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AI Board Member Agreement Review

Backed by Microsoft For Startups
Guided by Grayver Law Group
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Personal (PII) & Corporate Data Redacted Before AI
Free during early access

A board member agreement sets the terms of a director's service — compensation, indemnification, equity, fiduciary duties, and observer/independence status. Justee reviews board agreements against DGCL §141, §145 (indemnification), and SEC independence standards (NYSE/Nasdaq) to flag governance, equity, and indemnification gaps.

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Key Takeaways

DGCL §145 indemnification must be supplemented by indemnification agreement and D&O insurance

Director independence (NYSE 303A.02 / Nasdaq 5605) requires specific factual analysis, not just title

Director equity vesting should accelerate on change of control and termination without cause

1-2 minutes*

Average Review Time

175+ compliance points analyzed*

Compliance Checks

Bank-level AES-256 encryption

Document Security

* Estimates based on typical documents. Actual results vary by document type and complexity.

Board agreements get less legal attention than employment agreements but carry higher liability risk — directors face personal exposure under federal securities laws (§10(b)/Rule 10b-5, §16, §13(d)), state fiduciary duty law (Caremark, Smith v. Van Gorkom), and SOX §304 clawback. Delaware General Corporation Law §145 authorizes corporate indemnification but is permissive — the corporation must opt in via charter, bylaws, and indemnification agreement, plus carry adequate D&O insurance (typically $5M+ for venture-backed companies, $20M+ for IPO candidates). Independence standards under NYSE 303A.02 and Nasdaq 5605 require factual disqualification analysis (no employment relationship, no material business relationships, no compensation beyond board fees). Director equity typically vests over 1-3 years with single- or double-trigger acceleration on change of control. Justee analyzes board agreements against DGCL §145, NYSE/Nasdaq independence, the company's D&O policy, and standard NVCA precedents to flag governance landmines. Free, instant, no signup.

How It Works

1

Upload Your Document

Upload your contract in PDF, DOCX, or TXT format

2

AI Analysis

Our AI reviews your document for compliance issues

3

Review Findings

Get detailed findings with risk ratings and legal citations

4

Take Action

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What We Check

Verifies §145 indemnification and D&O insurance coverage

Tests director independence under NYSE/Nasdaq standards

Reviews equity vesting and acceleration triggers

Flags fiduciary-duty disclosure and conflicts

Confirms observer rights vs. voting director status

Common Risks We Identify

Indemnification narrower than DGCL §145 permits

Director independence claim fails Nasdaq factual test

Equity vesting lacks change-of-control acceleration

No advancement of legal expenses provision

D&O policy excludes derivative claims

Hypothetical Case Study by Justee

Justee recently analyzed a director agreement with §145-style indemnification but no advancement and no D&O confirmation for a Series C fintech adding an independent director with 0.4% equity over 3 years.

Issue Found: The agreement said indemnification "to the fullest extent permitted by law" but had no advancement of expenses provision. Six months later, the director was named in a derivative suit and the company refused to advance legal fees, citing the agreement's silence. The director paid $180K out of pocket before settling. The agreement also did not require a Side A D&O policy, leaving the director uninsured.

Justee Recommendation: For new directors, we now require: (i) an indemnification agreement (separate from bylaws) with mandatory advancement on standard undertaking, (ii) confirmation of D&O policy with Side A coverage of at least $5M, and (iii) annual policy renewal certificates delivered to the director.

Indemnification Without Advancement

Problematic Language

"The Company shall indemnify Director to the fullest extent permitted by Delaware law."

Recommended Language

"The Company shall (i) indemnify Director to the fullest extent permitted by DGCL §145 and the Company's charter and bylaws; (ii) advance legal fees and expenses to Director within thirty (30) days of receipt of an invoice and Director's standard undertaking to repay if ultimately determined not entitled to indemnification, in accordance with DGCL §145(e); (iii) maintain at all times during Director's service and for at least six (6) years thereafter a directors and officers liability insurance policy with Side A coverage of at least $[5,000,000], and provide Director with annual confirmation; and (iv) execute the Indemnification Agreement attached as Exhibit A."

Why it matters: Indemnification without advancement is hollow — directors cannot wait years for fees during litigation. The amended language adds advancement, D&O insurance commitment, and a separate indemnification agreement.

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"Justee is redefining the legal document compliance process across all practice areas, transforming hours of work into minutes, while reducing stress and boosting accuracy."

Artem Dolukhanyan
Artem Dolukhanyan

Partner, Corporate Transactions at Grayver Law Group

AI Review vs. Manual Review

FeatureJustee AI ReviewManual Review
Review Time2-5 minutes2-4 hours
CostFree trial available$150-500+
Legal CitationsAutomaticVaries by reviewer
Clause SuggestionsIncludedExtra fee
Availability24/7 instantBusiness hours
* Comparison data represents estimates based on industry research and internal testing for typical contract types. Review times, costs, and accuracy percentages vary by document complexity, length, jurisdiction, and specific legal requirements. See full disclaimer below.

Official Resources

DGCL §145 Indemnification

Delaware §145 director indemnification

NYSE 303A Independence Standards

NYSE listed-company independence

SEC Director Disclosure Rules

SEC director and officer disclosure

Related Document Reviews

Unanimous Written Consent ReviewBylaws ReviewIndemnification Agreement ReviewStock Option Agreement Review
Important Legal Disclaimer

Not Legal Advice: The information and analysis provided by Justee AI is for general informational purposes only and does not constitute legal advice. While we strive to provide accurate and helpful information, our AI-powered service is not a substitute for professional legal counsel.

No Attorney-Client Relationship: Use of Justee AI does not create an attorney-client relationship. Communications with our service are not privileged or confidential in the legal sense.

Consult a Professional: For specific legal matters, we strongly recommend consulting with a qualified attorney licensed in your jurisdiction. Legal requirements vary by location and circumstances, and only a licensed attorney can provide advice tailored to your specific situation.

Performance Estimates (*): All statistics, metrics, and numerical claims on this page — including review times, cost comparisons, accuracy percentages, and database size — are estimates based on internal testing, industry research, and typical use cases. Actual results vary based on document type, complexity, length, jurisdiction, and other factors. Cost comparisons reference publicly available average attorney rates and are not guaranteed savings. "1M+ laws and regulations" refers to the breadth of Justee's reference database and does not imply that every provision is checked against every law for every document.

By using our service, you acknowledge that you have read and agree to our Terms of Use and understand the limitations of AI-powered legal analysis. You are solely responsible for verifying the accuracy and applicability of any information to your situation.

Board Member / Director Agreement Review FAQ

Yes. Bylaws can be amended; indemnification agreements are contracts that survive amendment. Justee recommends a separate agreement for every director.

The corporation pays your legal fees during litigation, subject to your undertaking to repay if not entitled. Justee flags director agreements without advancement provisions.

Depends on stage. Series A/B: $5M minimum. Series C/D: $10M+. Pre-IPO: $20M+ with Side A. Justee recommends seeing the policy declarations page before signing.

Independence is factual — no material relationships, no employment, no consulting beyond board fees. Justee flags facts that may compromise independence under Nasdaq 5605 / NYSE 303A.02.

Yes. Observer agreements have different fiduciary and information-rights considerations and Justee adapts the review.

Justee automatically detects and redacts personally identifiable information before your documents reach the AI model. Protected types include:

Personal data:
  • Names, email addresses, and phone numbers
  • Social Security numbers and tax identifiers (ITIN)
  • Physical addresses and dates of birth
  • Credit card and bank account numbers
  • Driver's license and passport numbers
  • Medical provider identifiers (NPI) and case numbers
Corporate and business data:
  • Company and organization names
  • Business addresses and geographic locations
  • SWIFT/BIC codes, IBAN numbers, and bank routing numbers
  • Business license numbers and attorney bar IDs
  • Corporate tax identifiers (EIN)
Our system achieves 100% detection of standard PII types and approximately 97% overall coverage. Certain rare identifiers — such as cryptocurrency wallet addresses and MAC addresses — may not be detected automatically. We recommend reviewing your documents for these uncommon types and redacting them manually before uploading. See our Privacy Policy and Terms of Use for details and limitations.

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Last updated: May 13, 2026

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