Non-Executive Director Appointment Letter - Form Pro · UK-law

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Dear ________,

RE: LETTER OF APPOINTMENT AS A NON-EXECUTIVE DIRECTOR

We are pleased to confirm your appointment to the board of directors ("the Board") of ________, a company incorporated in England and Wales with registered number ________ and whose registered office is at ________ ("the Company"), as a Non-Executive Director on the terms and conditions set out below. It is agreed and acknowledged that this is a contract for services and not a contract of employment, and that you are not, and shall not be treated as, an employee or worker of the Company within the meaning of the Employment Rights Act 1996.

Please indicate your acceptance of these terms by signing the enclosed copy of this Letter as a deed, in the presence of an independent witness who should also insert his or her name, address and occupation, and returning it to the Chief Executive Officer of the Company.

The terms and conditions of your appointment are as follows:

1. The Appointment

1.1. Your appointment as a Non-Executive Director of the Company shall commence on ________ and, subject to the provisions of this Letter, the Company's articles of association and the Companies Act 2006 (as amended) ("the Act"), shall continue for an initial term of ________ ending on ________ ("the end-date").

1.2. The term of your appointment shall continue beyond the end-date unless and until terminated by either you or the Company giving to the other not less than the following period of notice in writing, and otherwise in accordance with this Letter, the articles of association of the Company or the Act: ________.

1.3. At the end of the relevant period, or immediately following the end-date, the Board may resolve to re-appoint you for a further period on the same or similar terms.

1.4. You will hold office in accordance with the Company's articles of association, and you should note in particular that the continuation of your appointment is subject to the provisions of those articles regarding re-election at annual general meetings and vacation of office, and to your election or re-election by the members of the Company where required.

1.5. This appointment is conditional upon you not being disqualified from acting as a director under the Company Directors Disqualification Act 1986 and being permitted by law to act as a director.

2. Duties

2.1. As a director you will, in the usual way, be entitled to receive copies of all papers of the Board and notices of all meetings of the Board, and shall be entitled to attend all Board meetings. You will have all the usual duties, obligations and responsibilities of a director under the Act, the general law and the Company's articles of association.

2.2. During the continuance of your appointment you will be required, without limitation, to:

2.2.1. faithfully, efficiently, competently and diligently perform your duties and exercise your powers as an independent Non-Executive Director;

2.2.2. carry out all reasonable and lawful directions given by or under the authority of the Board;

2.2.3. use your best endeavours to promote and protect the interests and reputation of the Company;

2.2.4. attend at least the following number of Board meetings of the Company:

________

2.2.5. promptly declare the nature and extent of any interest, whether direct or indirect, in any transaction, arrangement or proposed transaction entered into or to be entered into by the Company, and any conflict of interest which arises or may arise, in accordance with sections 175, 177 and 182 of the Act;

2.2.6. comply at all times with the Company's applicable corporate governance rules and procedures;

2.2.7. avoid engaging in any activity which is prejudicial to the interests, affairs and/or business of the Company;

2.2.8. attend at the Company's premises (or any other notified location) as often as is reasonably necessary in or for the performance of your duties, but in any event at least for the following:

________

Unless urgent and unavoidable circumstances prevent you from doing so, it is expected that you will attend the meetings outlined above;

2.2.9. assist the Company generally and be available for telephone calls in relation to the Company's affairs and for relevant meetings as may from time to time reasonably be required by the Chief Executive Officer of the Company;

2.2.10. at all times act independently, promoting the interests of the Company and exhibiting such degree of skill as is expected from an independent Non-Executive Director;

2.2.11. abide by and comply with all applicable rules and regulations of the Company from time to time, to the extent that they apply to a Non-Executive Director, together with compliance with your obligations under the Act;

2.2.12. generally advise the Company in connection with the management and conduct of the business carried on by the Company and its subsidiaries;

2.2.13. exhibit such degree of skill as may reasonably be expected from a person with your knowledge, expertise and experience; and

2.2.14. act only within your powers as a director of the Company, subject to your duties under the Act or otherwise, and exercise any power vested in you in good faith and in the best interests of the Company, whilst complying at all times with the Company's rules and procedures relating to corporate governance.

2.3. As an independent Non-Executive Director, we will expect you to bring objectivity and independence of view to the Board's discussions and to help the Board to provide effective oversight of management, high standards of financial probity and sound corporate governance.

2.4. The average time commitment contemplated by this clause will increase should you become a committee member or chair, or if you are given additional responsibilities such as being appointed the Senior Independent Director, or a non-executive director on the boards of any of the Company's subsidiaries. Details of the expected increase in time commitment will be covered in any relevant communication confirming the additional responsibility.

2.5. You will have particular regard to the general duties of directors set out in Part 10, Chapter 2 of the Act, including the duty to promote the success of the Company, and accordingly you shall:

2.5.1. act in the way you consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole (section 172 of the Act);

2.5.2. have regard to the likely consequences of any decision in the long term;

2.5.3. have regard to the interests of the Company's employees;

2.5.4. foster and have regard to the need to develop the Company's business relationships with suppliers, customers and others;

2.5.5. have regard to the impact of the Company's operations on the community and the environment;

2.5.6. have regard to the desirability of the Company maintaining a reputation for high standards of business conduct; and

2.5.7. have regard to the need to act fairly as between members of the Company.

2.6. You shall also comply with your duties under sections 171 (duty to act within powers), 173 (duty to exercise independent judgement), 174 (duty to exercise reasonable care, skill and diligence), 175 (duty to avoid conflicts of interest), 176 (duty not to accept benefits from third parties) and 177 and 182 (duties to declare interests) of the Act.

3. Remuneration and Expenses

3.1. The annual fee payable to you as at the date of this Letter is £________ (________) per annum.

3.2. You shall receive payment of the fee from the Company in arrears.

3.3. This fee covers all duties, including service on any Board committee or company subsidiary, with the exception of committee chairmanships and certain additional responsibilities, such as taking on the role of Senior Independent Director.

3.4. As an officer of the Company holding office, the fee will be subject to deduction of income tax and National Insurance contributions under the Pay As You Earn (PAYE) system and any other statutory deductions as may apply, and shall be paid in the following manner: ________.

3.5. The fee will be subject to periodic review by the Board, but no such review will necessarily result in an increase.

3.6. The Company will reimburse you for all reasonable and properly documented expenses you incur in performing the duties of your office, in accordance with the Company's usual expenses policy. Such expenses may include:

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3.7. On termination of the appointment you shall be entitled only to such fees as have accrued to the date of termination, together with reimbursement in the normal way of any expenses properly incurred prior to that date.

3.8. Save as set out above, you will not be entitled to receive any payment in respect of your appointment as a Non-Executive Director of the Company unless otherwise expressly agreed in writing by the Chief Executive Officer of the Company.

4. Outside Appointments and Conflicts of Interest

4.1. During the continuance of your appointment, you shall not, without the prior written consent of the Board, accept any other appointment, directorship or engagement which may give rise to a conflict of interest with your duties to the Company or which may interfere with the proper performance of your duties under this Letter.

4.2. You shall promptly disclose to the Board the nature and extent of any direct or indirect interest, situation or relationship which conflicts, or may conflict, with the interests of the Company or with your duties as a Non-Executive Director, and shall take such steps as the Board may reasonably require to avoid or manage any such conflict of interest.

4.3. If at any time you become aware of any actual or potential conflict of interest, you shall notify the Chairman and the Board in writing as soon as reasonably practicable, and you shall comply with the Company's procedures and the provisions of the articles of association and the Act in relation to the authorisation and management of such conflicts, including those arising under sections 175 to 177 of the Act.

5. Non-Disclosure of Confidential Information

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5.2. You shall use your best endeavours to prevent the publication or disclosure of the Confidential Information, or any part of such information, whether relating to the trade dealings, financial affairs or otherwise of the Company or any Group Company, which you may have received or obtained, or may hereafter receive or obtain, while a director of the Company.

5.3. You agree and acknowledge that the restrictions regarding Confidential Information set out in this Letter shall continue to apply without limit in time after the termination of your appointment.

5.4. You also agree, during your appointment, not to make, otherwise than for the benefit of the Company or any Group Company, any notes, memoranda, recordings, films, photographs, plans, drawings or any form of record relating to any matter within the scope of the business of the Company or any Group Company, or concerning any of the dealings or affairs of the Company or any Group Company ("Records").

5.5. The restrictions contained in this clause shall cease to apply to any Confidential Information which may, otherwise than by reason of your default, become available to the public generally.

5.6. Nothing in this clause shall prevent you from making a protected disclosure within the meaning of the Public Interest Disclosure Act 1998, or any disclosure required by law or by any regulatory authority.

5.7. You acknowledge that you shall have no rights whatsoever in respect of the Company's intellectual property rights, including without limitation all patents, trade and service marks, trade names, logos, copyright (including rights in computer software and databases), database rights, moral rights, design rights, confidential information, rights in know-how and all other intellectual property rights, whether or not registered or registrable.

6. Re-appointment

Your appointment on the terms of this Letter takes effect from the date set out in clause 1 and is to continue, subject as mentioned in this Letter. At or before the end of that period, the Board may resolve to re-appoint you for a further term on the terms of this Letter, or as further amended.

7. Insurance

The Company shall maintain, for the duration of your appointment, an appropriate policy of directors' and officers' liability insurance with a reputable and authorised insurer, providing cover of not less than £________ in respect of your acts and omissions as a Non-Executive Director. The Company shall provide you, on request, with a copy of the relevant policy and evidence of the date to which premiums have been paid.

8. Termination and Provisions on Termination

8.1. Your appointment as a Non-Executive Director of the Company will terminate immediately, without any entitlement to compensation, if at any time:

8.1.1. you are not re-appointed as a director of the Company upon retirement by rotation or otherwise pursuant to the Company's articles of association;

8.1.2. you are removed as a director of the Company by ordinary resolution passed at a general meeting of the Company under section 168 of the Act, or following signature of a written resolution of the members of the Company to that effect;

8.1.3. you are served with written notice of termination by the Company in accordance with clause 1.2;

8.1.4. the Board is of the reasonable opinion that you are engaged in conduct prejudicial to the Company's affairs, business or interests;

8.1.5. there appears to be an irreconcilable conflict of interest between you (or any associated entity) and the Company;

8.1.6. you cease to be a director of the Company by reason of your vacating office pursuant to any provision of the Company's articles of association or the Act; or

8.1.7. you cease to be a director of the Company by reason of your having served for a continuous period of longer than ________ years, which is the maximum tenure.

8.2. Notwithstanding the foregoing provisions of this clause, the Company may terminate your appointment with immediate effect if you:

8.2.1. commit a material breach of your obligations under this Letter; or

8.2.2. commit any serious or repeated breach or non-observance of your obligations to the Company (which include an obligation not to breach your duties to the Company, whether statutory, fiduciary or under the common law); or

8.2.3. are guilty of any fraud or dishonesty, or act in a manner which, in the reasonable opinion of the Company, brings or is likely to bring you or the Company into disrepute or is materially adverse to the interests of the Company; or

8.2.4. are convicted of any criminal offence other than an offence under road traffic legislation in the United Kingdom or elsewhere for which a fine or non-custodial penalty is imposed; or

8.2.5. are declared bankrupt or enter into any arrangement or composition with, or for the benefit of, your creditors; or

8.2.6. are disqualified from acting as a director under the Company Directors Disqualification Act 1986 or otherwise.

8.3. On the termination of your appointment you will, at the request of the Company, resign in writing and without compensation for loss of office from office as a director, and should you fail to do so the Company is by this provision of this Letter irrevocably authorised to appoint some other person in your name and on your behalf to sign any documents or do such things as are necessary or requisite to give effect to your resignation.

8.4. All Records which have been made or received by you during the course of your directorship are, and shall remain, the property of the Company, and shall, if so requested by the Company, be surrendered to the Chief Executive Officer or someone duly authorised by the Company upon the termination of your appointment, together with all other property of or relating to the Company which has been made or received by you at any time during the course of your directorship, or at the request of the Board at any time during the course of your directorship.

8.5. Where any shares have been allotted to you in connection with your appointment, upon termination or cessation of your appointment as a Non-Executive Director prior to the first anniversary of the date of this Letter or the commencement of your position, whichever is later, all allotted shares which have not vested shall immediately be forfeited at no cost to the Company and such shares shall never become vested in you. In respect of such shares, by this provision you appoint any other member of the Board to execute any stock transfer form on your behalf, as instructed by the Board, in relation to shares which have not vested or to which you are no longer entitled in accordance with the terms of this Letter.

9. Notices

9.1. Any notice required to be given under this Letter shall, in the case of notice to the Company, be deemed duly served if left at, or sent by registered or recorded delivery post to, the Company's trading address at:

________

with a copy to the registered office for the time being of the Company, and, in the case of notice to you, if handed to you personally or left at, or sent by registered or recorded delivery post to, your last known address.

9.2. Any such notice shall be deemed to be served at the time when it is handed to, or left at, the address of the party to be served and, if served by post, on the day (not being a Sunday or public holiday) next following the day of posting.

10. Warranties and Indemnities

10.1. You warrant that you are not disqualified from acting as a director and that you have not committed, nor been convicted of, any criminal offence prior to your appointment as a Non-Executive Director of the Company (other than any spent conviction within the meaning of the Rehabilitation of Offenders Act 1974), and you accept and understand that, where the Company becomes aware of any undisclosed criminal offence which you have committed or of which you have been convicted, this will constitute a valid ground to terminate your appointment under this Letter.

10.2. The Company shall indemnify you, to the fullest extent permitted by sections 232 to 234 of the Act and the Company's articles of association, against all liabilities, costs, claims, expenses and damages properly incurred by you in the proper performance of your duties as a Non-Executive Director, save to the extent that such liability arises from your own fraud, dishonesty, wilful default or material breach of this Letter.

11. General Provisions

11.1. This Letter is in substitution for all previous letters of appointment between you and the Company, which shall be deemed to have been terminated by mutual consent as from the date on which this appointment commenced or is deemed to have commenced.

11.2. You acknowledge that you have no claims of any kind against the Company, or any Group Company, or any of their employees, officers, advisers or representatives, or against their respective assets, otherwise than in respect of any director's fees to which you are expressly entitled under this Letter accrued due to the date of this Letter but not yet received.

11.3. This Letter shall not be amended, modified, varied or supplemented except in writing signed by duly authorised representatives of the parties.

11.4. No failure or delay on the part of the Company to exercise any right or remedy under this Letter shall be construed or operate as a waiver of such right or remedy, nor shall any single or partial exercise of any right or remedy preclude any further exercise of it.

11.5. The rights and remedies provided in this Letter are cumulative and are not exclusive of any rights or remedies provided by law.

11.6. You shall not make any statements to the press, on social media or any other public announcement in respect of your appointment or the termination of your appointment without the prior approval of the Board. The text of any press release or other communication to be published by or in the media concerning the subject matter of this Letter, or any subsequent termination, shall require the approval of the Chief Executive Officer of the Company or the Board.

11.7. You shall at all times during the period of your appointment comply with all relevant and applicable laws, legislation, statutes and regulations relating to anti-bribery and anti-corruption, including but not limited to the Bribery Act 2010, and with the Company's anti-bribery and anti-corruption policies from time to time.

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11.9. At any time after the date of this Letter, you shall, at the request of the Company, execute or procure the execution of such documents, and do or procure the doing of such acts and things, as the Company may reasonably require for the purpose of giving full effect to the provisions of this Letter.

11.10. The Company will collect and process your personal data in connection with your appointment in accordance with the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018. Such processing will be carried out in accordance with the Company's privacy notice for directors, a copy of which has been provided or made available to you.

11.11. A person who is not a party to this Letter shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms, save that any Group Company may enforce the provisions of clause 5 (Non-Disclosure of Confidential Information).

11.12. You confirm that you have been given the opportunity to take independent legal advice in respect of your obligations under this Letter prior to its execution, and that you fully understand its provisions.

12. Governing Law and Jurisdiction

The validity, construction and performance of this Letter, and any non-contractual obligations arising out of or in connection with it, shall be governed by and construed in accordance with the laws of England and Wales. The parties irrevocably submit to the exclusive jurisdiction of the courts of England and Wales.

Yours sincerely,

__________________________________
________
Chief Executive Officer, for and on behalf of ________

Email: ________, Telephone: ________

NON-EXECUTIVE DIRECTOR

I confirm that I have read and fully agree to the terms and conditions set out above relating to my appointment as a Non-Executive Director of the Company.

Executed as a deed and delivered on the date stated below by ________ in the presence of the witness whose details appear below:

__________________________________
Signature of ________

__________________________________
Date: ________

WITNESS

Signed in the presence of:

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Signature of Witness

__________________________________
Name of Witness (BLOCK CAPITALS): ________

Address of Witness: ________

Occupation of Witness: ________