REMUNERATION COMMITTEE TERMS OF REFERENCE
SPORTECH PLC (the "Company")
REMUNERATION COMMITTEE TERMS OF REFERENCE
1. INTRODUCTION
1.1 On 30 November 2007, the Board resolved, in accordance with the articles of
association of the Company, to confirm the terms of reference of the remuneration
committee of the Board.
1.2 The purpose of this document is to set out:
(a) the duties and responsibilities of the Committee; and
(b) the constitution of the Committee and the regulations governing proceedings of
the Committee.
1.3 In this document, references to:
(a) the "Board" are to the board of directors of the Company from time to time;
and
(b) the "Committee" are to the remuneration committee of the Board.
2. MEMBERSHIP
2.1 The members of the Committee shall be appointed by the Board
2.2 The Committee shall consist of at least three members, all of whom are independent
non-executive directors of the Company. The chairman of the Board shall be eligible to
be appointed as a member of the Committee provided that he was considered
independent at the time of his appointment as chairman of the Board.
2.3 Appointments to the Committee shall be for a period of up to three years, which may
be extended for up to two further periods of three years, provided the director in
question remains independent.
3. CHAIRMAN
3.1 The Board shall appoint the chairman of the Committee who shall be an independent
non-executive director. The chairman of the Board shall not be eligible to be appointed
as chairman of the Committee.
3.2 In the absence of the chairman of the Committee at any meeting of the Committee, the
members of the Committee present shall elect one of their number to chair the meeting.
4. SECRETARY
The company secretary shall act as the secretary of the Committee.
5. MEETINGS
5.1 Meetings of the Committee shall be held at such times as the chairman of the
Committee shall require but not less than three times a year.
5.2 Only members of the Committee are entitled as of right to attend meetings of the
Committee but others (such as the chief executive, the head of human resources and
external advisers) may be invited by the Committee to attend all or part of any meeting
as and when the Committee considers appropriate.
6. NOTICE
6.1 Meetings of the Committee shall be summoned by the secretary of the Committee at
the request of any member of the Committee.
6.2 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 proposed attendee and all other non-executive directors of the
Company, not later than five working days before the date of the meeting. Supporting
papers shall be sent to members of the Committee and (as appropriate) any other
proposed attendee at the same time.
7. QUORUM
The quorum necessary for the transaction of business at meetings of the Committee
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.
8. VOTING
8.1 Matters arising at any meeting of the Committee shall be decided by a majority of votes.
8.2 Each member of the Committee present at a meeting of the Committee shall have one
vote on matters arising at the meeting. The chairman of the Committee shall not have a
casting vote on any matter in respect of which there is an equality of votes.
8.3 A member of the Committee shall not vote in respect of any matter being considered by
the Committee in which he has, directly or indirectly, a personal interest and shall not
be counted in the quorum at a meeting in relation to any matter on which he is debarred
from voting.
9. DUTIES AND RESPONSIBILITIES
The Committee shall:
(a) determine and agree with the Board the framework or broad policy for the
remuneration of the Company's chief executive, chairman, the executive
directors, the company secretary and such other members of the executive
management as it is designated to consider. The remuneration of non-executive
directors shall be a matter for the chairman and the executive members of the
Board. No director or manager shall be involved in any decisions as to their
own remuneration;
(b) in determining such policy, take into account all factors which it deems
necessary. The objective of such policy 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;
(c) review the ongoing appropriateness and relevance of the remuneration policy;
(d) approve the design of, and determine targets for, any performance related pay
schemes operated by the Company and approve the total annual payments
made under such schemes;
(e) review the design of all share incentive plans for approval by the Board and
shareholders. For any such plans (including, but not limited to, the Sportech
Performance Share Plan), recommend each year whether awards will be made,
and if so, the overall amount of such awards, the individual awards to
executive directors and other senior executives and the performance targets to
be used;
(f) determine the policy for, and scope of, pension arrangements for each
executive director and other senior executives;
(g) 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;
(h) within the terms of the agreed policy and in consultation with the chairman
and/or chief executive as appropriate, recommend the total individual
remuneration package of each executive director and other senior executives
including bonuses, incentive payments and share options or other share awards;
(i) in determining such 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;
(j) review and note annually the remuneration trends across the Company and its
major subsidiaries;
(k) oversee any major changes in employee benefits structures throughout the
Company and its major subsidiaries;
(1) agree the policy for authorising claims for expenses from the chief executive
and chairman;
(m) ensure that all provisions regarding disclosure of remuneration including
pensions, as set out in the Directors' Remuneration Report Regulations 2002
and the Combined Code, are fulfilled; and
(n) be exclusively responsible for establishing the selection criteria, selecting,
appointing and setting the terms of reference for any remuneration consultants
who advise the Committee and for obtaining reliable, up-to-date information
about remuneration in other companies. The Committee shall have full
authority to commission any reports or surveys which it deems necessary to
help it fulfil its obligations.
10. MINUTES OF MEETINGS
10.1 The secretary of the Committee shall minute the proceedings and resolutions of all
meetings of the Committee, including the names of those present and in attendance.
10.2 Minutes of meetings of the Committee shall be circulated promptly to all members of
the Committee and, when finalised and agreed, to all other members of the Board,
unless a conflict of interest exists.
11. REPORTING RESPONSIBILITIES
11.1 The chairman of the Committee shall report formally to the Board on the proceedings
of the Committee following each meeting on all matters within its duties and
responsibilities.
11.2 The Committee shall make whatever recommendations to the Board it deems
appropriate on any area within its remit where action or improvement is needed.
11.3 The Committee shall produce an annual report of the Company's remuneration policy
and practices.
11.4 The Committee shall make available these terms of reference, explaining its role and
the authority delegated to it by the Board.
12. AUTHORITY
The Committee is authorised by the Board:
(a) to obtain, at the Company's expense, external legal or other professional advice
on any matter within its terms of reference; and
(b) to seek any information it requires from any director or employee of the
Company in order to perform its duties.
13. GENERAL
13.1 The chairman of the Committee shall attend each Annual General Meeting of the
Company prepared to respond to any shareholder questions concerning the
Committee's activities.
13.2 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.