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Most CEOs have employment contracts. They are two-edged swords for all involved. For the most part they guarantee a CEO a set amount of compensation over a set period of time or a known compensation if the organization decides to terminate the contract early.
Key Employee Agreement means an agreement entered into between the Company (or an Affiliate) and a Participant that protects confidential information and sets forth other terms and conditions of employment with the Company (or an Affiliate).
A nonprofit's officers include its president, vice president, secretary, treasurer, executive director, and chief executive officer (CEO). Officers are usually classified as employees because they work under the board of directors' direction and control.
An executive's employment agreement typically will set an effective date and state that the initial term of employment will be for a period of years subject to earlier termination under other provisions of the agreement.
A chief executive employment contract helps clarify compensation arrangements and provides security to both the CEO/executive director and the board. Nonprofits should draft a formal employment contract in all but the simplest employment relationships.