An Employment Agreement Amendment is a contract modifying a currently existing and previously executed employment agreement. They are often drafted in response to a material change of circumstances in respect to the employer's business model, the dynamics of the company's industry, or the individual employee's contributions.

Amendments, if properly drafted, can legally modify any aspect of the original employment agreement, including but not limited to provisions addressing the employee's compensation, term of employment, bonus structure or method of bonus payout (cash vs. stock), grounds for termination, or benefits package.

Employment Agreement Amendments can contain several modifications and read quite lengthy, or can include just one modification and be as short as one page.

The amendment must first contain a short and accurate statement stating the date of the amendment and referring to the original employment agreement by name and date. For instance:

"This First Amendment to the Employment Agreement between First Generation Marketing, a Delaware corporation (the "Company"), and Marty McFly (the "Employee") that was originally effective as of May 31, 2005 (the "Employment Agreement") is hereby entered into as of the 30th day of December 2005 (the "Amendment Effective Date"), by and between the Employee and the Company (collectively, the "Parties")."

Another example:

"This Amendment, dated December 22, 2000 (the "Amendment"), to the Employment Agreement, dated December 22, 1998 (the "Agreement"), by and between New Edge Media, Inc. ("NEM") and Mark Jergoff ("Executive")."

After carefully referring to the original agreement by name and date, the agreement should set forth any important recitals that led to the need for the amendment. For instance:

"WHEREAS, the Employment Agreement provides that the Employee can earn a cash bonus if specified fiscal year 2005 performance objectives are attained (the "2005 Bonus")."

"WHEREAS, the Parties believe that Employee may become entitled to receive a 2005 Bonus based on projected fiscal year 2005 Company performance."

"WHEREAS, the Parties desire to amend the Employment Agreement to provide that no 2005 Bonus will be paid to the Employee and that instead Employee shall receive an additional equity grant of restricted stock units (the "RSU") and that the price conditions for the performance units (the "PUs") will be modified".

It is also advisable to include a final "whereas" clause stating that the parties desire that all other terms of the Employment Agreement remain unchanged except as expressly provided herein.

After including the appropriate recitals, the provisions of the amendment should now be drafted carefully to address the intentions of the parties. After the appropriate provisions have been drafted, it is important to include a clause at the end stipulating that the Parties agree that this Amendment is not intended to confer any additional rights or obligations on or by either Party beyond those expressly set out herein.

In terms of modification of the amendment itself, the drafter may also want to explicitly state that the amendment may be amended or modified only by written agreement executed by the Parties.

About the Author:

Mark Warner is an Employment Agreement Amendment Research Analyst for RealDealDocs.com. RealDealDocs gives you insider access to millions of legal documents online drafted by the top law firms in the US that you can download, edit and print. Search For Free at RealDealDocs.com.