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1. DIRECTOR’S SERVICE AGREEMENT
THIS AGREEMENT is made on the [INSERT DATE] BETWEEN:
[NAME OF COMPANY] a company incorporated under the Companies Acts with registered number
[COMPANY NUMBER] and having its registered office at [COMPANY ADDRESS] ("the Company")
AND
[NAME OF DIRECTOR] residing at [ADDRESS OF DIRECTOR] ("the Director")
IT IS AGREED as follows:
1. DEFINITIONS
1.1 In this Agreement the words and expressions contained in this Clause 1.1 shall,
unless otherwise specified or the context otherwise requires, have the meanings set
opposite them:
"the Employment" means the employment of the Director by the Company under the terms
of this Agreement;
"the Board" means the board of directors of the Company from time to time or any duly
authorised committee thereof;
"group company" means any subsidiary or associated company of the group
"Confidential Information" means all information which may be imparted in confidence or
be of a confidential nature relating to the business or prospective business, plans or internal
affairs of the Company or any group company;
"Intellectual Property" means inventions, discoveries, processes, copyright works, designs,
plans, drawings, computer programmes and codes, and all other forms of data or records,
procedures or systems in respect of which intellectual property rights (as hereinafter
defined) subsist (or are capable of subsisting subject to the making of the appropriate
application or registration) and any later modification or development and all other similar
or analogous items;
"Intellectual Property Rights" means all and any intellectual property rights subsisting in any
part of the world, whether registered or unregistered, and all applications for such rights,
including without limitation, patents, applications for patents, inventions, trademarks or
trading names, service marks, know-how, United Kingdom and foreign designs, copyrights
(including rights in computer software), topography rights and other rights in electronic,
optical, magnetic devices or media, moral rights and all rights having equivalent or similar
effect wheresoever situated.
1.2 References in this Agreement to any statute or statutory provision shall include a reference
to that statute or statutory provision as may from time to time be amended, extended,
consolidated or replaced, and shall include any orders, regulations or instruments made
under the relevant statute.
1.3 References in this agreement to persons shall include references to firms, corporations or
unincorporated associations.
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2. 1.4 Words denoting the singular shall include the plural and vice versa and words denoting any
gender shall include all genders.
2. THE APPOINTMENT
2.1 The Company shall employ the Director and the Director shall serve the Company with effect
from [COMMENCEMENT DATE] ("the commencement date") notwithstanding the date or
dates of this Agreement.
2.2 The Company may at any time require the Director to serve any other group company or
companies and to carry out for such group company or companies such duties and
responsibilities as may be assigned by the Board, but otherwise on the same terms and
conditions as herein provided.
3. THE TERM
3.1 The Employment (subject to the provisions of Clause 14) shall continue unless and until
terminated at any time by either the Company or the Director giving [INSERT NOTICE
PERIOD] months notice in writing to that effect.
3.2 On either the Company or the Director serving notice to terminate the Employment for any
reason the Company shall be entitled to make a payment to the Director in lieu of notice,
such payment to be made after deductions required or permitted by law in respect of
income tax, national insurance contributions and any other relevant deductions.
4. DUTIES AND RESPONSIBILITIES
4.1 The Director shall well and faithfully serve the Company or any group company and use their
best endeavours to promote the interests of the Company or any group company and shall
undertake such duties and responsibilities and exercise such powers in relation to the
business of the Company or any group company as may be assigned to or vested in them by
the Board.
4.2 In discharging such duties and responsibilities and exercising such powers, the Director shall
at all times conform to the reasonable directions of the Board, and whenever required to do
so, shall give a full account to the Board of their conduct of the business or affairs of the
Company or any group company.
4.3 The Director shall work such hours as is necessary for the proper discharge of their duties
and shall attend and work at the address referred to in Clause 2.2 or at such place or places
in the United Kingdom or elsewhere as the Company shall reasonably specify, provided that
the Director shall not be required to work outside the United Kingdom for a period of longer
than one month.
5. REMUNERATION
5.1 As remuneration for their services hereunder, the Director shall be paid a salary at the rate
of [SALARY] per annum which shall accrue from day to day and be payable by equal
instalments in arrears at the end of each calendar month (or such other date as the
Company may determine) and which shall be inclusive of any fees payable to the Director as
director of the Company and/or any group company.
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3. 5.2 Such salary shall be subject to annual review on [REVIEW DATE] in each year or such other
date as may be agreed between the Company and the Director.
6. EXPENSES
6.1 The Director shall be reimbursed all reasonable expenses properly incurred by them in the
discharge of their duties hereunder upon production of satisfactory documentary evidence.
6.2 If the Company issues the Director with a company sponsored credit or charge card, such
card shall be used solely for expenses reimbursable under Clause 6.1. The Director shall
promptly return any such credit or charge card when so requested and in any event
forthwith upon termination of the Employment howsoever arising.
7. HOLIDAY ENTITLEMENT
7.1 In addition to public and statutory holidays, the Director shall be entitled to [DAYS HOLIDAY]
days paid holiday in each calendar year to be taken at such time or times as may be agreed
with the Board.
7.2 Such holiday entitlement shall accrue from day to day and may, with the consent of the
Board, be carried forward from one calendar year to the next but not further. For the
purpose of calculating holiday entitlement hereunder, the Company’s holiday year runs from
the commencement of this Agreement and annually thereafter. In respect of any holidays
accrued but not taken, the Director shall not be entitled to receive holiday pay except on
termination of office (other than termination pursuant to Clause 14) when the Director shall
be entitled to pay in lieu of outstanding holiday entitlement.
8. PENSION
8.1 There is no pension scheme in which the Director will participate by virtue of their
employment.
8.2 A contracting-out certificate under the Social Security Pensions Act 1975 is [NOT] in
force in respect of the Employment.
9. SICKNESS ABSENCE
9.1 If the Director is prevented by illness or injury from performing their duties and
responsibilities hereunder, they shall notify the Company on the first day of such illness or
injury and provide the Company with a completed self certification form in respect of any
absence from business lasting more than 3 days but less than 8, or a doctor’s certificate in
respect of any absence exceeding 7 consecutive days.
9.2 In the event of such illness or injury, the Director shall be entitled to receive full
remuneration unless and until the Director’s employment is terminated in terms of Clause
14.1.3, provided that such remuneration shall be inclusive of any statutory sick pay to which
the Director is entitled at the time and any social security sickness benefit or other benefits
or insurance policies recoverable by the Director.
10 RESTRICTIONS
10.1 The Director shall disclose to the Board any interest of their own (or that of their
spouse or any child of their or their spouse under the age of 18):
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4. 10.1.1 in any trade, business or occupation whatsoever which is in any way similar to any of
those in which the Company or any group company is involved; and
10.1.2 in any trade or business carried on by any supplier or customer of the Company or
any group company whether or not such trade, business or occupation may be
conducted for profit or gain.
10.2 Save as permitted under Clause 11.1 the Director shall not at any time, without the
prior written consent of the Board, carry on or be concerned, engaged or
interested directly or indirectly (whether as principal, shareholder, partner,
consultant, employee, director, sub- contractor, Director, agent or otherwise) in
any trade or business, other than that of the Company or any group company;
provided that this provision shall not prevent the Director from holding any
shares or loan capital (not, when aggregated with any shares or loan
capital held by the spouse of the Director and their children under the age of 18,
exceeding 3% of the shares or loan capital of the class concerned for
the time being issued) in any company which is quoted on a recognised investment
exchange (as defined by the Financial Services Act 1986).
11. INTELLECTUAL PROPERTY
11.1 If during the period of Employment the Director either alone or jointly with others
makes any invention, design or discovery capable of use in connection with any
business of the Company or any group company such invention, design or
discovery and any intellectual property rights associated with the same will belong
to the Company or any group company or (for the extent that the same belong
automatically to the Director by operation of law) will forthwith be assigned to
the Company or any group company. Upon making any such invention, design or
discovery the Director will immediately communicate all information concerning
the same to the Company or any group company. If so requested at the
Company’s expense but without receiving payment, the Director will execute and
procure execution of all documents and do all things necessary to vest the
title to such invention, design or discovery in the Company or any group company.
11.2 The Director hereby irrevocably appoints the Company or its nominee to be their
attorney in their name and on their behalf to execute any
documents and generally to act and to use their name for the
purpose of giving to the Company (or its nominee) the full provision
of Clause 12.1.
12 CONFIDENTIALITY
12.1 The Director shall at all times (both during and after the termination of their
Employment) maintain absolute confidentiality in respect of all
Confidential Information and shall not disclose any of the same except in the
proper performance of their duties hereunder or unless ordered to do
so by a court of competent jurisdiction.
13 TERMINATION OF APPOINTMENT
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5. 13.1 The Company shall be entitled to terminate the Employment at any time by giving
written notice of immediate termination to the Director in any of the following
circumstances:
13.2 if the Director commits a criminal offence or is found guilty of serious misconduct or
dishonesty or wilful neglect whether during the performance of
their duties or otherwise which in the opinion of the Company
renders the Director unfit to continue their Employment with the Company or
which would be likely to adversely prejudice the reputation or
interests of the Company or any group company;
13.3 if the Director seriously or persistently breaches any provision in this Agreement or
is, in the opinion of the Board, incompetent in the performance of their
duties;
13.4 if the Director is unable to perform their duties as a result of illness or injury for a
period or periods aggregating at least [INSERT DAYS] working days in
any period of 12 consecutive calendar months or for [INSERT DAYS]
consecutive working days;
13.5 if the Director becomes insolvent or bankrupt or enters into any composition or
arrangement with or for the benefit of their creditors;
13.6 if the Director becomes of unsound mind;
13.7 if the Director becomes prohibited by law from being a director.
13.8 The Director shall not be entitled to make a claim against the Company for damages
for loss of Employment where the Employment was validly terminated under this
Clause 14.
13.9 Upon termination of the Employment the Director shall deliver up to the Company
all notes, memoranda and other correspondence, documents, papers and
property belonging to the Company or any group company which may have
been prepared by them or have come into their possession and shall
not retain any copies thereof and not permit the same to be used by any party.
14 RESTRICTIONS AFTER TERMINATION
14.1 The Director shall not after termination of the Employment represent themself as
being in any way connected with the Company or any group
company.
14.2 Since the Director is likely to obtain knowledge of Confidential Information in the
course of their Employment and the trust and personal knowledge of
customers, suppliers and other contacts of the Company or any group
company the Director hereby agrees that in addition to the other terms of this
Agreement they will be bound by the following restrictions:
14.2.1 the Director shall not for a period of [RESTRICTED PERIOD] months from the date of
termination of Employment ("the restricted period"), and within
[RESTRICTED AREA] ("the prohibited area"), directly or indirectly carry on or
be engaged or concerned in (whether as director, manager, partner,
consultant, agent, employee or otherwise) any business which is or is likely
to be competitive with or similar to the business carried on by the Company or any
group company;
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6. 14.2.2 the Director shall not during the restricted period directly or indirectly by any means
whatsoever, whether for themself or for any third party, canvass or
solicit the custom of any person, firm, company or otherwise
who was a customer of, or who dealt with the Company or any group company at
any time during the 12 month period preceding the date of termination of
Employment;
14.2.3 the Director shall not during the restricted period directly or indirectly by any means
whatsoever, whether for themself or for any third party, solicit or
endeavour to entice away from the Company or any group
company any person who is at the date of termination of Employment
a director, consultant, agent, employee or otherwise of the Company or
any group company;
14.2.4 the Director shall not following termination of the Employment disclose any
confidential information relating to the business of the Company or any group
company to any party whatsoever, unless ordered to do so by a court of
competent jurisdiction.
15 RECONSTRUCTION AND AMALGAMATIONS
15.1 If before the expiration or determination of this Agreement the Employment shall be
terminated by reason of the liquidation of the Company for the
purpose of reconstruction or amalgamation and the Director shall be offered
employment with any concern or undertaking resulting from such
reconstruction or amalgamation on terms which are substantially the
same as the terms of this Agreement then they shall have no claim
against the Company in respect of the termination of the Employment.
16 GENERAL
16.1 If any of the foregoing undertakings is held for any reason not to be valid or
enforceable as going beyond what is reasonable for the protection of the interests
of the Company or any group company, but would be valid if part of the wording
were deleted or its extent reduced or modified, then such undertakings shall
apply with such modifications or variations as may be necessary to make them
enforceable, and any such modifications or variations shall not thereby affect the
validity of any of the other undertakings.
16.2 No failure on the part of either party to exercise, and no delay on its part in
exercising any right or remedy under this Agreement will operate as a waiver
thereof, nor will any single or partial exercise of any right or remedy preclude any
other or further exercise thereof or the exercise of any other right or remedy.
16.3 This Agreement governs the terms of the Director’s employment with the Company
from the commencement date to the exclusion of all other agreements or
arrangements whether written or oral or expressed or implied between the Director
and the Company relating to the Employment of the Director which are cancelled
with immediate effect.
17. GOVERNING LAW AND JURISDICTION
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7. This Agreement shall be governed by and construed in accordance with the law of [England
OR Scotland] and the parties hereby submit to the exclusive jurisdiction of the [English OR
Scottish] courts.
IF JURISDICTION IS ENGLAND INCLUDE FOLLOWING LINE
IN WITNESS WHEREOF the parties have signed this agreement the day and year first above written.
OR IF JURISDICTION IS SCOTLAND INCLUDE FOLLOWING LINE
IN WITNESS WHEREOF these presents are executed on this [INSERT DATE] as follows:
SIGNED for and on behalf of the Company
by
(Director/Secretary)
before this witness:
Witness signature:
Witness name:
Witness address:
SIGNED by the Director
before this witness:
Witness signature:
Witness name:
Witness address:
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8. GUIDANCE NOTES
These notes are provided to assist you in completing your document. They do not form part of the
Directors Service Agreement.
IMPORTANT: The content and terms of this Agreement are those commonly used to cover the
general provisions required between a Company (Employer) and a Director (Employee). This
Agreement is solely to be used as a template which can be tailored to the individual needs of the
parties using it. Clauses and terms can be added, edited and removed – but care must be taken to
ensure that if alterations are made all references to clause numbers in the Agreement are
amended to reflect those changes. The provision of this document does not consititute legal
advice or compliance and where necessary it is recommended that independent legal advice is
sought.
Each party must sign and date the document before a witness, who must also sign and insert their
name and address. If both parties sign at the same time, the same person may act as a witness for
each party.
Please complete and insert the fields highlighted in Red in the agreement to meet your specific
needs. A description of each of these field are listed below to assist in the information required.
[ADDRESS OF DIRECTOR]
The home address of the Director.
[COMPANY ADDRESS]
The registered office address of the Company.
[COMPANY NUMBER]
The registered company number.
[COMMENCEMENT DATE]
The day, month and year on which the appointment of the Director to the Company will
begin.
[DAYS HOLIDAY]
The number of annual days of paid holiday to which the Director will be entitled.
[England OR Scotland], [English OR Scottish]
Specify the jurisdiction which will apply to the Agreement. If the Company's place of
business is in Scotland specify "Scotland" and “Scottish”; if the Company's place of business
is in England or Wales specify "England" and “English”.
[EXPIRY DATE]
This value is used to calculate the expiry date of the (fixed period) contract.
[FIXED PERIOD]
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9. The number of months or years for which the (fixed period) contract will run.
[NAME OF COMPANY]
The name under which the Company trades.
[NAME OF DIRECTOR]
The full name of the Director.
[NOT]
An indication of whether or not the Company holds a contracting out certificate in respect of
the Social Security Pensions Act 1975. This is to do with contracting out of the State
additional pension top-up arrangements. If an employer has a good enough pension scheme
it can qualify for contracting out and as a result NI contributions are less than they otherwise
would be.
[PENSION SCHEME]
The name of the scheme in which the Director may participate.
[PLACE OF WORK]
The address where the Director will principally carry out his or her duties.
[RESTRICTED PERIOD], [RESTRICTED AREA]
It is common for employers to place restrictions upon a Director after termination of
employment to prevent the Director from using information obtained from the Company to
run a business in competition, poach staff or customers etc. The restrictions are limited to a
time period and a geographic area. The period should be no longer than is reasonably
necessary to protect the Company's legitimate business interests and the same care applies
to the extent of the restricted area. Excessive restrictions may not be upheld by the courts if
challenged.
[REVIEW DATE]
The day and month each year when the Director's salary will be reviewed. This would
typically be on the anniversary of the day Director joined the company. Alternatively, a fixed
date for all employees might be specified.
[SALARY]
The annual salary that the Director will be paid.
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