Terms of Business
The Terms of Business were last updated on November 2022
a. Upon execution of the Search Agreement, August Leadership (‘AL’) shall work with the Client to develop written specifications for the Position, including the duties, responsibilities, goals and objectives, and the type of backgrounds and experience that would be most desirable.
b. Client may alter the specifications of the Search within the first thirty (30) days. Thereafter any material alteration (i.e., any change which shall require mapping of a different pool of candidates) of the agreed upon specifications shall require the initiation of a new Search, or an additional fee, to be mutually agreed in writing by the Parties.
c. Client shall ensure to clearly indicate those areas of the Search that are necessary to be kept confidential and provide comprehensive and accurate information about their company, to be communicated to the Candidates.
d. AL shall identify the greatest possible number of potential candidates to the Client (long list/progress report), who shall be screened by our team to determine the details of their backgrounds and experience and to cultivate their interest in the Position. Only thoroughly evaluated individuals shall be referred to the Client through a detailed report of candidates’ experience and expectations (short list/final report), within 4-6 weeks from execution of the Search Agreement, or as agreed with the Client in the Search Agreement.
e. AL shall only refer qualified candidates who measure up to the high standards of the Client, without regard to race, creed, color, national origin, veteran status, religion, gender, sexual orientation, marital status, disability, age, or any other legally proscribed criteria.
f. AL shall assist the Client at all stages of the hiring process, however, the Client shall be responsible for confirming academic or professional qualifications, for arranging medical or other investigation of any potential employee and for obtaining work or other permits, where necessary. AL shall undertake to administer these procedures if requested but reserves the right to charge an additional fee.
g. The Client shall work with AL exclusively for the duration of the Search assignment and shall not advertise or use other recruitment methods without first discussing such a strategy with AL, as more than one approach to the candidate marketplace may cause confusion and may lower the value of the opportunity.
h. If, during the Search, any potential candidate(s) come to the Client’s attention, including any internal candidates, they must be referred to AL for inclusion in the Search for comparison to the candidate(s) AL is evaluating for the Position. Once AL is engaged on the Search, any candidate that is under consideration by the Client, shall be shared with AL to be included in the Search process.
i. In order to successfully conclude the Search process the Client shall ensure to provide timely feedback on the Position specifications, background information of its company, schedule interviews promptly with candidates and be available to discuss the challenges in the marketplace so that effective steps may be taken to improve the process, if required. In all circumstances the Client remains responsible for its decisions on the suitability of candidates.
2. FEES, EXPENSES AND PAYMENT TERMS
a. AL conducts searches solely on a retained fee basis. Our professional service charge for conducting a Search, i.e., for any candidate referred by AL and hired by the Client or its affiliates, within 12 months of the referral, is one third (33.33%) of the selected candidate’s Compensation (‘Company Fee’).
b. Compensation shall be defined as the annualized, first year, total cash compensation of the selected candidate, including base salary, target bonus, and signing bonus, but does not include equity, or relocation reimbursement, if any, unless agreed otherwise in the Search Agreement.
c. Annual bonus is estimated as follows: where a first-year bonus is guaranteed we use the guaranteed amount; where a maximum bonus is stipulated, we assume half that figure; where an ‘on target earnings’ figure is agreed, we use that target amount; where a bonus is open-ended, we agree an estimated amount with the client based on the bonus paid to comparable employees in previous years.
d. For the purposes of determining the Estimated Fee of the Company, the candidates’ Compensation shall be predetermined (‘Estimated Compensation’) and specified in the Search Agreement.
e. All payments shall be invoiced in three stages, unless agreed otherwise in the Search Agreement, as follows:
- A Retainer Fee, as one third of the Estimated Fee of the Company, shall be invoiced upon execution of the Search Agreement.
- A Working Fee, calculated as one third of the Estimated Fee of the Company, shall be invoiced upon presentation of the short list or thirty days from the date of the Retainer Fee invoice, whichever is earlier.
- A Completion Fee, calculated as one third of the actual Compensation, offered to the appointed candidate, less the amounts invoiced as Retainer and Working Fees, shall be invoiced upon the candidate’s acceptance of the Client’s offer, or one third of the Estimated Fee of the Company shall be invoiced at sixty days from the date of the Retainer Fee invoice. If placement occurs after the Completion Fee invoice, a final invoice may be raised to cover any upward adjustment.
f. The fees shall be net of any applicable taxes, payable within thirty (30) days of receipt of invoice. All applicable taxes shall be borne by the Client.
g. AL reserves the right to charge a monthly 1% interest on the outstanding balance that remains unpaid after the due date of the invoice, or as agreed between the Parties in the Search Agreement (Late Fee Payment).
h. Expenses necessarily incurred during a Search, such as candidates’ and consultants’ travelling and hotel expenses, communication, administrative and meeting costs, and other similar expenditure, shall be charged at cost or the Parties may jointly agree to an administrative fees or expenses, in the Search Agreement, to billed along with each invoice, as applicable.
i. Cancellation Policy: Payment of fees are not dependent upon the appointment of a candidate. Should the assignment be cancelled, before the short list is presented, the Retainer and Working Fees remain payable in full, including, where applicable, any outstanding expenses and administrative fees. Should the assignment be cancelled after the short list is presented, the full Completion Fee along with all administrative fees and expenses incurred, where applicable, become payable.
j. Should a candidate not introduced by AL, be offered, and accept the position, the Search fees and expenses become payable as though the Search had been cancelled, and then, according to whether the short list was presented. The appointment of an internal candidate shall be treated as if the candidate were introduced by AL.
k. Should the Client require the Search be placed on hold, they shall inform AL of such request in writing. AL shall automatically resume the Search within sixty (60) days of the hold date, unless intimated by the Client, in writing, to resume the Search at an earlier date.
l. If any candidate introduced by AL is subsequently placed at a different position by the Client or referred to other employers by the Client with a resulting engagement (‘Additional Placement’), AL shall be entitled to an additional fee as follows:
- Executive Roles:1/3 of the placed candidate’s Compensation unless agreed otherwise in the Search Agreement.
- Non-executive Role: mutually agreed between the Parties.
a. If an appointment proves unsuccessful and an appointed candidate’s contract is terminated by the client within six (6) months of commencement (unless otherwise agreed in the Search Agreement), for any reason other than restructuring or redundancy, AL shall work to replace the candidate.
b. The Client shall inform AL within 15 days of the departure of the placed candidate to initiate a replacement search. The replacement search may not be applied toward a different search assignment and the replacement search may only be conducted upon the specifications agreed in the original assignment. This guarantee is limited to one replacement search only, provided no outstanding fees under the original assignment are due to AL.
4. DATA PRIVACY
a. AL and the Client shall constitute data controllers in common in respect of the personal data of candidates and prospects (‘data subjects’) that may be exchanged between them. Personal Data may include contact details, CVs, references, and other information provided directly by the data subject or otherwise, collated about them for the purposes of assessing their suitability for a position (‘Personal Data’).
b. The Client shall be responsible for complying with all applicable data protection laws relevant to its processing of the personal data concerned and shall ensure that it takes appropriate technical and organizational measures to safeguard the security of the personal data in its possession and control.
c. The Client shall co-operate in relation to any exercise by a data subject of its rights in relation to the personal data that may be held by the Client and shall ensure that its processing activities are communicated to the relevant data subjects in accordance with applicable law.
d. The Client shall not retain the Personal Data for longer than is necessary for its purpose, unless otherwise required or permitted by law.
a. Confidential Information includes, but is not limited to information, technical data, or know-how, including but not limited to the Client’s operations, processes, systems, marketing and/or financials disclosed by the Client to AL. This includes all documentation marked as ‘confidential’ or not.
b. AL recognizes that it shall be exposed to sensitive and confidential information and therefore shall not disclose any information provided by the Client, whether confidential or not, to any person or entity except to such persons who are required to have such information, and to whom AL shall disclose, while carrying out standard activities in its capacity as executive search professionals. AL shall use all reasonable precautions to prevent inadvertent disclosure of confidential information to others.
6. INTELLECTUAL PROPERTY
a. AL shall exclusively own all intellectual property rights including, without limitation, all copyrights, including rights to short lists, long lists, candidate reports, and activity updates, rights to create derivative works, patents, trademarks, trade secrets, and any other intellectual property rights (“Intellectual Property Rights”) pertaining to items, materials, formats, documents provided to the Client during the Search.
b. Notwithstanding the above, AL conveys no intellectual property ownership rights to candidate resumes submitted to the Client for review. AL hereby acknowledges the Client’s right, title and interest to material, formats and documents provided to AL during the Search and AL shall not infringe or allow the Client’s Intellectual Property Rights to be infringed. It is understood by the Parties that the information provided to the Client, as a result of the Services, shall be the Intellectual Property of AL, any third party and/or the candidate, as applicable.
a. Capitalized terms used in these Terms of Business and not otherwise defined herein shall have the same meaning given under the Search Agreement.
b. These Terms of Business and the Search Agreement shall in all respects be interpreted, enforced, and governed by and in accordance with the internal substantive laws (and not the laws of choice of laws) of the State of New York, without regard to the conflict of laws principle, unless otherwise agreed in the Engagement Letter.
c. If either party breaches the Terms of Business or the Search Agreement, and litigation results, the non-breaching party, determined by a court of competent jurisdiction, shall be entitled to reimbursement of any costs, including attorney fees, incurred as a result of that breach.
d. AL shall not be liable for any loss of use, interruption of business, lost profits, or any indirect, special, incidental, or consequential damages of any kind regardless of the form of action whether in contract, tort (including negligence), strict product liability, or otherwise, even if it has been advised of the possibility of such damages. In no event shall AL’s aggregate liability exceed the fees received under a specific project defined in the Search Agreement.
e. English shall be the language of interpretation for the Terms of Business and any Search Agreement executed with a Client.
f. In the event of a conflict between the Terms of Business and the Search Agreement, the terms of the Search Agreement shall prevail.