Severance Compensation Program
What this document covers
The Severance Compensation Program is a legal document that outlines a compensation plan for specified officers following termination of their employment due to a change of control within a company. This form differs from standard severance agreements by specifically addressing scenarios involving a significant shift in ownership or management, ensuring key personnel are retained during transitional periods.
Key components of this form
- Definition of change of control, which triggers the severance benefits.
- Specifications of payments provided to eligible officers.
- Criteria for triggering severance payments, including terminations for cause and good reason.
- Details on who qualifies as beneficiaries under the program.
- Process for shareholder approval and its implications.
- Termination condition of the program if a change of control does not occur.
Common use cases
This form is essential when a company's Board of Directors anticipates a change of control, such as a merger or acquisition. It is particularly relevant to ensure that key officers have financial security and are motivated to maintain stability during this transition. Companies looking to define severance for top executives under these circumstances should utilize this program.
Who this form is for
This form is intended for:
- Executives and officers of a company facing potential changes in ownership.
- Board members seeking to implement a severance program for key employees.
- Shareholders interested in understanding the terms related to executive severance during a change of control.
Completing this form step by step
- Identify the key officers who will be beneficiaries of the severance program.
- Define the specific conditions under which severance payments will be triggered.
- Establish the definition of "change of control" relevant to your organization.
- Detail the payment structure, including the lump-sum amounts and payment timing.
- Prepare for shareholder approval by drafting necessary documentation and scheduling a vote.
Notarization guidance
In most cases, this form does not require notarization. However, some jurisdictions or signing circumstances might. US Legal Forms offers online notarization powered by Notarize, accessible 24/7 for a quick, remote process.
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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.
Mistakes to watch out for
- Failing to clearly define "change of control" and its implications.
- Not including all eligible officers in the list of beneficiaries.
- Neglecting to obtain shareholder approval before implementing the program.
- Overlooking state laws that may affect severance agreements.
Why use this form online
- Instant access to a professionally drafted severance program.
- The ability to customize the form to meet specific company needs.
- Easy downloading and storing for future reference.
- Time-saving process compared to creating a program from scratch.
Legal use & context
- The program is designed to protect key employees during ownership transitions.
- It helps ensure continuity and stability within the company.
- Terms and conditions outlined within the program may require compliance with state and federal regulations.
Quick recap
- The Severance Compensation Program is critical for protecting key officers during ownership changes.
- Clearly defining terms and eligibility is essential for effective execution.
- Obtaining shareholder approval is crucial to validate the program.
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FAQ
1The name of the employer and employee.2The effective date of the agreement.3The employment period of the outgoing employee.4The severance pay amount.5Terms of continuation of benefits.6Employee waiver of legal claims.What Is a Severance Package, and When Do You Need One\nwww.business.com > articles > what-is-a-severance-package
