Maximum Profit Clause Samples
The Maximum Profit clause sets a cap on the total profit a party can earn under a contract. In practice, this means that even if the actual profits from the contract exceed the specified limit, the party is only entitled to receive up to the maximum amount defined in the clause. This provision is commonly used in contracts where profit-sharing or incentive payments are involved, ensuring that payouts remain within agreed boundaries. Its core function is to control financial exposure and prevent excessive payouts, thereby providing predictability and managing risk for all parties involved.
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Maximum Profit. (a) Notwithstanding any provision of this Agreement, in no event shall Grantee’s Total Profit (as defined in Section 16(c)) exceed $112,000,000 (the “Maximum Profit”), and, if the Total Profit would otherwise exceed such amount, Grantee, in its sole discretion, shall either (1) reduce the number of shares subject to the Option (and any Substitute Option), (2) deliver to Issuer, or Substitute Issuer, as the case may be, for cancellation shares of Common Stock or Substitute Common Stock, as the case may be, previously purchased by Grantee valued at fair market value at the time of delivery, (3) pay cash to Issuer, or Substitute Issuer, as the case may be, (4) increase or otherwise adjust the Option Price or Substitute Option Price (or any portion thereof), (5) reduce the amount of the Option ▇▇▇▇▇▇▇▇▇▇ Price or Substitute Option Repurchase Price, or (6) undertake any combination of the foregoing (which combination shall be at Grantee’s sole election), so that Grantee’s actually realized Total Profit shall not exceed the Maximum Profit after taking into account the foregoing actions.
(b) Notwithstanding any provision of this Agreement, the Option (and any Substitute Option) may not be exercised for a number of shares as would, as of the date of exercise, result in a Notional Total Profit (as defined in Section 16(d)) of more than the Maximum Profit and, if exercise of the Option (and any Substitute Option) would otherwise result in the Notional Total Profit exceeding the Maximum Profit, Grantee, in its discretion, may take any of the actions specified in Section 16(a) so that the Notional Total Profit shall not exceed the Maximum Profit; provided, that nothing in this sentence shall restrict any subsequent exercise of the Option (and any Substitute Option) which at such time complies with this sentence.
(c) As used herein, the term “Total Profit” shall mean the aggregate amount (before taxes) of the following: (1) the excess of (A) the net cash amounts or fair market value of any property received by Grantee pursuant to the sale of the Option or any Option Shares (or any other securities into which such Option Shares are converted or exchanged) to any unaffiliated party, after payment of applicable brokerage or sales commissions and discounts, if any, over (B) Grantee’s aggregate purchase price for such Option Shares (or other securities), plus (2) all amounts received by Grantee, a Holder or an Owner (including a Substitute Option Holder or Substitute Share ...
Maximum Profit. As part of the CWELCC System accountability framework, controls are required to ensure that the ability of Licensees to generate undue profit is limited based on the CWELCC System funding being provided. The following terms and conditions relating to the maximum profit thresholds will be enforced for all Licensees who are approved to participate in the CWELCC system: • The Corporation will have the discretion to determine a maximum profit level that would govern the Licensee’s provision of child care to eligible children each calendar year. The maximum profit level will take into consideration several factors including, but not limited to, historic levels. The maximum profit level will be communicated to the Licensee prior to the service contract being signed. • In the case where the Licensee’s annual net profit relating to the provision of child care for eligible children exceeds the maximum profit amount set by the Corporation, the Licensee will be required to return any excess funds above this maximum amount to the Corporation. • The Corporation has the discretion to determine the portion of the Licensee’s net profit that may be attributed to the provision of child care for eligible children, as compared to net profit attributed to the provision of child care for children who are not eligible children. The maximum profit level for <Name of Operator> has been set at: