K3 BTG plc Remuneration Committee Terms of Reference

Constitution

1. The Board hereby resolves to establish a Committee of the Board to be known as the Remuneration Committee. This constitution replaces all previous constitutions of the Committee.

Membership and Chairman

1. Members of the Committee shall be appointed by the Board on the recommendation of the Nominations Committee. The Committee shall comprise of the independent non-executive directors and the Chairman of the Board. The Committee shall consist of not less than 2 members.
2. Only members of the Committee have the right to attend Committee meetings. Other individuals, and external advisers, may be invited to attend for all or part of any meeting as and when appropriate.
3. The Board shall appoint the Committee Chairman, who shall be an independent non-executive director. In the absence of the Chairman, the remaining members present shall elect one of themselves to chair any duly convened meeting. The quorum necessary for the transaction of the business shall be two.

Secretary

1. The secretary of the Committee shall be the Chief Executive.

Frequency of Meetings

1. The Committee shall meet at least once a year. In order to approve the remuneration report, one of the meetings shall be held immediately before the submission of the Company’s annual report and accounts to the Board for approval. The Chairman shall call a meeting of the Committee if so requested by any Committee member or by the Board.

Notice of Meetings

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

Minutes of Meetings

1. The Secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance. Minutes of the Committee meetings shall be circulated promptly to all members of the Committee and to the Board.

Annual General Meeting

1. The Chairman shall attend the Annual General Meeting prepared to respond to any shareholder questions on the Committee’s activities.

Duties

The Committee shall:

1. Determine and agree with the Board the framework or broad policy for the remuneration of the company’s Chairman, Chief Executive and executive directors. The remuneration of non-executive directors shall be a matter for the Chairman of the Board, the Chief Executive and executive directors. No director or manager shall be involved in any decision as to their own remuneration;
2. In determining such framework or policy, take into account all factors which it deems necessary. The objective shall be to ensure that members of the executive management of the company are provided with appropriate incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of the company;
3. Review the ongoing appropriateness and relevant of the remuneration policy;
4. Approve the design of, and determine targets for, any performance related pay schemes operated by the company and approve the total annual payment made under such schemes; Review the design of all share incentive plans requiring approval by the Board and shareholders. For any such plans, the Committee shall determine each year whether awards will be made and, if so, the amount of such awards, the individual awards to executive directors and the performance targets to be used;
5. Determine the policy for, and scope of, pension arrangements for each executive director; 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 recognised;
6. Within the terms of the agreed policy, and in consultation with the Chairman of the Board and/or Chief Executive as appropriate, determine the total individual remuneration package of each executive director, including bonuses, incentive payments and share options or other share awards;
7. In determining such remuneration packages and arrangements, give due regard to any relevant legal requirements, the provisions and recommendations in the Combined Code and the UK Listing Authority’s Listing Rules and associated guidance;
8. Review and note annually remuneration and other benefit structures across the company or group;
9. Ensure that all provisions regarding disclosure of remuneration (including pensions), as set out in legislation and the Combined Code are fulfilled; and
10. Be exclusively responsible for:
    • Establishing the selection criteria, for any remuneration consultants to advise the Committee
    • Selecting, appointing and setting the terms of reference for any such remuneration consultants.
    • Obtaining reliable, up-to-date information about remuneration in other companies
11. The Committee shall have full authority to commission any reports or surveys that it deems necessary to help it fulfil its obligations. The Committee shall, at least once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval.
12. The Committee is authorised by the Board to seek any information it requires from any employee of the company in order to perform its duties.

Reporting Responsibilities

1. The Chairman shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities.
2. The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.
3. The Committee shall produce an annual report of the company’s remuneration policy and practices for approval by the Board. The report will form part of the company’s Annual Report and be put to shareholders for approval at the AGM.
4. In connection with its duties the Committee is authorised by the Board to obtain, at the company’s expense, any outside legal or other professional advice.