Key Person Agreement Template for England and Wales

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Key Requirements PROMPT example:

Key Person Agreement

"I need a Key Person Agreement for our newly appointed CTO who will be leading our AI division, including provisions for share options and specific IP protection clauses as they'll be involved in developing our core technology starting March 2025."

Document background
A Key Person Agreement is essential when organizations need to secure the continued service of individuals critical to their operations. This contract type, governed by English and Welsh law, is particularly relevant for protecting company interests while providing enhanced terms to retain valuable employees. The agreement typically includes detailed provisions on compensation, confidentiality, non-compete clauses, and termination conditions. It's commonly used during business transitions, succession planning, or when securing specialized talent in competitive markets.
Suggested Sections

1. 1. Parties: Identification of the employer and key person

2. 2. Background: Context of the agreement and role importance

3. 3. Definitions: Key terms used throughout the agreement

4. 4. Appointment and Term: Duration and nature of the appointment

5. 5. Duties and Responsibilities: Detailed description of role and expectations

6. 6. Compensation and Benefits: Salary, bonuses, and other benefits

7. 7. Confidentiality: Protection of company information

8. 8. Intellectual Property: Ownership of work product

9. 9. Termination: Circumstances and process for ending the agreement

Optional Sections

1. Garden Leave: Optional provisions for paid leave during notice period, typically used when protecting sensitive information or client relationships

2. Change of Control: Optional provisions for company ownership changes, relevant for companies likely to undergo M&A activity

3. Key Person Insurance: Optional provisions for insurance requirements and beneficiaries when company takes out insurance on key person

4. Share Options: Optional terms for equity participation when offering equity incentives

Suggested Schedules

1. Schedule 1: Job Description: Detailed outline of responsibilities and duties

2. Schedule 2: Compensation Package: Detailed breakdown of salary, bonuses, and benefits

3. Schedule 3: Restricted Activities: List of prohibited activities during and after employment

4. Schedule 4: Company Policies: Reference to relevant company policies and procedures

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
Relevant Industries
Relevant Teams
Relevant Roles
Industries

Employment Rights Act 1996: Primary legislation governing employment rights, including basic employment rights, notice periods, and unfair dismissal provisions

Companies Act 2006: Legislation covering directors' duties and corporate governance requirements when the key person serves as a director

Equality Act 2010: Legislation ensuring prevention of discrimination and equal treatment provisions in employment relationships

Data Protection Act 2018 and UK GDPR: Laws governing personal data handling and privacy requirements in employment contracts

Financial Services and Markets Act 2000: Regulatory framework for key persons working in regulated financial services, including compliance requirements

Trade Secrets Regulations 2018: Legislation protecting confidential information and trade secrets in employment relationships

Common Law Principles: Legal principles covering duty of fidelity, implied terms, and restraint of trade doctrine in employment contracts

Working Time Regulations 1998: Legislation governing working hours and holiday entitlements for employees

National Minimum Wage Act 1998: Law establishing minimum compensation requirements for employees

Income Tax and Social Security Legislation: Laws governing tax implications and National Insurance contributions in employment relationships

Key Agreement Components: Essential elements including duties, compensation, confidentiality, IP rights, non-compete clauses, termination provisions, garden leave, insurance requirements, change of control, and dispute resolution

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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