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Executive  Employment Agreement Checklist Executive  Employment Agreement Checklist

Executive Employment Agreement Checklist - PowerPoint Presentation

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Uploaded On 2018-03-14

Executive Employment Agreement Checklist - PPT Presentation

By Michael T Cronin Esq Johnson Pope Bokor Ruppel amp Burns LLP 911 Chestnut Street Clearwater FL 33756 Phone 727 4611818 Fax 727 4620365 Email mikecjpfirmcom Terms of an Executive Employment Agreement ID: 651169

agreement executive employer bonus executive agreement bonus employer compensation employment termination terms including restriction requirements good reason section position

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Slide1

Executive Employment Agreement Checklist

By: Michael T. Cronin, Esq.

Johnson, Pope, Bokor, Ruppel & Burns, LLP

911 Chestnut Street

Clearwater, FL 33756

Phone: (727) 461-1818

Fax: (727) 462-0365

Email: mikec@jpfirm.comSlide2

Terms of an Executive Employment Agreement Checklist

The terms of an executive employment agreement often result from thorough negotiations between the executive and the employer. However, before the negotiation process begins, the employer should consider its position on the provisions below.

The Term of the Agreement

The

beginning date of the agreement

.

Whether

the term should:

be

fixed;

be

indefinite; or

automatically

renew

.

The

expiration date of the agreement.Slide3

Executive's Position and Duties

The

executive's title

.

The

executive's duties

.

The

person (identified by position) or entity to whom the executive must report.

Whether

the executive may be expected to serve on the company's board of directors (if elected) and any of its committees

.

Whether

the executive may be required to provide services to the employer's affiliates for no additional compensation

.

The

scope of any outside activities that the executive may be permitted to engage in (for example, service on boards of directors of other corporations or non-profit entities

).Slide4

Compensation and BenefitsDetermine the executive's starting annual rate of base salary and whether it will be subject to automatic or discretionary increases or adjustments each year

.

Decide whether the agreement should include

:

The

way the executive's bonus will be earned, including

:

whether

the bonus is earned annually or over some other time period

;

whether

the bonus is discretionary, guaranteed or performance-based

;

provisions

consistent with the requirements for performance-based compensation under

Section 162(m)

of the

Internal Revenue Code 

;

and

amounts

for a target bonus, threshold bonus, maximum bonus or guaranteed bonus.Slide5

 A signing bonus, including:

the

amount;

the

payment date;

any

applicable vesting periods; and

any

circumstances under which the executive must repay the signing bonus

.

Equity

awards and specific terms and conditions for the equity awards granted under the agreement

.

Any

perquisites (or perks) or employee benefits

.

Reimbursement

for legal fees the executive incurs in negotiating the employment agreement

.

Indemnification

, including coverage by directors' and officers' liability insurance

.Slide6

Payments and Benefits on Termination of EmploymentConsider the type and amount of severance or other termination benefits the employer intends to offer the executive on each termination event.

Potential Termination

Events

Termination of employment

:

On

the executive's death.

On

the executive's disability

.

By

the employer with or without cause

.

By

the executive for good reason or in the absence of good reason

.

Because

the employer or the executive does not renew the agreement

.

Depending on which events trigger the employer’s severance obligations, also consider how to define:

Cause.

Disability.

Good

reason

.Slide7

Restrictive Covenants

Consider

the duration and scope of the

:

non-compete;

non-solicitation

of employees restriction; and

non-solicitation

of customers or clients restriction

.

Specify

confidentiality requirements and intellectual property rights

.

Consider

whether any non-disparagement restriction should apply to

:

the

executive only; or

the

executive and the employer

.

Determine

which state law should govern the agreement and whether the desired duration and scope for each restriction are enforceable under applicable state law

.

Enforcement

Determine

whether any disputes arising under the agreement should be settled by

arbitration

.

Consider

whether to provide the executive with reimbursement for legal fees incurred in any actions enforcing the agreement, including any internal requirements the executive must satisfy to receive reimbursement

.Slide8

Design Considerations

Confirm

that all compensation arrangements are structured to comply with or be excluded from the requirements of

Section 409A 

.

Consider

whether the terms of the agreement are structured to maximize the employer's ability to deduct compensation expenses under IRC

Section 162(m)

.

Consider

whether to include a clawback provision. If so, also consider

:

the

types of compensation subject to the clawback provision; and

the

circumstances under which the clawback provision applies

.

Confirm

that incentive compensation structures do not encourage inappropriate

risk-taking.

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