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Change of Control Agreement

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Change of Control Agreement Powered By Docstoc
					A change of control agreement is an agreement between an employee and an employer
safeguarding the remunerative rights of the employee in exchange for continued
employment. This agreement is a group of mutual covenants designed to protect an
employee in the event that the company undergoes a change of control so that the
employee will be encouraged to remain in employment with the employer. If the
employment is terminated under certain conditions, such as without cause or through
involuntary termination, then the employee is entitled to receive certain benefits, such as
a bonus. This document should be used by an employee or by an employer seeking to
provide certain guarantees to an employee.
                  CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement (the “Agreement”) is hereby made and entered into on this
________________ day of ______________, _____ [Comment: insert date] (the “Effective
Date”)   by    and     between   ____________________________        (“Employer”)     and
____________________ (“Employee”).

WHEREAS,      Employee    is    currently   serving     in     the     capacity               of
________________________________ [Comment: insert the name of the position]; and

WHEREAS, Employer desires to provide certain protection to Employee in the event of a
change in control or potential change in control of Employer, in order to encourage Employee to
remain in the employment of Employer, notwithstanding any risks and uncertainties created by a
potential change in control of Employer, as set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants herein and of the continuing
employment of Employee by Employer, the parties agree as follows:

1.     Definition of Terms

The following terms referred to in this Agreement shall have the following meanings:

       a.     “Bonus” shall mean the following: (i) a lump sum payment equal to ___ (__)
              months of Employee’s annual base salary as in effect on the Effective Date, if
              prior to ___ (__) months from date of Change in Control (“Payment Date”) and
              Employer or successor corporation has not offered Employee employment with
              Employer or successor corporation or (ii) a lump sum payment equal to ___ (__)
              months of Employee’s annual base salary as in effect on the Effective Date, if
              prior to the Payment Date, Employer or successor corporation has offered
              Employee employment with Employer or successor corporation;

       b.     “Cause” shall mean: (i) any act of personal dishonesty taken by Employee in
              connection with his/her responsibilities as an employee and intended to result in
              substantial personal enrichment of Employee; (ii) commission of a felony or other
              offense that involves moral turpitude or is otherwise injurious to Employer or its
              reputation; (iii) a willful act by Employee that constitutes gross misconduct and
              that is injurious to Employer or its reputation; (iv) a material breach of this
              Agreement by Employee; or (v) continued violation by Employee of Employee’s
              obligations and duties as an employee of Employer that are demonstrably willful
              and deliberate on Employee’s part after written notification thereof by Employer
              or its successor, which notice shall specify the alleged instances of neglect of
              duty, and shall provide Employee with ____ (__) days in which to remedy such
              neglect, if it is subject to being remedied.

       c.     “Involuntary Termination” shall be deemed to occur if: (i) there is a significant
              reduction in Employee’s overall scope of duties, authorities, and responsibilities,
              provided that a change in job title shall not constitute a significant reduction in
              Employee’s duties; (ii) Employee is required to relocate its place of employment,
              other than a relocation within ____ (__) miles of Employee’s current business
              location; (iii) there is a reduction of more than ____ percent (%__) of Employee’s
              base salary; (iv) any material breach by Employer of any material provision of
              this Agreement that continues uncured for ___ (__) days following notice thereof,
              provided, however, that none of the foregoing shall constitute “involuntarily
              termination” to the extent Employee has agreed thereto in writing; or (v)
              termination of Employee’s employment with Employer or the successor
              corporation by Employer or the successor corporation other than for Cause.

       d.     “Change in Control” shall mean any merger, consolidation, sale of assets, or other
              similar transaction or series of transactions involving Employer, other than any
              such transaction or transactions following which Employer or its stockholders
              continue to own a majority of the combined voting power of the outstanding
              securities of the corporation or other entity surviving or succeeding to the
              business of Employer.

2.     Benefits upon a Change in Control

If: (a) during the term of this Agreement and while Employee remains an employee of Employer,
Employer shall be subject to a Change in Control and (b) within _______ (__) year(s) following
such Change in Control Employer terminates the employment of Employee involuntarily and
without Cause or a Involuntary Termination otherwise occurs, then in such case, Employee shall
be entitled to receive the Bonus. Employer or its successor shall pay such Bonus to Employee
not later than _________ (__) business days after the Payment Date.

3.     Exclusivity

The provisions of this Agreement are intended to be and are exclusive and in lieu of any other
rights or remedies to which Employee or Employer may otherwise be entitled, either at law, tort,
contract, in equity, under Employer policies in effect now or hereafter, or under this Agreement,
in the event that: (a) during the term of this Agreement and while Employee remains an
employee of Employer, Employer shall be subject to a Change in Control and (b) within
_________ (__) year(s) following such Change in Control, Employer terminates the employment
of Employee involuntarily and without Cause or an Involuntary Termination occurs. In such
circumstances, Employee shall be entitled to no benefits, compensation, or other
				
DOCUMENT INFO
Description: A change of control agreement is an agreement between an employee and an employer safeguarding the remunerative rights of the employee in exchange for continued employment. This agreement is a group of mutual covenants designed to protect an employee in the event that the company undergoes a change of control so that the employee will be encouraged to remain in employment with the employer. If the employment is terminated under certain conditions, such as without cause or through involuntary termination, then the employee is entitled to receive certain benefits, such as a bonus. This document should be used by an employee or by an employer seeking to provide certain guarantees to an employee.
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