A contractual discretion to pay a performance bonus described as 'entirely within the discretion of' the employer does not permit the employer to withhold the bonus capriciously, arbitrarily or unreasonably where set objectives have been satisfied; the discretion must be exercised honestly and conformably with the purposes of the contract. An employer's failure to set performance objectives as required by the contract gives rise to a claim for loss of commercial opportunity to receive the bonus. An ex gratia payment by the employer made in temporal and subject-matter connection with the contractual claim will be deducted from the damages award to avoid overcompensation.
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