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An employee equipment agreement is a legally binding contract between an employer and an employee regarding the use of company-owned equipment. It outlines the employer's expectations regarding how employees should handle this equipment. The video discusses employee permissions and responsibilities, emphasizing that employees must regularly maintain the equipment and return it upon leaving the company. The agreement specifies policies on using company equipment, particularly regarding the ability to take it off-site. It also covers common office equipment included in such agreements, highlighting the importance of clear guidelines for both parties.