Golden Parachute Agreement Pdf

The 2010 U.S. Dodd-Frank Act contains in its provisions a mandate for shareholder votes on any future adoption of a golden parachute by listed companies. [11] In Switzerland, a referendum was voted on 3 March 2013, which would « give shareholders the power to veto executive remuneration plans, including golden parachutes ». [12] Voters approved measures to limit CEO salaries and ban golden parachutes. [13] A golden parachute is an agreement between a company and an employee (usually a senior executive) that stipulates that the worker receives certain important benefits when the job is terminated. This may include severance pay, cash bonuses, stock options or other benefits. Most definitions indicate that the termination of the employment relationship is due to a merger or recovery[2][3], also known as « change-in-control-benefits »[4], but more recently, the term has been used to describe allegedly excessive severance pay to CEO (and other executives) that have nothing to do with a change of ownership (also known as a golden hand). [5] The first use of the term « golden parachute » is attributed to a 1961 creditor attempt to oust Howard Hughes from control of Trans World Airlines. The creditors provided Charles C. Tillinghast Jr. with an employment contract that contained a clause that would pay him money if he lost his job.

[6] If the promised payments are kept as specific and as easily quantifiable as possible, the amount of compliance will be reduced in a parachute payment. The vague language of an agreement leaves it open to interpretations that could lead to costly actions between the beneficiary and the company. Some promises may require costly amounts of actuarial or accounting work, such as .B additional years of service credit on the recipient`s pension benefit. the Board of Directors and any new Director (with the exception of a director appointed by a person who has entered into an agreement with the Corporation to conduct a transaction in accordance with the terms (A) or (D) of this section), including the was approved by the board of directors or by the shareholders of the company by a vote of at least two-thirds of the directors still in office at the time who were directors at the beginning of the period or whose election or The nomination for election was previously approved, for whatever reason, to cease forming a majority; (C) the company enters into an agreement, the conclusion of which would lead to entry if the control of the company were changed; or (D) the shareholders of the company of a merger or consolidation of the company with another company, other than a merger or consolidation, which would lead to the holding of the company`s shares held immediately before its subsequent representation (either by the rest or by the transformation into voting rights of the surviving entity) at least 30% of the combined voting rights of the shares of the company`s or that entity the right to vote on such a merger or consolidation or that the shareholders of the corporation authorize a plan of the company. full liquidation of the Corporation or agreement to sell or dispose of all of the Corporation`s assets or, for the most part, all of the Corporation`s assets.