REMUNERATION REPORT

COMPLIANCE WITH BEST PRACTICE
Sportech PLC seeks to apply best practice in remuneration policy.

COMPOSITION OF THE REMUNERATION COMMITTEE
The Remuneration Committee (the Committee) is made up of the Non-executive Directors only and was in place for the whole of the year under review. None of the Committee has any personal financial interest (other than as a shareholder), conflicts of interest from cross-Directorships or day-to-day involvement in the running of the business. The Committee’s role is to set the remuneration policy for the Executive Directors and to be advised of the remuneration packages of Senior Executives. The Committee makes its proposals following consultation with the Chief Executive (on remuneration other than his own) and is entitled to seek professional advice from outside the Group from remuneration consultants.

John Barnes has been Chairman of the Committee throughout the year under review. The Chief Executive is invited to attend meetings when appropriate, although he is not present when matters affecting his own remuneration are discussed.

The Non-executive Directors do not participate in any incentive, pension or benefit schemes of the Company and their remuneration is determined by the Board.

REMUNERATION POLICY FOR EXECUTIVE DIRECTORS AND SENIOR EXECUTIVES
The Committee aims to ensure that the remuneration packages offered to Executive Directors and Senior Executives are designed to:

	be competitive and to attract, retain and motivate Executives of the right calibre;
	reflect their responsibility; and
	incorporate a significant element of pay linked to the achievement of key business objectives and increased shareholder value.

In considering its policy, the Committee has given full consideration to the provisions of the Combined Code. The main component parts of the remuneration packages for Executive Directors and Senior Executives are as follows:

BASIC ANNUAL SALARY
An individual’s basic salary is reviewed and determined by the Committee annually, taking into account external research and his or her performance. The Committee also makes use of benchmark data provided by external remuneration consultants and is aware of the level of salary increases other employees within the Group receive. With effect from 1 January 2009, the Chief Executive’s salary was increased from £290,000 per annum to £300,000 per annum. This increase was at a rate lower than the prevailing Retail Price Index to reflect the wider economic conditions. The Finance Director’s salary was increased from £110,000 to £140,000 per annum with effect from 1 July 2008 reflecting the increase in the size of the Group following the acquisition of Vernons in December 2007 and also reflecting benchmark data provided by external remuneration consultants.

In addition to base salaries, each Executive Director is entitled to the following main benefits:

	Chief Executive – 29 working days’ holiday per annum in addition to normal bank and public holidays. Finance Director – 25 working days’ holiday per annum in addition to normal bank and public holidays;
	a fully expensed company car or cash equivalent; and
	private health insurance for themselves, their spouse and children.

PERFORMANCE RELATED BONUS
For both 2008 and 2009, the Executive Directors and Senior Executives will be rewarded on the basis of a two-part bonus structure, reflecting the achievement of profit targets and key business objectives. The total of such bonus payments will be limited to 100% of basic salary for the Chief Executive and 50% of basic salary for the Finance Director and other Senior Executives.

The bonus payments for 2008 were 62% (2007: 100%) of salary for the Chief Executive and 30% (2007: 50%) of salary for the Finance Director reflecting the achievement of key objectives. In 2007, a further bonus of 50% of salary for the Chief Executive and 25% for the Finance Director was paid to reflect the significant additional workload undertaken in respect of the Vernons acquisition.

PENSION ARRANGEMENTS
All Senior Executives are members of defined contribution schemes. Only basic annual salary is pensionable.

LONG TERM INCENTIVE PLANS
The Committee believes that share ownership and the granting of options strengthens the link between Executives’ personal interests and those of the shareholders. The Company currently has two long term incentive plans in place, as described below.

SHARE OPTION SCHEME
A share option scheme is in place, the rules of which are designed to comply with the best practice provisions annexed to the listing rules of the UK Listing Authority and current guidelines of institutional shareholders. The level of grant to any individual is at the discretion of the Committee. The total number of ordinary shares over which options will be granted under the scheme will
not exceed 3% of the Company’s issued ordinary share capital from time to time, or such higher percentage (not exceeding 10%) as may be approved by the shareholders at a future date. No grants under this scheme have been made in the year and it is currently not the intention of the Committee to issue any further share options under this scheme.

PERFORMANCE SHARE PLAN (PSP)
The PSP was introduced in 2007 and will provide for annual conditional awards for shares to be made subject to the achievement of challenging performance conditions, the key features of which are set out below. As the first award of shares was made in December 2007, the Committee decided not to make any awards to the Executive Directors in 2008 but it is the intention of the
Committee to award shares under the PSP during 2009.

MAXIMUM AWARD LEVEL
The normal maximum award will be set at 100% of base salary. In exceptional circumstances, such as recruitment or retention of key members of staff, the maximum award level may be increased to 200% of salary.

PERFORMANCE CONDITIONS
The vesting of awards will be subject to performance conditions set by the Committee.

In the case of all awards made to date to the Executive Directors, two distinct performance conditions apply.

The vesting of one-half of the award (Part A) will be dependent on the Company’s Total Shareholder Return (TSR) over a fixed three-year period relative to that of an index comprising the unweighted TSR performance of a comparator group, including other leading UK betting and gaming companies to be determined by the Remuneration Committee for each grant. For all awards to date, the comparator group comprises 888 Holdings plc, Ladbrokes plc, Partygaming plc and William Hill plc.

No portion of Part A will vest unless the Company’s TSR performance at least matches that of the index, thereafter a vesting schedule no less demanding than the following will apply:

The Company’s TSR performance over the performance period relative to comparator index	Extent of vesting of Part A
Equal to the index	25%
Between equal to the index and 11% per annum out performance of the index	Pro rata between 25% and 100%
11% per annum out performance of the index or better	100%

The TSR of the Company and those within the index will be measured over a fixed period being the three-year period commencing at the start of the month in which the grant of the award falls. The relevant TSR figures will be averaged over the three-month period before the start and end of the performance period.

In the case of all awards made to date to the Executive Directors, the vesting of the other half of the award (Part B) is dependent on the achievement of absolute share price targets over the same three-year performance period.

No portion of Part B will vest unless the Company’s share price over the period grows during the performance period by at least 18.75%, thereafter a vesting schedule no less demanding than the following will apply:

The Company’s share price growth during the performance period	Extent of vesting of Part B
18.75%	25%
Between 18.75% and 66%	Pro rata between 25% and 100%
66% or better	100%

For the purposes of determining the satisfaction of the share price growth targets, the Company’s base share price (taken as the average of the Company’s share price over the three months preceding the start of the performance period, adjusted as appropriate to take of share consolidations and issue of new shares) will be compared to the highest three‑month average share price achieved within the last year of the performance period.

The Committee can set different performance conditions from those described above for future awards provided that, in the reasonable opinion of the Remuneration Committee, the new targets are not materially less challenging in the circumstances than those described above.

The Committee may also vary the performance conditions applying to existing awards if an event has occurred which causes the Committee to consider that it would be appropriate to amend the performance conditions, provided the Committee considers the varied conditions are fair and reasonable and not materially less challenging than the original conditions would have been but for the event in question.

POLICY ON SHARE OWNERSHIP
Whilst the Board does not have a formal policy in place in respect of Executive share ownership, all Executives are expected to invest in the Company at an appropriate level compared to their compensation levels.

POLICY ON CONTRACTS OF SERVICE
All Directors have contracts with notice periods of no more than twelve months. Unless terminated beforehand, contracts run until the Director reaches the age of 65:

				Special
				contractual
	Contract	Unexpired	Notice	termination
	date	term	period	provisions
Piers Pottinger	3 November 2005	N/A	3 months	None
Ian Penrose	1 October 2005	N/A	1 year	None
Steve Cunliffe	3 July 2006	N/A	6 months	None
John Barnes	11 November 2005	N/A	3 months	None
Jon Holmes	16 July 2007	N/A	3 months	None

Kathryn Revitt does not have a service contract but serves the Company under a letter of appointment. This appointment may be terminated without liability for compensation.

POLICY ON EXTERNAL APPOINTMENTS
Sportech PLC recognises that its Directors are likely to be invited to become Non-executive Directors of other companies and that such exposure can broaden experience and knowledge, which will benefit the Company. Executive Directors are therefore allowed to accept Non-executive appointments with the Board’s prior permission, as long as these are not likely to lead to conflicts of interest. Ian Penrose is a Trustee of the National Football Museum, a registered charity and also a Non-executive Director of Business in Sports and Leisure. He receives no remuneration in respect of these appointments.

PERFORMANCE GRAPH
The following graph demonstrates how £100 invested in Sportech PLC as at 1 January 2004 has reduced compared with the same investment in a fund mirroring the make-up of the FTSE Small Cap index:

The FTSE Small Cap index has been chosen as it is the index most closely aligned to Sportech PLC.

AUDITED INFORMATION
The remainder of the Remuneration Report is audited information.

DIRECTORS’ REMUNERATION
Details of each Director’s remuneration for the year ended 31 December 2008 are given below:

			Taxable		2008	2007
	Year of	Fees/salary	Benefits⁷	Bonuses⁸	Total	Total
	appointment	£000	£000	£000	£000	£000
Executive Directors
Ian Penrose	2005	290	16	180	486	717
Steve Cunliffe	2006	125	11	42	178	194
Non-executive Directors
Piers Pottinger¹	2005	65	—	—	65	45
John Barnes²	2005	40	—	—	40	17
Kathryn Revitt³	2000	—	—	—	—	—
Jon Holmes⁴	2007	35	—	—	35	16
Aggregate emoluments		555	27	222	804	989
Fees paid to third parties					35	29

NOTES:
1 Piers Pottinger receives remuneration of £30,000 per annum in his role as Non-executive Chairman and     with effect from 1 August 2007 he also receives remuneration of £35,000 per annum for his role as     Non-executive Director.

2 John Barnes with effect from 1 August 2007 receives remuneration of £35,000 per annum for his role as     Non-executive Director and a further £5,000 per annum for his roles as Senior Non-executive Director and     Chairman of the Remuneration and Audit Committees.

3 The services of Kathryn Revitt are provided through a consultancy agreement between the Company and     Hemway Limited. Payments to Hemway Limited amounted to £35,000 in the year (2007: £29,000).

4 Jon Holmes receives remuneration of £35,000 per annum.

5 Taxable benefits comprise various medical insurance policies and car allowances.

Two Directors (2007: two Directors) were members of defined contribution schemes. Contributions paid by the Company in respect of these Directors were as follows:

	2008	2007
	£000	£000
Ian Penrose	23	22
Steve Cunliffe	10	8
	33	30

DIRECTORS’ SHARE OPTIONS
Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the Company granted to or held by the Directors. The options held by the Directors are as follows:

SPORTECH SHARE OPTION SCHEME

	As at 1 January and 31 December
	2008
	Number
Ian Penrose	505,050

Details of the options are as follows:

		Date
	Exercise	from which
Ian Penrose	price	exercisable	Expiry date	Granted on
505,050	£0.817	27 September 2008	26 September 2015	27 September 2005

Exercise of the options is subject to the share price reaching the following closing prices:

Shares	Closing price
151,515	£1.237
151,515	£1.732
101,010	£2.227
101,010	£2.722
505,050

The market price of the ordinary shares at 31 December 2008 was £0.62 and the range during the year was £0.4575 to £1.0025.

The options were granted at £nil cost to the Director. The performance criteria for all of the above share options were consistent with the remuneration policy. Once awarded the exercise of the share options is unconditional.

PSP


	31 December
	2007
	Number
Ian Penrose	428,676
Steve Cunliffe	162,601
	591,277

Details of the performance conditions for the PSP awards are detailed above. Only one grant of awards has been made in December 2007 and in respect of the share price growth targets attaching to this award, grants have been set from an adjusted base share price of £1.141.

JOHN BARNES
CHAIRMAN OF THE REMUNERATION COMMITTEE
24 March 2009

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