Directors service agreements and letters of engagement for Imperial_Chemical

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ICI » Topics » Directors service agreements and letters of engagement

This excerpt taken from the ICI 6-K filed Mar 21, 2007.

Directors’ service agreements and letters of engagement
It is the Remuneration Committee’s policy that Executive Directors are employed on contracts subject to no more than 12 months’ notice, in accordance with current corporate governance best practice. The Remuneration Committee strongly endorses the principle of mitigation of damages on early termination of a service agreement.

This excerpt taken from the ICI 20-F filed Mar 31, 2006.

Directors’ service agreements and letters of engagement
(not subject to audit)

Executive Directors
It is the Remuneration Committee’s policy that Executive Directors are employed on contracts subject to no more than 12 months’ notice, in accordance with current corporate governance best practice. The Remuneration Committee strongly endorses the principle of mitigation of damages on early termination of a service agreement.

The dates of current Executive Directors’ service agreements, the dates on which their appointments took effect and the current expiry dates of their agreements are as follows:

Executive Directors	Date of service agreement	Effective date	Expiry date

Dr J D G McAdam	14.10.03	09.04.03	Terminable on 12 months’ notice

A J Brown	02.11.05	14.11.05	Terminable on 12 months’ notice

D C M Hamill	28.10.03	08.12.03	Terminable on 12 months’ notice

C F Knott	02.09.04	01.09.04	Terminable on 12 months’ notice (note 1)

W H Powell	17.02.00	02.02.00	Terminable on 12 months’ notice (note 2)

(1)

As set out in note 11 to the table of Directors’ Emoluments, Mr C F Knott has two Service Agreements, both dated as set out above. Mr Knott’s appointment as an Executive Director of the Company is non-remunerative and is covered by a separate letter of appointment. Mr Knott’s employment is terminable on 12 months’ notice from the Company. To comply with statutory employment legislation in the Netherlands, Mr Knott is required to give six months’ notice of termination of employment to the Company. An ICI subsidiary company in the Netherlands has agreed to provide Mr Knott with certain protection against any future loss on disposal of the house he has purchased as his residence in the Netherlands. In the event that he ceases employment in the Netherlands with an ICI Group company, other than by resignation or for a reason relating to his conduct, during a period of 10 years from 31 August 2003 and in the event the house is sold at a price less than the original purchase price, the ICI subsidiary will reimburse him for 75% of the difference between the sale price and the original purchase price. The exact amount of the benefit to him as a result of this arrangement will not be known until the house is sold, but at the current valuation of the property no reimbursement would require to be made.

Remuneration report

ICI Annual Report and Accounts 2005 51

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Directors’ service agreements and letters of engagement (continued)
(not subject to audit)

Executive Directors (continued)

(2)

Mr W H Powell’s appointment as an Executive Director of the Company, which is non-remunerative, is terminable by either party giving not less than 12 months’ notice in writing. Mr Powell is separately employed by National Starch and Chemical Company as Chairman and Chief Executive and this employment is terminable on 12 months’ notice. These two notice periods may run concurrently.

There are no express provisions for compensation payable upon early termination of an Executive Director’s contract other than as detailed above.

Mr T A Scott, who died on 12 August 2005, had a service agreement dated 11 May 2001 with an effective date of 23 May 2001.

Chairman and Non-Executive Directors
The dates of the Chairman’s and current NEDs letters of engagement, the date on which their appointment took effect and the current expiry dates are as follows:

Chairman	Date of letter	Effective date	Expiry date
and Non-Executive Directors	of engagement

P B Ellwood	15.12.03	01.01.04	Terminable on 12 months’ notice

A Baan	24.07.01	25.06.01	(note 1)

Lord Butler	12.06.98	01.07.98	(note 1)

J T Gorman	25.10.00	20.09.00	(note 1)

R N Haythornthwaite	22.02.01	20.02.01	(note 1)

Baroness Noakes	06.02.04	01.03.04	(note 1)

(1)

Subject to satisfactory performance, NEDs are normally expected to serve two three-year terms commencing with the first Annual General Meeting after the date of their appointment. However, there may be circumstances where NEDs are invited to remain on the Board after the expiry of their second three-year term for a further period of up to three years. Any such invitation will be subject to the Director in question standing for annual re-election by shareholders. NEDs have no right to compensation on the early termination of their appointment.

52 ICI Annual Report and Accounts 2005

Remuneration report

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This excerpt taken from the ICI 6-K filed Mar 14, 2006.

Directors’ service agreements and letters of engagement
(not subject to audit)

The dates of current Executive Directors’ service agreements, the dates on which their appointments took effect and the current expiry dates of their agreements are as follows:

Executive Directors	Date of service agreement	Effective date	Expiry date

Dr J D G McAdam	14.10.03	09.04.03	Terminable on 12 months’ notice

A J Brown	02.11.05	14.11.05	Terminable on 12 months’ notice

D C M Hamill	28.10.03	08.12.03	Terminable on 12 months’ notice

C F Knott	02.09.04	01.09.04	Terminable on 12 months’ notice (note 1)

W H Powell	17.02.00	02.02.00	Terminable on 12 months’ notice (note 2)

(1)

Remuneration report

ICI Annual Report and Accounts 2005 51

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Directors’ service agreements and letters of engagement (continued)
(not subject to audit)

Executive Directors (continued)

(2)

There are no express provisions for compensation payable upon early termination of an Executive Director’s contract other than as detailed above.

Mr T A Scott, who died on 12 August 2005, had a service agreement dated 11 May 2001 with an effective date of 23 May 2001.

External directorships
Executive Directors are encouraged to take one external Non-Executive directorship. In order to avoid any conflict of interest all appointments are subject to the approval of the Remuneration Committee and the Board. Directors retain payments received in respect of these appointments.

Dr J D G McAdam received fees as a Non-Executive Director of Severn Trent Plc for the period to 1 September 2005, of £24,000. Dr McAdam also received fees during 2005 as a Non-Executive Director of J Sainsbury plc from the date of his appointment on 1 September 2005 to 31 December 2005 of £18,404. For the period 21 January 2005 to 7 December 2005 Mr D C Hamill received fees as a Non-Executive Director of BPB plc of £30,374. Mr W H Powell received fees as a Non-Executive Director of Granite Construction Incorporated of US$ 65,975.

Chairman	Date of letter	Effective date	Expiry date
and Non-Executive Directors	of engagement

P B Ellwood	15.12.03	01.01.04	Terminable on 12 months’ notice

A Baan	24.07.01	25.06.01	(note 1)

Lord Butler	12.06.98	01.07.98	(note 1)

J T Gorman	25.10.00	20.09.00	(note 1)

R N Haythornthwaite	22.02.01	20.02.01	(note 1)

Baroness Noakes	06.02.04	01.03.04	(note 1)

(1)

On behalf of the Board

R N Haythornthwaite
Chairman of the Remuneration Committee

16 February 2006

52 ICI Annual Report and Accounts 2005

Remuneration report

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EXCERPTS ON THIS PAGE:

6-K	Mar 21, 2007

20-F	Mar 31, 2006

6-K	Mar 14, 2006

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ICI » Topics » Directors service agreements and letters of engagement

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