[Director Name] BY EMAIL
[Date]
Dear [Director]
LETTER OF APPOINTMENT 1. I am pleased to confirm my invitation for you to join the Board of Mercury NZ Limited (Company) as a nonexecutive director. 2. This letter sets out the terms that will apply between you and the Company to your appointment as a nonexecutive director, if you accept this invitation. Term of Appointment 3. I propose that your appointment will be approved by the Board and will take effect on [Date]. You will be required to retire at the next annual meeting and seek election by shareholders. 4. Assuming you are appointed, you will hold office and this letter will continue until: •
You resign;
•
You are removed from office, or not re-elected, by a resolution of shareholders;
•
You become disqualified from being a director pursuant to the Companies Act; or
•
You are absent without leave for six consecutive meetings of the Board, and the Board resolves that you should vacate office.
Once you cease to hold office, this letter will also be automatically terminated (provided that each party will retain, or be required to fulfil, any accrued rights or obligations that have arisen before termination). 5. Following your election at the next annual meeting, you will be required to retire from office and stand for reelection by shareholders in accordance with the Constitution and the NZX and ASX listing rules (Listing Rules), which for indicative purposes is approximately every three years. Policies 6. During the period of your appointment, you will be required to comply with all of the Company’s Board and applicable committee charters, policies, codes and procedures as then in force (these can be found at www.mercury.co.nz in the Corporate Governance section), as well as such other requirements or policies as the Board may from time to time specify. Any new requirements or policies or amendments to these requirements or
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The Mercury Building, 33 Broadway, Newmarket 1023 PO Box 90399, Auckland 1142
New Zealand
PHONE: + 64 9 308 8200 + 64 9 308 8209 FAX:
mercury.co.nz
policies will be provided to you. Directors must carry out their duties in accordance with all applicable legal standards and standards of good corporate governance including any requirements of the Listing Rules. It is expected that directors will devote sufficient time to be prepared fully for all meetings. 7. You agree to provide the Company with all such information and take all such steps it may reasonably require to meet: (a) its obligations under any applicable law; (b) the recommendations of the NZX Corporate Governance Code; (c) the requirements of, or guidelines under, the Listing Rules; and (d) the standards of good commercial practice and best practice corporate governance as determined by the Board from time to time. Time Commitment 8. I anticipate that your duties will involve a commitment of approximately 10 scheduled Board meetings per year, appropriate preparation time ahead of those meetings, the Annual Shareholders’ Meeting, site visits, stakeholder functions and strategy days. In addition, certain corporate actions may require more of your time. To assist with your planning, enclosed with this letter is our key dates planner for this calendar year and the next calendar year. 9. By accepting this appointment, you have confirmed that you are able to allocate sufficient time to meet the expectations of your role. It is expected that you will seek the agreement of the Chair before accepting additional commitments that might affect the time you are able to devote to your role as a director of the Company. 10. If you are asked to serve on one or more of the Board committees, that will be covered in a separate communication setting out the committee’s terms of reference, any specific responsibilities, additional time commitments and any additional fees that may be involved. Remuneration 11. Each director is paid a base fee which is currently $[XX] per annum. In addition, Board committee fees are payable in relation to standing Board committees and additional fees may be payable for special projects as determined by the Board. Fees are payable monthly in advance. The amount of fees may be reviewed from time to time, but the total pool of fees able to be paid to directors may only be increased with shareholders’ approval (unless there is an increase in the number of directors, in which case the pool may be increased where permitted by the Listing Rules). You will not be entitled to a retirement allowance. 12. The Company will reimburse you for all reasonable and properly documented expenses you incur in performing your duties. It is recommended that you obtain the approval of the Chair to any expense, other than travel to Board meetings and accommodation where necessary, before you incur it. Conflict of Interest 13. The position as to conflicts of interest is dealt with in paragraph 13 of the Board Charter (which can be found at www.mercury.co.nz in the Corporate Governance section). 14. Directors must disclose to the Company any actual or potential conflicts of interest which may exist or be thought to exist as soon as they become aware of the issue and take any necessary and reasonable measures to try to resolve the conflict.
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Trading in Securities 15. You must comply with the Trading in Company Securities Policy (which can be found at www.mercury.co.nz in the Corporate Governance section). Access to Information and Independent Advice 16. You are entitled to access Company information, and seek independent advice, on the basis set out in paragraph 12 of the Board Charter. You are also entitled to access Company information under the Companies Act 1993 (and any other applicable law) and in accordance with the terms of the Mercury Deed of Directors’ Indemnity given by the Company in your favour. Indemnity and Insurance 17. The Company Secretary will provide you with a copy of the current directors’ and officers’ insurance policy, and of the indemnity contained in the deed poll made by the Company dated 23 September 2019 and entitled “Mercury Deed of Directors’ Indemnity” (Company Indemnity), given by the Company in your favour. If you have any queries we can arrange to make the Company’s lawyers available to you. 18. It is a term of the Company Indemnity that you will repay to the Company certain amounts which may be paid to you by the Company under that document. By entering into this letter, you acknowledge and agree that clause 7.6 of the Company Indemnity is an obligation which is enforceable by the Company against you as if the Company Indemnity were a contract between yourself and the Company. This paragraph 18 shall survive the termination of this letter and, accordingly, may be enforced against you by the Company at any time. 19. Nothing in this letter shall limit any of your rights under the insurance policy or the Company Indemnity referred to in paragraph 17 above, which shall continue in accordance with their terms (even if you cease to hold office and/or this letter is terminated). Confidentiality 20. The Company’s general policy on confidentiality is dealt with in section 3 of The Mercury Code (which can be found at www.mercury.co.nz in the Corporate Governance section). In addition, as a director, you must not disclose to any person (whether during the course of the appointment or at any time before or after) any confidential information concerning the Company, other than to discharge your legal duties or as otherwise permitted by the Companies Act 1993. When you cease to be a Director, the Company may require in writing that you return to the Company all property, materials and documents of the Company, other than such property, materials and documents as you reasonably wish to retain as a record of the discharge of your duties to the Company, in which case you agree to promptly return such property, materials and documents. General 21. The Company acknowledges and agrees that your liability to the Company for breach of any term of this letter shall be limited to the liability which you otherwise have to the Company at law (if any) for the act or omission giving rise to the breach. 22. This letter, together with the directors’ and officers’ insurance policy and the Company Indemnity (referred to in paragraph 17 above) are important documents which have meaningful legal consequences for you in connection with your role as a non-executive director of the Company. I therefore encourage you to obtain independent legal advice in relation to these documents, and to ask any questions which you may have about them, before accepting the appointment.
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23. Please confirm your acceptance of the terms of your appointment by returning a signed and dated copy of this letter.
Yours sincerely
Prue Flacks Chair I confirm and agree to the terms of my appointment as a non-executive director of the Company:
[Name of new Director]
Date:
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