The Founder Employment Agreement is a crucial document used when formalizing the relationship between a startup or company and its founder(s) in Indonesia. This agreement is particularly important as it addresses the unique dual role of founders as both employees and shareholders, ensuring compliance with Indonesian labor laws while protecting the interests of all parties involved. The document becomes necessary either at company formation or when transitioning from an informal to a formal structure, typically when receiving investment or scaling operations. It must comply with Indonesian Manpower Law and corporate regulations while addressing specific elements such as equity vesting, intellectual property rights, executive responsibilities, and termination provisions. The agreement serves as a foundational document that helps prevent future disputes and provides clarity on rights, obligations, and expectations for both the company and the founder.
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1. Parties: Identifies the company and the founder-employee as parties to the agreement
2. Background: Sets out the context of the founder's relationship with the company and the purpose of the agreement
3. Definitions: Defines key terms used throughout the agreement
4. Appointment and Term: Details the founder's position, effective date, and term of employment
5. Duties and Responsibilities: Outlines the founder's roles, responsibilities, and performance expectations
6. Commitment and Time Dedication: Specifies the founder's time commitment and exclusivity obligations
7. Remuneration and Benefits: Details salary, benefits, and any performance-based compensation
8. Share Ownership and Vesting: Describes the founder's equity stake and vesting schedule
9. Intellectual Property Rights: Covers assignment of IP rights and related obligations
10. Confidentiality: Defines confidential information and protection obligations
11. Non-Competition and Non-Solicitation: Specifies restrictions on competing activities and solicitation of employees/customers
12. Termination: Details grounds for termination and the process
13. Post-Termination Obligations: Outlines obligations that survive after employment ends
14. General Provisions: Contains standard legal provisions including governing law, notices, and amendments
1. Board Position: Required if the founder will serve on the board of directors, detailing director duties and compensation
2. International Travel: Include if role requires international travel, specifying travel policies and allowances
3. Equity Top-Up Rights: Optional section for future equity grants or anti-dilution provisions
4. Spouse Consent: Required in Indonesia if the founder is married, due to matrimonial property implications
5. Compliance with Religious Practices: Optional section addressing religious accommodation in predominantly Muslim Indonesia
6. Inventions Assignment: Detailed section required if founder has pre-existing IP or likely to develop significant IP
7. Corporate Governance Participation: Optional section detailing founder's role in corporate governance if not a board member
1. Schedule 1 - Job Description: Detailed description of founder's roles and responsibilities
2. Schedule 2 - Remuneration Package: Comprehensive breakdown of salary, benefits, and equity compensation
3. Schedule 3 - Share Vesting Schedule: Detailed vesting schedule and conditions for equity ownership
4. Schedule 4 - Intellectual Property Register: List of pre-existing IP and assigned IP
5. Schedule 5 - Company Policies: Key company policies applicable to the founder
6. Appendix A - Confidentiality Agreement: Detailed confidentiality terms and procedures
7. Appendix B - Share Rights and Restrictions: Detailed terms regarding share ownership and transfer restrictions
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