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A balanced England & Wales agreement for a startup or board advisor (usually an individual) engaged as an independent contractor, paid in equity, a cash fee or both: services and time commitment, an optional board-approved share or option grant with monthly vesting, cliff and optional acceleration, confidentiality, IP in work product, conflicts, liability and short-notice termination.
England & Wales
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This agreement is dated the date on which it is signed by the last of the parties.
This agreement is made between [TO BE CONFIRMED — Company] (the "Company") and [TO BE CONFIRMED — Advisor] (the "Advisor").
"Purpose" means [TO BE CONFIRMED — Purpose].
"Services" means [TO BE CONFIRMED — Services].
"Time Commitment" means up to 5 hours a month, at times agreed between the parties.
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"Initial Term" means 24 months.
"Fees" means [TO BE CONFIRMED — Fees].
"Payment Terms" means 30 days after receipt of a valid invoice.
"Expense Policy" means reasonable, properly incurred out-of-pocket expenses approved by the Company in writing in advance and supported by receipts.
Where a party is an individual, "it", "its" and "itself" refer to that individual; a reference to a party's officers, board, constitutional documents or being duly incorporated or organised applies only to a party that is a body corporate or other entity; and a reference to a party becoming insolvent includes, for an individual, being made bankrupt, entering into an individual voluntary arrangement or becoming subject to any equivalent procedure in any jurisdiction.
The Company appoints the Advisor to provide the Services for the Purpose, and the Advisor accepts that appointment. The Advisor must provide the Services with reasonable skill and care and in a timely, professional manner.
The Advisor must make itself reasonably available to provide the Services for the Time Commitment. The Advisor decides how, when and where it provides the Services, subject to reasonable coordination with the Company. Any work beyond the Time Commitment requires the parties' prior written agreement.
The Services do not include introducing or soliciting investors, negotiating or arranging any issue or sale of the Company's securities, promoting a market in them, or any other activity that requires a licence, authorisation or registration the Advisor does not hold. The Advisor must not carry on any of those activities for the Company unless the parties first agree separate written terms.
The Company must provide such information, access and decisions as are reasonably necessary for the Advisor to provide the Services. The Advisor may rely on information supplied by or for the Company unless the Advisor knows it is inaccurate or incomplete.
The Advisor has no authority to bind the Company, incur liability for it, make representations on its behalf or hold itself out as having that authority unless the Company gives prior written authority.
This agreement starts on the Commencement Date and continues for the Initial Term and afterwards until terminated. Either party may terminate it at any time by giving the other party written notice of at least 30 days.
Either party may terminate this agreement immediately by written notice if the other party commits a material breach which, if capable of remedy, is not remedied within 14 days after written notice requiring it to be remedied; becomes insolvent; or ceases or threatens to cease carrying on business. The Company may also terminate immediately if the Advisor commits serious misconduct, dishonesty or a material breach of the Confidentiality clause. If the Advisor is an individual, this agreement ends automatically on the Advisor's death, and the Company may terminate it immediately by written notice if the Advisor is unable through illness, injury or incapacity to provide the Services for more than 60 consecutive days.
On termination, the Advisor must promptly stop providing the Services, deliver all completed and in-progress work product to the Company, return or securely destroy the Company's Confidential Information as the Confidentiality clause requires, and submit any final invoice. The Company must pay any fees properly due for Services performed and expenses reimbursable under the Expense Policy up to termination. Vesting of any Advisor Equity stops as the Equity Compensation clause provides. Termination does not affect accrued rights. The Interpretation, Confidentiality, Intellectual Property, Liability, Notices, General and Governing Law and Jurisdiction clauses continue after termination, as do the Company's obligation to pay fees and expenses accrued up to termination and, where this agreement includes them, the Equity Compensation clause as it applies to equity that vested before termination, the Non-Solicitation clause for the period it states and the Data Protection clause as it applies to the deletion or return of personal data, together with any other provision intended to continue after termination.
In consideration of the Services, the Company must pay the Advisor the Fees. Unless the Fees state otherwise, the Advisor must invoice monthly in arrears and the Company must pay each valid invoice in accordance with the Payment Terms. If the Company disputes part of an invoice in good faith, it must say so promptly and pay the undisputed amount when due. Overdue undisputed sums carry interest at 4% a year above the Bank of England base rate from time to time, calculated daily, which the parties agree is a substantial remedy for late payment.
The Company must reimburse expenses only in accordance with the Expense Policy. The Advisor must provide reasonable supporting evidence for each expense claimed.
Fees and expenses are exclusive of VAT, which the Company must pay in addition where properly chargeable on receipt of a valid VAT invoice. The Advisor is responsible for its own income tax, National Insurance contributions and other liabilities arising from its compensation under this agreement, except to the extent the Company is legally required to deduct or account for them. If the Advisor provides the Services through an intermediary, each party must give the other the information and cooperation reasonably needed for any status determination under the off-payroll working rules.
Subject to the approval of the Company's board and to any shareholder approval or waiver of pre-emption rights that the Company's articles of association or the Companies Act 2006 require, the Company must grant the Advisor share options or shares equal to [TO BE CONFIRMED — Advisor equity (number or percentage of shares, and basis)] (the "Advisor Equity"), in the form the board approves, under the Company's share option plan or a separate award agreement. The Company must seek that board approval within 30 days after the date of this agreement, and the award documents must reflect the vesting terms of the Equity Compensation clause. Those documents govern all other terms, including price, exercise, leaver treatment, transfer and treatment on a sale, and prevail over this clause if they conflict. No right to the Advisor Equity arises until the board approves the grant and the award documents are signed. The Advisor is responsible for any tax arising to it on the Advisor Equity.
The Advisor Equity vests in equal monthly instalments over 24 months starting on the Commencement Date (the "Vesting Start Date"). Each instalment vests on the same day of each following month or, if a month has no such day, on its last day. No Advisor Equity vests until 3 months after the Vesting Start Date, when every instalment that would otherwise have vested by then vests together. Instalments are rounded down to whole shares, with any remainder vesting in the final instalment. Vesting stops on the date the Advisor's engagement under this agreement ends for any reason, and no Advisor Equity vests after that date except under the acceleration terms of this agreement, if any.
If, within 12 months after a Change of Control, the Company or its successor ends the Advisor's engagement under this agreement other than for the Advisor's material breach, all unvested Advisor Equity vests in full immediately before that engagement ends. "Change of Control" means a person, alone or with persons acting in concert, obtaining control of the Company within the meaning of section 1124 of the Corporation Tax Act 2010, or a sale of all or substantially all of the Company's business and assets, but not an internal reorganisation or a transaction made principally to raise finance. The Company must ensure the award documents reflect this clause.
The Advisor is an independent contractor and nothing in this agreement creates employment, worker, agency, partnership, fiduciary or joint-venture status between the parties. The Advisor is not entitled to holiday pay, sick pay, pension contributions or other employee benefits from the Company.
The Advisor confirms that entering into and performing this agreement does not breach any obligation it owes to another person, including a current or former employer. The Advisor must promptly disclose any actual or reasonably foreseeable conflict between its interests or other engagements and the Services, including advising a competitor of the Company, and the parties must discuss in good faith how to manage it. The Advisor may provide services to others, provided doing so does not breach this agreement, misuse the Company's Confidential Information or create a conflict that cannot reasonably be managed.
During the term of this agreement, the Company may name the Advisor as an advisor to the Company, and use the Advisor's name, title and a biography the Advisor has approved, on its website and in its investor, recruitment and marketing materials. The Advisor may withdraw this permission for future materials by written notice. When this agreement ends, the Company must stop presenting the Advisor as a current advisor within a reasonable time.
Each party must keep the other party's Confidential Information confidential and use it only to perform or receive the Services. A party may disclose Confidential Information to its personnel and professional advisers who need to know it and are bound by confidentiality obligations, or where disclosure is required by law, a court or a regulator. "Confidential Information" means information of a confidential nature relating to the other party or its business, excluding information that the receiving party can show is or becomes public other than through breach, was lawfully known without restriction before disclosure, or is independently developed without use of the other party's information. Nothing in this agreement prevents a person from reporting suspected wrongdoing to a regulator or law enforcement body or making a disclosure that the law protects.
On request and on termination, each party must return or securely destroy the other party's Confidential Information, except that it may retain copies required by law or held in routine backup systems, subject to continuing confidentiality. The confidentiality obligations continue for 3 years after termination, except for trade secrets, which remain protected for so long as they remain trade secrets.
The Advisor assigns to the Company, with full title guarantee and by way of present assignment of future rights, all intellectual property rights in work product created specifically for the Company in providing the Services, excluding the Advisor's Pre-existing Materials. The Advisor must promptly do all reasonable acts and sign documents needed to give effect to that assignment, at the Company's expense. The Advisor irrevocably waives, and must procure waivers of, moral rights in that work product to the extent permitted by law. "Pre-existing Materials" means materials, tools, know-how and intellectual property owned or developed by the Advisor independently of the Services.
The Advisor must not knowingly incorporate third-party materials into work product unless the Advisor has the right to do so and has told the Company of applicable licence terms. The Advisor must not knowingly infringe a third party's intellectual property rights in providing the Services.
Each party must comply with applicable data protection law. Where the Advisor processes personal data on the Company's behalf, the Advisor must process it only on the Company's documented instructions, keep it secure, ensure authorised personnel are bound by confidentiality, assist the Company reasonably with data-subject requests and security obligations, notify the Company without undue delay after becoming aware of a personal data breach, and delete or return personal data at the end of the Services unless law requires retention. The Advisor must not appoint a sub-processor or transfer personal data outside the United Kingdom without the Company's prior written authorisation and appropriate safeguards.
Nothing in this agreement excludes or limits liability for death or personal injury caused by negligence, fraud or fraudulent misrepresentation, or any liability that cannot lawfully be excluded or limited. Subject to that, neither party is liable to the other for indirect or consequential loss, or for loss of profit, revenue, business, goodwill or anticipated savings. Each party's total aggregate liability arising out of or in connection with this agreement is limited to the greater of £10,000 and the total fees paid or payable to the Advisor under this agreement in the 12 months before the event giving rise to the claim, except that this limit does not apply to liability for breach of the Confidentiality clause or to the Company's obligation to pay fees and expenses properly due.
During this agreement and for 6 months after termination, neither party may knowingly solicit for employment any employee of the other party with whom it had material contact through the Services, except through general recruitment advertising not targeted at that employee. This clause does not prevent a person from responding to an unsolicited approach.
A notice under this agreement must be in writing and delivered by hand, pre-paid first-class post or email to the relevant party's notice address: Company: [TO BE CONFIRMED — Company notice address]; Advisor: [TO BE CONFIRMED — Advisor notice address]. A notice is deemed received if delivered by hand, when left at the address; if posted within the United Kingdom, 2 Business Days after posting; and if sent by email, when no delivery-failure message is received, provided it is sent before 5.00 pm on a Business Day, otherwise on the next Business Day. "Business Day" means a day other than a Saturday, Sunday or public holiday in England.
Neither party may assign, transfer or subcontract its rights or obligations under this agreement without the other party's prior written consent, not to be unreasonably withheld or delayed, except that the Company may assign this agreement to a purchaser of all or substantially all of the business to which the Services relate or to a group company.
This agreement is the entire agreement between the parties concerning its subject matter and supersedes prior discussions and arrangements concerning it. Each party acknowledges that it has not relied on any statement not set out in this agreement, but nothing limits liability for fraud or fraudulent misrepresentation. A variation is effective only if in writing and signed by both parties.
A waiver is effective only if in writing and does not waive a later breach. If any provision is invalid or unenforceable, it is modified to the minimum extent necessary or, if that is not possible, removed; the rest of this agreement continues in force. A person who is not a party to this agreement has no right to enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999. This agreement may be signed in counterparts and by electronic signature.
This agreement and any non-contractual obligations arising out of or in connection with it are governed by the law of England and Wales. The courts of England and Wales have exclusive jurisdiction to settle any dispute arising out of or in connection with this agreement.