Summary
On November 26, 2013, The NASDAQ OMX Group, Inc. (now Nasdaq, Inc.) announced the adoption of a Change in Control Severance Plan for its Executive Vice Presidents and Senior Vice Presidents. This plan is designed to retain key executive talent by providing them with defined severance benefits in the event of a change in control of the company, coupled with a termination of employment without cause or for good reason within a specified period. The goal is to ensure executive focus and stability during potential transition periods, thereby safeguarding stockholder interests. The severance package for eligible executives includes a substantial lump sum payment equivalent to 200% of their annual base salary plus 100% of their annual target incentive award. Additionally, participants are entitled to a pro-rata portion of their annual target incentive, any earned but unpaid incentive awards, specified health and welfare benefits, and up to $50,000 in outplacement services. These benefits are contingent upon the executive signing a release of claims and adhering to restrictive covenants, including confidentiality, non-disparagement, non-solicitation of employees, and non-competition with a competing entity for one year post-termination. The plan incorporates a "best net provision" to manage potential excise tax implications and clearly excludes benefits for terminations due to death, disability, or voluntary resignation without good reason. Equity awards remain governed by separate agreements.
Key Highlights
- 1NASDAQ OMX Group adopted a Change in Control Severance Plan for Executive Vice Presidents and Senior Vice Presidents.
- 2The plan aims to retain key executives by offering severance benefits upon a 'double trigger' event: a change in control followed by termination without cause or for good reason.
- 3Eligible executives will receive 200% of base salary and 100% of target incentive award as a lump sum payment.
- 4Additional benefits include pro-rata incentive awards, health and welfare benefits, and outplacement services (up to $50,000).
- 5Receipt of benefits requires signing a release of claims and adhering to restrictive covenants (confidentiality, non-disparagement, non-solicitation, non-competition for one year).
- 6A 'best net provision' is included to manage excise tax implications.
- 7Benefits are not applicable for terminations due to death, disability, or resignation without good reason.