Tay in row over changingdirectors' contracts

TAY HOMES, the troubled housebuilder, was plunged into a furious row yesterday after it emerged that two top executives signed new contracts doubling their notice period after rebuffing an attempt by a rebel investor to change the board.

The Leeds-based company - which is facing a shareholder vote to oust the board at the end of the month - angrily denied suggestions that the chairman Norman Stubbs and the chief executive John Swanson had decided to increase the notice period for fear of being forced out by shareholders.

The length of the period is a crucial element in determining compensation packages for ousted directors. Outgoing executives normally receive a lump sum based on their annual salary multiplied by their notice period.

According to documents seen by the Independent, Mr Swanson and Mr Norman Stubbs signed the contracts extending their notice from six months to a year on 10 November.

This was around two weeks after a meeting with Sunley, a family-owned housebuilder with a 10 per cent stake in Tay. At the meeting, Sunley proposed the appointment of two of its nominees to the board in an attempt to improve Tay's performance and revive its flagging share price.

The board's rejection of the proposal led Sunley, backed by Philips & Drew, Tay's largest investor, to call the meeting to oust the existing management.

Mr Swanson yesterday said the changes to the notice period had been agreed in June by the company's remuneration committee. He said the contracts were not signed until November because lawyers had taken a long time to draw them up.

"The insinuation that we changed the contracts as a result of our meeting (with Sunley)... is tantamount to absolute nonsense," he said.