This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
Title: Understanding North Carolina Employment Contracts with Executive Receiving Commission Salary Plus Common Stock and Right of Refusal to Purchase Shares of Other Shareholders in Close Corporations Introduction: In North Carolina, employment contracts for executives can include various structures and provisions that go beyond a standard salary agreement. This article will provide a detailed description of a specific type of employment contract that is commonly utilized in the state. Specifically, we will focus on contracts including a commission-based salary, stock options, and the right of refusal to purchase shares of other shareholders in close corporations. Key Terms: 1. Employment Contract: A legally binding agreement between an employer and an executive employee that outlines the terms and conditions of their employment relationship, including compensation and benefits. 2. Executive Employee: An individual holding a high-level position within a company, typically involved in making strategic decisions and taking responsibility for the company's performance and success. 3. Commission Salary: Compensation based on a percentage of sales or revenue generated by an executive employee. This incentivizes the employee to drive growth and achieve sales targets. 4. Common Stock: Regular shares issued by a corporation that represent ownership in the company. Common stockholders have voting rights and may receive dividends if declared by the corporation. 5. Right of Refusal: The ability of an executive employee to decline an offer or request to purchase shares from other shareholders in a close corporation. This provides the employee with control over their ownership interests and potential dilution of their shares. 6. Close Corporation: A type of corporation with a limited number of shareholders who actively manage the business. Close corporations often have more flexibility and less stringent regulations compared to publicly traded companies. Types of North Carolina Employment Contracts: 1. Commission Salary Plus Common Stock: This type of employment contract includes a base salary for an executive employee, supplemented by commissions based on sales, revenue, or other performance metrics. Additionally, the contract grants the employee a specific number or percentage of common stock in the corporation. 2. Commission Salary Plus Common Stock With Right of Refusal: In addition to the features mentioned above, this contract allows the executive employee to exercise a right of refusal when other shareholders of the close corporation intend to sell their shares. The employee can choose to purchase the offered shares or decline the offer without affecting their existing ownership percentage. 3. Commission Salary Plus Common Stock and Right of Refusal With Vesting Schedule: This type of employment contract adds a vesting schedule to the previously mentioned features. The vesting schedule specifies a timeline within which the executive employee's ownership of the granted common stock fully matures. Until the completion of the vesting period, the employee may not have full rights to transfer or sell their allotted shares. Conclusion: North Carolina employment contracts for executives can incorporate various structures and provisions to align the interests of the executive employee with the success of the company. By combining commission-based salary, common stock ownership, and the right of refusal to purchase shares of other shareholders in close corporations, these contracts provide executives with a sense of ownership, accountability, and decision-making power within the organization.
