Severance Agreement between Publicly Held Corporation and Executive - Change in Control Severance
About this form
The Severance Agreement between Publicly Held Corporation and Executive - Change in Control Severance is a legal document that outlines the terms and conditions under which an executive may receive severance pay and benefits if their employment is terminated following a change in control of the corporation. This form is tailored for publicly held companies and specifies the conditions that define a "Change in Control," ensuring that executives are protected and compensated appropriately in such situations. Unlike other severance agreements, this document addresses specific corporate governance issues related to publicly traded corporations.
What’s included in this form
- Definitions of key terms, including "Change in Control," "Qualifying Termination," and "Good Reason."
- Obligations and conditions of the executive in the event of a Change in Control.
- Payment terms including cash compensation and benefits upon termination.
- Conditions that must be met for the executive to receive payments.
- Provisions for dispute resolution, including arbitration procedures.
- Clauses addressing the equity awards and outstanding stock options post-termination.
When this form is needed
This form is appropriate for use when a publicly held corporation undergoes a significant change in control, such as a merger or acquisition, that may lead to the termination of an executive's employment. Organizations should prepare this agreement to outline the severance benefits and protection for executives, ensuring clarity during corporate restructuring processes. It is particularly vital in situations where the executive's role may change or when their employment may be terminated due to factors beyond their control.
Who this form is for
- Publicly held corporations that wish to establish clear severance agreements for their executives in the event of a change in control.
- Executives who are negotiating their severance terms related to job security during potential corporate transitions.
- HR professionals and corporate legal counsels involved in drafting and implementing executive compensation packages.
Instructions for completing this form
- Identify the parties involved by entering the names and addresses of the company and the executive.
- Specify the effective date of the agreement.
- Define the terms for "Change in Control" as applicable to the corporation's structure.
- Detail the severance pay and benefits the executive is entitled to upon qualifying termination.
- Clearly articulate any restrictions or obligations placed on the executive in the event of a change in control.
- Include signatures from authorized representatives of the company and the executive to finalize the agreement.
Does this document require notarization?
This form does not typically require notarization unless specified by local law. It is important to check state-specific requirements to ensure compliance.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Avoid these common issues
- Failing to clearly define "Change in Control," which can lead to disputes over terms.
- Not specifying the necessary conditions for executive benefits, such as notice deadlines.
- Omitting relevant clauses that protect both parties in the agreement.
- Neglecting to have the agreement reviewed by legal counsel for compliance with state laws.
Why use this form online
- Easy access to a customizable template that meets legal standards.
- Immediate downloading and editing capabilities, allowing for quick implementation.
- Reduces the need for legal consultation, saving time and costs.
- Ensures compliance with current laws and best practices in executive severance agreements.
Quick recap
- The Severance Agreement is crucial for protecting executives during times of corporate transition.
- Clearly defined terms and conditions are essential to avoid disputes.
- Utilizing this form online provides efficiency and ease in customization.
- Consider state-specific regulations when finalizing the agreement.
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FAQ
Favorable severance agreements offer one month's worth of salary for every year of tenure with the company; while more frugal packages provide just one week's worth of salary for each year, experts said.
A severance agreement is a contract that an employer may ask an employee to sign when they are terminated from a job. Severance pay is often offered in exchange for an employee's release of their claims against the employer.
Typical severance packages offer one to two weeks of paid salary per year worked. Continuation of insurance benefits, assistance finding another job, and other perks can be negotiated.
A change in control severance plan that provides senior executives with severance payments and benefits on certain terminations of employment in connection with a change in control.
An executive severance package is an employment contract that details the benefits an executive-level employee will receive upon their departure from a company. Though the amount of severance pay is at your employer's discretion, you can typically negotiate it in your favor as an executive-level employee.
Fraud, misrepresentation, duress, or unconscionability are common defenses you can use if you want to void a severance agreement that you already signed.
A severance agreement protects executives employed on an at-will or other basis in the event of termination without good cause. A Board of Directors can fire an executive employed at-will at any time and for any reason that is not forbidden by law.