Key employee retention agreement

A sale is exactly when key staff are most likely to leave. They hear rumours, they are uncertain about a new owner, and competitors know a transition is the easiest time to recruit. If the departing owner was the main relationship holder, the second most important person in the building is often the one whose exit would do the most damage.

How buyers use them

• As a closing condition — the deal does not complete unless named people have signed
• With payment staged: part at closing, the balance after six or twelve months
• Alongside refreshed employment terms and, where appropriate, non-solicitation covenants
• Funded by the seller, the buyer, or split — which is a negotiated term, not a default