Negotiating and Drafting an Executive Employment Agreement

Resource type: Practice Note

Status: Maintained

Jurisdiction: USA

This Note explains the provisions employers and practitioners should consider when negotiating and drafting executive employment agreements. It discusses common types of compensation arrangements, severance provisions, relevant issues under the Internal Revenue Code and restrictive covenants. It also includes factors to consider when negotiating, including the more stringent regulatory environment and provisions that are viewed unfavorably by shareholders.

PLC Employee Benefits & Executive Compensation

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Resource ID: 2-504-5403
Products: PLC US Employee Benefits & Executive Compensation, PLC US Labor & Employment, PLC US Law Department
This resource is maintained, meaning that we monitor developments on a regular basis and update it as soon as possible.

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Related content

Related content

Topics

Contracts of EmploymentContracts of Employment (http://us.practicallaw.com/9-103-1223)
Employee Benefit Plans and the Employment RelationshipEmployee Benefit Plans and the Employment Relationship (http://us.practicallaw.com/3-503-9114)
Executive CompensationExecutive Compensation (http://us.practicallaw.com/6-503-9117)
Labor and EmploymentLabor and Employment (http://us.practicallaw.com/1-500-0075)

Practice Note: Overview

Section 409A: Deferred Compensation Tax Rules: Overview Section 409A: Deferred Compensation Tax Rules: Overview (http://uslf.practicallaw.com/topic6-501-2009)

Practice Notes

Applying Section 409A to Severance Benefits Applying Section 409A to Severance Benefits (http://uslf.practicallaw.com/topic6-501-2702)
Conducting Layoffs and Other Reductions in Force Conducting Layoffs and Other Reductions in Force (http://uslf.practicallaw.com/topic9-502-6665)
Non-compete Agreements with Employees Non-compete Agreements with Employees (http://uslf.practicallaw.com/topic7-501-3409)
Protection of Employers' Trade Secrets and Confidential Information Protection of Employers' Trade Secrets and Confidential Information (http://uslf.practicallaw.com/topic5-501-1473)
Section 162(m): Limit on Compensation Section 162(m): Limit on Compensation (http://uslf.practicallaw.com/topic7-501-5106)
Sections 280G and 4999 of the Code: Golden Parachute Payments Sections 280G and 4999 of the Code: Golden Parachute Payments (http://uslf.practicallaw.com/topic2-508-3188)
Standard recommended arbitration clauses Standard recommended arbitration clauses (http://uslf.practicallaw.com/topic1-381-8470)
Stock Options and Other Equity Compensation Stock Options and Other Equity Compensation (http://uslf.practicallaw.com/topic0-501-9297)
What's Market: Negotiating Executive Employment Agreements: Compensation and Benefits What's Market: Negotiating Executive Employment Agreements: Compensation and Benefits (http://uslf.practicallaw.com/topic5-515-0954)
What's Market: Negotiating Executive Employment Agreements: Severance Payments and Benefits What's Market: Negotiating Executive Employment Agreements: Severance Payments and Benefits (http://uslf.practicallaw.com/topic0-521-4232)

Standard Documents

Employee Confidentiality and Proprietary Rights Agreement Employee Confidentiality and Proprietary Rights Agreement (http://uslf.practicallaw.com/topic6-501-1547)
Employee Non-compete Agreement Employee Non-compete Agreement (http://uslf.practicallaw.com/topic7-502-1225)
Executive Employment Agreement Executive Employment Agreement (http://uslf.practicallaw.com/topic0-504-2226)
Executive Employment Agreement Term Sheet Executive Employment Agreement Term Sheet (http://uslf.practicallaw.com/topic9-525-1673)
Expatriate Secondment Letter of Assignment Expatriate Secondment Letter of Assignment (http://uslf.practicallaw.com/topic4-525-9389)
Mutual Agreement to Arbitrate Employment-related Disputes (California) Mutual Agreement to Arbitrate Employment-related Disputes (California) (http://uslf.practicallaw.com/topic9-520-3903)
Offer Letter for a Commission Salesperson Offer Letter for a Commission Salesperson (http://uslf.practicallaw.com/topic8-521-2842)
Offer Letter/Short-form Employment Agreement (California) Offer Letter/Short-form Employment Agreement (California) (http://uslf.practicallaw.com/topic1-508-6451)
Secondment Agreement (Domestic) Secondment Agreement (Domestic) (http://uslf.practicallaw.com/topic9-521-8725)
Secondment Letter to Employee for Domestic Transfer Secondment Letter to Employee for Domestic Transfer (http://uslf.practicallaw.com/topic0-521-9055)
Separation and Release of Claims Agreement Separation and Release of Claims Agreement (http://uslf.practicallaw.com/topic0-503-8253)

Standard Clauses

Board Resolutions: Approving an Executive Employment Agreement Board Resolutions: Approving an Executive Employment Agreement (http://uslf.practicallaw.com/topic8-507-0588)
Compensation Committee Resolutions: Approving an Executive Employment Agreement Compensation Committee Resolutions: Approving an Executive Employment Agreement (http://uslf.practicallaw.com/topic5-523-7504)
Mandatory Arbitration of Employment-related Claims (California) Mandatory Arbitration of Employment-related Claims (California) (http://uslf.practicallaw.com/topic4-509-0852)
Section 280G Employment Agreement Provisions: Full Gross-up Section 280G Employment Agreement Provisions: Full Gross-up (http://uslf.practicallaw.com/topic1-524-1206)
Section 280G Employment Agreement Provisions: Modified Gross-up Section 280G Employment Agreement Provisions: Modified Gross-up (http://uslf.practicallaw.com/topic3-525-0271)
Section 280G Employment Agreement Provisions: Safe Harbor Cutback Section 280G Employment Agreement Provisions: Safe Harbor Cutback (http://uslf.practicallaw.com/topic5-523-8344)
Section 280G Employment Agreement Provisions: Valley Provision (Better-off Cutback) Section 280G Employment Agreement Provisions: Valley Provision (Better-off Cutback) (http://uslf.practicallaw.com/topic8-523-8941)

Checklists

Departing Employee Checklist Departing Employee Checklist (http://uslf.practicallaw.com/topic4-503-8010)
Section 162(m) Performance-based Compensation Exception Checklist Section 162(m) Performance-based Compensation Exception Checklist (http://uslf.practicallaw.com/topic6-518-5217)
Section 409A Six-month Delay, Short-term Deferral and Separation Pay Plan Analysis Flowcharts Section 409A Six-month Delay, Short-term Deferral and Separation Pay Plan Analysis Flowcharts (http://uslf.practicallaw.com/topic3-501-9168)
Terms of an Executive Employment Agreement Checklist Terms of an Executive Employment Agreement Checklist (http://uslf.practicallaw.com/topic8-504-2821)
Terms to Consider When Designing a Severance Pay Plan Checklist Terms to Consider When Designing a Severance Pay Plan Checklist (http://uslf.practicallaw.com/topic3-504-8279)
Trade Secrets and Confidential Information Best Practices at Hiring Checklist Trade Secrets and Confidential Information Best Practices at Hiring Checklist (http://uslf.practicallaw.com/topic5-505-7753)

Articles

Executive Employment Agreements After the Dodd-Frank Act: Expert Q&A Executive Employment Agreements After the Dodd-Frank Act: Expert Q&A (http://uslf.practicallaw.com/topic3-518-7411)
Experts' View: Trends in Executive Severance Arrangements Experts' View: Trends in Executive Severance Arrangements (http://uslf.practicallaw.com/topic2-523-6247)
What's Market: Executive Employment Agreements: Post-termination Non-competition Provisions What's Market: Executive Employment Agreements: Post-termination Non-competition Provisions (http://uslf.practicallaw.com/topic5-519-1426)

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