188Directors' long-term service contracts: requirement of members' approvalU.K.
(1)This section applies to provision under which the guaranteed term of a director's employment—
(a)with the company of which he is a director, or
(b)where he is the director of a holding company, within the group consisting of that company and its subsidiaries,
is, or may be, longer than two years.
(2)A company may not agree to such provision unless it has been approved—
(a)by resolution of the members of the company, and
(b)in the case of a director of a holding company, by resolution of the members of that company.
(3)The guaranteed term of a director's employment is—
(a)the period (if any) during which the director's employment—
(i)is to continue, or may be continued otherwise than at the instance of the company (whether under the original agreement or under a new agreement entered into in pursuance of it), and
(ii)cannot be terminated by the company by notice, or can be so terminated only in specified circumstances, or
(b)in the case of employment terminable by the company by notice, the period of notice required to be given,
or, in the case of employment having a period within paragraph (a) and a period within paragraph (b), the aggregate of those periods.
(4)If more than six months before the end of the guaranteed term of a director's employment the company enters into a further service contract (otherwise than in pursuance of a right conferred, by or under the original contract, on the other party to it), this section applies as if there were added to the guaranteed term of the new contract the unexpired period of the guaranteed term of the original contract.
(5)A resolution approving provision to which this section applies must not be passed unless a memorandum setting out the proposed contract incorporating the provision is made available to members—
(a)in the case of a written resolution, by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to him;
(b)in the case of a resolution at a meeting, by being made available for inspection by members of the company both—
(i)at the company's registered office for not less than 15 days ending with the date of the meeting, and
(ii)at the meeting itself.
(6)No approval is required under this section on the part of the members of a body corporate that—
(a)is not a UK-registered company, or
(b)is a wholly-owned subsidiary of another body corporate.
(7)In this section “employment” means any employment under a director's service contract.
Modifications etc. (not altering text)
C1Ss. 188, 189 modified (22.2.2008) by The Northern Rock plc Transfer Order 2008 (S.I. 2008/432), art. 17(1), Sch. para. 2(g)
C2Ss. 188, 189 modified (8.00 a.m. on 29.9.2008) by the The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 (S.I. 2008/2546), art. 13(1)(3), Sch. 1 para. 2(g)
C3Ss. 188, 189 modified (9.30 a.m. on 7.10.2008) by The Heritable Bank plc Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2644), art. 26, Sch. 2 para. 2(g)
C4Ss. 188, 189 modified (retrospective to 30.3.2009 at 8.00 a.m.) by The Amendments to Law (Resolution of Dunfermline Building Society) Order 2009 (S.I. 2009/814), arts. 1(2), 7, Sch. para. 2(g)
C5Ss. 188 189 modified (1.3.2016) by The NRAM plc (formerly Northern Rock plc) Consequential and Supplementary Provisions Order 2016 (S.I. 2016/114), arts. 1(1), 7(1), (3), Sch. para. 1(g)
Commencement Information
I1S. 188 wholly in force at 1. 10.2007; s. 188 not in force at Royal Assent see s. 1300; s. 188 in force at 1.10.2007 by S.I. 2007/2194, art. 2(1)(d) (with saving in art. 12 and subject to transitional adaptations specified in Sch. 1 and with transitional provisions and savings in Sch. 3)