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Director Employment Agreement for the United Kingdom

Director Employment Agreement Template for England and Wales

A Director Employment Agreement is a comprehensive legal document governed by English and Welsh law that establishes the terms and conditions of a director's employment with a company. It covers essential aspects including appointment terms, duties, remuneration, benefits, and termination provisions, while ensuring compliance with Companies Act 2006 and other relevant legislation. The agreement protects both the company's interests and the director's rights while clearly defining the scope of the role and associated responsibilities.

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Director Employment Agreement

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What is a Director Employment Agreement?

The Director Employment Agreement is a crucial document used when appointing executive or non-executive directors to a company's board. It serves as the primary contract governing the relationship between the company and its directors, incorporating statutory obligations under English and Welsh law, including the Companies Act 2006. This agreement is essential for establishing clear terms of employment, protecting confidential information, setting out remuneration packages, and defining the scope of directors' duties and responsibilities. It's particularly important for ensuring compliance with corporate governance requirements and protecting both parties' interests in high-stakes leadership positions.

What sections should be included in a Director Employment Agreement?

1. Parties: Identification of the company and the director

2. Background: Context of the appointment and relationship

3. Definitions: Key terms used throughout the agreement

4. Appointment and Term: Position, effective date, and duration of appointment

5. Duties and Responsibilities: Scope of role and obligations as a director including statutory duties under Companies Act 2006

6. Remuneration: Salary, bonuses, and benefits package details

7. Working Hours and Location: Time commitment, place of work, and flexibility requirements

8. Holidays: Annual leave entitlement and conditions

9. Expenses: Policy on reimbursement of business expenses

10. Confidentiality: Protection of company information and trade secrets

11. Intellectual Property: Ownership and protection of IP created during employment

12. Termination: Grounds and process for ending the agreement, notice periods

13. Post-Termination Restrictions: Non-compete and other restrictive covenants

14. General: Standard boilerplate provisions including governing law

What sections are optional to include in a Director Employment Agreement?

1. Share Options: Details of any share schemes or equity-based compensation

2. International Travel: Requirements and compensation for overseas work

3. Garden Leave: Terms of garden leave during notice period

4. Change of Control: Provisions relating to company ownership changes

5. Corporate Governance: Additional governance requirements for listed companies

What schedules should be included in a Director Employment Agreement?

1. Schedule 1 - Duties: Detailed list of responsibilities and obligations

2. Schedule 2 - Benefits: Detailed description of all benefits and allowances

3. Schedule 3 - Bonus Scheme: Details of performance-related pay arrangements

4. Schedule 4 - Share Option Terms: Detailed terms of any share option arrangements

5. Schedule 5 - Company Policies: Key policies the director must comply with

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Cost

Free to use
Relevant legal definitions



































Clauses





































Industries

Companies Act 2006: Primary legislation governing directors' duties (Sections 171-177), disclosure requirements, and conflict of interest provisions. Forms the backbone of company law in England and Wales.

Employment Rights Act 1996: Establishes fundamental employment rights including unfair dismissal provisions, notice periods, and requirements for written statements of employment particulars.

Equality Act 2010: Provides protection against discrimination, ensures equal treatment, and requires reasonable accommodations in the workplace.

Working Time Regulations 1998: Regulates working hours, holiday entitlements, and rest break requirements for employees including directors.

National Minimum Wage Act 1998: Sets minimum compensation requirements and payment regulations, though typically less relevant for director-level positions.

Data Protection Act 2018 and UK GDPR: Governs personal data handling and privacy provisions, crucial for director's responsibilities and their own data protection.

Health and Safety at Work Act 1974: Establishes workplace safety obligations and director's responsibilities for ensuring organizational compliance.

Pensions Act 2008: Details auto-enrollment requirements and pension scheme provisions applicable to all employees including directors.

Corporate Governance Code: Provides best practice guidelines for directors and board responsibilities, particularly relevant for listed companies.

Bribery Act 2010: Sets anti-corruption provisions and compliance requirements that directors must adhere to and enforce.

Modern Slavery Act 2015: Establishes due diligence obligations and compliance requirements for preventing modern slavery in business operations.

Common Law Principles: Encompasses case law and established legal principles regarding directors' duties and corporate governance.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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