(Reuters) - Celgene Corp (O:CELG) and Bristol-Myers Squibb Co (N:BMY) will have to pay $2.2 billion if either of the drugmakers walks away from their $74 billion merger announced on Thursday, according to a regulatory filing.
The deal, which is worth $95 billion including Celgene's debt, is the largest pharmaceutical deal ever and brings together two of the world's largest cancer drug businesses.
Celgene's top executives, including its chief executive officer and chief financial officer, are entitled to severance benefits if they resigned with good reason or are terminated without cause within two years of the deal closing, according to the filing with the U.S. securities regulator on Friday.
The severance benefits include a cash severance payment equal to 2.5 times the officer's annual base salary and annual cash incentive opportunity, Celgene said https://www.sec.gov/Archives/edgar/data/816284/000114420419000539/0001144204-19-000539-index.htm.
Celgene CEO Mark Alles will be eligible for a severance benefit that would be three times his annual salary and cash incentive opportunity.
The company is yet to disclose his 2018 compensation.
If the termination or resignation is not connected to the deal closing, the severance payment would be 1.5 times the officer's salary, or two times in Alles' case, and would include cash incentive opportunity, Celgene said.