Executive agreements
Cause, good reason, severance, change in control, covenants and D&O.
| Clause | Why it matters |
|---|---|
| Title, duties, reporting line | A change here can be "good reason" to resign with severance. Make it specific. |
| "Cause" and "good reason" | These definitions decide whether you get severance. Narrow "cause"; include material pay cuts, demotion and forced relocation in "good reason". |
| Severance | Commonly 6 to 24 months of base (sometimes plus bonus) for senior roles, paid in exchange for signing a release. Ask for COBRA premiums and equity treatment too. |
| Change in control | "Double trigger" protection pays enhanced severance and accelerates equity if the company is sold and you're let go. Large payments can face the 20% "golden parachute" excise tax (Section 280G). |
| Restrictive covenants | Non-compete, non-solicitation of clients and employees, confidentiality. Enforceability depends on state law; check duration, geography and whether you're paid during the restricted period ("garden leave"). |
| IP & inventions | Assigns your work product to the employer. Several states (e.g., California) protect inventions made on your own time without company resources: list prior inventions. |
| Indemnification & D&O | Officers should be indemnified and covered by Directors & Officers insurance, including after they leave. |
| Arbitration | Many agreements require private arbitration. Since 2022, sexual harassment and assault claims can't be forced into arbitration. |
How-to guides
How toReview an executive employment agreement
- Read the definitions first: "cause", "good reason", "change in control", "disability". They drive everything else.
- Map every scenario: resignation, termination without cause, for cause, sale of the company, death or disability. What do you receive in each?
- Check restrictive covenants: duration, geography, scope and whether you are paid during the restricted period.
- Confirm indemnification and D&O insurance coverage continues after you leave.
- Look at dispute resolution: arbitration, governing law and who pays legal fees.
- Have an employment lawyer review it and ask the company to reimburse a reasonable legal fee.
How toNegotiate severance before you join
- It is far easier to agree severance at hiring than at exit.
- Ask for base plus target bonus for a fixed number of months, COBRA premiums, and pro-rated or accelerated equity.
- Add enhanced "double-trigger" protection in case of a sale.
- Make sure "good reason" lets you resign with severance if your role is materially reduced.
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Information reviewed September 2026. General information only, not legal, immigration, tax or financial advice. Laws change frequently and vary by state and personal situation; consult qualified professionals.