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An employee equipment agreement is a legally binding contract between an employer and employee regarding the use of company-owned work equipment. It outlines the company's expectations for how employees should handle this equipment. The video discusses employee permissions and responsibilities, emphasizing that employees must regularly maintain their equipment and return it if they leave the company. The agreement also details policies for using company equipment, particularly regarding its removal from the primary location. Additionally, it highlights common office equipment covered under this type of agreement.