Two words: Clean Break. This is a release of all claims between a member and the company (an LLC) that completely nullifies any existing operating agreement and maintains strong rights for the company. This agreement has no severance provision (beyond liquidating Member's capital account). This type of agreement should, unless otherwise stated in the operating agreement, be accompanied by a corporate resolution in lieu of a meeting stating that a...
show morell members unanimously agree to the resignation.
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MEMBER RETIREMENT AGREEMENT
The Member Retirement Agreement (hereinafter referred to as "Agreement") is entered into effective Date(the “Retirement Date” or “Effective Date”) by and between "the Parties":
Company Name ("Company")
Member Name ("Member")
WHEREAS, Member has been a Member of the Company in various capacities and is currently holding the position of Member;
WHEREAS, the Parties acknowledge it is in their individual and mutual best interests for Member to retire as a managing Member of the Company;
WHEREAS, the parties wish to define the terms and conditions of Member's retirement and separation from membership with the Company;
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the undersigned parties, intending to be legally bound, hereby agree as follows:
Effective immediately, Member agrees to retire from, and thereby terminate, his/her membership with the Company. On the Retirement Date, Member's membership with the Company and all further compensation, remuneration, and eligibility of Member under Company profit-sharing agreements shall terminate, including but not limited to rights to the Company’s intellectual or other property and rights to any explicit or implicit partnership relationship, except as otherwise provided in this Agreement or by applicable law.
This Agreement shall supersede and make null and void any existing operating agreement signed by the Parties.
2. Company’s Covenants
Upon execution of this Agreement, Company shall hereby pay Member a sum, by check, to recompensate him/her for the amount in Member's Capital Account. Member shall timely notify Company that he has received said check. Member will be entitled to no other compensation in any form whatsoever.
3. Member Covenants
(a) Unauthorized Disclosure. Upon execution of this Agreement, the Member shall not make any Unauthorized Disclosure. For purposes of this Agreement, "Unauthorized Disclosure" shall mean disclosure by the Member without the prior written consent of the Company to any person, other than a Member of the Company or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by the Member of duties as an Member or as may be legally required, of any confidential information with respect to any of the Company's customers, products, methods of distribution, strategies, business and marketing plans, business policies and practices, litigation strategies or defenses, and plans for new business concepts; provided, however, that such term shall not include the use or disclosure by the Member, without consent, of any information known generally to the public. This confidentiality covenant has no temporal, geographical or territorial restriction.
(b) Non-Solicitation. During the No-Raid Period described below, the Member shall not, either directly or indirectly, alone, or in conjunction with another party, intentionally interfere with or harm, or intentionally attempt to interfere with or harm, the relationship of the Company, its subsidiaries and/or affiliates, with any person who at any time was an Member, customer or supplier of the Company, its subsidiaries and/or affiliates or otherwise had a business relationship with the Company, its subsidiaries and/or affiliates, nor shall Member knowingly hire or cause to be hired any person who is employed by the Company. The "No-Raid Period" means the one-year period following the Retirement Date.
(c) Non-Competition. During the one-year period following the Retirement Date, the Member shall not, directly or indirectly, without the prior written consent of the Company, own, manage, operate, join, control, be employed by, consult with or participate in the ownership, management, operation or control of, or be connected with (as a stockholder, partner, or otherwise), any business, individual, partner, firm, corporation, or other entity that competes, directly or indirectly, with the Company or any division, subsidiary or affiliate of the Company ("Competing Entity").
(d) Remedies. The Member agrees that any breach of the terms of this Agreement would result in irreparable injury and damage to the Company for which the Company would have no adequate remedy at law. In the event of Member violating any terms of this Agreement, the Company shall be entitled to immediately cease further payments to Member under this Agreement. The Member and the Company further agree that the provisions of the covenants not to compete and solicit are reasonable and that the Company would not have entered into this Agreement but for the inclusion of such covenants herein. Should a court or arbitrator determine, however, that any provision of the covenants is unreasonable, either in period of time, geographical area, or otherwise, the parties hereto agree that the covenant should be interpreted and enforced to the maximum extent which such court or arbitrator deems reasonable. This paragraph 3(d) does not constitute a waiver by either party to any remedies in the form of compensatory or other money damages.
(e) Transfer of All Property. Member hereby assigns all rights to any and all Intellectual Property held by him, and relating to his membership of Company, to Company. “Intellectual Property” includes all ideas, concepts, drawings, writings, improvements, URLs, code of any sort, images, business plans, and any other proprietary information, whether or not protected under copyright, trademark, patent, or trade secret. Member will, at his own expense, cooperate and aid Company in any way necessary to effect the assignments stated in this paragraph.
4. No Severance Benefits
Member’s retirement shall not entitle Member to any severance benefits or compensation whatsoever, except those payments detailed in Paragraph 2.
5. Cooperation, Non-Disparagement, and Indemnity
Neither the Member nor the officers of the Company shall state or otherwise publish anything about the other party that would adversely affect the reputation, image or business relationships and goodwill of the other party in its or his market and community at large. Member shall fully cooperate with the Company in defense of legal claims asserted against the Company and other matters requiring the testimony or input and knowledge of Member, and the Company agrees to reimburse Member for reasonable costs and expenses incurred as a result thereof. The Company agrees to indemnify Member for liabilities and costs incurred by Member by reason of his membership with the Company, on the same basis as it does in similar circumstances with other Members.
Member agrees not to at any time talk about, write about, or otherwise publicize or disclose to any third party the terms of this Agreement or any fact concerning its negotiation, execution or implementation, except with (1) an attorney, accountant, or other advisor engaged by Member to advise him; (2) the Internal Revenue Service or other governmental agency upon proper request and as required by law; and (3) his immediate family, providing that all such persons agree in advance to keep said information confidential and not to disclose it to others.
7. Release of All Claims
(a) Release of Company by Member. In consideration of the receipt of the sums and covenants stated herein, Member does hereby, on behalf of himself, his heirs, administrators, executors, agents, and assigns, forever release, requite, and discharge the Company and its agents, parents, subsidiaries, affiliates, divisions, officers, directors, Members, predecessors, successors, and assigns ("Released Parties"), from any and all charges, claims, demands, judgments, actions, causes of action, damages, expenses, costs, attorneys' fees, and liabilities of any kind whatsoever, whether known or unknown, vested or contingent, in law, equity or otherwise, which Member has ever had, now has, or may hereafter have against said Released Parties for or on account of any matter, cause or thing whatsoever which has occurred prior to the date of his signing this Agreement. This release of claims includes, without limitation of the generality of the foregoing, any and all claims related to Member's membership with the Company, including voting and management rights and his retirement from his position and his membership on the Effective Date of this Agreement, and any and all rights that Member has or may have had under federal, state, and local statutes, regulations or public policies, as well as the laws of contract, torts, and all other subjects.
(b) Release of Member by Company. The Company does hereby, on behalf of itself and its agents, parents, subsidiaries, affiliates, divisions, officers, directors, Members, predecessors, successors and assigns, forever release, requite, and discharge the Member and his heirs, administrators, executors, agents and assigns, from any and all charges, claims, demands, judgments, actions, causes of action, damages, expenses, costs, attorneys' fees, and liabilities of any kind whatsoever, whether known or unknown, vested or contingent, in law, equity or otherwise, which the Company ever had, now has, or may hereafter have against Member for or on account of any matter, cause or thing whatsoever which has occurred prior to the date of Member's signing this Agreement; provided, however, that nothing herein shall be deemed to release or affect any rights of the Company pursuant to this Agreement; and provided further that nothing in this paragraph shall release Member from any claims by Company for Member’s willful misconduct or gross negligence, whether now known or later discovered.
8. Complete and Absolute Defense
This Agreement constitutes, among other things, a full and complete release of any and all claims released by either party, and it is the intention of the parties hereto that this Agreement is and shall be a complete and absolute defense to anything released hereunder. The parties expressly and knowingly waive their respective rights to assert any claims against the other which are released hereunder, and covenant not to sue the other party or Released Parties based upon any claims released hereunder. The parties further represent and warrant that no charges, claims or suits of any kind have been filed by either against the other as of the date of this Agreement.
It is understood that this Agreement is, among other things, an accommodation of the desires of each party, and the above-mentioned payments and covenants are not, and should not be construed as, an admission or acknowledgment by either party of any liability whatsoever to the other party or any other person or entity.
10. Return of Property
Member agrees that on or before his/her Retirement Date, he shall promptly return to Company, or destroy or relinquish his own access to all documents and property relating to Company’s affairs in his possession or control, including, but not limited to, personal computer(s) and all software, security keys and badges, supplier and customer information, files, reports, all correspondence both internal and external (memo's, letters, quotes, etc.), business plans, budgets, designs, and any and all other property of the Company.
11. Knowing and Voluntary Execution
Each of the parties hereto further states and represents that he or it has carefully read the foregoing Agreement, and knows the contents thereof, and that he or it has executed the same as his or its own free act and deed. Member further acknowledges that he has been and is hereby advised to consult with an attorney concerning this Agreement and that he had adequate opportunity to seek the advice of legal counsel in connection with this Agreement. Member also acknowledges that he has had the opportunity to ask questions about each and every provision of this Agreement and that he fully understands the effect of the provisions contained herein upon his legal rights.
12. Executed Counterparts
This Agreement may be executed in one or more counterparts, and any executed copy of this Agreement shall be valid and have the same force and effect as the originally executed Agreement.
13. Governing Law
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the New York.
No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Member and the Company.
Member's obligations and agreements under this Agreement shall be binding on the Member's heirs, executors, legal representatives and assigns and shall inure to the benefit of any successors and assigns of the Company. The Company may assign this Agreement or any of its rights or obligations arising hereunder to any party, as part of a sale of its assets or other similar change of control.
16. Entire Agreement
This Agreement constitutes the entire agreement between the parties hereto in respect of the subject matter hereof, and this Agreement supersedes all prior and contemporaneous agreements between the parties hereto in connection with the subject matter hereof.
17. Effective Date
This Agreement will become effective upon its signature by both parties.
IN WITNESS WHEREOF, both the parties have hereto set his hand this Date.