Chamber CEO
Succession Plan
Selecting a New CEO
Second Edition
________________________
W.A.C.E. Mission Statement
To enhance and promote the professional
growth and competence of
Chamber of Commerce Executives
__________________________
The Western Assocation of Chamber Executives
would like to acknowledge and thank all of the contributers to this publication
2005 First Edition
2009 2nd Edition
Leron Gubler
Hollywood (CA) Chamber
Kate King
Napa (CA) Chamber
Kathy Langdon
Gilbert (AZ) Chamber
Ken Moore
Edmond (OK) Chamber
Dave Maurer
Prescott (AZ) Chamber
Debbie Moreno
Bakersfield (CA) Chamber
Mary Ann Miller
Tempe (AZ) Chamber
Gary Toebben
Los Angeles (CA) Chamber
RESOURCES
W.A.C.E Resource Library
www.waceonline.com
Napa Chamber of Commerce
“Succession Plan”
US Chamber of Commerce
“Selecting the CEO for your Chamber of
Commerce”
www.uschamber.com
www.napachamber.com
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W.A.C.E. makes no representation or guarantee with respect to the accuracy, or completeness of the contents
of this publication and specifically disclaim any implied guarantee or fitness for a particular use. All of the
information supplied in this publication is published without guarantee and the user/reader must satisfy
themselves to its suitability for use.
Copyright © 2005
Published by Western Association of Chamber Executives
P.O. Box 1736 Sacramento, CA 95812-1736 (916) 442-2223
fax (916)444-6685 [email protected]
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Table of Contents
I.
Why a Succession Plan is Important
a. Preplanning Saves Valuable Time
b. Detailed Steps for Chief Executive Officer (CEO) Successful Plan
c. Interim Duties Assignment Checklist
II.
Selection Committee
a. Designing a Job Description
b. Sample Job Description
c. Request for Search Firm Proposal
d. Sample Recruitment Ad
III.
Interviewing Process
a. Selecting Candidates to Interview
b. Interviewing the Candidates (setting the stage)
c. Interview Questions
IV.
Selection Process
a. Final Interviews and Selection
b. Developing an Employment Contract
c. Providing Relocation Assistance
d. Notifying Those Interviewed and Not Selected
e. Introducing New Executive
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CHAPTER I
Why a Succession Plan is Important
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The following is a guide to succession for the office of Chief Paid Executive of your chamber. This guide
is designed for use in the instance of a sudden, unplanned vacancy or the resignation of the current Chief
Paid Executive and is intended to ensure the continued operation of YOUR CHAMBER with minimal
disruption.
W.A.C.E. is here to help your organization through a smooth transition. We encourage using us as a
resource; we offer several services such as a competitive salary analysis of like-sized chambers, job
postings, personal consultation, and a list of professionals to help during the interim period. You may
contact WACE at:
W.A.C.E.
PO Box 1736
Sacramento, CA 95812-1736
916-442-2223
[email protected]
This booklet will guide you through the process of preparing your chamber in advance for an unplanned
vacancy to hiring a new Chief Paid Executive.
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Preplanning Saves Valuable Time
It is recommended the following steps be in place prior to the vacancy of the Chief Paid Executive
position.
Job Description and Benefits
A current job description and outline of benefits provided will save the search committee time in
developing an ad and serve as a benchmark for negotiating salary/benefits offered to the new Chief Paid
Executive (see worksheet attached)
Management Development
In order to prepare for an unplanned vacancy of the Chief Paid Executive, ongoing opportunities should
be provided to management staff to broaden their knowledge and experience base, develop new skills and
continue the enhancement of existing expertise. This will be offered through formal education and
informal training/experience opportunities, and will be analyzed on an individual basis. The Chief Paid
Executive will provide the Executive Committee and/or Board of Directors an annual update of his/her
estimation of the capabilities of management staff.
Interim Chief Paid Executive
It is recommended that the
(highest ranking staff member) be appointed as interim Chief
Paid Executive, supported by the Board and staff. The
would have responsibility for all
operations during the search and placement process until the new Chief Paid Executive is on site.
A list of duties that may go unattended will be helpful in the interim. (see attached worksheet.)
Internal Candidates
YOUR CHAMBER employees should also be encouraged by the Board to submit their names for
consideration if interested. These names will be submitted to the search committee to be included in the
selection process.
It is not uncommon for several months to lapse before a new CEO is brought on board. The more you can
do to prepare for this situation, the less time it will take to hire a new Chief Paid Executive.
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Detailed Steps for a Successful Plan
The following provides a detailed plan for the succession of the Chief Paid Executive of YOUR
CHAMBER. This plan may differ depending upon the circumstances of the Chief Paid Executive’s
departure.
Step I
Chief Paid Executive notifies Board of Directors, in writing, of intent to retire/resign
(ideally with a minimum of 60 days notice but often less) or the position is suddenly,
unexpectedly vacated. In the case of an unexpected vacancy the Board of Directors may
refer to W.A.C.E.’s Executive & Chamber Assistance Directory, or ask assistance from a
neighboring Chamber.
Step II
The Board Chairman will call a special meeting of the Board of Directors, within two
weeks of notification of the vacancy, to discuss the succession plan and begin the
process. Board of Directors prepares a budget for and appoints a search committee.
Step III
The Board of Directors will assign interim Chief Paid Executive and/or duties (see
attached checklist.) A reasonable increase in salary for an employee to take on these
additional duties should be discussed.
Step IV
Board of Directors activates a search committee. Search committee will finalize job
description, salary range, and benefits to be used in advertising the position.
1) Appoint strong Chairperson with hiring process experience
2) Five to seven members most functional
3) Must commit time (three to five months not uncommon)
4) Absolute confidentiality in all actions is crucial
Step V
It is recommended the search committee contact W.A.C.E. for information on what
chambers of like size and budget offer in salary and benefits to assist in recruiting quality
candidates
Step VI
Search committee meets promptly to determine if a search firm is to be utilized and/or if
an internal search will be conducted.
Step VII
If a search firm is to be utilized, the search committee will arrange to interview several
firms for consideration. Once face-to-face interviews are conducted with the firms
contacted, the search committee selects a firm and an acceptable contract negotiated.
Care should be taken in regard to fees, deadlines and progress reports. (Approximately
three-week process)
Step VIII
If an internal search is selected, a chair or key contact should be designated from the
search committee.
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The search committee should draft an advertisement suitable for wide use; it may want to
contact W.A.C.E. for assistance. A working example is attached. The committee should
determine the location and frequency of the ad(s). Some considerations could include:
Position & title
Salary range
Benefits
Membership size
Chamber budget
Total number of staff
Population served
Description of general duties, educational or training requirements
Deadline to apply & Instructions to apply
Suggested media for advertisement may include:
W.A.C.E.
Career Opportunity Bulletin
PO Box 1736
Sacramento, CA 95812-1736
916-442-2223
www.waceonline.com
US Chamber of Commerce
888-732-5228
www.uschamber.com/careers
Local Newspapers
xxxx Any Street
Your Town, USA
State Association of Chamber Executives
xxx Street
My Town, USA
ACCE
(703) 998-3521
www.acce.org/profdev/jobwatch/jobs
Regional/Metro Newspapers
Xxx That Avenue
That Town, USA
Step VIII
The search committee will narrow the field of candidates to
. This can be
accomplished via phone and/or video conference interviews for the first tier of
candidates. Once the final field has reached two to four it is recommended that a face-toface interview be conducted. It is customary for the Chamber to pick up the cost for the
interviewees’ travel and lodging.
Step IX
The Search Committee will recommend the top candidate for hire to the Board of
Directors for approval. While it is not recommended, if there are two highly qualified
candidates, the search committee may request the Board to conduct interviews for both
candidates. Once the candidate has been selected for hire, the offer will be made and
details arranged for start date, etc.
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Interim Duties Assignment Checklist
The Chief Paid Executive manages and personally takes care of many duties within the office that may go
unattended if the interim Chief Paid Executive or another staff person is not trained to step in for a short
period of time. This checklist will outline some of those duties and those who would now become
responsible until a new Chief Paid Executive is named.
DUTIES
ASSIGNED TO:
Spokesperson for the Chamber
___________________________
Public Policy development
___________________________
Accounts Payable
___________________________
Accounts Receivable
___________________________
Board meeting preparation
___________________________
Speaking engagements
___________________________
Specific events/issues that need immediate attention:
___________________________
Staff issues
___________________________
Mail/phone calls for CEO
___________________________
Newsletter development
___________________________
Website development
___________________________
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CHAPTER II
Selection Committee
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Designing the Job Description For The Chief Paid Executive
This form should be filled out at the time the succession plan is reviewed by the board of directors and
updated when the search committee begins its duties to fill this position.
In the spaces below, evaluate the present position of the Chamber and identify the responsibilities and
purpose of those tasks for the Chief Paid Executive position being evaluated. The Board of Directors and
the current Chief Paid Executive should complete these sheets.
Current strengths of the Chamber:
Current weaknesses of the Chamber:
Potential future Chamber opportunities:
Potential Chamber threats:
What challenges must be successfully resolved by the Chief Paid Executive?
What primary attributes must the Chief Paid Executive possess?
Identify the regularly performed tasks and responsibilities of the position and the purpose of each:
Task/Responsibility
Purpose
Purpose of position:
Minimal requirements to fill position (experience, education and attributes):
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Major Tasks/Responsibilities:
Salary Range Membership Size Chamber Budget Number of Staff Population Served Deadline to apply Send resumes (and/or call) to _____________________________________________________
____________________________________________________________________________
Benefits:
Medical Insurance
Employee Only
Employee and Dependents
Retirement: (type)
Life Insurance
Long-Term/Short-Term Disability
Dental Insurance
Vision Insurance
Long-Term Care
Expense Account
Cell Phone
Service Club Membership
Professional Development (WACE, US Chamber Institute, etc.)
Mileage Reimbursed:
per mile
Monthly Auto Allowance
Auto Furnished
Number of Paid Holidays:
Number of Vacation Days/Personal Time:
Country Club Membership
Wellness Program/Health Club
Other _______________________________
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SAMPLE JOB DESCRIPTION
POSITION:
CHIEF EXECUTIVE OFFICER
GENERAL DESCRIPTION:
The Chamber Chief Executive Officer coordinates and implements the many activities of the Chamber of
Commerce, working under board policy guidelines of the Board of Directors and Executive Committee. He or she
coordinates/delegates the activities of many councils, committees and task forces and supervises the work of the
staff of these various entities in the pursuit of the Chamber's objectives. As the chief staff officer, he or she may be
called upon to represent the Chamber Board of Directors and Officers in contact with the membership, with outside
individuals, public agencies and officials, various organizations and groups, and with the general public, all
requiring judgment and tact to foster good community/chamber relations. The Chief Executive Officer reports to the
Executive Committee and the Board of Directors.
RESPONSIBILITIES:
Responsible for assuring that a membership recruitment and retention plan is in place. This may be
accomplished by directing and participating in a sales program and working with the appropriate people to
ensure adequate membership services.
Acquaints himself or herself with as many members as possible, familiarity with their business goals and
problems, for the purpose of maintaining good membership relations, stimulating communications within
the business community, identifying common goals and problems to which the Chamber should address
itself, and identifying people who may contribute time and resources to Chamber programs.
Maintains current statistics and familiarity of the economy of the area, both inside and outside the Chamber
membership.
Cultivates good relationships with city, county, state and federal governments and their elected officials
and staff.
Maintains a high level of communication among the Chamber officers, directors, staff, committees, and
members as well as between the Chamber and the general public.
Coordinates the activities of the Chamber committees, with the Board of Directors and Executive
Committee, and provides necessary personal and staff assistance.
Oversees all staff activities of the Chamber including the hiring and termination of employees.
Prepares and implements an annual budget for the Chamber and coordinates expenditures consistent with
the budget.
Reports to the Executive Committee and Board of Directors, on a monthly basis, the current status of the
membership and finances.
Informs the Executive Committee and Board of Directors of various problem areas and activities
throughout the community that may affect the business sector.
Oversees all Chamber publications.
Other duties as may be required.
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Request for Search Firm Proposal
Name/Address of
Search Firm
Subject: Request for Proposal
The Board of Directors of YOUR CHAMBER, a not-for-profit membership corporation, requests your
proposal to perform a search for qualified professionals to fill the position of Chief Paid Executive. A
copy of the position description is enclosed. We expect all candidates to have the following qualifications:
Five years experience as CEO of a Chamber or other membership association. An Executive/Senior
Vice President of a Chamber may be considered.
Thorough understanding of the political environment of chambers, trade associations and the business
community.
Demonstrated leadership, decisiveness and foresight.
Thorough knowledge of finance, economics, planning, management and/or competitive strategies,
evidenced by applicable degree(s) and/or appropriate experience.
Excellent communication and interpersonal skills as well as strong public speaking ability.
Your proposal should include the initial search, screening and interviewing processes to arrive at no more
than four final candidates. Your proposal must reach us no later than
.
Sincerely,
Chairman
Board of Directors
Enclosures
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Sample Recruitment Ad
Chief Paid Executive, Chamber of Commerce
The Board of Directors of YOUR CHAMBER, located in YOUR TOWN, seeks a highly qualified,
experienced and educated individual to assume the duties of Chief Paid Executive. This position will be
responsible for the management of a
member not-for-profit, broad-based business organization
with
employees and an annual budget of $
. Candidates must exhibit strong organizational,
management, financial, interpersonal and written/verbal communication skills. Must be able to work with
government officials. Salary & benefits are commensurate with experience. Please submit your resume
with salary history to
at
, no later than
.
(More specific chamber information is provided if used in a trade publication)
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CHAPTER III
Interviewing Process
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Selecting Candidates to Interview:
When all resumes are received, the chamber’s Selection Committee chairperson should contact the
applicants and request additional data, if needed.
Be prepared to provide additional information regarding the chamber as seasoned professionals will most
likely ask to see items such as the budget, current financial statement, audit, newsletters, personnel
manual and by-laws.
Carefully review the resumes and performance records of all candidates.
- As soon as applications are received, Selection Committee members should start screening the
candidates. This is a time-consuming process and it is recommended to begin well in advance of
the deadline for selecting the CEO
- Review resumes and analyze other submitted materials. Begin filling out the Applicant
Qualification Form (attachment ___) with available information to easily evaluate and compare
candidates. Qualifications listed on the form should represent expectations agreed upon by the
chamber’s Selection Committee.
- Evaluate the applications based on the job requirements established. Eliminate candidates who
don’t meet the minimum requirements.
- Select candidates to interview. Arrange an interview schedule. Interview the top candidates using
the same interview guide and format so all candidates are considered equally.
Phone interviews are an important tool to sift through the candidates and may want to be considered prior
investing a whole lot of money.
The Selection Committee should invite these candidates for personal interviews at the chamber’s expense.
Expenses may include airfare, rental care, hotel accommodations, a tour of the community, etc.
Experience shows that interviewing candidates on separate days produces the best results.
Few management positions in business firms are comparable to the position of chief executive of a
chamber of commerce. Each Selection Committee and Board member should keep in mind the unique
requirements for chamber of commerce executives.
These selected comments may help the Board in evaluating candidates. Interpret the suggestions in light
of local conditions and in balance with other considerations.
-
Don’t expect to hire a top-grade chamber executive at a low-grade salary.
Don’t underrate the importance of chamber management and staff experience.
Don’t expect a candidate with a mediocre record in other lines of work to be a superior chamber
executive.
Don’t overrate a candidate who has a ready-made program to offer.
Don’t seek a person to keep the chamber out of trouble by steering around difficult or
controversial problems.
Don’t be over-impressed with a candidate who seems to know all the answers without getting all
the facts.
Don’t overrate the candidate who promises to keep important members happy by catering to their
personal whims.
Don’t sell your community short by seeking a chamber executive to match mediocre chamber
achievement in the past.
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-
Don’t overestimate the value of employing a ‘hometown person’ because he or she knows the
town and the important people in it.
Don’t look for a person to take over the policymaking and leadership responsibilities of officers,
directors, and committee chairmen.
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Interviewing the Candidates (setting the stage)
Careful planning of the interviews by members of the chamber’s Selection Committee will
overcome some of the difficulties in evaluating the qualifications of candidates.
Experts agree that an ideal employment interview should fall between the extremes of
interrogation and conversation. The more completely the interviewer obtains the applicant’s confidence,
the more likely the applicant will reveal significant facts about himself/herself and his/her experiences.
This will help the interviewer more accurately evaluate the applicant’s qualifications for the position.
Provide the Appropriate Physical Surroundings
- The atmosphere (physical surroundings) in which the interview takes place is important in getting
the applicant to talk freely.
- Hold interviews in a private room. Don’t permit interruptions. The room should be informal.
Put the Applicant at Ease
- Almost every applicant experiences a certain amount of nervousness or tension at the beginning
of an interview. The interviewer is responsible for relieving this tension.
- A frank, open manner and a friendly smile will go a long way toward relieving initial tension.
Cheerful small talk about a topic of local interest will help establish a friendly relationship.
- After two or three minutes of casual conversation, the applicant will probably talk freely and
naturally. You can now easily direct the conversation to important areas.
- The interviewer should make an effort to limit note taking. When he or she finds such notes
necessary, he or she should make certain that they include only impersonal facts.
The Pattern of the Interview
- A discussion of the applicant’s work experience is a logical starting point for the interview.
- Education and training are also impersonal subjects which the applicant can discuss easily and
freely.
- By this time, the applicant should see that the interviewer is making a sincere effort to evaluate
his/her qualifications. This will encourage him/her to talk more freely about his/her aptitudes and
abilities. This portion of the interview is the most revealing. The interviewer must tactfully and
carefully guide this part of the interview in order to provide a fair and objective appraisal of the
applicant’s qualifications and appropriateness for the job.
- If the applicant hesitates at any point, the interviewer should have a skillfully phrased remark or
question ready to start the interview again. The interviewer should interrupt the applicant only to
obtain more specific information or to keep the interview on track.
- Generally speaking, the less the interviewer talks the more successful the interview.
You may find these suggestions helpful:
- Encourage the applicant to talk freely by an occasional indication of understanding. For example,
comment on the applicant’s work by saying “I can see how that experience was helpful to you.”
Avoid sharp or barbed questions that might put the applicant on the defensive.
- Avoid leading or suggestive questions – questions that are heavily weighted toward a particular
answer, or that are answered with “yes” or “no”.
- Don’t rush the interview. Just getting the facts is not enough. Many significant remarks will come
spontaneously if the applicant is given time to talk.
- At the end of the interview, listen carefully to the applicant’s remarks. He or she will often reveal
more about his/her background and personality once he/she feels the formal interview is over.
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Interview Questions to be considered:
1. Do you have any observations you’d care to make on important aspects of chamber management
that may help us as we consider your application?
2. Tell us about your special interests in chamber work and how they will apply to this community.
3. Give us your personal views on the chamber’s role in the community.
4. What are your personal short-term and long-term goals in chamber work?
5. What was the most fulfilling job you ever had? What did you like least about that job?
6. What kind of people do you work best with?
7. How do you communicate with the members, the Board, and elected officials? Assuming that
some of that communication is in written form give us some samples of your writing.
8. What general management experience have you had? How much of that has been in the not-forprofit management arena?
9. Please explain the difference between managing a not-for-profit chamber and a for-profit
business.
10. What personnel decisions have you had to make? How would you handle a non-performing staff
member?
11. Describe your experience in developing a budget.
12. How would you handle a business member who has called you or stopped in to complain about a
position taken by the chamber?
13. If the Mayor walked into your office without an appointment and wanted to discuss his/her views
about an article you wrote in the last chamber newsletter, how would you handle the situation?
14. A major community issue has your membership split 50-50 with members on both sides
expecting the chamber to take a position. How would you handle the situation?
15. How do you deal with the many different personalities of volunteers, from Board members to
committee members.
16. What do you see are the challenges in the community? The Chamber?
The selection committee may want to consider a few of these questions be used for the second interview.
The Selection Committee should carefully check references of those with whom it is most pleased.
Candidates may have letters of recommendation from former employers, associations, or business
associates.
The timing of reference checks needs to be considered carefully. It is best to do so later in the process but
before the offer is extended. Confidentiality is important in these circumstances, especially when it
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comes to going public. It is recommended that Selection Committees DO NOT publicly announce
finalists or mention “_____” was selected from a group of three finalists that included “_____” from the
“______” chamber and “______.”
The Selection Committee or the Board may contact others by letter or telephone or make personal visits
to business and organization leaders in the community in which the candidate works only if it is amenable
to the applicant. Doing so may jeopardize someone’s current position if the negotiations are not finalized
22
CHAPTER IV
Selection Process
23
Final Interviews and Selection Process
The Selection Committee should choose the final candidates. As in the case of the first interviews, the
chamber should pay the expenses of those traveling to the area for an interview.
The Selection Committee may want to consider a separate list of questions for the final candidates or
chose from those listed earlier in this document.
All interviews and reference checks are in strict confidence. Unfortunate incidents have occurred where
executives were embarrassed in their own communities by press releases announcing they were
candidates for the position.
Even though a Selection Committee screens applications and conducts preliminary interviews, the full
Board has responsibility for selecting the executive. It will also confirm the conditions of employment in
writing and will agree to a starting date, salary, fringe benefits and moving arrangements.
The Board of Directors may want to consider a reception-type function be planned with the final
candidate prior to the final vote by the Board of Directors?
A unanimous selection by the Board is good member and public relations. It increases the prospect of a
harmonious relationship between the Board and the chief staff executive. It also strengthens the chamber
and community members’ confidence in the Board and chamber staff. Even when the final decision is
marginal, the chairman should call for a unanimous approval for Board minutes.
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Developing an Employment Contract
An employment contract contains certain standard provisions and the major terms must be detailed and
clear. It involves the negotiation of terms between the chamber executive and the chamber Board of
Directors.
It is recommended the executive and the Board deal directly with each other on the terms and conditions
of a contract. They can meet without the presence of counsel, reach agreement on key issues and make
sure the agreement is reduced to notes which both sides can accept.
Once they have reached a “handshake” agreement, counsel can formalize the pact into a written
document. Counsel’s role is that of a technical draftsman rather than the negotiator.
Basic contract provisions
Term of Employment – The contract should specify the length of time of employment; when it will
begin and when it will end. This provision typically spells out the executive’s job title and general
responsibilities and duties.
Compensation – Spells out the details of financial compensation, including amounts and the time of
disbursement. The provision may provide for mandatory review by the Board at specified intervals. If
mention of a salary review is omitted, the chamber and/or executive may presume that the salary will
remain fixed during the term of the original agreement – unless either party signals a desire not to renew.
Some agreements specify prearranged salary increases in the later years of the contract.
Renewal of Agreement – Provides for an automatic renewal – usually for one year or in increments
equal to the term of the original agreement – unless either party signals a desire not to renew. If the
contract is silent on renewal, it expires at the end of the term of employment.
Fringe Benefits – Details those fringe benefits which the executive will receive. These may include such
benefits as health care, retirement plan contributions and group term life insurance. It’s a good idea to
cite these benefits even though all chamber employees may receive them.
Benefits:
Medical Insurance
Employee Only
Employee and Dependents
Retirement: (type)
Life Insurance
Long-Term/Short-Term Disability
Dental Insurance
Vision Insurance
Long-Term Care
Expense Account
Cell Phone
Service Club Membership
25
Professional Development (WACE, US Chamber Institute, etc.)
Mileage Reimbursed:
per mile
Monthly Auto Allowance
Auto Furnished
Number of Paid Holidays:
Number of Vacation Days/Personal Time:
Country Club Membership
Wellness Program/Health Club
Other _______________________
Compensation for Expenses – The chamber should reimburse the executive promptly for all ordinary
and necessary business expenses. It should also provide, however, that he/she document those expenses
(in the event of an audit by the Internal Revenue Service), and it should not provide for any lump-sum
periodic payment to cover expenses regardless of amounts actually spent.
Early Termination – Generally either party can break a fixed-term contract only if one of the parties
breaches the agreement. If either party wants to terminate the agreement, the reasons and procedures for
carrying out such termination should be detailed. If the Board has the option to terminate the agreement
early, the agreement should include the provisions setting forth the severance terms. The contract should
also contain a provision for binding arbitration in the event the parties are unable to settle their
disagreements over whether early termination is justified under the agreement.
The situation of an employee’s extended illness should be addressed as well. Without such a provision, a
chamber would probably find it uncomfortable to know how to deal with an executive’s incapacity. It is
best to deal with the situation in advance as part of the contract rather than wait for the unpleasant
situation to happen.
Outside Activities – It’s normal for most contracts to have a provision to bind the executive to devoting
his/her full time and attention to the activities of the chamber. The contract should, however, include a
provision making it clear that the executive is permitted to undertake other activities for personal profit
provided they don’t conflict with his/her job or other chamber interests.
Personnel – Many contracts include provisions authorizing the executive to hire and fire other staff
personnel.
“Boiler-Plate” provisions – The following provisions should also be considered:
- Binding any successor of the chamber to honor the contract.
- Stating that disagreements over the terms of the contract will be construed according to the laws of
a particular state.
- Indemnifying the executive for any legal costs incurred with his/her defending a suit brought
against official actions as a chamber employee.
- Indicating that the contract has been authorized and approved by the chamber’s Board.
Keep the contract simple and complete. It should cover all contingencies and should outline the rights
and responsibilities of both parties. It doesn’t have to be lengthy, complex or filled with “legalese.”
26
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SAMPLE
CHAMBER EXECUTIVE
EMPLOYMENT AGREEMENT
INTRODUCTION
Thank you for your request for a copy of our Sample Chamber Executive Employment
Agreement. When we first prepared a sample employment contract in 1974, written employment
agreements for chambers and chief staff executives of not-for-profit organizations were rare. This
agreement reflects our experience in serving as general counsel for over 250 local, state, regional,
national and international chambers, professional societies and other not-for-profit organizations.
Additionally, we have had the opportunity to work with over 500 other chambers and societies and
their executives and boards for special assignments.
Howe & Hutton, Ltd. prides itself on our total dedication to representing not-for-profit
organizations from our offices in Chicago, Washington, D.C., and St. Louis. Because we are only a
telephone call, email, or fax message away, we are readily available to our clients and potential
clients regardless of location. No matter where you are or whom you work with, we feel strongly,
both from the standpoint of the chamber executive as well as the organization itself, there is a definite
need for a well-written and thoughtful employment contract.
Boards are coming of age and as a result are more concerned about performance, job
description, cost of benefits, and termination possibilities than ever before. Job security and the
ability to make needed, but perhaps unpopular decisions, are real issues for the executive. This 2004
Revised May 2004. © Copyright 2004. Jonathan T. Howe, Esq., and Howe & Hutton, Ltd., Chicago, Illinois, Washington D.C.,
and St. Louis, Missouri. All rights reserved under International and Pan-American copyright conventions. No reproduction or
any other means of republication are allowed, including quotation, without the prior written permission of the copyright holders.
This sample is designed to provide accurate and authoritative information in regard to its subject matter. If legal advice or other
expert assistance is required, the services of a competent professional person should be sought, since this sample is not intended
to replace legal or other professional services through its publication.
27
Sample Agreement, consistent with recent tax law changes, attempts to address, in a balanced
manner, these conflicting but legitimate concerns.
This Sample Agreement is exactly that — a sample. No single agreement or form is
satisfactory for all applications. However, it does reflect many of the common benefits afforded to
chamber executives in today's economic climate.
SOME WORDS ABOUT INCOME TAXATION
Most of the "fringe" benefits described in this Sample Agreement have federal, and in some
cases, appropriate, state and local income tax consequences. It is a principle under federal tax laws
that "gross income" is to include all income regardless of source unless it is specifically excluded.
"Gross income" even includes employee benefits, the cost of which, if not paid by the employer,
would be borne by the employee. The tax laws do specify a number of benefits that are tax-free (e.g.,
group term life insurance up to $50,000 and health and medical plans) or tax-deferred (e.g., qualified
retirement contributions and non-qualified deferred compensation, if structured properly), but they
are certainly subject to change, as we‘ve seen in recent years.
In order to exclude such benefits from income, an employer often has to make the benefit
available to lower paid employees as well as executives. These are referred to as "nondiscrimination"
rules because they prohibit favoritism for highly paid employees.
With the Tax Reform Act of 1986, Congress attempted to
strengthen and make uniform the nondiscrimination rules for a
number of non-retirement benefits such as group term life
insurance and health benefits.
In 1993, additional changes were made as to the treatment of "spouse" expenses, caps on
qualified retirement plan benefits and other issues.
Many benefits are excluded from income if they are provided as a "plan" meeting
nondiscrimination rules for the benefit of employees. An individual employment contract is not such
a plan. Some of the contract benefits, as a result, may be taxable income to the executive. An
increased compensation level may be negotiated to compensate for the executive’s tax cost. Tax
consequences, however, should not be the primary objective in negotiating such benefits. From the
executive’s point of view, it is better to have a benefit and be taxed on it than to not have it at all.
Retirement plans and deferred compensation are another highly technical area, particularly
with respect to tax-exempt organizations. They are generally of two types: "qualified" or "nonqualified."
A qualified plan allows current deductions for employer contributions (not especially
beneficial for a tax-exempt organization), tax-free investment growth, special protection from
creditors, and deferred taxation to employees until benefits are received. There are a myriad of
technical rules a qualified plan must meet, including nondiscrimination rules, minimum vesting
(nonforfeiture) of benefits, participation and coverage requirements and contribution limits.
28
Many tax-exempt employers do not offer qualified plans
because of their complexity. Instead, the executive enters into a
non-qualified deferred compensation agreement. In addition,
especially in light of last year’s tax law changes, executives
often can enter into non-qualified deferred compensation
arrangements to supplement their qualified plan retirement
savings. Under a non-qualified deferred compensation
agreement, the executive defers receipt of income to defer
taxation on that income. To do this, the executive must be
subject to real possible non-receipt of the deferred income, i.e., a
“substantial risk of forfeiture,” or the arrangement must conform
to specified tax rules (i.e., be an “eligible deferred compensation
plan” under Internal Revenue Code (IRC) Section 457(b)) which
include a dollar limitation on the amount that can be deferred,
whether or not the deferral is elective.
Simply making the deferred income subject to the claims of
the exempt organization’s general creditors if the employer
becomes insolvent, or including certain "bad boy" provisions in
the event of termination of the executive for cause, will not
constitute a “substantial risk of forfeiture.” Even a covenant not
to compete or to provide consulting services may not constitute
a substantial risk of forfeiture under the circumstances of the
executive in question.
Legislation enacted in 2001 made changes to IRC Sections 401(k), 403(b) and 457(b) plans,
as well as to IRA limits, ratcheting up the contribution limits annually from 2002 through 2006.
There were also new provisions for individuals over age 50 who will be permitted to make “catchup” contributions to their IRAs and employer-sponsored retirement savings plans (401(k) and 403(b)
plans, but not 457(b) plans except for governmental programs), starting in 2002. Elective
contribution limits have changed each year since 2001 and are scheduled to continue to do so through
2006. For 2004, the maximum elective contribution is $13,000, plus an additional $3,000 for those at
least 50 years of age, i.e., $16,000 in total for a chamber executive at least 50 years old. Those dollar
limits continue to increase by $1,000 each year through 2006, so that in 2006 the maximum elective
contribution is $15,000, plus an additional $5,000 for those at least 50 years of age, i.e., $20,000.
29
Section 457 of the IRC generally limits the amount an employee of a tax-exempt employer
may defer without incurring a substantial risk of forfeiture. Most importantly for highly compensated
chamber executives, beginning in 2002 (1) maximum contributions to non-qualified 457(b)/eligible
deferred compensation plans ($8,500 in 2001) are increased to the above limits, except for the age 50
or over catch up allowance and (2) maximum available 457(b) contributions are no longer
reduced by elective contributions to qualified plans, such as to a 401(k) plan. Thus, in 2004 a
50-year-old chamber executive can make a $16,000 elective contribution to the chamber’s 401(k)
plan and have $13,000 deferred into a non-qualified 457(b) eligible deferred compensation plan. (In
2006, scheduled increases would allow both a $20,000 elective contribution to a 401(k) plan and a
$15,000 contribution to a 457(b) nonqualified plan.) If a greater amount of non-qualified deferral is
desired, other arrangements may be made, but would typically require a “substantial risk of
forfeiture” to defer taxation. Note, however, that the chamber could also make non-elective qualified
plan contributions without interfering with these elective limitations, although other qualified plan
limitations may come into play.
To ensure the earmarking of the benefit of non-qualified deferred compensation and its related
funds, a trust (commonly called a "Rabbi Trust") should be considered. With such a trust, the
employer contributes funds to a trustee. The trustee, by the terms of the trust, is obligated to provide
the benefit to the executive unless the employer chamber is insolvent. In the unlikely event that
occurs, the funds are held for the benefit of the organization's general creditors, including the
executive.
Compensation and estate planning are more complicated than ever, so employment contracts,
benefit plans, and whether maximum utilization is being made of available employee fringe benefits
and qualified retirement and non-qualified deferred compensation plans should be reviewed annually.
USE OF THIS SAMPLE AGREEMENT
As with any legal document, competent legal and tax advice should be sought in advance to
protect the interests of all of the parties. Employment agreements, in particular, are extremely detailoriented and encompass a wide range of terms and obligations. A well-drafted, comprehensive
agreement that is responsive to the current flux in the tax laws will further a chamber’s and its
executive’s security, both as employer and employee.
Howe & Hutton, Ltd.’s tax and employee benefit attorneys would be pleased to be of service
in advising on the tax consequences of any particular benefit or employment agreement, and would
be pleased also to assist in the drafting of any employment contract.
This Sample Agreement, as is this preface, is copyrighted. If you desire to make additional
copies for distribution or to use all or any portions of it, we request that you obtain our consent before
doing so.
If we can be of any further service to you, your chamber or society, please contact us.
30
SAMPLE
CHAMBER EXECUTIVE
EMPLOYMENT AGREEMENT
AGREEMENT entered into this
day of
, 200_, by and between
______________________ ("EXECUTIVE") and ___________________________________
("CHAMBER"), a(n) ______________________ not-for-profit corporation.
IT IS AGREED:
1.
Employment Term - CHAMBER hires and retains EXECUTIVE for the term
beginning _________________________, 200__ through ______________, 200__ as (title)
_______________________ of CHAMBER. [See Other Optional Clauses at end of Sample.]
2.
Duties and Responsibilities - EXECUTIVE shall perform the duties and
responsibilities of _____________ in accordance with CHAMBER Bylaws, rules and
regulations and shall provide executive management services for CHAMBER as set forth in the
job description attached to this Agreement as Exhibit A, and any amendments made in
accordance with Section 9 of this Agreement. [Note: The job description should include goals
to be achieved, and afford the basis for a performance evaluation. See Section 9.]
EXECUTIVE shall perform such other duties and services as may be entrusted to
EXECUTIVE by CHAMBER in accordance with its Bylaws and consistent with
EXECUTIVE's office in CHAMBER and the terms of this Agreement. During the term of this
Agreement, EXECUTIVE shall be the Chief Executive Officer of CHAMBER, and
EXECUTIVE shall report and be responsible to the chief elected officer (Chairman of the
Board) of CHAMBER.
In addition, EXECUTIVE, as part of EXECUTIVE's responsibilities and consistent
with this Agreement at no additional compensation, shall:
2.1
Have full and exclusive authority to hire, compensate and
terminate CHAMBER staff within the approved budget of CHAMBER and to
establish the job descriptions, duties and responsibilities of all staff in accordance
with policies as may be established by the Board of Directors.
2.2
In consultation with the Executive Committee, retain legal counsel,
public relations counsel, and other consultants for CHAMBER.
2.3
Recommend to the Board of Directors for its approval the selection
of outside certified public accountants for CHAMBER.
2.4
Have the right to prior notice of and to be present at all meetings of
the Board of Directors and Executive Committee of CHAMBER, except as
otherwise provided in this Agreement or by CHAMBER policy.
31
2.5
Be provided by CHAMBER with a private office, secretarial and
administrative assistance and such other personnel, facilities and equipment,
consistent with EXECUTIVE’s position and adequate for the performance of
EXECUTIVE’s duties as required under this Agreement.
2.6
If requested and agreed with no additional compensation, serve as
the plan administrator (trustee or other fiduciary), as defined under the Employee
Retirement Income Security Act of 1974 ("ERISA"), as amended, with respect to
CHAMBER’s employee benefit programs, or as an officer, director, trustee, or
delegate or representative to other chambers, organizations, corporations, or third
party groups.
[2.7
(Other items as may be appropriate.)]
3.
Compensation - EXECUTIVE shall be paid as compensation an annual salary of
$___________________ in ____ equal installments. This salary may be increased in accordance
with action of CHAMBER as provided in this Agreement. The CHAMBER Executive
Committee, based upon a formal evaluation process, shall review executive annually.
EXECUTIVE shall be eligible for an achievable performance-based bonus, based upon
mutually agreed upon goals established by the CHAMBER Executive Committee and the
EXECUTIVE. [See Other Optional Clauses at end of Sample.]
4.
Other Activities - During the term of this Agreement, except as otherwise agreed
to by EXECUTIVE and the CHAMBER Executive Committee, EXECUTIVE shall not work
for or with or accept or otherwise receive any compensation or other consideration from any
other organization, firm, chamber, society, person, corporation, or otherwise, for services to be
performed or performed by EXECUTIVE.
However, EXECUTIVE may serve, for
compensation or other consideration, as a lecturer or consultant to others, or engage in other
activities of short duration which do not otherwise interfere with EXECUTIVE’s ability to
perform or conflict with his/her responsibilities under this Agreement. In all such cases,
EXECUTIVE shall inform the chief elected officer of CHAMBER before undertaking such
activities.
5.
Insurance 5.1
Life Insurance -
5.1.1 Term Life Insurance - CHAMBER shall provide
and pay [a portion of] the premium for $___________ face amount
term life insurance, convertible and renewable, on the life of
face amount on the life of
EXECUTIVE, [and $
EXECUTIVE’s spouse and each child of EXECUTIVE,] with
EXECUTIVE having the right to designate the beneficiary or
beneficiaries. [NOTE: Up to $50,000 of Group Term Life
Insurance may be provided tax free if pursuant to a plan which does
not discriminate in favor of key employees. It may be desirable to go
beyond the tax-free amount of $50,000 for the executive and $2,000
32
per dependent to obtain low cost insurance. Consult your tax and
insurance advisors.]
5.1.2 Ordinary Life/Split Dollar Insurance - CHAMBER
shall provide and pay in accordance with a separate agreement a
face amount whole life
portion of the premium on $
insurance plus double/( ) indemnity on the life of EXECUTIVE.
Such premiums shall be paid by CHAMBER so as to afford split
dollar benefits to the parties, with CHAMBER being a partial
beneficiary under the policy, and EXECUTIVE having the right to
designate the beneficiary or beneficiaries for the remainder of the
proceeds of the policy. [NOTE: This is generally a taxable benefit,
at least in part; split-dollar arrangements require careful
professional attention and are potentially much less tax beneficial
given recent IRS pronouncements regarding them.]
5.1.3 "Key Man" Insurance - In recognition of the unique
responsibilities and expertise of EXECUTIVE, CHAMBER shall,
at its own expense, secure and maintain "key man" insurance on
the life of EXECUTIVE in such amount as CHAMBER deems
necessary or appropriate.
5.2
Disability - CHAMBER shall provide and pay the premium for a
long-term disability insurance policy providing for coverage to age
at the rate
of
percent of EXECUTIVE’s salary at the time of disability after the
day
of disability as defined in the policy. In the event EXECUTIVE is receiving
salary or other compensation from CHAMBER, EXECUTIVE shall reimburse
CHAMBER for the amount of disability benefits received by EXECUTIVE
during such time, but such reimbursement shall not exceed the amount received
by EXECUTIVE from CHAMBER. [NOTE: The face amount typically must be
adjusted each year as the executive’s salary changes, and the cost increases with
a higher salary and increasing age each year. If the executive pays the premium
instead of the chamber, the executive will avoid income taxation on the payment of
any benefits for a disability claim. If the chamber pays the premium, any benefits
are subject to income taxation. When the executive pays the premium, the chamber
may offer a higher compensation level to offset the cost of the premiums. In all such
cases, you should consult your tax advisor.]
5.3
Hospital, Health and Medical - CHAMBER shall provide and pay
the premium for hospitalization and major medical insurance or other hospital,
health and medical coverage as is provided other full-time employees of
CHAMBER for EXECUTIVE and the members of EXECUTIVE’s immediate
family.
5.4
Accidental Death and Dismemberment - CHAMBER shall
basic face amount insurance for the
provide and pay the premium for $
accidental death or dismemberment of EXECUTIVE, with 24 hours a day
coverage.
33
5.5
Other Insurance - CHAMBER shall provide and pay the premium
for such other insurance coverage, including but not limited to dental,
orthodonture, psychiatric, vision, medical counseling and other similar coverage,
as selected by EXECUTIVE, at a total annual premium rate for all such optional
.
coverage not to exceed $
6.
Retirement - [NOTE: One, none or more of these could apply.]
6.1
Qualified Plan - During the term of this Agreement, CHAMBER
shall make such contributions as are required on behalf of EXECUTIVE to the
CHAMBER Retirement Plan, which is treated as a qualified plan by the Internal
Revenue Service, and the rights of EXECUTIVE under such a plan shall be
governed by its terms. [NOTE: There are several forms of qualified retirement
plans. In each case, the chamber should specify, by description, the plan. This
may be a defined benefit pension plan, or discretionary profit-sharing plan, or
some other type of plan.]
6.2
Cash or Deferred Arrangement - Section 401(k) Plan CHAMBER has a cash or deferred arrangement consistent with the requirements
of Section 401(k) of the Internal Revenue Code of 1986, as amended. The terms
and conditions of that plan shall govern it without reference to this Agreement.
[NOTE: Limits on contributions are imposed.]
6.3
SEP - CHAMBER shall make all such payments as may be
required on behalf of EXECUTIVE to a Simplified Employee Pension Plan as
may be authorized and conducted by CHAMBER in accordance with applicable
provisions of such plan and of the Internal Revenue Code and in accordance with
such terms as may be approved by the Board of Directors of CHAMBER.
[NOTE: This may be an attractive alternative for the small chamber. Consult
your tax advisor.]
6.4
Deferred Compensation - CHAMBER and EXECUTIVE shall
enter into a supplementary employment agreement simultaneously with the
execution of this Agreement to provide for certain deferred compensation benefits
for EXECUTIVE. The terms and conditions of that agreement alone shall
govern it. [NOTE: Such compensation must be deferred before it is earned. The
tax advantages of "eligible" unfunded deferred compensation agreements are
governed and limited under Section 457 of the Internal Revenue Code.
"Ineligible" plans may also be utilized, but there must be a substantial risk of
forfeiture, i.e., possible loss of all benefits, to avoid current taxation. Be sure to
consult your tax advisor.]
6.5
Other Retirement Benefits - If this Agreement is terminated by the
mutually agreed upon retirement of EXECUTIVE at the age of
or as
otherwise agreed to by the parties, CHAMBER shall provide to EXECUTIVE
the following: [NOTE: This could include continued health coverage, annuity,
etc., to the extent such benefits or insurance coverage are obtainable. The Age
34
Discrimination in Employment Act bans any discrimination based on age as to
such benefits. Consult your legal advisor.]
7.
Expense Reimbursement -
7.1
In General - CHAMBER shall pay or reimburse EXECUTIVE
for all ordinary and necessary expenses incurred by EXECUTIVE in the
performance of EXECUTIVE’s duties under this Agreement and in accordance
with the policies of and budget approved by CHAMBER.
7.2
Professional Chamber Dues and Expenses - CHAMBER shall pay
or reimburse EXECUTIVE for appropriate professional chamber dues and fees
as may be approved by the Executive Committee of CHAMBER. In addition,
EXECUTIVE shall be reimbursed for all ordinary and necessary expenses
incurred by EXECUTIVE in attending or otherwise participating in the programs
of such organizations, within the budget approved by CHAMBER.
7.3
Spouse Expenses - The Executive Committee of CHAMBER, as a
condition of EXECUTIVE’s continued employment with CHAMBER, shall
periodically designate those meetings and activities for which it deems it
necessary, from a business point of view, for EXECUTIVE’s spouse to attend.
In all such cases, CHAMBER shall pay or reimburse all ordinary and necessary
expenses incurred by EXECUTIVE’s spouse to attend such meetings and
activities. [NOTE: Such expenses are generally considered taxable income to the
executive, with very few exceptions.]
7.4
Automobile Entitlement - In light of the unique nature of the
professional duties of EXECUTIVE, CHAMBER shall provide EXECUTIVE
with an automobile lease (not to exceed $______ per month) for business use as
required under this Agreement. CHAMBER shall insure or otherwise hold
harmless EXECUTIVE against all liability that results or may result from the use
of the automobile. EXECUTIVE shall be responsible for undertaking reasonable
precautions to prevent the loss, theft or destruction of the automobile, including
its garaging, the expense of which, however, shall be paid by CHAMBER. The
CHAMBER shall pay for insurance, gasoline, maintenance and operation of the
vehicle. [NOTE: Nontaxable monthly parking expenses are capped by the IRS.
Some chambers provide a monthly cash allowance instead. Auto leases and
monthly auto allowances are generally considered taxable income to the
executive unless business use is properly substantiated. Personal use invariably
results in taxable income.]
7.5
Club Membership - CHAMBER shall pay the membership dues
and related fees for EXECUTIVE’s membership in an appropriate business club
to be used by EXECUTIVE for the ordinary and necessary business purposes of
CHAMBER and to be selected by EXECUTIVE with the initial approval of the
Executive Committee. [NOTE: Such expenses, including airline clubs, are
generally considered taxable income to the executive, with very few exceptions.]
35
7.6
Relocation – CHAMBER shall pay reasonable housing, meals and
travel expenses to EXECUTIVE during the transition of relocation to
__________. EXECUTIVE is expected to relocate to _________ as soon as is
reasonable. At such time that EXECUTIVE moves his/her family to
___________, CHAMBER shall provide a complete relocation package to
include (but not limited to): house hunting trips, closing costs, sales commissions,
storage of goods (if necessary), points, moving expenses and other related real
estate costs. [NOTE: The tax treatment and substantiation requirements of
Moving Expenses are subject to specific IRC rules and IRS regulations. See IRS
Form 3903.
If the intent is to “make the executive whole,” certain
reimbursements (or direct payments) that are not excludable from income would
have to be “grossed up” to cover the increased tax liability of the executive.]
7.7
Day Care – CHAMBER shall pay up to ________ per day/per
month to defray costs of day care for EXECUTIVE’s dependents who require
such care when EXECUTIVE is unavailable because of CHAMBER activities.
[NOTE: Such payment will be taxable income unless pursuant to a Dependent Care
Assistance Plan, almost always a part of a Flexible Benefit (or Cafeteria or §125)
Plan, typically also entailing a Medical Expense Reimbursement Plan.]
8.
Other Benefits -
8.1
Vacation and Leave - EXECUTIVE shall be entitled to a
minimum of ____ business days of vacation per year, and such leave days as may
be in accordance with the policies approved by the Board of Directors of
CHAMBER. Such vacation and leave days may be taken at the discretion of
EXECUTIVE in consultation with the chief elected officer of CHAMBER.
Unused vacation and leave days of no more than _____ days may be carried over
to the next year without the specific approval of the Board.
8.2
Tuition - CHAMBER shall pay or reimburse EXECUTIVE for
per year, for courses leading to
annual tuition, not to exceed $
, which is deemed necessary by CHAMBER for EXECUTIVE to
maintain EXECUTIVE’s position under this Agreement, and CHAMBER shall
encourage and pay for such other professional development education for
EXECUTIVE as may be approved by the Executive Committee of CHAMBER.
[NOTE: The taxability and reporting rules regarding tuition reimbursement
programs have been in a state of flux in recent years. Professional advice should
be sought to both minimize tax consequences to the extent possible and meet all
reporting requirements.]
8.3
Medical Reimbursement - To the extent not covered by insurance,
CHAMBER’s Board of Directors shall adopt a nondiscriminatory medical
per year covering EXECUTIVE
reimbursement program in an amount of $
and such other CHAMBER employees as deemed necessary and appropriate by
the Board. In order to qualify, the CHAMBER shall match $______ for each $
paid by EXECUTIVE. [NOTE: Usually funded by employees through elective
contributions to a Flexible Benefit (or Cafeteria or §125) Plan.]
36
8.4
Medical Examination - Once each year during the term of this
Agreement, EXECUTIVE shall obtain a complete medical examination, the
reasonable cost of which shall be paid by CHAMBER. (The chief elected officer
of CHAMBER shall be advised in writing by the physician of the continued
physical ability of EXECUTIVE to perform his/her duties and such report shall
be confidential.)
9.
Evaluation - No later than _____________ of each year this Agreement is in
effect, CHAMBER shall evaluate and assess the performance of EXECUTIVE. Such
evaluation shall relate to the duties and responsibilities of EXECUTIVE under this Agreement,
EXECUTIVE’s progress toward established goals as set forth in the job description attached to
this Agreement as Exhibit A, and the working relationship between EXECUTIVE, the staff and
the membership. The evaluation shall be done by the Executive Committee which shall meet
alone without EXECUTIVE in executive session and thereafter separately with EXECUTIVE
to discuss its evaluation. CHAMBER and EXECUTIVE shall conduct such meetings in
accordance with procedures as may be agreed to. In the event that the performance of
EXECUTIVE is deemed unsatisfactory in any respect, the Executive Committee shall describe
in writing, in reasonable detail, specific instances of unsatisfactory performance. The evaluation
shall include recommendations as to areas for improvement in all instances where CHAMBER
deems performance to be unsatisfactory. A copy of the written evaluation shall be given to
EXECUTIVE. If EXECUTIVE disagrees with such evaluation, EXECUTIVE may respond in
writing to
. All such writings shall be made a part of EXECUTIVE’s confidential
personnel file. Upon the conclusion of the evaluation, the Executive Committee shall make
recommendations as to possible changes in the compensation and benefits of EXECUTIVE for
the next subsequent contract year in accordance with Section 3 of this Agreement and for
mutually agreed upon goals and objectives to be included in EXECUTIVE’s job description.
10.
Nondisclosure of Confidential Information - EXECUTIVE shall not during the
term of this Agreement, or at any time thereafter, impart to anyone any confidential information
which EXECUTIVE may acquire in the performance of EXECUTIVE’s duties under this
Agreement, except as permitted by CHAMBER or under compulsion of law. Under no
circumstances shall EXECUTIVE use, directly or indirectly, any such information for his/her
personal gain or profit.
11.
Indemnification - CHAMBER shall indemnify, defend and hold and save
EXECUTIVE, EXECUTIVE’s heirs, administrators and executors, and each of them, harmless
from any and all actions and causes of action, claims, demands, liabilities, losses, damages or
expenses, of whatsoever kind and nature, by a third party including judgments, interest and
attorney's fees and all other reasonable costs, expenses and charges which EXECUTIVE,
EXECUTIVE’s heirs, administrators and executors, or any of them shall or may at any time, or
from time to time, subsequent to the date of this Agreement sustain or incur, or become subject
to by reason of any claim or claims by a third party against EXECUTIVE, EXECUTIVE’s
heirs, administrators or executors or any of them for any reason resulting from EXECUTIVE,
EXECUTIVE’s heirs, administrators or executors, or any of them, carrying out the terms and
conditions of this Agreement, except for gross negligence, willful misconduct or criminal acts or
omissions on the part of EXECUTIVE, and provided further that EXECUTIVE,
EXECUTIVE’s heirs, administrators, executors, or any one of them promptly notifies
37
CHAMBER and its general counsel of adverse claims or threatened or actual lawsuits.
EXECUTIVE, EXECUTIVE’s heirs, administrators or executors, as appropriate, shall provide
complete cooperation to CHAMBER, its attorneys and agents in such case to the extent
possible.
12.
Effect of Agreement - This Agreement shall be binding upon the parties and their
respective heirs, executors, administrators, successors and assigns. EXECUTIVE shall not
assign any part of EXECUTIVE’s rights under this Agreement without the prior written consent
of CHAMBER. In the event of a merger, sale, transfer, consolidation, or reorganization
involving CHAMBER, this Agreement shall continue in full force and become an obligation of
CHAMBER’s successor.
13.
Amendment and Termination -
13.1
Mutual Agreement - This Agreement may be altered, amended or
terminated at any time by the mutual written agreement of EXECUTIVE and
CHAMBER.
13.2 Termination - This Agreement shall terminate in accordance with
Section 1 of this Agreement or upon the written notice of one party to the other,
provided that in the case of termination by CHAMBER there shall be formal
action, at a duly called meeting, by the Board of Directors (the Executive
Committee) which the chair may order as an Executive Session at which
EXECUTIVE may be excluded, except as otherwise provided, by way of a
resolution adopted by a majority (or two-thirds or other supermajority) of the
members of the Board (the Committee) to give such notice, and the occurrence of
any of the following events:
13.2.1 The bankruptcy or dissolution of CHAMBER.
13.2.2 The
day after the sending of a written notice of
an intention to terminate by CHAMBER to EXECUTIVE, or the
______ day after the sending of a written notice of an intention to
terminate by EXECUTIVE to CHAMBER. [NOTE: The effect
of this clause limits the term of the agreement to the notice period,
not the full term of the agreement.]
13.2.3 The death of EXECUTIVE, except that no notice
shall be required from CHAMBER.
13.2.4 The absence of EXECUTIVE by reason of illness
or other incapacity or the inability of EXECUTIVE to perform
his/her obligations under this Agreement for more than
days’ prior written
consecutive calendar days and upon
notification by CHAMBER to EXECUTIVE of an intent to
terminate because of such absence or inability.
38
13.2.5 The material breach of this Agreement, or the
negligent or willful misperformance by EXECUTIVE of
EXECUTIVE’s obligations under this Agreement or dishonest,
fraudulent or criminal acts on the part of EXECUTIVE, provided,
however, EXECUTIVE shall be given prior written notice of the
charges against him/her, and the opportunity to respond, in person
or in writing at the option of EXECUTIVE, to the charges before
a final decision is made to terminate this Agreement.
13.3
Termination Compensation - In the event of termination by
CHAMBER pursuant to Sections 13.2.1, 13.2.2 (except for termination by
EXECUTIVE), [13.2.3] or 13.2.4, [or the refusal by CHAMBER to offer to
retain EXECUTIVE as employee of CHAMBER upon this Agreement's
termination pursuant to Section 1,] EXECUTIVE shall be paid as termination
compensation:
13.3.1 An amount equal to ____ _______ salary
[Generally one month’s salary for each full year EXECUTIVE
has been employed by CHAMBER with a cap of a year’s full
compensation]. [NOTE: This could be set number, or based on a
formula. Also consider a payment related to any forfeited, i.e.,
non-vested, qualified retirement plan benefits.]
13.3.2 Except in the event of termination pursuant to
section 13.2.3, CHAMBER shall also provide _____under
Sections
,
,
, to the extent allowed by the insurance
policies provided by CHAMBER and for
,
during the Severance Period. [NOTE: Executive and chamber
should determine what benefits shall continue during the
Severance Period.]
13.3.3 In the event of termination pursuant to Section
13.2.3, CHAMBER shall also pay to EXECUTIVE’s estate or
heirs $________ plus such other benefits to which EXECUTIVE
was entitled on the date of EXECUTIVE’s death. [NOTE: This
may already be addressed in the life insurance provisions.]
13.3.4 In the event of termination by EXECUTIVE or
pursuant to Section 13.2.5, there shall be no termination
compensation except for legally vested benefits in vacation,
insurance and retirement programs as provided under this
Agreement or as required by law.
[NOTE:
There are, in addition to these, various
alternatives which should be considered as to termination
compensation, such as outplacement services, consulting
agreement, and other benefits.]
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14.
Other Provisions -
14.1 Joint Effect of Agreement - Nothing in this Agreement shall be
deemed to create a partnership or agency relationship between CHAMBER and
EXECUTIVE to make either jointly liable with the other for any obligation
arising out of the activities and services contemplated by this Agreement.
14.2 Section Headings - Section headings and numbers have been inserted
for the convenience of reference only, and if there is any conflict between any
such headings or numbers and the text of this Agreement, the text shall control.
14.3 Counterparts - This Agreement may be executed in one or more
counterparts, each of which shall be considered an original, and all of which shall
be considered one and the same instrument.
14.4 Waiver - Waiver by either party of any term or condition of this
Agreement or of any breach shall not constitute a waiver of any other term or
condition or breach of this Agreement.
14.5 Bond - CHAMBER may, at its option and expense, obtain a faithful
performance and fidelity bond on EXECUTIVE.
14.6 Execution and Applicable Law - This Agreement has been executed
in (City) , (State)
and shall be governed in accordance with the laws of
the State (Commonwealth) of
in every respect.
14.7 Notices - Any notice or communication permitted or required by this
Agreement shall be in writing and shall become effective upon personal service,
or service by wire transmission which has been acknowledged by the other party
as being received, or two days after its mailing by certified mail, return receipt
requested, postage prepaid addressed:
14.7.1 If to CHAMBER, to the then chief elected officer
of CHAMBER at his or her last recorded address on the records of
CHAMBER, with a copy to the general counsel of CHAMBER.
14.7.2 If to EXECUTIVE, to:
_______________________________
_______________________________
_______________________________
14.8 Entire Agreement - This Agreement, along with Exhibit A (and the
supplementary employment agreement providing for deferred compensation and
______________), contains all of the terms agreed upon by the parties with
respect to the subject matter of this Agreement and supersedes all other
40
agreements, arrangements and communications between the parties concerning
such subject matter, whether oral or written.
IN WITNESS WHEREOF, the parties to this Agreement have signed it on the day and
date first written above.
CHAMBER
EXECUTIVE
By:_____________________________
___________________________________
Its: _____________________________
***************
OTHER OPTIONAL CLAUSES
1.
Employment Term and Renewal
1.1
Initial Term - CHAMBER hires and retains EXECUTIVE for the
term beginning
, 200 through
, 200 as President
(Executive Vice President, Executive Director, etc.) of CHAMBER.
1.2
Renewal - If CHAMBER does not notify EXECUTIVE in
writing before
, 200__ that this Agreement is not to be renewed, it
shall be deemed that CHAMBER has renewed this Agreement for an additional
through
.
term of ______ year(s) beginning
EXECUTIVE, by certified mail to the then chief elected officer of CHAMBER,
shall remind him or her of the existence of this notification requirement before
_____________, 200 . Failure to serve such notice by EXECUTIVE shall be
deemed as a waiver by EXECUTIVE of the automatic renewal provisions
provided in this Section.
**********
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3.
Compensation and Cost of Living Increase - EXECUTIVE shall be paid a
minimum salary of $
per year in
equal installments on the
and
day of
each month. On each subsequent
, the annual compensation of EXECUTIVE shall be
adjusted upward by a percentage equal to the upward percentage change rounded to the nearest
,
(or such other location in the event the office of
percent in the City of
CHAMBER is relocated) All Item Consumer Price Index for the twelve-month period ending
_________in the year in question as compared to the base index as of
. If there is no
upward or if there is a downward change, EXECUTIVE’s compensation shall remain the same
for the next twelve-month period in question. This adjustment shall not be considered a merit
increase. In addition, this compensation may be adjusted upward in accordance with the action
of CHAMBER as provided for in this Agreement.
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Providing Relocation Assistance
Chambers generally acknowledge the extraordinary costs of moving an executive from one geographic
area to another by providing a number of special forms of assistance. While the chamber does not
necessarily pay each of the costs mentioned below, it should try to design a moving package that best fits
the Chamber and the new executive’s needs. They may include:
- Moving Expenses – Many chambers pay for all moving expenses, including storage of an
individual’s belongings as long as he/she needs to find a home.
- House-Hunting Expenses – The chamber often times finances a number of house-hunting trips for
its new chief executive, often including one trip for the entire family.
- Bonus – The chamber often will give its new chief executive a one-month bonus. This is used as
an incentive to persuade the executive to make the move from one area to another.
- House-Selling Assistance – The chamber may wish to pay the fee for the sale of the chief
executive’s existing home.
- Closing Costs – Some chambers pay all or part of closing fees on new home purchases.
- Temporary Living Expenses – It may be necessary for the chamber to pay living expenses for the
new executive until he or she gets properly settled in the new community.
- Travel – Depending on the particular situation, it may be desirable for the chamber to pay travel
costs for the family between the old and new cities to cover several visits.
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Notifying Those Interviewed and Not Selected
Upon selection or at contract negotiation the chamber should notify each candidate interviewed for the
position. The courtesy is usually extended by a confidential letter from the chamber Chairman of the
Board or Selection Committee chairman. It should contain appropriate comments on the qualifications of
the candidate that was selected as well as an expression of sincere appreciation.
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Introducing New Executive
Develop a plan for introducing the new executive to the membership and the community, such as a
reception inviting Board members, elected officials and key government staff members, along with the
membership.
Also send a press release to appropriate media.
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Applicant Qualification Form
Applicant
Employment Information
Current Position (CEO, Staff, Other)
Years of Chamber experience
Years in Current Position
Years as CEO
Number of Chambers Served
Number of Staff Now Supervising
Material Submitted
Business Plan/Annual Report
Newsletter
Membership Directory
Website
Marketing Materials
Published Work
Applicant
Applicant
Applicant
Applicant
Applicant
Applicant
Education and Professional
Training
Graduate of US Chamber Institute for
Organizational Management (IOM)
Graduate of W.A.C.E. Academy
College Degree
Professional Designations
Accredited Chamber Executive – ACE (WACE)
Certified Chamber Executive – CCE (ACCE/US
CHAMBER)
Certified Association Executive – CAE (ACCE/ASAE)
Comments
Applicant
Applicant
Applicant
Applicant
Applicant