Agreements with employees
Every employee of the company should have a standard letter that sets forth the general terms and conditions of their employment and states that they are “at-will” employees. This means that they can leave the company at any time (although their rights to retain their shares or exercise their will depend on the vesting terms), and also that the company can terminate their employment at any time—with or without cause. They should also sign an agreement with the company where they agree to keep the company’s information confidential, assign their rights to any developed intellectual property to the company and, in most states, agree not to compete with the company for a period of time following their employment.
To be enforceable, it is important that the employees sign these agreements upon their initial employment—their employment should be conditioned upon them signing these agreements. Otherwise, they may not be enforceable or the company will have to pay additional compensation in order to make them enforceable. View the forms you need in our Document Generator.
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- The right time to incorporate
- Determining the right type of entity to create
- Where to incorporate
- Defining “qualified to do business” and where to be qualified
- Who makes decisions for the company?
- How startups compensate employees
- Foreign employees and their need for a visa
- Who owns your IP
- Licensing IP from a university or hospital
- Retaining a license to your IP
- Non-competes with former employers
- Reserving shares under the company’s option plan
- Allocating equity among founders
- Vesting restrictions on shares held by the founders
- Vesting terms that make sense
- Accelerating vesting on a sale or termination
- Tax implications related to shares that vest
- Rules for foreign founders in the US on a student visa
- Who owns your IP
- Non-competes with former employers
- Take a good idea with you when you leave a company
- Retaining a license to your IP
- Founder compensation
- Founder employment agreements
- Vesting restrictions on shares held by the founders
- Accelerating vesting on a sale or termination
- Vesting terms that make sense
- Tax implications related to shares that vest
- Difference between options and restricted stock
- Tax differences between ISOs and NSOs
- Granting options vs. issuing restricted stock
- Advisory board setup and compensation
- Reserving shares under the company's option plan