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.com

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.

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).

Compensation and Benefits Determine 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.

 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.

Payments and Benefits on Termination of Employment Consider 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.

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.

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. MTC/ej/1150970v1