This Director's Agreement is made between a company and a director to secure the
services of the director. This document sets forth the material terms and conditions of
the director's employment including the director's duties and responsibilities,
compensation, and the initial term of the agreement. It contains numerous standard
clauses that are commonly included in these types of agreements, and may be
customized to address the specific needs of the parties. This document should be used
when a company hires a director.
This AGREEMENT, made on this _____________ day of ___________________,
20 ________ , (the “Effective Date”), by and between _______________________ , a
______________________corporation with its principal place of business in
______________________________________ (the “Company”)
and _______________________, an individual , residing at
WHEREAS, the Company wishes to secure the services of Director for the term of this
Agreement, and the Director is willing to serve as Director of the Company upon the terms and
conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties
hereto hereby agree as follows:
The Company hereby employs Director to serve as its Director, and Director hereby accepts such
employment by the Company, upon the terms and conditions herein provided.
2. DUTIES AND RESPONSIBILITIES
(a) Director shall perform such duties and responsibilities as are normally related to such
position in accordance with Company's bylaws and applicable law, including those services
described on Exhibit A, (the "Services") Director agrees to use his best efforts to provide the
Services. Director shall not let any other person or entity to perform the Services for or instead of
(b) Director may serve on other Boards of Directors or Advisory Boards, and may engage in
any other business activity (whether or not pursued for pecuniary advantage), as long as such
outside activities do not violate Director's obligations under this Agreement. Director represents
that, to the best of his knowledge, Director has no outstanding agreement or obligation that is in
conflict with any of the provisions of this Agreement, and Director agrees to use his best efforts
to avoid or minimize any such conflict and agrees not to enter into any agreement or obligation
that could create such a conflict, without the approval of the majority of the Board of Directors.
(c) Director will not engage in any activity that creates an actual conflict of interest with
Company, and Director agrees to notify the Board of Directors before engaging in any activity
that creates a potential conflict of interest with Company. Director shall not engage in any
activity that is in direct competition with the Company or serve in any capacity (including, but
not limited to, as an employee, consultant, advisor or director) in any company or entity that
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competes directly with the Company, as reasonably determined by a majority of Company's
disinterested board members, without the approval of the Board of Directors.
The initial principal location at which the Director shall perform services for the Company shall
This agreement shall commence on the Effective Date and shall continue for a period of
________________ years (the initial term).
5. VACATION AND SICK LEAVE
Director shall be entitled to the number of paid vacation days in consistent with existing
Company policies for its Directors. Director shall also be entitled to all paid holidays given by
the Company to its Directors.
In consideration of the services to be rendered under this Agreement, Company shall pay
Director a Fee at the rate of $_______________________ per year. This Fee shall be payable in
substantially equal monthly installments.
7. STOCK AND STOCK OPTIONS
(a) In consideration of the Services to be rendered by the Director under this Agreement,
Company agrees to grant Director the following two stock options subject to the approval of the
Board of Directors (the "Options"):
(i) an option to purchase ______________ number of shares of Company's common
stock at an exercise price of $___________ per share (the fair market value of Company's
common stock on the Effective Date), which shall be fully vested on the Effective Date;
(ii) an option to purchase ____________ number of shares of Company's common stock,
which shall have an exercise price equal to 100% of the price charged pursuant to
Company's Initial Public Offering ("IPO"),
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(b) These Options shall be subject to the terms and conditions of Company's Stock Incentive
Plan (the "Plan") and Company's standard Stock Option Agreement.
(c) In the event (i) of a merger, change in control or sale of Company or (ii) Director either is
terminated for Cause, as determined by a majority vote of the disinterested board members, the
Shares immediately shall become fully vested.
(d) "Cause" means a determination by a majority of the board members that the Director has
been engaged in any of the following: (i) malfeasance in office; (ii) gross misconduct or neglect;
(iii) false or fraudulent misrepresentation inducing Director's appointment; (iv) willful
conversion of corporate funds; (v) material breach of an obligation to make full disclosure; (vi)
gross incompetence; (vii) gross inefficiency; (viii) acts of moral turpitude; or (ix) repeated failure
to participate (either by telephone or in person) board meetings on a regular basis despite having
received proper notice of the meetings.
8. TERMINATION OF EMPLOYMENT
(a) Without cause, the Company may terminate this agreement at any time upon ____ days'
written notice to the Director. If requested by the Company, the Director shall continue to
perform his duties and shall receive salary up to the date of termination.
(b) Without cause, the Director may terminate this agreement upon ______ days' written
notice to the Company. If requested by the Company, the Director shall continue to perform his
duties and shall receive salary up to the date of termination. In addition, the Company at its
discretion may pay the Director a severance allowance on the date of the termination.
(c) The Company may terminate this Agreement for cause for any of the following events:
i. If Director is convicted for an offence of felony or any act involving moral turpitude;
ii. If Emplyee commits any act of theft, fraud, dishonesty or falsification of an employment
iii. If Director commits any breach of this Agreement which remains uncured for a period of
14 days following written notice of such breach ;
iv. If Director fails to perform reasonable assigned duties; and/or
v. If Director improperly discloses Company’s confidential information;
vi. If Director commits any act which causes detrimental effect to Company’s reputation and
9. TERMINATION OBLIGATIONS
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(a) Director agrees that all property, including, without limitation, all equipment, tangible
proprietary information, documents, records, notes, contracts, and computer-generated materials
provided to or prepared by Director incident to his services belong to Company and shall be
promptly returned at the request of Company.
(b) Upon termination of this Agreement, Director shall cooperate with Company in the
winding up or transferring to other directors of any pending work and shall also cooperate with
Company (to the extent allowed by law, and at Company's expense) in the defense of any action
brought by any third party against Company that relates to the Services.
Director agrees to promptly and freely disclose to the Company all such Proprietary Information
which Director conceives as a result of his employment by the Company, and Director agrees to
assign and hereby does assign all of his interest therein to the Company. Whenever requested to
do so by the Company, Director shall execute any and all applications, assignments, or other
instruments, which the Company shall deem necessary to apply for and obtain Letters Patent or
Copyrights of the United States, or any foreign country, to otherwise protect the Company's
interest in the Proprietary Information or to vest title to the Proprietary Information in the
Company. These obligations shall survive the termination of Director's employment and shall be
binding upon Director's assigns, executors, administrators, and other legal representatives.
For a period of two years following termination of this Agreement, the Director shall not,
directly or indirectly, through services to any partnership of which the Director is a partner or
Director or through any corporation or other entity in which the Director has any interest or by
whom is employed, compete with the Company or any of its affiliates or subsidiaries, in any
activity in which the Company or its affiliates or subsidiaries may have been engaged within five
years prior to the termination of this Agreement.
The Director shall not, during the term of this Agreement and for a period of two years
immediately following termination of this Agreement, either directly or indirectly, call on,
solicit, or take away, or attempt to call on, solicit or take away, any of the customers or clients of
the Company on whom the Director called or became acquainted with during the terms of this
Agreement, either for their own benefit, or for the benefit of any other person, firm, corporation
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(a) During the term of this Agreement and thereafter, Director agrees to keep and maintain
confidential all the “confidential information” of the Company, and Director shall not use or
disclose any such confidential information to any person, firm, corporation, or entity for any
purpose not authorized by the Company unless the information becomes public through no fault
on his part. The Director understands that any breach of this provision, or that of any other
Confidentiality and Non-Disclosure Agreement, is a material breach of this Agreement.
(b) For purposes of this paragraph, “confidential information” shall include information
disclosed to or known by Director as a consequence of his employment with the Company
(including information conceived, originated, discovered or developed by Director) not generally
known about the Company’s business, products, services and operations, including without
limitation any trade secrets, know how, inventions, customer lists, discoveries and improvements
and ideas, whether or not patentable or any other form of proprietary information of the
The obligations under this clause are continuing and shall not cease on termination of this
Director's employment hereunder shall terminate upon his death. Any sums due the Director
under this Agreement shall be paid to the Director’s beneficiary at the next normal pay period
after the date of Director’s death. Any sums due the Director under the Company’s Profit
Sharing Plan shall be paid to the Director’s beneficiary as provided by the terms of the Plan.
After receiving such final payments, the Director’s surviving spouse and/or his estate shall have
no further rights under this Agreement.
Pursuant to Company policy, the Company shall reimburse the Director for all authorized travel
and other reasonable expenses incurred by him in furtherance of the Company’s business upon
the Director’s presentation of an itemized account of expenditures.
16. BENEFIT PLANS
During the term of this Agreement, the Director shall be entitled to participate in any medical
and dental plans, life and disability insurance plans, retirement plans and any other fringe benefit
plans or programs maintained by the Company for the benefit of its Directors. Nothing in this
Agreement shall preclude the Company from terminating or amending any Director benefit plan
or program from time to time.
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Company will indemnify and defend Director against any liability incurred in the performance of
the Services to the fullest extent authorized in Company's Certificate of Incorporation, as
amended, bylaws, and applicable law. Company has purchased Director's and Officers liability
insurance, and Director shall be entitled to the protection of any insurance policies the Company
maintains for the benefit of its Directors and Officers against all costs, charges and expenses in
connection with any action, suit or proceeding to which he may be made a party by reason of his
affiliation with Company, its subsidiaries, or affiliates.
18. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of the State of
19. MEDIATION AND ARBITRATION
Any controversy or claim arising out of or in relation to this Agreement or the validity,
construction or performance of this Agreement, or the breach thereof, shall be resolved by
arbitration in accordance with the rules of the American Arbitration Association (AAA) under its
jurisdiction in the state of _____________________ before a single arbitrator. The parties shall
have the right to engage in pre-hearing discovery in connection with such arbitration
proceedings. The parties agree hereto that they will abide by and perform any award rendered in
any arbitration conducted pursuant hereto, that any court having jurisdiction thereof may issue a
judgment based upon such award and that the prevailing party in such arbitration and/or
confirmation proceeding shall be entitled to recover its reasonable attorneys' fees and expenses.
The arbitration award shall be final, binding and non-appealable. The Parties agree to accept
service of process in accordance with the AAA Rules.
Any notice to be given hereunder by any party to the other, may be affected either by personal
delivery in writing, or by mail, registered or certified, postage pre-paid with return receipt
requested. Mailed notices shall be addressed to the parties at the addresses appearing in the
introductory paragraphs of this Agreement, but each party may change their address by written
notice in accordance with this paragraph. Notices delivered personally shall be deemed
communicated as of actual receipt; mailed notices shall be deemed communicated as of five (5)
days after mailing. The Director agrees to keep the Company current as to their business and
mailing addresses, as well as telephone, email and mobile numbers.
21. INJUNCTIVE RELIEF
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Director recognizes that the covenants contained in this Agreement are reasonable and necessary
to protect the legitimate interests of the Company, that the parties would not have entered into
this Agreement in the absence of such covenants, and that Director’s breach or threatened
breach of such covenants shall cause the Company irreparable harm and significant injury, the
amount of which shall be extremely difficult to estimate and ascertain, thus, making any remedy
at law or in damages inadequate. Therefore, Director agrees that the Company shall be entitled,
without the necessity of posting of any bond or security, to the issuance of injunctive relief by
any court of competent jurisdiction enjoining any breach or threatened breach of such covenants
and for any other relief such court deems appropriate. This right shall be in addition to any other
remedy available hereunder or otherwise, whether at law or in equity.
The waiver by either party hereto of any breach of any provision of this Agreement shall not
operate or be construed as a waiver or any subsequent breach by either party hereto.
23. BINDING EFFECT AND ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the Company, its successors
and assigns and the Director and his heirs and legal representatives. This Agreement is personal
as to Director and may not be assigned by Director without first obtaining the written consent of
the Company. This Agreement may be assigned by the Company without the prior consent of
The unenforceability of any provision or provisions of this Agreement shall not affect the
enforceability of any other provision of this Agreement.If, for any reason, any provision of this
agreement is held invalid, all other provisions of this agreement shall remain in effect. If this
agreement is held invalid or cannot be enforced, then to the full extent permitted by law any prior
agreement between the Company (or any predecessor thereof) and the Director shall be deemed
reinstated as if this agreement had not been executed.
25. ENTIRE AGREEMENT
This Agreement contains the entire understanding of the parties relating to the employment of
the Director by the Company. It may be changed only by an agreement in writing signed by the
party or parties against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
26. AMENDMENT AND DEFAULT
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This Agreement may be amended in whole or part at any time and from time to time but only in
writing in a form substantially similar to the form hereof. In the event of default or breach of any
of the terms and conditions hereof the defaulting party agrees to pay the reasonable attorneys
fees incurred by the other party in enforcing the provisions hereof.
27. DIRECTOR ACKNOWLEDGMENT
Director acknowledges Director has had the opportunity to consult legal counsel concerning this
Agreement, that Director has read and understands the Agreement, that Director is fully aware of
its legal effect, and that Director has entered into it freely based on his own judgment and not on
any representations or promises other than those contained in this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals the day and
year first above written.
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