Director's Service Contract - Template, Sample Form Pro · NG-law
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DIRECTOR'S SERVICE CONTRACT
THIS DIRECTOR'S SERVICE CONTRACT (this "Agreement") is made on ________ BETWEEN:
________, a company duly incorporated under the Companies and Allied Matters Act 2020, with registration number (RC) ________, having its registered office at:
________
(hereinafter referred to as the "Company", which expression shall, where the context so admits, include its successors-in-title and assigns) of the one part;
AND
________, of the following address:
________
holding means of identification number ________ (hereinafter referred to as the "Director", which expression shall, where the context so admits, include his/her personal representatives) of the other part.
The Company and the Director shall each be referred to individually as a "Party" and collectively as the "Parties".
WHEREAS:
A. The Company is a company limited by shares incorporated and existing under the laws of the Federal Republic of Nigeria.
B. By a resolution dated ________, the Company resolved to appoint ________ as a Director of the Company.
C. The Director has accepted the said appointment upon the terms and conditions hereinafter contained.
NOW THEREFORE IN CONSIDERATION of the mutual covenants and agreements hereinafter contained and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged by each Party), the Parties HEREBY AGREE as follows:
1. INTERPRETATION
1.1. In this Agreement, unless the context otherwise requires:
"Articles" means the Articles of Association of the Company as may be amended from time to time;
"Board" or "Board of Directors" means the directors of the Company acting collectively as the governing body responsible for the management and strategic direction of the Company;
"CAMA" means the Companies and Allied Matters Act 2020, together with any regulations made thereunder and any statutory modification or re-enactment thereof;
"Commencement Date" means the date specified in §2.1 on which the Director's appointment takes effect;
"Confidential Information" has the meaning ascribed to it in §18;
"NDPA" means the Nigeria Data Protection Act 2023;
"Term" means the duration of the Director's appointment as set out in §2.1.
1.2. References to any statute include any modification, re-enactment or extension thereof and any subordinate legislation made thereunder. Words importing the singular include the plural and vice versa, and words importing one gender include all genders. Headings are for convenience only and shall not affect interpretation.
2. APPOINTMENT
2.1. Subject to the provisions of CAMA and the Articles, the Company hereby appoints ________ as an executive Director of ________ for a term of ________ commencing on ________ (the "Term"), to render the services described in this Agreement, PROVIDED THAT this Agreement may be determined before the expiration of the Term where:
(I) the Director is removed by the Company by ordinary resolution in accordance with section 288 of CAMA, the Articles or this Agreement;
(II) the Director resigns from office before the expiration of the Term; or
(III) the Director's appointment is terminated in accordance with §14.
2.2. The Director hereby accepts the appointment and agrees to perform all the duties and obligations contained in this Agreement.
2.3. Nothing in this Agreement shall exclude the application of the provisions of CAMA relating to the appointment, retirement, rotation, disqualification, removal and duties of directors.
2.4. The Director warrants that he/she is not, and will not during the Term become, disqualified from acting as a director under sections 281 and 283 of CAMA or otherwise restricted by any law or regulation.
3. FUNCTIONS OF THE DIRECTOR
The Director's functions may vary depending on the responsibilities delegated by the Board. Notwithstanding the foregoing, the Director's general duties and obligations to the Company shall include:
(I) acting faithfully, honestly and in the best interest of the Company, its members and other stakeholders, in accordance with sections 305 to 309 of CAMA;
(II) exercising the degree of care, skill and diligence reasonably expected of a person of his/her knowledge, experience and capacity;
(III) participating in the development and execution of the Company's strategic plan;
(IV) contributing to the formulation of the Company's policies and procedures;
(V) attending at least the following number of Board meetings of the Company: ________;
(VI) ensuring the Company's compliance with all applicable laws and regulations;
(VII) monitoring financial performance and risk management;
(VIII) participating in Board meetings and deliberations;
(IX) identifying and mitigating business risks;
(X) ensuring that appropriate risk management policies are in place;
(XI) providing leadership and guidance to the executive team;
(XII) overseeing the performance of senior executives;
(XIII) building and maintaining positive relationships with members, employees, customers and other stakeholders;
(XIV) exercising his/her powers within the bounds of the law and in accordance with the Articles; and
(XV) exercising his/her duties and obligations in good faith and for the best interest of the Company.
4. NO ASSIGNMENT
It is acknowledged that this Agreement relates to the provision of services by the Director personally. Accordingly, the rights, interests, obligations and duties of the Director under this Agreement shall not be transferred, assigned or delegated to any third party, save in the case of a written appointment by the Board authorising another Director to act as proxy at a Board meeting in accordance with §11.
5. DIRECTOR'S SHAREHOLDING
The Director is encouraged to hold shares in the Company. In the acquisition or disposition of any shares, the Director shall comply strictly with the Articles, the provisions of CAMA, the Investments and Securities Act and all other applicable legislative and regulatory requirements, including any restrictions on insider dealing.
6. OUTSIDE ENGAGEMENTS AND DISCLOSURE OF INTERESTS
6.2. The Director shall keep the Company informed of any change in his/her interests for the purpose of maintaining an updated register of interests.
6.3. While serving as a Director, the Director may hold any other office or place of profit under the Company (other than the office of auditor) on such terms as the Board may determine, provided such appointment does not conflict with the business of the Company or materially impair the Director's performance.
7. REMUNERATION
7.1. Director's Fees: In consideration of the services rendered, the Company shall pay the Director the sum of ________ as Director's fees, payable ________, subject to determination and review by the Board in accordance with section 293 of CAMA.
7.2. Meeting Allowance: The Director shall be entitled to reasonable allowances for attendance at Board and committee meetings, as determined in accordance with the Articles and applicable resolutions of the members.
7.3. Expenses: The Company shall reimburse the Director for all reasonable and necessary expenses properly incurred in the performance of his/her duties, subject to the Company's policies and approval procedures.
7.4. Review and Adjustment: The Board shall periodically review the Director's remuneration and may, at its discretion and subject to approval of the members where required, adjust the same having regard to the Company's financial performance and prevailing market conditions.
7.5. The Company shall be responsible for the deduction and remittance of all taxes and statutory contributions due in respect of sums payable to the Director under this Agreement, including obligations under the Personal Income Tax Act, the Pension Reform Act 2014, the Employee Compensation Act 2010 and any other applicable statute, and shall account for the same to the relevant authorities.
8. POWERS AND DUTIES OF THE DIRECTOR
8.1. The business of the Company shall be managed by the Directors, who may exercise all such powers of the Company as are not, by CAMA or the Memorandum and Articles, required to be exercised by the Company in general meeting.
8.2. The Director may be assigned to a special committee, in which case the Director shall comply with the rules of procedure governing such committee.
8.3. Upon appointment, the Director shall:
(I) act at all times in the best interest of the Company and for the benefit of its members as a whole;
(II) exercise reasonable care, skill and diligence in performing his/her duties, and where appointed by reason of specific qualifications, ensure that he/she retains such qualifications throughout the Directorship;
(III) exercise his/her powers only for the purposes for which they are conferred and not for any collateral purpose;
(IV) discharge his/her duties in the utmost good faith and avoid any conflict between his/her personal interests and those of the Company; and
(V) not exercise any powers beyond those expressly or impliedly granted by CAMA, the Articles or the Company.
8.4. The Director shall be required to hold at least ________ (________) shares in the Company.
9. LIMITATIONS
9.1. The Director shall not, without the prior approval of the Company given by resolution of the members or the Board (as applicable):
(I) acquire any business or material asset on behalf of the Company;
(II) enter into any binding agreement with any third party on behalf of the Company outside the ordinary course of business;
(III) exercise the Company's borrowing powers in excess of the limit set out in the Articles or by resolution of the members; or
(IV) sell or dispose of assets having a value of more than fifty per cent (50%) of the assets of the Company.
9.2. The Director may also perform such acts as directed by the Company and in accordance with the Articles and applicable laws.
10. PROXIES AND REPRESENTATIVES
The Director may, with the authorisation of the Board, appoint any firm or person to act as attorney of the Company for such purposes and with such powers, authorities and discretions as the Board may confer, subject to the Articles and applicable law.
11. ALTERNATE DIRECTOR AND PROXY
11.1. The Director may, with the approval of the Board, appoint any other person to act as his/her alternate.
11.2. The appointment and removal of an alternate Director shall be effected by notice in writing to the Company signed by the appointor, which notice shall include:
(I) the particulars of the alternate; and
(II) a statement signed by the proposed alternate indicating his/her acceptance to act.
11.3. The alternate Director shall have the same rights in relation to any decision-making process of the Board and may, subject to the terms of appointment, exercise the powers and responsibilities of the appointor.
11.4. The alternate may be counted in determining whether a quorum is present and may sign any written resolution.
11.5. The alternate Director shall not be entitled to any remuneration from the Company except where the appointor directs, by notice in writing, that part of his/her remuneration be paid to the alternate.
11.6. The appointment of an alternate Director terminates where:
(I) the appointor revokes the appointment by notice in writing to the Company;
(II) the appointor dies; or
(III) the appointor ceases to be a Director of the Company.
12. MEETINGS OF THE BOARD OF DIRECTORS
12.1. Board meetings shall be convened at regular intervals. Save as otherwise provided, all decisions of the Board shall be by majority vote of the Directors present and voting.
12.2. Resolutions of the Board shall be validly passed where a quorum is present, the quorum being as determined by the Articles, and in default thereof, as provided under section 285 of CAMA.
12.3. Each Director shall be entitled to one (1) vote, cast by show of hands, and in the event of an equality of votes the Chairman shall have a second or casting vote where so provided by the Articles.
12.4. A resolution in writing signed by all the Directors entitled to receive notice of a meeting of the Directors shall be as valid and effectual as if passed at a duly convened meeting.
12.5. The Company shall pay the Director such attendance/sitting fees and reimburse such reasonable expenses incurred in the discharge of his/her duties as may be approved by the members in general meeting.
13. INDEMNITY AND INSURANCE
13.1. The Company shall, to the fullest extent permitted by CAMA and the Articles, indemnify the Director against all liabilities, costs, claims, expenses and damages reasonably incurred by the Director in the proper discharge of his/her duties under this Agreement, provided that such liabilities did not arise from the Director's fraud, gross negligence, wilful misconduct or breach of this Agreement.
13.2. The Company may, at its discretion, maintain directors' and officers' liability insurance for the benefit of the Director, subject to the terms and conditions of such policy.
13.3. The indemnity provided under this §13 shall survive the termination of this Agreement in respect of any act or omission occurring during the Term.
14. TERMINATION OF THE DIRECTOR'S APPOINTMENT
14.1. Notwithstanding any other provision in this Agreement, the Company reserves the right to terminate the Director's appointment, subject to the requirements of section 288 of CAMA, where:
(I) the Director commits a material, repeated or continuing breach of any obligation under this Agreement;
(II) any representation or warranty made by the Director is found to be untrue or incorrect;
(III) the Director violates any covenant specified in this Agreement;
(IV) the Director fails to perform his/her duties and obligations under this Agreement;
(V) the Director contravenes any law, the Articles or any regulation that disqualifies him/her from holding office;
(VI) the Director is charged with fraud or any serious offence relating to the discharge of his/her duties;
(VII) any act or omission of the Director brings the name or reputation of the Company or its affiliates into serious disrepute or adversely affects its business interests;
(VIII) the Director engages in serious misconduct or serious neglect in the execution of his/her duties;
(IX) the Director is convicted of any criminal offence, excluding offences which the Board, in its reasonable opinion, considers not to affect the Director's role; or
(X) the Director is subject to any sanction, fine, penalty or censure for any actual or alleged violation of any securities law or regulation, whether in Nigeria or elsewhere.
14.2. The office of the Director shall be vacated where the Director:
(I) dies;
(II) ceases to hold the required shares in the Company;
(III) becomes bankrupt or makes any arrangement or composition with his/her creditors generally;
(IV) becomes of unsound mind;
(V) resigns from office by notice in writing to the Company, provided that the Director gives advance notice of: ________;
(VI) becomes prohibited or disqualified from acting as a director by reason of any law, regulation or order of court;
(VII) becomes unable to fulfil his/her duties by reason of ill-health, disability or incapacity, unless the Company can reasonably accommodate such impairment without undue hardship; or
(VIII) has been consistently absent from Board meetings without valid reason for a period determined by the Board.
14.3. Termination shall be effected in accordance with CAMA, including the giving of any special notice and the affording to the Director of an opportunity to be heard where required by law.
15. EFFECT OF TERMINATION
15.1. Upon termination of this Agreement for any reason, the Director shall promptly deliver to the Company all property, documents, records, correspondence, files and other materials (including all copies thereof) belonging to the Company or relating to its business that are in the Director's possession or control.
15.2. Termination shall be without prejudice to any rights, obligations or liabilities of either Party that have accrued prior to the date of termination, and shall not affect the continued operation of any provision of this Agreement which is expressly or by implication intended to survive termination, including the provisions relating to confidentiality, non-competition, indemnity and dispute resolution.
16. DISCLOSURE OF CONFLICTING INTERESTS
16.1. The Director shall perform all tasks and obligations diligently and to the highest standard of professionalism, and shall refrain from engaging in any activity, transaction or business that conflicts with the interests or objectives of the Company.
16.2. Where any actual or potential conflict arises, the Director undertakes to promptly disclose to the Board any financial or other personal interest in accordance with sections 303, 306 and 307 of CAMA.
17. CONFLICT OF INTEREST AND NON-COMPETITION
17.1. Unless otherwise provided herein, the Director shall not, during the Term, serve as a director of, provide services to, or engage in any business venture with any party where such engagement may result in a conflict with the Director's obligations under this Agreement.
17.2. The Director shall perform all tasks and obligations to the highest standard of professionalism and shall promptly disclose any financial or other personal interest that may conflict with the interest of the Company.
17.3. Unless otherwise agreed in writing, the Director undertakes that he/she shall not, without the prior written consent of the Company, for a period of ________ following the termination of this Agreement, whether on his/her own behalf or on behalf of any person competing or attempting to compete with the Company, directly or indirectly solicit, canvass or interfere with any person who:
(a) is a customer or client of the Company as at the date of termination of this Agreement;
(b) was a customer or client of the Company at any time within twelve (12) months prior to the date of termination; or
(c) has been pursued as a prospective customer or client by or on behalf of the Company within twelve (12) months prior to the date of termination, and in respect of whom the Company has not ceased such pursuit.
17.4. The Director affirms that the restrictions contained in §17.3 are reasonable and necessary to protect the legitimate business interests of the Company.
17.5. Each of the covenants in §17.3(a), §17.3(b) and §17.3(c) is independent and severable. If any such covenant is held unenforceable in whole or in part, such unenforceability shall apply only to that covenant or part, and all other covenants shall remain in full force and effect.
18. CONFIDENTIALITY OBLIGATIONS
(I) information that has become generally available to the public otherwise than by breach of this Agreement;
(II) information lawfully received on a non-confidential basis from a source not bound by any obligation of confidentiality;
(III) information that the Director is obliged to disclose by law or by order of a court or competent authority, provided that the Director promptly notifies the Company so that it may seek a protective order or other remedy; and
(IV) information disclosed by the Company to third parties without restriction.
18.2. The Director acknowledges that the Confidential Information constitutes among the most valuable assets of the Company.
18.3. The Director undertakes to treat all Confidential Information as confidential and shall not, without the prior written consent of a majority of the Board (excluding the Director where he/she is a member), publish, release or disclose any Confidential Information, whether during or after the Term, save for the purposes and benefit of the Company.
18.4. During the Term and for a period of twelve (12) months thereafter, the Director shall not use, directly or indirectly, any Confidential Information for personal benefit or for the benefit of any person competing with the Company.
18.5. In the processing of any personal data in the course of his/her duties, the Director shall comply with the Nigeria Data Protection Act 2023 and all regulations and directives issued by the Nigeria Data Protection Commission, and shall maintain the confidentiality and security of such personal data.
19. GOVERNING LAW
This Agreement and any dispute or claim arising out of or in connection with it shall be governed by and construed in accordance with the laws of the Federal Republic of Nigeria.
20. DISPUTE RESOLUTION
20.1. The Parties shall use their best endeavours to settle amicably any dispute or difference arising out of or in connection with this Agreement. Any dispute not so resolved within ________ shall be referred to and finally resolved by arbitration in accordance with the Arbitration and Mediation Act 2023.
20.2. The arbitral tribunal shall consist of ________ arbitrator(s) appointed by agreement of the Parties, and in default of agreement, appointed in accordance with the Arbitration and Mediation Act 2023. The seat and venue of arbitration shall be ________, and the proceedings shall be conducted in the English language.
20.3. The award of the arbitral tribunal shall be final and binding on the Parties and may be enforced by any court of competent jurisdiction.
21. JURISDICTION
Subject to §20, the Parties agree that the courts of the Federal Republic of Nigeria shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement.
22. GENERAL PROVISIONS
22.1. ASSIGNMENT: Neither Party may assign or transfer any of its rights, benefits or obligations under this Agreement without the prior written consent of the other Party.
22.2. ENTIRE AGREEMENT: This Agreement, together with any document referred to herein, constitutes the entire agreement between the Parties and supersedes all prior written or oral agreements between them in relation to its subject matter.
22.3. WAIVER: No failure or delay by either Party in exercising any right shall operate as a waiver thereof, and any waiver must be in writing and signed by the Party entitled to the benefit thereof.
22.4. VARIATION: No variation, amendment or supplement to this Agreement shall be effective unless made in writing and signed by or on behalf of both Parties.
22.5. SEVERABILITY: If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be severed and the remaining provisions shall continue in full force and effect.
22.6. COUNTERPARTS: This Agreement may be executed in several counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.
22.7. FURTHER ASSURANCE: Each Party shall execute and deliver all such documents and take all such actions as may reasonably be required to give full effect to the provisions of this Agreement.
22.8. NOTICES: All notices under this Agreement shall be in writing and addressed to the relevant Party at the address stated above or at such other address as may be notified in writing, and shall be deemed duly given:
a. if delivered personally, upon delivery at the address of the relevant Party;
b. if sent by courier, upon receipt of confirmation of delivery; and
c. if sent by electronic mail, upon confirmation of successful transmission to the email address ________.
IN WITNESS WHEREOF the Parties have executed this Agreement on the day and year first above written.
EXECUTED by the within-named ________ in accordance with section 102 of the Companies and Allied Matters Act 2020:
____________________________
________
Director
____________________________
________
Company Secretary/Director
SIGNED, SEALED AND DELIVERED by the within-named ________
________________________
in the presence of:
Name: ________
Address: ________
Occupation: ________
Signature: ________
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