Employment Agreement (Post-Close)

The purchase agreement gets the headlines, but the employment agreement controls your daily life after closing. It specifies your title, reporting structure, compensation, bonus targets, non-compete scope, termination triggers, and what happens to your unvested equity if you leave or get pushed out. Most buyers — especially PE firms — require the founder to stay for 2–3 years post-close. The employment agreement defines the terms of that stay. Founders who negotiate the purchase price aggressively but gloss over the employment agreement often find themselves trapped: reporting to a new board, hitting targets they didn’t set, and bound by a non-compete that prevents them from doing anything else if they walk away. The employment agreement should be negotiated in parallel with the purchase agreement, not as an afterthought. The two documents interact — your comp package, your equity rollover, your non-compete, and your termination provisions all affect what the deal is actually worth to you.