The Founder Employment Agreement is essential when transitioning from an informal founding role to a formal employment relationship within a Saudi Arabian company. This document becomes necessary either at company formation or when formalizing the founder's role as an employee, typically coinciding with funding rounds, company growth, or corporate restructuring. The agreement must comply with Saudi Labor Law while addressing the unique aspects of a founder's position, including their dual role as both employee and significant stakeholder. It covers crucial areas such as executive duties, equity arrangements, intellectual property rights, and confidentiality obligations, while ensuring alignment with Saudi Arabian corporate governance requirements and cultural considerations. This agreement is particularly important for protecting both parties' interests, establishing clear expectations, and providing a framework for the founder's employment relationship that accommodates their special status within the company.
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1. Parties: Identification of the Company and the Founder-Employee with full legal names and addresses
2. Background: Context of the agreement, including company formation, founder's role in establishment, and purpose of the employment relationship
3. Definitions: Key terms used throughout the agreement, including Company, Board, Cause, Good Reason, Intellectual Property, etc.
4. Appointment and Term: Position title, term of employment (fixed/indefinite), and effective date
5. Duties and Responsibilities: Detailed description of founder's executive role, reporting structure, and key responsibilities
6. Commitment and Time Dedication: Working hours, exclusivity requirements, and permitted outside activities
7. Compensation and Benefits: Base salary, bonuses, equity compensation, and standard benefits package
8. Equity Arrangements: Details of share ownership, vesting schedules, and share-related rights
9. Intellectual Property Rights: Assignment of IP created during employment and pre-existing IP provisions
10. Confidentiality: Protection of company secrets, confidential information, and trade secrets
11. Non-Competition and Non-Solicitation: Post-employment restrictions compliant with Saudi law
12. Termination: Grounds for termination, notice periods, and consequences of termination
13. Post-Termination Obligations: Ongoing duties, return of company property, and transition responsibilities
14. Governing Law and Jurisdiction: Application of Saudi law and dispute resolution procedures
1. Board Position: Terms of board membership, if founder will serve on board of directors
2. Multiple Founder Provisions: Special provisions for companies with multiple founders, including decision-making hierarchy
3. IPO Preparations: Obligations and restrictions in preparation for potential public offering
4. International Operations: Additional terms for founders managing international subsidiaries or operations
5. Shareholder Rights: Special voting rights or veto powers as a significant shareholder
6. Religious Observance: Specific provisions for religious obligations and prayer times in accordance with Saudi culture
7. Family Business Provisions: Special terms for family-owned businesses and succession planning
8. Emergency Succession: Temporary or permanent succession plan in case of founder incapacity
1. Schedule 1: Compensation Structure: Detailed breakdown of salary, bonuses, and benefits
2. Schedule 2: Share Vesting Schedule: Detailed equity vesting terms and conditions
3. Schedule 3: Key Performance Indicators: Specific performance metrics and targets
4. Schedule 4: Intellectual Property Register: List of pre-existing IP and assigned IP
5. Schedule 5: Permitted Outside Activities: List of approved external commitments and business interests
6. Appendix A: Company Policies: Key company policies applicable to the founder
7. Appendix B: Benefits Package: Detailed description of all benefits and allowances
8. Appendix C: Job Description: Detailed outline of duties and responsibilities
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