Employment Agreement
Definition
Employment Agreement: An employment agreement formalizes the relationship between employer and employee, covering role, compensation, equity, benefits, confidentiality, IP assignment, and termination terms. Well-drafted agreements protect both parties and prevent misunderstandings about expectations and obligations.
Example Usage
“Our employment agreement includes salary, equity grant, 4-year vesting schedule, IP assignment, and non-solicitation provisions.”
Common Misconceptions
Related Terms
Offer Letter
An offer letter is a formal document extending a job offer to a candidate, detailing compensation, start date, role, and terms of employment. It typic...
Vesting
Vesting is the process by which employees earn their equity over time. The standard vesting schedule is 4 years with a 1-year cliff, meaning no equity...
Equity
Equity represents ownership in a company, typically through shares of stock. Founders receive equity at formation, employees through stock options, an...
IP Assignment
An IP assignment agreement transfers ownership of intellectual property created by employees or contractors to the company. Without proper IP assignme...
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