DELVACCA Presents… Executive Employment Agreements: Minimizing Risk in a Mythological Minefield Presented by: Todd J. Glassman ([email protected]) Jason

DELVACCA Presents…DELVACCA Presents…Executive Employment Agreements: Executive Employment Agreements:

Minimizing Risk in a Mythological Minimizing Risk in a Mythological MinefieldMinefieldPresented by:Presented by:

Todd J. Glassman ([email protected])Todd J. Glassman ([email protected])Jason E. Reisman ([email protected])Jason E. Reisman ([email protected])

Obermayer Rebmann Maxwell & Hippel LLPObermayer Rebmann Maxwell & Hippel LLPRobert H. Taylor, Senior CounselRobert H. Taylor, Senior Counsel

Thomas Jefferson UniversityThomas Jefferson University

We thank Obermayer for sponsoring this presentation.We thank Obermayer for sponsoring this presentation.

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IntroductionIntroduction

The focus of today’s presentation is not on The focus of today’s presentation is not on the typical, one-sided “standard” at-will the typical, one-sided “standard” at-will employment agreement.employment agreement.

This presentation assumes that the parties This presentation assumes that the parties have already agreed upon compensation have already agreed upon compensation and benefits (and benefits (i.e.i.e., negotiated a term , negotiated a term sheet).sheet).

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IntroductionIntroduction

The Company is voluntarily creating The Company is voluntarily creating obligations on itself greater than those obligations on itself greater than those required by law under the “at-will” required by law under the “at-will” employment doctrine.employment doctrine.

The Executive enjoys rights greater than The Executive enjoys rights greater than those granted by law under the “at-will” those granted by law under the “at-will” employment doctrine.employment doctrine.

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Background: So how does it end?Background: So how does it end?When employment is not “at-will,” one of When employment is not “at-will,” one of the parties will typically end the the parties will typically end the employment relationship in one of four employment relationship in one of four ways:ways:– The Company terminates employee for The Company terminates employee for

““CauseCause””– The Company terminates employee without The Company terminates employee without

““CauseCause””– The Executive terminates employment for The Executive terminates employment for

““Good ReasonGood Reason””– The Executive terminates employment without The Executive terminates employment without

““Good ReasonGood Reason””

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Other ways that it may end…Other ways that it may end…

DeathDeath

DisabilityDisability

RetirementRetirement

Change in ControlChange in Control

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The Company’s PerspectiveThe Company’s Perspective

1.1. What matters in “What matters in “real lifereal life”?”?– Few provisions of an executive employment Few provisions of an executive employment

agreement (“EEA”) are ever negotiated by the agreement (“EEA”) are ever negotiated by the Executive.Executive.

2. What matters in 2. What matters in litigationlitigation??– The majority of the provisions in an EEA are The majority of the provisions in an EEA are

boilerplate-type concepts that become critical boilerplate-type concepts that become critical only in litigation (or pre-litigation negotiations).only in litigation (or pre-litigation negotiations).

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Executive’s “Real-Life” ConcernsExecutive’s “Real-Life” Concerns

Typically, the Executive will have reason Typically, the Executive will have reason to negotiate only three elements of an to negotiate only three elements of an EEA:EEA:– 1. Severance Package1. Severance Package– 2. Definition of “2. Definition of “CauseCause””– 3. Post-Employment Restrictions3. Post-Employment Restrictions

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What Executives Want: What Executives Want: 1. The Severance Package1. The Severance Package

Salary Continuation (or Lump Sum Salary Continuation (or Lump Sum Payout)Payout)Health & Welfare BenefitsHealth & Welfare Benefits– Benefits during salary continuationBenefits during salary continuation– Reimbursement of COBRAReimbursement of COBRA

Commission TailCommission TailAccelerated Vesting of Equity GrantsAccelerated Vesting of Equity GrantsExtended Exercise Periods for Stock Extended Exercise Periods for Stock OptionsOptions

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What Executives Get: NOTHINGWhat Executives Get: NOTHING******

******The Company should never agree to The Company should never agree to provide post-employment benefits absent provide post-employment benefits absent the Executive’s agreement to execute a the Executive’s agreement to execute a general release at the time of termination general release at the time of termination of employment and prior to the Executive’s of employment and prior to the Executive’s receipt of post-employment benefits.receipt of post-employment benefits.

The Company The Company maymay wish to attach that wish to attach that general release to the EEA.general release to the EEA.

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What Executives Want:What Executives Want:2. Narrow/Objective “2. Narrow/Objective “CauseCause” ”

DefinitionDefinition

The Company’s termination of the The Company’s termination of the Executive for “Executive for “CauseCause” disentitles the ” disentitles the Executive to severance benefits.Executive to severance benefits.

General Company view: the broader the General Company view: the broader the better.better.

Consider Executive right to cure.Consider Executive right to cure.

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““CauseCause” Defined” Defined

ElementElement: : ConvictionsConvictions– FelonyFelony– Crimes of Moral TurpitudeCrimes of Moral Turpitude– Any CrimeAny CrimeNarrow exampleNarrow example: The Executive’s conviction of : The Executive’s conviction of

or plea of guilty or nolo contendere to a or plea of guilty or nolo contendere to a felonyfelony, , a crime of falsehood or a crime a crime of falsehood or a crime involving moral turpitudeinvolving moral turpitude

Broad exampleBroad example: The Executive’s conviction of : The Executive’s conviction of or plea of guilty or nolo contendere to a or plea of guilty or nolo contendere to a crimecrime

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ElementElement: : MisconductMisconductNarrowNarrow: Any : Any grossgross misconduct or violation misconduct or violation

of law which is of law which is materiallymaterially injurious to the injurious to the operations, financial condition or business operations, financial condition or business reputation of the Companyreputation of the Company

BroadBroad: Any misconduct or violation of law : Any misconduct or violation of law which is injurious or which is injurious or potentiallypotentially injurious injurious to the operations, financial condition or to the operations, financial condition or business reputation of the Companybusiness reputation of the Company

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ElementElement: : Violation of Company PolicyViolation of Company Policy

NarrowNarrow: : WillfulWillful, , materialmaterial violation of any violation of any written Company policy written Company policy in in effect as of the effect as of the effective date of the EEAeffective date of the EEA

BroadBroad: Violation of any written Company : Violation of any written Company policypolicy

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ElementElement: : Breach of EEABreach of EEA

NarrowNarrow: The Executive’s : The Executive’s intentionalintentional breach breach of a of a materialmaterial provision of this Agreement provision of this Agreement

BroadBroad: The Executive’s breach of : The Executive’s breach of anyany provision of this Agreementprovision of this Agreement

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ElementElement: : PerformancePerformanceNarrowNarrow: The Executive’s : The Executive’s willfulwillful failure to perform her failure to perform her

duties to the Company (other than a failure resulting duties to the Company (other than a failure resulting from the Executive’s incapacity because of physical or from the Executive’s incapacity because of physical or mental illness, as provided in the EEA), which failure mental illness, as provided in the EEA), which failure results in results in monetarymonetary injury to the Company; or the injury to the Company; or the Executive’s Executive’s willfulwillful failure to follow the failure to follow the good faith, good faith, lawfullawful instructions of her instructions of her directdirect supervisor or the supervisor or the Company’s Board of Directors Company’s Board of Directors withwith respect to the respect to the operations of the Companyoperations of the Company

BroadBroad: The Executive’s continued failure to : The Executive’s continued failure to substantiallysubstantially perform her duties under the EEA or to follow the lawful perform her duties under the EEA or to follow the lawful and and reasonablereasonable directions of her supervisor or the directions of her supervisor or the BoardBoard

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Other “Other “CauseCause” Elements” Elements

Misappropriation/FraudMisappropriation/Fraud

Discrimination/HarassmentDiscrimination/Harassment

Failure to Report to WorkFailure to Report to Work

Dishonesty or Gross Dishonesty or Gross Negligence/MisrepresentationNegligence/Misrepresentation

Breach of Fiduciary DutyBreach of Fiduciary Duty

Substance AbuseSubstance Abuse

Breach of Pre-Existing Restrictive Covenant or Breach of Pre-Existing Restrictive Covenant or Duty of ConfidentialityDuty of Confidentiality

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Some “Some “CauseCause” ‘Wiggle Words’” ‘Wiggle Words’

MaterialMaterialSubstantialSubstantialGrossGrossRecklessRecklessWillful/IntentionalWillful/IntentionalReasonable Reasonable Arbiter of conduct (reservation of Arbiter of conduct (reservation of discretion)discretion)

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Without “Without “CauseCause” Defined: ” Defined: An Important Intricacy to ConsiderAn Important Intricacy to Consider

Whether non-renewal by the Company of Whether non-renewal by the Company of an EEA that is for a term of years an EEA that is for a term of years constitutes a without “constitutes a without “CauseCause” termination ” termination will determine whether the Executive shall will determine whether the Executive shall receive severance benefits upon the receive severance benefits upon the expiration and non-renewal of an EEA.expiration and non-renewal of an EEA.

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Hmmm…Hmmm…Bill Oliver joined Acme’s executive team in January 2008 Bill Oliver joined Acme’s executive team in January 2008 following an impressive track record at Big Retailer. As following an impressive track record at Big Retailer. As Acme’s EVP for Strategic Planning, Mr. Oliver entered into Acme’s EVP for Strategic Planning, Mr. Oliver entered into an EEA that could provide cash and equity of about $20 an EEA that could provide cash and equity of about $20 million over five years. Acme officials have determined that million over five years. Acme officials have determined that Oliver fostered an inappropriate relationship with the Oliver fostered an inappropriate relationship with the teenaged daughter of another Acme employee (a manager teenaged daughter of another Acme employee (a manager who reports to Oliver) and believes Oliver’s employment who reports to Oliver) and believes Oliver’s employment should be terminated. Oliver’s employment contract should be terminated. Oliver’s employment contract contains the following definition of acts which could warrant contains the following definition of acts which could warrant termination for cause:termination for cause:– ““Any gross misconduct or violation of law which is materially Any gross misconduct or violation of law which is materially

injurious to the operations, financial condition or business reputation injurious to the operations, financial condition or business reputation of the Companyof the Company.”.”

The CEO of Acme seeks your legal advice regarding Mr. The CEO of Acme seeks your legal advice regarding Mr. Oliver’s employment. Oliver’s employment. What do you recommend?What do you recommend? Why? Why?

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Good Reason: Good Reason: The Dark Side of “The Dark Side of “CauseCause””

Examples of “Examples of “Good ReasonGood Reason” for the Employee to ” for the Employee to terminate her employment and receive terminate her employment and receive severance benefits:severance benefits:– the Company’s the Company’s substantialsubstantial diminution of the diminution of the

Executive’s duties and responsibilitiesExecutive’s duties and responsibilities– a a materialmaterial reduction in the Executive’s salary or reduction in the Executive’s salary or

benefits, except such reductions that are “across the benefits, except such reductions that are “across the board”board”

– a reassignment which requires the Executive to move a reassignment which requires the Executive to move his principal office more than fifty (50) miles from the his principal office more than fifty (50) miles from the Executive’s office on the date of the entry of the EEA Executive’s office on the date of the entry of the EEA

Consider Company right to cureConsider Company right to cure

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Change in ControlChange in Control

Standard change in control benefits may involve Standard change in control benefits may involve a cash bonus and/or accelerated vesting.a cash bonus and/or accelerated vesting.The Executive may seek enhanced severance The Executive may seek enhanced severance benefits following a change in control benefits following a change in control andand (1) a (1) a no “no “causecause” termination by the Company ” termination by the Company oror (2) (2) the occurrence of an event giving rise to “the occurrence of an event giving rise to “good good reasonreason” for the Executive to terminate ” for the Executive to terminate employment.employment.The Company will usually tie enhanced The Company will usually tie enhanced severance benefits to timing in relation to the severance benefits to timing in relation to the change in control.change in control.

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What Executives Want:What Executives Want:3. “Non-Restrictive” Post-3. “Non-Restrictive” Post-Employment RestrictionsEmployment Restrictions

1.1. Covenant not to competeCovenant not to compete

2.2. Covenant not to solicit/interfereCovenant not to solicit/interfere

3.3. Covenant not to raid employeesCovenant not to raid employees

4.4. Covenant to protect trade secret, Covenant to protect trade secret, proprietary and confidential informationproprietary and confidential information

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Covenants Not to Compete (PA)Covenants Not to Compete (PA)

1.1. Continued employment is not sufficient Continued employment is not sufficient consideration to support a non-competition or consideration to support a non-competition or non-solicitation agreement.non-solicitation agreement.

2.2. Notify prospective Executive that his or her Notify prospective Executive that his or her EEA will contain restrictive covenants & provide EEA will contain restrictive covenants & provide a copy in advance of first day of employment.a copy in advance of first day of employment.

3.3. Obtain the Executive’s signed EEA on or Obtain the Executive’s signed EEA on or prior to first day of employment. prior to first day of employment. (You’d be (You’d be surprised!)surprised!)

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Covenants Not to Compete (PA)Covenants Not to Compete (PA)

4.4. Make copies and keep original EEA and Make copies and keep original EEA and copies in secure area. copies in secure area. (You’d (You’d reallyreally be be surprised!)surprised!)

5.5. Carefully consider the wording of Carefully consider the wording of restrictive covenants (restrictive covenants (e.g.e.g., “indirectly solicit” , “indirectly solicit” versus “solicit through another person or entity”).versus “solicit through another person or entity”).

6.6. Covenants not to compete are restraints Covenants not to compete are restraints on trade and, as such, are inherently disfavored on trade and, as such, are inherently disfavored by Courts. by Courts. So…So…

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Covenants Not to Compete (PA): Covenants Not to Compete (PA): Think before you draft!Think before you draft!

1.1. Carefully consider the restricted activities and the Carefully consider the restricted activities and the geographical and temporal scope.geographical and temporal scope.2.2. Court will apply a fact-specific, Court will apply a fact-specific, reasonablenessreasonableness standard. standard.3. 3. To be enforceable, a restrictive covenant must be:To be enforceable, a restrictive covenant must be:– Ancillary to an employment relationship;Ancillary to an employment relationship;– Supported by adequate consideration;Supported by adequate consideration;– ReasonablyReasonably necessary for the protection of legitimate necessary for the protection of legitimate

interests of the employer; andinterests of the employer; and– ReasonablyReasonably limited in duration and geographic extent. limited in duration and geographic extent.

4.4. Balancing testBalancing test: A court will balance the employer’s : A court will balance the employer’s legitimate business interests against the interest of the legitimate business interests against the interest of the employee in earning a living in his or her chosen profession, employee in earning a living in his or her chosen profession, trade or occupation, and will then balance the result against the trade or occupation, and will then balance the result against the interest of the public.interest of the public.4. Now that we’ve got that cleared up…what’s 4. Now that we’ve got that cleared up…what’s reasonablereasonable??

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Restrictive Covenants: Restrictive Covenants: What’s Reasonable?What’s Reasonable?

You’ll find out!!! (After the fact, You’ll find out!!! (After the fact, unfortunately…)unfortunately…)

To minimize risk, restrict what you need, To minimize risk, restrict what you need, not what you want.not what you want.

Be careful of “boilerplate restrictive Be careful of “boilerplate restrictive covenants.”covenants.”

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Other Protections Related to Other Protections Related to Restrictive CovenantsRestrictive Covenants

Contractual requirement for the Executive to notify Contractual requirement for the Executive to notify subsequent employer of restrictions and to provide a subsequent employer of restrictions and to provide a copy of EEAcopy of EEAContractual consent for the Company to provide notice Contractual consent for the Company to provide notice of restrictions to a subsequent employerof restrictions to a subsequent employerContractual requirement for the Executive to notify the Contractual requirement for the Executive to notify the Company of identity of subsequent employer and Company of identity of subsequent employer and title/duties regarding subsequent employmenttitle/duties regarding subsequent employmentThe Company may obtain right to cease severance The Company may obtain right to cease severance payments if the Executive has breached his or her payments if the Executive has breached his or her restrictive covenants (and to recoup previous payments restrictive covenants (and to recoup previous payments made)made)

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Hmmm…Hmmm…On July 8, 2010, Acme terminated Mr. Oliver’s On July 8, 2010, Acme terminated Mr. Oliver’s employment due to his inappropriate relationship with employment due to his inappropriate relationship with the teenaged daughter of another Acme employee. the teenaged daughter of another Acme employee. Shortly thereafter, Oliver filed a lawsuit alleging Acme Shortly thereafter, Oliver filed a lawsuit alleging Acme owes him the balance of the compensation set forth in owes him the balance of the compensation set forth in his contract, or roughly $12 million. Acme has his contract, or roughly $12 million. Acme has retained outside counsel to defend the lawsuit. retained outside counsel to defend the lawsuit. However, on September 15, 2010, Acme learned that However, on September 15, 2010, Acme learned that Oliver had joined Big Competitor, as its SVP for Oliver had joined Big Competitor, as its SVP for Strategic Planning. The CEO of Acme views this as Strategic Planning. The CEO of Acme views this as unacceptable, given the knowledge that Oliver has of unacceptable, given the knowledge that Oliver has of Acme’s business plans. The CEO reminds you that Acme’s business plans. The CEO reminds you that Mr. Oliver has a two year non-compete provision in his Mr. Oliver has a two year non-compete provision in his employment contract, and says that he wants to seek employment contract, and says that he wants to seek enforcement of that provision. enforcement of that provision. Yikes!Yikes!

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Confidential InformationConfidential Information

1.1. What’s really confidential? (What’s really confidential? (e.g.e.g., customer , customer identity versus customer decision-maker identity versus customer decision-maker identity)identity)2.2. How to define: general or specific?How to define: general or specific?– GeneralGeneral: : ““All knowledge, information, material or data about the All knowledge, information, material or data about the

Company or its business disclosed to or learned by Company or its business disclosed to or learned by the Executive through his employment with the the Executive through his employment with the Company, whether or not specifically designated by Company, whether or not specifically designated by the Company as confidential, which is proprietary the Company as confidential, which is proprietary and/or confidential, and including any information the and/or confidential, and including any information the Company has developed or develops that is not Company has developed or develops that is not known to the Company’s competitors and which known to the Company’s competitors and which provides the Company a competitive advantage.”provides the Company a competitive advantage.”

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Confidential InformationConfidential Information– SpecificSpecific (a/k/a the “Rolodex Definition”): (a/k/a the “Rolodex Definition”): ““The Company’s Confidential information includes: (i) Financial The Company’s Confidential information includes: (i) Financial

data, vendor pricing to the Company, vendor lists, computer data, vendor pricing to the Company, vendor lists, computer printouts, accounts receivable reports, revenue reports, cost printouts, accounts receivable reports, revenue reports, cost reports, budgets, profit and loss reports, sales figures and reports, budgets, profit and loss reports, sales figures and sales targets; (ii) Customer lists, customer contacts, potential sales targets; (ii) Customer lists, customer contacts, potential customer contacts, targeted potential customers, customer contacts, targeted potential customers, rolodex(es),rolodex(es), sales territories, sales strategies, proposals and contracts; sales territories, sales strategies, proposals and contracts; (iii) Employee lists, employee salaries, memoranda, samples, (iii) Employee lists, employee salaries, memoranda, samples, notes, books, correspondence, all written and graphic records notes, books, correspondence, all written and graphic records belonging to the Company and in the Executive’s possession belonging to the Company and in the Executive’s possession or under the Executive’s control; (iv) Such other Company or under the Executive’s control; (iv) Such other Company information designated as confidential, proprietary and/or information designated as confidential, proprietary and/or trade secret to which the Executive gains access during his trade secret to which the Executive gains access during his employment; and (v) All documents, files, correspondence, employment; and (v) All documents, files, correspondence, notes or other papers memorializing or containing any such notes or other papers memorializing or containing any such information.” information.”

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What Matters In Litigation?What Matters In Litigation?

Specific to Specific to Restrictive CovenantsRestrictive Covenants– Provide for the Company’s right to obtain Provide for the Company’s right to obtain

attorneys’ fees and costs for the Executive’s attorneys’ fees and costs for the Executive’s breachbreach

– Set forth the Executive’s acknowledgment of Set forth the Executive’s acknowledgment of irreparable harm and consent to the irreparable harm and consent to the Company’s right to obtain injunctive reliefCompany’s right to obtain injunctive relief

– Provide for a court’s ability to blue-pencil an Provide for a court’s ability to blue-pencil an overbroad restriction (in a blue-pencil state)overbroad restriction (in a blue-pencil state)

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Integration (“Entire Agreement”) clauseIntegration (“Entire Agreement”) clause This is the entire Agreement that exists This is the entire Agreement that exists

between the parties and supersedes all between the parties and supersedes all other agreements and understandings other agreements and understandings between the parties, written or verbal.between the parties, written or verbal.

Prevents use of extrinsic evidence in Prevents use of extrinsic evidence in interpreting EEA in the event of a dispute interpreting EEA in the event of a dispute over its terms.over its terms.

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Choice of Law/Consent to Venue Choice of Law/Consent to Venue The parties agree that the terms of this Agreement The parties agree that the terms of this Agreement

shall be construed in accordance with the laws of shall be construed in accordance with the laws of the Commonwealth of Pennsylvania. In the event the Commonwealth of Pennsylvania. In the event of any dispute arising under this Agreement, the of any dispute arising under this Agreement, the parties consent to the jurisdiction of the courts parties consent to the jurisdiction of the courts located within Pennsylvania. located within Pennsylvania.

Understand the intricacies of the state in which Understand the intricacies of the state in which you wish for the agreement to be enforced and you wish for the agreement to be enforced and litigated.litigated.

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What Matters In Litigation?What Matters In Litigation?SeverabilitySeverability (especially restrictive covenants) (especially restrictive covenants)If any provision of this Agreement or its application to If any provision of this Agreement or its application to

anyone or under any circumstances is adjudicated anyone or under any circumstances is adjudicated to be invalid or unenforceable, such invalidity or to be invalid or unenforceable, such invalidity or unenforceability shall not affect or impair in any unenforceability shall not affect or impair in any way the validity, legality or enforceability of the way the validity, legality or enforceability of the remainder of this Agreement, and shall not remainder of this Agreement, and shall not invalidate or render unenforceable such provision invalidate or render unenforceable such provision or application in any other jurisdiction.or application in any other jurisdiction.

Ensures that the Company avoids the legal Ensures that the Company avoids the legal principle that the presence of one legally invalid principle that the presence of one legally invalid contract provision impacts the enforceability of contract provision impacts the enforceability of other otherwise enforceable provisions.other otherwise enforceable provisions.

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No Drafting PartiesNo Drafting PartiesThe parties acknowledge and agree that each has The parties acknowledge and agree that each has

fully participated in the negotiation and drafting of fully participated in the negotiation and drafting of this agreement and, as such, neither party shall this agreement and, as such, neither party shall be considered the drafter of this agreement. As be considered the drafter of this agreement. As such, this agreement shall not be construed either such, this agreement shall not be construed either for or against either party in that regard.for or against either party in that regard.

Addresses the principle of law that a contractual Addresses the principle of law that a contractual ambiguity shall be construed against the drafter ambiguity shall be construed against the drafter ((i.e.i.e., the Company) of the agreement., the Company) of the agreement.

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Non Waiver of BreachNon Waiver of BreachThe failure of either party to enforce any provision or The failure of either party to enforce any provision or

provisions of this Agreement shall not be construed provisions of this Agreement shall not be construed as a waiver of any such provision or provisions as to as a waiver of any such provision or provisions as to any future violations thereof, nor prevent that party any future violations thereof, nor prevent that party thereafter from enforcing each and every other thereafter from enforcing each and every other provision of this Agreement. The rights granted provision of this Agreement. The rights granted herein by and to the parties are cumulative and the herein by and to the parties are cumulative and the waiver of any single remedy shall not constitute a waiver of any single remedy shall not constitute a waiver of such party’s right to assert all other legal waiver of such party’s right to assert all other legal remedies available to it under the circumstances.remedies available to it under the circumstances.

Ensures that the Company’s failure to enforce a Ensures that the Company’s failure to enforce a right under the agreement is not affected by the right under the agreement is not affected by the Company’s waiver of enforcement of another Company’s waiver of enforcement of another contractual right.contractual right.

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No ModificationNo ModificationThe parties agree that this Agreement may The parties agree that this Agreement may

only be amended by an instrument in only be amended by an instrument in writing executed by the parties hereto, and writing executed by the parties hereto, and that neither party shall assert that this that neither party shall assert that this Agreement has been modified in any Agreement has been modified in any manner other than by written instrument.manner other than by written instrument.

Prevents a party from asserting that the Prevents a party from asserting that the parties modified an EEA orally or by their parties modified an EEA orally or by their course of conduct.course of conduct.

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Successors and AssignsSuccessors and AssignsThis Agreement shall not be assignable by This Agreement shall not be assignable by

any party, except by Company to any any party, except by Company to any successor in interest to its respective successor in interest to its respective businesses. businesses.

In some states, the Company’s failure to In some states, the Company’s failure to contract for its right to assign an EEA upon contract for its right to assign an EEA upon its sale of business will preclude the its sale of business will preclude the Company from automatically assigning the Company from automatically assigning the EEA to the successor.EEA to the successor.

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Jury Trial Waiver/ADRJury Trial Waiver/ADR– Litigation v. ADRLitigation v. ADR– If litigation, waive right to jury trial?If litigation, waive right to jury trial?– Jury trial waiver must be “knowing and voluntary”:Jury trial waiver must be “knowing and voluntary”:

whether a gross disparity in bargaining power existed between whether a gross disparity in bargaining power existed between partiespartiesbusiness or professional experience of the party opposing the business or professional experience of the party opposing the waiver waiver whether the clause containing the waiver was inconspicuous whether the clause containing the waiver was inconspicuous whether the opposing party had an opportunity to negotiate whether the opposing party had an opportunity to negotiate contract termscontract terms

– Types of ADR to consider: mediation, arbitration or bothTypes of ADR to consider: mediation, arbitration or both– split venues for injunctive (in court) v. non-injunctive (in split venues for injunctive (in court) v. non-injunctive (in

arbitration) reliefarbitration) relief

Documents

DELVACCA Presents… Executive Employment Agreements: Minimizing Risk in a Mythological Minefield Presented by: Todd J. Glassman ([email protected]) Jason