Termination and loss of office
The primary principle underpinning the determination of any payments on loss of office is that payments for failure will not be
made. Service contracts and plan rules have been drafted in such a way that the Committee has the necessary powers to ensure
this. On departure, the Committee will take into account factors including the reason for the executive leaving, performance
during the time served in the year and contractual obligations when approving any payments. When an executive is terminated
for cause there is no entitlement to salary, pension, benefits or an annual bonus and unvested share awards lapse.
The following table provides a summary of the treatment of each component of pay applicable for the current executive directors.
It should be noted that the Committee applies judgement in determining whether an individual is classed as a good leaver or
otherwise under the share plans and is authorised to reach compromise agreements with departing executives. Agreed departure
can include death, ill health, redundancy or retirement.
Payment
Agreed departure
Differences in a change in control situation
Salary, pension
and benefits
The Committee may make payment in lieu of notice.
None.
Annual bonus
Individuals can be considered for a bonus; factors such as time
served during the performance period and performance can be
taken into account.
Deferred bonuses vest.
Performance to the date of the event taking place will be considered in
determining whether any bonus should be payable, subject to the overall
maximum applicable to the relevant individual.
For directors appointed prior to September 2013, there remains a bonus
entitlement if a change in control has taken place within the 24 months
prior to termination. In this scenario, the director is entitled to bonus, or
compensation in lieu of bonus, in respect of the relevant calendar year.
IIP
performance
share awards
and legacy PSP
Performance measured at the end of the performance period,
or at the date of cessation of employment.
Pro-rating for time elapsed at cessation of employment will be
considered by the Committee.
The Committee can reduce or increase the exercise period for
unvested and vested but unexercised awards (legacy PSP only).
Similar to agreed departure.
A reduction in the exercise period for vested but unexercised awards.
Performance and time elapsed will be taken into account, but the
Committee may enable awards to vest in full.
In certain situations (as defined in the plan rules) rollover awards of
a broadly equivalent nature can be offered.
Legacy Share
Matching Plan
(no awards
from 2015)
Invested shares are transferred back on cessation or at the end
of the investment period.
Matching shares:
Performance measured at the end of the
performance period, or at the date of cessation of employment.
Pro-rating for time elapsed at cessation of employment will be
considered by the Committee.
The Committee can reduce or increase the exercise period for
unvested and vested but unexercised awards.
Similar to agreed departure.
A reduction in the exercise period for vested but unexercised awards.
Performance and time elapsed will be taken into account, but the
Committee may enable awards to vest in full.
In certain situations (as defined in the plan rules) rollover awards can
be offered, taking into account performance and time elapsed, although
these can be disapplied by the grantor.
Other
The Committee may approve other limited payments which may
include legal fees connected to the departure, untaken holiday,
out-placement and repatriation.
Similar to agreed departure.
65
Strategic Review
Performance Review
Corporate Governance
Financial Statements
Introduction
Annual Report and Accounts 2014
