The Founder Employment Agreement is essential when formalizing the employment relationship between a company founder and their established company under German law. This document becomes necessary when transitioning from a purely entrepreneurial role to a formal employment structure, typically during company growth, external investment rounds, or corporate restructuring. It addresses the complex dual position of founders as both employees and shareholders, ensuring compliance with German employment law while protecting both the company's and founder's interests. The agreement includes crucial provisions regarding compensation, duties, intellectual property rights, confidentiality, and post-termination obligations, all tailored to meet German legal requirements. This document is particularly important for securing investment, establishing clear organizational structures, and providing legal certainty in founder-company relationships.
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1. Parties: Identification of the company and the founder-employee, including their addresses and roles
2. Background: Context of the agreement, including the founder's role in establishing the company and the dual nature of their position
3. Definitions: Key terms used throughout the agreement, including Company, Board, Intellectual Property, Confidential Information
4. Appointment and Duties: Position, title, and detailed responsibilities of the founder as an employee
5. Term and Notice Periods: Duration of employment and notice requirements in accordance with German law
6. Working Time and Place of Work: Working hours, flexibility, and primary work location in compliance with German Working Hours Act
7. Remuneration and Benefits: Salary, bonuses, profit sharing, and statutory benefits
8. Vacation and Leave: Annual leave entitlement and public holidays as per German Federal Vacation Act
9. Illness and Incapacity: Sick leave and pay continuation as per German law
10. Intellectual Property Rights: Assignment of IP rights and inventor's compensation under German law
11. Confidentiality: Protection of company secrets and confidential information
12. Data Protection: GDPR and BDSG compliance provisions
13. Post-Termination Restrictions: Non-compete and non-solicitation provisions compliant with German law
14. Termination: Grounds for termination and procedures following German employment law
15. Company Policies: Compliance with company policies and procedures
16. Governing Law and Jurisdiction: Application of German law and jurisdiction
1. Corporate Governance Duties: Additional provisions for founders serving on management board or as managing directors
2. External Activities: Terms for permitting or restricting outside business activities or board positions
3. Shareholding Obligations: Minimum shareholding requirements and share dealing restrictions
4. International Travel: Terms for international work if company has multiple locations
5. Training and Development: Provisions for continued professional development and training
6. Insurance Coverage: D&O insurance and other specific insurance requirements
7. Gardening Leave: Provisions for garden leave during notice period
8. Severance Terms: Pre-agreed severance arrangements in case of specific termination scenarios
1. Schedule 1: Job Description: Detailed outline of founder's roles, responsibilities, and reporting structure
2. Schedule 2: Remuneration Package: Detailed breakdown of salary, bonuses, equity compensation, and benefits
3. Schedule 3: Share Options or Investment Agreement Reference: Details of equity participation or reference to separate shareholders' agreement
4. Schedule 4: Intellectual Property Rights: List of pre-existing IP and specific terms for future IP
5. Schedule 5: Company Policies: Key company policies applicable to the founder-employee
6. Appendix A: Data Protection Notice: Detailed information about personal data processing as required by GDPR
7. Appendix B: Non-Compete Terms: Detailed post-termination restrictions and compensation terms
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