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Reappointment of managing director

Sowmya.S.Balan (Paid Assistant) (749 Points)

24 April 2012

dear sirs

can any one provide me format of notice, resolution and explanatory statement for reappointment of managing director

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Shruti_D (ACS) (453 Points)
Replied 24 April 2012

Formats appended below for reference.

Kindly check the relevant provisons of re appointment of MD at ur end and accordingly make changes.

Hope it serves the purpose.

Board resolution:

Consideration and approval of the re-appointment of Mr. A as the Managing Director of the Company:

The Board was informed that vide its Resolution dated ____(date of old board resolution of apptmt/ reappmt), had approved the re-appointment of Mr. A as the Managing Director of the Company for a period of five years with effect from ____. The said term would expire on ____.

(Brief profile of Mr. A.)

It was now proposed to re-appoint him as Managing Director of the Company with effect from ______ for a further period of 5 years on the same terms and conditions of remuneration as were paid to him earlier. The details of the same are as under:

1. Tenure of Appointment : 5 years with effect from ______.

2. Salary & Perquisites : Mr. A would be paid salary as detailed below:

No.	Particulars
I.	Salary	:
II.	Perquisites:
A.	House Rent Allowance	:
B	Discretionary Allowance	:
C.	Provident Fund	:
D.	Car	:
E.	Others	:
III.	Benefits and amenities:
A.	Gratuity	:

3. The appointment would be terminable from either side by giving 3 months notice in writing.

4. If the said appointment ceased before the agreement period of 5 years, no compensation would be payable to Mr. A, for the unexpired period.

It is further informed that the appointment and payment of the remuneration, perquisites and amenities would be subject to the provisions of sections 198, 269, 309 and Schedule XIII and such other applicable provisions, if any, of the Companies Act,1956 and also subject to the approval of shareholders at the ensuing Annual General meeting of the Company.

Notwithstanding anything to contrary herein, where in any financial year during the currency of tenure of the Managing Director, the Company has no profits or inadequate profits, the Company would pay Mr. A remuneration/ perquisites not exceeding the ceiling laid down in Section II of Part II of Schedule XIII of the Companies Act, 1956, and as would be decided by the Board of Directors.

The Board discussed the matter and passed the following Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 198,269,309 and Schedule XIII and subject to other provisions, if any, of the Companies Act, 1956, including any statutory modification or any amendment or any substitution or re-enactment thereof for the time being in force, and subject to the approval of the members and such other statutory approvals as may be required, Mr. A be and is hereby re-appointed as the Managing Director of the Company for a period of 5 years with effect from _____ on the same terms and conditions of remuneration as were paid to him earlier. The details of the same are as under:

No.	Particulars
I.	Salary	:
II.	Perquisites:
A.	House Rent Allowance	:
B	Discretionary Allowance	:
C.	Provident Fund	:
D.	Car	:
E.	Others	:
III.	Benefits and amenities:
A.	Gratuity	:

"RESOLVED FURTHER THAT the Managing Director shall perform such duties and services as shall from time to time be entrusted to him including the powers exercisable by the Board under the Articles of Association of the Company and shall undertake to use his best endeavours to promote the interests of the Company and comply with such orders and directions as may be given to him by the Board from time to time.”

"RESOLVED FURTHER THAT no sitting fees shall be paid to the Managing Director, for attending the Meetings of the Board of Directors of the Company or Committees thereof".

"RESOLVED FURTHER THAT during such time as Mr. A holds and continues to hold the office of Managing Director of the Company, he shall not be liable to retire by rotation.”

"RESOLVED FURTHER THAT in the event of loss or inadequacy of profits in any financial year during the aforesaid period, the Company will pay Mr. A remuneration, perquisites not exceeding the ceiling laid down in Section II of Part II of Schedule XIII of the Companies Act, 1956, as may be decided by the Board of Directors".

"RESOLVED FURTHER THAT any Director of a Company be and is hereby authorized to do all such acts deeds and things as may be necessary, expedient or desirable for the purpose of giving effect to this resolution."

Mr. B, Mr. C and Mr. A being interested in the said resolution did not participate nor vote on the said resolution.

NOTICE

SPECIAL BUSINESS:

To consider, and if thought fit, to pass with or without modification, the following resolution as a Special Resolution:

"RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309 read with Schedule XIII and other applicable provisions of the Companies Act, 1956, including any Statutory modification or re-enactment thereof, for the time being in force, the Company in general meeting hereby approves the re-appointment of Mr. A as Managing Director of the Company for period of five years with effect from _____________ on the same terms and conditions of remuneration as were paid to him earlier, which are set out in the explanatory statement annexed to this Notice.”

"RESOLVED FURTHER THAT in the event of loss or inadequacy of profits in any financial year during the aforesaid period, the Company shall pay to Mr. A remuneration and perquisites not exceeding the ceiling limit laid down in Section II of Part II of Schedule XIII of the Companies Act, 1956, as may be decided by the Board of Directors".

"RESOLVED FURTHER THAT the Board of Directors of the Company be and are hereby authorised to vary any of the terms of remuneration in consultation with Managing Director provided such variation is in accordance with the provisions of Schedule XIII of the Companies Act, 1956 and/ or the provisions of law as may be applicable thereto from time to time."

ANNEXURE TO NOTICE

Explanatory statements Under Section 173 of the Companies Act, 1956

1. The Board vide its Resolution dated ___________ had approved the re-appointment of Mr. A as the Managing Director of the Company for a period of five years with effect from __________ on same terms and conditions of remuneration as were paid to him earlier. The details of the same are as under:

No.	Particulars
I.	Salary	:
II.	Perquisites:
A.	House Rent Allowance	:
B	Discretionary Allowance	:
C.	Provident Fund	:
D.	Car	:
E.	Others	:
III.	Benefits and amenities:
A.	Gratuity	:

2. (brief Profile of director).

3. The aforesaid appointment would be terminable from either side by giving 3 months notice in writing.

4. If the aforesaid appointment is ceased before the agreement period of 5 years, no compensation would be payable to Mr. A, for the unexpired period.

5. Where in any financial year during the currency of tenure of the Managing Director, the Company had no profits or inadequate profits, the Company would pay Mr. A, remuneration, perquisites not exceeding the ceiling laid down in Section II of Part II of Schedule XIII of the Companies Act, 1956, and as would be decided by the Board of Directors.

6. The terms and conditions of remuneration may be varied from time to time by the Board as it may, in its discretion, deem fit, in consultation with Managing Director provided such variation is in accordance with the provisions of Schedule XIII of the Companies Act, 1956 and/ or the provisions of law as may be applicable thereto from time to time.

7. The Managing Director shall not be entitled to receive any fees for attending the Meetings of the Board of Directors of the Company or Committees thereof.

8. The remuneration package of Mr. A and other details such as remuneration, service contract, notice period, etc. have been disclosed above. The Company does not have any scheme for grant of stock options.

The Board recommends the approval by the members of the re-appointment of Mr. A as the Managing Director and payment of remuneration to him.

Mr. B, Mr. C and Mr. A are concerned or interested in the said resolution at item no. __ accompanying notice.

The above may be treated as an abstract of the terms of re-appointment payable to Mr. A, as Managing Director as required, pursuant to section 302 of the Companies Act, 1956.

DIRECTORS’ REPORT

DIRECTORS:

Re-appointment of Managing Director:

The Board at its Meeting held on ____- had approved, subject to the approval of shareholders, the re-appointment of Mr. A as the Managing Director of the Company with effect from _________on the same terms and conditions of remuneration as were paid to him earlier. The necessary Resolution for the approval of the same is covered in the Notice convening the Annual General Meeting.

AGM RESO:

“RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309 read with Schedule XIII and other applicable provisions of the Companies Act, 1956, including any Statutory modification or re-enactment thereof, for the time being in force, the Company in general meeting hereby approves the re-appointment of Mr. A as Managing Director of the Company for period of five years with effect from _________- on the same terms and conditions of remuneration as were paid to him earlier, which are set out in the explanatory statement annexed to the Notice.”