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Founder Employment Agreement

Founder Employment Agreement

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Published by Dick Hua

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Published by: Dick Hua on Dec 12, 2011
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12/12/2011

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FOUNDER’S EMPLOYMENT AGREEMENT Agreement made this ___ day of ___________ , 200*, between ______________, Inc.

, a _____________ State corporation, (“Employer”), and _______________, (title) of (address), (“Employee”). RECITALS 1. Employer is a start-up engaged in the business of providing [describe products and services]. 2. Employee is a [founder or co-founder] of the business and is an officer of the company. 3. Employee has experience in the above-designated business and is willing to be employed by Employer, and Employer is willing to employ Employee, on the terms, covenants, and conditions hereinafter set forth. For the reasons set forth above, and in consideration of the mutual promises and agreements hereinafter set forth, Employer and Employee agree as follows: SECTION ONE: EMPLOYMENT Employer hereby employs, engages, and hires employee as [Title, i.e., President and CEO], to oversee [specific role and duties, i.e., the operations of the company, including capital placement, hiring employees and consultants, forging strategic partnerships, designing, building and launching the company’s products and service, and representing the company at industry events]. Employee hereby accepts and agrees to such hiring, engagement, and employment, subject to the general supervision and direction of the company’s board of directors. Employee shall perform such other duties as are customarily performed by one holding such position in other, same or similar businesses or enterprises as that engaged in by Employer, and shall also additionally render such other and unrelated services and duties as may be assigned to him from time to time by Employer. Such additional or unrelated services and duties shall not arbitrarily alter Employees title or role as co-founder. Employer reserves the right to hire a separate [Title, i.e., CEO] in the future. SECTION TWO: BEST EFFORTS OF EMPLOYEE Employee agrees that he/she will at all times faithfully, professionally, and to the best of His/her ability, experience, and talents, perform all of the duties that may be required of and from him/her pursuant to the expressed and implicit terms hereof, to the reasonable satisfaction of Employer. Such duties shall be rendered at the company’s offices in [City, State] and other such places that may be reasonably required by Employer, but which do not require the Employee to permanently re-locate. SECTION THREE: TERM OF EMPLOYMENT The term of this agreement shall be a period of [X months/years], commencing on [Date] and terminating on [Date], subject, however, to prior termination as hereinafter provided. This agreement may be renewed by mutual consent at the end of the term. SECTION FOUR: COMPENSATION OF EMPLOYEE

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and Employer shall be entitled to all of the benefits and profits arising from or incident to all work. Employee may terminate this agreement in the event Employer discontinues operations because of insolvency. gross negligence. Employee shall NOT be entitled to any additional compensation by reason of any service which he/she may perform as the member of any managing committee of employer or as a member of the company’s board of directors. compensation at the rate of [$X] per annum. [$X] in year two. SECTION SIX: TERMINATION Employer may only terminate Employee “for cause. payable twice a month on the 15th and 30th days of each month in year one. Employer will continue to pay Employee in accordance with Section Four for the duration of the illness.” In the event of Employee’s death. or other reason beyond Employer or Employee’s control. Such options shall vest at the rate of [X] shares per year on the anniversary date of employment.” which is defined as “dereliction of duty. knowledge. and advice of Employee on behalf of Employer. under a Founder/Key Officer Stock Option Plan established by the board.” In the event of termination “for cause. services. Employee shall be granted the opportunity to participate in such bonus plans and be paid at these higher levels at no less favorable rates and terms as those paid to other company executives. and [$X] in year three. 9. this agreement shall terminate immediately and neither party shall have any further obligation to the other. in full payment for employee's services hereunder. priced at [$X] per share. In the event of illness. of which Employee is of equal stature and has relative experience. except that Employee will surrender any work product to the designated trustee of the company and Employer will be obligated to pay Employee any compensation due and owing. and 10 of this agreement will remain in force. Any such illness exceeding six months shall be grounds for termination “for cause. SECTION FIVE: BENEFITS AND ADDITIONAL COMPENSATION Employee shall have the opportunity to participate in Employer-sponsored benefits programs if and when they are established. Employer shall reimburse employee for all documented and approved expenses incurred by employee in the performance of his/her duties. and employee shall accept from employer. In any such event. Employee shall also be granted [X] stock options.Employer shall pay employee.” sections 8. and skills to the business and interest of Employer. which renders Employee unable to fulfill the duties specified in this Agreement to the satisfaction of the Board of Directors. SECTION SEVEN: OTHER EMPLOYMENT Employee shall devote substantially all of his/her time. Compensation during illness may be reduced by any amount paid by State Disability or other company-sponsored insurance plans. Employee shall be entitled to three weeks paid vacation in year one and four weeks paid vacation in years two and three of this agreement. or illegal acts. Should the company’s board of directors and/or compensation committee institute bonuses or adjust executive salaries or stock options to higher levels in any one year. provided the illness does not exceed six months. attention. bankruptcy. 2 . Employee’s heirs shall be entitled to full compensation under this agreement.

Employee hereby waives any so-called "droit moral" rights. the executions and delivery of separate assignments and additional documents) as Employer may reasonably request to effect. and/or subject matter or combinations thereof. be interested directly or indirectly. trade secret and other proprietary rights. that relates in any way to or is based on Confidential Employer information or technology being developed by Employer. Employee will continue to have an involvement in these activities outside of his/her work for Employer. or as a result of cooperation between Employer and Employee. employee or. Employee. title or interest that it may now or hereafter have in any Confidential Employer information and related patent. nothing herein contained shall be deemed to prevent or limit the right of Employee to invest any of his/her surplus funds in the capital stock or other securities of any corporation whose stock or securities are publicly owned or are regularly traded on any public exchange. However. Employee shall retain the right to receive credit and attribution for white papers. unless (a) the Invention or Work relates (i) directly to Employer’s business or (ii) to Employer’s actual or demonstrably anticipated research 3 .Employer acknowledges that Employee is engaged in the following outside business activities [list outside activities]. supplies. whether such works are published for internal distribution or external distribution. Employee shall not. in any other capacity. "moral rights of authors" and all other similar rights however denominated throughout the world. SECTION EIGHT: INTELLECTUAL PROPERTY RIGHTS Employee agrees and acknowledges that Employer owns all intellectual property rights in materials or information developed by Employer. officer. director. trademarks. Employee hereby assigns any and all rights. Notwithstanding any terms of this Agreement appearing to be to the contrary. Nothing in this Agreement shall be deemed to prevent Employer from preparation and prosecution of applications for and the procurement. this agreement does not apply to any Invention or Work of Employee for which no equipment. throughout the world. based on inventions. maintenance. stockholder. copyright. facilities or trade secret information of Employer was used and which was developed entirely on Employee’s own time. enforcement and defense of patents. in any other business similar to Employer’s business or any allied trade. advisor. as partner. Nor shall anything herein contained be deemed to prevent Employee from investing or limit Employee's right to invest his surplus funds in real estate. Employee shall take such additional actions (including without limitation. service marks. presentations and other authoritative works which are created by Employee on behalf of Employer. issuance. Employee shall regularly and promptly disclose information and technology developed by Employee that relates in any way to or is based on Confidential Employer information to Employer. Employer claims no interest in Employee’s work for these activites. disclosed under this Agreement. and/or copyrights. perfect or evidence such assignment or Employer’s ownership of all Confidential Employer information and related proprietary rights. in any manner. during the term hereof. publications.

without limitation. all text. any software. Confidential Employer Information may be contained in oral communications. In addition. software. drawings. any information regarding products and services incorporating the technology of other companies. notes. Confidential Employer Information does not include any information that: (i) was known to it prior to its receipt from Employer. All Confidential Employer Information disclosed by Employer. Employee will take all necessary steps to prevent disclosure of Confidential Employer Information to others and will not use or disclose Confidential Employer Information except as set forth in this Agreement or with the express prior written consent of Employer. SECTION NINE: CONFIDENTIALITY "Confidential Employer Information" means all of Employer's system architecture. contacts. diagrams. marketing. equipment or devices incorporating any Confidential Employer Information may be disclosed or delivered to third parties only with the prior written consent of Employer. or (b) the Invention or Work results from any services Employee provided to Employer. or which under the circumstances should in good faith be treated as confidential. financing. Employee shall be responsible for ensuring that any permitted third-party recipients of Confidential Employer Information have signed a Confidential Disclosure and Non-Use Agreement satisfactory to Employer having obligations of non-disclosure and non-use at least equivalent to those contained in this Agreement. Employee agrees that all Confidential Employer Information disclosed to Employee is subject to this Agreement and will be received and held in confidence by Employee. and other proprietary know-how (except that excluded herein). whether or not the know-how is the subject of a pending patent application or is a patentable invention. including. documentation. equipment or devices incorporating any Confidential Employer Information are and shall remain the sole and exclusive property of Employer and. 4 . (ii) was received by Employee from a third party without violation of a nondisclosure obligation of that third party. software and hardware. manuals. hardware. formulas. specifications. or (iv) is or becomes a part of the public domain through no violation of this Agreement. Employee shall have no interest in or rights to use or disclose Confidential Employer Information. planning. industry contacts. and know-how related to any of Employer's services. technical information. Employee shall have the burden in any dispute of showing that information is not Confidential Employer Information. Employee agrees that Confidential Employer Information disclosed to it under this Agreement and any plans. (iii) is independently developed by or for Employee without using Confidential Employer Information. hardware. Source materials. materials and information developed. created or produced by Employee for Employer shall constitute Confidential Employer Information. as well as in any tangible expressions referring or relating to Employer's systems and business practices.or development. information and technology developed by Employee under this Agreement shall also be deemed Confidential Employer Information upon its conception. and any other information that is clearly marked as confidential or proprietary. except as set forth in this Agreement. all materials referring or relating to Confidential Employer Information. writings.

Employee shall also furnish to Employer a certificate verifying that all records relating to Confidential Employer Information have been destroyed or returned to Employer. (b) personally or through any other person approach. 5 . Employee is still subject to all other obligations to Employer. bankers or others. Employee’s agreements to protect Employer’s confidential information apply both while Employee is engaged by Employer and after the engagement by Employer ends. regardless of the reason it ends. obscure or alter any notice of patent. copyright. SECTION TEN: NON-COMPETITION AND OBLIGATIONS OF EMPLOYEE AFTER TERMINATION For eighteen (18) months after Employee’s engagement by Employer ends. (b) design or develop Competing Products. This applies both while Employee engaged by Employer and after this engagement by Employer ends. or provide services or information to. Employee shall immediately notify Employer and cooperate fully with Employer in contesting such disclosure. or sooner if Employer requests. regardless of the reason it ends. or (iii) is shown on the attached list of Competing Companies. or (c) work for or with. backgrounds or qualifications of any Employer employees or otherwise identify them as potential candidates for employment. Employee will not on Employee’s behalf or on behalf of a client of Employee directly or indirectly solicit any employee to leave his or her employment with Employer. including obligations related to Employer’s inventions. Employee will not. Employee shall immediately notify Employer of any actual or suspected unauthorized use or disclosure of Confidential Employer Information. all documents and property his/her care. regardless of the reason it ends. Employee understands that in cases where this non-competition provision does not apply. Employee will not disparage Employer or its business or products and will not interfere with Employer’s relationships with its customers. directly or indirectly: (a) sell.Employee will safeguard and return to Employer when his/her engagement ends. custody or control relating to his/her engagement or Employer’s business. Employee shall not remove. or (c) participate in any pre-employment interviews with any person who was employed by Employer while Employee was engaged by Employer. including without limitation any documents that contain Employer’s confidential information. employees. markets or proposes to sell or market Competing Products in any geographic area where Employer’s products are then marketed. and will cooperate with Employer in obtaining injunctive or other equitable relief and in any suit for damages. This includes that Employee will not (a) disclose to any third party the names. (ii) is designing or developing Competing Products. vendors. If Employee of any permitted third-party recipients of Confidential Employer Information receives a subpoena or other legal process seeking disclosure of the Confidential Employer Information. copyrights and confidential information. regardless of the reason it ends. any person or entity that (i) sells. market or propose to sell or market products that compete or will compete with Employer’s then existing or reasonably anticipated products (“Competing Products”) in any geographic area where Employer’s products are then marketed. recruit or otherwise solicit employees of Employer to work for any other employer. trade secret or proprietary right on any Confidential Employer Information without Employer's prior written authorization. For eighteen (18) months after Employees engagement ends.

This remedy is in addition to any other remedy available to Employer. No waiver of any breach shall constitute a subsequent waiver of any subsequent breach.” Should Employer wish to terminate this agreement for any reason other than “for cause. of this Agreement. Employee acknowledges that the Confidential Employer Information contains trade secrets and other proprietary information. or to compel performance. any rights and remedies Employee may have against Employer or its successors or assigns will be limited to the right to recover actual damages. Employee acknowledge that the terms of this agreement are reasonably necessary to protect Employer’s legitimate business interests and acknowledges that when this engagement with Employer ends Employee’s experience and capabilities are such that Employee can obtain other engagements or employment that does not violate this agreement. contains the entire understanding of the parties with respect to its subject matter and supersedes all other agreements and offers with respect to such subject matter. preliminary and permanent injunctions by any court of competent jurisdiction to prevent breach. signed by the party against whom enforcement of the waiver or change is sought. or under any other circumstances whatsoever. in an action at law. This provision shall apply if Employer is acquired or sells substantially all of its assets. PROVISIONS This Agreement. SECTION TWELVE: MISC.” as defined in Section Six. if any. Employee therefore agrees to the entry of temporary. including but not limited to any right to rescind or terminate Employer’s rights hereunder or to seek or obtain injunctive relief of any kind. SECTION ELEVEN: EMPLOYER’S OBLIGATIONS UPON TERMINATION FOR ANY REASON OTHER THAN “FOR CAUSE.Before Employee undertakes any work within eighteen (18) months after this engagement ends that will involve subject matter related to Employer’s activities. and that an injunction to enforce this agreement will not prevent Employee from earning a reasonable livelihood. Employee will fully disclose the proposed work to Employer. Employer shall pay Employee the full and complete compensation outlined in Sections Four and Five immediately upon termination. 6 . and that any disclosure or use of the Confidential Information other than as expressly permitted herein will cause irreparable harm to Employer. Employee hereby waives any right or remedy in equity. The provisions of this Agreement may not be waived or changed except in writing. This Agreement shall be binding on and inure to the benefit of the parties' successors and permitted assigns. Employee agrees to timely execute any additional agreements relating to Employer Stock Options or Agreements relating to the purchase or ownership of Employer Stock in conjunction with any Stock Options or grants set related to this Agreement. This Agreement may not be assigned by Employee without the prior written consent of Employer. In the event of an actual or alleged breach of this Agreement by Employer. including the right to immediately vest all stock options which would have been earned under this agreement.

EMPLOYEE By: Printed Name: Its: EMPLOYER By: Printed Name: Its: _______________________________________ 7 . The parties recognize that remedies at law may be inadequate to protect Employer or Employee against the breach of this Agreement and the parties therefore consent to the granting of injunctive relief. amendment. preliminary or final. If any provision of this Agreement is held to be invalid. telegraph. No cancellation. telex. including reasonable fees of attorneys. then the substantially prevailing party in such action will be entitled to recover from the other its costs and expenses incurred in taking or defending such action. and costs incurred and inclusive of any appeal. to Employer or Employee without proof of actual damages. and the remaining provisions of this Agreement shall continue in full force and effect without being impaired or invalidated in any way. modification. or waiver of any right or remedy herein provided. whether temporary. or as subsequently changed by notice. Employee and Employer agree that venue and jurisdiction for purposes of resolving any dispute that arises in connection with this Agreement shall lie only in courts located in [City. or other change in this Agreement or any provision hereof. and shall be deemed given when delivered or sent to the address given at the outset of this Agreement. No waiver of any right or remedy in respect of any occurrence or event on one occasion shall be deemed a waiver of such right or remedy in respect of such occurrence or event on any other occasion. shall be effective for any purpose unless specifically set forth in writing signed by both parties. or facsimile copier. void or unenforceable as written. If any action to enforce or interpret this Agreement is taken by Employer or Employee against the other.Any notice required or permitted to be given under this Agreement shall be in writing and may be personally delivered or sent by courier service. the fees of experts and other technical advisors. State] and they agree to bring all such actions in [City. such provision shall be interpreted so as to apply and be enforced to the maximum extent permitted by law. State]. This Agreement shall be governed by and interpreted in accordance with the laws of the State of [State].

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