A side letter to an employment contract is an additional document that modifies or supplements the main employment contract.
It is used to address specific issues or terms that are not covered in the main contract or to provide additional clarification or detail.
In this article, we will provide you with templates, examples, and samples of side letters to employment contracts.
These templates and examples will help you to draft your own side letter that meets your specific needs.
We will also provide you with guidance on how to negotiate and use a side letter to your advantage.
Side Letter to Employment Contract
Dear Mr./Ms. [Recipient Name],
This side letter serves to supplement and amend the employment contract dated [date] between you and me. It is intended to clarify certain terms and conditions of my employment.
Specifically, this side letter addresses the following matters:
Equity: I will be granted an option to purchase [number] shares of common stock in the company at a price of [price per share]. The option will vest over a period of [number] years, with [percentage]% vesting each year.
Bonus: I will be eligible for an annual bonus of up to [percentage]% of my base salary, based on the company’s financial performance and my individual contributions.
Vacation: I will be entitled to [number] days of paid vacation per year, in addition to the company’s standard holidays.
These terms and conditions shall be incorporated into and form part of my employment contract. In the event of any conflict between this side letter and the employment contract, the terms of this side letter shall prevail.
Please acknowledge receipt of this side letter by signing and returning a copy to me.
Thank you for your attention to this matter. I look forward to a mutually beneficial and productive working relationship.
Sincerely,
[Your Signature]
Side Letter to Employment Agreement
Purpose:
This Side Letter serves to amend and supplement the Employment Agreement (the Agreement) dated [Insert Date] between the Employer and the Employee. This Side Letter shall be read and construed together with the Agreement, and shall have the same force and effect as if it were fully incorporated therein.
Amendments:
- Bonus Plan:
The Agreement is hereby amended to include the following bonus plan:
The Employee shall be eligible for an annual performance bonus of up to [Insert Percentage]% of their base salary.
The bonus shall be determined based on the Employee’s performance against pre-established goals and objectives.
The bonus shall be paid out [Insert Frequency].
- Equity Grant:
The Agreement is hereby amended to include the following equity grant:
The Employee shall be granted [Insert Number] shares of the Employer’s common stock.
The shares shall be granted subject to a vesting schedule of [Insert Vesting Period].
The shares shall be subject to the terms and conditions of the Employer’s Stock Option Plan.
- Confidentiality:
The Agreement is hereby amended to include the following additional confidentiality provision:
The Employee agrees not to disclose any confidential information of the Employer to any third party without the prior written consent of the Employer.
Confidential information includes, but is not limited to, trade secrets, customer lists, financial information, and business plans.
- Termination:
The Agreement is hereby amended to include the following additional termination provision:
In the event of a termination without cause by the Employer, the Employee shall be entitled to [Insert Number] months of severance pay.
The severance pay shall be paid in [Insert Frequency] installments.
- Other:
All other terms and conditions of the Agreement shall remain in full force and effect.
This Side Letter may be amended or modified only by a written agreement signed by both the Employer and the Employee.
Acceptance:
By signing below, the Employer and the Employee acknowledge and agree to the terms and conditions of this Side Letter.
Employer:
Signature: ________________________
Printed Name: ________________________
Date: ________________________
Employee:
Signature: ________________________
Printed Name: ________________________
Date: ________________________
Formal Side Letter To Employment Contract
Dear [Employee Name],
This letter serves as a formal side letter to amend your employment contract dated [Original Contract Date]. This side letter is intended to supplement and modify the original contract in the following manner:
[Insert Amendment]
[Additional Amendments (if any)]
All other terms and conditions of your employment contract remain unchanged. This side letter shall be deemed incorporated into and form a part of your original employment contract.
Please acknowledge your understanding and acceptance of this side letter by signing and returning a copy to us.
Sincerely,
[Employer Name]
Employee Acknowledgment:
I acknowledge receipt of this side letter and agree to the terms and conditions set forth herein.
Employee Signature: ____________________________________
Side Letter To Employment Contract Sample
Purpose:
This Side Letter serves to amend and supplement the Employment Contract dated [Insert Date] (the Original Contract) between the parties.
Specific Amendments:
- Compensation: The annual base salary specified in the Original Contract is hereby amended to [Insert New Base Salary].
- Benefits: The following benefits are hereby added to the employee’s benefits package:
[List of Additional Benefits]
- Equity: The employee shall be granted an option to purchase [Insert Number] shares of the Employer’s common stock at a price of [Insert Option Price] per share. The option shall vest over a period of [Insert Vesting Period] years.
- Non-Compete Agreement: The non-compete agreement contained in the Original Contract is hereby amended as follows:
[Insert Specific Amendments to Non-Compete Agreement]
- Termination: The termination provisions of the Original Contract are hereby amended as follows:
[Insert Specific Amendments to Termination Provisions]
Other Provisions:
All other terms and conditions of the Original Contract remain in full force and effect.
This Side Letter shall be construed in accordance with the laws of [Insert State or Country].
This Side Letter may not be modified or amended except by a written agreement signed by both parties.
Signatures:
Employer:
By: ___________________________
Name: ___________________________
Title: ___________________________
Employee:
By: ___________________________
Name: ___________________________
Title: ___________________________
Best Side Letter To Employment Contract
Date: [Insert Date]
Parties:
Employer: [Insert Employer Name]
Employee: [Insert Employee Name]
Purpose:
This Side Letter supplements and amends the Employment Contract dated [Insert Date] (the Contract) between the Employer and the Employee.
Additional Terms:
- Equity Grant
The Employer shall grant to the Employee [Insert Number] shares of the Employer’s common stock (the Shares) upon the Employee’s commencement of employment.
The Shares shall be subject to a vesting schedule as follows:
25% of the Shares shall vest after one year of continuous employment.
The remaining 75% of the Shares shall vest in equal monthly installments over the following three years.
The Shares shall be subject to the terms and conditions of the Employer’s Stock Option Plan.
- Performance Bonus
In addition to the base salary specified in the Contract, the Employee shall be eligible for an annual performance bonus of up to [Insert Percentage]% of the Employee’s base salary.
The amount of the bonus shall be determined by the Employer based on the Employee’s performance and the overall performance of the Employer.
- Relocation Assistance
The Employer shall reimburse the Employee for reasonable relocation expenses incurred in connection with the Employee’s move to [Insert Location].
Reimbursable expenses shall include:
Moving expenses
Temporary housing
Transportation costs
The total amount of relocation assistance shall not exceed [Insert Amount].
- Confidentiality
The Employee acknowledges that the Employee will have access to confidential information of the Employer.
The Employee agrees to maintain the confidentiality of such information and not to disclose it to any third party without the prior written consent of the Employer.
- Governing Law
This Side Letter and the Contract shall be governed by and construed in accordance with the laws of [Insert State/Country].
- Entire Agreement
This Side Letter, together with the Contract, constitutes the entire agreement between the Employer and the Employee with respect to the subject matter hereof.
Signatures:
Employer: _____________________
Side Letter Commitment To Employment
Purpose:
This Side Letter serves as a supplement to the Employment Agreement (the Agreement) between the Company and the Employee, dated [Insert Date]. It further defines the Company’s commitment to the Employee’s employment.
Commitment to Employment:
The Company acknowledges and agrees that it is committed to the Employee’s continued employment with the Company for a period of [Insert Number] years from the date of this Side Letter (the Commitment Period).
Conditions of Employment:
The Employee’s continued employment during the Commitment Period is subject to the following conditions:
The Employee continues to perform his/her duties in a satisfactory manner, as determined by the Company in its sole discretion.
The Employee does not engage in any conduct that would constitute a material breach of the Agreement or any other Company policy.
The Company’s business operations remain viable and do not require a reduction in workforce.
Termination of Commitment:
The Company may terminate the Commitment Period at any time prior to its expiration if:
The Employee violates any of the conditions of employment set forth above.
The Company undergoes a significant financial downturn or restructuring that necessitates a reduction in workforce.
Notice of Termination:
In the event of termination of the Commitment Period, the Company will provide the Employee with [Insert Number] months’ written notice.
Severance Pay:
If the Employee’s employment is terminated by the Company without cause during the Commitment Period, the Employee will be entitled to severance pay in accordance with the terms of the Agreement.
Confidentiality:
The Employee acknowledges and agrees that the terms of this Side Letter are confidential and shall not be disclosed to any third party without the prior written consent of the Company.
Entire Agreement:
This Side Letter, together with the Agreement, constitutes the entire agreement between the parties with respect to the Employee’s employment during the Commitment Period. Any prior agreements or understandings between the parties are hereby superseded.
Signatures:
Company:
By: _________________________
Name: _________________________
Title: _________________________
Employee:
By: _________________________
Name: _________________________
Title: _________________________
Side Letter Contract For Employment
This Side Letter Agreement (the Agreement) is entered into this [Date] by and between:
Employer: [Employer Name] (Employer)
Employee: [Employee Name] (Employee)
Recitals:
WHEREAS, Employee has accepted an offer of employment from Employer as [Job Title] (the Position);
WHEREAS, the parties desire to supplement and clarify certain terms of Employee’s employment as set forth in the Employment Agreement dated [Date] (the Primary Agreement);
Now, therefore, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:
- Additional Compensation
In addition to the compensation set forth in the Primary Agreement, Employee shall be entitled to receive the following additional compensation:
[Specify additional compensation, e.g., bonus, stock options, etc.]
- Equity
Employee shall be granted an option to purchase [Number] shares of Employer’s common stock (the Option). The Option shall be subject to the terms and conditions of the Employer’s Stock Option Plan, as amended from time to time.
- Confidentiality
Employee acknowledges that during the course of their employment, they will have access to confidential information of Employer. Employee agrees to maintain the confidentiality of such information and to use it only for the benefit of Employer.
- Non-Competition
During the term of Employee’s employment and for a period of [Number] years following the termination of their employment, Employee shall not engage in any business or activity that is competitive with Employer’s business.
- Dispute Resolution
Any disputes arising under this Agreement shall be resolved through binding arbitration in accordance with the rules of the American Arbitration Association.
- Severability
If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.
- Amendment
This Agreement may be amended only by a written instrument signed by both parties.
- Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of [State].
- Entire Agreement
This Agreement, together with the Primary Agreement, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral.
In witness whereof, the parties have executed this Side Letter Agreement as of the date first written above.
Employer:
By: [Authorized Signatory]
Title:
Employee:
By: [Employee Signature]
Printed Name:
Side Letter To Employment Contract template
Re: Amendment to Employment Contract
This Side Letter (the Side Letter) amends and supplements the Employment Contract (the Contract) dated [Insert Date] between [Employee Name] (the Employee) and [Employer Name] (the Employer).
- Additional Compensation
In addition to the compensation set forth in the Contract, the Employee shall be entitled to the following additional compensation:
Annual Bonus: The Employee shall be eligible for an annual bonus in an amount equal to [Insert Percentage]% of the Employee’s base salary, payable on [Insert Date].
Equity Grant: The Employee shall be granted [Insert Number] shares of the Employer’s common stock, vesting over a period of [Insert Number] years.
- Vacation
The Employee’s vacation entitlement shall be increased from [Insert Current Number] days per year to [Insert New Number] days per year, effective immediately.
- Relocation Expenses
The Employer shall reimburse the Employee for all reasonable and necessary relocation expenses incurred in connection with the Employee’s relocation to [Insert Location].
- Non-Compete Agreement
The non-compete agreement contained in the Contract shall be amended as follows:
The term of the non-compete agreement shall be reduced from [Insert Current Number] years to [Insert New Number] years.
The geographic scope of the non-compete agreement shall be limited to [Insert Geographic Area].
- Other Amendments
[Insert any other amendments to the Contract as necessary.]
- Entire Agreement
This Side Letter, together with the Contract, constitutes the entire agreement between the parties with respect to the matters covered herein. All prior agreements, understandings, and representations, whether written or oral, are hereby superseded and replaced by this Side Letter.
- Severability
If any provision of this Side Letter is held to be invalid or unenforceable, such provision shall be severed from this Side Letter and the remaining provisions shall remain in full force and effect.
- Amendment
This Side Letter may only be amended by a written instrument signed by both parties.
- Governing Law
This Side Letter shall be governed by and construed in accordance with the laws of [Insert State or Jurisdiction].
Employee Signature:
Simple Side Letter To Employment Contract
Purpose:
This Side Letter amends and supplements the Employment Contract dated [Original Contract Date] (the Original Contract) between the Employer and the Employee.
Additional Terms:
- Bonus:
In addition to the bonus structure outlined in the Original Contract, the Employee shall be eligible for an annual bonus of up to [Percentage]% of their base salary, subject to the Employer’s discretion and performance evaluation.
- Equity:
The Employee shall be granted an option to purchase [Number] shares of the Employer’s common stock at a price of $[Price] per share. The option shall vest over a period of [Number] years, with [Percentage]% of the shares vesting each year.
- Relocation Assistance:
If the Employee is required to relocate for the Employer, the Employer shall provide the following relocation assistance:
Reimbursement for moving expenses up to $[Amount]
Temporary housing allowance for up to [Duration]
Job placement assistance for the Employee’s spouse or partner
- Confidentiality:
The Employee acknowledges and agrees to maintain the confidentiality of all proprietary and confidential information of the Employer, both during and after their employment.
- Entire Agreement:
This Side Letter, together with the Original Contract, constitutes the entire agreement between the parties with respect to the Employee’s employment. Any prior agreements or understandings are hereby superseded.
Signatures:
Employer:
By: [Employer’s Signature]
Name: [Employer’s Name]
Title: [Employer’s Title]
Employee:
By: [Employee’s Signature]
Name: [Employee’s Name]
Title: [Employee’s Title]
Side Letter To Employment Contract Format
Purpose:
This Side Letter supplements and amends the Employment Contract dated [Date of Employment Contract].
Specific Provisions:
[Specific Provision 1]
[Specific Provision 2]
[Specific Provision 3]
Confidentiality:
The terms of this Side Letter are confidential and shall not be disclosed to any third party without the prior written consent of both parties.
Governing Law:
This Side Letter shall be governed by and construed in accordance with the laws of [Governing State].
Entire Agreement:
This Side Letter, together with the Employment Contract, constitutes the entire agreement between the parties and supersedes all prior agreements, understandings, and negotiations.
Signatures:
By signing below, the parties acknowledge that they have read and understood this Side Letter and agree to be bound by its terms.
Employer:
Signature: ____________________
How to Write a Side Letter to an Employment Contract
What is a Side Letter?
A side letter is a written agreement that is separate from an employment contract. It is used to clarify or modify the terms of the employment contract.
Side letters are often used to address specific issues that are not covered in the employment contract, such as:
- Compensation
- Benefits
- Job duties
- Termination
Why Use a Side Letter?
There are several reasons why you might want to use a side letter. For example, you might want to use a side letter to:
- Negotiate a higher salary or better benefits
- Clarify your job duties
- Protect yourself from termination
How to Write a Side Letter
When writing a side letter, it is important to be clear and concise. You should also make sure that the side letter is consistent with the terms of the employment contract.
Here are some tips for writing a side letter:
- Start by stating the purpose of the side letter.
- Be specific about the terms that you are modifying or clarifying.
- Use clear and concise language.
- Make sure that the side letter is consistent with the terms of the employment contract.
- Have the side letter reviewed by an attorney before you sign it.
Conclusion
Side letters can be a useful tool for clarifying or modifying the terms of an employment contract. However, it is important to use side letters carefully and to make sure that they are consistent with the terms of the employment contract.
If you have any questions about side letters, you should consult with an attorney.
FAQs about Side Letter To Employment Contract
What is a side letter to an employment contract?
A side letter is a separate agreement that is entered into alongside an employment contract.
It is used to modify or supplement the terms of the main contract, typically to address specific issues or concerns that are not covered in the main contract.
What are some common reasons for using a side letter?
Side letters are often used to address issues such as:
- Compensation and benefits
- Confidentiality and non-compete agreements
- Termination and severance
- Equity and stock options
- Intellectual property rights
What are the benefits of using a side letter?
Side letters can provide several benefits, including:
- Flexibility: Side letters allow parties to address specific issues or concerns that may not be covered in the main contract.
- Confidentiality: Side letters can be kept confidential, which can be important for sensitive matters.
- Enforceability: Side letters are legally binding agreements, provided they are properly drafted and executed.
What are some potential risks of using a side letter?
There are also some potential risks associated with using side letters, including:
- Inconsistent with main contract: Side letters must be consistent with the terms of the main employment contract. If there is any inconsistency, the terms of the main contract will prevail.
- Lack of clarity: Side letters can sometimes be poorly drafted or ambiguous, which can lead to disputes.
- Undue influence: Side letters may be used to pressure employees into accepting terms that they would not otherwise agree to.
How can I negotiate a side letter?
If you are considering negotiating a side letter, it is important to:
- Seek legal advice: It is advisable to consult with an employment lawyer to ensure that the side letter is drafted in a way that protects your interests.
- Be clear about your objectives: Before entering into negotiations, be clear about what you want to achieve with the side letter.
- Be prepared to compromise: Negotiations often involve compromise. Be prepared to give and take in order to reach an agreement that is acceptable to both parties.