Sample Executive Employment Agreement Analysis

An executive employment agreement with a 24-month nationwide non-compete covering any connection with any competing business, a confidentiality clause that purports to bar disclosure to government agencies, and an IP-assignment provision that captures personal-time inventions with no carve-out.

Reviewed by the BizLeaseCheck Editorial Team · Last updated May 26, 2026 · Informational analysis, not legal advice.

95Danger score

Critical risk indicators — Employment / NDA

This is the same report shape every BizLeaseCheck analysis produces: a 0–100 danger score, prioritized red flags with verbatim evidence quotes, the key dates buried in the document, and a tailored negotiation email draft.

8 red flags

9 key dates

Evidence-backed

Email draft included

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Executive Summary

Document: Employment agreementReviewed for: the Employee

This agreement is highly employer-favorable and presents substantial risk to the Executive across compensation, equity, restrictive covenants, IP ownership, termination, severance, and dispute resolution. The most serious issues are: (1) a 24-month nationwide non-compete covering virtually any connection with a competing business; enforceability is highly state-specific and should be reviewed by a lawyer licensed in the governing-law state and any state where services are performed; (2) a 24-month customer and employee non-solicit that also bars accepting business from customers or prospective customers; (3) perpetual confidentiality with no standard carve-outs and an unlawful-sounding restriction on disclosure to government agencies; (4) an invention-assignment clause that reaches all inventions developed during employment even off-hours and without company resources, with no statutory carve-out; (5) broad, subjective Cause defined in the Company’s sole discretion with no notice or cure and no Good Reason protection; (6) only 4 weeks of severance, conditioned on release and ongoing covenant compliance; (7) equity with a 1-year cliff, no acceleration under any circumstance, and only a 90-day post-termination exercise window; (8) bonus and commission provisions that are fully discretionary and forfeitable even for completed performance; and (9) mandatory individual arbitration in Delaware with fee-shifting and a class/jury waiver. The agreement also allows salary reductions in the Company’s sole discretion and includes a one-sided perpetual non-disparagement clause. Overall, this document should be negotiated materially before signing.

95Danger score

Employment Terms Overview— Vice President of Sales

Base salary

$185,000

At-will?

Yes

Mandatory arbitration?

Yes

Class-action waiver?

Yes

Compensation & bonus

Base salary $185,000, but subject to adjustment up or down in the Company’s sole discretion. Discretionary annual target bonus up to 30% of base salary (up to $55,500 at current salary), forfeited unless actively employed on payout date. Commissions governed by a separate plan that the Company may amend, suspend, or terminate at any time; commissions only earned on customer payment collection and none are payable after last day if deals close or collect later.

Equity & vesting

Option for 40,000 shares subject to Board approval; 4-year vesting with 25% cliff on first anniversary of vesting commencement date and monthly vesting thereafter; no acceleration on change of control or termination; vested options expire 90 days after termination.

Non-compete

During employment and for 24 months after termination, anywhere in the United States, Executive may not directly or indirectly own, manage, operate, be employed by, consult for, or otherwise be connected with any business that competes in any way with the Company or affiliates. Enforceability is state-specific and requires lawyer review.

Non-solicitation

During employment and for 24 months after termination, Executive may not solicit, contact, or accept business from any customer or prospective customer of the Company, and may not solicit, hire, or encourage to leave any employee or contractor.

IP / invention assignment

All inventions and IP conceived, developed, or reduced to practice at any time during employment are assigned to the Company, whether or not during working hours, on Company premises, or using Company resources; all copyrightable work deemed work made for hire; moral rights waived. No statutory carve-out stated for inventions developed on own time without company resources.

Confidentiality / NDA

Perpetual confidentiality covering any and all information of any kind relating to the Company or its business, including information learned or recalled, whether or not marked confidential and whether or not a trade secret; disclosure to any person or entity, including any government agency, requires prior written consent.

Termination

At-will. Company may terminate for Cause defined broadly in its sole discretion to include unsatisfactory performance, failure to meet expectations, or conduct contrary to Company interests, with no notice or cure. Agreement expressly states there is no Good Reason or constructive termination right.

Severance

If terminated without Cause, severance equals 4 weeks of base salary (about $14,230.77 gross at current salary), conditioned on a general release and continued full compliance with non-compete, non-solicit, and confidentiality covenants; any breach immediately terminates severance.

Other restrictive covenants

24-month non-compete, 24-month non-solicit, perpetual confidentiality, broad invention assignment, one-sided perpetual non-disparagement, and employer assignability of all restrictive covenants.

Governing law

Delaware

Critical Dates & Deadlines

Don't miss these dates. Add them to your calendar immediately.

Effective Date / Start Date

Estimate

2026-03-01|Agreement entered into as of March 1, 2026. The text does not separately state a different employment start date.

Equity Vesting Commencement

Date not specified|Vesting commencement date is referenced but not expressly stated in the provided text.

Estimated Equity Cliff Date

Estimate

2027-03-01|25% of the option vests on the first anniversary of the vesting commencement date; if commencement matches the Effective Date, the cliff would be March 1, 2027.

Non-Compete Expiration

Estimate

Date not specified|Expires 24 months after termination of employment.

Non-Solicit Expiration

Estimate

Date not specified|Expires 24 months after termination of employment.

Post-Termination Option Exercise Deadline

Estimate

Date not specified|Vested options must be exercised within 90 days after termination.

Bonus Payout Timing

Estimate

Date not specified|Bonuses are typically paid in March of the following year, and active employment is required on the payout date.

Offer Acceptance Deadline

Date not specified|No acceptance deadline appears in the provided text.

Notice or Resignation Deadline

Date not specified|No notice period is required; either party may terminate at any time with or without notice.

Detected Red Flags

Download Redlines (DOCX) View Source PDF

CriticalIssue Score: 99/100

Agreement purports to bar disclosure to government agencies

Section 6.2

Why it's dangerous

This language is highly problematic because an NDA cannot lawfully bar an employee from reporting suspected legal violations to government agencies or cooperating with investigations. It also omits standard whistleblower and trade-secret-immunity notices.

“including any government agency, without the prior written consent of the Company.”(View in PDF)

Negotiation Tactic

Present this as a compliance fix for both sides, not an aggressive ask. Many employers will accept standard whistleblower carve-out language.

Suggested Redline

Nothing in this Agreement prohibits or restricts the Executive from reporting possible violations of law to, communicating with, filing a charge or complaint with, or participating in any investigation or proceeding conducted by any federal, state, or local government agency or commission, including the SEC, EEOC, NLRB, or DOJ, nor from making disclosures protected under applicable whistleblower laws. The Executive is also provided notice of immunity under 18 U.S.C. Section 1833(b) for confidential disclosure of trade secrets to government officials or attorneys for the purpose of reporting or investigating a suspected violation of law.

CriticalIssue Score: 98/100

24-month nationwide non-compete is extremely broad and state-specific enforceability must be verified

Section 8.1

Why it's dangerous

This non-compete is unusually aggressive: 24 months, nationwide, and triggered after termination for any reason. It could materially impair your ability to work in your field. Whether it is enforceable depends heavily on state law, the governing law, and where you live and work; a lawyer licensed in the relevant state(s) should review it.

“for a period of twenty-four (24) months following termination of employment for any reason, the Executive shall not, anywhere in the United States”(View in PDF)

Negotiation Tactic

Lead with state-specific enforceability uncertainty and the fact that the non-solicit/confidentiality provisions already protect legitimate interests.

Suggested Redline

The post-employment non-compete shall be deleted. If the Company requires a post-employment restriction, it shall be limited to 6 months following termination, apply only in geographic areas in which the Executive had material sales or management responsibility during the last 12 months of employment, and prohibit only the Executive’s provision of substantially similar services for a business that directly competes with the specific products or services of the Company with which the Executive was materially involved.

CriticalIssue Score: 97/100

Cause is defined in the Company’s sole discretion using subjective standards and no cure right

Section 10.1

Why it's dangerous

Cause is so broad and subjective that ordinary performance disputes could justify a for-Cause termination. Because there is no notice or cure, the Company can terminate immediately, cut off severance, and potentially trigger other adverse consequences such as bonus forfeiture and covenant enforcement posture.

“the Company, in its sole discretion, determines to be unsatisfactory job performance, a failure to meet expectations, or conduct the Company deems contrary to its interests”(View in PDF)

Negotiation Tactic

Explain that Cause should distinguish serious misconduct from ordinary performance management; otherwise the severance promise is largely illusory.

Suggested Redline

"Cause" means only: (i) conviction of, or plea of guilty or nolo contendere to, a felony or a crime involving fraud or moral turpitude; (ii) fraud, embezzlement, or willful misconduct causing material harm to the Company; (iii) material breach of this Agreement or written Company policy after written notice and 30 days’ opportunity to cure, if curable; or (iv) willful and continued failure to substantially perform duties after written notice and 30 days’ opportunity to cure.

CriticalIssue Score: 96/100

Invention assignment captures all inventions during employment even off-hours and without company resources

Section 7.1

Why it's dangerous

This clause assigns all inventions created during employment regardless of where, when, or how they were developed. It can sweep in side projects and personal inventions unrelated to the Company. Several states require a carve-out for inventions developed entirely on an employee’s own time without company resources, and the agreement does not include one.

“whether or not during working hours, whether or not on Company premises, and whether or not using Company equipment or resources.”(View in PDF)

Negotiation Tactic

This is a standard statutory-compliance and fairness point. Ask for the company’s standard state-law invention notice and carve-out.

Suggested Redline

The Executive assigns to the Company only those inventions, discoveries, works of authorship, and other intellectual property that (i) are conceived, developed, or reduced to practice in the course of the Executive’s employment duties for the Company, (ii) relate to the Company’s current or demonstrably anticipated business, research, or development, or (iii) are developed using the Company’s equipment, supplies, facilities, trade secrets, or Confidential Information. Excluded are inventions developed entirely on the Executive’s own time without use of the Company’s equipment, supplies, facilities, trade secrets, or Confidential Information, except to the extent otherwise required by applicable law.

CriticalIssue Score: 95/100

Confidentiality is perpetual and defined far too broadly

Section 6.1

Why it's dangerous

The definition sweeps in virtually everything, including information you merely recall, whether or not marked confidential and whether or not it is a trade secret. Combined with perpetual duration, this can chill ordinary future work and make compliance uncertain.

“indefinitely and in perpetuity, all "Confidential Information," which is defined as any and all information of any kind relating to the Company or its business”(View in PDF)

Negotiation Tactic

Emphasize that you will protect legitimate trade secrets, but the current language is too vague to administer and could interfere with future employment.

Suggested Redline

For purposes of this Agreement, Confidential Information means non-public proprietary information of the Company that is disclosed to or learned by the Executive in the course of employment and that derives independent economic value from not being generally known. Confidential Information does not include information that is or becomes public through no breach by the Executive, was known to the Executive before disclosure, is independently developed without use of Company confidential information, or is rightfully obtained from a third party. The confidentiality obligation shall continue for trade secrets for so long as they remain trade secrets and for all other Confidential Information for 3 years after termination.

CriticalIssue Score: 94/100

Non-compete also bars virtually any connection with a competitor

Section 8.1

Why it's dangerous

The restriction is not limited to competitive roles. It bars being employed by or otherwise connected with any competing business in any way, which could prohibit non-competitive jobs, passive investments, advisory work, or roles unrelated to your actual duties.

“directly or indirectly own, manage, operate, be employed by, consult for, or otherwise be connected with any business that competes in any way with the Company”(View in PDF)

Negotiation Tactic

Ask the company to define the protected business lines and prohibited functions with precision; vague scope is a major practical problem even apart from enforceability.

Suggested Redline

For purposes of any post-employment restriction, the Executive shall be prohibited only from providing services that are the same as or substantially similar to the services the Executive provided to the Company during the final 12 months of employment, and only with respect to products or services that directly compete with the specific products or services of the Company for which the Executive had material responsibility. Passive ownership of less than 2% of a public company shall not be prohibited.

CriticalIssue Score: 94/100

Employee must pay half of arbitrator fees and prevailing-company attorneys’ fees

Section 12.2

Why it's dangerous

This materially increases the cost of bringing claims and creates asymmetric downside risk if you lose. Arbitrator fees can be substantial, and fee-shifting in favor of the Company can chill even meritorious claims.

“The Executive shall bear one-half of the arbitrator's fees and the Company's reasonable attorneys' fees if the Company is the prevailing party.”(View in PDF)

Negotiation Tactic

This is a strong fairness point because many employment arbitration programs require the employer to bear most forum costs.

Suggested Redline

The Company shall pay all arbitration forum costs and arbitrator compensation in excess of the filing fee that the Executive would pay to commence an action in a court of competent jurisdiction. Each party shall bear its own attorneys’ fees and costs, except to the extent a statute expressly provides otherwise or the arbitrator determines that a claim or defense was frivolous or brought in bad faith.

CriticalIssue Score: 93/100

Annual bonus is fully discretionary and forfeited unless employed on payout date

Section 3.2

Why it's dangerous

The target bonus is up to 30% of base salary, or up to $55,500 at current salary, but the Company can deny it entirely even after a completed performance year. If you resign or are terminated before payout, you forfeit the entire amount, including bonus attributable to a completed prior year.

“no bonus is earned or payable unless the Executive remains actively employed by the Company on the date bonuses are actually paid”(View in PDF)

Negotiation Tactic

Use the completed-prior-year forfeiture as the most unreasonable point. Employers often move on paying earned or prorated bonuses after separation.

Suggested Redline

Any annual bonus earned based on performance for a completed fiscal year shall be paid when bonuses are paid generally, regardless of whether the Executive remains employed on the payment date, except in the event of termination for Cause. If employment terminates without Cause or for Good Reason during a bonus year, the Executive shall receive a prorated target bonus based on actual performance through the termination date.

Negotiation Email Draft

Subject: Proposed revisions to Executive Employment Agreement Hi Dana, Thank you for sending over the agreement. I’m excited about the Vice President of Sales role and the opportunity at Meridian Dynamics. I reviewed the draft carefully and would like to discuss a few revisions so the terms better reflect the scope of the role and create a more balanced package. The main items I’d like to address are: 1. Compensation certainty - Keep the $185,000 base salary from being reduced unilaterally, except for a proportionate company-wide executive reduction. - Revise the annual bonus provision so bonus earned for a completed year is paid even if employment ends before the payout date, and provide prorated bonus treatment if I’m terminated without Cause or resign for Good Reason. - Attach the current Sales Compensation Plan and make any changes prospective only, with a reasonable tail for commissions on deals sourced or closed before separation. 2. Equity protection - Confirm the 40,000-option grant will be approved by the Board within a defined period. - Add double-trigger acceleration if there is a Change of Control and I’m terminated without Cause or resign for Good Reason in connection with the transaction. - Extend the post-termination exercise period for vested options to at least 12 months. 3. Restrictive covenants - Narrow the non-compete substantially, or remove it. As drafted, the 24-month nationwide restriction is broader than I can reasonably accept. - Narrow the non-solicit to active solicitation of customers I worked with directly, for a shorter period, and remove the restrictions on prospective customers and passive acceptance of business. - Limit the employee non-solicit to employees with whom I had material contact, and exclude general recruiting. 4. Confidentiality and IP - Add standard confidentiality carve-outs for public information, prior knowledge, independent development, and legally protected disclosures. - Add express language preserving the right to communicate with government agencies and make protected reports without prior Company consent. - Narrow the invention-assignment provision so it applies to work-related inventions and includes the standard carve-out for inventions developed entirely on my own time without Company resources. 5. Termination and severance - Tighten the definition of Cause to objective misconduct standards and add notice and cure for curable issues. - Add a Good Reason definition covering material pay reduction, material diminution in duties/title, relocation, and material breach. - Increase severance to a more meaningful level for this role, with continued payment not cut off absent a material uncured breach. 6. Dispute resolution - If arbitration remains, I’d like venue in my primary work state, Company payment of arbitration-specific costs, removal of prevailing-party fee shifting, and an express carve-out preserving rights that cannot be waived by law. 7. Non-disparagement - Make this provision mutual, narrower, and subject to standard carve-outs for truthful statements, legal process, and protected activity. I’m very interested in moving forward and think these changes are reasonable and should be straightforward to document. If helpful, I’m happy to mark up the agreement directly or discuss live. Best, Jordan A. Reyes Covenant AI Analysis

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