Checklist of Employment Agreement Issues from the Perspective of the Employee

CHECKLIST OF EMPLOYMENT AGREEMENT ISSUES
FROM THE PERSPECTIVE OF THE EMPLOYEE

1. What is the title of the Employee’s job?
2. What are the Employee’s responsibilities?
3. Can the Employee be demoted? Can Employee’s responsibilities be substantially modified, decreased, or increased?
4. Is Employee guaranteed a seat on the Board of Directors while an employee?
5. Where is the place of employment?
6. Can Employee be relocated unilaterally to another city, or only with the Employee’s consent?
7. Is the Employee allowed to be involved in other activities (e.g., a directorship on other Boards, involvement in community activities)?

1. What is the base salary?
2. When is it payable?
3. Does the salary go up each year by a designated amount or by cost of living increases?
4. Are there designated times for performance reviews?

1. Does Employee get a signing bonus?
2. Is Employee entitled to a guaranteed bonus?
3. Are there bonuses to be tied to objective performance standards?
4. Are target bonus levels or minimum bonuses to be established?

1. Will the Employee participate in all benefit plans of the Company?
2. Which of these plans should be in place for the Employee? Are all of the payments for the benefits the responsibility of the Company?
   (1) Health and medical (including spouse and dependent coverage)
   (2) Disability
   (3) 401(k)
   (4) Pension
   (5) Cafeteria Plan
   (6) Life insurance
   (7) Stock Option/Stock Grant
   (8) Vision
   (9) Dental
   (10) Executive Financial Counseling
3. How much vacation per year is Employee entitled? Does unused vacation continue to accrue for the benefit of Employee and payable on termination of employment?
4. Is there a designated sick pay policy?
5. Any special loans or forgiveness arrangements?
6. Are some of the benefits taxable to the Employee? Should Employee be reimbursed for the tax?

1. How long is the employment term?
2. Is the Employee given the right to terminate at the Employee’s discretion prior to the end of the term?
3. Does the Agreement get renewed automatically on a year-to-year basis unless the Company gives the Employee notice of non-renewal at least 90 days in advance of the end of the term?
4. Is the employment “at will”?
5. What are the grounds, if any, on which employers can terminate?
6. What are the terms, if any, for compensation in the event of early termination?
7. What are the circumstances that the Employee can be fired “for cause”, such as:
   (1) Conviction of a felony or any act involving moral turpitude;
   (2) Commission of any act of theft, fraud, dishonesty or falsification of an employment record;
   (3) Material uncured breach of the Employment Agreement;
   (4) Failure to perform reasonable assigned duties; and/or
   (5) Improper disclosure of the Company’s confidential information.
   
8. Employee needs to avoid “for cause” definitions that give the Company too much latitude for termination.
9. Is Employee entitled to severance pay on termination? How much?
10. If the Employee is terminated without cause, is it clear that Employee will get all salary and benefits that Employee would otherwise have been entitled to for the remaining term of the Agreement?
11. If terminated without cause, is the Company required to continue paying for benefits or COBRA benefits for some period of time?

1. Will the Employee’s business expenses be reimbursed promptly?
2. Is there a car or car allowance, cellular phone provided, or other such amenities?
3. Are moving expenses to be reimbursed?
4. Is there a...