Glossary · People and paperwork
Employment agreement(Employment contract)
In short
A contract between an employer and an employee outlining terms of employment, compensation, and responsibilities. Buyers review these for key employees to understand obligations and ensure continuity post-acquisition.
What it means in a deal
For crucial employees, review existing employment agreements to understand severance clauses, non-competes, or change-of-control provisions. You may need to negotiate new agreements or modify existing ones to align with your post-acquisition strategy and retain key talent.
Related terms
Common questions about Employment agreement
- If a seller note is on standby, is the seller prohibited from any post-sale employment with the business?
- How does life insurance effectively fund a business buy-sell agreement?
- How does the purchase agreement structure affect an SBA partner buyout?
- How does an operating agreement impact an SBA partner buyout loan?
- What happens if the seller terminates the purchase agreement mid-process?
- What are the specific conditions for an acceptable full standby agreement?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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