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Contracts of employment of directors.
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28.—(1) Subject to subsection (6), a company shall not incorporate in any agreement a term to which this section applies unless the term is first approved by a resolution of the company in general meeting and, in the case of a director of a holding company, by a resolution of that company in general meeting.
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(2) This section applies to any term by which a director's employment with the company of which he is the director or, where he is the director of a holding company, his employment within the group 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 the original agreement), for a period exceeding five years during which the employment—
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(a) cannot be terminated by the company by notice; or
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(b) can be so terminated only in specified circumstances.
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(3) In any case where—
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(a) a person is or is to be employed with a company under an agreement which cannot be terminated by the company by notice or can be so terminated only in specified circumstances; and
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(b) more than six months before the expiration of the period for which he is or is to be so employed, the company enters into a further agreement (otherwise than in pursuance of a right conferred by or by virtue of the original agreement on the other party thereto) under which he is to be employed with the company or, where he is a director of a holding company, within the group,
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subsection (2) shall apply as if to the period for which he is to be employed under that further agreement there were added a further period equal to the unexpired period of the original agreement.
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(4) A resolution of a company approving a term to which this section applies shall not be passed at a general meeting of the company unless a written memorandum setting out the proposed agreement incorporating the term is available for inspection by members of the company both—
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(a) at the registered office of the company for not less than the period of 15 days ending with the date of the meeting; and
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(b) at the meeting itself.
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(5) A term incorporated in an agreement in contravention of this section shall to the extent that it contravenes this section be void; and that agreement and, in a case where subsection (3) applies, the original agreement shall be deemed to contain a term entitling the company to terminate it at any time by the giving of reasonable notice.
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(6) No approval is required to be given under this section by any body corporate unless it is a company within the meaning of the Principal Act or registered under Part IX of that Act or if it is, for the purposes of section 150 of that Act, a wholly owned subsidiary of any body corporate, wherever incorporated.
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(7) In this section—
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(a) “employment” includes employment under a contract for services; and
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(b) “group”, in relation to a director of a holding company, means the group which consists of that company and its subsidiaries.
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