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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.
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
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
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
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
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.
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
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
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
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