Change Of Ownership Clause In Employment Agreement

Change Of Ownership Clause In Employment Agreement

When a substantial change in the ownership of the company results in them laying off workers, the clause ensures that in the event of termination, they receive a significant payment. A well-developed employment contract defines the conditions for termination of employment. The « dismissal provisions » generally provide for the amount of dismissal or payment instead of the dismissal of a worker in the event of dismissal without legitimate cause. Similarly, a written employment contract may set the amount of dismissal that a worker must grant to his employer if he wishes to terminate the employment relationship. A change of control agreement can be exercised either if the worker resigns or if the employer succeeds in dismissing the employee (for no reason). In this way, it provides benefits to both parties. A typical agreement states that when the company undergoes a change of control, an employee has a certain number of months during which he or she can decide to resign and the company pays the employee a lump sum equivalent to a certain number of months of the employee`s base salary at the time of the change of control. in addition to a possible severance pay. The agreement they normally enter into for the same lump sum payment, if the employer is the party who wishes to terminate the employment relationship.

(a) Involuntary dismissal except for cause, death or disability or voluntary dismissal for a significant reason after a change of control. . . .

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