The contract is an employment agreement between the Company and the Employee. It includes a pay and commission structure where the Employee will receive a monthly fee and a commission of sales made by the Employee, with the possibility for the Company to select different commission options at 12, 24 and 60 months. The Employee will also receive a commission for any brand collaborations or licensing brought to the Company. The agreement also includes a 24-month vesting schedule where the Employee will earn __% of the company equity in equal parts over 24 months. The vesting will accelerate in the event of the company exiting or fundraising. The Employee’s duties include procuring new wholesale clients, developing wholesale strategy, assisting with marketing and sales materials, and managing wholesale relationships. The agreement also includes provisions for confidentiality, non-solicitation, non-compete, and a section where the Employee assigns any intellectual property created while employed to the Company.
- What is the purpose of an employment agreement? An employment agreement is a legally binding contract between an employer and an employee that outlines the terms and conditions of the employment relationship. It sets out the duties and responsibilities of the employee, compensation, benefits, and other important details such as termination and non-compete clauses.
- What are some common clauses found in employment agreements? Common clauses found in employment agreements include job duties and responsibilities, compensation and benefits, termination and severability, non-compete and non-solicitation, confidentiality and intellectual property, and dispute resolution.
- What is the difference between an “at-will” and a “for-cause” employment agreement? An “at-will” employment agreement is one where either the employer or the employee can terminate the employment relationship at any time, with or without cause. A “for-cause” employment agreement is one where the employee can only be terminated for specified reasons, such as misconduct or violation of company policies.
- What is a non-compete clause in an employment agreement? A non-compete clause is a provision in an employment agreement that prohibits the employee from working for a competitor for a certain period of time after leaving the company. This is designed to protect the employer’s confidential information and trade secrets.
- What is a non-solicitation clause in an employment agreement? A non-solicitation clause is a provision in an employment agreement that prohibits the employee from soliciting the company’s customers or employees for a certain period of time after leaving the company. This is designed to protect the employer’s customer base and workforce.
- What is a confidentiality clause in an employment agreement? A confidentiality clause is a provision in an employment agreement that prohibits the employee from disclosing the company’s confidential information and trade secrets to third parties. This is designed to protect the employer’s confidential information and trade secrets.
- What is an arbitration clause in an employment agreement? An arbitration clause is a provision in an employment agreement that requires any disputes arising from the employment relationship to be resolved through arbitration instead of through a court of law. This can be beneficial for both the employer and employee as it can be less time-consuming and expensive compared to going to court.
- What is a severability clause in an employment agreement? A severability clause is a provision in an employment agreement that states that if any part of the agreement is found to be unenforceable, the remaining parts of the agreement will still be valid and enforceable. This helps to ensure that the entire agreement is not invalidated if one part of it is found to be unenforceable.
- What is a “forfeiture” clause in an employment agreement? A forfeiture clause is a provision in an employment agreement that states that if an employee is terminated, they may lose any unvested benefits or equity they would have received had they stayed employed until the vesting date. This is common in agreements that include equity as a component of compensation.
- What is a “change of control” clause in an employment agreement? A change of control clause is a provision in an employment agreement that provides certain rights or benefits to the employee in the event of a change of control of the company. For example, it may provide for accelerated vesting of equity or a severance package in the event of a change of control.
- How long should an employment agreement be? Employment agreements can vary in length depending on the complexity of the terms and conditions, but generally should be clear and concise and easy to understand. It’s important that both the employer and employee fully understand the rights and obligations under the agreement, which should be reviewed by legal counsel prior to signing.
- What is a “choice of law” clause in an employment agreement? A choice of law clause is a provision in an employment agreement that specifies which state’s laws will govern the agreement. This is important because different states have different laws and regulations, and specifying which law will apply can help to avoid confusion and disputes.
- What is an “entire agreement” clause in an employment agreement? An entire agreement clause is a provision in an employment agreement that states that the agreement represents the entire understanding of the parties and supersedes all prior agreements, negotiations, and representations. This helps to ensure that all parties understand that the agreement is binding and that no prior agreements or understandings will be taken into account.
- What is a “severability” clause in an employment agreement? A severability clause is a provision in an employment agreement that states that if any part of the agreement is found to be unenforceable or invalid, it will not affect the enforceability or validity of the rest of the agreement. This helps to ensure that the agreement will remain valid even if one part of it is deemed unenforceable.
- What is a “termination” clause in an employment agreement? A termination clause is a provision in an employment agreement that outlines the conditions under which the employment can be terminated by either party. This can include things like notice periods, termination for cause, and severance pay.
- What is a “representations and warranties” clause in an employment agreement? A representations and warranties clause is a provision in an employment agreement that requires the employee to make certain statements or promises about their qualifications and suitability for the job. This can include things like certifying that the employee does not have any pre-existing obligations that would conflict with their work for the company, and that their work will be performed to professional standards.
- What is a “counterparts” clause in an employment agreement? A counterparts clause is a provision in an employment agreement that allows the parties to execute the agreement in multiple counterparts, rather than in one original document. This can make it easier to execute the agreement, as each party can sign a separate copy of the agreement.
- What is a “no third-party rights” clause in an employment agreement? A no third-party rights clause is a provision in an employment agreement that states that the agreement is only binding on the parties who signed it and cannot be enforced by any third party. This means that someone who is not a party to the agreement cannot take legal action to enforce any of its terms.
Free Employment Agreement Template
This Employment Agreement (the “Agreement”) is made and entered into as of __________, 2023 (the “Effective Date”) by and between __________ (the “Company”) and __________, (address) (the “Employee”). The parties agree as follows:
- Position and Duties. The Employee will be employed as (title) and shall have the following duties and responsibilities:
- Base Compensation. The Employee shall be paid a monthly fee of $______.
- Commission. The Employee shall be eligible to receive a commission of ___% on all sales made by the Employee. The Company shall have the right to select different commission options at 12 months, 24 months, and 60 months, provided however that the changes will not apply retroactively if the resulting commission due to the Employee is lower.
- Brand Collaborations & Licensing: The Employee shall be eligible to receive a commission of 15% for any brand collaborations or licensing that the Employee brings to the Company.
- Payments. All undisputed fees and commissions shall be paid on the first day of each calendar month. The Employee shall provide the Company with all necessary documentation and information to properly calculate and pay the commission. All fees and commissions are subject to taxes and withholdings, as may be required by law.
- Schedule. The Employee shall be eligible for a 24-months vesting schedule for 7% of the Company. This 7% equity shall fully vest in equal parts monthly over 24 months from the Effective Date, subject to the Employee’s continued service to the Company through each vesting date.
- Acceleration. In the event of a qualifying funding round, or a change of control within the 24-month period before the unvested equity interest is fully vested, all unvested equity interest will automatically vest. A “qualifying funding round” shall mean the Company raises capital by issuing shares or other equity securities, whether by private or public offering, or through the sale of securities, and the total funds raised are greater than or equal to $__________. A “change of control” shall be deemed to occur if any the following events occur:
- The sale of all or substantially all of the assets of the Company.
- The merger or consolidation of the Company with or into another entity.
- The sale of 50% or more of the outstanding voting securities of the Company to a person or entity.
- Forfeiture upon Termination. In the event of the termination of the Employee’s service for any reason, upon the date of such termination (the “Termination Date”) all the unvested interest shall be forfeited to the Company. As a result of any forfeiture of unvested interest pursuant to this section, the Company shall become the legal and beneficial owner of the unvested interest being forfeited and shall have all rights and interest therein or related thereto.
- Property Rights of Parties.
- All files, records, documents, drawings, specifications, equipment and similar items relating to the business of the Company, whether or not prepared by the Employee, shall remain the exclusive property of the Company.
- The Company shall have the right to use, copyright, reproduce, publish, or distribute any and all materials created by the Employee under the name of the Company, without obtaining permission from the Employee and without expense and charge.
- On the termination of employment or whenever requested by the Company, the Employee shall immediately deliver to the Company all property in the Employee’s possession or under the Employee’s control belonging to the Company (including but not limited to all accounting records and files). Such property shall be returned in good condition, ordinary wear and tear excepted.
- Compliance with Laws. The Employee shall comply with all applicable laws, ordinances, codes, and regulations of the State of South Carolina, local and federal governments.
- Term and Termination.
- Term. This Agreement shall commence on the Effective Date and reman in effect for three years thereafter (the “Term”), unless terminated early by either party at any time, with or without cause, by giving written two weeks’ notice to the other party.
- Effect of Termination. In the event of the termination of the Employee’s service by either party for any reason, upon the date of such termination (the “Termination Date”) all the unvested equity interest shall be forfeited to the Company. As a result of any forfeiture of unvested equity interest pursuant to this section, the Company shall become the legal and beneficial owner of the unvested equity interest being forfeited and shall have all rights and interest therein or related thereto, and the Company shall have the right to transfer to its own name the number of unvested equity interest being forfeited to the Company, without further action by the Employee. The Employee shall promptly return to the Company all Confidential Information, trade secrets, and other proprietary information, including all copies thereof, in the Employee’s possession or control, and shall not retain any such information or materials in any form. Additionally, the Employee shall promptly deliver to the Company all notes, reports, documents, and other work product prepared by the Employee during the Employee’s service with the Company, and shall not retain any such work product in any form. The Employee shall further cooperate with the Company, at the Company’s expense, in efforts to retrieve any confidential information, trade secrets, or proprietary information, or work product that may be in the possession of third parties as a result of the Employee’s service with the Company.
- No Right to Continued Service. Nothing in this Agreement shall confer upon the Employee any right to continue to provide services to or for the benefit of the Company, or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to terminate the services of the Employee, at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company and the Employee.
- No Pre-existing Obligations. The Employee represents and warrants that the Employee has no pre-existing obligations or commitments (and will not assume or otherwise undertake any obligations or commitments) that would be in conflict or inconsistent with or that would hinder the Employee’s performance of its obligations under this Agreement.
- Performance Standard. The Employee represents and warrants that services will be performed in a thorough and professional manner, consistent with high professional and industry standards by individuals with the requisite training, background, experience, technical knowledge, and skills to perform services.
- Non-Infringement. The Employee represents and warrants that the Employee’s work product will not infringe, misappropriate, or violate the rights of any third party, including, without limitation, any intellectual property rights or any rights of privacy or rights of publicity, except to the extent any portion of the Employee’s work product is created, developed, or supplied by the Company or by a third party on behalf of the Company. The Employee will not incorporate any proprietary information, inventions, intellectual property, or other third-party material into any work product prepared for the Company.
- Competitive Activities. During the term of this Agreement, the Employee will not, directly or indirectly, in any individual or representative capacity, engage or participate in or provide services to any business that is competitive with the types and kinds of business being conducted by the Company.
- Non-Solicitation of Personnel. During the term of this Agreement and for a period of one (1) year thereafter, the Employee will not directly or indirectly solicit the services of any Company employee or consultant for the Employee’s own benefit or for the benefit of any other person or entity.
- Monitoring. The Employee shall give the Company, through its authorized representatives, access to and the right to examine any or all pertinent records or other written materials maintained by the Employee and related to the business of the Company or this Agreement. The Employee shall also give the Company the right at all reasonable times to inspect or otherwise evaluate the work performed or being performed hereunder by the Employee.
- Assignment. Neither this Agreement nor any duties or obligations under it shall be assignable by the Employee without the prior written consent of the Company.
- Binding Effect. Subject to the provisions regarding assignment, this Agreement shall be binding on and inure to the benefit of the parties to it and their respective heirs, executors, administrators, legal representatives, successors, and assigns.
- No Third Party Rights. This Agreement shall not be deemed to create any rights in favor of any person other than the parties hereto and their respective successors and assigns.
- Independent Legal Advice. The Employee acknowledges that the Company has provided the Employee with a reasonable opportunity to obtain independent legal advice with respect to this agreement, and that either: (a) The Employee has had such independent legal advice prior to executing this agreement, or; (b) The Employee has willingly chosen not to obtain such advice and to execute this agreement without having obtained such advice.
- Scope. The Employee shall keep in strict confidence and shall not disclose to any third party or use for the Employee’s benefit or for the benefit of any third party, any Confidential Information (as defined below) of the Company, its affiliates or clients, except as required by law or court order, provided that the Employee shall give the Company prompt notice of any such legal requirement and shall reasonably cooperate with the Company in protecting against or limiting the scope of such disclosure or use. The Employee shall not use any Confidential Information for any purpose other than as may be reasonably necessary for the performance of the Employee’s duties under this Agreement. The Employee shall return to the Company all documents and other tangible items containing or reflecting Confidential Information promptly upon request or upon termination of the Employee’s employment. The term “Confidential Information” shall mean any and all information or material that has or could have commercial value or other utility in the business in which the Company is engaged. If the Employee is uncertain as to whether any information or material is Confidential Information, the Employee shall err on the side of caution and treat such information or material as Confidential Information. If the Employee is compelled by law to disclose Confidential Information, the Employee shall provide the Company with prompt written notice of such compelled disclosure (to the extent legally permitted) so that the Company may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement. If such protective order or other remedy is not obtained, or if the Company waives compliance with the provisions of this Agreement, the Employee may disclose only that portion of the Confidential Information that the Employee is legally compelled to disclose and shall use reasonable efforts to obtain assurance that confidential treatment shall be accorded the Confidential Information.
- Exceptions. The above confidentiality obligations shall not apply to information that is: (a) publicly available through no fault of the Employee; (b) discovered or created by the Employee before the Employee’s engagement with the Company or after the termination of the Employee’s engagement with the Company; (c) learned by the Employee through legitimate means other than from the Company or the Company’s representatives; or (d) is required to be disclosed by law or by the rules of any securities exchange on which the Company’s securities may be listed, but only if the Employee has given the Company prior written notice and the Company has been given a reasonable opportunity to contest such disclosure.
- Governing Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of __________, without giving effect to any choice of law or conflict of law provisions. Any disputes arising under or in connection with this Agreement shall be subject to the exclusive jurisdiction of the courts of the State of ___________.
- No Presumption Against Drafting Party. This Agreement has been drafted with input from both parties and shall not be construed against any party as the drafting party. Each party has had the opportunity to review and negotiate the terms of this Agreement and the language used in this Agreement shall not be construed against any party as the drafting party.
- Modification. This Agreement may be amended or modified only by a writing signed by both parties.
- Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
- Waiver. No failure or delay by either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder.
- Survival. Any provision which by its nature is intended to survive termination of this Agreement, shall survive termination or expiration of this Agreement.
- Notices. All notices and other communications under this Agreement shall be in writing and shall be sent by certified mail, return receipt requested, or by overnight courier, to the addresses set forth in this Agreement or such other address as either party may specify in writing.
- Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
- Section Headings. The section headings in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.
- Entire Agreement. This Agreement constitutes the entire agreement between the parties regarding the subject matter hereof and supersedes all prior agreements, understandings, and negotiations, whether written or oral.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
Name, Title: _____________________
Name, Title: _____________________