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Back to Forms for 'Compensation & Benefits'.


STOCK INCENTIVE AND NONCOMPETITION AGREEMENT

STOCK INCENTIVE AND NONCOMPETITION AGREEMENT

 

____________________ (state)

 

____________________ (county)

 

This agreement is made and entered into this ______ day of ________ (month), __ (year), by and between ___________________________, Inc., a ______________ (state) corporation, designated herein as the Company, and _____________________ designated herein as Employee.  Both parties state and acknowledge as follows:

 

A.    The Company is principally engaged in _____________________________; and

 

B.    The Company desires to provide incentive for future performance by Employee, and Employee desires to provide services to the Company.

 

Now, therefore, in consideration of the premises and the covenants set forth herein, it is agreed between the parties as follows:

 

1.    Performance:  Employee, during the continuance of his employment by the Company, shall use his best efforts in the selection and supervision of personnel, the conception, organization, execution and coordination of operating, merchandising and expansion programs, and the application thereto of progressive techniques, controls, systems and procedures, as required to improve sales, reduce expenses and otherwise increase profitability and protect and enhance the image of the Company in relation to its personnel and the public.  Employee, in the fulfillment of such responsibilities and the performance of such duties, shall be accountable to and be subject to the direction and control of the Company's Board of Directors.  Employee shall devote as much of his time and attention and energies and services as is reasonably needed for the fulfillment of such responsibilities and performance of such duties, serve on such committees to which the Company may appoint him from time to time, exert  his best efforts to improve the business and condition of the Company, and not be or become employed or engaged in any endeavor or business or business activity during continuance of his employment except as provided in paragraph 3.

 

2.    Stock Bonus:  Company shall provide Employee with __________ (____) (# of shares) of the Company's outstanding stock.  Employee shall be entitled to all voting rights, rights to dividends and other rights of holders of Shares; however, should Employee leave the employ of the Company (for any reason) before one year from the date of this Agreement, ___________ percent of the shares distributed under this Section 2 shall be forfeited.  If Employee leaves the employ of Company (for any reason) after one (1) year from the date of this Agreement but before three (3) years from the date of this Agreement, ___________ percent of the shares distributed to Employee under this Section 2. shall be forfeited.  If Employee leaves the employ of the Company (for any reason) after three (3) years from the date of this Agreement but before five (5) years from the date of this Agreement, _____________ percent of the shares distributed to Employee under this Section 2. shall be forfeited.  If a forfeiture would result in the creation of fractional share(s), the number of share(s) to be forfeited shall be rounded out to prevent the creation of fractional share(s).  All stock distributed under this Agreement shall be adjusted to preserve the value of the bonus in the event of a stock dividend, stock split or reverse stock split, recapitalization, merger, consolidation, reorganization, cash or property dividend, exchange of shares, repurchase of shares or any other change in corporate structure of or by Company that in any such event materially affects the outstanding shares of stock.  All stock distributed under this Agreement shall be subject to that Shareholders Agreement, a copy of which is attached hereto as Exhibit A.

 

3.    Noncompetition:  As partial consideration for the issuance of shares to Employee described in Section 2. above, Employee will not for a period of two (2) years from the effective date of this Agreement, or for a period of one (1) year after Employees employment with Company has been terminated by either party, whichever period is longer, either directly or indirectly:

 

(a)  Own, have a proprietary interest of any kind in, or in any way enter into or attempt to enter into the __________________________ business as it relates to corporate formation or structuring:

 

(b)  Induce or attempt to persuade any former, current or future employee, agent, manager, consultant, director, or other participant in Company's business to terminate such employment or other relationship in order to enter into any relationship with the Employee, any business organization in which the employee is a participant in any capacity whatsoever, or any other business organization in competition with Company's business; or

 

(c)  Use contracts, proprietary information, trade secrets, confidential information, customer lists, mailing lists, goodwill, or other intangible property used or useful in connection with the Company's business.

 

4.    Stock Option:  Company shall provide employee with an option to purchase ________ (___), but not less than ________ (___), shares, for an aggregate purchase price of _____________ (amount) ($________).  All stock purchased under this Option shall be adjusted to preserve the value of the bonus in the event of a stock dividend, stock split or reverse stock split, recapitalization, merger, consolidation, reorganization, cash or property dividend, exchange of shares, repurchase of shares or any other change in the corporate structure of or by the Company that in any such event materially affects the outstanding shares of stock.  All stock purchased under this Option shall be subject to the Shareholders Agreement attached hereto and included herein as Exhibit A.  Said purchase price shall be payable at the closing of purchase in cash or by certified check made payable to the Company.  Such option may be exercised by giving the Company written notice of Employees Exercise of such option prior to ____________ (date),  If such option is not exercised by ____________ (date), such option shall terminate and be of no further force and effect.  The closing of such purchase and sale shall be held at

__________________________ (company address) and shall be held within ______ (___) days after Employee gives notice of his intention to exercise the option.

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement under seal this the ______ day of __________ (month), ____ (year).

 

 

____________________________________ Inc. (Company Name)

 

 

____________________________________ President’s Signature

 

 

____________________________________ Employee’s Signature

 

 

Attest:  _____________________________

            Secretary



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