Download Annual Report, 2.44 MB - Xyratex

performance criteria by the individual executive officer. Non-cash payments to executive officersconsisted of leased cars and health insurance.Item 6C: Board PracticesBoard PracticesOur board of directors currently consists of six members of which a majority are independentdirectors. All directors hold office until their successors have been elected and qualified or until theirearlier death, resignation, disqualification or removal. The terms of office of the directors is dividedinto three classes:• Class I, whose term will expire at the annual general meeting to be held in 2007;• Class II, whose term will expire at the annual general meeting to be held in 2006; and• Class III, whose term will expire at the annual general meeting to be held in 2008.Class I consists of Andrew Sukawaty and Ernest Sampias; Class II consists of Steve Barber andJonathan Brooks; and Class III consists of Steve Sanghi and Nic Humphries. At each annual generalmeeting after the initial classification or special meeting in lieu thereof, the successors to directorswhose terms expire will then serve from the time of election until the third annual meeting followingelection or special meeting held in lieu thereof. In addition, a resolution of the board of directors maychange the authorized number of directors within the upper and lower limits set out in our bye-laws.Any additional directorships resulting from an increase in the number of directors will be distributedamong the three classes so that, as nearly as possible, each class will consist of one-third of thedirectors. This classification of the board of directors may have the effect of delaying or preventingchanges in control or management of our company.The employment contracts governing the service of our directors do not provide for benefits upontermination of employment. There are no family relationships among any of our directors, executiveofficers or key employees.Board CommitteesOur bye-laws give our board of directors the authority to delegate its powers to a committeeappointed by the board. Committees may consist partly or entirely of non-directors, except for the auditcommittee, nominations and governance committee and compensation committee, which must consistonly of independent directors. Our committees are required to conduct meetings and take action inaccordance with the directions of the board and the provisions of our bye-laws or the written chartersestablishing these committees.Compensation CommitteeOur Compensation Committee consists of Andrew Sukawaty, Jonathan Brooks and Steve Sanghi,each of whom satisfy the ‘‘independence’’ requirements of the Nasdaq Corporate Governance Rules.The Compensation Committee determines the remuneration policy as well as the terms and conditionsof service and the cessation of service of our directors and executive officers, and evaluates thecompensation plans, policies and programs of the Company to encourage high performance, promoteaccountability and insure that employee interests are aligned with the interests of the Company’sshareholders. Members of the Compensation Committee do not participate in decisions regarding theirown remuneration. The Compensation Committee generally meets at least four times a year and met6 times during the financial year ended November 30, 2005. Its members are not eligible for bonuses orpension entitlements. The committee has access to the services of independent advisors as it requires.65