DIY Legal Forms

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Basic Employment Agreement

1. Introduction. Agreement made [date] between [name], with principal offices at [address] (Company), and [name], residing at [address] (Employee).

2. Employment. Company employs Employee, and Employee accepts the employment, subject to and in accordance with the terms and conditions of this Agreement.

3. Term of Employment. Employee's employment will begin on [date], and will end on [date]. Company has the right to extend the employment for an additional [number] years on written notice to Employee given not less than [number] months prior to [date].

4. Compensation. Company will pay Employee a salary of ........ dollars ($........) per year, payable in equal monthly installments at the end of each month. Employee's compensation shall be periodically increased in accordance with the following schedule:

[schedule of pay raises]

5. Employee's Title and Duties. Company hires Employee as [title], and his duties are to [list]. Employee's duties may be increased or diminished at Company's direction. If Employee is elected or appointed a director or an officer of Company during Employee's employment, Employee will serve in such office without further compensation. Company is not required by this Agreement to cause Employee's election or appointment as a director or officer.

[Alterative Paragraph]

5. Employee's Title and Duties. Company hires Employee as [title], and Employee's duties are to [list], together with any duties that may be incidental to Employee's principal duties. Employee will be elected or appointed by Company's Board of Directors to the office of [title] of Company within [number] months after Employee's employment begins. Employee will be retained in that office during the term of Employee's employment. Employee may terminate this Agreement upon [number] days' notice to Company if Employee (a) is not elected or appointed to the office of [title] within the time specified in this Paragraph or (b) is elected or appointed to the office of [title] in accordance with the terms of this Paragraph but is subsequently removed from that office or is not reelected or reappointed at appropriate times.

6. Employee to Devote Full Time to Company's Business. Employee will devote Employee's entire time, attention, and energies to the business of Company and, during the employment period, will not engage in any other business activity, regardless of whether such activity is pursued for profit, gain, or other pecuniary advantage. However, Employee is not prohibited from making personal investments in any other businesses, as long as those investments do not require Employee to participate in the operation of the companies in which Employee invests.

7. Office Space and Secretary. Company will furnish Employee with a private office, secretary, and any other facilities and services that are adequate for the performance of Employee's duties and suitable to Employee's position.

8. Reimbursement of Expenses. Employee may incur reasonable expenses for promoting Company's business, including expenses for entertainment, travel, and similar items. Company will reimburse Employee for all business expenses after Employee presents an itemized account of expenditures, together with receipts, vouchers, and other supporting material, subject to Company's approval.

9. Vacations. Employee is entitled to an annual vacation of [number] weeks at full pay. Employee will take his annual vacation over a consecutive period during the months of [names] or [names]. If Employee does not use all his vacation time in any one year, the unused portion cannot be carried into subsequent years.

10. Employee's Short-Term Illness or Incapacity. Employee is entitled to absences because of illness or incapacity of no more than a total of [number] days in each year. If Employee cannot perform his duties because of illness or incapacity for more than a total of [number] days in any year, the compensation otherwise due Employee shall be reduced by ........ percent (........%), commencing with the beginning of the [number] day (on a cumulative basis) of such absence. Employee's full compensation will be reinstated when Employee returns to work and is able to discharge his duties.

11. Employee's Long-Term Illness or Incapacity. If Employee is absent from work because of illness or incapacity for a cumulative period of more than [number] months in any year, Company may terminate this Agreement upon [number] months' [or, days'] notice to Employee.

12. Termination of Agreement Upon Sale or Termination of Company's Business. Despite anything to the contrary contained in this Agreement, Company may terminate Employee's employment upon [number] weeks' notice to Employee if any of the following events occur:

a. Sale of Company's Assets. The sale of substantially all of Company's assets to a single purchaser or group of associated purchasers;

b. Sale of Company's Shares. The sale, exchange, or other disposition, in one transaction of ........ percent (........%) of Company's outstanding corporate shares;

c. Termination of Company's Business. Company's bona fide decision to terminate its business and liquidate its assets; or

d. Merger on Consolidation. The merger or consolidation of Company in a transaction in which Company's shareholders receive less than ........ percent (........%) of the outstanding voting shares of the new or continuing corporation.

[Alternative Paragraph]

12. Termination of Employment by Either Party on Notice. Without cause, Company may terminate this Agreement at any time upon [number] weeks' written notice to Employee. If Company requests, Employee will continue to perform Employee's duties and be paid the salary provided herein up to the date of termination. In addition, Company will pay Employee on the date of termination a severance allowance of ........ dollars ($........), less all payroll taxes required to be withheld. Without cause, Employee may terminate the employment upon [number] weeks' written notice to Company. Employee will be required to perform ail duties and will be paid the salary provided herein up to the date of termination but will not receive a severance allowance.

13. Employee's Death. If Employee dies during the term of the employment, Company will pay to Employee's estate any compensation due up to the end of the month in which Employee dies. In addition, Company will pay ........ dollars ($........), within [number] days of his death, to Employee's spouse, as a death benefit. If Employee's spouse is dead, this amount will be paid to Employee's children in equal shares. If Employee leaves no surviving children, this sum will be paid to Employee's estate.

14. Employee's Covenant Not to Compete With Company Upon Termination of Employment. For [number] years after the termination of Employee's employment for any reason, Employee will not, within a [number]-mile radius of Company's present place of business, own, manage, operate, or control any business similar to that conducted by Company.

15. Arbitration of Controversies. Any claim or controversy that arises out of or relates to this Agreement, or the breach of it, will be settled by arbitration in [city], in accordance with the rules then obtaining of the American Arbitration Association. Judgment upon the award rendered may be entered in any court possessing jurisdiction of arbitration awards.

16. Waiver of Breach of Agreement. If either party waives a breach of this Agreement by the other party, that waiver will not operate or be construed as a waiver of later similar breaches.

17. Company May Assign Agreement. Company's rights and obligations under this Agreement will inure to the benefit of and be binding upon Company's successors and assignees,

18. Entire Agreement. This Instrument is the entire agreement of Company and Employee. Oral changes will have no effect. It may be altered only by a written agreement signed by the party against whom enforcement of any waiver, change, modification, extension, or discharge is sought.

IN WITNESS WHEREOF, the parties have signed this Agreement on [date].

[name]

By: [signature]

Company

[signature]

Employee