pay any such outstanding amount in a single additional payment within the first two pay periods following your becoming a TerraForm employee (or, for expenses, as soon thereafter as you have submitted any required substantiation).
(i) Basic and Enhanced Bonus. Regardless of whether you remain employed by SunEdison or become an employee of TerraForm, you will be eligible to participate in an annual variable incentive plan of TerraForm effective as of January 1, 2016 (the “VIP”). The target amount under the VIP for your position is 75% of your base salary, with a minimum, assuming at least minimum performance relative to objectives is achieved, of 50% and a maximum of 100% of your base salary, depending on the extent target level performance is achieved. For 2016, you will be eligible for an additional bonus (the “Bonus Enhancement”) with a target amount of 12.5% of your base salary, and a maximum of 25% of your base salary, based on performance relative to objectives. Payments under the VIP and the Bonus Enhancement are dependent upon a combination of TerraForm’s financial performance and your personal performance (with the details to be set forth on an Exhibit C that will be attached hereto within 30 days following your signing this letter) and will be made to you by TerraForm. Payments under the VIP and the Bonus Enhancement will also be subject to approval by TerraForm’s Board of Directors (the “Board”) or its Compensation Committee (the “Committee”). The Committee (or the Board if it chooses to act) will have the discretion to determine whether you have achieved the TerraForm key objectives and your personal objectives in your performance for 2016. TerraForm expects to continue comparable bonus arrangements in 2017.
(ii) Bonus Offsets and Timing Rules. The VIP and the Bonus Enhancement will be calculated based on the sum of (x) your base salary from SunEdison while you remain its employee and (y) if you become TerraForm’s employee, your base salary from TerraForm. Any amounts due by TerraForm to you under Section 2(b)(i) will be reduced by payments you receive under the same or similar bonus arrangements at SunEdison for the calendar year 2016. Payments under Section 2(b)(i) will be made to you no later than March 15, 2017.
(iii) Required Employment and Reservation of Rights. To receive any bonus under Section 2(b)(i), you must remain employed by either SunEdison or TerraForm through the date the bonuses are due to be paid or otherwise as set forth in the applicable bonus policy. TerraForm, acting through its Board or the Committee, reserves the right to change, alter, modify, or delete (each, a “change”) any provisions of Section 2(b) at any time, with or without prior notice, provided that no such change shall take effect until January 1 of the calendar year following that in which it is made.
Paid Time Off. If your employment is transferred pursuant to Section 1(a) above or you otherwise commence employment with TerraForm, TerraForm will also honor any unused and uncompensated paid time off that remained accrued for you by SunEdison (or is otherwise substantiated as remaining outstanding in the year of termination) at the date you become employed by TerraForm, up to an aggregate of 280 hours (but disregarding any limits on the termination date accruals caused by SunEdison’s bankruptcy filing). TerraForm is in the process of developing its procedures for accrual, caps, and payment with respect to paid time off for its own employees. You will be treated in a manner consistent with the other similarly situated employees under such policies, including reimbursement for paid time off (to the extent accrued as described above) if you do not become employed by TerraForm.