The Advisors' Blog

This Meridian memo really grabs your attention right from the get-go.

In a merger and acquisition environment where scrutiny is high and single change-in-control (CIC) provisions can lead to an “Against” recommendation from proxy advisors, outdated “golden parachute” arrangements can quickly become a distraction, or worse, a liability.

It continues with tips so your CIC protections align with shareholder expectations and make executives economically neutral about a potential transaction.

1. Keep Severance Multiples in Check

2. Double-Trigger Equity is the Standard

3. Clarify “Cause” and “Good Reason” Definitions

4. Eliminate 280G Tax Gross-Ups

5. Be Transparent About Legacy Agreements

Here’s additional detail from the alert on the third point above:

Modernizing CIC arrangements is not just about quantum or structure—it’s also about language. There are examples of legacy agreements that include vague or broad employment termination definitions of “cause” and “good reason,” which can lead to disputes, unintended payouts or unfavorable governance optics.

Today, approximately 70–80% of companies rely on standardized CIC agreements or severance plans rather than individualized employment agreements—a shift that creates a valuable opportunity to align and standardize key terms across participants.

To reduce risk and strengthen governance alignment, companies should consider reviewing and updating these definitions to reflect objective, clear and market-aligned definitions.

We’ve posted this memo and others like it in our “Change-in-Control Agreements” Practice Area.

– Meredith Ervine