Remuneration Policies

Remuneration and Nomination Committee Charter

1. Introduction
   1. This Charter governs the composition, membership, roles and responsibilities of the remuneration and nomination committee of the Company (Committee).
   2. The operation of the Committee is also governed, where applicable, by the constitution of the Company.
2. Objectives
   1. The purpose of the Committee is to provide the board of directors of the Company (Board) advice and recommendations which enable the Board to:
      1. set in place remuneration policies which are designed to attract and retain senior executives and directors with the expertise to enhance the performance and growth of the Company;
      2. ensure that the level and composition of remuneration packages are fair, reasonable and adequate and, in the case of executive directors and senior executives, display a clear relationship between the performance of the individual and the performance of the Company; and
      3. ensure that it has an appropriate balance of skills, experience and personal attributes for it to discharge its duties and responsibilities effectively, enhance Board performance, maximise shareholder value and to ensure that the composition of the Board is regularly reviewed and renewed, as appropriate.
3. Composition
   1. The Committee must consist of a minimum of three members, with the majority of members being independent directors if the circumstances of the Company allow (Members).
   2. The Committee will appoint a secretary and a chairperson from among its Members. The chairperson will be an independent director if the circumstances allow.
4. Meetings
   1. The Committee will meet as frequently as required but must, at a minimum, meet once per year.
   2. The secretary must call a meeting of the Committee at the request of any Member and must:
      1. together with the chairperson, draw up and circulate an agenda and any supporting documentation to Members prior to each meeting; and
      2. notify the Members of the date, time and location of the meeting as far in advance as possible, but not less than five business days before the meeting.
   3. A quorum for a Committee meeting will be at least two Members, one of whom must be an independent director.
   4. The Committee may invite any person, to attend part or all of any meeting as it considers appropriate to assist it in discharging its functions. A person invited to attend a meeting, other than as a Member, may not vote on any matter.
   5. The secretary is responsible for taking minutes of each meeting and distributing them to Committee members as soon as practicable.
5. Roles and responsibilities regarding remuneration of directors
   1. The Committee is responsible for the following with respect to executive remuneration policy and remuneration packaging:
      1. providing the Board with advice and recommendations regarding the ongoing development of an executive remuneration policy that meets the Objectives set out at section 2 (an example of a Remuneration Policy for directors and executives is set out in Attachment A to this document);
      2. regularly reviewing the remuneration policy and other relevant polices on an ongoing basis and recommend any necessary changes to the Board;
      3. reviewing the proposed remuneration arrangements of all persons who report directly to the Managing Director;
      4. providing the Board with advice and recommendations regarding:
         1. the Company's polices on recruitment, retention and termination;
         2. executive superannuation arrangements;
         3. the remuneration packages of senior executives and executive directors;
         4. the Company's policies with respect to incentive schemes;
         5. the incentive schemes of senior executives and executive directors; and
         6. assisting the Board in the development of appropriate benchmarks for use in designing incentive schemes.
   2. The Committee is responsible for the following with respect to termination payments for both executives and non-executives:
      1. providing advice and recommendations to the Board on the Company's termination and redundancy polices and the payments made to outgoing directors and senior executives;
      2. ensuring that termination payments:
         1. are fair to the individual and the Company; and
         2. do not reward failure.
6. Roles and responsibilities regarding nomination of directors
   1. The Committee is responsible for the following with respect to the nomination of members to the Board:
      1. Review and selection criteria:
         The selection criteria for Board vacancies will vary depending upon the position to be filled and the strategic needs of the Company. However, in general, the Committee should:
         1. identify additional skills, competencies and personal attributes that may be desirable in assisting the Board in discharging its responsibilities and meeting its objectives;
         2. at least once each year, undertake a review of the skills, competencies and personal attributes of the current Directors; and
         3. when the Committee considers that additional skills or competencies are considered desirable on the Board, the Committee will develop a brief for the “ideal” candidate (based on the qualities identified and their importance, as ranked by the Committee) as part of the recommendation to the Board for a new appointment; and
      2. Appointment policy
         1. The identification of potential candidates may be assisted by the use of external recruitment agencies as appropriate. Directors may also refer potential appointees to the Committee.
         2. The Committee will be responsible for the nomination of suitable candidates who best meet the selection criteria identified having regard to:
            1. the capability of the candidate to devote the necessary time and commitment to the role. This involves a consideration of matters such as other Board or executive appointments; and
            2. potential conflicts of interest and independence.
         3. A shortlist of candidates agreed by the Committee will be recommended to the Board and interviewed.
         4. Detailed background information in relation to a potential candidate should be provided to all Directors.
         5. Reference checks of candidates should be undertaken prior to appointment.
         6. An offer of a Board appointment must be made by the Chairman only after having consulted all Directors, with any recommendations from the Committee having been circulated to all Directors.
         7. All new Board appointments should be confirmed by letter in the standard format as approved by the Committee from time to time.
         8. A Director appointed to fill a vacancy in this manner must stand for election at the company’s next Annual General Meeting, in accordance with the company’s constitution.
7. Reporting
   1. The Committee must report to the Board, at the first Board meeting subsequent to each Committee meeting, regarding the proceedings of each Committee meeting, the outcomes of the Committee's reviews and recommendations and any other relevant issues.
   2. The Committee must provide the Board with advice and recommendations regarding the appropriate material and disclosures to be included in the corporate governance section of the Company's annual report which relates to the Company's remuneration policies and procedures.
8. Review of the Charter
   1. This Charter will be reviewed annually and revised by the Board as required.
   2. The Board may make changes to this Charter by resolution.

Attachment A

Remuneration Policy – Executive and Non-Executive Directors

1. Structure and objectives of policy and relationship to company performance
   1. A distinction is made between the structure of non-executive directors’ remuneration and that of executives, reflected in this policy.
   2. The objectives of the executive remuneration policy are as follows:
      1. to motivate executive management to manage and lead the business successfully and to drive strong long-term organisational growth in line with the strategy and business objectives;
      2. to drive successful organisational performance by incorporating an annual performance incentive and establish longer-term performance objectives;
      3. to further drive longer-term organisational performance through an equity-based reward structure;
      4. to make sure that there is transparency and fairness in executive remuneration policy and practices;
      5. to deliver a balanced solution addressing all elements of total pay – base pay, incentive pay (cash and shares) and benefits including loans;
      6. to make sure appropriate superannuation arrangements are in place for executives; and
      7. to contribute to appropriate attraction and retention strategies for executives.
   3. The objectives of the non-executive director remuneration policy are as follows:
      1. to attract and retain appropriately qualified and experienced directors;
      2. to remunerate directors fairly having regard to their responsibilities, including providing leadership and guidance to management; and
      3. to build sustainable shareholder value by encouraging a longer-term strategic perspective, by not linking fees to the results of the Company.
2. Executive remuneration packages
   1. The Remuneration Committee makes recommendations to the Board in relation to the remuneration framework for executives.
   2. It is intended that base salaries take into account market relativities, having regard to the need for the Company to attract, motivate and retain executives.
   3. The Board decides the remuneration of the key executives based on their direct accountability and responsibility for the operational management, strategic direction and decision-making for the Company and demonstrated leadership, provided that any director having a material personal interest in a resolution relating to remuneration abstains from voting on that resolution.
   4. Executive remuneration packages include an “at risk” or “performance based” component.
   5. Payment of any part of the “at risk” or “performance based” component for executives is payable at the discretion of the Board (subject to the company’s Constitution).
   6. Payment is contingent upon the achievement of agreed performance standards or financial benchmarks which are set at the start of each financial year.
   7. Executives may also participate in the bonus pool that is allocated amongst other employees. Executives only participate in the bonus pool if company performance exceeds the budget set at the beginning of the financial year.
   8. The superannuation guarantee charge contribution (currently 9%) is made for all employees, including executives. Employees may also salary sacrifice additional amounts into superannuation.
   9. Executive employment contracts are not to be for fixed terms and are not to include provision for payment on early termination, without Board approval.
   10. The method for working out whether the Company has an obligation to make disclosures in its annual report regarding any particular non-director executives is in accordance with the requirements of the Corporations Act 2001 (Cth) (Corporations Act) and accounting standards. This includes, amongst other things, the amount of remuneration for Corporations Act purposes, which is based on the total remuneration package for executives comprising base salary, plus “at risk” or “performance based” component, plus superannuation.
3. Non-executive director remuneration
   1. The Remuneration Committee makes recommendations to the Board in relation to the remuneration framework for directors.
   2. Non-executive directors’ fees are reviewed annually by the Board, having regard to recommendations from the Remuneration and Nomination Committee (Committee). The Committee surveys comparable remuneration levels in the external market, particularly in the banking and finance sector, and makes sure that fees and payments paid reflect the demands that are made and the responsibilities of directors.
   3. Non-executive director remuneration comprises the following:
      1. base fees.
      2. superannuation guarantee charge payments (currently 9%).
   4. Non-executive directors do not receive bonuses or incentive payments or participate in the employee share or option plans. There is no direct link between non-executive director remuneration and the short term results of the Company.
   5. No retirement benefits (other than superannuation guarantee charge payments) accrue to existing or new non-executive directors.