Severance Contingency; Definitions Clause Samples
The "Severance Contingency; Definitions" clause establishes the specific conditions under which severance benefits will be provided and clearly defines key terms relevant to those benefits. It typically outlines what events or circumstances, such as involuntary termination or a change in company control, trigger severance eligibility, and clarifies the meaning of terms like "cause," "good reason," or "severance period." By precisely defining both the contingencies and the terminology, this clause ensures that both parties understand when severance is owed and under what circumstances, thereby reducing ambiguity and potential disputes regarding post-employment compensation.
Severance Contingency; Definitions. In the event of a Double Trigger, Executive (provided he timely executes and delivers a counterpart of an Agreement and General Release as set forth in Section 4 below) shall be entitled to the following severance, and no more: a lump sum equal to (a) 12 times his monthly base salary as of the Acquisition Agreement Date, plus (b) 12 times the indicated monthly COBRA premiums for medical and dental benefits for Executive and his eligible dependents (together the “Severance Payment”). It is understood that the Severance Payment shall be subject to tax withholding as required by law. An “Acquisition” shall include any merger, stock sale, or asset sale by which the Company (or all or substantially all of the Company’s assets or stock) is acquired, or any other transaction by which any person acquires beneficial ownership of more than 50% in interest of the Company’s voting securities, but in no event shall an issuance of securities by the Company for financing purposes be deemed an Acquisition by the issuee for purposes of this Agreement. If his employment is continued by a successor or affiliate company after an Acquisition, Executive’s employment shall not be considered to have been terminated solely because his employer is no longer the Company; and where the context so suggests, the defined term “the Company” shall be deemed to include such successor or affiliate company.