Non-Executive Director Appointment Letter - Form
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Dear ________,
RE: LETTER OF APPOINTMENT OF NON-EXECUTIVE DIRECTOR
We are pleased to confirm your appointment to the board of directors ("the Board") of ________ ("the Company") as a Non-Executive Director of the Company subject terms and conditions set out below. It is agreed that this is a contract for services and not a contract of employment.
Please indicate your acceptance of these terms by signing a copy of this Letter as a binding contract by signing where indicated in the presence of an independent witness, who should also insert his/her name, address and occupation and returning it to the Chief Executive Officer of the Company.
The terms and conditions of your appointments as as follows:
1. The Appointment
1.1. Your appointment as a Non-Executive Director of the Company shall commence on ________ and will continue for an initial term of ________ and shall end 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 the following notice in writing to the other and in accordance with this Letter, the Articles of Association of the Company or the Companies Act 2006 (as amended) ("the Act"): ________.
1.3. At the end of the relevant period or immediately following the end-date, the Company may through the Board resolve to re-appoint you for a further period or new or similar terms.
1.4. You will hold office in accordance with the Company's articles of association and in particular should note that continuation of your contract of appointment is subject to the provisions of the articles regarding re-election at AGMs and vacation of office.
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.
2.2. During the continuance of your appointment you will be required to, without limitations:
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. to use your best endeavours to promote and extend 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 of any interest, whether direct or indirect, in any contract or proposed contract entered into by the Company or any conflicts of interest which arise or may arise;
2.2.6. comply at all times to the Company's applicable corporate governance rules and procedures;
2.2.7. avoid engaging in any activity which is prejudicial to the interest, affairs and/or business of the Company;
2.2.8. attend at the Company's premises at the company's address (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 relevant meetings from time to time 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 in respect of 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 a degree of skill as may be reasonably 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 Companies Act 2006 or otherwise, and to 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 director and company chairman, we will expect you to bring objectivity and independence of view to the discussions and to help the Board to provide effectiveness of management, high standards of financial probity and corporate governance.
2.4. The average time commitment stated in 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 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 as set out in Part 10, Chapter 2 of the Act, including the duty to promote the success of the company in the following ways:
2.5.1. to act and conduct yourself in good faith and in a manner which would be most likely to promote the success of the company for the benefit of our members as a whole;
2.5.2. to consider the likely consequences of any decision in the long term;
2.5.3. to always acknowledge, consider and promote the interests of the company's employees;
2.5.4. to foster and encourage the growth of the company's business relationships with suppliers, customers and others;
2.5.5. to consider the impact of the company's operations on the community and the environment;
2.5.6. to promote, encourage and consider the desirability of the company maintaining a reputation for high standards of business conduct; and
2.5.7. to acknowledge and consider the need to act fairly between members of the company.
3. Remuneration and Expenses
3.1. The gross salary 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. All fees will be subject to income tax and other statutory deductions as may apply to you and shall be paid in the following manner: ________.
3.5. Fees will be subject to periodic review by the board.
3.6. The Company will reimburse you for all reasonable and properly-documented expenses you incur in performing the duties of your office, as per the Company's usual expenses policy. Such expenses may include:
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3.7. On termination of the appointment you shall only be entitled to such fees as may 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 CEO 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.
5. Non-Disclosure of Confidential Information
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 indefinitely 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, tape 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. You acknowledge that you shall have no rights whatsoever in respect of the Company's Intellectual Property being the Company's intellectual property rights including without limitation all patents, trade and service marks, trade names, logos, copyrights including rights in computer software and database, 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 Agreement is with effect from the date set out in paragraph 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 Agreement, or as further amended.
7. Insurance
You shall be required at all times during the period of your appointment as a Non-Executive Director of the Company to hold a valid and appropriate policy of directors' insurance with a reputable and authorised insurer. At any point during the term of your appointment, the Company shall be entitled to request a copy of any relevant certificates or documents proving that you hold a valid and active policy of directors' insurance and shall be able to request evidence of the date upon which any premiums have been paid up to.
8. Termination and Provisions on Termination
8.1. Your appointment as a Non-Executive Director of the Company will, however, terminate immediately without any entitlement to compensation if at any time:
8.1.1. you are not reappointed 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 resolution passed at a General Meeting of the Company or following signature of written resolutions of the Members of the Company to that effect;
8.1.3. you are served with written notice of termination by the Company;
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 a conflict of interest between you (or any other 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 provisions of the Company's Articles of Association or the Act.;
8.1.7. you cease to be a director of the Company by reason of your having served for a period of longer than ________ years, which is the maximum tenure.
8.2. Notwithstanding any previous above stated terms of this clause, we may terminate your appointment with immediate effect if you:
8.3. commit a material breach of your obligations under this letter; or
8.4. 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 common-law); or
8.5. are guilty of any fraud or dishonesty or acted in a manner which, in the opinion of the Company acting reasonably, brings or is likely to bring you or the Company into disrepute or is materially adverse to the interests of the Company; or
8.6. are convicted of any arrestable criminal offence other than an offence under road traffic legislation in the UK or elsewhere for which a fine or non-custodial penalty is imposed; or
8.7. are declared bankrupt or have made an arrangement with or for the benefit of your creditors; or
8.8. are disqualified from acting as a director.
8.9. 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 CEO 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 necessary or requisite to give effect to the resignation.
8.10. All Records as shall have been made or received by you during the course of your directorship are, and shall if so requested by the Company, be the property of the Company and shall be surrendered to the CEO or someone duly authorised by the Company upon the termination of your appointment, together with all other property of or relating to the Company as shall have 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 of the Company.
8.11. Upon termination of cessation of your appointment as a Non-Executive Director prior to the first anniversary of the date of this Letter or 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 to 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 notices required to be given under this Letter shall in the case of notices 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:
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with a copy to the registered office for the time being of the Company and in 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 the same is handed to or left at the address of the party to be served and if served by post, on the day, not being Sunday or public holiday, next following the day of posting.
10. Warranties and Indemnities
10.1. You warrant that you have not committed or been convicted of any criminal offences previous to your appointment as a Non-Executive Director of the Company and accept and understand that where the Company becomes aware of any previous criminal offences you have committed or been convicted of will constitute a valid ground to terminate your appointment under this Letter.
10.2. The Company warrants and provides an indemnity that you shall not be held personally liable for any liabilities, claims or offences that may arise which were committed or performed by the Company before, during or after your appointment as a Non-Executive Director of the Company.
11. General provisions
11.1. This appointment Letter shall be 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 as the case may be.
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 CEO of the Company or the Board.
11.7. You shall at all times during the period of your appointment comply and follow 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.
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. You consent to the processing of your personal data in connection with the business or affairs of the Company and in compliance with the Data Protection Act 2018.
11.11. You confirm that you have been advised in respect of your obligations under this Letter prior to your execution of this document and fully understand its provisions. Prior to the date of this Letter you were provided an opportunity to seek legal advice and confirmed that you obtained such advice from an experienced solicitor.
12. Governing Law and Jurisdiction
The validity, construction and performance of this Agreement shall be governed by the laws of England and Wales. The parties submit to the exclusive jurisdiction of the Courts of England and Wales.
Yours sincerely,
__________________________________
CEO 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.
Signed and Executed as a Deed by:
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Signature of ________
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Date
WITNESS
Signature in the presence of:
__________________________________
Signature of Witness
__________________________________
Name of Witness (BLOCK CAPITALS)
Address of Witness: __________________
__________________________________
__________________________________
__________________________________
__________________________________
Occupation of Witness: __________________________________
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