Director’s Service Agreement Template

A Directors Service Agreement (DSA) is a legally binding contract that outlines the terms and conditions of a director’s engagement with a company. It serves as a comprehensive guide for both the director and the company, ensuring clarity, transparency, and accountability. To create a professional DSA template, consider the following essential elements:

1. Identification of the Parties

Clearly state the names and addresses of the company and the director entering into the agreement.

Include any relevant registration numbers or other identifying information.

2. Scope of Services

Define the specific duties and responsibilities of the director.

Specify whether the director will be an executive or non-executive director.

Outline the expected time commitment and involvement level.

Include any limitations or exclusions of the director’s duties.

3. Term and Termination

Establish the duration of the agreement, whether it’s for a fixed term or indefinite.

Specify the conditions under which either party can terminate the agreement.

Include provisions for notice periods, severance payments, and confidentiality obligations upon termination.

4. Remuneration and Benefits

Clearly outline the compensation structure for the director’s services, including salary, bonuses, stock options, or other forms of remuneration.

Specify the frequency of payments and any applicable taxes or deductions.

Address any benefits or perks provided to the director, such as health insurance, pension plans, or expense reimbursements.

5. Indemnification

Establish the company’s obligation to indemnify the director for any legal costs, expenses, or liabilities incurred in connection with their duties, subject to certain exceptions.

Specify the circumstances under which indemnification is available and any limitations or exclusions.

6. Confidentiality and Non-Compete

Protect the company’s confidential information by requiring the director to maintain confidentiality and refrain from disclosing or using such information for personal gain.

Consider including a non-compete clause to prevent the director from competing with the company for a specified period after termination.

7. Governing Law and Dispute Resolution

Specify the governing law that will apply to the agreement.

Choose a jurisdiction for resolving any disputes that may arise.

Consider including a dispute resolution mechanism, such as mediation or arbitration, to avoid costly litigation.

8. Entire Agreement and Amendments

State that the agreement constitutes the entire understanding between the parties and supersedes any prior agreements or representations.

Outline the procedures for modifying or amending the agreement.

9. Notices

Specify how notices or communications should be given to the parties, including addresses and methods of delivery.

10. Execution

Include a signature block for both the company and the director to sign the agreement.

Date the agreement to indicate the effective date.

Additional Considerations

Professional Review: Consult with an attorney to ensure the DSA complies with applicable laws and regulations.

Customization: Tailor the template to the specific needs and circumstances of the company and the director.

Clarity and Conciseness: Use clear and concise language to avoid misunderstandings.

Consistency: Maintain consistency throughout the agreement in terms of formatting, terminology, and style.

Professional Appearance: Present the agreement in a professional and polished format, using high-quality paper and a clear font.

By carefully addressing these key elements and considering the additional factors, you can create a professional and effective Directors Service Agreement template that protects the interests of both the company and the director.