There are a number of differences between the corporate structure of the Company and that of a public limited company incorporated in the UK under the Companies Act. While the Directors consider that it is appropriate to retain the majority of the usual features of a U.S. corporation, they have taken certain actions, where practicable, to meet UK standard practice. However, investors should be aware that the rights of stockholders in the Company may be different from the rights of shareholders in a UK incorporated company.
The corporation law of Delaware establishes a different governance and executive management structure from that of a typical English company. The control and management of the Company is divided between Shareholders, a Board of Directors and officers of the Company. The Board is elected by the Shareholders at a meeting called for that purpose. The Board is entitled to exercise its powers through committees and to appoint officers. Officers have general powers and duties of day-to-day supervision and management of the Company. For example, the functions of ‘‘Managing Director’’ and ‘‘Finance Director’’ in English companies are typically undertaken in a Delaware corporation by the Chief Executive Officer and Chief Financial Officer, respectively (who in these roles are officers, and not directors, of the Company).
The Directors are committed to maintaining high standards of corporate governance. They intend to take account of the requirements of the UK Combined Code on Corporate Governance to the extent they consider it appropriate having regard to the Company’s size, stage of development and resources, and the fact that Planet Payment, Inc. is incorporated in the U.S. rather than the UK. The roles of chairman and chief executive officer in the Company are currently exercised by one person, Philip Beck. The Directors believe that Mr. Beck’s holding of this dual role is in the Company’s best interests, given the current stage of the Company’s development. The Directors will monitor this structure going forward.
Lady Barbara Judge and Cameron McColl are regarded by the Company as independent non-executive directors for the purposes of the Combined Code. The Company is not currently subject to the rules, regulations and corporate governance requirements imposed upon U.S. public companies in particular under the Sarbanes-Oxley Act of 2002. However, the Directors do intend to take into account U.S. corporate governance best practices going forward.
The Board currently consists of six members, three of whom are non-executive Directors. The Board is divided into three classes. Directors are assigned to each class in accordance with the Company’s Bylaws and resolutions adopted by the Board, with the number of directors in each class to be divided as equally as reasonably possible. At each annual meeting of shareholders, one class of Directors is nominated for re-election, while the other classes are not. With respect to the class up for re-election, Directors are then elected for a new three-year term. This structure is intended to provide greater stability on the Board, as it staggers the turnover of the Board over three years.
In recognition of the particular circumstances of time and travel commitments of the non-executive Directors and to attract such non-executive Directors, the Company has agreed to provide annual cash remuneration to non-executive directors, together with additional incentivisation by awards of share options. In doing so, the Company has taken into account the remuneration packages typically put in place for non-executive directors in the U.S. (which often include such awards) and the UK, and the benefits of aligning the non-executive Directors’ interests with those of Shareholders in the Company.
The Company will hold regular board meetings. The Directors will be responsible for formulating, reviewing and approving the Company’s strategy, budget and major capital expenditures. The Directors have established an audit committee, a remuneration committee and a nomination committee with formally delegated rules and responsibilities. For further information on the Board Committees see Committees
The Directors intend to comply with Rule 21 of the AIM Rules relating to dealings by directors of the Company, and will take all reasonable steps to ensure compliance by the Company’s applicable employees. The Company has adopted a share dealing code for its Directors,officers and employees to facilitate compliance with this rule.