Director's Service Agreement
Updated 29 November 2025
Director's Service Agreement
This Director's Service Agreement (the "Agreement"), effective [effective date] sets out the terms on which you will serve as a statutory director and senior executive of [company name], as well as constituting your contract or employment. It replaces and supersedes any prior employment particulars or informal arrangements.
This agreement is given in compliance with the Companies Act 2006 and applicable employment legislation.
Parties
This Agreement is entered into between:
[company name], a company incorporated in England and Wales with company number [company number] and registered office at [company registered office address] (the "Company"); and
[director name], residing at [director address] (the "Director" or "you").
Appointment and term
Your appointment as an executive director of the Company will commence on [start date]. This Agreement remains in effect until terminated by either party in accordance with the terms set out below.
Your employment under this Agreement is separate from your office as a statutory director of the Company. Nothing in this Agreement confers any right on you to continue to hold the office of director, which may only be terminated in accordance with the Company’s Articles of Association or applicable law. Termination of your employment does not automatically terminate your office as a director, but you are required to resign that office in accordance with the “Resignation as director” clause.
Continuous employment
Choose either option:
No employment with any previous employer will count towards your continuous employment.
Or
Your prior period of employment with [previous employer] from [previous start date] to [previous end date] will count towards your continuous employment for statutory purposes.
Duties and responsibilities
You agree to perform your statutory duties under the Companies Act 2006, including sections 171–177 and the duties to:
Act in the Company’s best interests.
Exercise reasonable care and skill.
Exercise independent judgment in all decisions.
Avoid conflicts of interest
Disclose any personal interest in company transactions.
Promote the success of the company.
You will report to [direct report]. Your responsibilities include [director responsibilities]. You also agree to comply with all relevant laws and regulations and the Company's Articles of Association and governance policies, and to attend board and committee meetings as required.
Your job description may be amended by the Company and, in addition to duties set out in the job description, you may be required to undertake additional or other reasonable duties as necessary to meet the needs of the Company's business.
Any equipment or materials provided to you remain the property of the Company and must be used only for business purposes unless otherwise approved.
Remuneration
Your annual remuneration will be [annual remuneration], payable [payment frequency] in arrears.
You may also be eligible for discretionary benefits as set out in this Agreement.
Expenses
The Company will reimburse you for all reasonable and properly-incurred expenses that you incur in the performance of your duties under this Agreement, in accordance with the Company’s expenses policy as amended from time to time. You must provide such receipts or other evidence of expenditure as the Company may reasonably require.
The Company's expenses policy is available from [location of expenses policy].
Place of work
Your normal place of work is [place of work]. You may also be required to work at [alternative work location] or travel internationally as required for your director duties.
As a director, you are expected to travel on behalf of the Company as necessary to fulfil your responsibilities.
Working abroad
Insert if applicable
You will be paid [remuneration currency while abroad] while working outside the UK.
You will also receive [allowance while abroad] allowance while abroad.
You will be entitled to [benefits while abroad].
On returning to the UK, you [terms of return to the uk].
Working hours
Your normal working days and hours are [workings days / hours] with a daily [lunch break type] lunch break of [lunch break duration] depending on pro rata hours agreed. However, as a senior executive and director, you are expected to work such hours as necessary for the proper performance of your duties and responsibilities. This may include evenings, weekends, or travel without additional remuneration. This requirement has been taken into account when setting your salary.
Remove the below if the arrangement is not intended to be a flexi-hours contract.
Variable hours or days of work
Your hours or days of work may change. [details of how hours or days of work may change].
Working Time Regulations
You agree to opt out of the 48-hour maximum average working week under the Working Time Regulations 1998. You acknowledge that, as a senior employee, you may be required to work in excess of 48 hours per week when reasonably necessary to perform your duties.
You may withdraw this agreement at any time by giving the Company one month’s written notice. The Company will continue to ensure you have adequate rest and breaks and will manage workloads to avoid excessive or unsafe hours.
Holiday entitlement
An employer must give enough information to make sure that entitlements, including accrued holiday pay on termination, can be precisely calculated.
Your holiday entitlement is [holiday entitlement] plus UK public holidays.
Given your seniority, you may be required to maintain reasonable availability during critical periods and ensure appropriate handover arrangements.
Holiday accrues pro rata throughout the holiday year, which runs from 1 January to 31 December, and payment in lieu of accrued but untaken holiday on termination will be calculated in accordance with the Working Time Regulations 1998 using the statutory formula.
Other benefits
Use either A or B
You'll be entitled to director-level benefits from [benefits start date] as follows:
[describe discretionary benefits as applicable]
You're also eligible for other benefits, as set out in the Company's benefits policy, available from [location of benefits policy]. The Company's benefits policy can change over time.
The following are suggested additional benefits that you may include in the above provision:
Standard Senior Employee Benefits Clause (Private medical, life assurance, income protection, allowance)
You will be eligible to participate in the Company's benefits programme for senior employees, which currently includes private medical insurance, life assurance, income-protection insurance, and an employer-funded wellbeing allowance. Full details of these benefits, including eligibility requirements, provider terms, and any employee contributions, will be provided separately. The Company may amend, replace, or withdraw any of these benefits at any time on reasonable notice of any such change.
Executive Allowance & Flexible Benefits (Cash allowance that can be spent across various benefits)
You will receive an annual executive benefits allowance of £_______, payable monthly in arrears, which you may use towards any benefits offered under the Company's flexible benefits scheme, including but not limited to private healthcare, dental cover, additional pension contributions, wellbeing support, and enhanced insurance products. You may also elect to receive any unused portion of this allowance as additional taxable salary. The Company may amend the structure of the executive benefits allowance or the benefits scheme at its discretion.
Bonus / Short-Term Incentive Plan (STIP) (Clean, high-level clause that avoids over-promising)
You may be eligible to participate in the Company's annual bonus scheme (or any successor incentive scheme) in accordance with the Company's rules as amended from time to time. Any bonus is discretionary, is not guaranteed, and does not form part of your contractual pay. Eligibility, performance criteria, targets, and payment terms will be communicated to you at the start of each performance year. You must be employed and not under notice on the bonus payment date to receive any award unless the scheme rules provide otherwise.
Long-Term Incentive / Equity Scheme (Common for directors, heads of department, senior specialists)
You may be invited to participate in the Company's long-term incentive plan (“LTIP”) or equity scheme, subject to the applicable plan rules and any award documentation provided to you. Participation in any LTIP or equity scheme is entirely discretionary and does not form part of your contractual remuneration. The Company reserves the right to amend, suspend, or terminate any such plan at any time.
Executive Car / Mobility Allowance (Full prose clause for senior roles with travel requirements)
If your role requires significant business travel, the Company will provide you with a monthly mobility allowance of £_______ in lieu of a company car. This allowance is paid as a taxable benefit and is intended to cover travel-related expenses including vehicle leasing, fuel, insurance, and maintenance. The Company may require you to maintain adequate business-use insurance when using your own vehicle for company business.
Wellbeing and Lifestyle Benefits Package (For modern or tech-company senior contracts)
You will have access to the Company's senior wellbeing package, which may include mental health support services, professional coaching, on-demand counselling, gym or wellness allowances, and access to digital wellbeing tools. These services may be provided by third-party providers and may change from time to time.
All benefits may be amended at the Company's discretion.
Absence and sick pay
If you're absent from work for any reason, you must inform [absence notification to] by [absence notification method] as soon as possible, but no later than [absence notification time].
For absences of less than 7 days, you can self-certify.
On your return to work you must complete and return a self-certification form to your manager. This must be returned before the end of your first day back at work.
For absences of 7 days or more because of sickness or injury, you must get a fit note from a registered healthcare professional.
Senior employees must keep the organisation informed of any absence that impacts strategic or managerial responsibilities and ensure appropriate delegation where possible.
All sickness or injury absences will be added to your employment record.
Sick pay
Use either or both options
You may be entitled to be paid if you're not able to work due to 'incapacity' (sickness or injury). [terms of pay as set out in statutory sick pay guidance or the employer's sick pay terms for employees].
You may be eligible for contractual sick pay. [terms of contractual sick pay].
Paid leave
Use A and/or B
You may be eligible for statutory paid leave, including [statutory paid leave details]
The Company must state terms and conditions relating to statutory paid leave, including:
maternity leave
adoption leave
paternity leave
shared parental leave
bereavement leave
You may be eligible for additional paid leave from the Company, including [additional paid leave details]
The Company must state terms and conditions relating to any additional paid leave that they offer, for example:
leave to care for dependants
compassionate leave
sabbatical leave
training and study leave
Further information about paid leave can be found in the respective policies, which are available [contact for employer policies].
Pension arrangements
Pension arrangements can be provided later, but must be provided within 2 months of the start of employment.
Use either A or B
If you're eligible, we'll automatically enrol you into the Company's occupational pension scheme in accordance with the Company's obligations under Part 1 of the Pensions Act 2008. If you do not opt out of automatic enrolment, details of the scheme will be provided once you join. Pension terms and conditions are [pension terms].
Pension terms and conditions can be found [location of pension terms].
Include the following enhanced pension provision where applicable - this is used for senior roles where pension contributions exceed auto-enrolment)
Enhanced pension
In addition to any statutory or automatic-enrolment pension contributions, the Company will contribute [enhanced pension contribution %] of your basic salary into a qualifying pension scheme of your choice, subject to the scheme’s rules and annual allowance limits. You may make additional voluntary contributions through salary sacrifice where permitted. The Company reserves the right to review or amend the Company's pension contribution levels from time to time.
Training
Use any of the following options. Option A can be provided later, but must be provided within 2 months of the start of employment.
The Company offers [training offered] training and in some cases [allowances for training], subject to certain eligibility requirements and other conditions. Details of this training are set out in [location of employer training details].
The Company require you to complete [compulsory training courses paid for by the employer]. The Company will pay for the cost of this training.
You're required to complete [compulsory training courses not paid for by the employer] at your own expense.
Probationary period
Use either A or B
There is no probationary period.
There is a probationary period of [probation period length] for new employees. During this time, your probationary period terms include [probation period terms].
For senior employees, the probationary period may include enhanced performance expectations and regular review meetings with senior leadership.
Termination and notice
Use A if an employee has different notice periods during and after their probationary period. Use B if the notice periods during and after probation are the same or if there is not a probationary period.
During your probationary period, the notice that you or the Company must give to end your employment is [notice period during probation].
After your probationary period, the notice that you must give to end your employment is [notice period required from director].
The Company may end your employment at any time by giving you [notice period required from the company] or the statutory notice you're entitled to, whichever is longer.
The notice you must give to end your employment is [notice period required from director].
The Company may end your employment at any time by giving you [notice period required from the company] or the statutory notice you're entitled to, whichever is longer.
A notice period for a director is typically 3-6 months, but this can be longer for particularly specialised roles.
Notwithstanding the foregoing, the Company may terminate this Agreement immediately in the event of any misconduct, breach of fiduciary duty, or disqualification as a director.
Upon termination of your employment, or at any other time on request, you must immediately return all Company property in your possession or control, including but not limited to documents, files, records, equipment, devices, keys, access cards, and any data stored on personal devices. You must permanently delete all Company information from any personal devices or storage systems, except where required by law to retain it.
Garden Leave
Upon the termination of your employment for any reason, you may be placed on "garden leave". During this period, the Company may require you to:
Cease performing all or any of your duties and obligations.
Resign from any committee or officer positions you hold within the Company or any Group Company.
Not attend or vote at meetings of the board of directors or any committee of the board, except where your attendance or participation is required by law.
Not attend any office or place of business.
You will continue to receive your normal salary, benefits, and other contractual remuneration until your termination date. During garden leave, you remain an employee, and you must continue to comply with all terms of your employment contract, including confidentiality and non-solicitation clauses.
For the avoidance of doubt, your office as a statutory director continues during garden leave unless and until you resign or are removed in accordance with the Company’s Articles of Association or applicable law. While on garden leave you must continue to comply with your statutory duties as a director under the Companies Act 2006.
Payment in Lieu of Notice (PILON)
The Company may, at its sole discretion, terminate your employment with immediate effect without requiring you to work your notice period. In this event, you will receive a lump sum payment equivalent to your [pilon payment] for your notice period of [number] months.
This payment will be subject to standard deductions for tax and National Insurance.
Resignation as director
Upon termination of your employment for any reason, you will immediately resign your office as director and any other appointments you hold with the Company or any Group Company, without compensation.
Collective agreements
Can be provided later, but must be provided within 2 months of the start of employment
A 'collective agreement' is an agreement an employer has with employees' representatives (including trade unions) that allow terms and conditions like pay or working hours to be negotiated on behalf of employees.
Use either A or B
There are no collective agreements affecting your directorship or employment.
[dates and parties involved in collective agreements for this contract].
Grievances
If you need to raise a grievance, you should put it in writing to [grievance contact].
Use either A, B or C
The grievance procedure which applies to you is attached to this statement.
The grievance procedure which applies to you can be found [location of grievance procedure].
You should use this grievance procedure: [details of grievance procedure explained].
Disciplinary rules and procedures
Use either A, B or C
The disciplinary rules which apply to you are attached to this statement.
The disciplinary rules which apply to you can be found [location of disciplinary rules].
The disciplinary rules which apply to you are [details of disciplinary rules].
If you're unhappy with any disciplinary decision taken in relation to you, you can appeal by writing to [disciplinary appeal to].
Confidentiality
You must not, during your employment or at any time after it ends, use, disclose or communicate to any person any confidential information relating to the Company, its clients, suppliers, partners, employees or any other third parties connected with the Company, except where such disclosure is required in the proper performance of your duties or where the information is already lawfully in the public domain. “Confidential information” includes, without limitation, business plans, financial information, pricing, trade secrets, customer and supplier lists, technical data, software, processes, know-how, employee details, and any information marked or reasonably understood to be confidential.
You must take all reasonable steps to protect the confidentiality of such information and to prevent its unauthorised use or disclosure. You must return to the Company, on request or on termination of your employment, all documents, records, correspondence, data, equipment and other materials (whether in hard copy or electronic form) containing or relating to confidential information, and you must not retain any copies.
This obligation does not prevent you from making a protected disclosure under the Public Interest Disclosure Act 1998 or from disclosing information where required by law or by a regulatory authority.
Intellectual Property
Ownership of IP. Any intellectual property (IP), including inventions, designs, developments, software, processes, methodologies, or creative works, which you create, develop, or contribute to during the course of your employment, either alone or jointly with others, and which relates to the Company's business or results from the use of Company resources, shall be the Company's exclusive property to the fullest extent permitted by law. You agree to assign and do hereby assign to the Company all rights, title, and interest in such IP.
Moral Rights. To the extent permitted by law, you waive any moral rights you may have in any IP created in the course of your employment. You agree, on request and at the Company's expense, to sign any documents and take any actions reasonably necessary to secure, perfect, or enforce the Company's rights in such IP.
Assistance Post-Termination. You agree to provide reasonable assistance, at the Company's expense, after the end of your employment, including signing documents and providing information, to protect, register, or enforce any IP created during your employment.
Pre-Existing IP / Third-Party IP. You must disclose in writing any IP that you developed prior to your employment which may be used during your employment. You represent that the IP you create for the Company will not infringe the rights of any third party. Any third-party IP incorporated into the Company's projects must be approved in writing and used in accordance with applicable licences.
Use of Company IP. You shall not use, reproduce, or disclose any of the Company's IP for purposes other than the performance of your duties, both during and after your employment, except as required by law or with the Company's prior written consent.
Confidentiality Intersection. This IP clause operates alongside the Confidentiality provisions of this agreement. All IP-related information is considered confidential.
Conflicts of Interest
You must disclose any actual or potential conflict of interest. You must not undertake outside employment or consultancy work without prior written consent.
Restrictive Covenants
You acknowledge that, during your employment, you will have access to confidential information, strategic plans, trade connections, and key business relationships. To protect the Company's legitimate business interests, including confidential information, customer relationships, workforce stability, and goodwill, you agree to the following restrictions after termination. For the purposes of this Section:
"Restricted Business: means any business that competes with the Company or any Group Company in which you were materially involved in the 12 months before termination.
Make sure the definition of Restricted Business above is not too broad, as it will be unenforceable. You MUST include a list of market sectors or business areas the company operates in, a geographic scope if relevant, and a carve-out permitting passive investments ("Nothing in this clause prevents you from holding up to 5% of shares in a publicly listed company as a passive investment").
"Restricted Customer" means any client, customer, supplier, prospect, or business partner with whom you had material dealings in the 12 months before termination.
"Restricted Employee" means any employee, worker, or contractor who worked closely with you, or held a senior, managerial, technical, sales, client-facing, or strategically significant role during the 12 months before termination.
Non-Competition. For six (3) months after termination, you shall not work for, engage in, or be concerned with any Restricted Business in a role similar to that performed for the Company, or in any role in which you would reasonably be expected to use or disclose the Company's confidential information.
If you wish for a longer non-compete, make sure to check the legal limit for post-termination non-competes, as there is the potential for anything longer than 3 months to be unenforceable under new employment law reforms.
Non-Solicitation of Customers. For twelve (12) months after termination, you shall not solicit or endeavour to solicit any Restricted Customer to provide goods or services that compete with those offered by the Company.
Non-Dealing With Customers. For twelve (12) months after termination, you shall not provide goods or services to, or deal with, any Restricted Customer in competition with the Company, whether or not approached by the customer.
Non-Poaching of Employees. For twelve (12) months after termination, you shall not solicit, induce, encourage, or employ any Restricted Employee.
Non-Interference. For twelve (12) months after termination, you shall not interfere with or disrupt relationships between the Company and its customers, suppliers, employees, contractors, investors, or other business partners.
Any period of Garden Leave served prior to termination shall reduce the duration of each restriction on a day-for-day basis.
If any restriction is found unenforceable, it shall apply with only such modifications as are necessary to make it valid. Each restriction is independent and the unenforceability of one does not affect the others.
Health and safety
You must comply with the Company's health and safety policies while performing work, and report any hazards, accidents, or unsafe conditions immediately.
Data protection
If you process personal data on the Company's behalf, you agree to comply with UK data protection law and any instructions the Company gives.
You must take appropriate technical and organisational measures to keep personal data secure. Your personal data will be processed in accordance with the Company’s Employee Privacy Notice, which will be provided to you separately.
Ensure to provide the privacy notice.
Warranties
You warrant that:
You are legally able to service as a director and are not an undischarged bankrupt or subject to a disqualification order.
You are free to enter into this employment and are not bound by any conflicting obligation.
Your service will comply with all applicable laws.
Any materials you provide will not infringe the rights of third parties.
Indemnity and Liability
The Company will indemnify the Director for any liabilities arising from proper execution of their duties, except in cases of misconduct or fraud.
Miscellaneous Provisions
This Agreement constitutes the full understanding between the parties. It may not be assigned without the prior written consent of both parties.
Neither party shall be liable for failure or delay caused by events beyond their reasonable control, including acts of God, strikes, war, or government action. The affected party must notify the other promptly. If the event continues for more than 90 days, either party may terminate the Agreement.
A failure or delay in exercising any right under this Agreement does not waive that right. Any waiver must be in writing.
If any provision is invalid or unenforceable, it shall be modified or removed to the minimum extent necessary, and the rest of the Agreement shall remain in effect.
Governing law and jurisdiction
This agreement is governed by the law of England and Wales, and any dispute will be subject to the courts of England and Wales.
Please sign and return the statement to confirm you've received and accepted these terms.
Director's signature:
Date:
Manager's signature on behalf of the organisation:
Date:
About this template
What is this template?
Director's Service Agreement is a free, ready-to-use Service Agreements template you can open, customize, and download on GitLaw. It gives you a professionally structured starting point, so you never have to draft from a blank page. The wording is plain and modern, organized into clear sections that are easy to read, edit, and adapt to your own situation before you share or sign it.
When should you use it?
Reach for this Service Agreements template whenever you need a reliable agreement quickly and want to be sure the essentials are covered. It suits individuals, freelancers, startups, and established businesses alike. Instead of paying for a document drafted from scratch, you can start here, tailor the details to your arrangement, and have a polished draft ready in minutes. This version is drafted with England & Wales in mind, though you should always review the final wording against the laws that apply to you.
What's typically included?
A well-drafted Service Agreements usually sets out the parties involved, the scope of the agreement, and each side's rights and responsibilities. Expect sections covering key terms and definitions, how long the agreement lasts, how it can be ended, and what happens if something goes wrong. This template brings those building blocks together in a sensible order, so you can focus on the specifics rather than worrying about what to include. Open it to read the full document, then sign up to edit, negotiate, and e-sign it directly in GitLaw.