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.
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. © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 2 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, © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 3 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 © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 4 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 © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 5 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 © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 6 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 © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 7 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) © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 8 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) © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 9
Pages to are hidden for
"Employment Agreement for LLC Managing Director"Please download to view full document