Executive Employment Agreement are complex employment contracts because they deal with other not as common issues such as:
Termination for cause: how are you going to define “cause”?
Profit sharing and vesting schedules: often, equity is part of the compensation for high level employees. How and when will the shares/equity/units vest in the employee? What rights will the employee have, if any, as an equity holder?
Buy-sell provisions: buying back the employees shares in the event of death or disability.
Restrictive covenants such as non-compete agreements, non solicitation and strict confidentiality agreements.
Intellectual property rights: protecting the company’s intellectual property is critical. Are they creating anything for the company? If so, how do you ensure that the Company has the exclusive right to those creations/developments? What intellectual property is the employee bringing to the table? What intellectual property will remain the employee’s after termination of the relationship?
These are just a few of the issues that one has to consider when putting together an executive employment agreement. To get a better sense of the issues I’ve attached two executive employment agreement templates, for educational purposes.
This first employment contract is a 32 page long-form contract. It has all of the bells and whistles and options you’d expect from an executive employment contract:
Executive Employment Agreement (Long-Form)
This next employment contract is shortened version of the previous contract form. It’s only 15 pages but contains most of the employment agreement essentials including “work for hire” language, and various restrictive covenants like non compete provisions, confidentiality, and so on.
Executive Employment Agreement – v1
This last employment contract is a 16 page contract which contains much of the basics as the contract above, except that it’s geared more towards a business development hire and contains stock option language as well.
Executive Employment Agreement v2
One size does not fit all but the three of these contracts together contain valuable insights and options for you when hiring a high level or executive employee.