Employment contracts and service agreements

We can provide tailored advice and guidance to ensure that your senior executive or directors service contract accurately reflects your role and responsibilities, protects your interests, and complies with all relevant legal requirements.

We work closely with our clients to negotiate and draft directors service agreements that are clear, comprehensive, and enforceable, giving you peace of mind and security in your employment.

• When you enter into a new contract or service agreement or if your terms of employment change, it is essential that you are aware of all the terms and how they affect you.
• This includes how any incentives are provided, your responsibilities as a director or senior executive and restrictions that may be imposed when you leave the company.
• We can guide you through your contract step by step, making all the terms clear and helping you negotiate before you sign, to put you in the strongest possible position for the future.

What is a directors service agreement?

A directors service agreement is a legal contract between a director and their employer that outlines the terms and conditions of their service as a director. The agreement typically includes details such as the director’s responsibilities, compensation, benefits, and the length of their appointment. A directors service agreement is usually entered into at the beginning of the director’s appointment and serves as the basis for the ongoing relationship between the director and the company.

The importance of using a legal expert

As a director or senior executive, it’s likely that your contract or service agreement will include a range of benefits, such as bonuses, share incentives, private health insurance and a company car and allowance. With these incentives there will also be extra responsibilities, so it is highly advisable to have an expert check your contract and/or service agreement, to ensure you are satisfied with the terms and fully aware of all your obligations. The latter may include restrictions that apply after you’ve left the company, such as covenants and confidentiality clauses.

Whether you are joining a company and have a new contract or service agreement or the terms of your employment have changed, your position will be much stronger if you have a specialist employment solicitor scrutinise the terms before you sign. Once you have signed, you are bound by the terms and further negotiation is usually very difficult.

Our team has broad experience of advising directors and senior executives on their contracts and service agreements. This includes closely examining and making you aware of the express and implied terms, and explaining the ramifications of incentives such as share agreements.

Shares as incentives

An incentive frequently offered to senior executives is the opportunity to own shares in your employer’s business. If you take up this option, you should be given a shareholder’s agreement, which sets out your relationship with the business as a shareholder.

Although it is separate from your service agreement, it could still include provision to have you removed from the business if there is a dispute. If this happens you could potentially lose your shares, so it is vital that we check your shareholder’s agreement and service agreement together, to ensure you have the protection you need.