STRICTLY PRIVATE & CONFIDENTIAL
ADDRESSEE ONLY
Mark Pain
Group Finance Director
25th July 2000
Dear Mark,
As you know the PRC is carrying out a comprehensive review of the company's executive remuneration arrangements.
An outcome of this is a decision to increase your salary to £320,000 with effect from 1st August 2000. I will, of course, write to you again if and when the PRC makes any other changes.
Your sincerely,
John King
Human Resources Director
Abbey National plc | |
STRICTLY PRIVATE ADDRESSEE ONLY Mr M A Pain Group Finance Director Baker Street BAK C07 | Abbey House 201 Grafton Gate East Milton Keynes MK9 1AN Telephone 01908 343289 Facsimile 01908 343687 E-mail jking1@abbeynational.co.uk |
John King Human Resources Director |
JK/KB/117
17th April, 2000
Dear Mark
Variation to your Contract of Employment
The Personnel and Remuneration Committee has agreed to an amendment to the Executive Managers' Redundancy Agreement. Clause 12.2 of your Contract of Employment sets out the terms which apply in the event of your redundancy and incorporates the Executive Managers' Redundancy Agreement.
I am enclosing a copy of the amended clause, Schedule 2, which replaces the existing Clause 12.2 in your Contract with effect from 1st March, 2000 and should be substituted for it. All other terms of your Contract of Employment remains the same.
Yours sincerely
John King
Human Resources Director
Enc:
The Abbey National Grou p comprises Abbey National pic and its subsidiary group of companies.
Abbey National plc Registered Office: Abbey House, Baker Street, London NW1 6XL. Reg. No. 2294747. Registered in England.
SCHEDULE 2
STATEMENT OF TERMS APPLICABLE TO SENIOR EXECUTIVES AND
EXECUTIVE MANAGERS OF ABBEY NATIONAL PLC IN THE EVENT OF
INVOLUNTARY REDUNDANCY
1. | Definition | |
Abbey National plc ("the Company") adopts the definition of redundancy given in Section 136 of the Employment Rights Act 1996 ("the Act"). Redundancy is there defined as a situation where: | ||
(a) | the employer has ceased or intends to cease to carry on the business for the purposes of which the employee was employed by the employer; or | |
(b) | the employer has ceased or intends to cease to carry on the business in the place at which the employee was contracted to work, or | |
(c) | the requirements of that business for employees to carry out work of a particular kind, has ceased or diminished or are expected to cease or diminish, or | |
(d) | the requirements of that business for employees to carry out work of a particular kind, in the place at which they were contracted to work, have ceased or diminished or are expected to cease or diminish. | |
2. | Measures to Avoid Redundancy | |
It is acknowledged that natural wastage can assist in the prevention of redundancy in some circumstances but the Company will make every effort to avoid or reduce the need for redundancy where in itself natural wastage is insufficient. | ||
Every effort will also be made to re-deploy personnel affected by redundancy into suitable jobs. Due regard has to be given to the match between the skills of the individual and the skill requirements of the new job and account taken of |
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the possibility of retraining to effect a match. Other factors such as location and domestic arrangements may have to be considered. | ||
3. | Terms of Severance | |
3.1 | The following terms are applied to those employees who leave the Company by way of redundancy. A person is redundant if he or she occupies a job which has been declared redundant and no suitable alternative employment has been offered. In these terms, "length of service" means the period of continuous employment as defined in the Act. | |
3.2 | The redundancy payment shall be equal to 3.25 x one week's pay for each completed year of service subject to: | |
(a) | a minimum payment of: | |
– | 26 weeks' pay if service is less than 2 years, | |
– | 40 weeks' pay if service is 2 years or over but less than 5 years; | |
– | 52 weeks' pay if service is 5 years or over, and | |
(b) | a maximum payment of 104 weeks' pay. | |
3.3 | Where an employee is not required to serve all or part of his contractual notice period, he shall (in addition to any payment under clause 3.2 above) receive a payment in lieu of notice (as defined in the Contract of Employment). | |
3.4 | Where the effective date of termination of employment falls within the twenty-four months prior to the employee's 60th birthday, the redundancy payment calculated under clause 3.2 shall be reduced by one twenty-fourth for each complete month worked by the employee during the said twenty four month period (e.g. where there are only two full months to the employee's 60th birthday, the redundancy payment shall be two twenty-fourths of the calculated amount), but subject to a minimum payment of not less than the amount to which the employee would be entitled under the Act. |
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4. | Planning | |
The Company recognises that consultations on the possibility of redundancy arising should take place as early as is practicable and that wherever possible this should be in advance of any legal commitment which might from time to time arise by law. | ||
5. | Selection for Redundancy | |
The following criteria will be borne in mind in the selection of people for redundancy: | ||
– | Those employees who have long periods of continuous service with the Company have a greater claim to retain their employment with the Company than those of shorter service if all other factors are equal. However, this shall only be one of the factors which will be considered in selecting for redundancy. | |
– | The part(s) of the Company affected by the redundancies shall be defined and account taken of the spread of jobs within the department(s), function(s) or area(s) affected. | |
– | The Company will give weight in its consideration to the standard of work and the general performance and potential of the individuals affected in selecting which employees are to be made redundant. The Company would be particularly concerned to ensure that it retained those personnel whose abilities and commitment ensured maximum efficiency at this senior level. | |
– | The Company would take account of the geographical location of the redundancies in proposing a list of those to be made redundant. In particular the practicability of transfer as an alternative would be considered fully. |
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6. | Terms of Transfer | |
6.1 | Where it is possible to transfer a person to avoid redundancy, provided that the person concerned has the necessary skills and potential to fill the job, this option will be used. | |
6.2 | Where a post becomes redundant, the Company will seek to place the affected employee in a comparable alternative post. Where such post is offered the employee will not be regarded as being redundant and therefore will not be entitled to a redundancy payment on the terms set out in Clause 3 above. In deciding whether an alternative post is comparable, account will be taken of the location of the post and the nature and level of responsibilities. | |
6.3 | In some circumstances the Company may offer the employee an alternative post which, because of the location or nature of the duties, is not fully comparable with their previous role. In these cases the post will be offered on the basis of a trial period. The length of the trial period shall be determined by the Company and shall be at least equivalent to the period of notice required under Section 86 of the Act, subject to a minimum of one month and a maximum of six months. At the end of the trial period, the Company or the employee shall have the right to terminate the contract and in such circumstances the employee shall retain the right to a severance payment as set out in Clause 3 above. | |
6.4 | In the event of a person being offered, and accepting, a transfer to a lower grade post, the Company shall determine whether or not any salary reductions shall apply (and, if so, on what basis they shall take effect) and the basis on which general salary increases shall be calculated in respect of the new post. | |
6.5 | On transfer the employee shall receive a statement in writing of all aspects of the new post (e.g. what the work is, where it is located, the job grade of the post and the change in terms and conditions implied by the transfer). | |
7. | Mortgage Arrangements | |
7.1 | Where an employee who becomes redundant has a mortgage or part mortgage at a staff concessionary rate then that mortgage, or part mortgage, will continue at staff rate for six months in the case of a person who has less than two years of service and for one year in the case of a person who has two years or more of service. |
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7.2 | No decisions will be taken relating to the mortgage of a redundant employee without the involvement of the Human Resources Director. | |
7.3 | In the event that the former employee moves house, either to take up new employment or to reduce the mortgage commitment, the Company will, after discussion with the individual, be prepared to consider varying its normal lending policies in respect of the size of the advance and the repayment arrangements. | |
7.4 | Where a move is made for the reasons set out in Clause 7.3 above and for a period of less than two years from the date of expiry of the period of notice the Company will not charge a valuation fee for an advance on another property. | |
The provisions outlined in Clauses 7.1 to 7.4 above are not intended to be an exhaustive statement of the Company's policy or position but merely indicate areas in which the Company would offer assistance to employees affected by redundancy. | ||
8. | Pension Arrangements | |
(These provisions apply to members of the Abbey National Amalgamated Pension Scheme only) | ||
8.1 | Subject always to clause 8.2 below, employees who are made redundant and are 50 years of age or over may apply for early retirement. The Company will normally recommend to the trustees of the Pension Scheme that such requests be granted on the following basis and subject to any limits laid down by the Occupational Pensions Regulatory Authority, the Inland Revenue or the Rules of the Scheme: | |
8.1.1 where the employee has less than five years' service, the normal terms of the Scheme will apply; | ||
8.1.2 where the employee has five years or over but less than ten years' service, one year will be added to their pensionable service and the actuarial reduction will be lessened by one year; |
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8.1.3 where the employee has service of ten years or over, two years will be added to their pensionable service and the actuarial reduction will be lessened by two years. | ||
8.2 | Clause 8.1 shall be subject to the following provisions: | |
8.2.1 In all cases, the addition to service referred to in clause 8.1.2 and 8.1.3 shall not be greater than the employee's prospective service to his or her 60th birthday. | ||
8.2.2 Employees with thirty-three and a third years' service or more and employees with less than thirty-three and a third years' service who, through paying additional voluntary contributions, have achieved their maximum pension entitlement shall not have any more years added to their pensionable service or be entitled to any form of cash payment in lieu of the enhancements described above. | ||
8.2.3 The periods of one and two years respectively referred to in clauses 8.1.2 and 8.1.3 above (both with regard to addition to pensionable service and actuarial reduction) shall be reduced by any period of notice served by an employee under a contract of employment (whether actually worked or taken as garden leave). | ||
8.3 | People who opt for early retirement shall not forego payments to which they are entitled under Clause 3 above except in the circumstances set out in Clause 3.3. above. | |
8.4 | A member of the Abbey National Amalgamated Pension Scheme who leaves the service of the Company by reason of redundancy and who neither takes an immediate pension nor receives a refund of contributions made to the Scheme will be entitled to a deferred pension commencing at his/her normal pension date (as defined in the Rules of the Scheme) or to transfer his/her pension under the Rules of the Scheme. Any deferred pension will be calculated in accordance with the Rules of the Scheme and will be subject to increase throughout the period from the date of expiry of the period of notice to the Normal Pension Date. The increase will be calculated in accordance with the |
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Rules of the Scheme and such legislative provisions as may be operative at the time. | ||
9 | Legal Rights | |
No employee shall forfeit any legal rights under these arrangements. |
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C E R T I F I E D C O P Y
DATED 21st JANUARY 1998
ABBEY NATIONAL plc
and
MR M A PAIN
CONTRACT OF EMPLOYMENT
I certify this to be a true copy of the original Contract | |
Gwyn Malkin Solicitor Head of Legal Services Abbey National plc 22 January 1998 |
Clause | Subject Matter | Page | |
CONTRACT OF EMPLOYMENT
OF: MARK ANDREW PAIN
TITLE: FINANCE DIRECTOR
DATED: 21st JANUARY 1998
This Contract set out the terms on which Abbey National plc ("the Company" or "we" or "us") employs you.
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(iv) | if so requested by the Company, delete all Confidential Business Information from any computer discs, tapes or other reusable material in your possession or under your custody or control and destroy all other documents and tangible items in your possession or under your custody or control which contain or refer to any Confidential Business Information. | |
11.3 | You agree that you will not at any time after termination of your employment disclose to any person, firm or company, or make use of, any Confidential Business Information. | |
11.4 | For the purposes of this paragraph, "Confidential Business Information" shall mean all and any information (whether or not recorded in documentary form or on computer disc or tape) relating to the business methods, corporate plans, management systems, finances or financial affairs, maturing new business opportunities or research and development projects of the Company or any Associated Company and trade secrets, secret formulae, processes, inventions, designs, know-how discoveries, technical specifications and other technical information relating to the creation, production or supply of any past, present or future product or service of the Company or any Associated Company and other information to which the Company or any Associated Company attaches an equivalent level of confidentiality or in respect of which it owes an obligation of confidentiality to any third party | |
(i) | which you shall acquire at any time during your employment by the Company (or acquired during any previous employment with an Associated Company) and | |
(ii) | which is not readily ascertainable by persons not connected with the Company or any Associated Company either at all or without a significant expenditure of labour skill or money. | |
11.5 | Each provision of this clause 11 is independent and severable from the remaining provisions and enforceable accordingly. If any provision of this clause 11 shall be unenforceable for any reason but would be enforceable if part of its wording were deleted it shall apply with such deletions as may be necessary to make it enforceable. | |
11.6 | You will comply (and ensure that your spouse and any minor children comply) with all applicable rules of law or codes, London Stock Exchange regulations and any code of |
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your own act or default cease to be a director of the Company or Associated Company. | ||
12.2 | If your employment is terminated by reason of redundancy (as defined under the Employment Rights Act 1996) you will be entitled to a redundancy payment calculated in line with the Executive Manager's Redundancy Agreement. | |
12.3 | Upon termination of this contract (for whatever reason) you will, at the request of the Company, | |
(i) | resign from office as a Director of the Company and of any Associated Companies without claim for compensation and, in the event of your failure to do so, the Company is hereby irrevocably authorised to appoint some person in your name and on your behalf to sign and deliver such resignation or resignations to the Company and to any Associated Companies; | |
(ii) | return all the Company's or Associated Company's documents, computer discs or tapes and all other property in your possession and control belonging to or containing any confidential information of the Company's business which you have received as a Director. | |
12.4 | Notwithstanding the termination of this Contract, its terms shall remain in full force and effect to the extent that and in respect of any of your obligations which are expressed to operate after termination or are of a continuing nature and may be enforced against you accordingly. | |
12.5 | If your employment under this contract is terminated by reason of the liquidation of the Company for the purpose of reconstruction or amalgamation and you are offered employment with any concern or undertaking resulting from the reconstruction or amalgamation on terms and conditions no less favourable than the terms of this Contract then you shall have no claim against the Company in respect of the termination of your employment under this Contract. | |
12.6 | If either you or the Company serves notice on the other to terminate your employment the Company may in its absolute discretion either pay you in lieu of notice or require you to take 'garden leave' for all or part ofthe remaining period of your employment. |
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company or joint venture arrangement in which the Company has or from time to time has an interest. | |
14.3 | "The Board" means the Board of Directors of Abbey National plc for the time being including any committee of the Board duly appointed by it. |
14.4 | "The Chairman" means the person for the time being who is Chairman of the Board. |
14.5 | "The Chief Executive" means the person for the time being who is Chief Executive of the Company. |
14.6 | The "Remuneration Committee" means a committee for the time being of the Board who are non-executive directors. |
14.7 | This Contract is governed by and shall be construed in accordance with English law and the English Courts shall have exclusive jurisdiction. |
This contract is executed as a Deed on the date first mentioned above. |
The Common Seal of ABBEY NATIONAL plc was hereunto affixed by Order of the Board of Directors in the presence of: | 1893/98 | |
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Executed as a Deed by Mark Andrew Pain | |
Witnessed by: | |
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