Remuneration Committee Terms of Reference

1. Membership

1.1. Members of the Committee shall be appointed by the Board, in consultation with the Chairman of the Remuneration Committee. The Committee shall be made up of at least three members, all of whom are independent Non-executive Directors.

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

1.3. Appointments to the Committee shall be for a period of up to three years, which may be extended for two further three year periods, provided the Director remains independent.

1.4. 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 themselves to chair the meeting.

2. Secretary

2.1. The Company Secretary or their nominee shall act as the Secretary of the Committee.

3. Quorum

3.1. 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.

4. Frequency of Meetings

4.1. The Committee shall meet at least twice a year and at such other times as the chairman of the Committee or any member of the Committee shall require.

5. Notice of Meetings

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

5.2. 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 and any other person required or invited to attend, no later than three working 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.

6. Minutes of Meetings

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

6.2. Minutes of Committee meetings shall be circulated promptly to all members of the Committee and, once agreed, to all members of the board, unless a conflict of interest exists.

7. Annual General Meeting

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

8. Duties

The Committee shall:

8.1. determine and agree with the Board the framework or broad policy for the remuneration of the Chairman of the Board (the ‘Chairman’), Executive Directors of the Company and any member of the Group’s Executive Management whose management band is Band 1 or above, and such other members of the Executive Management as it is designated to consider (Executive Directors and other relevant members of the Group’s Executive Management are hereinafter referred to as ‘Executives’). 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;

8.2. in determining such policy, take into account all factors which it deems necessary, including the pay and employment conditions elsewhere in the Group. The objective of such policy shall be to ensure that Executives are provided with appropriate incentives to attract, retain and encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of the Company; it shall also liaise with the Nomination Committee to ensure that the remuneration of newly appointed Executives is within the Company’s overall policy;

8.3. judge where to position the Company relative to other companies using such comparisons with caution, in view of the risk of an upward ratchet of remuneration levels with no corresponding improvement in performance;

8.4. 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;

8.5. ensure that the costs, liabilities and dilution levels in any long term incentives are monitored;

8.6. review the design of all share incentive plans for approval by the Board and shareholders. For any such plans, determine each year whether awards will be made, and if so, the overall amount of such awards, the individual awards to Executives and the performance targets to be used;

8.7. determine the policy for, and scope of, pension arrangements for each Executive;

8.8. approve any terms and conditions of appointment of the Chairman and any changes thereto;

8.9. approve any terms and conditions of appointment of any Executive, including pensions and contractual notice arrangements and any changes thereto;

8.10. determine the policy for and terms and conditions (and any changes thereto) of service agreements for Executives and 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;

8.11. within the terms of the agreed policy and in consultation with the Chairman and/or Group Chief Executive as appropriate, determine the total individual remuneration package of the Chairman and Executives including where appropriate, in respect of Executives bonuses, incentive payments and share options or other share awards;

8.12. in determining such packages and arrangements, give due regard to any relevant legal requirements, the provisions of the Combined Code and the UK Listing Authority’s Listing Rules and associated guidance;

8.13. be aware of the remuneration trends across the Company and the Group; and be aware of and advise on any major changes in employee benefits structures throughout the Company and the Group;

8.14. agree the policy for authorising claims for expenses from the Group Chief Executive and Chairman;

8.15. 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

8.16. 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 obtain reliable, up to date information about remuneration in other companies.

9. Reporting Responsibilities

9.1. The Committee Chairman shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities unless a conflict of interest exists.

9.2. The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.

9.3. The Committee shall produce an Annual report of the Company’s remuneration policy and practices which will form part of the Company’s Annual report and ensure each year that it is put to shareholders for approval at the AGM.

9.4. The Committee shall report the frequency of, and attendance by members at Committee meetings in the Annual reports.

10. Other

10.1. 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.

10.2. The Committee shall ensure that the terms of reference of the Committee, including its role and the authority delegated to it by the Board are made available on request, and on the Company’s website.

10.3 The Committee shall ensure that where remuneration consultants are appointed, a statement of whether they have any other connection with the Company is made available on request, and on the Company’s website.

11. Authority

11.1. The Committee and each of its members is authorised to seek any information it requires from any employee of the Company in order to perform its duties, taking care to recognise and avoid conflicts of interest;

11.2. In connection with its duties the Committee is authorised to obtain, at the Company’s expense, any outside legal or other professional advice;

11.3. The Committee is authorised to commission any reports or surveys which it deems necessary to help it fulfil its obligations.

References to ‘the Committee’ shall mean the Remuneration committee.

References to ‘the Board’ shall mean the Board of Directors.

References to the ‘Company’ or ‘Group’ shall mean Inchcape plc or the Inchcape Group.