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What is a Director’s Service Agreement?

A Director’s Service Agreement is a contract by which a company hires a director as an employee.

The Director’s Service Agreement is a long-form contract with detailed provisions on various aspects of employment.

When drafting a Director’s Service Agreement, the employer should be aware of certain statutory provisions in determining the terms of employment, for example the amount of minimum wage (if applicable), rest days, paid annual leave, statutory holidays or maximum working hours (if applicable).

Key points included

  • Director’s remuneration and any benefits the director is entitled to;
  • How the company’s confidential information will be protected;
  • How the company’s intellectual property will be protected;
  • Director’s duties;
  • Circumstances that warrant termination of the Director’s Service Agreement;
  • What restrictions will be imposed on the director after resignation or termination;
  • References to statutory duties applicable to the director; and
  • Whether the director is prohibited from engaging in business or professional activities outside the employment and methods of obtaining prior approval if such activity might be acceptable to the company.

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