All Countries
Corporate Governance
Director Profit Sharing Agreement

Director Profit Sharing Agreement Template for New Zealand

Create a bespoke document in minutes,  or upload and review your own.

4.6 / 5
4.8 / 5

Let's create your Director Profit Sharing Agreement

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Get your first 2 documents free

Your data doesn't train Genie's AI

You keep IP ownership of your information

Key Requirements PROMPT example:

Director Profit Sharing Agreement

"I need a Director Profit Sharing Agreement for a technology startup in Auckland, where three directors will share 15% of net profits equally, with quarterly distributions starting from March 2025, and including specific KPIs related to company growth and international expansion."

Celebrated by
Collaborations with
Investors
Document background
The Director Profit Sharing Agreement is utilized when a company wishes to align director interests with company performance through profit participation. This document is particularly relevant in New Zealand's corporate environment where companies seek to attract and retain high-caliber directors while ensuring compliance with the Companies Act 1993 and related regulations. The agreement typically includes detailed provisions for profit calculation, payment mechanisms, performance criteria, and termination conditions. It's commonly used in private companies, professional services firms, and growth-oriented businesses where director compensation is directly linked to company performance. The document provides legal protection for both parties while establishing clear parameters for profit distribution and associated obligations.
Suggested Sections

1. Parties: Identifies the company and the director(s) entering into the agreement

2. Background: Explains the context of the agreement, the director's role, and the company's intention to implement profit-sharing

3. Definitions and Interpretation: Defines key terms used throughout the agreement, including 'Profit', 'Profit Share', 'Financial Year', etc.

4. Term and Appointment: Specifies the duration of the profit-sharing arrangement and its relationship to the director's appointment

5. Calculation of Profit Share: Details the formula and methodology for calculating the director's profit share

6. Payment Terms: Specifies when and how profit share payments will be made, including any interim payments

7. Company's Obligations: Outlines the company's responsibilities regarding financial reporting, calculations, and payments

8. Director's Obligations: Details the director's duties, performance requirements, and any conditions attached to the profit share

9. Confidentiality: Provisions regarding the confidential treatment of company information and the agreement terms

10. Termination: Circumstances under which the agreement can be terminated and the consequences

11. General Provisions: Standard legal clauses including governing law, notices, amendments, and dispute resolution

Optional Sections

1. Performance Criteria: Additional performance-based conditions for profit share eligibility, used when profit share is linked to specific KPIs

2. Clawback Provisions: Provisions for recovering profit share payments in specific circumstances, used in regulated industries or for risk management

3. Non-Competition: Restrictions on competing activities, used when protecting company interests is crucial

4. International Payments: Provisions for international payment arrangements, used when director is based overseas

5. Multiple Director Arrangements: Provisions for coordinating profit sharing among multiple eligible directors, used in larger companies

6. Tax Equalization: Provisions for managing tax implications, used particularly in international arrangements

Suggested Schedules

1. Schedule 1: Profit Calculation Methodology: Detailed formula and accounting principles for calculating relevant profit

2. Schedule 2: Payment Schedule: Timing and structure of profit share payments including any interim payment arrangements

3. Schedule 3: Performance Metrics: Detailed KPIs or performance criteria if applicable to profit share calculation

4. Schedule 4: Worked Examples: Example calculations of profit share under various scenarios

5. Schedule 5: Company Financial Year Details: Specifics about the company's financial year and reporting dates

6. Appendix A: Board Resolution: Copy of board resolution approving the profit sharing arrangement

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Applicable Law
Board
Business Day
Company
Confidential Information
Director
Effective Date
Financial Year
Force Majeure Event
Good Leaver
Bad Leaver
Gross Profit
Net Profit
Operating Profit
Payment Date
Performance Criteria
Profit Share
Profit Share Period
Related Company
Relevant Percentage
Tax Year
Term
Termination Date
Working Hours
Management Accounts
Annual Accounts
Calculation Period
Distribution Date
Exceptional Items
Material Adverse Change
Performance Targets
Threshold Amount
Accounting Principles
Dispute
Group
Intellectual Property Rights
Notice
Parties
Quarter
Representatives
Relevant Industries

Professional Services

Financial Services

Technology

Manufacturing

Retail

Construction

Healthcare

Consulting

Real Estate

Private Equity

Family Business

StartUp

Relevant Teams

Legal

Finance

Board of Directors

Executive Leadership

Corporate Governance

Human Resources

Company Secretariat

Compliance

Tax

Relevant Roles

Director

Executive Director

Managing Director

Non-Executive Director

Finance Director

Company Secretary

Chief Executive Officer

Chief Financial Officer

Board Chairman

Corporate Counsel

Legal Counsel

Company Director

Industries
Companies Act 1993: The primary legislation governing company operations in New Zealand, including director duties, responsibilities, and disclosure requirements. Sections 131-138 specifically address directors' duties which must be considered in profit-sharing arrangements.
Income Tax Act 2007: Governs the taxation of profit-sharing arrangements, including how payments to directors are treated for tax purposes and the distinction between income and capital payments.
Financial Markets Conduct Act 2013: Relevant if the profit-sharing arrangement includes any form of securities or financial products, ensuring compliance with disclosure and offering requirements.
Contract and Commercial Law Act 2017: Provides the general framework for contract formation and enforcement in New Zealand, ensuring the agreement meets basic contractual requirements.
Employment Relations Act 2000: May be relevant if the director also has an employment relationship with the company, affecting how the profit-sharing arrangement interacts with employment terms.
Tax Administration Act 1994: Covers the administrative aspects of taxation, including reporting requirements for profit-sharing payments and PAYE obligations if applicable.
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

Find the exact document you need

Agreement Between Directors Of A Company

A New Zealand law-governed agreement establishing the framework for relationships and responsibilities between company directors, ensuring compliance with the Companies Act 1993.

find out more

Directors Contract Of Employment

A New Zealand-governed employment agreement for company directors that establishes terms of service in both executive and board capacities.

find out more

Director Indemnity Agreement

A New Zealand law-governed agreement establishing the terms for company indemnification of a director's liabilities and costs incurred in their official capacity.

find out more

Medical Director Agreement

A New Zealand-compliant agreement establishing terms and conditions for Medical Director appointments in healthcare organizations.

find out more

Director Indemnification Agreement

A New Zealand law-governed agreement setting out terms for company indemnification of directors against liabilities and costs incurred in their role.

find out more

Directors Service Contract

A New Zealand law-governed agreement establishing the terms and conditions of a director's appointment, including duties, responsibilities, and remuneration.

find out more

Director Appointment Agreement

A New Zealand law-governed agreement formalizing a director's appointment to a company board, establishing terms, duties, and compliance requirements.

find out more

Director Profit Sharing Agreement

A New Zealand-governed agreement establishing terms for director profit sharing arrangements, including calculation methods and payment conditions.

find out more

Director Shareholder Agreement

A New Zealand-governed agreement establishing the legal framework between company directors and shareholders, defining their rights, responsibilities, and relationships.

find out more

Director Fee Agreement

A New Zealand law-governed agreement establishing director remuneration terms and conditions for board service.

find out more

Independent Director Agreement

A New Zealand-governed agreement establishing the appointment terms and conditions for an independent director, ensuring compliance with local corporate law and governance requirements.

find out more

Directors Loan Agreement

A New Zealand-compliant agreement establishing terms for a loan between a company and its director, including loan amount, interest, repayment terms, and regulatory compliance requirements.

find out more

Nominee Director Agreement

A New Zealand-governed agreement establishing the appointment and terms of service for a nominee director, including duties and compliance requirements under NZ law.

find out more

Company Director Agreement

A New Zealand-governed agreement establishing the terms, duties, and obligations of a company director's appointment.

find out more

Non Executive Director Agreement

A New Zealand-governed agreement establishing the appointment terms and conditions for a non-executive director, including duties, responsibilities, and remuneration.

find out more

Executive Director Employment Contract

New Zealand-governed employment agreement for executive directors, combining senior executive employment terms with director duties and obligations.

find out more

Download our whitepaper on the future of AI in Legal

By providing your email address you are consenting to our Privacy Notice.
Thank you for downloading our whitepaper. This should arrive in your inbox shortly. In the meantime, why not jump straight to a section that interests you here: https://www.genieai.co/our-research
Oops! Something went wrong while submitting the form.

Genie’s Security Promise

Genie is the safest place to draft. Here’s how we prioritise your privacy and security.

Your documents are private:

We do not train on your data; Genie’s AI improves independently

All data stored on Genie is private to your organisation

Your documents are protected:

Your documents are protected by ultra-secure 256-bit encryption

Our bank-grade security infrastructure undergoes regular external audits

We are ISO27001 certified, so your data is secure

Organizational security

You retain IP ownership of your documents

You have full control over your data and who gets to see it

Innovation in privacy:

Genie partnered with the Computational Privacy Department at Imperial College London

Together, we ran a £1 million research project on privacy and anonymity in legal contracts

Want to know more?

Visit our Trust Centre for more details and real-time security updates.

Read our Privacy Policy.