Employment Agreement Template

Employment Agreement

This Employment Agreement (the "Agreement") is made and entered into as of [Date], by and between [Employee Name] (the "Executive") and [Company Name], a [State of Incorporation or Organization] [Type of Entity] (the "Company").

1. Employment   

The Company hereby employs Executive, and Executive agrees to serve, as [Job Title] during the Term of Employment (as defined in Section 2 below).  In such capacity, Executive shall be responsible for the duties set forth in Exhibit A, which may be amended from time to time, and performing those duties and given such authority as is consistent and commensurate with Executive’s position, as may from time to time be reasonably directed by [the Board of Directors of [Company Name]] (to whom Executive shall directly report), or such other executive as Company may deem in its sole discretion.  

2. Term of Employment  

The Term of Employment under this Agreement shall be for the period commencing on [Start Date] and ending on [End Date] (the "Term of Employment")[, provided however, that this Agreement shall be automatically renewed thereafter for successive twelve (12) month terms (each a "Renewal Term") if neither party gives the other party at least thirty (30) days prior written notice of its intention to terminate the Agreement before the end of the original Term of Employment or any Renewal Term (the "Notice Period")], unless earlier terminated pursuant to the provisions of Section 9 of the Agreement. 

3.  Place of Performance. 

The principal place of Executive's employment shall be [Company's principal executive office] currently located in [Office Location][; provided that, the Executive may be required to travel on Company business during the Employment Term].

4. Compensation and Benefits

(a) Base Salary.  As full compensation for the services rendered under this Agreement during the Term of Employment, Company shall pay Executive an annual base salary of [____ dollars ($__)] ("Base Salary").  The Base Salary shall be payable in accordance with standard Company payroll practices for salaried personnel, subject to applicable withholdings.

(b) Benefits.  During the Term of Employment, Executive will receive the benefits that Company shall provide its [senior executives/employees] generally, including [employee health insurance benefits, disability, 401(k), and participation in bonus, stock option, and other incentive compensation programs], if any, in effect at any particular time.  Company reserves the right to amend or cancel any employee benefit plans at any time in its sole discretion, subject to the terms of the applicable plan and applicable law.  

(c) Vacation/Time Off.  Executive will also be provided with [Vacation Number (__)] [weeks][days] of [vacation][paid time off] per calendar year during the Term of Employment, pro-rated for partial years, in accordance with Company vacation/time off policies in effect from time to time.  [All vacation must be used by December 31 of each year of the Term of Employment at which time any unused vacation will expire and Executive will no longer be entitled to such unused vacation time.  No compensation shall be payable in respect of any unused vacation days.]  

[(d) Stock Options.  Company intends to grant to Executive options (the "Options") to purchase [Number] shares of the common stock of [Company Name] pursuant to the [name of Company Stock Option Plan] (the "Plan"), subject to the terms and conditions of the Plan and a nonqualified stock option agreement to be entered into between Executive and Company (the "Stock Option Agreement").  The exercise price for the Options shall be the fair market value of Company Common Stock on the date of the grant as determined by the Board of Directors or the Compensation Committee of Company.  Any additional Options granted to Executive shall be subject to the approval of the Board and/or the Compensation Committee.]  

[(e) Management Bonus.  For [year agreement is signed], Executive will be eligible for a management bonus of up to [Bonus Amount] based on [Bonus Requirements].  Thereafter, Executive will be eligible for a management bonus as determined by [the Board of Directors].  Bonuses are earned and paid as follows: [Bonus Process and Procedure].]

[5.  Non-Solicitation/Non-Compete

(a) Non-Solicitation.  Executive shall not, at any time during the term of this Agreement, and for [1] year(s) after the termination of Executive’s employment with Company, for any reason, directly or indirectly, (i) recruit any employee of Company or its affiliates or solicit or induce, or attempt to solicit or induce, any employee of Company or its affiliates to terminate his or her employment with, or otherwise cease his or her relationship with Company or its affiliates, or (ii) solicit, divert, or take away, or attempt to solicit, divert, or to take away, the business of any of the clients, customers, or accounts, or prospective clients, customers, or accounts, of Company or its affiliates that were contacted, solicited or served by Company or its affiliates while Executive was employed or retained by, or affiliated with Company.

(b) Non-Compete.  Executive shall not, at any time during the [Non-compete Period], directly or indirectly, own, manage, operate, join, control, or participate in the ownership, management, operation, or control of, or be employed or retained by, render services to, provide financing or advice to, or otherwise be connected in any manner with any business that then competes with any business of Company or its affiliates. ] 

6.  Confidentiality  

(a) Nondisclosure of Confidential information.  Executive acknowledges that all information concerning Company’s business, financial condition, operations, strategies, and prospects, including, but not limited to, customer, supplier, and distributor lists and information, trade secrets, plans, manufacturing techniques, sales, marketing and expansion strategies, products, services, production, development, technology, and processes and all related technical information, procurement, and sales activities and procedures, promotion, and pricing techniques and credit and financial data relating to Company are valuable, special and unique assets of Company (collectively, the "Confidential Information"); provided, however, that Confidential Information shall not include any information that (i) is or shall become generally known to the public (other than as a result of a breach of this Agreement by Executive); (ii) shall become available to a disclosing party from an unaffiliated third party; provided, that such party shall not be under any obligation of confidentiality to Company; or (iii) is required by law or court order to be disclosed; provided, that Executive shall give Company prompt written notice of any such legal or judicial process requiring disclosure of Confidential Information and shall reasonably cooperate with Company, at Company’s expense, in any lawful action which Company desires to take to limit the disclosure required by such legal or judicial process, and shall permit Company to attempt, by appropriate legal means, to limit and/or delay such disclosure.  

(b) Ownership of Confidential Information.Executive acknowledges and agrees that all Confidential Information is the exclusive property of Company.  Executive shall not disclose, directly or indirectly, Confidential Information to any person or, directly or indirectly, make use of or exploit for Executive’s own purposes or the benefit of any other person (except as an officer, director, or employee of Company or its affiliates) any Confidential Information.

7.  Proprietary Rights

(a) IP Ownership.  Executive acknowledges and agrees that all inventions, ideas, sketches, designs, prototypes, developments, improvements, or other intellectual property made or created by Executive, either alone or in conjunction with others, at any time or at any place during the Term of Employment by Company, whether or not reduced to writing or practice during such Term of Employment, which relate to the business in which Company is engaged, shall be the exclusive property of Company.  Executive shall promptly disclose all inventions, developments, and improvements to Company and, at the request and expense of Company, shall assign all of Executive’s rights to Company.  Executive shall sign all instruments reasonably necessary for the filing and prosecution of any applications for or extension or renewals of any intellectual property right by Company.

(b) Copyrights.  All copyrightable work by Executive relating to Company’s business during the Term of Employment is intended to be "work made for hire" as defined in Section 101 of the Copyright Act of 1976, as amended, and shall be the property of Company.  If the copyright to any copyrightable work is not the property of Company by operation of law, Executive will, without further consideration, assign to Company all right, title, and interest in such copyrightable work and will assist Company in every reasonable way, at Company’s expense, to secure, maintain, and defend for Company’s benefit copyrights and any extensions and renewals thereof in any and all countries, such work to be and to remain the property of Company whether copyrighted or not.

8.  Enforceability and Breach

(a) Enforceability.  Executive acknowledges and agrees that the limitations placed on Executive by this Agreement are reasonable and are required for the protection of Company.  Executive agrees that if any such limitation is determined in arbitration or by a court of competent jurisdiction to be unenforceable, Executive agrees and submits to the reduction of such limitation as the court or arbitrator(s) deem reasonable.  The limitations placed on Executive by the Agreement are of the essence of this Agreement and they shall be construed and enforced independently.  Executive acknowledges and agrees that the provisions set forth in section 5, 6, 7, and 8, and any other provision which, by its terms, is intended to survive, shall survive the termination or cancellation of this Agreement.

(b)  Breach. Executive acknowledges and agree that: (i) Company will be irreparably injured in the event of a breach by Executive of any of Executive’s obligations under this Agreement; (ii) monetary damages will not be an adequate remedy for any such breach; (iii) Company will be entitled to seek injunctive relief, in addition to any other remedy which it may have, in the event of any such breach; and (iv) Company shall be entitled, without the necessity of proving actual damages, to seek injunctive relief for any breach of this Agreement.  

9. Termination

(a) General.  The Term of Employment shall be for the period provided in Section 2, unless employment and this Agreement is terminated earlier in accordance with the provisions of this section.  

(b) Death and Disability.  Executive’s employment under this Agreement shall terminate upon (i) Executive’s death, or (ii) in the event Executive becomes disabled within the meaning of any disability policy then in force at Company at the time benefits begin to be paid thereunder, or absent such a policy, if Company gives Executive thirty (30) calendar days advance notice of termination because of Executive’s physical or mental incapacity on a permanent basis ("Disability").  In the absence of such a policy, Executive shall be deemed to have a Disability if Executive is unable, by reason of any physical or mental incapacity, for a period of ninety (90) substantially consecutive calendar days or shorter periods aggregating one hundred twenty (120) calendar days or more during any twelve (12) month period, to perform Executive’s duties pursuant to this Agreement in a reasonably satisfactory manner.  In the event of any disagreement between Executive and Company as to whether Executive has a Disability (if the Disability is to be determined by Company, as opposed to the disability carrier), the question of such Disability shall be submitted for decision to an impartial and reputable physician (the "Deciding Doctor") chosen by mutual agreement of Company and Executive or, failing such agreement, the Deciding Doctor shall be jointly chosen by two physicians from [City, State] (one of whom shall be selected by Company and the other by Executive).  The decision of the Deciding Doctor regarding whether Executive has a Disability shall be final and binding on Company and Executive.  Executive shall submit to any medical examinations reasonably necessary to enable the Deciding Doctor to make a decision regarding whether Executive has a Disability.

(c) Termination by Company for "Cause". The Company may terminate Executive’s employment at any time during the Term of Employment for "Cause"; provided, however, that Company shall provide Executive with written notice specifying in reasonable detail the basis for the termination, and up to ten (10) days after receipt of such notice in which to cure such "Cause," if it is reasonably capable of being cured.  For the purposes of this Agreement, "Cause" shall mean: (i) knowingly or recklessly causing material injury to Company’s business or reputation; (ii) willful misconduct in the performance of, or a willful failure to perform in any material respect, Executive’s duties pursuant to this Agreement; (iii) commission of dishonest or fraudulent conduct whether or not in connection with Executive’s employment; (iv) unlawful behavior involving moral turpitude whether or not in connection with Executive’s employment; and/or (v) a material breach or material violation of this Agreement or company policies. 

(d) Termination by Executive for Good Reason.  Executive may terminate Executive’s employment at any time during the Term of Employment for "Good Reason" by providing Company with prior written notice specifying the reasons for the termination and following Company’s failure to cure the within ten (10) calendar days after its receipt of such notice.  Executive’s employment shall terminate at the end of such ten (10) calendar day period if Company has failed to cure the reason for Executive’s termination within such ten (10) calendar day period.  For purposes of this Agreement, "Good Reason" shall mean the occurrence of any of the following: (i) Company requiring Executive to engage in any illegal act; (ii) a Company-required, involuntary relocation of Executive’s place of residence, or a relocation of the office of Company that significantly increases Executive’s travel to work requirements (which in effect would amount to an involuntary relocation); (iii) the assignment to Executive of duties substantially inconsistent with Executive’s status as a senior executive officer of Company, or a substantial alteration in the nature or status of Executive’s responsibilities from those as of the date hereof or as the same may be reasonably changed from time to time; or (iv) a reduction by Company in Executive’s total cash compensation (not including incentive compensation) in effect on the date of the Agreement.  

(e) Certain Obligations of Company Following Termination of Executive’s Employment.  Following the termination of Executive’s employment under the circumstances described below, Company shall pay to Executive in accordance with its regular payroll practices the following compensation and provide the following benefits in full satisfaction and final settlement of any and all claims and demands that Executive now have or hereafter may have against Company (and its officers, directors, shareholders, and affiliates) under this Agreement (and provided Executive executes an appropriate release of claims against Company in a form provided by Company):

(i) In the event that Executive’s employment hereunder is terminated by Company other than for Cause (excluding expiration of the Term of Employment), or by Executive for Good Reason (excluding expiration of the Term of Employment), the following will occur:

(A) Company will pay Executive all accrued and unpaid compensation and benefits up to and including the date of termination; and 

(B)

(ii) In the event that Executive’s employment is terminated by Company for Cause, or by Executive voluntarily other than for Good Reason, all compensation and rights to benefits from Company pursuant to this Agreement shall cease on the date of such termination; provided, that Executive shall be entitled to all compensation and benefits as may have already accrued as of such date or as expressly provided in plans in which Executive was participating at such date or by law.

[(iii) In the event Executive’s employment is terminated by Company by reason of Executive’s death or Disability, all compensation and rights to benefits from Company pursuant to this Agreement shall cease on the date of such death or termination, as the case may be; provided that, Executive shall be entitled to all compensation and benefits as may have already accrued as of such date or as expressly provided in plans in which Executive participated at such date or by law.  [Subject to the terms of the applicable stock option agreement, [Exercise Terms].]  Any payments on disability will be provided in a manner which is consistent with federal and state law.

(f) Executive’s Duties on Termination.  Upon termination of Executive’s employment with Company for any reason, including upon expiration of the Term of Employment, those duties and obligations set forth in Sections 4, 5, 6, and 7, and all other provisions which, by their terms, are intended to survive, shall survive and continue and bind Executive in accordance with the applicable terms.

(g) Notice of Termination.  In the case of any voluntary termination of employment by Executive, Executive shall provide Company with ninety (90) days prior written notice of Executive’s intention to terminate the Agreement.

[(h) Resignation of All Other Positions.  Upon termination of the Executive’s employment for any reason, Executive shall be deemed to have resigned, effective as of the termination date, from all positions that the Executive holds as an officer or member of the board of directors (or a committee thereof) of the Company or any of its affiliates.]

[(i) Post Termination Cooperation.  ]

10. Miscellaneous

(a) Governing Law.  The validity, interpretation, construction, and performance of this Agreement shall be governed by the laws of the State of [State] applicable to contracts entered into and to be performed wholly within said State.  

(b)  Disputes.  Regarding any dispute or disagreement that arises under this Agreement, Executive hereby consents to the jurisdiction of the Federal and State courts located in [City, State] and waives any objections to such courts based on venue, including but not limited to, forum non conveniens, in connection with any claim or dispute arising under this Agreement. 

(c) Assignment.  This Agreement is a personal contract, and Executive’s rights, obligations and interests under the Agreement may not be sold, transferred, or assigned.  The Company may freely assign this Agreement and any of its rights, obligations, and interests under the Agreement.  This Agreement shall be binding upon and inure to the benefit of each party’s successors and permitted assigns.

(d) Headings. Section and paragraph headings contained in the Agreement are for reference only and shall not be considered a part of this Agreement.

(e)  Notices. Any notices or other communications required or permitted under this Agreement shall be in writing and shall be deemed given (a) on the same day if given by hand, (b) on the fifth business day after mailing if given by registered or certified mail, return receipt requested, postage prepaid, (c) on the next business day after it was deposited with the courier service if sent by reputable overnight courier for next business day delivery, addressed to Executive at Executive’s home address, or to Company at [Company address].

(f) Arbitration. 

(g) Severability.  If any term or provision hereof is determined to be invalid or unenforceable, (a) the remaining terms and provisions hereof shall be unimpaired, (b) any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction, and (c) the invalid or unenforceable term or provision shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision.

(h) Counterparts.  This Agreement may be executed in one or more counterparts each of which shall be deemed to be an original and all of which taken together shall constitute one and the same agreement (and all signatures need not appear on any one counterpart), and this Agreement shall become effective when one or more counterparts has been signed by each of the parties and delivered to the other party.

(i) Waiver.  The failure of either party to at any time enforce any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Agreement or any provision of the Agreement, or the right of either of the parties to thereafter enforce the provisions of this Agreement. 

(j)  Entire Agreement.  This Agreement contains the entire agreement between the parties with respect to Executive’s employment by Company and the subject matter of this Agreement. This Agreement may only be changed or amended by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, or discharge is sought.

AGREED:

EXHIBIT A

Duties and Responsibilities