Santa Clara California Agreement Between Board Member and Close Corporation

• Category: Contracts - Board Member
• State: Multi-State
• County: Santa Clara
• Control #: US-1035BG
• Format: Word; Rich Text

Description

A corporation whose shares are held by a single shareholder or a closely-knit group of shareholders (such as a family) is known as a close corporation. The shares of stock are not traded publicly. Many of these types of corporations are small firms that in the past would have been operated as a sole proprietorship or partner¬ship, but have been incorporated in order to obtain the advantages of limited liability or a tax benefit or both. A disclaimer is a denial or renunciation of liability. A disclaimer may apply to a denial of responsibility for another's claim and/or may be a statement of non-responsibility. Santa Clara California Agreement Between Board Member and Close Corporation In Santa Clara, California, a close corporation is a type of legal entity that operates similarly to a regular corporation but has fewer shareholders and less stringent reporting requirements. A close corporation often encompasses a small group of individuals or a family who jointly own and manage the corporation. The Agreement Between Board Member and Close Corporation in Santa Clara, California, establishes the terms and conditions of the relationship between the board member and the close corporation. This legally binding document outlines the rights, responsibilities, and expectations of both parties involved. Key provisions commonly found in a Santa Clara California Agreement Between Board Member and Close Corporation include: 1. Duration and Termination: This section details the length of the board member's term, as well as the circumstances under which the agreement may be terminated, such as resignation, removal, or expiration of the designated term. 2. Compensation: The agreement specifies the compensation structure for the board member, whether it includes a fixed salary, stock options, bonuses, or any other form of remuneration. It may also outline reimbursement policies for expenses incurred during the performance of board duties. 3. Duties and Obligations: The agreement enumerates the specific duties and obligations expected of the board member. This includes regular attendance at board meetings, active participation in the decision-making process, loyalty to the corporation's best interests, adherence to ethical standards, and compliance with applicable laws and regulations. 4. Confidentiality and Non-Disclosure: To protect sensitive corporate information, the agreement typically includes provisions concerning confidentiality and non-disclosure. This ensures that board members maintain the confidentiality of proprietary, financial, or strategic information they become privy to during their tenure. 5. Conflict of Interest: Given that board members may have other business interests, this section addresses any potential conflict of interest situations that may arise. It stipulates that board members must disclose any conflicts and potentially recuse themselves from decisions in which they have a personal interest. 6. Indemnification: The agreement often provides for indemnification, protecting the board member from personal liability resulting from actions taken in good faith while fulfilling their duties. It may outline the corporation's obligation to defend, indemnify, and hold harmless the board member, subject to certain legal limitations. Types of Santa Clara California Agreements Between Board Member and Close Corporation: 1. Open-ended Agreement: This agreement remains in effect until either party decides to terminate the relationship, subject to any stipulated notice periods. 2. Fixed-Term Agreement: This type of agreement sets a specific duration for the board member's service, typically for a predetermined number of years. Upon completion of the term, the agreement may be renewed or terminated. 3. Executive Board Agreement: This specific type of agreement applies when the board member also serves in an executive role within the close corporation, such as CEO or CFO. It may contain additional clauses tailored to their unique responsibilities and compensation structure. In conclusion, a Santa Clara California Agreement Between Board Member and Close Corporation is a crucial legal document that governs the relationship between a board member and a close corporation based in Santa Clara, California. It establishes the expectations, rights, responsibilities, and compensation terms pertinent to the position, and may vary based on the specific type of agreement established.

Santa Clara California Agreement Between Board Member and Close Corporation In Santa Clara, California, a close corporation is a type of legal entity that operates similarly to a regular corporation but has fewer shareholders and less stringent reporting requirements. A close corporation often encompasses a small group of individuals or a family who jointly own and manage the corporation. The Agreement Between Board Member and Close Corporation in Santa Clara, California, establishes the terms and conditions of the relationship between the board member and the close corporation. This legally binding document outlines the rights, responsibilities, and expectations of both parties involved. Key provisions commonly found in a Santa Clara California Agreement Between Board Member and Close Corporation include: 1. Duration and Termination: This section details the length of the board member's term, as well as the circumstances under which the agreement may be terminated, such as resignation, removal, or expiration of the designated term. 2. Compensation: The agreement specifies the compensation structure for the board member, whether it includes a fixed salary, stock options, bonuses, or any other form of remuneration. It may also outline reimbursement policies for expenses incurred during the performance of board duties. 3. Duties and Obligations: The agreement enumerates the specific duties and obligations expected of the board member. This includes regular attendance at board meetings, active participation in the decision-making process, loyalty to the corporation's best interests, adherence to ethical standards, and compliance with applicable laws and regulations. 4. Confidentiality and Non-Disclosure: To protect sensitive corporate information, the agreement typically includes provisions concerning confidentiality and non-disclosure. This ensures that board members maintain the confidentiality of proprietary, financial, or strategic information they become privy to during their tenure. 5. Conflict of Interest: Given that board members may have other business interests, this section addresses any potential conflict of interest situations that may arise. It stipulates that board members must disclose any conflicts and potentially recuse themselves from decisions in which they have a personal interest. 6. Indemnification: The agreement often provides for indemnification, protecting the board member from personal liability resulting from actions taken in good faith while fulfilling their duties. It may outline the corporation's obligation to defend, indemnify, and hold harmless the board member, subject to certain legal limitations. Types of Santa Clara California Agreements Between Board Member and Close Corporation: 1. Open-ended Agreement: This agreement remains in effect until either party decides to terminate the relationship, subject to any stipulated notice periods. 2. Fixed-Term Agreement: This type of agreement sets a specific duration for the board member's service, typically for a predetermined number of years. Upon completion of the term, the agreement may be renewed or terminated. 3. Executive Board Agreement: This specific type of agreement applies when the board member also serves in an executive role within the close corporation, such as CEO or CFO. It may contain additional clauses tailored to their unique responsibilities and compensation structure. In conclusion, a Santa Clara California Agreement Between Board Member and Close Corporation is a crucial legal document that governs the relationship between a board member and a close corporation based in Santa Clara, California. It establishes the expectations, rights, responsibilities, and compensation terms pertinent to the position, and may vary based on the specific type of agreement established.