Regarding Dr. Hession's 'Change of Control' payments:
According to the 5/4/16 AGM Management Information Circular:
Hession receives his "Termination Compensation" if a "Change of Control" takes place.
The "change of control" trigger event is an IOC BOD recommendation to accept a bid to sell the company, not the actual sale of the company. Thus, it has already taken place.
Such 'termination compensation' is
- :50% of the RSUs available to Hession for ALL milestone events in his contract, including FEED, FID, First Cargo, etc.
- He also, upon termination, receives double his severance payment of a full-year's compensation, including any performance and bonus compensation (thus, 2 full-year's compensation) if the 'Change of control' happens prior to July 10, 2016. [of which the 'trigger event' did'].
- Finally, all of Hession's RSUs are immediately vested upon the 'trigger event' which was the BOD recommendation of the OSH bid [not its acceptance by shareholders].
- To add to the shareholder pain, Hession also receives his discovery bonus for any new discovery well found within 12 months of his termination, if such discovery well lease was held by IOC at the time of his termination (even if by 'change of control'].
The bottom line is that Hession's Termination Package is a done deal, regardless of the outcome of the current situation, short of any lawsuit for breach of fiduciary duty [which I personally see as a very uphill battle at this point.]
The wording in this section of the AGM material is unclear, but I believe that the 'change of control trigger event' also applies to this provision (double severance compensation). It would appear that the BOD and Dr. Hession were fully aware of the timing of the subsequent events (ie. IOC BOD acceptance of the OSH bid and recommendation to shareholders to vote "yes"] as these events took place prior to the July 10, 2016 deadline for Dr. Hession.
I have not calculated all of the dollar amounts for all of this, but I believe that earlier reports of around $40 million are correct. Note that that amount could still increase post any sale due to his post-sale ability to continue to earn a discovery bonus.
As much as I detest this golden and diamond-studded parachute, one has to very grudgingly give him credit for getting all of this into his contract and its subsequent revisions by his new BOD. He may have set a new standard for such golden parachutes, certainly with regard to the actual valuation of the company giving such a termination package after 3 years work.