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TERMS OF REFERENCE OF THE REMUNERATION COMMITTEE
Reference to "the Board" shall mean the Board of Directors of the Company
Reference to "the Company" shall mean Aga Rangemaster Group plc
1. Constitution
It is resolved that a committee of the board be established, to be known as the Remuneration Committee (the "Committee").
2. Membership
(a) The Committee shall be appointed by the Board from amongst the independent non-executive directors of the Company. The Committee shall consist of not less than three members.
(b) The Chairman of the Board shall not be eligible to be appointed as chairman of the Committee.
(c) The Board shall appoint the chairman of the Committee and determine the period for which the chairman of the Committee shall hold office. In the absence of the Committee chairman and/or appointed deputy, the remaining members shall elect one of themselves to chair the meeting and approve the minutes of meeting.
(d) Care should be taken to minimise the risk of conflict of any interest that might be seen to give rise to an unacceptable influence.
3. Secretary
(a) The Company secretary or their nominee shall act as secretary to the Committee.
(b) The secretary shall keep an appropriate record of the attendees of the Committee, its proceedings and resolutions.
(c) Minutes shall be circulated promptly to all members of the Committee and to all members of the Board.
4. Quorum
The quorum for meetings shall be two members. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.
5. Attendance at meetings
The Chief Executive of the Company shall have the right to address any meeting of the Committee. Otherwise, the Committee shall have the discretion to decide who, other than its members, shall attend or address its meetings. Neither the Chief Executive, Chairman of the Board nor other executive directors shall be present or involved in any decision in respect of his or her own remuneration.
6. Frequency of meetings
The Committee shall meet not less than twice a year and at such other times as the chairman of the Committee shall require.
7. Notice of Meetings
(a) Meetings of the Committee shall be summoned by the secretary of the Committee at the request of the chairman of the committee or any member thereof.
(b) Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee, any other person required to attend and all other non-executive directors, no fewer than 3 working days prior to the meeting.
8. Authority
The Committee is authorised by the Board to: -
(a) investigate any activity within its terms of reference;
(b) seek any information it requires from any employee of the Company in order to perform its duties ands all employees are directed to co-operate with any request made by the Committee;
(c) obtain outside legal or other independent professional advice, at the Company`s expense, and to ensure attendance of other advisers with relevant experience and expertise if it considers this necessary.
9. Duties
The Committee shall:
(a) determine and agree with the Board the framework or broad policy for the remuneration and compensation in respect of the executive directors, the Company secretary and the Chairman of the Board in accordance with the Combined Code and the UK Listing Authority`s Listing Rules and associated guidance;
(b) determine targets for any performance-related pay schemes operated by the Company and ask the Board, where appropriate, to seek shareholder approval for any long-term incentive arrangements;
(c) determine the policy for and scope of pension arrangements and service agreements for each executive director;
(d) ensure that contractual terms on termination and compensation commitments made are fair to the individual and the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised;
(e) determine, within the terms of the agreed policy, the total individual remuneration package of each executive director including where appropriate, bonuses, incentive payments and share options;
(f) review competitor companies but insure that automatic increases are not implemented;
(g) be aware of and advise on any major changes in employee benefit structures throughout the company;
(h) agree the policy for vetting and authorising claims for expenses from the Chief Executive and the Chairman of the Board;
(i) ensure that provisions regarding disclosure of remuneration and pensions, as set out in the Directors` Remuneration Report Regulations 2002 and in the Combined Code are fulfilled and produce an annual report of the Committee`s remuneration policy;
(j) be exclusively responsible for establishing the selection criteria, selecting, appointing and setting terms of reference for any remuneration consultants who advise the Committee;
(k) report the frequency of, and attendance by members at, remuneration Committee meetings in the annual report; and
(l) ensure the Committee`s terms of reference are made publicly available;
10. Reporting procedures
(a) The chairman of the Committee shall attend the Annual General Meeting prepared to respond to any shareholder questions through the Chairman of the Board on the Committee`s activities and responsibilities.
(b) The Committee members shall review these terms of reference annually and make recommendations to the Board.
Issue No. 4 - Approved by the Board
Last Reviewed : 6th December 2007.
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