Qualifying Termination Change in Control Clause Samples
The "Qualifying Termination; Change in Control" clause defines the circumstances under which an employee’s termination is considered a qualifying event, particularly in connection with a change in control of the company, such as a merger or acquisition. Typically, this clause outlines specific conditions—like involuntary termination without cause or resignation for good reason within a set period following a change in control—that trigger enhanced severance benefits or accelerated vesting of equity awards. Its core function is to protect employees from adverse employment actions related to corporate transactions, ensuring they receive fair treatment and compensation if their job is affected by a change in the company’s ownership or structure.
Qualifying Termination Change in Control. If Executive’s Termination Date occurs by reason of a Qualifying Termination on or within two (2) years following a Change in Control (as defined below), then, in addition to the payments and benefits to which Executive is entitled under Paragraph 4(a), Executive will be entitled to the following payments and benefits (which shall not be subject to satisfaction of the Release Requirements):
(i) Company shall pay Executive the Severance Benefit in accordance with the provisions of Paragraph 4(b)(i).
(ii) If Executive is entitled to and elects COBRA Coverage, Company shall provide Executive with the Post-Termination Coverage Benefit in accordance with the provisions of Paragraph 4(b)(ii).
(iii) Company shall pay Executive a cash payment equal to the amount of the Annual Bonus that Executive would have received for the bonus year in which the Termination Date occurs had his Termination Date not occurred, based on actual Company performance and pro-rated for the portion of the bonus year completed prior to the Termination Date, payable at the same time as the annual bonus is paid to similarly-situated active executive employees in accordance with the terms of the applicable bonus plan of Company.
Qualifying Termination Change in Control. If Executive’s Termination Date occurs by reason of a Qualifying Termination on or within two (2) years following a Change in Control (as defined below), then, in addition to the payments and benefits to which Executive is entitled under Paragraph 4(a), Executive will be entitled to the following payments and benefits (which shall not be subject to satisfaction of the Release Requirements):
(i) Company shall pay Executive the Severance Benefit in accordance with the provisions of Paragraph 4(b)(i).
(ii) If Executive is entitled to and elects COBRA Coverage, Company shall provide Executive with the Post-Termination Coverage Benefit in accordance with the provisions of Paragraph 4(b)(ii).
(iii) Company shall pay Executive a cash payment equal to the amount of the Annual Bonus that Executive would have received for the bonus year in which the Termination Date occurs had his/her Termination Date not occurred, based on actual Company performance and pro rated for the portion of the bonus year completed prior to the Termination Date, payable at the same time as the annual bonus is paid to similarly-situated active executive employees in accordance with the terms of the applicable bonus plan of Company.
(iv) All vested stock options that are outstanding on the Effective Date and that continue to be exercisable by their terms on the Termination Date will remain exercisable for five (5) years after the Termination Date (or, if less, the expiration date of such stock option).
Qualifying Termination Change in Control. If, during the Term, Executive incurs a Qualifying Termination during the CIC Period, then subject to and conditioned upon (x) Executive’s execution and delivery to the Company of a Release within twenty-one (21) days (or, to the extent required by law, forty-five (45) days) following the Termination Date and Executive’s non-revocation of such Release within seven (7) days following Executive’s execution thereof and (y) Executive’s continued compliance with the provisions of the Confidentiality Agreement, the Company shall pay or provide to Executive the following (in addition to the Accrued Obligations):
(i) The Company shall pay to Executive an amount in cash equal to two (2) times the sum of (A) Executive’s then-current Base Salary and (B) Executive’s Target Bonus for the Company’s fiscal year in which the Termination Date occurs (the “Cash CIC Severance”). The Company shall pay the Cash CIC Severance in a single lump-sum amount on the later of the First Payroll Date or the date on which the Change in Control is consummated; provided, that if Cash Salary Severance payments have commenced under Section 5(b)(i) and/or the Cash Bonus Severance has been paid under Section 5(b)(ii), in either case, prior to the consummation of the Change in Control, then the excess of the Cash CIC Severance over the actual aggregate amount of the Cash Salary Severance and Cash Bonus Severance previously paid to Executive shall be paid to Executive in a lump-sum on the date on which the Change in Control is consummated (and, for clarity, no further Cash Salary Severance or Cash Bonus Severance payments shall be made to Executive under Sections 5(b)(i) or 5(b)(ii)).
(ii) The Company shall pay to Executive the Prior-Year Bonus (if any), payable in a single lump sum amount on the date on which annual bonuses are generally paid to other similarly-situated employees of the Company with respect to the fiscal year to which it relates or, if later, on the First Payroll Date (but in all events in the calendar year in which the Termination Date occurs).
(iii) Subject to Executive’s valid election to continue healthcare coverage under Section 4980B of the Code, during the period commencing on the Termination Date and ending on the earlier of (A) the second (2nd) anniversary of the Termination Date or (B) the date on which Executive becomes covered by a group health insurance program provided by a subsequent employer (in any case, the “CIC COBRA Period”), the Company shall, at the Compan...
Qualifying Termination Change in Control. Subject to Sections 4(d), 11(c) and 11(e), and the Executive’s continued compliance with the provisions of Section 7 hereof, if the Executive’s employment with the Company is terminated during the Employment Period due to a Qualifying Termination that occurs within 30 days prior to or 12 months following a Change in Control, then in addition to the Accrued Obligations and the Non-CIC Severance, the Company shall (i) pay the Executive an amount equal to 0.5 times the Executive’s Target Bonus, and (ii) accelerate and vest on a prorated basis, each outstanding equity award (which, for clarity, shall not include the Incentive Bonus) held by the Executive as of the Date of Termination, to the extent then unvested (the “CIC Severance”). Each of the equity awards shall be prorated as a fraction, the numerator of which is the number of calendar days the Executive was employed with the Company during the applicable vesting period and the denominator of which is the number of whole calendar days in the applicable vesting period. Any performance goal applicable to an equity award shall be deemed achieved at target. To the extent payable in cash, the CIC Severance shall be paid in a lump-sum payment as soon as practicable following the Release Effective Date, but no later than 74 days after the Executive’s Date of Termination.
Qualifying Termination Change in Control. If Executive’s Termination Date occurs by reason of a Qualifying Termination (1) on or within six (6) months prior to a Change in Control (as defined below) and at a time when Company is a party to a letter of intent relating to transactions, which, if consummated, would constitute a Change in Control or Company is in negotiations regarding a transaction which, if consummated, would constitute a Change in Control, (2) within three (3) months prior to a Change in Control, or (3) on or within two (2) years following a Change in Control then, in addition to the payments and benefits to which Executive is entitled under Paragraph 4(a), Executive will be entitled to the following payments and benefits (which shall not be subject to satisfaction of the Release Requirements):
(i) Company shall pay Executive a cash severance payment in a gross amount equal to the sum of (1) Executive’s Base Salary (determined as of the Termination Date without regard to any reduction thereof under circumstances that constitute Good Reason) and (2) Executive’s target Annual Bonus (the “CIC Severance Payment”). Any CIC Severance Payment will commence on the first regular payroll date after the Payment Date and shall continue to be paid in substantially equal payroll by payroll installments for a period of twelve (12) months thereafter.
(ii) If Executive is entitled to and elects COBRA Coverage, Company shall provide Executive with the Post-Termination Coverage Benefit in accordance with the provisions of Paragraph 4(b)(iii).
(iii) All outstanding unvested stock options will be fully vested on the Termination Date.
Qualifying Termination Change in Control