Document:

Exhibit 10.15

 

PRINCIPAL STATEMENT OF MAIN TERMS AND CONDITIONS OF EMPLOYMENT

(PURSUANT TO THE EMPLOYMENT RIGHTS ACT 1996)

 

FOR: JOHN PEARSON

 

	
1.                                      GENERAL   DETAILS
    	
 
    
	
 
    	
 
    
	
Date   Of Issue:
    	
11   July 2006
    
	
 
    	
 
    
	
Name   Of Employing Company:
    	
AMEC   Group Ltd within the
    
	
 
    	
Oil   & Gas Division
    
	
 
    	
 
    
	
Located   At:
    	
City   Gate
    
	
 
    	
Altens   Farm Road
    
	
 
    	
Nigg
    
	
 
    	
Aberdeen
    
	
 
    	
AB12   3LB
    
	
 
    	
 
    
	
Has   Engaged:
    	
Mr   John Pearson
    
	
 
    	
 
    
	
Of   (address):
    	
Newhills   Cottage
    
	
 
    	
Strachan
    
	
 
    	
By   Banchory
    
	
 
    	
Aberdeenshire
    
	
 
    	
AB31   6NL
    
	
 
    	
 
    
	
As   (Job Title):
    	
Managing   Director – Europe & West Africa, Oil & Gas
    
	
 
    	
 
    
	
Date   of commencement of continuous employment:
    	
1   January 2000
    
	
 
    	
 
    
	
Date   of appointment to the above position:
    	
1   July 2006
    

 

1.1                               PLACE OF WORK

 

Your place of work will be in Aberdeen or such other location, as the Board shall reasonably decide within the United Kingdom. You may also be required to travel from your place of employment both within the United Kingdom and internationally.

 

2.                                      REMUNERATION

 

2.1                               Your salary will be at the rate of £150,000 per annum and is paid in twelve equal monthly instalments on 28th day of each month or the nearest preceding working day by credit transfer to a bank of your choice in the United Kingdom.

 

2.2                               Your normal annual salary review date will be 1 January each year

 

2.3                               The calculation of a day’s remuneration (for part month payment) is 1/260th x annual salary.

 

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3.                                      DUTIES/HOURS OF WORK

 

3.1                               As an employee you will perform and discharge such duties in connection with the business of the Company or any Group Company as the Board or any person by, or under the authority of the Board may from time to time reasonably request.

 

3.2                               You shall not during the term of employment with the Company be employed or engaged, directly or indirectly, in any capacity in any other business or commercial activity without the express and prior written consent of the Company.

 

3.3                               As a senior employee, you are required to work such hours as may reasonably be required for the proper performance of your duties. Under these terms, you are regarded as having control over the regulation of your working hours and are therefore not covered within the scope of the “Working Time Directive”.

 

4.                                      HOLIDAYS

 

4.1                               The holiday year runs from 1 January to 31 December. Employees employed on 1 January will be entitled to 25 days paid annual holiday in the period to the following 31 December accrued from 1 January each year in accordance with the table set out in clause 4.2. If your employment terminates before 31 December in any holiday year, clause 4.5 applies.

 

4.2                               For employees who start/leave during the holiday year, entitlement will accrue based on complete months of service, as follows:-

 

	
Complete Months
    	
 
    	
No. of Days
    	
 
    	
Complete Months
    	
 
    	
No. of Days
    	
 
    
	
Of Service
    	
 
    	
Holiday
    	
 
    	
of Service
    	
 
    	
Holiday
    	
 
    
	
1
    	
 
    	
2.5
    	
 
    	
7
    	
 
    	
15
    	
 
    
	
2
    	
 
    	
4.5
    	
 
    	
8
    	
 
    	
17
    	
 
    
	
3
    	
 
    	
6.5
    	
 
    	
9
    	
 
    	
19
    	
 
    
	
4
    	
 
    	
8.5
    	
 
    	
10
    	
 
    	
21
    	
 
    
	
5
    	
 
    	
10.5
    	
 
    	
11
    	
 
    	
23
    	
 
    
	
6
    	
 
    	
12.5
    	
 
    	
12
    	
 
    	
25
    	
 
    

 

4.3                               You are entitled to paid public or statutory holidays according to the number observed at your work location. The dates of public or statutory holidays vary from year to year, and the actual days holiday observed may be subject to local arrangements. The dates to be observed at each location will be placed on relevant notice boards at the start of each calendar year.

 

4.4                               Up to 5 days of the annual holiday entitlement (as set out in 4.1 and 4.2 above as appropriate) may be designated by the Company to be taken at particular times of the year (usually around the Christmas break). Any other holiday arrangements will be by mutual agreement with your immediate manager.

 

Normally no more than two weeks may be taken consecutively unless specific prior permission is obtained from your immediate manager.

 

4.5                               If at the time of leaving the Company, holidays taken by you are less than those accrued, the salary equivalent to the outstanding days will be paid in your final salary payments.

 

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If at the time of leaving the Company, holidays taken by you exceed those accrued; the salary equivalent to the outstanding days will be deducted in your final salary payments.

 

For this purpose, a day’s holiday is calculated as:    1       x    annual salary

 260

 

There will be no entitlement to payment in lieu of holidays not taken should you leave the Company without serving notice in accordance with the terms of your employment.

 

4.6                               Holidays may not normally be carried forward to the following holiday year neither will payment be made in lieu of holidays not taken.

 

5.                                      BENEFITS

 

You will continue to be eligible to receive the following benefits which are subject to periodic review.

 

5.1                               Company Car

 

You will be eligible to receive a grade 1 Company Car or Car Allowance in accordance with the company car policy (which may be amended from time to time).

 

5.2                               Private Medical Insurance

 

You will continue to be eligible for membership of the AMEC Healthcare Scheme. The Company pays the cost of your membership of the scheme and that of your eligible dependants, as appropriate. You should be aware that this cost will attract a benefit in kind liability for tax purposes.

 

5.3                               Permanent Health Insurance

 

You will continue to be included in the Group’s Permanent Health Insurance Scheme, subject to acceptance by Insurers of your Scheme membership. Providing the scheme criteria are satisfied and there are no restrictions to your cover applied by insurers, this will continue payments at the half salary level, plus ongoing contributions to the AMEC pension scheme, for periods of incapacity in excess of twelve months, if necessary until age 60, subject to acceptance by Insurers of any incapacity benefit claim.

 

6.                                      NOTICE OF TERMINATION OF EMPLOYMENT

 

6.1                               Notice of termination of employment must be in writing on the terms below.

 

(a)                                 If notice is given by the Company 12 Months

 

(b)                                 If notice is given by the employee 6 Months

 

6.2                               Where notice is given, the Company reserves the right, at its absolute discretion, to waive the notice period (in whole or in part) and where applicable, in substitution make payment in compensation for loss of employment.

 

6.3                               Your employment may be terminated by the Company without notice or payment in lieu of notice in the event of dismissal arising from an act of gross misconduct.

 

6.4                               In the event of dismissal for an offence judged to be one of theft or fraudulent practice or of malicious damage to property which results in financial loss to the

 

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Company, a deduction equal to this loss will be made from any outstanding monies which may be due in respect of employment.

 

6.5                               The Company may, at its absolute discretion, require you not to attend your place of work for the duration of your notice period and may, at its discretion, provide you with alternative duties of a similar nature or relieve you of some or all of your contractual duties during that period.

 

7.                                      ABSENCE & SICK PAY

 

7.1                               In the event of your absence from work, you should arrange that your immediate manager/director is notified at the earliest opportunity, giving the reason for your absence and its probable length.

 

7.2                               If your absence is due to sickness and it exceeds seven calendar days, you must obtain a medical certificate from your doctor and ensure that it is sent to your immediate manager/director.

 

7.3                               For shorter absences, internal notification procedures exist, and on return to work you should ensure that these are adhered to. Further information can be obtained from your Human Resources Manager.

 

7.4                               Payment of both Occupational and Statutory Sick Pay may be withheld if notification procedures are not carried out.

 

7.5                               Entitlement to Occupational Sick Pay in any 12 month period will be a maximum of 26 weeks full pay and 26 weeks half pay, provided notification procedures have been adhered to and medical certificates are produced as necessary.

 

The rate of Occupational Sick Pay will be your normal salary, LESS any entitlement to Statutory Sick Pay.

 

7.6                               In the case of sickness, ill health or other disabilities, the Company reserves the right to require you to attend for and submit to a medical examination by a medical practitioner of its choice and you are hereby required to give permission for that medical practitioner to disclose relevant findings to the Company.

 

7.7                               If the absence is caused by the negligence of a third party, sick pay will be paid as a loan. Lost earnings recovered from the third party should be used to repay the loan to the Company.

 

7.8                               In the interests of safety and standards of behaviour whilst on Company business, you should never allow your judgement to be impaired by alcohol and/or drugs. If you are in doubt about the effect of drugs prescribed for medicinal purposes you should seek advice from a doctor and advise your immediate superior.

 

At any time whilst on duty, or on the Company’s premises for the purpose of taking up duty, you may be required to provide, on request by an authorised person with reasonable cause (in accordance with the terms of the Company’s Substance Abuse Policy), a specimen of breath and/or urine for the purpose of screening for alcohol and/or prohibited drugs.

 

The signing of your statement of Terms and Conditions of employment constitutes your consent to details of the result of any screening referred to above being passed to the Company by any authorised person.

 

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7.9                               If you are prevented by incapacity from properly performing your duties under this agreement for a consecutive period of 5 working days the Company may appoint another person or persons to perform those duties until such time as you are able to resume fully the performance of your duties.

 

8.                                      PENSION SCHEME

 

8.1                               The Company operates a voluntary, contributory pension and life assurance scheme known as the AMEC Staff Pension Scheme. Subject to meeting the requirements laid down in the rules of the scheme, you are entitled to become and remain a member. Full details of the scheme can be found in the AMEC Staff Pension Scheme booklet.

 

You are also eligible for membership of the AMEC Executive Pension Scheme. This tops up the Staff Scheme and the combined schemes provide the following:-

 

·                  normal retirement age 62;

 

·                  a future service accrual rate of 1/45th of final pensionable salary for each year of pensionable service;

 

·                  a spouse/dependents pension fraction of 2/3rds of your prospective pension on death before retirement;

 

·                  life assurance cover of four times basic annual salary.

 

Basic salary for the purposes of calculating pensionable salary and life assurance cover under the schemes is restricted to a maximum “earnings cap”. This is normally reviewed from April each year. The cap for the 2006/07 tax year is £112,500 p.a.

 

9.                                      EMPLOYEE OBLIGATIONS

 

9.1                               You acknowledge that you have been appointed to a senior position and you have acquired, or will in the course of your employment acquire confidential information, trade secrets and knowledge about the business, its operations, customers and trade connections of the Company and the Group and you agree to enter into the restrictions in this clause for the purpose of protecting those interests and the stable trained workforce of the Company and the Group. (Further details of your resultant obligations are more comprehensively and technically laid out in paragraphs 9.2 to 9.5 inclusive.)

 

9.2                               You shall not without the prior written consent of the Board (such consent not to be unreasonably withheld) for a period of 6 months after the termination of your employment directly or indirectly, on your own behalf, or on behalf of any person, firm or company, in connection with any business which is (or is intended or about to be) similar to or competitive with the business carried on by the Company and the Group at the date of termination of your employment in relation to the provision of any goods or services similar to or competitive with those sold or provided by the Company and the Group at the date of termination of employment with which you were concerned, or for which you had management responsibilities, at any time during the 12 months immediately preceding the termination of your employment:

 

9.2.1                     solicit or canvass the custom of any person firm or company who during the 12 months prior to the termination of the Appointment was a customer or potential customer of the Company and/or any Group company and (in the case of a customer) from whom you had obtained business or to whom you had provided services on behalf of the Company and/or any Group company

 

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or (in the case of a potential customer) with whom you have dealt with a view to obtaining business;

 

9.2.2                     deal with any person, firm or company who during the 12 months prior to the termination of the Appointment was a customer or potential customer of the Company and/or any Group company and (in the case of a customer) from whom you had obtained business or to whom you had provided services on behalf of the Company and/or any Group company or (in the case of a potential customer) with whom you had dealt with a view to obtaining business;

 

9.2.3                     employ, or offer to employ, or attempt to employ, or entice away, or enter into partnership with, or attempt to enter into partnership with, any employee of the Company or any Group company who was employed by the Company or any Group company at the time of the termination of your employment provided that this restriction shall only apply to persons whom you have managed or with whom you have worked at any time during the 12 months immediately preceding the termination of your employment and shall not include clerical administrative and secretarial staff.

 

9.3                               In the event that you receive an offer of employment or request to provide services either during your employment or during the currency of the restrictive periods set out in this clause, you shall provide immediately to such person, company or other entity making such an offer or request a full and accurate copy of this agreement signed by both parties.

 

9.4                               The restrictions contained in this clause are considered by the parties to be reasonable in all the circumstances. Each sub clause constitutes an entirely separate and independent restriction and the duration, extent and application of each of the restrictions are no greater than is necessary for the protection of the interests of the Company and any Group company.

 

9.5                               Subject to the rights of an employee under the Patents Act 1977 and the Copyright Designs and Patents Act 1988, any invention, development, improvement process or secret made, discovered or acquired by you which relates to or concerns any of the products or methods of production of the Companies of AMEC plc, shall belong to and be the absolute property of AMEC plc to the fullest extent permitted by the law.

 

You will be required to communicate full details, including all necessary plans and models, to co-operate in obtaining or returning any letters of patent, trade marks, registered designs or similar protection and to carry out any action necessary to vest in AMEC plc the beneficial style to such invention, development, improvement process or secret. AMEC shall not be liable to account to any employee for any revenue or profit derived from or resulting from any such invention, development, improvement process or secret.

 

9.6                               On termination of employment you will be required to return all passwords, books, documents (whether hard copy or electronic mail) papers, materials, credit cards, computer hardware, keys and other property of, or relating to, your employment.

 

10.                               EXPENSES

 

10.1                        You may claim reasonable out of pocket expenses incurred as a result of your employment related to business trips and entertaining, in accordance with current policy. Details can be found in the Pay and Attendance section of the Staff Handbook.

 

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11.                               OVERPAYMENT

 

11.1                        The Company reserves the right to recover from you any amount of overpayment of salary or expenses made to you. In signing this contract it will be taken that you have duly authorised the Company to make appropriate deductions from your pay in this respect.

 

12.                               CHANGES IN TERMS & CONDITIONS OF EMPLOYMENT

 

Any changes to your terms and conditions of employment will be notified to you in writing either by way of a revised Principal Statement of Main Terms and Conditions of Employment being issued or a letter of amendment.

 

13.                               CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

 

13.1                        Nothing in this agreement is intended to confer on any person any right to enforce any term of this agreement which that person would not have but for the Contracts (Rights of Third Parties) Act 1999.

 

14.                               DATA PROTECTION

 

14.1                       The Company will maintain a personnel file relating to your employment. The information held on you will include sensitive personal data, as defined in Part 1 (ii) of the Data Protection Act 1998. By signing this contract, you hereby give explicit consent (as defined in the Act) to the processing of personal and personal sensitive data for normal employment purposes. On occasions, data from your personnel file may also need to be sent outside the European economic area and, if so, you also hereby give your explicit consent to such a transfer.

 

15.                               SIGNATORIES

 

I acknowledge receipt of this Principal Statement Of Main Terms and Conditions Of Employment as required by the Employment Rights Act 1996, and confirm my agreement that these constitute my contract of employment. All previous agreements and arrangements between the parties hereto and between the Executive and any Group Company relating to the terms of service of the Executive are hereby cancelled.

 

	
Signed
    	
/s/   John Pearson
    	
 
    	
Dated
    	
24/7/06
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Signed   on behalf the Company
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Signed
    	
/s/   Neil Bruce
    	
 
    	
Dated
    	
11th July 2006
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Job   Title 
    	
Chief   Operating Officer
    	
 
    	
 
    	
 
    

 

Enclosures:

 

Duplicate Copy of Statement

Permanent Health Insurance Information

 

7

 

ADDENDUM

 

For your further information, the following procedures apply for your employment:

 

GRIEVANCE PROCEDURE

 

In the event of you having a grievance or complaint concerning your employment you should raise the matter through the grievance procedure. At any stage of this procedure you are entitled, if you so wish, to have a representative in the form of a working colleague or a recognised trade union official present during any of the grievance meetings. A full explanation of the grievance procedure can be found in the Employment Handbook, however the following summary is provided for information.

 

Stage 1

 

Initially the matter should be raised orally with your immediate manager who will consider the circumstances and respond, normally within 14 days of your complaint being heard.

 

Stage 2

 

Having failed to resolve the grievance satisfactorily at stage 1, you should put the facts of the matter in writing, addressed to the relevant Director, requesting an interview. The Director will respond as soon as reasonable practicable.

 

If this fails to resolve the matter, it may be progressed to stage 3.

 

Stage 3

 

The ultimate authority on matters relating to the grievance procedure is the relevant member of the Group Executive who, upon reference from either you or your manager, will take such action as is necessary to resolve the matter.

 

Human Resources is available for advice at all times.

 

DISCIPLINARY RULES

 

The objective of the Disciplinary rules and procedures applying to your employment is to ensure that breaches or infringements of discipline are identified and dealt with as appropriate and that any action taken is in accord with a fair and consistent pattern which applies to everyone.

 

A full explanation of the disciplinary procedure together with disciplinary rules can be found in the Employment Handbook in the section entitled ‘Rules and Procedures’, however the following summary is provided for information.

 

	
Stage 1
    	
 
    	
Oral warning.
    	
 
    
	
Stage 2
    	
 
    	
Written warning.
    	
 
    
	
Stage 3
    	
 
    	
Final written warning.
    	
 
    
	
Stage 4
    	
 
    	
Dismissal
    	
 
    

 

In cases of serious misconduct, you may be dismissed without notice or payment in lieu of notice.

 

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Examples of gross misconduct (without being exclusive) are:

 

(a)                   Falsification of records documents etc. or any fraudulent practice.

(b)                   Actual or threatened violence

(c)                    Theft, unauthorised use or removal, or malicious damage of property

(d)                   Major breaches of company policies, rules or procedures

(e)                    Unauthorised disclosure of confidential information

(f)                     Repeated refusal to carry out a reasonable instruction

(g)                    Discrimination, bullying, harassment or victimisation

(h)                   Conduct which may seriously offend a client or adversely affect AMEC’s reputation.

 

9

 

AMEC UK Permanent Health Insurance

 

The AMEC UK PHI (Permanent Health Insurance) scheme provides payment of benefit, subject to cover limits and medical underwriting where required, for an employee member who is totally incapacitated by reason of injury or illness from following his/her occupation. Cover will apply to injury or illness sustained anywhere in the world.

 

For the first six months of any incapacity, salary will continue to be paid in full as sick pay by the employing company. This will be followed by a further six months sick pay at half salary, also paid by the company. As continuation of salary is sick pay any statutory sick pay receivable is inclusive.

 

If the incapacity continues beyond the 12 month period the company will make a claim on the PHI policy which, if accepted by the insurers after full review of the medical evidence, will provide an ongoing benefit normally of 50% of the pre-incapacity salary (subject to any cover limits which are notified individually). This will continue until such time as the employee member recovers and returns to work or reaches the age of 60, whichever is the sooner (subject to the continued acceptance by Insurers of the ongoing incapacity benefit claim). The employee remains in the company’s service and therefore any benefit paid is taxed as earned income under P.A.Y.E.

 

In addition the policy provides for the employee member’s own ordinary and the company’s pension contributions to the AMEC pension scheme(s) to be continued for the same period. Thus the PHI scheme provides an income and protects the incapacitated employee member’s pension situation throughout their period of continuous incapacity up to age 60. If an employee member remains incapacitated at that stage they may apply for ill-health early retirement under the company’s pension scheme(s).

 

Benefits under the scheme may be restricted if the employee member is in receipt of other pension benefits or has income from accident, sickness or other long term disability insurance policies. If the employee member has any such policies, further information about these potential restrictions can be provided on request by the Insurance Department.

 

Benefits provided by the insurers will be increased annually, whilst they remain in payment, in line with the Retail Price Index up to a maximum of 5% per annum. The same rate of increase as applies to the PHI benefit will apply also to the employee member’s pensionable salary under the pension scheme(s). In consideration of this the employee member’s salary will not be reviewed annually by the company and terms of employment will be revised accordingly. The company also reserves the right to reduce or withdraw the employee’s company car or car allowance provision.

 

If, following total incapacity of not less than 12 months, the employee member resumes work on a part-time basis at reduced income or in a new less remunerative occupation, a proportionate benefit may be payable.

 

The entire cost of the PHI scheme is met by the company. The company reserves the right to amend or terminate the scheme at any time but without detriment to any employee member in receipt of a disability benefit under the scheme or who is totally incapacitated but whose disablement has not exceeded the qualifying period, in accordance with the rules at the time.

 

1Exhibit 10.16

 

GROUP MANAGEMENT ANNUAL BONUS PLAN RULES

 

1.             Outline of Plan

 

1.1          The objectives of the plan are to encourage participants to:

 

a)             deliver superior results by setting clear, measurable personal and business performance targets; and

 

b)             contribute as members of the senior management team to the achievement of AMEC plc performance targets;

 

and to reward achievement against these targets.

 

1.2                               The plan is overseen by the Remuneration Committee which, in relation to Designated Executives, retains absolute discretion over the setting of bonus targets, adjustment of the targets in the course of or at the end of the year if they deem this appropriate, and the judgement of performance.  This also applies for other participants in respect of the AMEC plc Performance Element (see 4 below).

 

1.3                               The plan year will run from 1 January to 31 December.   Payments in respect of each bonus year are normally made during March of the subsequent year subject to any voluntary elections by participants to receive bonus in the form of deferred shares (see 9 below).  However the Remuneration Committee may decide in advance that part of the bonus for any particular year will be compulsorily deferred in accordance with 3.4 below.

 

1.4                               It is anticipated that the plan will be continued from year to year but the Remuneration Committee reserves the right to withdraw or amend the plan by notifying participants at any time.

 

1.5                               These Rules apply to bonus years from 2013 onwards.

 

2.             Eligibility and Definitions

 

2.1                               All Executive Directors and other members of the Group Management Team will be included in the plan.

 

2.2                               In order to have any entitlement to bonus, including any deferred element, participants must remain in employment until payment is due to be made, except where their employment has terminated due to retirement with the Company’s consent or otherwise at the committee’s discretion.

 

2.3                              The relevant salary for all elements of bonus is the total basic salary received by each participant for that part of the plan year when they were included in that bonus plan i.e. joiners and leavers are included pro rata, as are salary changes for participants.

 

2.4                               Bonus will not be pensionable.

 

3.                         Maximum Bonus Potential and allocation between elements

 

3.1                               The maximum bonus potential for the Chief Executive is 150%.  The maximum bonus potential for other Executive Directors is 125%.  The maximum bonus potential for other executives will be determined by the Chief Executive between

 

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60% and 100%.  In each case, these are percentages of relevant salary as defined at 2.3 above.

 

3.2                               The plan consists of four elements:

 

AMEC plc performance (EBITA and Cash Flow)

Business Unit performance (EBITA and Cash Flow)

Other business targets

Individual performance against defined personal objectives

 

3.3                               The bonus allocation between these elements will vary from individual to individual according to their overall maximum and whether or not Business Unit targets are included, however the proportion of overall potential bonus allocated to the EBITA targets will be not less than half.

 

3.4                               For executive directors, part of their bonus opportunity equal to 25% of their salary will be subject to additional EBITA targets and will be deferred in accordance with the provisions in section 8 below

 

4.                         AMEC plc Performance Element

 

4.1                               A realistic, stretching but achievable Maximum performance level will be set each year that is consistent with the highest potential level of EBITA for the year. Maximum bonus under this element will be earned if this performance level is met.

 

4.2                               A Target performance level for the year will also be set, normally in line with the approved Short Range Plan.

 

4.3                               A Threshold performance level for the year will also be set.  No bonus will be payable under this element for achievement of less than Threshold.  Under normal circumstances, the threshold will be greater than the previous year’s actual result, thus ensuring that no bonus will be payable under this element unless EBITA grows year on year.

 

Maximum and Threshold performance levels will be recommended by the Chief Executive to the Remuneration Committee following approval of the Short Range Plan.

 

4.4                               Where the result falls between two of the set targets, the actual bonus payable will be determined on a straight line sliding scale between the amounts payable at those two targets.

 

4.5                               The proportion of maximum bonus on this element payable for the achievement of Threshold or Target performance may vary from year to year as determined by the Remuneration Committee.

 

4.6                               A further stretch target above the Maximum will be set in respect of the deferred bonus element for executive directors referred to under 3.4 above.  Bonus will be earned on a straight line basis running from Nil at Maximum to 25% of salary at the higher stretch target.

 

4.7                               Cash Flow targets for AMEC plc will also be established following the same principles.

 

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4.8                               The definitions for EBITA and cash flow will be confirmed each year as part of the target setting.

 

5.             Business Unit Performance Element

 

5.1                               Business Unit EBITA and Cash Flow targets for the year will be established following the same principles as outlined above.

 

5.2                               Business Unit targets will apply to those participants who have operational responsibilities and will relate to the unit or units for which they are responsible.

 

6.             Other Business Targets

 

6.1                               Other business performance targets may be set for members of the Management Team collectively or for individual members, in line with the company’s strategic objectives and non-financial KPIs.

 

7.             Individual Performance Element

 

7.1                               Individuals may be paid an element of their bonus based on the achievement of a number of predetermined personal targets.   This will operate independently of the other elements.

 

7.2                               This element of bonus may be split amongst a number of personal targets.   The number of targets and the proportion of total bonus allocated to each target may vary between individuals.   A sliding scale of differing levels of bonus for different levels of achievement may be included.  Targets should, as far as possible, be specific and measurable, and normally be achievable during the period in question.

 

7.3                               In the case of Designated Executives other than himself, personal targets will be recommended to the Remuneration Committee by the Chief Executive.  Personal targets for the Chief Executive will be recommended by the Chairman.  In the case of other participants, personal targets will be agreed between participants and the Chief Executive as soon as possible in the relevant plan year or within one month of joining the scheme for those not included at the start of the year.   Copies will be lodged with Group Human Resources.

 

7.4                               Achievement against personal targets will be assessed at the end of the year and the appropriate level of payment will be recommended to the Remuneration Committee by the Chief Executive in the case of Executive Directors other than himself.  Achievement and payment for the Chief Executive will be recommended by the Chairman.  Achievement and payment for other executives will be determined by the Chief Executive.

 

8.             Compulsory Deferred bonus

 

8.1                               Deferred bonus earned in relation to 3.4 above will be converted, after tax, into AMEC plc shares based on the Market Value (defined in the same way as under the Performance Share Plan) at the date when the normal annual bonus is paid. These shares will be held for a three year deferral period by the Trustee of the AMEC Employee Share Trust.

 

8.2                               During the deferral period, the individual will have beneficial ownership of the shares, including the right to receive dividends on them, but will not be able to sell,

 

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pledge or otherwise encumber them except to designate them as Investment Shares in relation to an award under the Performance Share Plan.

 

8.3                               In the event that the individual leaves employment before the end of the deferral period for reasons of resignation to take up another full-time job or dismissal for gross misconduct, the deferred shares will be forfeit.  In the event of leaving for other reasons, the Remuneration Committee will have the discretion to decide whether to release the deferred shares at the time of leaving or at the end of the original deferral period.

 

8.4                               In the event that, before the end of the deferral period, the accounts for the year for which the shares were earned are required to be restated for a correction of a prior period error, as defined by International Account Standard 8 (Accounting Policies, changes in Accounting Estimates and Errors), the Remuneration Committee may determine that some or all, at its discretion, of the deferred shares will be forfeit.

 

9.             Voluntary Deferred bonus

 

9.1                               Prior to the amount of bonus earned for the year being determined, participants may elect to receive that portion of their bonus that would otherwise be due as a cash payment in the form of a nil cost option over AMEC plc shares. The committee retains full discretion as to whether to permit this for any particular year.

 

9.2                               In the event that voluntary elections are agreed, the gross amount of bonus will be converted into AMEC plc shares based on the Market Value (defined in the same way as under the Performance Share Plan) at the date when the normal annual bonus is paid and instead of receiving bonus the individual will be given an option over that number of shares.  The number of shares will be increased to take account of any dividends that become payable in the period between grant and exercise.

 

9.3                               The option may not be exercised until 3 months after the date of grant and may then be exercised at any time within the following 6 months. The requisite number of shares may be sold and the amounts realised retained by the Company in order to meet any tax with-holding required at either the point of vesting or exercise.

 

9.4                               In the event that the individual leaves employment before the option becomes exercisable for reasons of resignation to take up another full-time job or dismissal for gross misconduct, the option will lapse and the deferred bonus will be forfeit.  In the event of leaving for other reasons, the Remuneration Committee will have the discretion to decide whether to permit the early exercise of the option or for it to continue to subsist and be exercised in accordance with the original terms.

 

Note: Where Deferred Bonus shares that have been used as Investment Shares in relation to an award under the Performance Share Plan become forfeit or lapse prior to vesting, this will also apply to the associated Matched Share award, in accordance with the rules of that plan.

 

13 February 2013

 

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