Annual Report and Accounts 2006 - Optos
Annual Report and Accounts 2006 - Optos
Annual Report and Accounts 2006 - Optos
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Directors’ Remuneration <strong>Report</strong><br />
continued<br />
SERVICE CONTRACTS<br />
The Company has entered into service contracts with each of its executive Directors, none of which is for a fixed term. It is the remuneration committee’s policy to<br />
offer service contracts for an indefinite term subject to termination on a maximum of one year’s notice or an equivalent severance payment. Save for Mr Butts who<br />
has a US-style service agreement, each of the executive Directors’ service contracts can be terminated by the Director giving not less than six months’ written notice<br />
of termination or by the Company giving the Director not less than 12 months’ written notice of termination. The dates of the executed contracts for each executive<br />
Director are as follows:<br />
Allan Watson 9 February <strong>2006</strong><br />
Douglas Anderson 9 February <strong>2006</strong><br />
Ian Stevens 6 October <strong>2006</strong><br />
Thomas Butts 15 December <strong>2006</strong><br />
Save in relation to Mr Butts, the Company has the right, in its absolute discretion, to terminate each of the service contracts at any time by making a payment in lieu of<br />
the notice period comprising basic salary, car allowance (if applicable), bonuses (based upon the bonus paid during the previous financial year), benefits <strong>and</strong> pension<br />
contributions.<br />
Mr Butts is a US citizen <strong>and</strong> the Company has agreed to provide him with a service contract which is consistent with market practice in the United States <strong>and</strong> is<br />
governed by the laws of the Commonwealth of Massachusetts. The Company has the right, in its absolute discretion, to terminate Mr Butts’ service contract at any time<br />
without “Cause” by giving him two months’ written notice or making a payment in lieu of notice equal to his salary for the notice period. In addition <strong>and</strong> in exchange<br />
for the execution by Mr Butts of a release of claims against the Company, Mr Butts is entitled to a severance package comprised of one year of salary,<br />
bonus (based on the bonus paid during the previous financial year) <strong>and</strong> medical benefits. The severance package will be reduced by the amount of any payments<br />
Mr Butts receives in lieu of his notice period. If Mr Butts resigns in certain circumstances, he is also entitled to receive the severance package referred to above.<br />
Mr Stevens’ international assignment to the United States ended on 30 September <strong>2006</strong>. The Company has agreed that it will endeavour to find Mr Stevens a new role<br />
working for the Company in the United Kingdom which is similar to the position he held in the United Kingdom prior to his international assignment <strong>and</strong> acceptable<br />
to Mr Stevens. In the event that the Company fail to find such a position by 30 June 2007 (or, if earlier, three months after the date on which the Company appoints<br />
a permanent chief executive officer), then either party will be entitled to terminate Mr Stevens’ service contract. In such an event, Mr Stevens will be entitled to a<br />
severance payment which will comprise: (a) a pro rata bonus for the current financial year (in proportion to those pro rata performance targets which have been<br />
met as at the termination date); (b) 12 months’ basic salary, car allowance <strong>and</strong> pension contributions; (c) a bonus of 50% of his basic salary (but, in the event that the<br />
pro rata performance targets were not met as at the termination date, then such bonus will be reduced proportionately); <strong>and</strong> (d) £3,500 in lieu of 12 months’<br />
contractual benefits. Mr Stevens will also be entitled to exercise his share options for a period of two years following the termination date.<br />
There are no other provisions for early termination of the service contracts.<br />
NON-EXECUTIVE DIRECTORS<br />
The Company’s policy is to establish <strong>and</strong> maintain a body of non-executive Directors with a breadth of skills <strong>and</strong> experience that is relevant to the Company’s business.<br />
In this context, it is the Board’s policy for the non-executive Directors to be paid a level of fee that reflects market conditions <strong>and</strong> is sufficient to attract individuals with<br />
appropriate knowledge <strong>and</strong> experience. The Board seeks to pay the market rate to reflect the time taken to carry out the role of non-executive Director <strong>and</strong> reviews<br />
the rates annually.<br />
The Company has entered into a letter of appointment with each of the current non-executive Directors. Each letter of appointment is for a fixed three-year term,<br />
provided that either party may terminate the appointment at any time during the term of appointment by giving three months’ notice of termination <strong>and</strong> the<br />
appointment may be terminated any time in accordance with the articles of association of the Company or the Companies Act 1985. The dates of the letters of<br />
appointment <strong>and</strong> the expiry dates are:<br />
Non-executive Director Date of Letter of Appointment Expiry Date<br />
Dr John Padfield 11 January <strong>2006</strong> 30 December 2008<br />
Anne Glover 27 January <strong>2006</strong> 26 January 2009<br />
Patrick Paul 27 January <strong>2006</strong> 26 January 2009<br />
Barry Rose 27 January <strong>2006</strong> 26 January 2009<br />
Dr David Guyer 5 May <strong>2006</strong> 26 January 2009<br />
<strong>Optos</strong> plc <strong>Annual</strong> <strong>Report</strong> & <strong>Accounts</strong> <strong>2006</strong> 27