Founder Employment Agreement Template for England and Wales

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Key Requirements PROMPT example:

Founder Employment Agreement

"I need a Founder Employment Agreement for our tech startup's CTO and co-founder, who will own 25% of the company's shares and needs specific provisions for intellectual property rights as they'll be leading our AI development team."

Document background
The Founder Employment Agreement is essential when formalizing the relationship between a founder and their company under English and Welsh law. This document is typically used when transitioning from an informal founding arrangement to a structured employment relationship, or when bringing the founding team under formal employment contracts. It includes crucial elements such as equity arrangements, intellectual property assignments, and executive responsibilities, while ensuring compliance with UK employment law. The agreement is particularly important for protecting both the company's and the founder's interests, especially in cases involving venture capital investment or potential future exit events.
Suggested Sections

1. Parties: Identification of the company and the founder

2. Background: Context of the founder's relationship with the company and establishment of the agreement

3. Definitions: Key terms used throughout the agreement including defined roles, companies, and technical terms

4. Appointment and Duties: Role, responsibilities, reporting structure, and commitment requirements

5. Remuneration and Benefits: Salary, bonuses, benefits package, and compensation structure

6. Working Hours and Location: Work schedule, place of work, and flexibility arrangements

7. Intellectual Property: Ownership and assignment of IP rights, including pre-existing IP and new developments

8. Confidentiality: Protection of company information and trade secrets

9. Termination: Circumstances and process for ending employment, notice periods, and consequences

Optional Sections

1. Share Options: Terms of any share option scheme or equity arrangements

2. Garden Leave: Terms for placing founder on garden leave during notice period

3. International Travel: Terms for international work and travel requirements

4. Board Position: Terms relating to appointment and removal from board positions

5. External Activities: Provisions regarding other business interests and external appointments

Suggested Schedules

1. Schedule 1: Share Option Scheme: Detailed terms and conditions of share options or equity arrangements

2. Schedule 2: Restrictive Covenants: Post-employment restrictions and non-compete provisions

3. Schedule 3: Benefits Package: Detailed description of benefits, including insurance, pension, and other perks

4. Appendix A: Job Description: Detailed role responsibilities and performance expectations

5. Appendix B: Board Resolution: Company approval of appointment and terms

Authors

Alex Denne

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

Relevant legal definitions
Clauses
Industries

Employment Rights Act 1996: Primary legislation governing basic employment rights, notice periods, unfair dismissal provisions, and mandatory statement of employment particulars requirements

Equality Act 2010: Legislation ensuring protection against discrimination, equal treatment provisions, and reasonable accommodations in the workplace

Working Time Regulations 1998: Regulations covering working hours limits, rest breaks, holiday entitlement, and opt-out provisions

Companies Act 2006: Key company law legislation covering directors' duties, corporate governance requirements, and management of conflicts of interest

Copyright, Designs and Patents Act 1988: Intellectual property legislation governing IP ownership and assignment of rights, crucial for founder agreements

UK GDPR and Data Protection Act 2018: Data protection legislation determining requirements for personal data handling and privacy compliance

National Minimum Wage Act 1998: Legislation setting out minimum compensation requirements, though typically less relevant for founder-level agreements

Pensions Act 2008: Legislation covering pension requirements including auto-enrollment obligations for employers

Health and Safety at Work Act 1974: Legislation establishing employer obligations regarding workplace safety and health standards

Founder-Specific Provisions: Special considerations including share schemes/options, board positions, restrictive covenants, confidentiality provisions, and good/bad leaver provisions specific to founder agreements

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,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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