Brief Introduction About Executive Cooperation Agreement
An executive cooperation agreement is a legal agreement between an organization and an executive employee of that organization. The aforesaid agreement is signed by the executive employee of the company in acceptance of the terms and conditions of the agreement, as determined by the management of the company.
What Is the Executive Cooperation Agreement?
This agreement is entered into between an executive employee of an organization and its management. The agreement is taken by the executive employee and the management of the company with regard to the terms and conditions of the employment and elaborates on the employee cooperation definition.
What Is the Purpose of an Executive Cooperation Agreement?
What is employee cooperation benefit? This agreement is made to avoid any sort of dispute between the executive employee and management of the company and also to maintain transparency in relation to the employees’ activities.
Contents of an Executive Cooperation Agreement
The following are some of the contents of this
- Name and address of the parties involved i.e., company and executive employee
- Date of execution of the agreement
- Consideration clause that suggests an exchange for a cooperate- employee cooperation, in other words
- Nondisparagement clause
- Future cooperation by the employee
- Voluntary & Involuntary participation
- Confidentiality clause
- Right to individual representationDuration of the agreement
- Details of the terms and conditions as specified by the management
- Methods of termination
- Terms and conditions in case of breach of agreement
- Remedies and penalties available in case of breach of agreement
How to Draft an Executive Cooperation Agreement?
The process of drafting this agreement is mentioned below;
- Mention the name and address of the parties involved i.e., company and executive employee
- Mention the date of execution of the agreement and duration
- Mention the noncompetition clause that debars the employee from engaging into business with any other party during his tenure
- Mention the non-solicitation clause forbidding the employee from inducing other employees from quitting the employment
- Mention the income tax liabilities, insurances and similar contributions required by each party
- Mention the methods of termination
- Mention the terms and conditions in case of breach of agreement
- Mention the remedies and penalties available in case of breach of agreement
In this agreement, there is no such negotiation involved as the terms and conditions are clearly made by the company, and the executive employee has to accept it accordingly. However, in case the employee is not satisfied with a certain clause, he can negotiate for the same.
Benefits and Drawbacks of an Executive Cooperation Agreement
This agreement avoids any sort of misconduct on the part of the executive employee, and it ultimately improves the efficiency of the employee.
Sometimes, the employee feels bound with the agreement and assumes to have lost the freedom to work creatively in a certain project.
What Happens in Case of Violation of an Executive Cooperation Agreement?
In case of violation of the agreement, both the parties can sue each other and claim for damages in the court of law, whether it may be the executive employee or management of the company as the case may be.
To sum up, this agreement is a very common form of agreement these days that act as a means to maintain transparency between the employee and management, while not affecting the professional relationship between the two.
Sample for Executive Cooperation Agreement
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