An Executive Employment Agreement is a binding agreement for employment between a company and an executive. In exchange for valuable consideration given by the company, the executive is agreeing to perform certain services. In contrast to an Executive Compensation Agreement, Executive Employment Agreements are binding, and by executing the agreement, both the company and the executive are promising to perform under the agreement’s terms.

Executive Employment Agreements should begin with a “Recitals” section that lays out the overall purpose of the agreement. Each recital begins with “WHEREAS.” Generally, the first recital should state simply that the “Employer’s Board of Directors desires to employ Employee in an executive capacity and Employee desires to be so employed in that capacity.” After any other applicable recitals, the agreement should say “THEREFORE, in consideration of the mutual covenants and conditions set forth below, the parties agree as follows.”

The following are key provisions commonly found in Executive Employment Agreements:

1. Term. The length of the term of the agreement and the termination date should be provided. Also, any understanding regarding the option to renew the agreement, either on the executive’s side, the company’s side, or both, should be addressed. Most likely, the contract will be renewable or extendable under the same terms expressed in the agreement upon mutual agreement of the parties.

2. Compensation and Benefits. First, this provision should list the employee’s annual salary. Next potential salary adjustments, either increases or decreases, should be laid out. The executive may be able to negotiate for an automatic salary increase if a certain event occurs, such as a merger, sale of the company, or accomplishment of certain goals. The employee’s benefits package must also be described, including any stock options, health insurance, expense accounts, and vacation time.

3. Duties of Employee. The employee’s position should be listed again, and his expected duties should be described in detail. If the precise services of the executive may be extended or curtailed by mutual agreement, this should be listed as well. Executive should promise to undertake the responsibilities for and devote his productive time, abilities, and attention to the business of the employer during the term of the Agreement, as well as comply with all federal, state, and local laws.

4. Duties of Employer. The employer should promise to pay all compensation, benefits, and allowances as set forth in the agreement. The employer should also agree to provide offices, and if agreed upon, “stenographic help” (a secretary) as appropriate.

5. Confidential Information. The employee must agree to keep confidential information confidential and to refrain from disclosing confidential information to any third party during the term of his employment and for a period of time following his employment, which could be anywhere from one to three years or longer.

6. Non-Competition. The company should require the executive to promise not to work, directly or indirectly, as an owner, partner, manager, officer, employee, or consultant for any business that competes with the employer during the term of the agreement and for a certain period of time afterwards.

7. Termination. The agreement should spell out whether or not the employee can be terminated only for cause, or for any reason at all. If only for cause, then cause must be defined. One possible definition for cause would be: (a) any breach of any material obligations owed to employer; (b) failure to follow a directive of the company’s Board of Directors; or (c) conviction of a felony or any act involving moral turpitude. The severance pay that will be owed to executive upon termination either for cause or without cause should be provided.

These are the most important provisions of an Executive Employment Agreement. General provisions covering consequences of breach, assignment, modification, governing law, and severability should round out the agreement. For more information or to download part or all of actual Executive Employment Agreements, please visit the Agreement section of the Real Deal Docs website and conduct a search accordingly.

Popularity: 7% [?]

An Employee Retention Agreement is a legal contract entered into by an employer and a key employee whose services the company desires to retain. When employees know that their company might be acquired, they understand that their employment security may be in danger. In these situations, companies who want to ensure these employees’ continuing loyalty and commitment sometimes feel that it is in the best interests of the company and its stockholders to provide the employee with an incentive to continue his or her employment and to motivate the employee to maximize the value of the company upon a possible change of control.

Employee Retention Agreements generally provide a bonus structure and severance model for key employees, and may include significant severance pay, acceleration of stock options, or other benefits the company deems necessary to retain the employee. Drafters of these agreements should also pay careful attention to include, if applicable, the following provisions:

1. TERM OF AGREEMENT. The agreement should likely terminate upon the earlier of: (a) the termination of Employee’s employment for any reason prior to a change of control, or (b) the date that all obligations of the parties hereto with respect to this Agreement have been satisfied. This provision should be drafted accordingly.

2. AT-WILL EMPLOYMENT. If applicable, the company and the employee should both acknowledge that the Employee’s employment is and shall continue to be at-will, as defined under applicable law. If the Employee’s employment terminates for any reason prior to a change of control, the Employee shall not be entitled to the benefits provided by this Agreement, or any other benefit unless otherwise available in accordance with the Company’s established employee plans and practices or pursuant to other agreements with the Company.

3. DEFINITION OF TERMS. It is important that the following terms referred to in this Agreement be defined:

(a) Change of Control. “Change of Control” may be drafted to mean a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other capital reorganization of the Company with or into another corporation. Some limitations on that definition may also be applicable.

(b) Cause. “Cause” for Employee’s termination should be defined to mean the good faith judgment of the Company’s Board of Directors, that the undersigned has engaged in or committed any of the following: (i) gross negligence or willful misconduct in the performance of his duties to the Company, (ii) repeated unexplained or unjustified absence from the Company, (iii) a material and willful violation of federal or state law, (iv) commission of any act of fraud with respect to the Company, (v) breach of any confidentiality obligation to the Company, whether determined by agreement or by applicable law; or (vi) conviction of a felony or a crime involving moral turpitude causing material harm to the standing and reputation of the Company.

(c) Constructive Termination. “Constructive Termination” should be defined as occurring if here is (1) (a) a material adverse change in Employee’s position causing such position to be of materially reduced responsibility, (b) any reduction of Employee’s base compensation, or (c) Employee’s refusal to relocate to a facility or location more than 50 miles from the Company’s current location and (2) within the 30-day period immediately following any of the foregoing events, Employee elects to terminate his or her employment voluntarily.

4. SEPARATION BENEFITS UPON INVOLUNTARY TERMINATION FOLLOWING CHANGE OF CONTROL. The employee may want to include a provision that states that within one year of the effective date of a change of control, the employee’s employment with the Company is terminated (an “Involuntary Termination”) by the Company or the successor corporation without cause or, by the Employee as the result of a constructive termination by the Company or the successor corporation, then, the vesting of Employee’s then unvested shares of the Company’s common stock shall automatically be accelerated so as to become vested as of the effective date of the involuntary termination or constructive termination.

These are a few of the most important provisions that must be included in an effective Employee Retention Agreement. Provisions covering the enforceability of the agreement on successors of the employer and employee, waiver, choice of law, and severability should also be included.

Popularity: 8% [?]

This article will cover the key provisions of an agreement to distribute filmed entertainment, usually made between a producer or licensor (”Producer”) of a motion picture and a distributor (”Distributor”). These agreements are critical to the process of filmmaking; without them, films would not be viewed by the public.

1) Picture

This provision covers the specifications of the film to be delivered by the producer to the distributor. Will it be a color picture or black and white? What type of film will be used? (35 mm vs. 16 mm) How long or short must the film be? For feature films, it is typical for the distributor to require that the film be no shorter than 90 minutes and no longer than either 105 or 120 minutes. Producers with a bigger name, and hence more leverage, however, may be able to negotiate for more freedom when it comes to the acceptable length of the film. Lastly, the distributor will often require that the film be capable of receiving an MPAA rating of no more restrictive than an “R”, or “PG-13″, depending on the type and intended audience of the picture.

2) Territory

It is important for the parties to agree on what territory or territories the distribution agreement covers. Some distribution agreements are for worldwide rights to distribute the film; others cover just domestic or foreign rights. This provision can also cover whether or not the producer is obliged to deliver a subtitled version of the film so it can be shown in foreign markets.

3) Term

The parties must agree as to how long the distributor’s exclusive rights will last. This term is measured from the date of delivery. The distributor may also want to negotiate for a right to match any offer as to extending or renewal of the term.

4) Rights Granted

Here is where the agreement will lay out that whether or not the distributor is receiving the exclusive right under copyright and otherwise to exhibit, distribute, advertise, promote, publicize, market, sell, manufacture, license and otherwise exploit the picture in the territory during the term, in all forms of theatrical, free television, pay cable, subscription cable, and any other medium agreed upon by the parties. The scope of rights given to the distributor will vary from agreement to agreement. However, usually the right to advertise the film through commercials and billboards accompanies the right to distribute it.

5) Definition and Disposition of Gross Receipts

“Gross receipts” is a term used in the film industry to measure the success of a film. While there is a generally accepted definition of gross receipts, the agreement should nonetheless define the term. Usually gross receipts means “any and all gross sums actually received by the distributor, arising out of or in connection with the exercise of any of the rights herein contained.” Minimum guarantee payments, advances, and/or security deposits are usually included in gross receipts. By contrast, “net receipts” should be defined as well. Generally speaking, the term “net receipts” is defined as gross receipts minus all distribution expenses.

After providing these definitions, the agreement must spell out what percentage of the gross or net receipts the producer is entitled to and what percentage the distributor will keep. For instance, a common arrangement is for the producer to be entitled to 80% of the net receipts, and distributor entitled to 20%. This split is obviously negotiated by the parties.

These are the most important provisions of a film distribution agreement. Other provisions covering distribution expenses, credits, representations and warranties, and termination rights should also be covered. But it is most important for the producers and distributors to first agree on the territory, the term, the specification of the picture, the rights granted, and the disposition of gross or net receipts between the two parties.

Popularity: 12% [?]