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Awards for Executive Directors<br />
It is the current intention that share awards granted to Executive Directors under the <strong>Vesuvius</strong> Share<br />
Plan within 12 months following the Demerger will likely be granted in the form of performance<br />
share awards.<br />
Following the 12 month period, the <strong>Vesuvius</strong> Remuneration Committee shall have the discretion to<br />
consider the grant of different types of award to Executive Directors under the <strong>Vesuvius</strong> Share Plan.<br />
The <strong>Vesuvius</strong> Share Plan is similar to the current Cookson LTIP except that it has been simplified to<br />
remove matching shares whilst providing flexibility as to the types of award that can be granted.<br />
(a) Performance conditions for performance share awards<br />
The vesting of performance share awards granted by the Company will be based on the Company’s<br />
performance against specified performance conditions measured over a three year period.<br />
The present intention is that the performance metrics will be similar to Cookson (EPS and TSR<br />
based), and the performance scale is intended to be set so that it is of similar difficulty to that which<br />
applied under the Cookson LTIP.<br />
(b) Performance conditions for market-price options<br />
It is the current intention that any market-price options granted by the Company will vest subject to<br />
an EPS growth condition. However, the <strong>Vesuvius</strong> Remuneration Committee shall have the discretion<br />
to determine the use of other financial or operational measures.<br />
(c) Eligibility and individual grant levels<br />
Executive Directors will normally be eligible to receive, on an annual basis:<br />
• a performance share award with a face value of up to 200 per cent. of base salary; or<br />
• a market-price option with a face value of up to 300 per cent. of base salary<br />
The <strong>Vesuvius</strong> Remuneration Committee shall have the discretion to grant a mix of performance<br />
share awards and market-price options to an executive if the commercial value of the mixed grant is<br />
not higher than the commercial value that would have been otherwise provided to the executive<br />
under a single grant.<br />
Cookson’s remuneration consultants have confirmed that the total potential annual value of the<br />
intended share plan awards for Executive Directors is of a broadly similar economic value to the<br />
total potential annual value of the existing share plan awards for the Cookson Executive Directors.<br />
5.5 Pension and other benefits<br />
Pensions and other benefit arrangements for Executive Directors will remain largely unchanged<br />
following the Demerger, with Mr O’Shea having entitlement on a similar basis to other Executive<br />
Directors.<br />
6 Directors’ service contracts and letters of appointment<br />
6.1 Executive Directors’ service agreements<br />
John McDonough CBE<br />
Pursuant to the terms of a letter of engagement with <strong>Vesuvius</strong> <strong>plc</strong> dated 31 October 2012, John<br />
McDonough agreed to serve as a Non-Executive Director and Chairman of <strong>Vesuvius</strong> <strong>plc</strong> for an<br />
annual fee of £185,000. Mr McDonough was appointed Chairman with effect from 31 October 2012,<br />
and is to stand for election for an annual term with effect from the <strong>Vesuvius</strong> annual general meeting<br />
in May 2013. Mr McDonough’s appointment as Chairman can be terminated by either party on 12<br />
months’ notice during the first year of Mr McDonough’s appointment, and six months’ notice<br />
thereafter. It is subject to the <strong>Vesuvius</strong> Articles and will terminate automatically if Mr McDonough<br />
is removed from office by a resolution of <strong>Vesuvius</strong> Shareholders or is not re-elected to office. Any<br />
compensation for loss of office would be based upon his fee. None of the other Non-Executive<br />
Directors is entitled to receive compensation for loss of office at any time.<br />
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