The Remuneration Committee is a Committee of the Board as defined within the Shareholders Agreement. Its powers and discretions are delegated to it by the Shareholders and Board of Directors of the Company as set out below.

Members of the Committee shall be appointed by Board and Shareholder approval and shall be made up of the independent non-executive directors as follows:

• Jim McMahon (Chairman)
• David Shearer
• Bruce Anderson

Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the Chief Executive and external advisers may be invited to attend for all or part of any meeting as and when appropriate.

The Board shall appoint the Committee Chairman who shall be an independent non-executive director. In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of their number to chair the meeting. The Chairman of the Board shall not be Chairman of the Committee.

The Company Secretary shall act as the Secretary of the Committee.

The quorum necessary for the transaction of business shall be two. 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.

The Committee shall meet at least twice a year and at such other times as the Chairman of the Committee shall require.

Meetings of the Committee shall be summoned by the Secretary of the Committee at the request of any of its members.

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 and any other person required to attend, no later than four days before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees as appropriate, at the same time.

The Secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance.

Minutes of Committee meetings shall be circulated promptly to all members of the Committee.

The duties of the Committee are as follows:-

• to determine and agree with the Board the framework or broad policy for the remuneration of the Executive Directors of the Company and P. Callcutt ("the Directors").
  
  The remuneration of non-executive directors shall be a matter for a Committee of the Board consisting of the Chairman of the Company, Chief Executive and Finance Director.
  
  No director or manager should be involved in any decisions as to their own remuneration;
• to determine targets for any performance-related pay schemes applicable to the Directors, operated by the Company;
• to determine the policy for and scope of pension arrangements for the Directors;
• to ensure that contractual terms on termination, and any payments made, are fair to the individual and the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised.
• within the terms of the agreed policy, to determine the total individual remuneration package of each Director including, where appropriate, bonuses, incentive payments, share options and LTIPs;
• to be aware of and advise on any major changes in employee benefit structures throughout the Company or group;
• to agree the policy for authorising claims for expenses from the Directors;
• to be responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the Committee;
• to make available the Committee's Terms of Reference. These should set out the Committee's delegate responsibilities and be reviewed and, where necessary, updated annually.