The tech world is abuzz with the sound of wedding bells, glitter, favors and of course ‘pre-nup agreements’. One thing to be said for the impending ‘holy matrimony’.…the Board over at Dell consists of such finance heavyweights such as Sallie Krawcheck, James Breyer, Judy Lewent etc. In fact 40% of the board consists of these finance heavyweights. Naturally, if nothing else, the agreement can be assumed to have been given the best oversight from a financial perspective.

 

Here is the scoop from the merger agreement:

 

1. At Perot Systems, change-in-control severance agreements were changed on September 20th to provide accelerated vesting of any previously issued restricted stock awards as well as reimbursement of any tax that the IRS may levy on such a bonus amount.

 

2. Dell gets to appoint certain number of directors which will be directly proportion to the percentage of shares it owns in the new company. I wonder how many of the finance heavyweights from Dell’s board will be carried forward. However, there will be at least 3 directors on the new Board who will be neither officers of the Company nor designees or affiliates of Dell.

 

3. Perot has to pay Dell some pretty steep termination fees ($130,000,000) in case the agreement gets terminated for specified reasons. (If you are truly interested to see what triggers such a large ‘divorce’ settlement, look up the actual merger document on page 72)

 

4. As per Dell’s 8-K, there is no current Employee Benefit Plan that provides any severance benefits or retention benefits.

 

The Netherlands Bankers' Association will implement a code of conduct for banks next year that will limit the level of bonuses. Starting Jan. 1, bonuses for board members can't exceed their fixed income by more than 100%, and bonuses could be clawed back "if long-term targets will not be met.

 

France and Germany have moved to limit the size of banks and bonuses paid to executives.

 

Your take? Too socialist for you or just what we need.....

 

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