I've got a deal where there is a key employee (non-owner) who we need to stay post-close. When asked, he says that he "thinks" he'll stay. What is the best way to structure the agreements so that we can i) get this employee to stay and ii) protect ourselves if he doesn't?
As far as I know, you can't have an employment agreement that compels someone to stay in a job. Is the best we can do to promise him a bonus is he stays for "x" length of time?
As far as the purchase agreement with the seller, I find it hard to believe that you could get away with a clawback if an employee leaves. Maybe the best we could do is an additional payment to the seller if the key employee stays for "x" length of time? But we'll be using an SBA loan, and I believe that the purchase payment can't have contingencies.
What do you think?
Locking up a key employee
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