NOTE: The resolution sample here is only for reference to help you with drafting. Do refer the relevant provisions of the Companies Act, rules framed thereunder and any other applicable laws to be able to not miss out anything important while drafting.SAMPLE
#. Appointment of Ms./Mr. ............. ................... as CEO & Managing Director
To consider and, if thought fit, to pass the following resolution, with or without modification(s), as an Ordinary Resolution:-
“RESOLVED THAT pursuant to the provisions of Sections 196, 197, 203 and other applicable provisions, if any, of the Companies Act, 2013 ("the Act"), including any statutory modifications or re-enactments thereof for the time being in force, read with Schedule V to the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, the consent of the members of the company be and is hereby accorded for the appointment and terms of remuneration of Mr./Ms. .......... ................. (DIN: ................) as the CEO & Managing Director of the company for a period of five years from (Date) to (Date), upon the terms and conditions set out in the Explanatory Statement annexed to the Notice convening this meeting (including the remuneration to be paid in the event of loss or inadequacy of profits in any financial year during the tenure of his appointment), with liberty to the Board of Directors ("the Board") to alter and vary the terms and conditions of the said appointment in such manner as may be agreed upon between Mr./Ms. ........ .......... and the Board.
FURTHER RESOLVED THAT the Board of Directors of the company (which term shall be deemed to include any Committee of the Board constituted to exercise its powers, including the powers conferred by this Resolution) be and is hereby authorised to take all such steps as may be necessary, proper and expedient to give effect to this Resolution.”
.....................................................
Explanatory Statement
As required by Section 102 of the Companies Act, 2013 ("the Act"), the following Explanatory Statement sets out all material facts relating to the business mentioned under Item No. ... of the accompanying Notice dated ..............:
The Board of Directors of the company ("the Board") has appointed Mr./Ms. ............. ................ as CEO and Managing Director of the company for a period from (Date) to (Date), subject to approval of the Members. Mr./Ms. ............. ................ has over ....decades of experience in the ........ sector and has been a key player in the development of .....................
Mr./Ms. ............. ................ holds a Degree in .................................... (Mention brief details on his/her educational profile.)
Mr./Ms. ............. ................ was the CEO & Managing Director of .......... (Mention brief details on previous employment.)
The principal terms and conditions of Mr./Ms. ............. ................’s appointment as CEO & Managing Director (hereinafter referred to as ‘Mr./Ms. ............. ................’ or the ‘CEO & Managing Director’) are as follows:
1. Term and Termination:
1.1 From (Date) to (Date).
1.2 The Agreement may be terminated earlier, without any cause, by Mr./Ms. ............. ................ or the company by giving ...months’ notice of such termination to the other party or the company paying ...months’ remuneration which shall be limited to provision of Salary, Benefits, Perquisites, Allowances and any prorated Incentive Remuneration (paid at the discretion of the Board), in lieu of such notice.
2. Duties and Powers:
2.1 The CEO & Managing Director shall devote his whole time and attention to the business of the company and perform such duties as may be entrusted to him by the Board from time to time and separately communicated to him and exercise such powers as may be assigned to him, subject to the superintendence, control and directions of the Board in connection with and in the best interests of the business of the company and the business of one or more of its associated companies and/or subsidiaries, including performing duties as assigned to the CEO & Managing Director from time to time by serving on the boards of such associated companies and/or subsidiaries or any other executive body or any committee of such a company.
2.2 The CEO & Managing Director shall not exceed the powers so delegated by the Board pursuant to clause 2.1 above.
2.3 The CEO & Managing Director undertakes to employ the best of his skill and ability and to make his utmost endeavours to promote the interests and welfare of the company and to conform to and comply with the policies and regulations of the company and all such orders and directions as may be given to him from time to time by the Board.
2.4 The CEO & Managing Director shall undertake his duties from such location as may be directed by the Board.
3. Remuneration:
3.1 So long as the CEO & Managing Director performs his duties and conforms to the terms and conditions contained in his Agreement, he shall, subject to such approvals as may be required, be entitled to the following remuneration subject to deduction at source of all applicable taxes in accordance with the laws for the time being in force:
A) Basic Salary: INR .............. per month upto a maximum of INR .............. per month, with the authority of the Board to fix his salary within the said maximum amount from time to time. The annual increments which will be effective 1st April each year, will be decided by the Board and will be merit based and take into account the company’s performance as well
B) Benefits, Perquisites, Allowances: In addition to the Basic Salary referred to in (A) above, the CEO & Managing Director shall be entitled to:
a) Rent-free residential accommodation (furnished or otherwise), the company bearing the cost of repairs, maintenance, society charges and utilities (e.g. gas, electricity and water charges) for the said accommodation.
OR
House Rent, House Maintenance and Utility Allowances aggregating 85% of the basic salary (in case residential accommodation is not provided by the company).
b) Hospitalisation, Transport, Telecommunication and other facilities:
i) Hospitalisation and major medical expenses for self, spouse and dependent (minor) children;
ii) Car, with driver provided, maintained by the company for official and personal use. If this is not availed, Mr./Ms. ............. ................ will be paid a monthly allowance of INR ................ per month to cover the cost of the vehicle, fuel, maintenance and driver. This amount will be fully taxable in his hands.
iii) Telecommunication facilities including broadband, internet and mobile.
iv) Housing Loan as per the Rules of the company.
c) Other perquisites and allowances given below subject to a maximum of 50% of the basic salary, comprising the following:
(i) Allowances 30% (ii) Leave Travel Concession/Allowance 7.5% (iii) Medical allowance 7.5% [Total 45%]
(iv) Personal Accident Insurance @ actuals subject (v) Club Membership fees of 2 clubs [to a cap of 5%]
d) Contribution to Provident Fund, Superannuation Fund or Annuity Fund and Gratuity Fund as per the Rules of the company. In case there is no contribution to a Superannuation Fund, the same would be payable as an allowance as per the Rules of the company.
e) The CEO & Managing Director shall be entitled to leave in accordance with the Rules of the company. Annual Leave earned but not availed by the CEO & Managing Director is encashable in accordance with the Rules of the company.
C) Commission: In addition to Salary, Benefits, Perquisites and Allowances payable, the CEO & Managing Director would be paid such remuneration by way of Commission, calculated with reference to the net profits of the company in a particular financial year, as may be determined by the Board of the company at the end of each financial year, subject to the overall ceilings stipulated in Section 197 of the Act. The specific amount payable to the CEO & Managing Director will be based on his performance as evaluated by the Board or the Nomination and Remuneration Committee and approved by the Board and will be payable annually after the annual accounts have been adopted by the Board.
D) Incentive Remuneration: Such incentive remuneration not exceeding 200% of salary to be paid at the discretion of the Board annually, based on certain performance criteria and such other parameters as may be considered appropriate from time to time.
4. The terms and conditions of the appointment of the CEO & Managing Director and/or the Agreement may be altered and varied from time to time by the Board as it may, in its discretion deem fit, irrespective of the limits stipulated under Schedule V to the Act or any amendments made hereafter in this regard in such manner as may be agreed to between the Board and the CEO & Managing Director, subject to such approvals as may be required.
5. The CEO & Managing Director, so long as he functions as such, undertakes not to become interested or otherwise concerned, directly or through his spouse and/or children, in any selling agency of the company.
6. All Personnel Policies of the company and the related Rules which are applicable to other employees of the company shall also be applicable to the CEO & Managing Director, unless specifically provided otherwise.
7. The employment of the CEO & Managing Director may be terminated by the company without notice or payment in lieu of notice:
a. if the CEO & Managing Director is found guilty of any gross negligence, default or misconduct in connection with or affecting the business of the company or any subsidiary or associated company to which he is required by the Agreement to render services; or
b. in the event of any serious or repeated or continuing breach (after prior warning) or nonobservance by the CEO & Managing Director of any of the stipulations contained in the Agreement; or
c. in the event the Board expresses its loss of confidence in the CEO & Managing Director.
8. In the event the CEO & Managing Director is not in a position to discharge his official duties due to any physical or mental incapacity, the Board shall be entitled to terminate his contract on such terms as the Board may consider appropriate in the circumstances.
9. Upon the termination by whatever means of his employment under the Agreement:
a. the CEO & Managing Director shall immediately cease to hold offices held by him in any holding company, subsidiaries or associate companies without claim for compensation for loss of office by virtue of Section 167(1)(h) of the Act and shall resign as trustee of any trust connected with the company;
b. the CEO & Managing Director shall not without the consent of the company at any time thereafter represent himself as connected with the company or any of its subsidiaries and associated companies.
10. If and when the Agreement expires or is terminated for any reason whatsoever, Mr./Ms. ............. ................ will cease to be the CEO & Managing Director and also will cease to be a Director of the company. If at any time, the CEO & Managing Director ceases to be a Director of the company for any reason whatsoever, he shall cease to be the CEO & Managing Director and the Agreement shall forthwith terminate. If at any time, the CEO & Managing Director ceases to be in the employment of the company for any reason whatsoever, he shall cease to be a Director and CEO & Managing Director of the company.
11. The terms and conditions of the appointment of the CEO & Managing Director also include clauses pertaining to adherence with the company's Code of Conduct, Intellectual Property, maintenance of confidentiality, non-competition and non-solicitation.
In compliance with the provisions of Sections 196, 197, 203 and other applicable provisions of the Act, read with Schedule V to the Act, the terms of remuneration specified above are now being placed before the Members for their approval.
Other than Mr./Ms. ............. ................ and his relatives, none of the Directors or KMP of the company or their respective relatives are concerned or interested in the Resolutions at Item No. ... of the accompanying Notice. Mr./Ms. ............. ................ is not related to any other Director or KMP of the company.
The Board is of the view that the appointment of Mr./Ms. ............. ................ as CEO & Managing Director will be beneficial to the functioning and future growth opportunities of the company and the remuneration payable to him is commensurate with his abilities and experience and, accordingly.
The Board commends the Resolution at Item No. ... of the accompanying Notice for approval by the Members of the company.
Mr./Ms. ............. ................ holds a Degree in .................................... (Mention brief details on his/her educational profile.)
Mr./Ms. ............. ................ was the CEO & Managing Director of .......... (Mention brief details on previous employment.)
The principal terms and conditions of Mr./Ms. ............. ................’s appointment as CEO & Managing Director (hereinafter referred to as ‘Mr./Ms. ............. ................’ or the ‘CEO & Managing Director’) are as follows:
1. Term and Termination:
1.1 From (Date) to (Date).
1.2 The Agreement may be terminated earlier, without any cause, by Mr./Ms. ............. ................ or the company by giving ...months’ notice of such termination to the other party or the company paying ...months’ remuneration which shall be limited to provision of Salary, Benefits, Perquisites, Allowances and any prorated Incentive Remuneration (paid at the discretion of the Board), in lieu of such notice.
2. Duties and Powers:
2.1 The CEO & Managing Director shall devote his whole time and attention to the business of the company and perform such duties as may be entrusted to him by the Board from time to time and separately communicated to him and exercise such powers as may be assigned to him, subject to the superintendence, control and directions of the Board in connection with and in the best interests of the business of the company and the business of one or more of its associated companies and/or subsidiaries, including performing duties as assigned to the CEO & Managing Director from time to time by serving on the boards of such associated companies and/or subsidiaries or any other executive body or any committee of such a company.
2.2 The CEO & Managing Director shall not exceed the powers so delegated by the Board pursuant to clause 2.1 above.
2.3 The CEO & Managing Director undertakes to employ the best of his skill and ability and to make his utmost endeavours to promote the interests and welfare of the company and to conform to and comply with the policies and regulations of the company and all such orders and directions as may be given to him from time to time by the Board.
2.4 The CEO & Managing Director shall undertake his duties from such location as may be directed by the Board.
3.1 So long as the CEO & Managing Director performs his duties and conforms to the terms and conditions contained in his Agreement, he shall, subject to such approvals as may be required, be entitled to the following remuneration subject to deduction at source of all applicable taxes in accordance with the laws for the time being in force:
A) Basic Salary: INR .............. per month upto a maximum of INR .............. per month, with the authority of the Board to fix his salary within the said maximum amount from time to time. The annual increments which will be effective 1st April each year, will be decided by the Board and will be merit based and take into account the company’s performance as well
B) Benefits, Perquisites, Allowances: In addition to the Basic Salary referred to in (A) above, the CEO & Managing Director shall be entitled to:
a) Rent-free residential accommodation (furnished or otherwise), the company bearing the cost of repairs, maintenance, society charges and utilities (e.g. gas, electricity and water charges) for the said accommodation.
OR
House Rent, House Maintenance and Utility Allowances aggregating 85% of the basic salary (in case residential accommodation is not provided by the company).
b) Hospitalisation, Transport, Telecommunication and other facilities:
i) Hospitalisation and major medical expenses for self, spouse and dependent (minor) children;
ii) Car, with driver provided, maintained by the company for official and personal use. If this is not availed, Mr./Ms. ............. ................ will be paid a monthly allowance of INR ................ per month to cover the cost of the vehicle, fuel, maintenance and driver. This amount will be fully taxable in his hands.
iii) Telecommunication facilities including broadband, internet and mobile.
iv) Housing Loan as per the Rules of the company.
c) Other perquisites and allowances given below subject to a maximum of 50% of the basic salary, comprising the following:
(i) Allowances 30% (ii) Leave Travel Concession/Allowance 7.5% (iii) Medical allowance 7.5% [Total 45%]
(iv) Personal Accident Insurance @ actuals subject (v) Club Membership fees of 2 clubs [to a cap of 5%]
d) Contribution to Provident Fund, Superannuation Fund or Annuity Fund and Gratuity Fund as per the Rules of the company. In case there is no contribution to a Superannuation Fund, the same would be payable as an allowance as per the Rules of the company.
e) The CEO & Managing Director shall be entitled to leave in accordance with the Rules of the company. Annual Leave earned but not availed by the CEO & Managing Director is encashable in accordance with the Rules of the company.
C) Commission: In addition to Salary, Benefits, Perquisites and Allowances payable, the CEO & Managing Director would be paid such remuneration by way of Commission, calculated with reference to the net profits of the company in a particular financial year, as may be determined by the Board of the company at the end of each financial year, subject to the overall ceilings stipulated in Section 197 of the Act. The specific amount payable to the CEO & Managing Director will be based on his performance as evaluated by the Board or the Nomination and Remuneration Committee and approved by the Board and will be payable annually after the annual accounts have been adopted by the Board.
D) Incentive Remuneration: Such incentive remuneration not exceeding 200% of salary to be paid at the discretion of the Board annually, based on certain performance criteria and such other parameters as may be considered appropriate from time to time.
5. The CEO & Managing Director, so long as he functions as such, undertakes not to become interested or otherwise concerned, directly or through his spouse and/or children, in any selling agency of the company.
6. All Personnel Policies of the company and the related Rules which are applicable to other employees of the company shall also be applicable to the CEO & Managing Director, unless specifically provided otherwise.
7. The employment of the CEO & Managing Director may be terminated by the company without notice or payment in lieu of notice:
a. if the CEO & Managing Director is found guilty of any gross negligence, default or misconduct in connection with or affecting the business of the company or any subsidiary or associated company to which he is required by the Agreement to render services; or
b. in the event of any serious or repeated or continuing breach (after prior warning) or nonobservance by the CEO & Managing Director of any of the stipulations contained in the Agreement; or
c. in the event the Board expresses its loss of confidence in the CEO & Managing Director.
8. In the event the CEO & Managing Director is not in a position to discharge his official duties due to any physical or mental incapacity, the Board shall be entitled to terminate his contract on such terms as the Board may consider appropriate in the circumstances.
9. Upon the termination by whatever means of his employment under the Agreement:
a. the CEO & Managing Director shall immediately cease to hold offices held by him in any holding company, subsidiaries or associate companies without claim for compensation for loss of office by virtue of Section 167(1)(h) of the Act and shall resign as trustee of any trust connected with the company;
b. the CEO & Managing Director shall not without the consent of the company at any time thereafter represent himself as connected with the company or any of its subsidiaries and associated companies.
10. If and when the Agreement expires or is terminated for any reason whatsoever, Mr./Ms. ............. ................ will cease to be the CEO & Managing Director and also will cease to be a Director of the company. If at any time, the CEO & Managing Director ceases to be a Director of the company for any reason whatsoever, he shall cease to be the CEO & Managing Director and the Agreement shall forthwith terminate. If at any time, the CEO & Managing Director ceases to be in the employment of the company for any reason whatsoever, he shall cease to be a Director and CEO & Managing Director of the company.
11. The terms and conditions of the appointment of the CEO & Managing Director also include clauses pertaining to adherence with the company's Code of Conduct, Intellectual Property, maintenance of confidentiality, non-competition and non-solicitation.
In compliance with the provisions of Sections 196, 197, 203 and other applicable provisions of the Act, read with Schedule V to the Act, the terms of remuneration specified above are now being placed before the Members for their approval.
Other than Mr./Ms. ............. ................ and his relatives, none of the Directors or KMP of the company or their respective relatives are concerned or interested in the Resolutions at Item No. ... of the accompanying Notice. Mr./Ms. ............. ................ is not related to any other Director or KMP of the company.
The Board is of the view that the appointment of Mr./Ms. ............. ................ as CEO & Managing Director will be beneficial to the functioning and future growth opportunities of the company and the remuneration payable to him is commensurate with his abilities and experience and, accordingly.
The Board commends the Resolution at Item No. ... of the accompanying Notice for approval by the Members of the company.
Many thanks for this help
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