An Employment Agreement Amendment is a contract modifying a currently existing and previously executed employment agreement. They are often drafted in response to a material change of circumstances in respect to the employer's business model, the dynamics of the company's industry, or the individual employee's contributions.
Amendments, if properly drafted, can legally modify any aspect of the original employment agreement, including but not limited to provisions addressing the employee's compensation, term of employment, bonus structure or method of bonus payout (cash vs. stock), grounds for termination, or benefits package.
Employment Agreement Amendments can contain several modifications and read quite lengthy, or can include just one modification and be as short as one page.
The amendment must first contain a short and accurate statement stating the date of the amendment and referring to the original employment agreement by name and date. For instance:
"This First Amendment to the Employment Agreement between First Generation Marketing, a Delaware corporation (the "Company"), and Marty McFly (the "Employee") that was originally effective as of May 31, 2005 (the "Employment Agreement") is hereby entered into as of the 30th day of December 2005 (the "Amendment Effective Date"), by and between the Employee and the Company (collectively, the "Parties")."
Another example:
"This Amendment, dated December 22, 2000 (the "Amendment"), to the Employment Agreement, dated December 22, 1998 (the "Agreement"), by and between New Edge Media, Inc. ("NEM") and Mark Jergoff ("Executive")."
After carefully referring to the original agreement by name and date, the agreement should set forth any important recitals that led to the need for the amendment. For instance:
"WHEREAS, the Employment Agreement provides that the Employee can earn a cash bonus if specified fiscal year 2005 performance objectives are attained (the "2005 Bonus")."
"WHEREAS, the Parties believe that Employee may become entitled to receive a 2005 Bonus based on projected fiscal year 2005 Company performance."
"WHEREAS, the Parties desire to amend the Employment Agreement to provide that no 2005 Bonus will be paid to the Employee and that instead Employee shall receive an additional equity grant of restricted stock units (the "RSU") and that the price conditions for the performance units (the "PUs") will be modified".
It is also advisable to include a final "whereas" clause stating that the parties desire that all other terms of the Employment Agreement remain unchanged except as expressly provided herein.
After including the appropriate recitals, the provisions of the amendment should now be drafted carefully to address the intentions of the parties. After the appropriate provisions have been drafted, it is important to include a clause at the end stipulating that the Parties agree that this Amendment is not intended to confer any additional rights or obligations on or by either Party beyond those expressly set out herein.
In terms of modification of the amendment itself, the drafter may also want to explicitly state that the amendment may be amended or modified only by written agreement executed by the Parties.
At Will Employment Agreement
Also, through the agreement, higher executives may protect intellectual property, since workers are prohibited from disclosing any private information.
Meanwhile, employment agreement must not be discriminatory in a way. The gender, race, religion, age and national origin or color must not be a basis when drafting the terms and conditions of the contract. It must be fair to all employees so that they can perform their duties well. It must also provide equal benefits to all workers.
The Employment Contract
An employment contract is consists of the following:
1.The agreement to employ and be employed. This contains the agreement between the employer and the employee.
2.Description and explanation of employee's duties. Here, the position and the duties of the employee are stated, including the performing of any service that the employer will assign.
3.Manner of performance of employee's duties. An employer must be faithful to his work. He/ she must be industrious enough to exert his/her best performance, skill, talent and experience in a way that will satisfy his/her employer.
4.Length and duration of employment. This includes the term of the employment: the years an employee will render his/her service to the company, and date of termination or the end of his service.
5.Payment and reimbursement. The amount of payment or the wage that will be given to the employee is cited here. Also included in this section is the reimbursement of employer to any necessary expenses that the employee will incur while traveling, etc.
6.Employee's loyalty to the employer and devotion to work. An employee should devote his time, knowledge, skill and attention only to the company he/she is working and also to his/ her employer. The employee will also be entitled to all benefits and profits. However, he/ she must not be interested in other businesses and must be loyal to his/ her company.
7.Confidentiality agreement relating to business. An employee will not be allowed to disclose, divulge or communicate to any person, firm or company in any manner. Any information, issues concerning the company and employer, manner of operation, processes and plans should be confidential and important. Thus, when an employee violated this section it means he/she simply violated the agreement.
8.Availability of the option to terminate employment in case of permanent disability. Here, the employee has the option to terminate the contract in the event the employee became ?permanently disabled.? Employer must therefore give prior notice to the employee through registered mail.
9.Closure of business will result to termination of employment. In the event that the employee will discontinue his work or service to the company for the abovementioned reason, this agreement will end and terminate as of the given date.
10.Employee's commitments binding on employer only on written consent. The employee has no right to make any commitments or contracts on behalf of his/ her employer without any written consent.
11.Restricted contract terms. The contract contains the entire agreement and it must be exclusive to the employer and the employee.
12.The modification or waiver must be considered effective only if it is on writing. No contract will be valid unless it is written and executed by the in-charged party. Moreover, no evidence or any waiver shall be provided in any proceeding or litigation unless it is in writing.
13. Legally sound contract. The agreement must also contain this section stating that it is in accordance with the laws of the state (citing your state).
Both Mark Warner & Darren Agaton are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Mark Warner has sinced written about articles on various topics from Family Concerns, Do it Yourself Sunroom and Legal Matters. Mark Warner is an Research Analyst for RealDealDocs.com. RealDea. Mark Warner's top article generates over 27100 views. to your Favourites.
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