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Executive Directors' service contracts

Compensation and entitlements

Each Executive Director has a one-year rolling contract. The contract may be varied from time to time to take account of changes in terms and conditions as well as to incorporate best practice. Each contract includes a provision for a termination or compensation payment in lieu of notice.

The Remuneration Committee has discretion to agree longer contracts in the event that an Executive Director is recruited externally or from overseas, when it may then be appropriate to offer a contract with an initial period of longer than one year, reducing to a one-year rolling contract after the expiry of the initial period.

An Executive Director’s compensation payment, in lieu of notice, would comprise: (1) 12 months’ salary at his then current base pay; and (2) a cash payment in respect of other benefits under the contract such as medical insurance, or the Company may at its option continue those benefits for a 12-month period.

The compensation payment is payable where the requisite 12 months’ notice is not given to the Executive Director or when he terminates by giving 12 months’ notice and the Company does not wish him to serve his notice. If a period of notice is served, the compensation payment is reduced pro rata. In the event that a contract is terminated for cause (such as gross misconduct), the Company may terminate the contract with immediate effect and no compensation would be payable.

Awards made under the Company’s share incentive schemes will vest or transfer to an individual upon termination of their contract in accordance with the specific circumstances set out in the rules of the schemes. Such circumstances will include: death; injury/disability; ill-health; and redundancy.

In all other circumstances, the awards will lapse immediately unless the Remuneration Committee decides otherwise. The Committee exercises its discretion by reference to guidelines that set out a list of possible relevant factors to assist in the determination of a leaver’s status. These include whether an individual:

  • resigns from the Company to work for a competitor or to undertake a similar type of role to that carried out for the Company (indicative of discretion not to release awards);
  • is dismissed for any reason such as misconduct or poor performance (indicative of discretion not to release awards);
  • resigns intending to cease working altogether or to pursue a completely different career (indicative of discretion to release awards);
  • delays their resignation from the Company to accommodate the Company’s plans or the demands of their current workload (indicative of discretion to release awards);
  • departs with the agreement of the Company (indicative of discretion to release awards).

In exercising its discretion, the Remuneration Committee will also take into account the individual’s overall performance as well as their contribution to the Company during their period of employment. The Committee will not exercise its powers of discretion in such a way that it will discriminate against any individual on the grounds of that person’s age, sex, sexual orientation, disability, race or religious belief.

Pension entitlements are dealt with in accordance with the terms and conditions of the applicable pension scheme and do not form part of the contractual compensation payment.

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