tin parachute

And it remains to be seen how many of these tin parachutes will ever take effect.

Because it was friendly, the tin parachutes were not activated.

This thought is echoed by executives at the other companies that have tin parachutes.

Known as a "tin parachute," the severance benefits would cover all employees.

About 8 percent of the companies surveyed provide so-called tin parachutes, which cover all employees to some degree.

It remains unclear whether tin parachute plans such as Irving's would be upheld in court.

Others advise against the tin parachutes simply because, like any poison pill, they can be all too toxic.

Although the use of golden parachutes has become widespread, tin parachutes are still rare.

Expansion of Plan Seen Analysts expect the tin parachutes to proliferate.

And some investment bankers maintain that the tin parachute can be overcome by simply conditioning a takeover bid on its repeal.

Even if there is a court challenge to tin parachutes, Mr. Greenfield suspects that they would survive.

The tin parachute, of course, is also a form of poison pill, meaning a condition established by a corporate board to make a takeover prohibitively expensive.

Motives Questioned There are those, however, who do not buy the argument that companies are concerned about their rank and file in setting up the tin parachutes.

Furthermore, so-called tin parachutes are also rising quickly in popularity, according to a survey by Hewitt Associates, employee benefits consultants based in Lincolnshire, Ill.

Golden Parachutes in Place Even before it adopted the tin parachute last month, Irving already had in place golden parachutes for 13 of its top executives.

The so-called "tin parachutes" would not necessarily prevent an unwanted acquisition or merger, but they have been adopted by other banking companies because they make employees more confident about their future.

The board of the Phillips Petroleum Company has adopted a "tin parachute" to provide better severance pay and benefits should a job be lost without just cause within two years of a management change.

Can Be Kept Secret Unlike golden parachutes for executives, which must be disclosed publicly, tin parachutes are often kept secret - at least until a hostile bidder appears on the scene.

RIDING THE LATEST TREND Companies that have adopted "tin parachutes" in the last two years to help prevent a takeover.

Since last fall, the furniture maker's employees have been protected by a novel type of severance plan that adds a new wrinkle to the takeover game and advances the art of the takeover defense: the "tin parachute."

Dissuade takeover attempts by increasing the cost of a takeover, often part of a Poison Pill strategy, although tin parachutes (giving every employee takeover benefits and/or job protection) are generally far more effective in this regard.

While "golden parachutes" provide lucrative severance packages for a company's top executives, Texaco's proposed tin parachute would cover its entire domestic work force of 28,000 people, including the 13,000 people employed by Texaco units not under bankruptcy protection.

The potential magnitude and terms of the so-called tin parachute has creditors worried, they said, not only because it could place an enormous financial burden on the company but also because employees' claims would take precedence over those of unsecured creditors.

But in this case, no matter how the buyout competition plays out, Mr. Johnson and more than 100 other senior executives will collect a total of more than $125 million in "golden parachutes" and "tin parachutes," which are extraordinary payments made in the event of a takeover.

How the Plan Works Under the tin parachute plan, Herman Miller's employees, depending on their tenure and other considerations, are entitled to cash payments of up to two and a half times their annual compensation, including bonus and incentive pay, if the company changes hands against the board of directors' wishes.