Glossary of Legal Terms

A section of the Internal Revenue Code that governs the timing and taxation of deferred compensation to ensure compliance and avoid penalties.

A federal law that prohibits discrimination against individuals with disabilities in all areas of public life, including jobs.

Policies that consider race, color, religion, sex, or national origin to benefit an underrepresented group in employment, education, and business.

A form of variable pay provided to executives based on individual, company, or departmental performance within a fiscal year.

A process where a neutral third party hears a dispute and makes a binding decision, often used as an alternative to litigation.

A doctrine that allows employers to terminate an employee at any time for any reason, except for illegal reasons, and without warning.

A New Jersey law that restricts employers from inquiring about an applicant’s criminal history on job applications and during initial hiring stages.

The process of comparing an executive’s compensation package to those of similar positions in other companies to ensure competitive pay levels.

An agreement providing executives with compensation and benefits in the event of a significant change in company ownership, typically involving mergers or acquisitions.

A contractual agreement that allows a company to reclaim previously paid compensation if certain conditions, such as financial restatements or misconduct, occur.

New Jersey’s whistleblower protection law that protects employees from retaliation for reporting illegal or unethical activities by their employer.

When an employee resigns due to an employer creating a hostile or intolerable work environment.

Allows a party in litigation to depose a corporation, partnership, association, or governmental agency through a designated representative, effectively ensuring the involved parties can effectively gather necessary information for a case. This representative must possess knowledge or have access to information relevant to the matters under scrutiny.

A portion of an executive’s income that is delayed until a later date, often to take advantage of favorable tax treatment or as a retirement benefit.

Units representing a company’s stock, credited to an executive’s account, typically as part of deferred compensation, and paid out in cash or stock upon retirement or termination.

A pre-trial process where a witness gives sworn testimony under oath, recorded by a court reporter, to gather information for a case.

Under NJLAD, discrimination against employees or applicants based on disability is prohibited, and employers must provide reasonable accommodations unless it causes undue hardship.

Under New Jersey law, employees may be entitled to leave as a reasonable accommodation for a disability under NJLAD, separate from federal FMLA leave.

Unfair treatment of employees based on protected characteristics such as race, gender, age, disability, religion, or national origin.

A New Jersey law that provides certain labor protections, such as overtime pay and rest periods, specifically for domestic workers.

A provision that requires two events (typically a change in control and termination of employment) before an executive receives enhanced severance or accelerated vesting of equity awards.

New Jersey’s law that mandates employers to provide paid sick leave to employees, allowing them to accrue one hour of sick leave for every 30 hours worked.

A federal agency that enforces laws prohibiting workplace discrimination.

A federal law that prohibits gender-based wage discrimination for jobs that require equal skill, effort, and responsibility.

A form of non-cash pay that represents ownership in the company, including stock options, RSUs, and performance shares, designed to align executive interests with shareholders.

The decrease in existing shareholders’ ownership percentage of a company due to the issuance of additional shares, often resulting from executive compensation programs.

A plan that provides additional compensation to executives based on the achievement of specific financial, operational, or strategic goals.

A plan allowing executives to defer a portion of their income to future years, often to manage tax liabilities and retirement planning.

Additional benefits provided to executives, which may include insurance plans, financial planning services, company cars, private jet usage, club memberships, and other non-monetary compensation.

A pre-arranged package that outlines the compensation and benefits an executive will receive if their employment is terminated, particularly in cases of layoffs or mergers.

Corporate policies requiring executives to hold a certain amount of company stock, often to ensure alignment with shareholder interests.

A federal law that establishes minimum wage, overtime pay, and other employment standards.

A federal law that provides eligible employees with up to 12 weeks of unpaid leave per year for certain family and medical reasons.

Incentives designed to retain executives by making it financially unattractive for them to leave the company, often through deferred bonuses or stock options.

A large payment or significant benefits guaranteed to an executive in the event of termination following a merger, acquisition, or change in control of the company.

A payment made to executives to cover the taxes due on certain benefits, effectively increasing the net amount of the benefit.

Unwelcome conduct based on protected characteristics that create a hostile, intimidating, or abusive work environment.

A form of workplace harassment where the conduct is so severe or pervasive that it affects the employee’s ability to perform their job.

Stock options that receive favorable tax treatment, where the employee is taxed on capital gains rather than ordinary income, provided certain conditions are met.

A provision in an executive employment agreement that requires the company to cover legal costs and liabilities incurred by the executive while performing their duties.

A person who provides services to a business but is not an employee; they have more control over how they perform their work and do not receive the same benefits as employees.

Compensation designed to reward executives for achieving long-term business goals, typically spanning over three to five years, often in the form of stock options or performance shares.

Under New Jersey’s Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA), employers cannot take adverse action against employees solely for the use of cannabis outside of work hours.

A voluntary and confidential process where a neutral third party helps disputing parties reach a mutually acceptable agreement without making binding decisions.

An extension of NJLAD, this law mandates equal pay for substantially similar work and provides stronger protections against wage discrimination.

A state law that provides eligible employees with up to 12 weeks of unpaid leave in a 24-month period to care for a family member with a serious health condition or for the birth or adoption of a child.

A state law that prohibits discrimination in employment, housing, and public accommodations based on characteristics such as race, gender, sexual orientation, disability, age, and more.

New Jersey’s version of the federal WARN Act, which requires employers to provide 60 days’ advance notice of mass layoffs or plant closures.

A contractual provision that prohibits an employer from hiring employees from a competitor or prevents employees from soliciting colleagues to join a competitor, often used to protect business interests and reduce workforce turnover.

A contract where an employee agrees not to enter into competition with the employer after the employment period is over.

A legal contract that protects confidential information and prohibits its disclosure to third parties.

Stock options that do not qualify for special tax treatment, meaning that income is taxed as ordinary income when exercised.

A contract that prevents an executive from soliciting the company’s clients, customers, or employees for a certain period after leaving the company.

A federal agency responsible for ensuring safe and healthy working conditions for employees by setting and enforcing standards.

Shares of stock granted to executives contingent upon the achievement of predetermined company performance metrics, typically over a multi-year period.

Pay tied to the achievement of specific company goals or individual targets, often used to align executive interests with shareholder objectives.

A type of deferred compensation plan that credits an executive with units representing shares of stock, which can be converted to cash or actual stock upon vesting or other triggering events.

A group of people who are legally protected from employment discrimination under federal law, including race, color, religion, sex, national origin, age, disability, and genetic information.

A document filed with the SEC that provides details on executive compensation, among other matters, to inform shareholders before annual meetings.

Shares granted to executives that come with conditions such as vesting periods or performance criteria before they can be sold or fully owned.

Company shares granted to an executive as part of their compensation, which vest over time or upon the achievement of certain milestones.

Adverse actions taken by an employer against an employee for engaging in legally protected activities, such as filing a discrimination complaint.

The New Jersey Security and Financial Empowerment Act (NJ SAFE Act) provides leave to employees who are victims of domestic violence or sexual assault, or whose family members are victims, to address issues related to the violence.

A term referring to shareholders’ right to vote on executive compensation packages at annual meetings, a practice mandated by corporate governance regulations.

Compensation and benefits provided to an employee when they leave the company, often in exchange for releasing the employer from liability.

A provision that allows an executive to receive enhanced severance or accelerated vesting of equity awards upon the occurrence of a single event, such as a change in control.

The right to purchase a company’s stock at a predetermined price, often used as a form of executive compensation to incentivize performance and align interests with shareholders.

A process where equity awards, such as stock options or RSUs, become exercisable or payable over a specific period, contingent upon the executive remaining employed with the company.

An employee who reports illegal, unethical, or unsafe practices within their company to authorities or the public.

Unwanted conduct based on race, gender, religion, national origin, disability, or other protected characteristics that creates a hostile work environment or interferes with an employee’s job performance.

Negative actions taken by an employer against an employee for participating in legally protected activities, such as filing a complaint or reporting misconduct.