Key Man Termination Clause Samples
A Key Man Termination clause allows for the early termination of an agreement if a specified key individual, often a founder or essential executive, is no longer involved with the business. Typically, this clause identifies one or more key persons whose departure, incapacity, or unavailability triggers the right for the other party to end the contract. This mechanism is commonly used in investment or partnership agreements to protect parties from the risks associated with the loss of critical leadership or expertise, ensuring that the agreement remains viable only while key personnel are actively engaged.
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Key Man Termination. In the event of the death or Permanent Disability (as defined below) of ▇▇▇▇ ▇. Icahn during the Term (a “Key Man Event”), the Employer shall, within 30 days following the Key Man Event (during which 30-day period this Agreement shall remain in effect and the Employer may exercise any and all of its rights hereunder), deliver a written notice to the Co-Managers in which the Employer shall elect to either terminate or continue this Agreement. If no such notice is delivered, the Employer will be deemed to have elected to continue this Agreement. If the Employer elects to terminate the Agreement under this Section 8(i), then the Escrowed Amount contemplated in Section 4(i) and the Second Profit Sharing Payment contemplated in Section 5 will be (i) marked as of the close of business on the business day immediately preceding the time that the Key Man Event is first reported in the national print or electronic media (the “Key Man Amount”) and (ii) paid to the Employee sixty (60) days following such Key Man Event ( minus the Total Benefit Payments). If the Employer elects to continue the Agreement: (i) this Agreement shall continue to remain in effect; (ii) the Employee shall not receive the Key Man Amount; (iii) the Employer shall issue a press release stating that (a) it has elected to continue the Agreement and (b) it has no present intention to liquidate any of the Sargon positions (but retains the right to buy and sell Securities in its discretion); (iv) from and after the 30 th day following the Key Man Event, each of the Employer Restrictions (as defined below) shall become null and void and may no longer be exercised by the Employer (it being understood and agreed that the investment parameters contained in Section 4(a), and all other provisions of this Agreement, shall remain in full force and effect in such case). For the avoidance of doubt, any such election by the Employer to continue the Agreement shall in no event limit the rights thereafter of (i) the Employee to terminate his employment under this Agreement at any time, by voluntary termination or Permitted Resignation, or (ii) the Employer to terminate the employment of Employee under this Agreement at any time, with or without Cause, or to terminate Sargon pursuant to Section 4(f).