Extract to table

• Confidentiality: Perpetual obligation not to disclose or use AHT confidential information, with customary carve-outs for information that becomes publicly available, is independently developed, or is required to be disclosed by law or regulation (including Defend Trade Secrets Act whistleblower immunity notice)

Key requirements include: • The agreement must be in writing and signed by both parties; • The agreement must expressly state that the employee has the right to consult with counsel prior to signing; • The agreement must be supported by independent consideration (for new employees, the commencement of employment is sufficient, but the statute also requires a "garden-leave" payment or "other mutually-agreed upon consideration"); • The garden-leave payment must be at least 50% of the employee's highest annualized base salary during the two years preceding the termination (here, the proposed garden-leave payment of $287,500 equals 50% of the proposed $575,000 base salary); • The non-competition period may not exceed twelve (12) months from the date of cessation of employment (or twenty-four months if the employee has breached a fiduciary duty or has unlawfully taken the employer's property); • The agreement must be reasonable in scope and geographic reach; and • The agreement must comply with all other applicable provisions of the statute

Key considerations include: • Massachusetts courts have held that certain types of earned compensation, including commissions and certain bonuses, may constitute "wages" within the meaning of the Wage Act and thus may not be subject to forfeiture or clawback; • The Wage Act provides for treble damages, attorneys' fees, and costs in the event of a violation, creating substantial exposure for employers; • The signing bonus clawback provision (24-month clawback in the event of voluntary resignation or termination for cause) must be carefully structured to avoid characterization as an unlawful wage forfeiture; • Severance payments may be characterized as "wages" under certain circumstances, and the form of general release agreement must be reviewed for compliance with the Wage Act's requirements regarding the timing of final wage payments upon termination

The following elements of the COO compensation package require Section 409A analysis: • Stock Options: Must be granted at no less than fair market value on the date of grant to qualify for the stock rights exclusion under Treasury Regulation § 1

• Severance Payments: Must comply with the two-year / two-times safe harbor under Treasury Regulation § 1

409A-1(b)(9)(iii), or must otherwise be structured as a "separation pay plan" that satisfies the requirements of Section 409A