Document background
The Director Settlement Agreement is a crucial document used when a director exits a company's board, whether due to retirement, resignation, or negotiated departure. This agreement, governed by Canadian federal and provincial laws, serves to document the comprehensive terms of the separation, including financial settlements, mutual releases, and ongoing obligations. It ensures compliance with corporate legislation, particularly the Canada Business Corporations Act, and addresses regulatory requirements, especially for public companies. The document typically includes provisions for confidentiality, non-disparagement, and the treatment of any equity holdings, while also addressing director and officer liability insurance continuation. It's particularly important in situations where the departing director held multiple roles (such as executive positions) or when the departure involves potential disputes or significant corporate transitions.
