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Director Employment Agreement for the United States

Director Employment Agreement Template for United States

A Director Employment Agreement is a comprehensive legal document used in the United States to establish the terms and conditions of employment for corporate directors. This agreement outlines key aspects including compensation, duties, responsibilities, term of employment, and termination provisions. It must comply with both federal and state-specific employment laws, corporate governance requirements, and, for public companies, SEC regulations and stock exchange rules.

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Director Employment Agreement

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What is a Director Employment Agreement?

The Director Employment Agreement is a crucial document used when appointing new directors or formalizing existing director relationships within a company. This contract type is essential for establishing clear terms of employment, protecting both the company and the director, and ensuring compliance with U.S. corporate governance requirements. It typically includes detailed provisions on compensation, duties, confidentiality, non-compete clauses, and termination conditions. The agreement must be tailored to comply with both federal regulations and state-specific laws where the company operates.

What sections should be included in a Director Employment Agreement?

1. Parties: Identification of the company and the director being appointed

2. Background: Context of the appointment and any relevant corporate history

3. Definitions: Key terms used throughout the agreement

4. Appointment and Term: Details of the position and duration of appointment

5. Duties and Responsibilities: Scope of director's role and obligations

6. Compensation: Base salary, bonuses, and other financial benefits

7. Benefits and Expenses: Details of benefits package, expense reimbursement, and insurance coverage

8. Confidentiality: Obligations regarding confidential information and trade secrets

9. Intellectual Property: Rights and obligations regarding IP created during employment

10. Non-Competition and Non-Solicitation: Restrictions on competitive activities and employee/client solicitation

11. Termination Provisions: Circumstances and procedures for ending the agreement

12. Indemnification: Protection and insurance coverage for director's actions

13. General Provisions: Miscellaneous legal provisions including governing law, notices, and amendments

What sections are optional to include in a Director Employment Agreement?

1. Equity Participation: Stock options or share-based compensation terms and conditions

2. Change of Control: Provisions relating to company acquisition or merger scenarios

3. International Assignment: Terms and conditions for overseas assignments or responsibilities

4. Board Committee Participation: Specific duties and compensation related to board committee membership

5. Compliance with Securities Laws: Special provisions for directors of public companies regarding securities trading and reporting

What schedules should be included in a Director Employment Agreement?

1. Schedule A - Job Description: Detailed outline of role, responsibilities, and reporting relationships

2. Schedule B - Compensation Schedule: Detailed breakdown of all compensation elements including salary, bonuses, and incentives

3. Schedule C - Benefits Package: Comprehensive list of benefits including insurance, pension, and other perquisites

4. Schedule D - Stock Option Plan: Terms and conditions of equity-based compensation

5. Schedule E - Company Policies: Key corporate policies and procedures applicable to the director

6. Appendix 1 - D&O Insurance Coverage: Details of directors and officers liability insurance coverage

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Cost

Free to use
Clauses




































Industries

Fair Labor Standards Act (FLSA): Federal law establishing standards for wage, overtime pay, recordkeeping, and child labor. Though directors are typically exempt employees, understanding FLSA is crucial for compliance in their supervisory roles.

Internal Revenue Code (IRC): Federal tax code containing regulations on executive compensation, tax treatment of benefits, and reporting requirements for director compensation.

Employee Retirement Income Security Act (ERISA): Federal law governing employee benefit plans, including pension and welfare benefit plans that may be part of director compensation packages.

Securities Exchange Act of 1934: Federal law governing securities trading and requiring various disclosures for public companies, including executive compensation and insider trading regulations.

Sarbanes-Oxley Act (SOX): Federal law establishing enhanced corporate governance and financial disclosure requirements, particularly important for directors of public companies.

Dodd-Frank Wall Street Reform: Federal law implementing various corporate governance reforms, including say-on-pay provisions and enhanced disclosure requirements for executive compensation.

Equal Employment Opportunity Laws: Federal laws including Title VII, ADA, and ADEA that prohibit discrimination in employment practices, including at the executive level.

State Corporation Laws: State-specific laws governing corporate formation, operation, and governance, including director duties and responsibilities.

Stock Exchange Rules: Requirements set by stock exchanges (like NYSE or NASDAQ) regarding corporate governance and director responsibilities for listed companies.

SEC Regulations: Federal securities regulations governing disclosure requirements, insider trading, and other aspects of corporate governance for public companies.

State Employment Laws: State-specific regulations governing employment relationships, including wage and hour requirements, leave policies, and termination provisions.

Non-compete Laws: State-specific laws governing the enforceability of non-compete agreements and protection of trade secrets.

Workers' Compensation Laws: State-specific requirements for maintaining workers' compensation insurance and handling workplace injuries.

IRS Executive Compensation Rules: Specific tax regulations governing executive compensation, including limitations on deductibility and special reporting requirements.

Section 409A: IRS regulations governing deferred compensation arrangements, with strict requirements for timing of elections and distributions.

Section 280G: IRS regulations regarding 'golden parachute' payments made to executives in connection with a change in control.

Industry-Specific Regulations: Regulations specific to certain industries (e.g., financial services, healthcare) that may affect director responsibilities and compensation.

Company Bylaws: Internal company rules governing corporate operations, including director duties, elections, and governance procedures.

D&O Insurance Requirements: Insurance requirements and provisions protecting directors and officers from personal liability in their corporate roles.

Equity Compensation Rules: Regulations governing the granting and administration of stock options and other equity-based compensation to directors.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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