N BROWN GROUP PLC

Terms of Reference - Remuneration Committee

Membership

1. The committee shall comprise the independent non-executive directors of the company (with a minimum of three members).
2. A quorum shall be three members (or, if there are only three members of the committee, a quorum shall be two members).
3. The chairman of the committee ("the Chairman") shall be appointed by the Board of Directors.
4. All members of the committee shall be appointed for an initial term of three years, after which their appointments may be subject to annual rotation or re-confirmation as the Board of Directors may determine.

Meetings

5. Executive directors shall not normally attend meetings nor shall they have the right of attendance. However, the Chief Executive may be invited to attend meetings to discuss the performance of other executive directors and make proposals as necessary.
6. The Chairman shall call a meeting at the request of any member of the Board or at his own instigation.
7. The Chairman shall make available to members of the committee any information considered necessary for the purpose of any discussion at a meeting.
8. The Company Secretary of the company shall be the secretary of the committee and shall attend meetings in this capacity.
9. Meetings shall be held at least twice a year.
10. The Chairman shall attend the annual general meeting of the company and shall assist in answering questions put to the Board by shareholders on directors’ remuneration or any other aspect of the remuneration report contained in the company’s annual report or other relevant issue.

Authority

11. The committee is authorised by the board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee of the group and all employees shall co-operate with any request made by the committee.
12. The committee is authorised by the board to obtain either internal or external professional advice. Persons other than members of the committee may attend meetings of the committee if the Chairman considers this necessary.

Responsibilities

13. The responsibilities of the committee are as follows:-
    1. To review and make recommendations to the board concerning matters of group policy on the remuneration of executive directors of the company, executive directors of other group companies and other senior management within the group.
    2. To review and determine the specific remuneration packages, and any proposed changes, for each of the executive directors of the company and executive directors of other group companies, including but not limited to:-
       • Terms of employment, resignation and retirement
       Salaries, fees, bonuses and other forms of paid remuneration
       • Pension arrangements
       • Company cars, medical cover, life assurance and other benefits in kind
       • Share option, profit sharing and other incentive schemes
       • Early termination payments and contractual commitments
    3. To review and make recommendations to the board concerning the terms of any share option, profit sharing or other share ownership incentive scheme, and any proposed changes, to be operated within the group.
    4. In determining or making recommendations concerning the terms of any performance related remuneration, to follow the provisions of Schedule A of the Combined Code of the Committee on Corporate Governance (issued 25 June 1998).
    5. To review and determine the processes used by the human resources management within the group, to specify the benefits and conditions of employment of senior management and to ensure best practice in regard to career appraisal and career management.
    6. To ensure that the Group’s principal shareholders are sufficiently advised in relation to remuneration issues as for any other matters which may be of relevance to them.
    7. To prepare a draft remuneration report each year, for approval and issue by the board to shareholders, which complies with the provisions of Schedule B of the Combined Code of the Committee on Corporate Governance (issued 25 June 1998).
    8. To consider other topics, as defined from time to time by the board.

Reporting to the Board

14. The Chairman shall report to the Board at its next meeting, issues discussed and recommendations to be made by the committee.
15. The secretary shall make available minutes of all meetings of the committee to all members of the Board.

Adopted by the Board with effect from 21 April 1999