earn-out
An arrangement where at least part of the purchase price on the sale and purchase of a business is calculated by reference to the future performance of the business being purchased. Commonly used as a management incentive where owner-managed businesses are sold and the managers continue to work in the business following the sale.
+ earn-out
USA
An arrangement where at least part of the purchase price of a business is calculated by reference to the future performance of the business being purchased. An earn-out is typically structured as one or more contingent payments after the closing which are payable on the satisfaction of certain milestones (such as future sales targets). An earn-out can be used as an incentive for management where the prior owner continues to manage the business following the sale.
For a discussion of earn-outs, see Practice Note, Earn-outs (www.practicallaw.com/0-500-1650).
Related links

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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  • earn one's keep — {v. phr.} To merit one s salary or keep by performing the labor or chores that are expected of one. * /John earned his keep at the music conservatory by dusting off all the musical instruments every day./ …   Dictionary of American idioms

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