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A balanced US advisor agreement (Delaware, New York, California or another state's law) for a startup or board advisor engaged as an independent contractor and paid in equity, a cash fee or both: services and time commitment, an optional board-approved nonstatutory stock option or restricted stock grant with monthly vesting, cliff and optional acceleration, confidentiality with the federal trade-secret immunity notice, IP assignment, conflicts and termination on notice.
Delaware, United States · New York, United States · California, United States · United States (Federal)
Highlighted blanks are the details your parties fill in.
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 legal name and details] (the "Company") and [TO BE CONFIRMED — Advisor legal name and details] (the "Advisor").
"Purpose" means [TO BE CONFIRMED — Purpose].
"Services" means [TO BE CONFIRMED — Services].
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"Start Date" means [TO BE CONFIRMED — Start Date].
"Initial Term" means 24 months.
"Fee" means [TO BE CONFIRMED — Fee].
"Fee Period" means [TO BE CONFIRMED — Fee Period].
"Payment Period" means 30 days after receipt of an undisputed invoice.
"Expense Treatment" means reasonable, documented out-of-pocket expenses pre-approved in writing by the Company.
"Termination Notice" means written notice of at least 30 days.
"Confidentiality Period" means 3 years after termination, except for trade secrets for so long as they remain trade secrets under applicable law.
"Governing Law" means Delaware law.
"Dispute Forum" means the State of Delaware.
"Personal Data Scope" means [TO BE CONFIRMED — Personal Data Scope].
Where a party is an individual, "it," "its," and "itself" refer to that individual, and a reference to a party's officers, board, governing documents, or being duly organized applies only to a party that is an entity.
The Company engages the Advisor to perform the Services for the Purpose, and the Advisor accepts that engagement. The Advisor will perform the Services professionally, diligently and in compliance with applicable law, and will keep the Company reasonably informed of material progress.
The Advisor will 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 will not carry on any of those activities for the Company unless the parties first agree separate written terms.
This agreement begins on the Start Date and continues for the Initial Term and afterwards until terminated. Either party may terminate this agreement at any time for any reason by giving the other party the Termination Notice. Either party may terminate this agreement immediately by written notice if the other party materially breaches it and, where the breach can be cured, does not cure it within 10 days after receiving written notice. Termination does not affect accrued rights or obligations. The Company will pay any undisputed fees for Services properly performed through termination and reimbursable expenses properly incurred before termination.
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, because of illness or incapacity, to perform the Services for more than 60 consecutive days.
When this agreement ends, the following continue in effect: the Company's obligation to pay fees and reimburse expenses accrued before it ends; the Interpretation, Confidentiality, Intellectual Property, Notices, General, and Governing Law and Disputes clauses; where this agreement includes them, the Equity Compensation clause as it applies to equity that vested before this agreement ends, the Restrictive Covenants clause for the period it states, and the Data Protection clause as it applies to personal data the Advisor still holds; and any other provision that by its nature is intended to continue.
The Company will pay the Advisor the Fee for each Fee Period in which the Advisor performs the Services. The Advisor will submit an accurate invoice listing the Services performed at the end of each Fee Period, and the Company will pay each undisputed invoice within the Payment Period.
The Company will reimburse expenses only as permitted by the Expense Treatment, provided that the Advisor supplies reasonable supporting documentation. The Advisor is responsible for all taxes on its compensation under this agreement, and the Company will not withhold taxes from payments to the Advisor except as applicable law requires.
Where New York General Business Law section 1410 and following applies to this agreement, the Company will pay the Advisor's compensation by the dates this agreement sets or, where it sets none, no later than 30 days after the Services are completed; will not require the Advisor, as a condition of timely payment, to accept less compensation or to provide more services or intellectual property rights than this agreement requires; and will keep a copy of this agreement for the period that law requires. The Advisor will submit a list of the Services performed with each invoice and, if no invoice is due, within 30 days after this agreement ends.
Where California Business and Professions Code section 18100 and following applies to this agreement, the Company will pay the Advisor's compensation by the dates this agreement sets or, where it sets none, no later than 30 days after the Services are completed; will not require the Advisor, as a condition of timely payment, to accept less compensation or to provide more services or intellectual property rights than this agreement requires; and will keep a copy of this agreement for the period that law requires. The Advisor will submit a list of the Services performed with each invoice and, if no invoice is due, within 30 days after this agreement ends.
Subject to approval by the Company's board of directors or an authorized committee, the Company will grant the Advisor equity in the Company equal to [TO BE CONFIRMED — Advisor equity (number or percentage of shares, and basis)] (the "Advisor Equity") under the Company's equity incentive plan, as a nonstatutory stock option or restricted stock as the board determines, with any exercise or purchase price not less than the fair market value of a share on the grant date. The Company will seek that approval within 30 days after the date of this agreement, and the award agreement will reflect the vesting terms of the Equity Compensation clause. The plan and award agreement govern all other terms and prevail over this clause if they conflict. No Advisor Equity is granted, and no right to it arises, until the grant is approved and the award agreement is signed. The Advisor acquires any Advisor Equity for its own account, understands that it is issued under an exemption from securities registration and may be resold only as securities laws permit, and is responsible for the taxes arising to it on the Advisor Equity.
The Advisor Equity vests in equal monthly instalments over 24 months starting on the Start 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 merger, consolidation, sale of stock or other transaction after which the Company's stockholders immediately before it hold less than 50% of the voting power of the surviving or acquiring entity, or a sale of all or substantially all of the Company's assets, but not a transaction made principally to raise financing. The Company will ensure the award documents reflect this clause.
The Advisor is an independent contractor and not an employee, agent, partner, joint venturer, or representative of the Company. The Advisor has no authority to bind the Company, incur obligations for it, or make representations on its behalf. The Advisor is solely responsible for its personnel, methods of performance, insurance, and taxes, except as applicable law requires otherwise. The Advisor is not entitled to Company employee benefits.
The Advisor may receive non-public information relating to the Company, its affiliates, customers, suppliers, business, technology, finances, or plans ("Confidential Information"). The Advisor will use Confidential Information only to perform the Services and will protect it using at least reasonable care. Confidential Information does not include information that the Advisor can demonstrate: is or becomes public other than through breach of this agreement; was lawfully known to the Advisor without a confidentiality duty; is lawfully received from a third party without a confidentiality duty; or is independently developed without use of Confidential Information. The Advisor may disclose Confidential Information where required by law if it gives advance notice where legally permitted and reasonably cooperates with the Company’s efforts to seek protective treatment. These obligations continue for the Confidentiality Period. On request or termination, the Advisor will promptly return or securely destroy Confidential Information, except for routine archival copies retained under standard backup practices or copies required by law.
Under 18 U.S.C. section 1833(b), an individual will not be held criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (a) in confidence to a federal, state or local government official, directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or (b) in a complaint or other document filed under seal in a lawsuit or other proceeding. An individual who sues for retaliation for reporting a suspected violation of law may disclose the trade secret to the individual's attorney and use it in the court proceeding if the individual files any document containing it under seal and does not disclose it except under court order. Nothing in this agreement prevents the Advisor from reporting a possible violation of law to a government agency.
The Advisor assigns to the Company all right, title, and interest in work product created specifically for the Company in performing the Services, including inventions, discoveries, designs, writings, software, documentation, and other materials, to the extent assignable ("Work Product"). The Advisor will execute reasonable documents and take reasonable actions needed to confirm that ownership. To the extent any Work Product cannot be assigned, the Advisor grants the Company an exclusive, perpetual, worldwide, irrevocable, transferable, sublicensable, fully paid-up licence to use, reproduce, modify, distribute, display, perform, and otherwise exploit it. The Advisor retains ownership of pre-existing materials and general know-how, but grants the Company a perpetual, worldwide, irrevocable, transferable, sublicensable, fully paid-up licence to use any such materials incorporated in the Work Product as necessary to use the Work Product. The Advisor will not knowingly include third-party materials unless authorized by the Company and properly licensed.
The assignment to the Company under the Intellectual Property clause does not apply to an invention that the Advisor develops entirely on the Advisor's own time without using the Company's equipment, supplies, facilities or trade secret information, except an invention that (a) relates, when it is conceived or reduced to practice, to the Company's business or its actual or demonstrably anticipated research or development, or (b) results from any work the Advisor performs for the Company. This clause is the written notice described in California Labor Code section 2872, given to the extent California Labor Code section 2870 applies to this agreement; it does not make the Advisor an employee of the Company.
The Advisor represents that entering into and performing this agreement does not violate any obligation it owes to another person, including a current or former employer. The Advisor will promptly disclose any actual conflict of interest that could materially affect the Services, including advising a competitor of the Company. The Advisor will comply with applicable anti-bribery, sanctions, export-control and securities laws in performing the Services and will not trade in, or tip others about, securities on the basis of material non-public information obtained through the Services.
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 will stop presenting the Advisor as a current advisor within a reasonable time.
During the term, the Advisor will not knowingly solicit a Company employee or contractor with whom the Advisor had material contact through the Services to end that person’s relationship with the Company. This clause does not prohibit general solicitations not targeted at those persons or hiring a person who responds without targeted solicitation. This clause applies only to the extent permitted by applicable law.
The Advisor will process personal data only as necessary to provide the Services within the Personal Data Scope and in accordance with the Company’s documented lawful instructions. The Advisor will use reasonable administrative, technical, and physical safeguards, notify the Company without undue delay after discovering unauthorized access to or disclosure of personal data, and reasonably cooperate with the Company’s response. The Advisor will not sell, share, or use personal data for its own purposes except as permitted by applicable law and the Company’s documented instructions.
Notices under this agreement must be in writing and delivered personally, by nationally recognized overnight courier, or by email with confirmation of transmission, to the Company at [TO BE CONFIRMED — Company notice address] and to the Advisor at [TO BE CONFIRMED — Advisor notice address]. A party may change its notice details by giving notice under this clause.
Neither party may assign this agreement without the other party’s written consent, except that the Company may assign it in connection with a merger, reorganization, or transfer of substantially all of its relevant business or assets. The Advisor may not delegate material performance without the Company’s written consent. This agreement, together with any documents expressly incorporated in it, is the entire agreement about its subject matter and supersedes prior discussions and agreements about it. Any amendment or waiver must be in writing and signed by both parties. If a provision is unenforceable, it will be modified only as necessary to make it enforceable, and the remaining provisions remain effective. No failure or delay in exercising a right is a waiver. This agreement may be signed in counterparts and by electronic signature.
The Governing Law governs this agreement, without regard to conflict-of-laws rules. The state and federal courts located in the Dispute Forum have exclusive jurisdiction over any dispute arising out of or relating to this agreement, and each party consents to their jurisdiction and venue. Either party may seek temporary, preliminary, or permanent equitable relief in a court of competent jurisdiction to protect Confidential Information or intellectual-property rights.