You are on page 1of 7

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

1

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

officer. Employer claims no interest in Employee’s work for these activites. "moral rights of authors" and all other similar rights however denominated throughout the world. facilities or trade secret information of Employer was used and which was developed entirely on Employee’s own time. SECTION EIGHT: INTELLECTUAL PROPERTY RIGHTS Employee agrees and acknowledges that Employer owns all intellectual property rights in materials or information developed by Employer. 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. Nothing in this Agreement shall be deemed to prevent Employer from preparation and prosecution of applications for and the procurement. 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. during the term hereof. in any other business similar to Employer’s business or any allied trade. employee or. publications. Employee shall take such additional actions (including without limitation. whether such works are published for internal distribution or external distribution. However. in any manner. presentations and other authoritative works which are created by Employee on behalf of Employer. Employee shall not. issuance. this agreement does not apply to any Invention or Work of Employee for which no equipment. the executions and delivery of separate assignments and additional documents) as Employer may reasonably request to effect. perfect or evidence such assignment or Employer’s ownership of all Confidential Employer information and related proprietary rights. trade secret and other proprietary rights. based on inventions. that relates in any way to or is based on Confidential Employer information or technology being developed by Employer. Notwithstanding any terms of this Agreement appearing to be to the contrary. disclosed under this Agreement. Employee will continue to have an involvement in these activities outside of his/her work for Employer. Employee hereby assigns any and all rights. 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. maintenance. title or interest that it may now or hereafter have in any Confidential Employer information and related patent. unless (a) the Invention or Work relates (i) directly to Employer’s business or (ii) to Employer’s actual or demonstrably anticipated research 3 . as partner. or as a result of cooperation between Employer and Employee. trademarks. Employee hereby waives any so-called "droit moral" rights. supplies. stockholder. be interested directly or indirectly. and/or subject matter or combinations thereof. in any other capacity. Employee. throughout the world. service marks. enforcement and defense of patents. copyright. director.Employer acknowledges that Employee is engaged in the following outside business activities [list outside activities]. Employee shall retain the right to receive credit and attribution for white papers. and/or copyrights. advisor.

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

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

” as defined in Section Six. and that any disclosure or use of the Confidential Information other than as expressly permitted herein will cause irreparable harm to Employer. of this Agreement. PROVISIONS This Agreement.” Should Employer wish to terminate this agreement for any reason other than “for cause. This remedy is in addition to any other remedy available to Employer. 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.Before Employee undertakes any work within eighteen (18) months after this engagement ends that will involve subject matter related to Employer’s activities. SECTION ELEVEN: EMPLOYER’S OBLIGATIONS UPON TERMINATION FOR ANY REASON OTHER THAN “FOR CAUSE. 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. No waiver of any breach shall constitute a subsequent waiver of any subsequent breach. In the event of an actual or alleged breach of this Agreement by Employer. or to compel performance. preliminary and permanent injunctions by any court of competent jurisdiction to prevent breach. and that an injunction to enforce this agreement will not prevent Employee from earning a reasonable livelihood. SECTION TWELVE: MISC. Employee will fully disclose the proposed work to Employer. 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. Employer shall pay Employee the full and complete compensation outlined in Sections Four and Five immediately upon termination. Employee acknowledges that the Confidential Employer Information contains trade secrets and other proprietary information. in an action at law. if any. 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. This Agreement shall be binding on and inure to the benefit of the parties' successors and permitted assigns. Employee hereby waives any right or remedy in equity. This provision shall apply if Employer is acquired or sells substantially all of its assets. signed by the party against whom enforcement of the waiver or change is sought. 6 . or under any other circumstances whatsoever. Employee therefore agrees to the entry of temporary. The provisions of this Agreement may not be waived or changed except in writing. including the right to immediately vest all stock options which would have been earned under this agreement.

or as subsequently changed by notice. 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. and the remaining provisions of this Agreement shall continue in full force and effect without being impaired or invalidated in any way. 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. modification. or waiver of any right or remedy herein provided. and costs incurred and inclusive of any appeal. such provision shall be interpreted so as to apply and be enforced to the maximum extent permitted by law. 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. preliminary or final. the fees of experts and other technical advisors. or other change in this Agreement or any provision hereof. or facsimile copier.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. This Agreement shall be governed by and interpreted in accordance with the laws of the State of [State]. 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. void or unenforceable as written. and shall be deemed given when delivered or sent to the address given at the outset of this Agreement. telegraph. to Employer or Employee without proof of actual damages. EMPLOYEE By: Printed Name: Its: EMPLOYER By: Printed Name: Its: _______________________________________ 7 . amendment. including reasonable fees of attorneys. shall be effective for any purpose unless specifically set forth in writing signed by both parties. No cancellation. telex. If any provision of this Agreement is held to be invalid. State] and they agree to bring all such actions in [City. If any action to enforce or interpret this Agreement is taken by Employer or Employee against the other. whether temporary. State].