Summary
Microsoft Corporation (MSFT) filed an 8-K on September 26, 2013, to announce the approval of its Senior Executive Severance Benefit Plan (Severance Plan) by the Compensation Committee of its Board of Directors, effective September 21, 2013. This plan is designed to enhance leadership continuity by providing specific severance benefits to designated executives who participate in the Company's Executive Incentive Program and are terminated without cause. The Severance Plan outlines a package of benefits including a cash payment equivalent to one year's base salary plus target annual cash award, a pro-rata payment of the executive's annual cash award, accelerated vesting of stock awards scheduled to vest within 12 months post-termination, six months of continued health care premiums, and twelve months of outplacement assistance. Importantly, the plan does not include a change-in-control provision, and executives must sign a separation agreement including a release of claims, confidentiality, non-disparagement, and a twelve-month non-compete/non-solicitation clause to receive these benefits.
Key Highlights
- 1Microsoft has implemented a new Senior Executive Severance Benefit Plan to ensure leadership stability.
- 2The plan provides severance benefits to executives terminated without cause.
- 3Benefits include salary continuation, prorated bonus, accelerated stock vesting, COBRA premium coverage, and outplacement services.
- 4The severance package is specifically for designated executives participating in the Executive Incentive Program.
- 5There is no change-in-control provision within the Severance Plan.
- 6Executives must agree to a separation agreement with non-compete and non-solicitation clauses to receive benefits.