Change Of Control Provision Employment Agreement
A change of control agreement can be exercised either if the worker resigns or if the employer succeeds in dismissing the employee (for no reason). In this way, it provides benefits to both parties. A typical agreement states that when the company undergoes a change of control, an employee has a certain number of months during which he or she can decide to resign and the company pays the employee a lump sum equivalent to a certain number of months of the employee`s base salary at the time of the change of control. in addition to a possible severance pay. The agreement they normally enter into for the same lump sum payment, if the employer is the party who wishes to terminate the employment relationship. The term « dismissal in the event of a change of control » does not include other dismissals, including the termination of the employment of manager (1) by the company for a significant reason; (2) by the company due to the disability of the director; (3) following the death of the executive; or (4) as a result of the voluntary termination of the employment relationship by the executive for reasons other than a reduction in liability. The « double trigger » is more frequent and favors the company. This trigger presupposes a termination by the executive, without reason or rightly, and a payment period of one year generally defined. Unlike the individual trigger, the executive cannot resign voluntarily. Its participation in the existing and future company is imposed by the agreement. However, the executive still enjoys a great deal of protection, while the change of control takes place. The company will have a clear desire to maintain the loyalty and commitment of the leader and will reward the leader well at the end of the change of control. Such an outcome is attractive to ensure continuity and commitment of key personnel.
(a) the successor of the company. Any successor to the entity (whether directly or indirectly and through purchase, merger, consolidation, liquidation or otherwise) or all or, in essence, all or essentially all of the entity`s operations and/or assets assumes the obligations under this Agreement and expressly agrees to perform the obligations under this Agreement in the same manner and to the same extent that the enterprise would be required to perform such obligations without succession. For all purposes of this Agreement, the term « Company » means any successor to the Enterprise and/or the assets of the Enterprise that executes and delivers the Acquisition Agreement described in this Section 5(a) or that is bound by law to the terms of this Agreement. . . .