Nomination & Remuneration Committee Charter
1. General Scope and Authority
Alinta Energy is a stapled structure comprised of the following entities:
- Alinta Energy Limited (“AEL”);
- Alinta Energy Trust (“AET”); and
- any respective subsidiary entities of AEL and AET.
Alinta Energy Services Limited (“AESL”) is the responsible entity of AET. The issued units of AET and the issued shares of AEL are stapled together and listed on the Australian Securities Exchange (“ASX”) and trade as stapled securities under the ASX code “AEJ”. The relationship between AEL and AESL is governed by the terms of a Stapling Deed dated 9 November 2006 (“Stapling Deed”).Following consultation with the Board of Directors of AESL, the Board of Directors of AEL by a resolution passed on 25 June 2007 established the AEL Nomination and Remuneration Committee (“Committee”), which is constituted under this Charter.
The proceedings and meetings of the Committee will be regulated by the provisions of the constitution of AEL for regulating the meetings and proceedings of the Board of AEL to the extent to which they are relevant to the terms of this Charter. The Committee may vary the rules regulating its proceedings and meetings.
The Board of AEL has delegated certain tasks to the Committee under this Charter. Specifically the Committee will review and make recommendations (as appropriate) to the Board of AEL in relation to:
(a) the composition of the AEL Board (having particular regard to the skills possessed by Directors) and
succession planning for the Board;
(b) the level of remuneration for Directors, as well as approve, on behalf of the Board, the public reporting of AEL Director remuneration;
(c) the public reporting of remuneration for Alinta Energy’s Key Management Personnel (being the Alinta Energy CEO, the direct reports of the Alinta Energy CEO and any other person nominated as such by the Committee from time to time);
(d) the performance of Alinta Energy’s Key Management Personnel; and
(e) the terms of the proposed remuneration (e.g. base salary and any short term incentive payments) for Alinta Energy's Key Management Personnel.
Any discussion or voting by the Committee on matters under paragraph (d) above will be undertaken in the absence of the Key Management Personnel whose performance is the subject of the review.
The Committee, as representative of AEL with delegated authority under this Charter, has the right to request any information from Alinta Energy management that the Committee considers necessary or desirable to enable it to assess the performance of Alinta Energy’s Key Management Personnel or to comply with any law. This right to request information includes the right to obtain external advice when necessary, and any advice so obtained will be made available to all Directors of the Board.
2. Composition
This Committee will consist of not less than 3 Members, a majority of whom must be independent directors. This will remain the case until that number and composition is amended by a resolution of the Board of AEL. A Member of the Committee need not be a Director of AEL.
A Member of the Committee will cease to be a Member of the Committee if the Member retires, is removed or resigns from the Board of AEL and it is determined that the Member will not continue as a (non-director) Member of the Committee. The Board of AEL will decide a suitable replacement for that Member of the Committee in its discretion, subject only to the ASX Listing Rules and the Corporations Act.
The Chairman of the Committee must be an independent director.
A Committee quorum will comprise 2 Members of the Committee.
In the absence of the Chairman of the Committee, the other Members of the Committee must elect one of their Members as Chairman for the meeting or for the relevant part of the meeting, as appropriate.
The Committee may invite any representative of Alinta Energy management and any of its Key Management Personnel or other individual to attend the meetings of the Committee as they deem appropriate.
The Company Secretary is the secretary of the Committee.
3. Meetings
The Committee will meet as frequently as required but not less than once per year.
Any Committee Member or the Company Secretary may call a meeting of the Committee.
A notice of each meeting confirming the date, time, venue and agenda must be forwarded to each Member of the Committee (with a copy to all Directors of AEL) a reasonable time prior to the date of the meeting. The notice for Members will be accompanied by, or closely followed by, all relevant supporting papers for the agenda items that are to be discussed at the meeting.
The Committee will have access to advice from a representative of Alinta Energy management and any of its Key Management Personnel or other individuals including appropriately qualified external advisors, if that is required. The Committee may meet with external advisors in the absence of Alinta Energy management or any of its Key Management Personnel.
The Chairman of the Committee or that person’s delegate must report to the Board of AEL (or, where applicable, AESL) at its next meeting following each meeting of this Committee.
A meeting of the Committee may be held by Members communicating with each other by any technological means by which they are able simultaneously to hear each other and participate in discussion. The minutes of the meeting shall record the method by which the meeting was conducted. Decisions of the Committee may also be made by way of circular or written resolution of Committee Members.
Minutes of proceedings and resolutions of Committee meetings, as well as resolutions passed by way of circular resolution, must be kept by the Company Secretary. Minutes and circular resolutions will be distributed to all Committee Members and the Chairman of the Board of AEL after preliminary approval of those minutes has been given by the Chairman of the Committee. Minutes, agenda and supporting papers will be provided to any AEL Director upon a request to the Company Secretary, so long as no conflict of interest exists.
4. Duties and Responsibilities
The duties and responsibilities of this Committee are as follows:
Remuneration
KMP Performance and Remuneration
The Committee will:
(a) review the Key Performance Indicators (KPIs) for each of Alinta Energy’s Key Management Personnel and provide feedback about their respective performance against such KPIs;
(b) review and make recommendations to the AEL Board regarding remuneration of Alinta Energy’s Key Management Personnel (or other individuals as appropriate); and
(c) approve the Remuneration Report to be disclosed in the AEL Annual Report.
Long Term Incentive Plans
The Committee will:
(a) consider for approval the formulation of any long term incentive plans ("LTI Plans") involving the issue of
Alinta Energy Stapled Securities; and
(b) monitor and review any LTI Plans for compliance with changes to legislation, regulation and market
expectations or practices.
Independent Director Remuneration
The Committee will make recommendations to the Board for determining the level of remuneration (including superannuation) to be applied to Independent Directors of AEL. The Committee may engage external advisors to provide information to the Board to be considered in its deliberations for the purpose of recommending an appropriate level of remuneration for Independent Directors. All fees paid to Independent Directors will be disclosed in AEL’s Annual Report to the extent required by law.
Nomination and Succession
The Committee will:
(a) periodically assess the skills required to competently discharge the Board’s obligations considering the
strategic direction of Alinta Energy and report to the Board on the outcome of that assessment;
(b) make recommendations to the Chairman of the Board about how to enhance the skill levels possessed
by the present Directors of AEL;
(c) review and identify potential candidates for appointment to the Board of AEL. In identifying suitable
candidates, the Committee will have regard to the skills required relative to the skills represented by the
then members of the Board of AEL;
(d) make recommendations to the Board on candidates that the Committee considers appropriate for
appointment;
(e) provide confirmation of the Directors to retire annually by rotation; and
(f) have oversight of the AEL Board’s annual performance evaluation process which will be managed by
the Committee Chairman and the Company Secretary.
5. Advice to the AESL Board
(a) Consistent with the intent and philosophy that underpins the terms and conditions of the Stapling Deed
that exists between AEL and AESL as the Responsible Entity of AET, the Committee will, at the
request of the Board of AESL, from time to time carry out on behalf of AESL, similar activities as the
Committee is authorised to carry out for AEL, and the Committee will provide to the Board of AESL,
advices and recommendations in relation to the matters referred to in this Charter. It is the intent that the
AESL Board can rely on those activities, advices and recommendations as if the Committee was a
committee of the AESL Board.
(b) The Board of AESL only has the authority to request the Committee to carry out activities that relate to
AESL, and have no authority to request the Committee to carry out activities in relation to AEL or any
entities in which AEL has a direct or indirect membership interest.
6. Review
The terms of this Charter will be reviewed by the Board of AEL periodically as required, but not less than every two years.