Recovery Agreement: Definition, Example
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What is a Recovery Agreement?
A recovery agreement is a contract between an employer and executive employee where the executive must pay back erroneously awarded compensation if given. Usually, companies are able to catch erroneous compensation by preparing an accounting restatement. Even if the erroneous deposit to the executive employee is the company's fault, the recovery agreement guarantees that the company must be reimbursed. Otherwise, terms within the contract state what the consequences will be.
The purpose of the recovery agreement is to protect the company from loss stemming from human error. It also gives companies legal recourse to take if executive employees refuse to pay back erroneous funds.
Recovery Agreement Sample
1. | As a condition of receipt of any incentive-based compensation (as defined in the Recovery Policy) (including, without limitation, any cash or equity awards) by Executive, Executive agrees that (a) such incentive-based compensation is subject to recoupment under the terms of the Recovery Policy, and (b) if required pursuant to the terms of the Recovery Policy, as determined by the Compensation Committee of the Board, the Executive will promptly reimburse the Company the gross amount of any erroneously awarded compensation (including, without limitation, forfeiting any incentive-based compensation (such as, by way of example only, performance share awards) that have been earned or “banked” but not yet vested). |
2. | Notwithstanding (a) the terms of any indemnification agreement entered into between Executive and the Company, or (b) any rights Executive may have with respect to indemnification or reimbursement (i) from the Company pursuant to the terms of the Company’s certificate of incorporation, bylaws or otherwise or (ii) pursuant to any insurance maintained by the Company on behalf of its directors and officers (including Executive) or the Indemnification Trust Agreement, dated June 23, 2003, among the Company, The Bank of New York (Delaware) and the Beneficiaries Representative thereunder (collectively, the “Indemnity Document”), Executive waives any right to indemnification or reimbursement, and acknowledges and agrees that Executive shall not be entitled to any indemnification or reimbursement, pursuant to any of the Indemnity Documents solely with respect to any erroneously awarded compensation that Executive is required to reimburse to the Company pursuant to the Recovery Policy. |
3. | Executive agrees that (a) the Recovery Policy may be amended from time to time by the Board or a committee thereof and that this Agreement shall continue to apply to any such amended Recovery Policy and (b) any recoupment under the Recovery Policy may be in addition to any other remedies that may be available to the Company or to the Board (or any committee thereof) under the Company’s policies as well as applicable law, including disciplinary actions, including but not limited to, termination of employment. |
4. | The Company will Cooperate (as defined below) with Executive in the event that Executive makes a repayment pursuant to the Recovery Policy by, to the extent permitted under applicable law, rule or regulation, (a) taking commercially reasonable action to ensure that any compensation repaid by Executive in or before the year of its receipt is not reflected on Executive’s Form W-2, (b) filing Forms |
5. | If any provision of this Agreement is determined to be unenforceable or invalid under any applicable law, such provision will be applied to the maximum extent permitted by applicable law, and shall automatically be deemed amended in a manner consistent with its objectives to the extent necessary to conform to any limitations required under applicable law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of California. |
Juniper Networks, Inc. | [Insert Name of Executive] | |||
By: | ||||
Name: | Signature | |||
Title: | ||||
Date | Date | |||
Reference:
Security Exchange Commission - Edgar Database, EX-10.60 4 jnpr-20151231ex1060.htm FORM OF EXECUTIVE COMPENSATION RECOVERY AGREEMENT, Viewed September 27, 2022, View Source on SEC.
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Lawyers with backgrounds working on recovery agreements work with clients to help. Do you need help with a recovery agreement?
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Meet some of our Recovery Agreement Lawyers
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McGhee at Law is a purpose-driven law firm located in Indiana. We are focused on assisting Clients with creating opportunities of advancement. Our strategy is to assist, advise and support our Clients in fulfilling their vision for their personal lives and businesses through the practice of law.
"Mariah was great to work with. She clearly explained her billing system in the bid, was responsive with her messages, and quickly provided the legal documentation we needed as requested. I would not hesitate to hire her services again."
Daniel D.
I was born and raised in Wayne, New Jersey and attended Seton Hall University, graduating cum laude. I followed my family down to Florida to attend Ave Maria School of Law where I graduated cum laude. I was admitted to the Florida Bar in 2018. During law school, I participated in the Certified Legal Internship program with the State Attorney's Office of the 20th Judicial Circuit and litigated 5 jury trials, 1 non jury trial and argued various motions before the court under the supervision of an Assistant State Attorney. I was an Assistant States Attorney for Collier County from 2018 to 2020 before moving into private practice in the areas of real estate and first party property from 2020 to 2021. As of November 2021, I started my own law practice that focuses on business planning, real estate and estate planning.
"Daniel is thorough, he remains in communication, and he gets the job done. Highly recommend."
June 28, 2023
Shanon G.
Have experience in contract, family law, municipality work, criminal defense, litigation, some wills and estates as well. Been practicing law for over 22 years.
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Whitney S.
Whitney L. Smith's journey from entrepreneur to advocate is fueled by a profound understanding of the business world. With a decade of firsthand entrepreneurial experience, she entered law school driven by a mission to protect others' businesses. However, her passion for real estate law blossomed as she recognized the tremendous benefits rental property ownership offers to individuals seeking passive income and community development. Blending her deep understanding of transactional law with zealous courtroom advocacy, she empowers landlords to thrive. Born and raised in St. Petersburg, Florida, she is a proud graduate of Stetson College of Law and cherishes her role as a devoted parent to two children and a beloved pit bull companion.
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