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.
Philip Beck, Chairman, Chief Executive Officer — Philip Beck, 47, founded the Company in 1999 with the intention to solve the problems faced by multi-national Merchants in accepting multi-currency credit card payments where the Merchants’ banks, credit card Processors and payment networks were unable to provide effective payment solutions. Mr. Beck has led the Company since its inception, developing and refining the Company’s strategy, in particular, the Company’s approach to multi-currency processing and developing the Company’s business relationships. Mr. Beck has over 18 years’ experience as an international banking and corporate lawyer working with a range of businesses from start-ups to multinational corporates, practicing in New York from 1984 to 2001. As a partner in New York law firms, Mr. Beck represented a number of international banking institutions. Mr. Beck received his law degree from London University in 1981 and is admitted to practise law in New York USA, England and Wales and the British Virgin Islands.
Graham Arad, Director, SVP and General Counsel — Graham Arad, 48, is an experienced international lawyer practising principally in the area of corporate and commercial law. Mr. Arad has been the Company’s General Counsel since its founding in 1999 and has supervised the legal aspects of the Group’s business since that time. Mr. Arad was admitted as a solicitor in England and Wales in 1983, and has been practising as an attorney in New York since 1991, and in the British Virgin Islands since 1995. Mr. Arad was a partner in law firms in London, New York and the British Virgin Islands for over 20 years in total and obtained his law degree from London University.
Cameron McColl, Non Executive Director — Cameron McColl, 47, has significant experience in setting up and developing new companies. An electronics engineer by training, Mr. McColl has worked for firms such as Medtel (pty) Limited, Ferranti Radar Limited, National Semiconductor Limited and Advanced Micro Devices Limited. In 1989, Mr. McColl founded McColl McGregor Limited, Scotland’s first high technology call centre operation, specialising in the technology and finance sectors. In 1993, Mr. McColl co-founded Memory Corporation plc, a high technology semiconductor design group, which was listed on AIM in 1995, and served as CEO until 1996. In 1994, Mr. McColl co-founded Telecom Service Centres Limited (‘‘TSC’’), which grew to over 2,000 employees, and served as Chairman until 1998. TSC was sold in 2004, at which time Mr. McColl resigned. Since 1996 Mr. McColl has been involved in commercial real estate investment, as an investor in and director of Shawhead Limited. Mr. McColl resides in the British Virgin Islands, and previously served as a non-executive director and the Chairman of the Board of the Company from 1999 to 2001. Mr. McColl holds a Bachelor of Science degree in Electrical and Electronic Engineering from Edinburgh University.
Jonathan Kaiden, Non Executive Director — Jon Kaiden, 40, has been a principal and founding member of Sopris Capital Associates, LLC since 2003 (Sopris is principally owned by Andrew Paul, one of the holders of Preferred Shares). Mr. Kaiden has more than 20 years of private equity and investment banking experience, with a strong focus on healthcare and information technology. Prior to joining Sopris Capital, Mr. Kaiden served as an investment banker and securities attorney focusing on corporate finance and mergers & acquisitions. After beginning his investment banking career at S.G. Cowen, Mr. Kaiden became a vice president with The Seabury Group, a boutique merchant banking group geared toward helping middle market companies obtain private equity and venture capital. Mr. Kaiden then headed Josephthal & Co.’s healthcare investment banking practice. Prior to receiving his MBA, Mr. Kaiden practiced corporate and securities law for three years at the New York law firm Stroock & Stroock & Lavan. Mr. Kaiden holds an MBA, with honors, from Columbia Business School (1996), and J.D., cum laude, from Brooklyn Law School (1991). Mr. Kaiden obtained his undergraduate degree, a B.A. in government, from Cornell University (1988).
Barbara Thomas Judge, Non Executive Director – Lady Judge is a lawyer, international banker and entrepreneur. She is currently Chairman of the UK Atomic Energy Authority and Deputy Chairman of both Friends Provident plc and the Financial Reporting Council. Additionally, Lady Judge is a non-executive director of Quintain Estates and Development PLC and PA Consulting Group amongst others. Lady Judge also serves as Chairman of the Governing Body of the School of Oriental and African Studies and as a Trustee of the Royal Academy of Arts and of The Wallace Collection. Lady Judge started her carreer as an attorney in private practice and became a partner at the New York firm of Kaye Scholer, Fierman, Hays & Handler, in 1978. In 1980 she was appointed a Commissioner of the US Securities & Exchange Commission, the youngest person to be appointed to the position and became Chairman of the SEC’s Special Committee on Internationalisation of the Securities Markets. She subsequently became a main board director of News International plc and Samuel Montagu and Co., when she resided in Hong Kong from 1983-1987. Lady Judge obtained a B.A. in History from the University of Pennsylvania and graduated second in her class, when receiving her J.D. with honours at the New York University Law School.
The remuneration committee of the Board will meet regularly and at least twice per year. In accordance with its terms of reference, the remuneration committee will review the scale and structure of the remuneration and benefits packages of the executive Directors and other executive officers, including share options. The remuneration committee will also either approve all grants of share options to employees and consultants, or make recommendations to the Board with respect to such grants. The remuneration and terms and conditions of appointment of the non-executive Directors will be determined by the entire Board of Directors.
Remuneration Committee Terms of Reference
Remuneration Committee Membership: Cameron McColl and Jonathan Kaiden
The nomination committee identifies and nominates candidates for election to the Board of Directors, oversees evaluation of the Board of Directors, and handles various corporate governance matters. The nomination committee will meet regularly and at least twice per year.
Nomination Committee Terms of Reference
Nomination Committee Membership: Philip Beck and Cameron McColl
The audit committee will meet regularly and at least twice per year. In accordance with its terms of reference, the committee will review, act on and report to the Board of Directors with respect to various auditing and accounting matters, including the selection of Planet Payment’s auditors, the scope of the annual audits, fees to be paid to Planet Payment’s auditors, the performance and independence of Planet Payment’s auditors and the accounting practices of Planet Payment and Planet Payment’s accounts. It will also receive and consider reports from management on those matters.
Audit Committee Terms of Reference
Audit Committee Membership: Cameron McColl and Jonathan Kaiden
AIM is the Alternative Investment Market of the London Stock Exchange. It is a “junior” market of the London Stock Exchange in that it was established for the express purpose of enabling younger, smaller companies to have access to the financial market and to enable their shares to be publicly traded. Further information on AIM may be obtained from the London Stock Exchange’s Website
On AIM the Company’s shares trade under the ticker symbols “PPT” for unrestricted shares and “PPTR” for restricted or Reg S shares.
The Company’s shares of Common Stock were admitted to trading on the AIM Market of the London Stock Exchange on March 20th 2006.
OTCQX is a new premium listing service for issuers of securities that are traded over-the-counter (OTC). The OTCQX trading, quotation and disclosure platform, comprised of the PremierQXSM and PrimeQXSM tiers, is designed to distinguish public companies meeting certain enhanced disclosure and other criteria from the nearly tens of thousands of securities traded OTC. Additional information is available on www.otcqx.com.
Planet Payment’s unrestricted Common Shares trade in the US on the OTCQX under the ticker “PLPM”, with the stock price quoted in US dollars. Shares of Planet Payment continue to be traded on the London Stock Exchange’s AIM market under the tickers “PPT” (unrestricted) and “PPTR” (Reg. S shares), with the stock price continuing to be quoted in Pounds Sterling.
On November 19, 2008, the shares of Common Stock were listed on the OTCQX tier of Pink OTC Markets in the United States. Please note that Planet Payment, Inc. is not yet treated as a public company in the United States although its securities are publicly traded in the United States.
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