Management Contract for Germany

Management Contract Template for Germany

A comprehensive legal agreement governed by German law that establishes the terms and conditions of employment for senior management positions within a company. The document addresses key aspects including appointment terms, duties, remuneration, benefits, and obligations in accordance with German corporate and employment law requirements. It incorporates specific provisions required under German legislation such as the German Civil Code (BGB), Limited Liability Companies Act (GmbH-Gesetz), and relevant corporate governance regulations, while ensuring compliance with German labor laws and social security requirements.

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What is a Management Contract?

The Management Contract serves as a crucial legal document for establishing and regulating the employment relationship between a company and its senior executives in Germany. This agreement is essential when appointing managing directors, board members, or senior executives, particularly in German GmbH or AG companies. The contract must comply with German corporate law, employment regulations, and tax requirements while addressing specific aspects such as remuneration structures, benefits, responsibilities, and post-contractual obligations. It differs from standard employment contracts due to the increased autonomy and responsibility levels granted to management positions, requiring careful consideration of corporate governance principles and fiduciary duties under German law.

What sections should be included in a Management Contract?

1. Parties: Identification of the company and the manager, including full legal names and addresses

2. Background: Context of the appointment and brief description of the company's business

3. Definitions: Key terms used throughout the agreement

4. Appointment and Term: Official appointment, position title, and duration of the management role

5. Duties and Responsibilities: Detailed description of management duties, reporting lines, and scope of authority

6. Working Time and Place of Work: Expected working hours and primary location of work

7. Remuneration: Base salary, bonuses, and other financial benefits

8. Benefits and Expenses: Additional benefits, expense policies, and reimbursement procedures

9. Vacation and Leave: Annual leave entitlement and regulations

10. Confidentiality: Obligations regarding company secrets and confidential information

11. Intellectual Property: Assignment of IP rights created during the management role

12. Data Protection: Compliance with GDPR and German data protection laws

13. Non-Competition: Post-contractual competition restrictions in accordance with German law

14. Termination: Grounds for termination, notice periods, and procedures

15. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction

16. Severability: Standard clause ensuring partial invalidity doesn't void entire agreement

What sections are optional to include in a Management Contract?

1. Corporate Governance Compliance: Required for listed companies or those subject to specific governance requirements

2. Secondary Activities: Include when the manager may have other business interests or board positions

3. Share Options: Required when offering equity-based compensation

4. International Travel: Include for roles requiring significant international responsibilities

5. Acting as Managing Director: Special provisions required when the manager will be appointed as 'Geschäftsführer'

6. Insurance Coverage: Detailed insurance provisions for high-risk industries or specific liability concerns

7. Works Council Interaction: Required when the manager needs to interact with works councils

8. Representation Powers: Specific powers of attorney and representation rights

9. Change of Control: Include for companies anticipating potential ownership changes

What schedules should be included in a Management Contract?

1. Schedule 1 - Duties and Responsibilities: Detailed list of specific management responsibilities and authority limits

2. Schedule 2 - Remuneration Structure: Detailed breakdown of salary, bonuses, and performance metrics

3. Schedule 3 - Benefits Package: Comprehensive list of benefits including insurance, pension, car allowance etc.

4. Schedule 4 - Company Policies: Key company policies applicable to the manager

5. Schedule 5 - Approved Secondary Activities: List of pre-approved external appointments or activities

6. Appendix A - Power of Attorney: Formal power of attorney document if required

7. Appendix B - Share Option Terms: Detailed terms of any share option or equity participation scheme

8. Appendix C - Data Protection Notice: Detailed information about personal data processing

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

Jurisdiction

Germany

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use

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