| 1) |
No company shall make any payment or grant any benefit or advantage to any director or past director of the company or of its subsidiary company or holding company or of any subsidiary of its holding company- |
| a) |
by way of compensation for loss of office or as consideration for or in connection with his retirement from office: |
| b) |
by way of compensation, consideration or for any other reason, for loss or retention of office or otherwise in connection with any scheme referred to in section 313; or |
| c) |
by way of such compensation, consideration or other reason in connection with any scheme or transaction which constitutes an affected transaction as contemplated in Chapter XV(A) (hereinafter in this section referred to as a take-over offer or take-over scheme), |
unless full particulars with respect to the proposed payment (including the amount thereof), benefit or advantage have been disclosed to the members of the company and the making of the payment or the grant of the benefit or advantage has been approved by special resolution of the company.
| 2) |
Any payment made or benefit or advantage granted contrary to the provisions of subsection (1) shall- |
| a) |
in the case of paragraphs (a) and (b) of that subsection, be deemed to have been received by the director or past director concerned in trust for the company; and |
| b) |
in the case of paragraph (c) of that subsection, be deemed to have been received by the director or past director concerned in trust for any persons who have sold their shares as a result of the take-over offer concerned. |
| 3) |
If in connection with any take-over scheme the price to be paid to a director or past director for any shares of the company held by him is in excess of the price offered to other holders of such shares in terms of the take-over scheme or any benefit or advantage is granted to such director or past director, the excess or the money value of the benefit or advantage, as the case may be, shall for the purposes of this section, be deemed to have been a payment made contrary to the provisions of sub-section (1) (c). |
| 4) |
A director's expenses of distributing any sum among persons entitled thereto by virtue of subsection (2) (b) shall be borne by him and shall not be retained out of that sum. |
| 5) |
Where in proceedings for the recovery of any payment, benefit or advantage deemed to have been received in trust, it is shown that- |
| a) |
the payment was made or the benefit or advantage was granted in pursuance of any arrangement entered into as part of an agreement in respect of any scheme or take-over scheme, or within one year before or two years after that agreement or the take-over offer; and |
| b) |
the company, or the transferee company under any scheme or the offeror in respect of any take-over scheme was privy to that arrangement, |
the payment. benefit or advantage shall be deemed, except in so far as the contrary is shown, to be one to which this section applies.
| 6) |
The provisions of this section shall not apply with reference to any bona fide payment made or benefit or advantage granted by way of damages for breach of contract or by way of a pension, including any superannuation allowance, gratuity or similar payment in respect of past services. |
| 7) |
Nothing in this section shall be taken to prejudice the operation of any rule of law requiring disclosure to be made with respect to any such payments, benefits or advantages as are mentioned in this section or with respect to any other payments, benefits or advantages made or granted or to be made or granted to the directors or past directors of a company. |
Stamp Duties Act, 1968 (Act 77 of 1968)
