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Director Fee Agreement

Director Fee Agreement Template for South Africa

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Key Requirements PROMPT example:

Director Fee Agreement

"I need a Director Fee Agreement for a non-executive director based in Australia who will be joining our South African mining company's board from March 2025, including provisions for virtual board attendance and foreign currency payments."

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Document background
The Director Fee Agreement is a fundamental governance document used when appointing or renewing terms for company directors in South Africa. It establishes clear terms for director compensation, aligning with the requirements of the Companies Act 71 of 2008 and the principles of the King IV Report on Corporate Governance. This agreement is essential for both listed and unlisted companies to formalize director remuneration arrangements, ensure regulatory compliance, and maintain transparency in corporate governance. The document typically includes comprehensive details about fee structures, payment terms, duties, and obligations, while considering tax implications and, where relevant, exchange control requirements for foreign directors. It serves as a critical reference point for both the company and the director throughout the engagement period.
Suggested Sections

1. Parties: Identification of the company and the director, including registration/ID numbers and addresses

2. Background: Context of the appointment and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Appointment and Term: Confirmation of directorship appointment and duration

5. Director's Duties and Responsibilities: Core responsibilities and obligations as per Companies Act and company requirements

6. Fee Structure: Base fees, meeting fees, and other remuneration components

7. Payment Terms: Timing and method of payment, including tax considerations

8. Expenses: Policy on reimbursement of expenses incurred in role performance

9. Compliance and Governance: Obligations regarding company policies, King IV, and relevant legislation

10. Confidentiality: Protection of company information and trade secrets

11. Termination: Circumstances and process for ending the agreement

12. General Provisions: Standard clauses including notices, entire agreement, and governing law

Optional Sections

1. Additional Board Committee Fees: Include when director serves on board committees with additional remuneration

2. Share-Based Compensation: Include if director is eligible for share options or similar schemes

3. International Travel Provisions: Include for non-resident directors or when international travel is required

4. Professional Indemnity: Include when specific indemnification beyond standard company provisions is needed

5. Non-Competition: Include for executive directors or when specific competitive restrictions apply

6. Exchange Control Provisions: Include for non-resident directors regarding payment in foreign currency

7. Performance Metrics: Include when fees are partially based on performance criteria

Suggested Schedules

1. Fee Schedule: Detailed breakdown of all fees, including base fee, meeting fees, and committee fees

2. Meeting Schedule: Annual board and committee meeting calendar if predetermined

3. Expense Policy: Detailed policy on claimable expenses and claiming procedures

4. Performance Criteria: Specific metrics and targets if performance-based compensation applies

5. Company Policies: Key company policies affecting director duties and conduct

6. Declaration of Interests: Form for declaring other directorships and potential conflicts

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Financial Services

Mining

Manufacturing

Technology

Retail

Healthcare

Energy

Telecommunications

Professional Services

Real Estate

Construction

Agriculture

Education

Transportation

Media and Entertainment

Relevant Teams

Legal

Corporate Governance

Board Secretariat

Human Resources

Finance

Compliance

Risk Management

Executive Office

Relevant Roles

Board Director

Non-Executive Director

Executive Director

Independent Director

Board Chairman

Company Secretary

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Governance Officer

Compliance Officer

Human Resources Director

Industries
Companies Act 71 of 2008: Primary legislation governing companies in South Africa, including provisions for director appointments, duties, and remuneration (particularly sections 66-78)
Income Tax Act 58 of 1962: Regulates taxation of director fees, including withholding obligations and deductibility of expenses
King IV Report on Corporate Governance: While not legislation, provides crucial guidelines on director remuneration policies and practices for South African companies
Exchange Control Regulations: Relevant if the director is a non-resident, governing how fees can be paid and transferred outside South Africa
Basic Conditions of Employment Act 75 of 1997: May be relevant in determining the nature of the director's relationship with the company, though directors are typically not employees
Protection of Personal Information Act 4 of 2013 (POPIA): Governs the processing and storage of personal information, relevant for director's personal details in agreements
Financial Intelligence Centre Act 38 of 2001: Relevant for compliance with anti-money laundering regulations, especially regarding payment of director fees
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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