Director’s service agreement

THIS AGREEMENT IS MADE ON 10 JULY 20… BETWEEN:

(1) PREMIUM TOURS LIMITED (‘the Company’), whose registered office is at 44 Princess Diana Walk, South Kensigton, London, W2 3SL

AND

(2) DAVID KENT (‘the Sales Director’) of 4 Kensigton Palace Gardens, London, W2 4AJ.

IT IS HEREBY AGREED that the aforesaid David Kent will serve as Sales Director of Premium Tours Limited on the following terms and conditions.

1. DEFINITIONS

In the agreement the following expressions shall have the meanings set out below:

1.1 ‘the Board’ — the board of directors of the company

1.2 ‘intellectual property’ — trade marks, copyrights, inventions and confidential information

2. TERMS OF ENGAGEMENT

2.1 The Sales Director shall be employed by the Company for an initial fixed-term period of three years commencing from 10 July 20…. This agreement may be terminated thereafter by either party providing to the other not less than six months’ notice in writing.

3. DUTIES

3.1 The Sales Director shall during his employment with the Company:

3.1.1 endeavour to promote and develop business on behalf of the Company

4. REMUNERATION

4.1 The Sales Director shall be paid an annual salary of £75,000, payable monthly in arrears on the 28^th of each month by direct credit transfer.

5. COMPANY VEHICLE

5.1 The Company shall provide the Sales Director with a Mercedes 300E motorcar and will pay all running costs of said vehicle, including insurance and maintenance.

6. PENSION SCHEME

6. 1 The Sales Director will throughout his employment with the Company be eligible to become and remain a member of the Company’s pension scheme. The Company will pay into Company’s pension scheme on behalf of the Sales Director an amount equal to 4% of his annual salary during his employment with the Company.

7. HOLIDAY ENTITLEMENT

7.1 The Sales Director shall be entitled to 25 working days’ holiday in each calendar year. This is in addition to normal public holidays.

8. CONFIDENTIALITY

8.1 In order to protect confidentiality of the Company’s affairs, business and/or intellectual property rights, the Sales Director hereby agrees not to disclose to any other party during the course of his employment or thereafter any confidential information relating to the Company nor to use any such information in any way for any purpose following termination of employment with the Company. This restriction is to remain valid for a period of 12 months from termination of the Sales Director’s employment with the Company.

9. RESTRAINT OF TRADE

9.1 The Sales Director hereby covenants with the Company that he shall not for a period of 12 months following termination of employment with the Company either directly or indirectly engage in or be involved in any activity or business in competition with the Company.

10. LEGAL JURISDICTION

10.1 This agreement shall be governed by English law and the parties hereby submit to the exclusive jurisdiction of the English courts.

SIGNED BY John Richardson

For and on behalf of Premium Tours Limited

SIGNED BY David Kent

Of 4 Kensigton Palace Gardens, London, W2 4AJ

Dated this 10^th day of July 20….

III. Match the following English and Ukrainian words and phrases:

payable in arrears	закінчення терміну служби, роботи
credit transfer	взяти на себе зобов’язання згідно з угодою
running costs	керівник відділу збуту
maintenance	розкривати конфіденційну інформацію
Sales Director	кредитний переказ
to disclose confidential information	експлуаційні витрати
termination of employment	сплачуваний пізніше
to covenant	технічне обслуговування

IV. Answer the questions concerning David Kent’s service agreement, while also citing the specific clause of the service agreement providing the source of your answer.

1. When does David Kent’s service contract commence?

2. David Kent’s service agreement is a fixed-term agreement. For what period of time?

3. What if any specific duties does Kent have under the agreement?

4. What is Kent’s annual salary?

5. What other benefits is Kent provided with under the terms of the agreement?

6. Will Kent be in breach of the service agreement if he does establish his own business in competition to Premium Tours and if so why?

7. Which legal jurisdiction are any disputes between the parties to be resolved under according to the terms of the agreement?

8. Why would a Bushell v Faith clause not assist David Kent in seeking to prevent his removal from the board?

V. The following document is a draft letter of advice to John Richardson. It contains a number of omissions. Complete the letter by filling in the blank spaces with appropriate words given below:

remove, ordinary(2), Section 303, vote, shareholders (2), compensation, representations, director, breach of contract, resolution(2), notice(2), voted, majority, removal, shares, negotiating, meeting, settlement/agreement, agreement, shareholding, pass, fixed-term.

Dear Mr Richardson

Re. Removal of David Kent from the Board of Premium Tours Limited

I now write to advise you on the legal position concerning your wish to remove Mr Kent from the board.

Procedure for Removal

(1) of the Companies Act 1985 (CA) enables the (2)______________of a company to remove a (3) from office. The procedure required is basically as follows. An ordinary (4)____________ will have to be passed by the shareholders, requiring a simple (5)________ (i.e. over 50% of the votes cast). This criterion does not appear to present a problem since Mr Kent does not hold any (6)________ in the company despite being a director. He does not therefore personally possess any voting power with which to oppose the (7) _________proposing his removal.

In addition, your personal (8) amounts to 70% of the company’s authorised and issued share capital. This means you control over 50% of the votes available. You are therefore able to (9)_______ the required (10) resolution regardless of whether the other shareholders (11) for or against the resolution.

Mr Kent does however have the right to have any written (12)______________ he may wish to make in his defence distributed to the (13) prior to the resolution being (14) upon. Twenty-one days (15) is required of the shareholders’ (16)_________ at which the resolution will be proposed.

Possible Consequences of Removal

I have reviewed the copy of Mr Kent’s service (17) . It is important to appreciate that this is a threee year (18) ___________contract and that two and a half years of this term remains unexpired. While therefore it will be possible to (19) Mr Kent from the board by (20) resolution as set out above, this is likely to prove expensive to the company. In particular, Mr Kent will have a meritorious claim for (21) on the basis of (22) of . In addition, there is a six months’ (23) provision upon culmination of the three-year period. He will therefore be able to claim damages for monies remaining payable under the agreement (i.e. three year’s earnings). With a view to seeking to minimise the cost of Mr David’s (24) from the board I would be pleased to assist you in (25) a mutually beneficial (26) . I look forward to receiving you further instructions.

Your sincerely,

VI. Select from the letter of advice you have now completed alternative words or phrases similar in meaning to each of the following:

1. members of a company	S - - - - - - - - - -
2. amount of shares a person possesses	S - - - - - - - - - -
3. submissions	R - - - - - - - - - -
4. gathering of shareholders	S - - - - - - - - - - m - - - - - - -
5.resolution passed by simple majority	O - - - - - - - - - r - - - -- - - -
6. contract for a specific period of time	F - - - - - - - t - - - - - - c - - -- - -- -

VII. The first parts of complete sentences are listed in the first column below. Complete each of these sentences by matching each of these parts with its corresponding part in the second column:

1. If a settlement is reached this will result in	by English law
2.A carefully drafted confidentiality clause	per s. 303 Companies Act 1985
3.David Kent’s service contract is governed by	another agreement!
4.Removing a director will not prevent	can protect a company’s trade secret
5.Shareholders can remove a director by ordinary resolution	a breach of contract claim

VIII. In pairs, role-play a meeting between John Richardson and his lawyer for the purpose of providing John Richardson with advice on the law and procedure involved in removing David Kent from the board. One of you should play the role of the client John Richardson and the other the role of the lawyer. The person role-playing the client should be prepared to ask relevant questions. The person playing the lawyer’s role should be prepared to provide relevant advice. If you are working on your own then imagine that you are the lawyer about to meet with John Richardson and make notes of the advice you would provide at the meeting.

IX. Translate into English:

1. Керівник відділу збуту не має права розкривати іншій стороні конфіденційну інформацію стосовно діяльності компанії.

2. Керівник відділу збуту зобов’язується впродовж 12 місяців після закінчення трудової угоди не займатися діяльністю, яка б склала конкуренцію компанії.

3. Ця угода регулюється англійським правом.

4. Якщо директор не є акціонером компанії, то він не має права голосу, щоб протистояти рішенню щодо його звільнення.