An executive employment agreement (EEA) is a legally binding contract between an executive and the employer outlining the terms and conditions of employment. The agreement is geared towards ensuring that the rights of both parties are protected throughout the length of the executive’s tenure. As such, it is important to pay attention to the EEA terms to avoid any legal wrangling that may arise in case of a breach of agreement.
Here are some EEA terms that should be considered:
1. Compensation and benefits: This term outlines the executive’s base salary, bonuses, stock options, health insurance, retirement benefits, and any other perks that come with the job. It should be clearly defined to avoid any misunderstandings or disagreements.
2. Job Description: This term outlines the duties and responsibilities of the executive. It should clearly define the expectations of the employer in terms of the role that the executive will play in the success of the organization.
3. Duration of employment: The duration of employment defines the period that the employer anticipates the executive to work for them. It could be a fixed term or an indefinite employment agreement.
4. Non-compete clause: This term restricts the executive from working for a competitor after leaving the company. It is important for the employer to have this term to avoid the executive sharing confidential information with competitors.
5. Termination clause: A termination clause outlines the circumstances under which the employer or employee can terminate the employment agreement. It`s critical to be clear on the conditions that warrant termination.
6. Intellectual property: This term outlines the ownership of any intellectual property created by the executive while employed by the organization. The employer should be clear about who owns patents, trademarks, and copyrights related to the executive`s work.
7. Dispute resolution: This term outlines how disputes between the executive and employer will be resolved. It could be through mediation, arbitration or litigation.
In conclusion, an executive employment agreement is a critical document that defines the essential terms and conditions of employment. It`s essential for both parties to carefully consider the EEA terms before signing the agreement. Failure to do so could result in legal issues down the line.
