Twitter's $7 million whistleblower payout violates purchase deal, Musk's lawyers argue
, telling the company that the severance payment worth $7.75 million that it made to Zatko in June violated a provision in their sales agreement.
In the letter uploaded to the SEC website, Musk's lawyers cited Section 6.1 of the merger agreement, which says Twitter promised not to"grant or provide any severance or termination payments or benefits to any Company Service Provider other than the payment of severance amounts or benefits in the ordinary course of business consistent with past practice and subject to the execution and non-revocation of a release of claims in favor of the Company and its Subsidiaries.
Musk and Twitter entered the purchase agreement in April, and it wasn't until June when Zatko received his severance pay. The company didn't seek Musk's consent before making the payment or notify him of the transaction, the lawyers said in the letter. Musk apparently only found out about the settlement when Twitter included the information in its court filing on September 3rd.
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