Stay Bonus Agreement Sample

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A stay bonus agreement is a contractual agreement between an employer and an employee that incentivizes the employee to stay with the company for a specified amount of time. The agreement offers a cash or stock bonus to the employee as a reward for remaining with the company through a merger, acquisition, or other significant transaction. A stay bonus agreement is typically used to ensure that key employees continue to work for the company during a critical period, providing stability and continuity during a potentially disruptive time.

If you are an employer, it is essential to have a stay bonus agreement in place, especially if your company is going through a period of transition. A well-crafted agreement can help mitigate the risk of key employees leaving the company during a challenging period. Additionally, it can serve as a useful tool for attracting new talent to your organization.

Here is a sample stay bonus agreement that can be used as a framework for creating your own:

Stay Bonus Agreement

This Stay Bonus Agreement (“Agreement”) is made and entered into effective as of [date] (“Effective Date”) between [Employer Name], a [State of Incorporation] corporation with its principal place of business at [Address] (“Employer”), and [Employee Name] (“Employee”).

WHEREAS, Employer desires to retain the services of Employee during a time of transition, specifically [insert reason for stay bonus], and

WHEREAS, Employee is willing to remain in the employ of Employer during this time of transition in exchange for the consideration outlined in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions contained herein, the parties agree as follows:

1. Stay Bonus. Employer agrees to pay Employee a Stay Bonus in the amount of [insert amount] upon the occurrence of the following conditions:

a. The Effective Date of this Agreement.

b. The completion of [insert specific date] and/or [insert specific event].

2. Payment of Stay Bonus. The Stay Bonus shall be paid to Employee within [insert number] days following the occurrence of the conditions listed in Section 1 above.

3. Termination of Employment. In the event that Employee`s employment with Employer is terminated for any reason prior to the completion of the conditions listed in Section 1 above, Employee shall forfeit any right to receive the Stay Bonus.

4. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of [State of Incorporation].

5. Entire Agreement. This Agreement constitutes the entire understanding between the parties and supersedes all prior negotiations, understandings, and agreements between them relating to the subject matter hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

[Employer Name]

By: ___________________________







By signing this agreement, both the employer and employee acknowledge their commitment to each other and the importance of working together during a critical period. The stay bonus agreement provides an additional incentive for key employees to remain with the company, which can help ensure the successful completion of the transition period.

In conclusion, a stay bonus agreement is an essential tool for companies going through a period of transition. It can help mitigate the risk of key employees leaving the company during a critical time, providing stability and continuity during a potentially disruptive period. Use the sample agreement provided as a framework to create your own stay bonus agreement that fits the specific needs of your organization.