Amendment of the employment contract
An Employment Agreement Amendment is a contract that modifies a currently existing and previously executed employment agreement. They are often written in response to a substantial change in circumstances with respect to the employer’s business model, the company’s industry dynamics, or the individual contributions of employees. Amendments, if drafted correctly, may legally modify any aspect of the original employment contract, including, but not limited to, provisions addressing employee compensation, period of employment, bonus structure, or bonus payment method ( cash vs. shares), termination grounds, or benefits package. Amendments to the employment contract can contain several modifications and be quite lengthy, or they can include only one modification and be as short as one page.
The amendment must first contain a brief and precise statement indicating the date of the amendment and referring to the original employment contract by name and date. For example:
“This First Amendment to the Employment Agreement between First Generation Marketing, a Delaware corporation (the” Company “), and Marty McFly (the” Employee “) originally effective May 31, 2005 (the” Employment Agreement ” ) is hereby entered into as of December 30, 2005 (the “Effective Date of the Amendment”), 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 state the important considerations that led to the need for the amendment. For example:
“WHEREAS, the Employment Agreement states that the Employee may earn a cash bonus if specific performance targets for fiscal year 2005 are met (the” 2005 Bonus “)”
“WHEREAS, the Parties believe that the Employee may be entitled to receive a Bonus 2005 based on the projected performance of the Company for fiscal year 2005”
“WHEREAS, the Parties wish to amend the Employment Agreement to provide that no 2005 Bonus will be paid to the Employee and that the Employee will instead receive an additional capital grant of restricted stock units (the” RSUs “) and that the price conditions for the performance units (the “PU”) will change “
It is also advisable to include a final “considering” clause indicating that the parties want all other terms of the Employment Agreement to remain unchanged, except as expressly provided in this document.
After including the relevant 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 stating that the Parties agree that this Amendment is not intended to confer any additional rights or obligations on either Party beyond those expressly set forth herein. document. Regarding the modification of the amendment itself, the drafter may also want to explicitly state that the amendment can be amended or modified only by a written agreement signed by the Parties.