THIS IS AN EMPLOYMENT AGREEMENT, dated the ____ day of , 20 ___ , effective the day of , 20 ___ (“Effective Date”), by and between (“Company”), a corporation with its principal place of business in , and (“Employee”), of , .
WHEREAS, the Company wishes to assure itself of the services of Employee for the period provided in this Agreement, and Employee is willing to serve in the employ of the Company upon the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto hereby agree as follows:
1. Employment. The Company hereby employs Employee, and Employee hereby accepts such employment by the Company, upon the terms and conditions herein provided.
2. Position and Responsibilities. During the period of his employment hereunder, Employee agrees to serve as Executive Vice President of the Company and to be responsible for the day to day operation of the Company and such other duties as may be delegated to him from time to time by the President of the Company. The Company may change or modify the position of Employee or his duties at any time during the term hereof, however, such changes shall not result in a change in Employee’s compensation as provided for herein.
3. Term of Employment and Duties.
(A) Term. This agreement shall commence on the Effective Date and shall continue for a period of twelve (12) full calendar months thereafter (the primary term), unless sooner terminated, as provided in paragraph 8 hereof. The primary term shall be automatically extended for additional successive one (1) year terms (the extended term) unless either party gives notice to the other party not less than ninety (90) days prior to the expiration of the current term and any extended term that the contract is not going to be extended. In the event of such notice the contract shall expire upon the last day of said current term.
(A) Duties. Employee shall devote his full time and attention to the performance of his
duties. Except as otherwise herein provided, Employee shall not engage in any other business or occupation without the Company’s written consent; provided, however, nothing contained herein shall prohibit Employee from making passive or personal investments for which the expenditure of time is not required. Employee acknowledges that he shall travel, as reasonably required by the Company, to the offices of existing and potential clients and elsewhere in connection with his employment.
(C) Vacation and Sick Leave. Employee shall be entitled to sick leave consistent with existing Company policies published in the current personnel policy manual and vacation of not less than fifteen (15) working days each year during the term or extension hereof.
(D) Overtime. It is expressly agreed that Employee’s duties shall during the term hereof be administrative and executive in nature and Employee and his position shall be exempt from the overtime provisions of the Fair Labor Standards Act and all other state and federal regulations.
4. Compensation. Except as otherwise provided herein, for all services rendered by Employee in any capacity during his employment under this Agreement, including, without limitation, services as an employee, executive, officer, director, or member of any committee of the Company, related companies or subsidiaries of the Company, commencing the Effective Date, the Company shall pay Employee a gross salary before taxes of Dollars ($ ___ ) per annum, for the primary term and Dollars ($ ___ )
for the first extended term and all other extended terms unless first agreed by the parties hereto in writing. Salary payments net of deductions for applicable taxes shall be payable in equal twice monthly installments. In addition, Employee shall be paid an annual incentive bonus in such amounts and at such times as shall be determined by the Company.
5. Stock Option: Employee is hereby granted an option to purchase non-voting shares of stock in the Company in an amount equal to ____ percent ( ____ %) of the issued and outstanding stock of the Company. Said option can be exercised at any time during the term hereof. Employee is also granted an option to purchase additional non-voting shares in an amount equal to one per cent ( ___ _ %) for each full year of any extended terms hereof up to a maximum of five per cent ( ____ %) of said stock. The option price for the purchase of the first one per cent ( __ %) shall be the value of the stock as of __ , 20 __ as determined by the Company’s accountant using accepted methods of valuation of similar firms. Likewise for each additional per cent of stock for each extended term the purchase price shall be that of the stock’s value on of the respective year of the extended term. This option is non-assignable by the Employee. To exercise this option Employee shall tender to Employer in cash or other acceptable consideration the purchase price and said stock shall be transferred to Employee.
Acceptable consideration shall include the Employee’s promissory note in an amount of
not more than __ percent ( __ %) of the purchase price with the balance thereof to be paid
in cash. Said note shall bear interest at prime lending rate plus percent ( ___ %) adjusted annually with all principal due ___ ( ___ ) years from date and interest due annually. Said note shall be secured by a pledge of Employee’s stock.
In the event of a sale of the Company the Employee shall not be required to exercise the option(s) but shall be deemed to have exercised all options to which he is entitled up to a maximum of per cent ( %) of the Company’s stock prior to sale and shall be entitled to receive the pro rata net proceeds of the sale of the stock of the company to the same extent as if he had exercised his option(s) and then sold his stock simultaneous with the sale of the business.
6. Stock Bonus: For each share of stock optioned under the above options Employee shall be entitled to receive as a bonus an equal amount of non-voting stock up to a maximum of ___ per cent ( ___ %) of the Company’s stock. This bonus shall vest in the Employee at the rate of ___ percent ( __ %) per each year of this agreement subject only to forfeiture in the event of termination or resignation as provided below. Said bonus stock shall not be issued to Employee until said option(s) is exercised and once issued is not subject to forfeiture except as provided for in paragraph 7.
7. Death or Disability. In the event of the death or permanent disability of the Employee all unexercised stock options and unissued but vested stock bonuses shall be purchased by the Company and the Employee or his estate shall sell to the Company all options and stock bonuses held by the Employee at the most recent price therefor as established by the terms hereof, net of the option price. In the event the Employee breaches the terms of this agreement, resigns or is terminated all vested stock bonuses shall be forfeited and all stock options shall be purchased by the Company at the most recent price as established by the terms hereof net of the option price.
8. Sale of Company. In the event of a sale of the Company at anytime during the term of this agreement or any extension hereof, all stock options and stock bonuses shall be accelerated to vest in the Employee non-voting stock equal to ___ percent ( __ %) of the Company so that Employee shall receive his pro rata share of the sale as if he owned __ percent ( ___ %) of the Company.
9. Professional Development Plan. The Employee shall seek continuing education and professional development opportunities consistent with required job skills necessary to manage and lead the Company toward established goals. The Employee shall undertake such educational program(s) and the Company shall provide education leave and financial support as prior agreed in writing.
10. Termination of Employment. The Company may terminate Employee’s employment under this Agreement at any time, but only after a determination by the President that cause for termination exists. Cause shall include but shall not be strictly limited to:
a. Failure to devote full time and effort to his duties hereunder;
b. Failure to perform the duties and/or responsibilities assigned to him in a manner satisfactory to the Company.
Employee may resign his employment if the Company should fail to substantially perform its obligations under the terms of this Agreement.
In the event of termination, the Company may elect to pay Employee as severance pay his existing salary for three (3) months after notice of termination or may provide in the notice of termination an effective date of termination not less than three (3) months from the date of the notice. It is the intent hereof that in the event of termination Employee shall continue to receive his existing salary for not less than and not more than three (3) months and at the election of the Company shall continue to perform his duties hereunder during said three (3) month period.
11. Covenant Not to Compete. During the term of this Agreement and for a period of two (2) years after expiration hereof or any extended term hereof, or for a period of two (2) years after Employee leaves his position with the Company for reasons other than termination, Employee covenants that he will not, without the prior written consent of the Company which shall specifically refer to this covenant, directly or indirectly for any reason participate or engage in, assist or have any interest in, as principal, consultant, advisor, agent, financier or employee, any business entity which is, or which is about to become, engaged in, providing goods and/or
services in competition with the Company within the State of and within a geographical radius of 100 miles from any Company branch office location.
(A) Nondisclosure. During the term of this Agreement and thereafter, Employee covenants that he shall keep secret and confidential the “confidential information” of the Company, and shall not use or disclose such information for any purpose not authorized by the Company unless the information becomes public through no activity on his part. For purposes of this paragraph, “confidential information” includes information disclosed to or known by Employee as a consequence of or through his employment with the Company (including information conceived, originated, discovered or developed by Employee) not generally known about the Company’s business, products, services and operations, including without limitation any trade secrets, know how, inventions, discoveries and improvements and ideas, whether of not patentable.
(B) Discharge. Breach of any of the foregoing covenants shall be cause for discharge of Employee pursuant to paragraph 6 of this Agreement.
(C) Enforceability. The Employee recognizes and agrees that in the event Employee breaches the non-compete provisions hereof that the Company will have no adequate remedy at law and will be entitled to injunctive relief as well as money damages. If any provision hereof shall be held invalid, illegal or unenforceable, the remaining provisions shall continue in full force and effect. If any provisions shall for any reason be held to be excessively broad as to time, duration, geographical scope, activity or subject, it shall be construed, by limiting and reducing it, so as to be enforceable to the extent permitted by applicable law.
12. Survivors Bound. This Agreement shall be binding upon and inure to the benefit of the parties hereto, the legal representatives, successors in interest and assigns, respectively, of each party.
13. Illness or Incapacity. (A) If Employee becomes unable to devote his required time to the business of the Company because of illness or incapacity during the term of this Agreement, then during such period of illness or incapacity, his salary shall be % of his monthly Basic Salary for the first three (3) months. Compensation for subsequent periods of disability may be provided for under the terms of a disability income insurance program which may be carried on the Employee by the Company.
(B) Successive periods of disability, illness or incapacity will be considered separate periods unless the later period of disability, illness or incapacity is due to the same or a related cause and commences less than three (3) months from the ending of the previous period of disability.
(C) If the Employee shall not have resumed his duties within the three (3) month period specified in paragraph (A) above, the Employee’s employment under this Agreement and the Company’s financial obligations hereunder may be terminated as of the end of said three (3) month period and the Company shall purchase Employee’s stock options and vested stock bonuses as provided for in paragraph 6. Any purchase of Employee’s stock in the event of disability shall be on terms which pay unto Employee a monthly amount of not less than his then current monthly salary until the total purchase price is paid.
(D) Any dispute regarding the existence, extent or continuance of the disability, illness or incapacity shall be resolved by the determination of a majority of three medical doctors who are not employees of the Company, one of whom shall be selected by the Company, one of whom shall be selected by the Employee and a third whom shall be selected by the other two doctors.
14. Death as Termination of Employment. (A) Any sums due the Employee under this Agreement shall be paid to the Employee’s beneficiary at the next normal pay period after the date of Employee’s death.
(B) Any sums due the Employee under the Company’s Profit Sharing Plan shall be paid to the Employee’s beneficiary as provided by the terms of the Plan.
(C) After receiving the payments provided for in this Section, the Employee’s surviving spouse and/or his estate shall have no further rights under this Agreement.
15. Insurance. The Company is authorized to purchase, own and be the beneficiary of a policy of insurance of the life of the Employee in such amounts as the Company may elect to compensate the Company for the loss of the Employee as “Key Man” and/or fund the stock repurchase provision hereof. If requested by the Company, the Employee shall submit to such examinations as may be prescribed by the Company’s insurer in furtherance of such application for insurance.
16. Expenses and Facilities. The Employee shall be furnished with such facilities and services as are adequate for the performance of his duties. In addition, the Company shall reimburse the Employee for all authorized expenses incurred by him in furtherance of the Company’s business upon the Employee’s presentation of detailed vouchers evidencing a valid business purpose for such expenses. Company shall also provide Employee with a major credit card for use in payment of said expenses.
17. Benefit Plans and Auto. (A) The Employee shall be entitled to participate in any fringe benefit plans or programs maintained by the Company for the benefit of its employees.
(B) The Employee will have use of a company automobile in order to carry out his duties hereunder. Employee will keep a record of business related expenses incurred in operating the automobile and upon submission of such records, Company will reimburse the Employee for those expenses.
- Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of .
19. Waiver. The waiver by either party hereto of any breach of any provision of this Agreement shall not operate or be construed as a waiver or any subsequent breach by either party hereto.
20. Binding Effect and Assignment. This Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns and the Employee and his heirs and legal representatives. This Agreement is personal as to Employee and may not be assigned by Employee without first obtaining the written consent of the Company. This Agreement may be assigned by the Company without the prior consent of Employee.
21. Severability. The unenforceability of any provision or provisions of this Agreement shall not affect the enforceability of any other provision of this Agreement.
22. Entire Understanding. This Agreement contains the entire understanding of the parties relating to the employment of the Employee by the Company. It may be changed only by an agreement in writing signed by the party or parties against whom enforcement of any waiver, change, modification, extension or discharge is sought.
23. Amendment and Default. This Agreement may be amended in whole or part at any time and from time to time but only in writing in a form substantially similar to the form hereof. In the event of default or breach of any of the terms and conditions hereof the defaulting party agrees to pay the reasonable attorneys fees incurred by the other party in enforcing the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals the day and year first above written.
PERSONALLY appeared before me, the undersigned authority in and for the county and state aforesaid, the within named , who acknowledged to me that he is President of , and who acknowledged that he signed and delivered the above and foregoing instrument on the date and year therein mentioned, for and on behalf of said corporation after first having been duly authorized so to do.
GIVEN under my hand and official seal, this the __ day of ,
MY COMMISSION EXPIRES:
STATE OF ___
COUNTY OF ___
PERSONALLY came and appeared before me, the undersigned in and for the jurisdiction aforesaid, the within named in the above and foregoing instrument of writing, who acknowledged to me that he signed and delivered the above foregoing instrument of writing on the day and in the year and for the purposes therein mentioned.
GIVEN under my hand and official seal of office on this the ___ day of ,
20 ___ .
MY COMMISSION EXPIRES:
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