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Scottish Court of Session Decisions
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Cite as:  ScotCS 320
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OUTER HOUSE, COURT OF SESSION
OPINION OF LORD EASSIE
in the cause
BLACKROCK INTERNATIONAL LTD
Pursuer: O'Neill, Q.C.; Drummond Miller, W.S.
Defenders: Tyre, Q.C., Fairley; Maclay Murray & Spens
15 December 2000
 The pursuer in this case was formerly employed by the defenders as a fund manager. His employment with the defenders was terminated on 15 February 1999. Following his dismissal, the pursuer made a complaint of unfair dismissal to the Employment Tribunal and that application was settled on certain terms. This litigation is now concerned with two particular disputes in relation to the pursuer's contract of employment and his entitlements under it.
 The first of those issues is whether the pursuer continues to be entitled, under Clause 3(b) of his contract of employment, to be given an "equity-equivalent" amounting to a particular percentage of the value of the capital stock of the defenders notwithstanding his having agreed to participate in an incentive scheme known as the "BlackRock International Ltd Long-term Deferred Compensation Plan". The second issue concerns the length of notice of termination of his employment which the defenders were contractually bound to give.
 After certain preliminary hearings (the action having been brought as a commercial action) a proof before answer was allowed, its scope being restricted to those two issues and a third issue, namely the value of various non-pecuniary benefits given to the pursuer under his contract. That third issue is now no longer contentious, parties being agreed that the pursuer's "remuneration package" translates into an annual value of £101,342.
 Prior to taking up employment with the defenders in late 1995, the pursuer worked as a fund manager with Dunedin Fund Managers Ltd ("Dunedin"). He was recruited to work for Dunedin by a Mr Gordon Anderson, who was then a director of Dunedin. In the course of 1995 Mr Anderson was required to resign office and leave Dunedin. On doing so, he, and certain others of his former colleagues in Dunedin, endeavoured to find financial backing for the setting up of a new asset management company. Possible financial backing was in due course found in an American bank - PNC Bank Corporation - and negotiations were conducted with that bank. The proposals involved the setting up of a company which would be a wholly owned subsidiary of PNC. A Scottish company - No. 160821 - was incorporated on 4 October 1995. The present defenders are that company. After a change of name immaterial for present purposes, it acquired the name of Castle International Asset Management Ltd - hereinafter "Castle". It acquired its present name, BlackRock International Ltd on 5 March 1998 in circumstances to be mentioned later.
 As part of the negotiations between PNC and Mr Anderson and his immediate associates, it was agreed that Mr Anderson and other senior personnel to be employed in the new company, Castle, should have an equity-linked incentive. Since PNC was not willing that anyone other than PNC hold actual shares in the company, it was agreed that an equity-equivalent mechanism would be provided whereby a fund amounting to an equivalent of 20% of the value of the stock of the company would be available for allocation among certain senior personnel. However, since the shares in Castle would not be traded on the market, it was necessary to arrive at some formula for valuation of this equity-equivalent or "shadow" equity. The company was not expected to return profits in its initial years. In due course PNC and Mr Anderson agreed a formula for calculating the amount of the equity-equivalent fund to be available in the future for the selected personnel. According to what was said by Mr Anderson in his evidence, final agreement on these and other matters was reached with PNC in the course of December 1995.
Recruitment of the Pursuer
 In anticipation of the successful conclusion of the negotiations with PNC, steps were being taken to recruit personnel.
 Having replied to an advertisement in the Financial Times newspaper, the pursuer had a meeting in November 1995 with Mr Douglas Waggoner, who had previously been a colleague in Dunedin and was involved with Mr Anderson in establishing the new venture. According to the evidence given by the pursuer, the meeting took place in an hotel in Edinburgh and lasted about one hour; Mr Waggoner gave an explanation of the new venture's plans and expressed a wish that the pursuer join them to head up the emerging market division of the new house; he outlined to the pursuer the general terms of employment such as salary and other benefits, the main idea being that these would largely reflect the pursuer's conditions of employment at Dunedin but in addition he would have some stake in the equity value of the new company.
 Following that meeting, Mr Waggoner, on behalf of the defending company under their then current name, wrote a letter dated 30 November 1995 offering the pursuer a position as a senior investment manager on certain terms. The letter is number 6/1 of process. The pursuer accepted that offer by signing on 1 December 1995 the acceptance docquet annexed to the offer. Clause 3(b) of that letter is in these terms:
"As an important member of the team, you will be granted an interest in an equity-equivalent of the company amounting to 0.75% of the total outstanding capital stock of the company. This interest is granted to you without payment by yourself."
By way of simply comparing the level of detail into which the letter otherwise went respecting the additional benefits to be provided by the employer, mention may be made of Clause 3(d) which is in these terms:
"A non-contributory pension scheme, life assurance and permanent health insurance".
The letter concluded with the statement that "a subsequent document to formalise this arrangement further will be forthcoming."
 It appears however that in the event no such formalised document was ever produced or executed, perhaps for the reason given by the pursuer in evidence that each member of the new team had trust in the others.
 Having accepted that offer of employment the pursuer then resigned his position with Dunedin and began to work for Castle in January 1996. At the very beginning the pursuer's work was largely involved in setting up computer systems and other office equipment to enable the company to start business. In due course once it had obtained the requisite authorisations from the regulatory authorities it was entrusted with funds for management. As I understood it, in large measure, these funds came from the United States.
The Corporate Reorganisation
 It appears that at around late 1997 or early 1988 PNC, the parent company of Castle, reviewed the structure of the several asset management businesses carried on by subsidiary companies within its corporate group. One such business was carried on by a subsidiary incorporated under the laws of the State of Delaware whose name was BlackRock Inc. The decision taken by PNC was to group all the other subsidiary asset management companies as subsidiaries of the Delaware company, BlackRock Inc. which would, so far as those other subsidiaries were concerned, become the intermediate holding company.
 The reorganisation of the corporate legal structure was accompanied by what was generally described by the witnesses in their evidence as a "re-branding" exercise. Among other things, that exercise involved the principle that all the asset management businesses ultimately owned by PNC should function under the "BlackRock" name. Consequently the name of the defenders was changed from Castle to its current form of BlackRock International Ltd.
 In his evidence Mr Anderson explained that these changes resulted in the directors of Castle (of whom he was one) being replaced by individuals who were de facto members of the Delaware equivalent of the board of directors of BlackRock Inc. However, that change in the board of directors made little functional difference. The daily direction and management of Castle by its directors in Edinburgh had been subject to the controlling effect of the company's being a wholly owned subsidiary of PNC. After the reorganisation that daily direction and management was assumed by a management committee comprising in effect the former directors. The re-branding also involved the adoption of American job titles. Accordingly senior members of the company, such as he, were styled "managing directors"; at the next lower level in the hierarchy one found "directors"; and at a further inferior level one found "vice presidents". Under this new nomenclature the pursuer became a "director" - though not of course a director in the cisatlantic company law sense.
 More importantly however, Mr Anderson further explained that the reorganisation also involved the transfer to New York of a number of functions which had hitherto been done by Castle in Edinburgh. Thus a single accounting system for all the BlackRock companies was established; personnel management was moved to the American parent; marketing was also transferred which meant, for example, that the future attraction of new clients, and hence new funds, would in a large part be dependent upon the efforts of marketing staff employed in the USA.
 The reorganisation also had important implications for the arrangements originally arrived at with PNC for the shadow equity or equity-equivalent intended for senior staff in Castle. One of those implications arose from the transfer of functions to New York. With the accounting systems, finance, human resources and marketing being moved from Edinburgh it would become very difficult to arrive at a value for the Scottish company as a stand-alone in its own right and accordingly difficult to reach a view as to the value of equity in it. The other principal implication for the equity-equivalent incentives for senior Castle employees arose from the parent company's desire, if not insistence, that as part of the general rationalisation of its asset management businesses there should be a rationalisation, or standardisation, of incentive schemes. In the event, the parent company insisted on there being two such incentive schemes.
The New Incentive Schemes
 One of the two schemes was intended for those who held the rank of "managing director" in the North American sense. Put very shortly indeed, it involved the participants buying actual shares in BlackRock Inc. at a particular price calculated on certain assumptions as to what they should receive in absolute terms at a future date, five years hence, but discounted down at a percentage per annum which in effect imposed on the participants an interest to ensure that the value of shares in BlackRock Inc. increased at a rate greater than the assumptions involved in the discount to present value.
 For those below the rank of managing director - such as the pursuer - the incentive would take the shape of participation in what was called a long-term deferred compensation plan ("the Plan"). Again put shortly, a participant in the Plan would receive a particular sum payable in instalments at years 3/4/5 which might be increased by 25% were the funds under management to exceed a particular figure or be decreased by a like percentage were those funds to fall below another particular figure. In other words, assuming he remained in the service of the employer for the requisite period, the employee could look forward to getting additional remuneration varying within certain bands dependant on the amount of the funds under management. As was freely recognised by the defenders' witnesses, this was not an equity-equivalent or shadow equity scheme since (a) it was not related to the value of the share capital in the company but varied according to a different criterion, namely the amount of the funds under management; and (b) it was capped above and below so that while the participants had some protection against falls in the amount of funds under management they were not given the full enjoyment of possible increases above the upper cap.
 According to my understanding of Mr Anderson's evidence, so far at least as the employees of Castle were concerned, the amounts which would be available to an employee under either of those schemes depended on the overall valuation of the equity-equivalent potentially available collectively to the employees of Castle under the original arrangements with PNC, had they continued to their full term. Mr Anderson therefore negotiated with his North American counterparts a valuation of the equity-equivalent of the capital value of Castle based on the formula and assumptions previously discussed with PNC Bank in 1995. He believed that he had in the event reached a good deal for those concerned. I did not understand these aspects of Mr Anderson's testimony to be disputed by counsel for the pursuer.
The 1998 Staff Meetings
 In consequence of the reorganisation proposals, certain meetings of the staff of the defenders were held in Edinburgh. There appear to have been two principal meetings. The first involved the bringing together of all of the staff of whatever level when the nature and some of the implications of the reorganisation were then explained generally. Later, a further meeting was convened to be attended only by those employees of the defenders who on taking up employment with Castle had been told that they would be given some percentage in an equity-equivalent arrangement. At that meeting issues concerning the equity-related incentives were discussed. Although the precise date of the meeting was not clear from the evidence, it appears to have been in or around April 1998. The evidence given by those witnesses who attended may be summarised as follows.
 The meeting was addressed by Mr Anderson. According to him, he had prepared transparencies for overhead projection on a screen in order to illustrate his explanations of the new schemes and how they compared with the existing proposals for an equity equivalent. He took certain hypothetical figures to demonstrate how the new arrangements produced the same total equity-equivalent as would have been estimated in the old régime. Mr Anderson deponed that he had stated to the meeting that the new arrangements were in substitution for what had previously been offered. However, he said, it must have been very clear to all present that one arrangement was being exchanged for another. Following his presentation a number of staff asked questions. Some were not in favour. One area of comment was directed to the existence of two new schemes, one for the managing directors and one for less senior members of staff, which was seen by some as not consistent with all the senior staff being members of a single team. Other objections, said Mr Anderson, were voiced in relation to the capping arrangements in the Plan, which meant that it was not a shadow equity scheme, and gave cash payouts which could not be carried forward. On the other hand, some people were content with the proposed Plan because it had the security of a minimum payment, which an ordinary equity-equivalent did not.
 Also in attendance at this meeting was another witness, Mr William Low, who had been a fund manager at Dunedin and had been recruited to Castle on essentially the same basis as the pursuer. He too had been offered an interest in an equity-equivalent. His understanding of that offer was that he would not receive any shares but at some future time would receive a payment based on an estimate of the capital value of Castle. The reorganisation involved his too acquiring the job title "director" and accordingly, as such, he was not eligible for the proposed arrangements for "managing directors". Mr Low's recollection of the meeting was that those present were given a presentation by Mr Anderson of the changes in the equity incentive which would flow from the reorganisation. Those attending were, said Mr Low, told that their equity-equivalent was to be transferred into a different Plan. The mechanics of that were, said Mr Low, then described by Mr Anderson and those details were recounted in evidence by Mr Low to an extent not necessary to repeat here. The description included an explanation of the upper and lower capping arrangements in the Plan. Mr Low said that he had been unhappy about the proposals. He had not liked the senior management having a direct interest in the equity of BlackRock Inc., whereas he was not to have a true equity-equivalent. Mr Low was however clear in his evidence that it was made plain that the rights under the proposed Plan were to be in substitution for what he had been offered on joining the company. The whole meeting was, as he put it, about swapping what they had for what they might get under the new arrangements. The general consensus of those for whom the Plan was intended was that they did not wish the proposed removal of their right to the "upside" in an equity-equivalent.
 A further witness who attended the meeting was Mr Nigel Barrie. He too had been recruited from Dunedin to Castle and prior to the 1998 reorganisation was one of the Castle directors. On the reorganisation he became a managing director in the transatlantic sense. His recollection of the meeting was that in his presentation Mr Anderson indicated that their equity-equivalent in Castle would no longer exist, since Castle would no longer effectively exist and that so far as he, Barrie, as a managing director was concerned, the equity-equivalent would be replaced by an equity interest in BlackRock Inc. At the meeting Mr Anderson explained also that the other senior personnel who were not managing directors would be offered participation in the Plan. Mr Anderson had explained that a total value had been adjusted for the equity in Castle and that the amount of each member's equity-equivalent for transfer to the new schemes would be the appropriate percentage of the value so adjusted and agreed. Discussion had then taken place at the meeting about the basis for that valuation. Mr Barrie stated in evidence that his view had been that an attractive valuation had been achieved. It was clear that the new arrangements were being put forward in substitution for any earlier entitlement to an equity-equivalent. For his part Mr Barrie deponed that he had also been unhappy with what was proposed since, if he were to have any equity-equivalent at all, it would now involve his making a capital outlay in the purchase of stock at a time when it was personally inconvenient for him to have to incur that expenditure.
 In his evidence the pursuer accepted that he had been present at a meeting in April 1998 when both the proposed scheme for the managing directors and the proposed long-term deferred compensation Plan for other members of staff had been discussed. The managing directors were to take part in a scheme whereby they would subscribe for shares in BlackRock Inc. at an attractive price. He was not to be invited to participate this scheme. He saw it as divisive. Others, not involved in that scheme, were given some details of the long-term Plan. They were told that a fixed sum of money would be paid. In his evidence the pursuer maintained that nothing was said about the Plan being in lieu of the equity-equivalent. He denied that it was clear or obvious that what was being offered was being offered in substitution. The pursuer said that he considered the Plan to be a sort of golden handcuff which would run alongside his equity in the company. The pursuer further deponed that he considered that he was entitled to equity - actual shares - in the company. He agreed however, that nothing concrete had occurred in relation to any interest in an equity or equity-equivalent prior to the April 1998 meeting. The pursuer accepted that neither at the April meeting or later had he sought from Gordon Anderson, or anyone else, any confirmation that the Plan was additional to the equity or equity-equivalent which he was to be given under Clause 3(b).
 As was generally accepted, by all the relevant witnesses, at the time of the April meeting no documentation relating to the Plan was available to those present. Subsequently at some point in the summer of 1998 - the exact date was not clear from the evidence and is not, I think, material - each of those for whom the Plan was intended was sent from New York a letter bearing the date "April 30, 1998" which informed the addressee that he, or she, had been selected as a participant in the Plan; enclosed a copy of the Plan and informed the addressee of the amount, in dollars, of his participation. After giving that information the second and final paragraphs of the letter continued thus:-
"By executing and dating the enclosed copy of this letter in the space provided, you acknowledge receipt of the Plan and agree to be bound by its terms and conditions. Please return your signed copy of this letter to Gordon Anderson. If you have any questions concerning this letter or the Plan, please contact your manager."
The letter sent to the pursuer is 7/2 of process. At the foot was a pro-forma docquet of acceptance. The pursuer signed that acceptance and returned it to Gordon Anderson. The docquet contains the date 1 May 1998 albeit that the pursuer deponed to his having signed the docquet on 10 October 1998. It may be observed, however, that it was generally accepted by all the witnesses on this aspect of the case that the reason for these dates being contained in the letter and the docquet was a desire to backdate the commencement of the Plan to April 1998 and in the event nothing appears to turn on that backdating, other than perhaps more readily to associate the letter and the Plan with the discussions in April 1998.
 Among others, the Plan contained provisions reflecting the capping arrangements which had been described at the April meeting. Neither the letter nor the Plan contained any express statement that the benefits conferred by the latter were in substitution for the grant of an equity-equivalent under Clause 3(b) of the offer of employment.
 In his evidence the pursuer deponed to having assumed that his original equity entitlement continued notwithstanding his acceptance of participation in the Plan. He said that on handing the signed acceptance to Mr Anderson, he commented that he "was aware that no obligation was placed on him by signing the document" to which he said he received no reply. Mr Anderson, in his evidence indicated that he had no recollection of that observation having been made nor indeed any recollection of their being any conversation of significance. In his evidence the pursuer accepted that he did not say to Mr Anderson - nor indeed to anyone else - that he had assumed the continuance of an entitlement to be given an interest in an equity-equivalent in the defenders.
 A similar letter and copy of the Plan were received in the summer of 1998 by Mr Low. In his evidence Mr Low said that he did not sign the docquet. He was unhappy with some of the provisions of the Plan. In the following year, in September 1999, he was sent a similar invitation but with an amended version of the Plan. It was different in that among other respects it contemplated the possibility of some transfer of the cash entitlement into stock options in BlackRock Inc. It was put to him, and he agreed, that another change was that there was a new Clause 11 of the Plan which among its (somewhat convoluted) provisions included one which, put very shortly, was to the effect that participation in the Plan carried with it an express acceptance that, if the participant held any prior equity-equivalent, the Plan should "supersede and replace such prior equity-equivalent".
 While the amendment effected to Clause 11 was seen by counsel for the pursuer as being important for the pursuer's case, it was not a matter which had any real importance for Mr Low. As Mr Low put it in his evidence, it had always been implicit that the Plan was transferring existing rights. By way of explanation of the alteration to Clause 11, Mr Anderson stated that he had sought an explanation from in-house legal counsel in New York and had been told that it had been inserted in light of the claims being made by the pursuer and which are now the subject of this litigation, solely to avoid any repetition in future of the making of any such assertion.
 For completeness it should be recorded that Mr Low did eventually sign the covering letter accompanying the amended Plan, though he did so for reasons other than the amendment. As I understood him, he signed it because he considered it to be the only really practical course for him to adopt.
Submissions for the Pursuer (Equity-equivalent Issue)
 Mr O'Neill, who appeared for the pursuer, submitted in the first place that the provisions of Clause 3(b) of the offer of employment specifying that the pursuer would be granted an interest in an equity-equivalent of the defenders could only be amended by mutual agreement. Variation could not be imposed unilaterally. Nor could variation of that provision be effected by virtue of an agreement or arrangement between the employing company and its parent company, such an agreement being res inter alios acta. Accordingly, said counsel, the fact that the defenders and their parent company might have come to certain agreements in relation to equity-equivalent schemes had no affect on the pursuer's entitlements under his contract of employment.
 His following submission was that the pursuer's acceptance of participation in the Plan was a wholly separate contractual arrangement between the pursuer and the parent company, BlackRock Inc. It was accordingly additional to the pursuer's rights under his employment contract with the defenders. It was not to be implied in the terms of the pursuer's acceptance of that offer that it be in substitution for the provisions in the prior contract of employment between the pursuer and the defenders relating to the grant to him of an equity-equivalent interest in the defenders.
 In a written note of his submissions which he handed up Mr O'Neill referred to a number of authorities. First, on the general principles of interpretation of contract, reference was made to Muirhead & Turnbull v Dickson (1905) 7 F 686, 694; Scottish Power Plc v Brit Oil (Exploration) Ltd and Others (Court of Appeal, England, unreported 18 November 1997). In relation to the need for agreement before a term of a contract may be held to be varied or altered, counsel referred in particular to Rigby v Ferodo Ltd  I.C.R. 29; Bainbridge v Circuit Foil UK Ltd  I.R.L.R. 305 and Villella v MFI Furniture Centres Ltd  I.R.L.R 468.
 There was, said counsel, no evidence that the pursuer had agreed to the terms of Clause 3(b) being altered. There was nothing inconsistent with his accepting participation in the Plan while yet maintaining his rights under Clause 3(b) of the offer of employment in November 1995. While Mr Gordon Anderson may have undertaken negotiations in 1998 with the parent company with a view to securing the best deal for the staff in Edinburgh, there was nothing to suggest that he was given authority by the pursuer to negotiate matters on his behalf. It would indeed be strange were the pursuer to authorise his employer to re-negotiate his own contractual terms. By the time at which Mr Anderson reported the results of the negotiations he, being no longer a member of the board of the company, could not make any representation on their behalf.
 A further submission advanced on behalf of the pursuer was designed to meet what Mr O'Neill saw as being a possible contention that it was to be implied in the terms of the Plan itself that its provisions be in substitution for the provisions of any prior equity-equivalent. That is to say, in substance, that there was implied in the Plan what was later included expressly in the amended version. Extensive reference to various cases on the implication of contractual terms was contained in the written note of argument. However, in light of the submissions on behalf of the defenders, I do not find it necessary to examine these. I list the authorities simply as a matter of record. These were Liverpool County Council v Irvine  A.C. 239; Prestwick Circuits Ltd v McAndrew 1990 S.L.T. 655; Crawford v Bruce 1992 S.L.T. 524; Ductform Ventilation Ltd v Andrews Weatherfoil Ltd 1995 S.L.T. 88; Scottish Power Plc v Kvaerner Construction 1999 S.L.T. 721. Counsel submitted that since the pursuer had stated in his evidence that he would not have accepted participation in the Plan if the supercession of his previous entitlement were a condition, the implication of such a term failed the "officious bystander" test referred to in those authorities. In any event it was not necessary for the working of the Plan that there be no other equity or equity-equivalent rights held by the pursuer in the defenders. The two could co-exist.
 The Court should accordingly hold that the pursuer's entitlements under Clause 3(b) of the offer of employment were not affected by his agreement to participate in the Plan.
Submissions for the Defenders (Equity-equivalent Issue)
 Starting with the offer of employment (6/1 of process) Mr Tyre for the defenders observed that its Clause 3(b) did not entitle the pursuer to an allocation of shares in the company; instead it was a statement that the pursuer would be given something described as an interest in an "equity-equivalent". The term was inspecific. There was no specification of the mechanism whereby this might be arranged nor of the provisions relating to the point in time at which the interest might vest or be payable, nor of any other details required to give practical effect to such an arrangement. As with the clause promising a pension scheme, without any further definition, the provision was effectively only a statement of intention rather than a directly enforceable contractual right.
 Counsel recognised that the particular issue of the enforceability and interpretation of that provision did not however arise at this stage. Whatever might be the position in that regard, nothing further occurred until 1998. In that year, 1998, the pursuer unquestionably accepted participation in the Plan. Counsel stated that because the Plan was capped and the caps, upper and lower, were not related to the capital value of the stock in the company, the defenders did not contend that the Plan was properly an equity-equivalent in the sense of Clause 3(b) which could be treated as being in full implement of that clause. The question arising in this branch of the case was accordingly whether by accepting the offer of participation in the Plan the pursuer relinquished whatever entitlement he might have had under Clause 3(b) to be given an interest in an equity-equivalent. In relation to the Plan, one had to ask what was offered and on what terms, and what was accepted. That question required, however, to be addressed in the light of the whole factual circumstances and the history of matters. The pursuer's approach of looking merely at the letter dated 30 April 1998 (7/2 of process) and the Plan was fallacious because it ignored the factual context known to both parties in which the letter and the company Plan were sent. The conclusions to be drawn from the pursuer's signing and returning the docquet on that letter depended on the whole surrounding circumstances.
 For what was meant by "surrounding circumstances" counsel referred to the by now relatively well known passage from the speech of Lord Wilberforce in Reardon Smith Line Ltd v Hansen-Tangen  1 W.L.R. 989. Reference was also made to Bovis Construction Ltd v Watlings Construction Ltd 1994 S.L.T. 865; Ferguson Shipbuilders Ltd v Voith Hydro GmbH & Co KG 2000 S.L.T. 229 and the speech of Lord Wilberforce in Investors' Compensation Scheme Ltd v West Bromich Building Society  1W.L.R. 896, 912.
 The factual matrix in which the Plan was offered to the pursuer included what had been explained at the April meeting, namely that the Plan was in substitution for any prior equity-equivalent in the company. That having been made clear to the pursuer, the defenders were entitled to consider his acceptance of participation in the Plan as acceptance of it as a substitute for some equity-equivalent. In essence, said counsel, the position was that being unable to offer X the defenders were offering Y in its place. If the person to whom Y was offered elected to accept it in place of X then there was a form of novation of obligation. In that regard counsel referred me to the discussion on novation of obligations contained McBride on Contract, p.547 ff.
Discussion (Equity-equivalent Issue)
 In my view, the analysis put forward by counsel for the defenders is the one which must be preferred.
 It is clear from the evidence given by Mr Anderson, Mr Low and Mr Barrie that at the meeting of those with a claim to an interest in an equity-equivalent in the defenders which was convened by Mr Anderson in about April 1998, Mr Anderson made it plain that the Plan (and for those to whom it applied, the managing directors' scheme) came in place of any equity-equivalent in the defenders envisaged under the offers of employment. There was plainly never any question whatever of its being additional to some continuing equity-equivalent in the defenders. Mr Low and Mr Barrie clearly understood from what was said by Mr Anderson at the meeting that such was the case.
 I have no difficulty in accepting the evidence given by these three witnesses about what was said at that meeting. Indeed, despite the pursuer's partially inconsistent account of his impression of that meeting, I was not in the end of the day invited by counsel from the pursuer to reject the evidence given by those three witnesses concerning what occurred that meeting. Rather, if I correctly understood counsel for the pursuer, his resort was to the perhaps technical suggestion that what was said by Mr Anderson at the meeting was not technically attributable to the pursuer's employer. Because, as part of the negotiation with PNC concerning the reorganisation, Mr Anderson had sought to get the best deal possible for those based in Edinburgh, he could not then be said to be speaking for the employer at the meeting, he having by that time ceased to be a member of the board of directors of the defenders. In my view, this submission is unsound. Mr Anderson was the chief officer in Edinburgh and I see nothing inconsistent in his first having endeavoured, while yet a director, to secure favourable arrangements for himself and the others involved and thereafter presenting those proposals and arrangements on behalf of the employer, namely the defenders.
 The other, also technical, point taken by counsel for the pursuer, as I understood it, was that because the letter inviting participation in the Plan and enclosing the Plan came from New York, it was, somehow, a separate contract entered into between BlackRock Inc. and the pursuer. I would observe, in limine, that the letter 7/2 of process is in some ways ambivalent in that it simply has the heading "BlackRock" without any specific attribution of its corporate origin. Its signatory was at that time a member of BlackRock International Ltd, the defenders. That apart, it is to be observed that what was invited was participation in the BlackRock International Ltd Long-term Deferred Compensation Plan and a cursory reference to the Plan in particular Clause 1, readily discloses the intention that the Plan be a matter between the defenders and its employees. I regard this point as without substance.
 In these circumstances I am wholly satisfied that it had been made clear by the defenders that the basis upon which the relevant employees would be offered participation in the Plan was that of substitution for any equity-equivalent. The defenders were accordingly entitled to conclude, when the pursuer accepted the offer to participate in the Plan and delivered his acceptance to Mr Anderson, the chief officer of the defenders in Edinburgh, that the pursuer did so on that basis of substitution. It was not, in my view, necessary that the substitutional basis, already explained, be repeated in the letter offering participation in the Plan or in the Plan itself. By way of simple analogy, one may postulate the perhaps not unfamiliar case of a supplier of goods who, having contracted to supply a machine of a particular model, finds that model to be no longer available. He makes an offer to the customer to supply a different model by way of substitution. If delivery of that different model is subsequently accepted by the customer, it is clear that by that action the customer has accepted the offer of the substitute model in place of the original contractual obligation to deliver a machine of the type originally specified. If one had to imply in the acceptance of the substitute model a test such as the officious by-stander test it would readily be satisfied. It could hardly be said that the recipient of the substitute machine was maintaining an obligation to receive the original machine in addition to the substitute.
 In these circumstances I think that counsel for the defenders was right when he said that it would not matter if the pursuer, at the time of signing the docquet on the letter 7/2 of process and delivering it to Mr Anderson, had a belief that the Plan was additional to his entitlement under Clause 3(b) to be given an equity-equivalent, since by accepting the Plan he conveyed the impression of accepting the substitute offered in performance of that contrary obligation on the part of the employer. As is stated in Gloag on Contract (2nd edition) page 7, in a passage to which I was referred:
"If however the words or acts of one party are calculated to convey to a reasonable and neutral person the impression that he agreed to a proposal, and did convey that impression to the other party, agreement, for all legal purposes, is established, irrespective of the possibility that the apparent was not the real intention."
 While on one view that is sufficient for a disposal of this issue, counsel for the defenders submitted that the pursuer's evidence on this matter was not credible. Lest matters proceed further, however, it is appropriate that I express a view on that question. While the pursuer gave evidence to the effect that at the time of signing the letter agreeing to participation in the Plan he believed that the Plan was additional, and not substitutional, and while he denied that Mr Anderson had made clear at the meeting that the Plan was to be in place of any existing entitlement to an equity-equivalent I am unable to accept that evidence. I make the initial observation that it appeared to me that the pursuer plainly felt bitter about the fact and manner of his dismissal and it may, perhaps, be that a sense of grievance has subsequently persuaded him to a current mistaken belief that, at the time, he thought the Plan to be additional. But, that said, as a fund manager the pursuer was, and no doubt is, an intelligent and astute person. The other evidence in the case wholly satisfies me that the pursuer must indeed have been well aware that the Plan was to be in substitution for any existing entitlement. For example, the description given to the meeting by Mr Anderson of the manner in which the future equity value in the company had been estimated and agreed for the purposes of the figures to be included in the Plan, and the comparison examples which he gave, only make sense if the Plan were in substitution. Further, the complaints voiced at the meeting about the capping provisions again make sense only if the Plan were presented as being in place of a true equity-equivalent scheme. It is I think significant that, as he conceded in his evidence, the pursuer never expressed the view to anyone (prior to his dismissal) that the Plan was additional, nor did he seek from Gordon Anderson or anyone else any confirmation that the Plan was additional to what was offered to him in his contract of employment.
 Also of significance in the assessment of the credibility and reliability of the pursuer's testimony is the evidence relating to a remark written by the pursuer in June 1998 in the employee comment section of his annual performance appraisal form (7/3 of process). Among other comments not material to present issues, the pursuer wrote - "I am disappointed with the likely change of equity incentive which has been personally de-motivating." In evidence the pursuer sought to explain this remark as being intended merely as a reference to what he described as the divisive effect of the proposed scheme for managing directors. I have to say that I did not find his explanation in any way persuasive. In my view, this hand-written remark is wholly consistent with the pursuer's being well aware that the Plan which he was to be offered was in place of any other offer of an interest in an equity-equivalent scheme.
 I accordingly consider that the pursuer signed the acceptance of his participation in the Plan in the knowledge that it was being proffered in substitution for and to the exclusion of anything to which he might have been entitled under Clause 3(b).
 The letter of 30 November 1995 offering the pursuer employment with the defenders contained no stipulation concerning the length of notice to be given by either party in the event that either wished to terminate the contract. Parties are at issue as to the length of notice which ought to be implied. Each tendered an expert witness on this aspect of the case but before turning to the evidence given by those witnesses it is convenient to mention such other evidence in the case as may have a bearing on this particular issue.
 The pursuer's contract of employment with Dunedin stipulated a period of one month. On 31 October 1995 the pursuer was offered an increase in that period to six months' notice (to be given either way). The pursuer said in evidence that he declined that offer. He further conceded in evidence that at the time at which the offer was made Dunedin clearly had "an inkling of what was afoot". Mr Low was accorded a period of one month's notice when he joined Dunedin, but after six years' service it was increased to six weeks. His current contract with the defenders provides for a period of notice of three months. Mr Barrie, who joined Dunedin in 1985 and became a director (in the cisatlantic sense) of Dunedin in 1993 had a six month period of notice. His current contract of employment issued in mid-1998 after the corporate reorganisation stipulates for a period of ninety days if the company wishes to terminate his employment and sixty days if he wishes to resign.
 The expert tendered on the pursuer's behalf, Mr Malcolm Dix, is a self-employed career development and outplacement consultant. His report is number 6/7 of process and I do not think it necessary to rehearse its terms. In it he states, as his concluding opinion, that "... a one year period of notice would be reasonable for Mr Rae". That view was also adopted by the pursuer himself in evidence. Mr Dix, in his evidence, explained that he spent approximately two-thirds of his time on outplacement consultancy work for a firm Sanders & Sidney. That involved advising their client - the employer - who would be considering making one or more employee redundant, about the content of an appropriate "severance package". The other third of his time would be spent on career development or outplacement advice for other clients. In relation to sector involvement, about one-third of the individuals with whom he was concerned were in what might be described generally as the financial sector. Mr Dix was questioned by counsel for the defenders about the financial houses mentioned in his report and in particular the extent to which he had been concerned with fund managers. As I understood his evidence, Mr Dix had dealt with one fund manager who was "not a good fit" and had been terminated and had assisted in the recruitment of another to a different finance house. Mr Dix said in evidence that he was unaware of the period of notice applicable to the pursuer while he was in his prior employment with Dunedin but he would have expected it to be at least six months or one year. For a senior manager employed in fund management he would expect a period of 2-3 years.
 The defenders tendered as their expert witness, Mr Charles Bennie, whose report is No.7/4 of process. Mr Bennie is a director of and recruitment consultant with Stevens Financial in London, focusing largely on the asset management business. As described both in his report and in evidence, his function is that of a "head-hunter" seeking a fund manager on behalf of a potential employer. In his report, the terms of which I again do not feel necessary to rehearse, Mr Bennie expresses the opinion that someone of the pursuer's age and experience might, on moving from Dunedin, expect a notice entitlement of between 2-3 months. A fund manager with a record of outstanding performance - in the top decile of fund managers - might expect a notice entitlement of 6 months to one year; but the pursuer was not in that category, his salary being "middle of the way".
 The principal basis for Mr Bennie's opinion was said by him to be his experience of the notice entitlement to be found in contracts of employment of those who were being "head-hunted". He required to have that detail before presenting the proposed candidate to his client. Mr Bennie indicated that about 25% of his activity came from clients based in Scotland; a small amount came from "Europe" (by which I took him to mean the mainland or continent of Europe) and the balance, around 70%, came from London. Mr Bennie said that he probably placed some 8-9 fund managers per annum but apart from such actual placements there were also some presentations of candidates who were not accepted and he required to keep in general contact with the activity and development of the employment market for fund managers.
 In my approach to the expert evidence in this case I consider that it is appropriate to have in mind that the very issue arises by reason of the absence of any express stipulation in the contract as to notice entitlement. The question of the appropriate length of notice is accordingly to be viewed in advance of any decision by an employer to dismiss the employee or by the employee to resign his employment. In particular, the purported grounds for dismissal of the pursuer in the present case are for these purposes not relevant. Likewise the fact that some employers, faced with the need to dispense with the services of an employee may be disposed to negotiate a severance package out of a desire - recognised by Mr Dix - to ensure an amicable parting, mixed with a wish to be well thought of in the financial services or other community and, perhaps, a dose of genuine human kindness is not relevant to this issue.
 Setting aside those irrelevant considerations my preference between experts is for Mr Bennie. It is true that in the final paragraph of his report Mr Bennie makes reference to the pursuer's alleged poor performance while in the employment of the defenders and in cross-examination of Mr Bennie counsel for the pursuer seized upon this. Counsel also founded on Mr Bennie's ignorance at the time of his report of the offer by Dunedin of a six month notice entitlement made immediately before the pursuer's resignation. Given the understandable acceptance by the pursuer that the offer of an increased notice entitlement was made when Dunedin had at the very least "an inkling" of his pending resignation, the latter point carries little, if any, weight. As to the former, my impression from Mr Bennie's oral evidence was that the mention in the final paragraph was effectively an aside and did not enter into considerations affecting his evidence of the practice in the fund manager employment market regarding the notice provisions actually included in contracts of employment.
 By contrast, I consider that there is substance in Mr Tyre's submission that Mr Dix approached matters from the viewpoint of an outplacement consultant, concerned primarily with the negotiation of reasonable terms at the point of a contemplated dismissal for redundancy and not from the standpoint of what was normally to be found, as a contractual term, in the employment contract of a fund manager. My impression was that his opinion was largely coloured by that approach. It is, I think, also correct that Mr Dix had comparatively less specific experience of negotiating contracts of employment on behalf of fund managers and to a fair extent it has to be said that his views were based on general discussion among friends and acquaintances who may well not have been presented with the proper hypothesis on which to express a view appropriate to the particular issue in this case. Be that as it may, it appears to me that, more importantly, Mr Bennie's evidence is more consistent with the extrinsic, non-expert evidence, already outlined.
 In light of the whole evidence I consider that the appropriate period of notice of termination to be implied in the pursuer's contract of employment is one of three months.
 I was invited by counsel simply to make findings on the matters in issue and remitted for proof before answer. The findings which I make are these:-
(i) The offer to the pursuer to participate in the Plan was made to and accepted by him in substitution for any entitlement under Clause 3(b) of the offer of employment contained in the letter of 30 November 1995 that he be given an interest in an equity-equivalent of the defenders.
(ii) The period of reasonable notice of termination to be implied in the pursuer's contract of employment with the defenders was three months.
(iii) The pecuniary value of the pursuer's annual salary and the other benefits given to him under his contract of employment with the defenders, expressed in annual terms, was £101,342.
I shall put the case out By Order for discussion of further procedure.