Directors’ service contracts
The offeree board circular must contain particulars of all service contracts of any director or proposed director of the offeree company with the company or any of its subsidiaries. If there are none, this should be stated.
If any such contracts have been entered into or amended within 6 months of the date of the document, particulars must be given in respect of the earlier contracts (if any) which have been replaced or amended as well as in respect of the current contracts. If there have been none, this should be stated.
NOTES ON RULE 25.5
Particulars to be disclosed
Particulars in respect of existing service contracts and, where appropriate under Rule 25.5(b), earlier contracts or an appropriate negative statement must be provided as follows:
the name of the director under contract;
the date of the contract, the unexpired term and details of any notice periods;
full particulars of the director’s remuneration including salary and other benefits;
any commission or profit sharing arrangements;
any provision for compensation payable upon early termination of the contract; and
details of any other arrangements which are necessary to enable investors to estimate the possible liability of the company on early termination of the contract.
It is not acceptable to refer to the latest annual report, indicating that information regarding service contracts may be found there, or to state that the contracts are open for inspection at a specified place.
Recent increases in remuneration
The Panel will regard as the amendment of a service contract under this Rule any case where the remuneration of an offeree company director is increased within 6 months of the date of the document. Therefore, any such increase must be disclosed in the document and the current and previous levels of remuneration stated.