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Employment Agreement for LLC Managing Director

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Employment Agreement for LLC Managing Director Powered By Docstoc
					This is an employment agreement for managing member of a limited liability company
(LLC). A managing member is an agent of the company that participates in the day-to-
day management of the LLC but also has an ownership interest in the LLC. A
managing member is entitled to share in the profits of the company and is also entitled
to be compensated for work performed as an employee. As drafted, this agreement
contains standard clauses, such as confidentiality and non-competition provisions and a
mandatory arbitration clause, but can be customized to ensure the specific terms of the
parties’ agreement are addressed.
      Employment Agreement with Managing Member of Limited Liability Company
This Employment Agreement is made on the (date), between (Name of Executive) of
(street address, city, state, zip code), referred to herein as Executive, and (Name of
Employer), a limited liability company organized and existing under the laws of the state
of (Name of state), with its principal office located at (street address, city, state, zip
code), referred to herein as the Company.
Whereas, Executive is currently serving as a Managing Member of the Company; and
Whereas, the Company desires to enter into this Agreement in order to formalize
Executive's relationship with the Company; and
Whereas, Executive desires to continue such employment upon the terms set forth in
this Agreement;
Now, therefore, for and in consideration of the mutual covenants contained in this
Agreement, and other good and valuable consideration, the parties agree as follows:
I.       Employment
         A.      By this Agreement, the Company employs (referred to hereafter as the
         "Employment") Executive as the Managing Member of the Company. It is the
         intention of the parties to vest full authority to control the day-to-day operations of
         the Company with Executive, subject to the supervision, control and guidance in
         certain instances of the Executive Board Members of the Company (the "Board").
         Executive accepts the Employment and agrees to: (i) render such executive
         services; (ii) perform such executive duties; and (iii) exercise such executive
         supervision and powers to, for and with respect to the Company, as may be
         established by the Board, for the period and upon the terms set forth in this
         Agreement.
         B.     Executive shall devote substantially all of his business time and attention
         to the business and affairs of the Company consistent with his executive position
         with the Company, except for vacations permitted pursuant to Section III,
         Paragraph C, and Disability (as defined in Section V, Paragraph B). This
         Agreement shall not be construed as preventing Executive from engaging in
         charitable and community affairs, or giving attention to his passive investments,
         provided that such activities do not interfere with the regular performance of his
         duties and responsibilities under this Agreement.
II.      Term
       Except as otherwise specifically provided in Section V below, the term of this
Agreement (the "Term") shall commence on the date of this Agreement, and shall
continue until the (number) anniversary of the date of this Agreement, subject to the
terms and conditions of this Agreement. This Agreement shall be renewed for
subsequent (number)-year periods unless either party shall terminate this Agreement
upon at least (number) days' written notice.
III.     Compensation
         A.  Base Salary.


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               Executive shall be paid a base salary (the "Base Salary") at an annual rate
        of $_______________, payable at such intervals as the other executive officers
        of the Company are paid, but in any event at least on a monthly basis. The Base
        Salary shall be reviewed by the Executive Board on or before January 1 of each
        year during the Term, with such reviews to commence prior to such date, and
        shall be subject to increase in the discretion of the Executive Board, taking into
        account merit, corporate and individual performance and general business
        conditions. Such increase, if any, in Executive's Base Salary shall be effective on
        January 1 of each year during the Term commencing in (month), (year).
        B.   Employee Benefits. In addition to the Base Salary and the Bonus
        Compensation, Executive shall be entitled:
                 1.     To continue to receive the fringe benefits now provided by the
                 Company in addition to any additional benefits provided in the future to its
                 executive officers, including, but not limited to, life, hospitalization,
                 surgical, major medical and disability insurance and sick leave;
                 2.      To be a full participant in all of the Company's other benefit plans,
                 pension plans, retirement plans and profit-sharing plans which may be in
                 effect from time to time or may later be adopted by the Company; and
                 3.     To all costs and expenses for the operation, including parking,
                 maintenance and insurance, of Executive's automobile; provided,
                 however, that such costs and expenses shall not exceed $___________
                 in any month.
        C.       Vacation.
                During the Term, Executive shall be entitled to such vacation with pay
        during each calendar year of his Employment under this Agreement consistent
        with his position as an executive officer of the Company, but in no event less
        than (number) weeks in any such calendar year (pro-rated as necessary for
        partial calendar years during the Term). Such vacation may be taken, in
        Executive's discretion, at such time or times as are not inconsistent with the
        reasonable business needs of the Company. Executive shall not be entitled to
        any additional compensation if Executive, for whatever reason, fails to take such
        vacation during any year of his Employment under this Agreement. Executive
        shall also be entitled to all paid holidays given by the Company to its executive
        officers.
IV.    Expenses. During the Term, the Company shall reimburse Executive upon
presentation of appropriate vouchers or receipts, in accordance with the Company's
expense reimbursement policies, for all out-of-pocket business travel and entertainment
expenses incurred or expended by Executive in connection with the performance of his
duties under this Agreement.
V.      Termination of Employment
        A.    Death. In the event of the death of Executive during the Term, Executive's
        Employment under this Agreement shall be terminated as of the date of his death
        and Executive's designated beneficiary, or, in the absence of such designation,


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        the estate or other legal representative of Executive (collectively, the "Estate"),
        shall be paid Executive's unpaid Base Salary through the month in which the
        death occurs and any unpaid Bonus Compensation through the month in which
        the death occurs. In the case of such incomplete fiscal year, the Bonus
        Compensation shall be pro-rated through the month in which the death occurs.
        The Estate shall be entitled to all other death benefits in accordance with the
        terms of the Company's benefit programs and plans.
        B.     Disability. If Executive shall be unable to render the services or perform
        his duties under this Agreement by reason of illness, injury or incapacity (whether
        physical, mental, emotional or psychological) (a "Disability") for a period of either:
        (i) (number) consecutive days; or (ii) (number) days in any consecutive 365-day
        period, then the Company shall have the right to terminate this Agreement by
        giving Executive (number) days' prior written notice. If Executive's Employment
        under this Agreement is so terminated, Executive shall be paid, in addition to
        payments under any disability insurance policy in effect, Executive's unpaid Base
        Salary through the month in which the termination occurs, plus Bonus
        Compensation on the same basis as is set forth in Paragraph A above.
        C.       Termination of Employment of Executive by the Company for Cause.
                 1.      Nothing in this Agreement shall prevent the Company from
                 terminating Executive's Employment for Cause (as defined below). From
                 and after the date of such termination, Executive shall no longer be
                 entitled to receive Base Salary and Bonus Compensation, Executive shall
                 no longer be entitled to indemnification or the advancement of expenses in
                 connection with any action arising from or related to such termination, and
                 the Company shall no longer be required to pay premiums on any life
                 insurance or disability policy for Executive. Any rights and benefits which
                 Executive may have in respect of any other compensation or any
                 employee benefit plans or programs of the Company, whether pursuant to
                 Section III, Paragraph B, or otherwise, shall be determined in
                 accordance with the terms of such other compensation arrangements or
                 plans or programs. The term "Cause," as used in this Agreement, shall
                 mean that: (i) Executive shall embezzle funds or misappropriate other
                 property of the Company; (ii) Executive shall willfully disobey a lawful
                 directive of the Board, whether through commission or omission; (iii)
                 Executive shall breach the Agreement in a material manner or engage in
                 fraudulent conduct as regards the Company; or (iv) Executive shall be
                 convicted of a felony or any other criminal act involving moral turpitude.
                 2.       The Company shall provide Executive with written notice stating
                 that it intends to terminate Executive's Employment for Cause under this
                 Paragraph C and specifying the particular act or acts on the basis of
                 which the Board intends to so terminate Executive's Employment.
                 Executive shall then be given the opportunity, within (number) days of his
                 receipt of such notice, to have a meeting with the Board to discuss such
                 act or acts (other than with respect to an action described in
                 Subparagraph C(1)(i) above as to which the Board may immediately


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                 terminate Executive's Employment for Cause). Other than with respect to
                 an action described in Subparagraph C(1)(i) above, Executive shall be
                 given (number) days after his meeting with the Board to take reasonable
                 steps to cease or correct the performance (or nonperformance) giving rise
                 to such written notice. If the Executive Board determines that Executive
                 has failed within such (number)-day period to take reasonable steps to
                 cease or correct such performance (or nonperformance), which
                 determination shall be made in the Executive Board's sole discretion,
                 Executive shall be given the opportunity, within (number) days of his
                 receipt of written notice to such effect, to have a meeting with the
                 Executive Board to discuss such determination. Following that meeting, if
                 the Executive Board believes that Executive has failed to take reasonable
                 steps to cease or correct his performance (or nonperformance) as above
                 described, which determination shall be made in the Board's sole
                 discretion, the Board may then terminate the Employment of Executive for
                 Cause.
        D.       Termination of Employment Other than for Cause, Death or
                 Disability.
                 1.     Termination. This Agreement may be terminated by the Company
                 (in addition to termination pursuant to Paragraph A, B or C above) at any
                 time and for any reason or upon the expiration of the Term.
                 2.      Severance and Non-Competition Payments.
                         a.      If this Agreement is terminated by the Company, other than
                         as a result of death or Disability of Executive or for Cause, the
                         Company shall pay Executive a severance and non-competition
                         payment equal to the sum of (x) an amount equal to the Base
                         Salary for (number) years plus (y) an amount equal to _______% of
                         the average of the Bonus Compensation earned by Executive in
                         respect of the last (number) full fiscal years [or such lesser number
                         of years, if Executive has been employed for less than (number) full
                         fiscal years] immediately preceding the year of termination. The
                         Base Salary portion of the severance and non-competition payment
                         shall be payable in a lump sum on the first day of the month
                         following the termination and the Bonus Compensation portion of
                         the severance and non-competition payment shall be payable in
                         (number) equal annual installments commencing on the first
                         anniversary of the first day of the month following termination.
                         b.    Executive shall not be required to mitigate the amount of any
                         severance and non-competition payment provided for under this
                         Agreement by seeking other employment or otherwise.
VI.     Confidential Information
        A.    Executive agrees that he will not at any time, either during the Term or
        subsequently, use, disclose or make accessible to any other person, firm,
        partnership, corporation or any other entity any Confidential Information (as


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        defined below) pertaining to the business of the Company except: (i) while
        employed by the Company, in the business of and for the benefit of the
        Company; or (ii) when required to do so by a court of competent jurisdiction, by
        any governmental agency having supervisory authority over the business of the
        Company, or by any administrative body or legislative body (including a
        committee of the same) with jurisdiction to order the Company to divulge,
        disclose or make accessible such information. For purposes of this Agreement,
        "Confidential Information" shall mean non-public information concerning the
        Company's financial data, statistical data, strategic business plans, product
        development (or other proprietary product data), customer and supplier lists,
        customer and supplier information, information relating to practices, processes,
        methods, trade secrets, marketing plans and other non-public, proprietary and
        confidential information of the Company; provided, however, that Confidential
        Information shall not include any information which: (x) is known generally to the
        public other than as a result of unauthorized disclosure by Executive; (y)
        becomes available to Executive on a non-confidential basis from a source other
        than the Company; or (z) was available to Executive on a non-confidential basis
        prior to its disclosure to Executive by the Company. It is specifically agreed by
        Executive that any Confidential Information received by Executive during his
        Employment by the Company is deemed Confidential Information for purposes of
        this Agreement. If Executive's Employment is terminated under this Agreement
        for any reason, his immediately shall return to the Company all Confidential
        Information in his possession.
        B.     Executive and the Company agree that this covenant regarding
        Confidential Information is a reasonable covenant under the circumstances, and
        further agree that if, in the opinion of any court of competent jurisdiction, such
        covenant is not reasonable in any respect, such court shall have the right, power
        and authority to excise or modify such provision or provisions of this covenant as
        to the court shall appear not reasonable and to enforce the remainder of the
        covenant as so amended. Executive agrees that any breach of the covenant
        contained in this Section VI would irreparably injure the Company. Accordingly,
        Executive agrees that the Company, in addition to pursuing any other remedies it
        may have in law or in equity, may obtain an injunction against Executive from any
        court having jurisdiction over the matter, restraining any further violation of this
        Section VI.
VII.    Non-Competition and Non-Solicitation
        A.      Executive agrees that during the Non-Competition Period (as defined in
        Paragraph D below), without the prior written consent of the Company: (i) he
        shall not be a principal, manager, agent, consultant, officer, member or employee
        of, or, directly or indirectly, own more than five percent of any class or series of
        equity securities in, any partnership, corporation, or other entity, which, now or at
        such time, has material operations which are engaged in any business activity
        competitive (directly or indirectly) with the business of the Company; and (ii) he
        shall not, on behalf of any competing entity, directly or indirectly, have any
        dealings or contact with any entities that were customers of the Company within



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        the 12-month period prior to the termination of Employment or that the Company
        made a presentation during the 12-month period prior to the termination of
        Employment.
        B.      During the Non-Competition Period, Executive agrees that, without the
        prior written consent of the Company (and other than on behalf of the Company),
        Executive shall not, on his own behalf or on behalf of any person or entity,
        directly or indirectly hire or solicit the employment of any employee who has been
        employed by the Company at any time during the 12 months immediately
        preceding such date of hiring or solicitation.
        C.     Executive and the Company agree that the covenants of non-competition
        and non-solicitation are reasonable covenants under the circumstances, and
        further agree that if, in the opinion of any court of competent jurisdiction such
        covenants are not reasonable in any respect, such court shall have the right,
        power, and authority to excise or modify such provision or provisions of these
        covenants as to the court shall appear not reasonable and to enforce the
        remainder of these covenants as so amended. Executive agrees that any breach
        of the covenants contained in this Section VII would irreparably injure the
        Company. Accordingly, Executive agrees that the Company, in addition to
        pursuing any other remedies it may have in law or in equity, may obtain an
        injunction against Executive from any court having jurisdiction over the matter,
        restraining any further violation of this Section VII.
        D.   The provisions of this Section VII shall survive the termination of this
        Agreement for (number) years from the date of such termination (the "Non-
        Competition Period").
VIII. Severability. The invalidity of any portion of this Agreement will not and shall
not be deemed to affect the validity of any other provision. If any provision of this
Agreement is held to be invalid, the parties agree that the remaining provisions shall be
deemed to be in full force and effect as if they had been executed by both parties
subsequent to the expungement of the invalid provision.
IX.   No Waiver. The failure of either party to this Agreement to insist upon the
performance of any of the terms and conditions of this Agreement, or the waiver of any
breach of any of the terms and conditions of this Agreement, shall not be construed as
subsequently waiving any such terms and conditions, but the same shall continue and
remain in full force and effect as if no such forbearance or waiver had occurred.
X.     Governing Law. This Agreement shall be governed by, construed, and enforced
in accordance with the laws of the State of (Name of state).
XI.    Notices. Unless provided herein to the contrary, any notice provided for or
concerning this Agreement shall be in writing and shall be deemed sufficiently given
when sent by certified or registered mail if sent to the respective address of each party
as set forth at the beginning of this Agreement.
XII. Attorney’s Fees. In the event that any lawsuit is filed in relation to this
Agreement, the unsuccessful party in the action shall pay to the successful party, in


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addition to all the sums that either party may be called on to pay, a reasonable sum for
the successful party's attorney fees.
XIII. Mandatory Arbitration. Notwithstanding the foregoing, and anything herein to
the contrary, any dispute under this Agreement shall be required to be resolved by
binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator,
each party shall select one arbitrator and both arbitrators shall then select a third. The
third arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed
by the rules of the American Arbitration Association then in force and effect.
XIV. Entire Agreement. This Agreement shall constitute the entire agreement
between the parties and any prior understanding or representation of any kind
preceding the date of this Agreement shall not be binding upon either party except to
the extent incorporated in this Agreement.
XV. Modification of Agreement. Any modification of this Agreement or additional
obligation assumed by either party in connection with this Agreement shall be binding
only if placed in writing and signed by each party or an authorized representative of
each party.
XVI. Assignment of Rights. The rights of each party under this Agreement are
personal to that party and may not be assigned or transferred to any other person, firm,
corporation, or other entity without the prior, express, and written consent of the other
party.
XVII. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.
XVIII. Compliance with Laws. In performing under this Agreement, all applicable
governmental laws, regulations, orders, and other rules of duly-constituted authority will
be followed and complied with in all respects by both parties.
        WITNESS our signatures as of the day and date first above stated.


                                                      __________________________________
                                                      The Executive Board of (Name of Company)



________________________                           By:_______________________________
(Printed Name of Executive)                           (Printed Name of Board Member)

________________________                                _______________________________
(Signature of Executive)                               (Signature of Board Member)




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                                                   By:_______________________________
                                                   (Printed Name of Board Member)

                                                   _________________________________
                                                   (Signature of Board Member)


                                                   By:_______________________________
                                                   (Printed Name of Board Member)

                                                   __________________________________
                                                   (Signature of Board Member)


                                                   By:_______________________________
                                                   (Printed Name of Board Member)

                                                   _________________________________
                                                   (Signature of Board Member)




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DOCUMENT INFO
Description: This is an employment agreement for managing member of a limited liability company (LLC). A managing member is an agent of the company that participates in the day-to-day management of the LLC but also has an ownership interest in the LLC. A managing member is entitled to share in the profits of the company and is also entitled to be compensated for work performed as an employee. As drafted, this agreement contains standard clauses, such as confidentiality and non-competition provisions and a mandatory arbitration clause, but can be customized to ensure the specific terms of the parties’ agreement are addressed.