PERFORMANCE EVALUATION POLICY

1. THE BOARD AND INDIVIDUAL DIRECTORS
1.1 Policy
To ensure that individual Directors and the Board as a whole work efficiently and effectively in achieving their functions set out in the Board charter.

1.2 Procedure
Each year the Board undertakes the following activities:

• The Chairman meets separately with each non-executive director to discuss individual performance and ideas for improvement
• The Board as a whole discusses and analyses its own performance during the year, including suggestions for change or improvement

2. BOARD COMMITTEES
2.1 Policy
To ensure that the committees to which the Board has delegated responsibilities are performing efficiently and effectively in accordance with the duties and responsibilities set out in their charters.

2.2 Procedure
The Corporate Governance Committee reviews the Board Committees’ achievements for the year based on their duties. The Corporate Governance Committee reviews the charters of the Committees once a year to ensure that they are up to date.

3. MANAGING DIRECTOR AND KEY EXECUTIVES
3.1 Policy
To ensure that the Managing Director and key executives execute the company’s strategy through the efficient and effective implementation of the business objectives.

3.2 Procedure Each year the Board reviews Adtrans Group’s (ADG) strategy. Following such a review the Board sets the organisation performance objectives based on both qualitative and quantitative measures. These objectives are reviewed periodically to ensure they remain consistent with the Group’s priorities and the changing nature of its business. These objectives are the performance targets for the Managing Director. Performance against these objectives is reviewed annually by the Chairman and is reflected in the Managing Director’s remuneration review, which may consist of both a performance bonus and review of fixed remuneration.

The business objectives are reviewed every year and agreed by and disseminated to every business unit in the group. Achievement of these business plans and budgets help to set a criteria on which ADG’s management team is assessed and therefore determines the basis of remuneration payments. The Managing Director makes recommendations on the remuneration of these executives which are reviewed by the Chairman and regularly monitored by the Remuneration Committee.