A SAMPLE NON-DISCLOSURE / NON-COMPETE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), effective as of _______________, is entered into by and between ____________________ (the "Employee") and______________, a ______________(state) corporation (the "Company") (collectively referred to herein as the "Parties").
The Company desires to establish its right to the employment and/or continued services of Employee in the capacity described below and on the terms, conditions, and rights of termination hereinafter set forth, and Employee is willing to accept such employment on such terms and conditions.
In consideration of the mutual agreements set forth, Employee and the Company agree as follows:
1. Employment as the Executive Vice President of the Company. The Company does hereby employ Employee as Executive Vice President of the Company, and Employee accepts and agrees to such hiring. Employee's duties during the Employment Period shall be such executive and/or managerial duties as the Company shall from time to time prescribe. Employee will devote his full time, energy and skill to the performance of his duties for the Company and for the benefit of the Company, reasonable vacations authorized by the Company's President or Board of Directors and reasonable absences because of illness excepted. Furthermore, Employee will exercise due diligence and care in the performance of his duties to the Company under this Agreement.
2. Employment Period. Employee shall be employed by the Company for the duties set forth in Section 1 for a one (1) year term commencing as of __________________ and ending on __________________, unless Employee is terminated earlier pursuant to Sections 7 or 8 of the Agreement or, alternatively, voluntarily elects to terminate his employment prior to such date pursuant to Section 9.
(a) Base Salary and Benefits. The Company shall pay Employee and Employee agrees to accept from the Company in full payment for his services and promises to the Company (specifically including Non-Solicitation restrictions in Section 11 and Proprietary Information restrictions as set forth in Section 12) a base salary at the rate and payment and benefits set forth in Appendix A (attached hereto).
(b) Incentive Compensation Employee also may receive quarterly incentive compensation based on the Company's exceeding budget goals for the fiscal year 1996-1997 as follows:
Incentive compensation payments shall be made on the dates such payments are regularly made by the Company, not to exceed thirty (30) days from the end of the quarter in which they accrued. If the Employee's employment ends for any reason during any quarter, Employee shall only be entitled to receive incentive compensation accrued during the prior quarter.
(c) Stock Options. After fifteen (15) months of employment, Employee shall have the option to purchase shares of stock of the Employer as described in this Section 3. The number of shares that the Employee shall have the option to purchase shall be based on performance goals to be agreed upon between the parties. The type of stock Employee shall have the option to purchase, voting or non-voting, preferred or equity, and the purchase price of such option shares shall be set within the sole discretion of the Employer. The Employee shall have additional stock options after twenty-four (24) and thirty-six (36) months of employment as determined by the parties when setting the performance goals described herein. Nothing within this section shall be construed to alter the Employment Period in Section 2. Any stock purchased pursuant to this Section 3 shall be repurchased by Employer at a price determined by an independent appraiser. If the stock repurchase occurs within three (3) years of the date of the transfer, then Employer shall be entitled to repurchase the stock at the same price at which Employee purchased it.
4. Fringe Benefits. Employee is entitled to the benefits provided by the Company as set forth in Appendix A, attached hereto and incorporated herein by this reference. Employee shall be entitled to participate in any benefit programs adopted from time to time by the Company for the benefit of its employees to the extent provided in such programs, and Employee shall receive such other fringe benefits as may be granted to him from time to time by the Company's Board of Directors.
5. Vacation. Employee is entitled to vacation, the terms of which are set forth in Appendix A, attached hereto and incorporated herein by this reference. Such vacation is to be scheduled and taken in accordance with the Company's standard vacation policies.
6. Business Expenses. The Company will reimburse Employee for any and all necessary, customary, and usual expenses which are properly receipted according to Company policies and are incurred by Employee on behalf of the Company.
7. Death or Disability.
(a) Termination of Employment. If Employee becomes physically or mentally disabled while employed by the Company and as a result thereof becomes unable to continue the proper performance of his duties hereunder, or if Employee dies while employed by the Company, Employee's employment shall automatically cease and terminate. The Company's obligation to pay Employee's base salary pursuant to Section 3(a) shall cease as of the date of Employee's death or, in the case of mental or physical disability, Employee's last day of active employment. The Company's obligation to pay incentive compensation to Employee or Employee's estate in the event of Employee's death, shall be determined according to the Company's Incentive Compensation Plan.
(b) Definition of Disability. Employee shall be considered to have a "disability" for purposes of this Section 7, if, in the judgment of the Board of Directors and a licensed physician selected by the Board of Directors, Employee is unable to perform his customary duties under this Agreement because of a physical or mental impairment with reasonable accommodation and without posing an undue hardship upon the business.
8. Termination by the Company.
(a) Termination for Cause. The Company may terminate Employee at any time for "cause." The term "cause" as used herein shall mean:
(1) the failure of Employee to discharge or perform his duties and obligations under this Agreement with due diligence and care;
(2) the refusal of Employee to implement or adhere to policies or directives of the Board of Directors of the Company;
(3) conduct by the Employee of a criminal nature which may have an adverse impact on the Company's reputation and standing in the community;
(4) conduct which is in violation of Employee's common law duty of loyalty to the Company;
(5) fraudulent conduct by the Employee in connection with the business affairs of the Company, regardless of whether said conduct is designed to defraud the Company or others; or
(6 ) conduct by the Employee which is in violation of any provision of this Agreement.
The existence of cause shall be conclusively determined by the Chief Executive Officer of the Company or his or her duly appointed agent. If Employee's termination is for cause, the Company's obligations to pay Employee's base salary shall terminate as of the last day of Employee's active employment with the Company. Employee shall not be entitled to receive any incentive compensation for the fiscal year in which his employment is terminated if his employment is terminated for cause.
(b) Termination Due to RIF or Reorganization. In the event the Company experiences significant economic losses or a decline in revenues which necessitate the termination of Employee's services, the Company may terminate Employee without cause pursuant to a general reduction in force or reorganization of the Company. If Employee is terminated without cause pursuant to a general reduction in force or reorganization, the Company shall pay to Employee severance payments equal to 1\12 of Employee's annual base salary calculated on the annual base salary in effect for Employee at the time of his termination, less legal and authorized deductions. Severance Payments shall be paid to Employee under this subparagraph on the Company's regular pay dates.
9. Termination by Employee. Employee shall have the right to terminate this Agreement at any time. Employee agrees to provide the Company with fourteen (14) days prior written notice of any such termination. The Company's obligation to pay Employee's base salary shall cease as of Employee's last day of work.
10. Effect of Termination of Agreement. Upon the proper termination of this Agreement by the Company or Employee, this Agreement shall thereupon be and become void and of no further force or effect, except that the Stock Option provisions set forth in Section 3(c), the Non-Solicitation provisions set forth in Section 11, and the Proprietary Information provisions of Section 12 shall survive any said termination and shall continue to bind Employee for the period of time stated therein. Furthermore, the Arbitration provisions of Section 18 shall continue to govern any disputes arising hereunder. Any payments due pursuant to the terms of this Agreement for services rendered prior to the termination shall be made as provided in this Agreement.
11. Non-Solicitation Agreement. For a period of one (1) year after termination or cessation of his employment with the Company for any reason whatsoever, Employee shall not, on his own behalf or on behalf of any other person, partnership, association, corporation or other entity, hire or solicit or in any manner attempt to influence or induce any employee of the Company or its affiliates to leave the employment of the Company or its affiliates, nor shall he use or disclose to any person, partnership, association, corporation or other entity any information obtained while an employee of the Company concerning the names and addresses of the Company's employees.
12. Proprietary Information.
(a) Return of Proprietary Information. Upon termination of this Agreement, for any reason, Employee shall immediately turn over to the Company any "proprietary information," as defined below. Employee shall have no right to retain any copies of any material qualifying as "proprietary information" for any reason whatsoever after termination of this employment hereunder without the express written consent of the Company.
(b) Non-Disclosure. It is understood and agreed that, in the course of his employment hereunder and through his activities for and on behalf of the Company, Employee will receive, deal with and have access to the Company's "proprietary information" and the Employee holds the Company's "proprietary information" in trust and confidence for the Company. Employee agrees that he shall not, during the term of this Agreement or thereafter, in any fashion, form or manner, directly or indirectly, retain, make copies of, divulge, disclose or communicate to any person, in any manner whatsoever, except when necessary or required in the normal course of Employee's employment hereunder and for the benefit of the Company or with the express written consent of the Company, any of the Company's "proprietary information" or any information of any kind, nature or description whatsoever concerning any matters affecting or relating to the Company's business.
(c) Proprietary Information Defined. For purposes of this Agreement, "proprietary information" means and includes the following: the identity of clients or customers or potential clients or customers of the Company; any written, typed or printed lists or other materials identifying the clients or customers of the Company; any financial or other information supplied by clients or customers of the Company; any and all data or information involving the techniques, programs, methods or contacts employed by the Company in the conduct of its business; any lists, documents, manuals, records, forms, or other material used by the Company in the conduct of its business; any descriptive materials describing the methods and procedures employed by the Company in the conduct of its business; and any other secret or confidential information concerning the Company's business or affairs. The terms "list" and "document" (or their equivalent) as used in this Section 12 are not limited to a physical writing or compilation but also include any and all information whatsoever regarding the subject matter of the "list" or "document," whether or not such compilation has been reduced to writing.
13. Termination of Prior Agreements. This Agreement terminates and supersedes any and all prior agreements and understandings between the Parties with respect to employment or with respect to the compensation of Employee by the Company.
14. Assignment. This Agreement is personal in its nature and neither of the Parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder; provided that, in the event of the merger, consolidation or transfer or sale of all or substantially all of the assets of the Company with or to any other individual or entity, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge and perform all the promises, covenants, duties and obligations of the Company hereunder.
15. Governing Law. This Agreement and the legal relations thus created between the Parties hereto shall be governed by and construed under and in accordance with the laws of the State of Texas.
16. Entire Agreement. This Agreement embodies the entire agreement of the Parties respecting the matters within its scope and may be modified only in writing.
17. Waiver. Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times.
18. Arbitration. All claims, disputes and other matters in question between the Parties arising out of the employment relationship, the Proprietary Information provisions of Section 12 of this Agreement, shall be decided by arbitration according to the rules of the American Arbitration Association (AAA), unless the Parties mutually agree otherwise. An Arbitrator shall be selected from the panels of Arbitrators of the AAA, pursuant to the procedures set out in the AAA Commercial Arbitration Rules. The award by the Arbitrator shall be final, and judgment may be entered upon it according to applicable law in any Texas or Federal court having jurisdiction. Nothing in this clause shall be construed to prevent the Company from asking a court of competent jurisdiction to enter appropriate equitable relief to enjoin a violation of the Proprietary Information provisions of Section 12 of this Agreement. The Company shall have the right to seek such relief in connection with or apart from the Parties' rights under this clause to arbitrate such disputes. The Arbitrator shall, in its award, allocate between the Parties the costs of arbitration, which shall include reasonable attorneys' fees of the Parties, as well as the Arbitrator's fees and expenses, in such proportions as the Arbitrator deems just.
19. Severability. In the event that a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken. All portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, any court order striking any portion of this Agreement shall modify the stricken terms to give as much effect as possible to the intentions of the Parties under this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and Employee has hereunto signed this Agreement, on the _______ day of ________, 20___.
1. Base Salary. Employer shall pay to Employee a salary at the base rate of Eighty Thousand Dollars ($80,000.00) per year, payable in semi-monthly installments, less authorized and legal deductions.
2. Fringe Benefits. Employee shall receive the following fringe benefits:
(a) Employer shall pay to Employee a car allowance of Seven Hundred Dollars ($700.00) per month, less legal deductions.
(b) Employer shall reimburse Employee for cellular phone expenses up to Three Hundred Dollars ($300.00) per month. Employee shall submit receipts of these expenses to the Employer to receive reimbursement.
(c) Employer shall reimburse Employee for medical expenses not reimbursed by the Employer's health insurance provider up to One Thousand Two Hundred Dollars ($ 1,200.00) during the term of the Agreement. Employee shall submit receipts of these expenses to the Employer to receive reimbursement.
3. Vacation. Employee is entitled to three (3) weeks of vacation during the term of the Agreement. If the Employee remains employed by Employer following the expiration of the Agreement, Employee shall be entitled to carry over any unused vacation up to two (2) weeks to the next calendar year. No unused vacation time shall carry over for a period of more than one (1) year from the date it accrued.