DIY Legal Forms

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Buy-Sell Agreement on Termination of Employment

1. Parties. [name], of [address] (Executive), is presently [position] of the [name of corporation] (Corporation) under a contract of employment made [date]. Executive is also a shareholder of Corporation. The undersigned are all of the remaining shareholders of Corporation.

2. Agreement to Buy. If Executive's employment is terminated at any time, whether with or without cause and whether voluntary or involuntary, then Corporation will purchase all of the stock of Corporation owned by Executive at the time of such termination, in accordance with this Agreement.

3. Price. The purchase price shall be the fair market value of the stock as of the date of termination of Executive's employment. This value shall be fixed by agreement between Executive and the undersigned. However, if the parties cannot come to an agreement within [number] days of the termination date of Executive's employment, then the fair market value shall be fixed by the certified public accountant then employed by Corporation.

[Alternative Paragraph]

3. Price. The purchase price shall be the fair market value of the stock as of the date of termination of Executive's employment. This value shall be fixed by agreement between Executive and the undersigned. However, if the parties cannot come to an agreement within [number] days of the termination of executive's employment, then the fair market value shall be fixed by a panel of three arbitrators. The panel shall consist of one arbitrator chosen by Executive, one arbitrator chosen by the undersigned, and a third arbitrator chosen by the first two.

4. Manner of Payment. The purchase price of executive's stock shall be paid as follows:

a. ........ percent (........%) of the purchase price within [number] days of the date of termination of Executive's employment; and

b. The balance to be paid over [number] years in equal semiannual installments, plus interest at the rate of ........ percent (........%) per year on the unpaid balance. The first such payment shall be made [number] months after the date of termination of executive's employment. If there is a default in payment of any such installment, including the payment of any interest, then, at the option of Executive, the remaining balance of the purchase price, plus all earned and unpaid interest, shall immediately become due and payable.

5. Delivery of Shares. Upon receipt of the first payment specified in Paragraph 4(a), Executive shall deliver all of Executive's stock, properly indorsed, to Corporation.

6. Notice on Stock Certificate. The following legend shall be placed on Corporation's certificates of stock held by Executive immediately following the execution of this Agreement:

"TAKE NOTICE that the sale, assignment, transfer, or pledge of the shares represented by this certificate is subject to the restrictions contained in an agreement made [date] between [name] and Corporation, a copy of which is on file at Corporation's offices."

7. Binding Nature. This Agreement is binding on Executive, Corporation, and their heirs, legal representatives, and assigns.

[dated]

[name of Corporation]

By: [signature]

[title]

Agreed and Accepted:

[signature]

Executive

*** If Required By State Law ***

This Section for Notary:

ACKNOWLEDGMENT

State of _________

County of ________ [COUNTY]

On [DATE] before me, [NAME OF NOTARY], notary, personally appeared [NAME OF PERSON(S) INVOLVED], personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

Signature ________
Notary

My commission expires: _____

(Seal)