Employment Agreement Review

Staff Engineer Offer — Series B Startup, $195K Base, 0.4% Equity, California

About this sample. This is one example of what a successful Resolvix Employment Agreement Review looks like. The scenario: a senior software engineer at the Staff Engineer level reviewing an offer from a Series B startup based in California — $195K base salary, 0.4% equity on a 4-year vest with a 1-year cliff. Reviewed from the employee's perspective. Your engagement will reflect your specific offer, company stage, and state law. All company names, figures, and clause language are illustrative.

Executive Summary

Issues requiring action before signing:

• No acceleration clause. If the company is acquired and your role is eliminated, your unvested equity is forfeited. Single-trigger acceleration on acquisition protects you in the most common liquidity scenario for a Series B company.
• Non-compete is present. California Business & Professions Code §16600 makes employee non-competes void and unenforceable in California. The clause should be deleted — not because it can be enforced, but because its presence creates ambiguity and potential harassment risk.
• Prior inventions carve-out is missing. The IP assignment clause captures all inventions "related to company business." Without a signed prior inventions exhibit attached to this agreement, anything you built before your start date that touches software engineering could be claimed by the company.
• 90-day option exercise window. If you leave or are terminated, you have 90 days to exercise vested options or forfeit them. Exercising early-stage options triggers AMT and requires cash — this window can be a financial trap. A 2-year or 5-year post-termination exercise window (PTEW) is increasingly standard at employee-friendly startups.

1. Compensation & Equity

Base Salary

$195,000 base salary for a Staff Engineer in California is within market range. Based on 2025–2026 compensation data for Staff Engineers at Series B companies in the Bay Area and Southern California, the 50th–75th percentile band is approximately $190K–$215K base, with total cash (including bonus) ranging from $210K–$240K. The offer is competitive at base; if there is no performance bonus structure in the agreement, that is worth asking about.

Equity Analysis

The preferred vs. common stock difference: Your options are priced at the 409A common stock value, which is typically 20–30% of the preferred share price paid by Series B investors. If the company raises a Series C at a $120M valuation, preferred investors have liquidation preferences that are paid before common stockholders. In a sale at a below-preference price — which is common in acqui-hires and distressed sales — common stockholders including option holders may receive little or nothing even if the company has positive enterprise value. This is not a negotiation point, but it is context you must understand before signing.

This is single-trigger-plus acceleration (acquisition + termination). Pure single-trigger (acceleration on acquisition alone) is harder to get at Series B; double-trigger (acquisition + termination) is standard. Start with single-trigger and accept double-trigger as a fallback — either is a meaningful improvement over the current nothing.

2. Restrictive Covenants

Non-Compete: Present but Unenforceable in California

Non-Solicitation of Employees: 12 Months — Borderline

§9.2 prohibits soliciting Company employees for 12 months post-termination. California courts have applied §16600 to employee non-solicitation clauses since the 2018 AMN Healthcare decision, finding them unenforceable as a restraint on trade. However, the law is unsettled post-Edwards v. Arthur Andersen, and some courts distinguish active solicitation from mere hiring. The clause is borderline — a competent plaintiff's attorney could challenge it successfully, but the Company could also use it to threaten litigation. Request deletion; accept narrowing to 6 months as a fallback.

Non-Solicitation of Customers: Likely Unenforceable

§9.3 prohibits soliciting Company customers for 12 months. This is almost certainly unenforceable in California under §16600 as a restraint on trade. However, a narrowly drafted trade secret protection clause — prohibiting use of confidential customer lists — is enforceable. Request that §9.3 be replaced with a trade-secret-based restriction rather than a blanket solicitation prohibition.

3. IP Assignment

The IP assignment clause (§10) is the most consequential section of any technology employment agreement. It determines who owns work you do during your employment — and potentially work you did before.

Scope of the Assignment Clause

Current language (§10.1): "Employee hereby assigns to the Company all right, title, and interest in and to any and all inventions, discoveries, developments, improvements, and works of authorship (collectively, 'Inventions') conceived, developed, or reduced to practice by Employee, whether alone or jointly with others, during the Employment Term that (a) relate to the Company's current or reasonably anticipated business, products, or research and development; (b) result from or relate to any work performed by Employee for the Company; or (c) are developed using the Company's equipment, supplies, facilities, or trade secret information."

Prong (a) — "relate to the Company's business" — is the dangerous one. A company in the developer tools or infrastructure space could argue that any software engineering project "relates to" its business, even if you built it on a weekend with no Company resources.

Moonlighting Restriction

§10.4 requires written approval from the Company before engaging in any outside employment, consulting, or advisory role. This is standard and legally permissible in California. However, "written approval" in practice means you need to ask permission for every side project or advisory role — including unpaid ones. Negotiate to: (1) carve out open-source contributions explicitly; (2) narrow the restriction to activities that create a conflict of interest with the Company's actual business, rather than all outside work.

4. Termination & Severance

The 90-Day Exercise Window Problem

This is one of the most financially consequential and least-discussed clauses in startup employment agreements. When you leave or are terminated, you have 90 days to exercise your vested Incentive Stock Options (ISOs). Exercising requires cash — you pay the strike price multiplied by the number of shares. At an early-stage company with a low 409A valuation, the cash requirement may be manageable. At a later-stage company, it can be tens or hundreds of thousands of dollars. If you cannot pay, the options expire worthless.

The IRS ISO holding period requirement adds a second complication: to receive ISO tax treatment (long-term capital gains instead of ordinary income), you must hold the shares for at least 2 years from grant and 1 year from exercise. A 90-day window makes it nearly impossible to satisfy the ISO holding period before a potential liquidation event, forcing exercise-and-sell at ordinary income rates. A post-termination exercise window (PTEW) of 2–5 years preserves your ability to plan the exercise strategically.

Note on ISO conversion: Options that are not exercised within 90 days of termination automatically convert from ISOs to NQSOs under IRS rules, losing favorable tax treatment. The redline above acknowledges this — it is not a drafting error. The 2-year window is worth the ISO-to-NQSO conversion because it eliminates the financial trap of a forced cash exercise on a 90-day deadline.

5. What to Ask For

Must-Have Asks (Do Not Sign Without These)

1. Add a signed Prior Inventions Exhibit (Exhibit A) listing all personal projects, open-source contributions, and tools you have built before your start date. This is the single highest-priority item in this review. An exhibit template should be provided by the Company; if it is not, request one or draft one yourself and ask them to countersign.
2. Delete the non-compete clause (§9.1) or add an explicit California-law carve-out acknowledging its unenforceability. The preferred outcome is deletion. Accepted fallback: a stated acknowledgment that the clause does not apply to employees working in California.
3. Add single-trigger acceleration on acquisition (or double-trigger as fallback). Use the language above. If the Company refuses all acceleration, ask for at least 12 months of accelerated vesting upon termination without cause following an acquisition (double-trigger).
4. Extend the post-termination exercise window from 90 days to 2 years (or minimum 1 year). Acknowledge in writing that ISOs convert to NQSOs after 90 days.

Should-Have Asks

• Negotiate 3 months of base salary as severance ($48,750) upon termination without cause, conditioned on signing a general release of claims within 21 days. This is a standard ask for a Staff Engineer and costs the Company nothing unless they terminate you.
• Narrow the moonlighting restriction (§10.4) to explicitly carve out open-source contributions, personal projects that do not compete with the Company's actual products, and unpaid advisory roles. Get the carve-out in writing — verbal assurances from the hiring manager are unenforceable.
• Replace the customer non-solicitation clause (§9.3) with a narrower trade-secret-based restriction: you agree not to use confidential customer lists, but you are not prohibited from working with customers you developed a relationship with independently of the Company.

Nice-to-Have Asks

• Add a performance review and compensation adjustment schedule — at minimum, a commitment to annual reviews with a target base salary increase range.
• Negotiate early exercise rights (Section 83(b) election) for your option grant if the Company uses an equity plan that permits it. Early exercise locks in the low 409A strike price for tax purposes.
• Ask for the Company's cap table (at least a summary) and the total fully-diluted share count so you can verify that your 0.4% is calculated correctly and understand where you stand relative to Series B preferred liquidation preferences.

Action Steps