template may include provisions related to the tax treatment of these non-compliant bonuses, ensuring the company and employees are aware of their obligations.

By utilizing this legal template, companies can establish a consistent and transparent approach to awarding annual cash bonuses that are not compliant with Section 162m under US law. The template aims to protect the rights and interests of both the employer and employees involved in the bonus program while adhering to legal requirements.