ESPRIT HOLDINGS LIMITED
TERMS OF REFERENCE *
The Board has resolved to establish a Committee of the Board
to be known as the
Remuneration Committee ("Remuneration Committee").
The Remuneration Committee is responsible for the following
(as may from time to time be varied or supplemented by the
(a) To make recommendations to the Board on the Group's
policy and structure for all remuneration of Directors and
Senior Management (in these terms of reference, "Senior
Management" refers to the Chief Executive Officer and one
level down of senior staff, as may from time to time be
determined by the Remuneration Committee) and on the
establishment of a formal and transparent procedure for
developing policy on such remuneration.
(b) To determine the specific remuneration packages of all
Executive Directors and Senior Management, including benefits
in kind, pension rights and compensation payments, including
any compensation payable for loss or termination of their
office or appointment, and to make recommendations to the
Board of the remuneration of Non-Executive Directors. The
Remuneration Committee should consider factors such as
salaries paid by comparable companies, time commitment and
responsibilities of the directors, employment conditions
elsewhere in the Group and desirability of performance-based
remuneration. The Remuneration Committee should consult the
Chairman of the Board and the Chief Executive Officer about
their proposals relating to the remuneration of Executive
Directors and Senior Management.
(c) To review and approve performance-based remuneration of
Executive Directors and senior management by reference to
corporate goals and objectives resolved by the Board from
time to time and approve the total annual payments made under
any performance related pay scheme.
(d) To review the design of all share incentive schemes for
approval by the Board and shareholders and with respect to
any such plans, determine each year whether awards will be
made and if so, the overall amount of such awards, and the
individual awards to Executive Directors and Senior
Management and the performance targets to be used.
(e) To review and approve the compensation payable to
Executive Directors and Senior Management in connection with
any loss or termination of their office or appointment to
ensure that such compensation is determined in accordance
relevant contractual terms and that such compensation is
otherwise fair and not excessive for the Group.
(f) To review and approve compensation arrangements relating
to dismissal or removal of Directors for misconduct to ensure
that such arrangements are determined in accordance with
relevant contractual terms and that any compensation payment
is otherwise reasonable and appropriate.
(g) To ensure that no Director or any of his associates is
involved in deciding his own remuneration.
(h) To advise the shareholders on how to vote with respect to
any service contracts of Directors that require
shareholders' approval under the Rules Governing the
Listing of Securities on The Stock Exchange of Hong Kong
(i) To review the basis of and, if the Remuneration Committee
so decides, approve any significant discretionary payment to
an employee who is neither a Director nor a member of Senior
Management but who is related to any Director or any member
of Senior Management.
3. SUPPORT FROM THE COMPANY
The Remuneration Committee is authorised by the Board to
utilize all such resources as are required for it to
discharge its duties and to have access to professional
advice if considered necessary. The Remuneration Committee
shall be exclusively responsible for establishing the
selection criteria, selecting, appointing and setting the
terms of reference for any remuneration consultants who
advise the Remuneration Committee, and to obtain reliable,
up-to-date information about remuneration in other companies
or in the market.
(a) The Remuneration Committee shall be appointed by the
Board in consultation with the Chairman of the Remuneration
Committee from amongst the Executive Directors and/or the
Non-Executive Directors of the Company.
(b) The Remuneration Committee shall consist of not less than
three (3) members and the majority of which should be
Independent Non-Executive Directors.
(c) Appointments to the Remuneration Committee shall be
co-terminus with the directorship of the relevant members
(whether by retirement, rotation or otherwise).
(d) The Board shall appoint the Remuneration Committee
Chairman. In the absence of the Chairman and/or his appointed
deputy, the remaining members present shall elect one of
themselves to chair the meeting.
(i) Meetings of the Remuneration Committee shall be summoned
by the chairman or the Company Secretary or a person
designated by the Company Secretary at the request of any of
(ii) 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 Remuneration Committee, and any person required to
attend, at least three days before the date of the meeting.
Supporting papers shall be sent to Remuneration Committee
members and to other attendees as appropriate, at the same
(iii) Only members of the Remuneration Committee have the
right to attend Remuneration Committee meetings. However,
other individuals such as the Chairman, the Chief Executive
Officer, the Head of Human Resources and external advisers,
may be invited to attend for all or part of any meeting, as
and when appropriate.
(i) The quorum necessary for the transaction of the business
of the Remuneration Committee shall be two. A duly convened
meeting of the Remuneration 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 Remuneration Committee.
(ii) As no Director or his associate should be involved in
setting his own remuneration, relevant members of the
Remuneration Committee should abstain from voting in relation
to his own remuneration or that of his associates and, in
addition, such member should not be counted for the purpose
of constituting a quorum in relation to any resolutions
concerning his own remuneration or that of his associates
(i.e. a director who is a member of the Remuneration
Committee, whether executive or non-executive, cannot be
counted in the quorum insofar as it relates to any resolution
regarding his own remuneration or that of his associates and
such a Director cannot vote on his own remuneration or that
of his associates, but the Director shall be counted in the
quorum and be entitled to vote on any resolutions regarding
the remuneration of other Directors).
Members may participate in any meeting of the Remuneration
Committee by means of a conference telephone or other
communication equipment through which all persons
participating in the meeting can communicate with each other
simultaneously and instantaneously and, for the purpose of
counting a quorum, such participation shall constitute
presence at a meeting as if those participating were present
(d) Frequency of Meetings
The Remuneration Committee shall meet at least once a year
and at such other times as any member of the Remuneration
Committee shall require.
(e) Minutes of Meeting
(i) The Company Secretary or a person designated by the
Company Secretary shall be appointed by the Remuneration
Committee to act as its secretary and the secretary shall
minute the proceedings and resolutions of all Remuneration
Committee meetings, including the names of those present and
(ii) Minutes of Remuneration Committee meeting shall be
circulated promptly to all members of the Remuneration
6. ANNUAL GENERAL MEETING
The Chairman of the Remuneration Committee (or if he is not
able to attend, his delegate who must be a member of the
Remuneration Committee) shall attend the annual general
meetings and be prepared to respond to any questions from
shareholders with respect to the activities of the
7. REPORTING PROCEDURE TO THE BOARD
(a) The Remuneration Committee shall make whatever
recommendations to the Board it deems appropriate on any
areas within its remit where action or improvement is needed,
and it shall compile a report on its activities for the Board
to consider in the context of preparing the Company's annual
(b) The minutes discussed and approved by the Remuneration
Committee will be made available to the Board. In addition,
the Remuneration Committee will report formally to the Board
in respect of its decisions and/or recommendations, or any
significant matters of interest, after each meeting in case
these matters are not sufficiently covered in the minutes or
should be reported upon before the minutes are
(c) The delegation to the Remuneration Committee is always
subject to compliance with the applicable laws, regulations
and the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited.
Approved by the Board at its meeting held on June 22, 2005
* The updated version of these Terms of Reference in
compliance with the new Corporate Governance Code set out in
Appendix 14 of the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited with effect from
April 1, 2012 is pending the approval by the Board at the
forthcoming Board Meeting.
This press release was issued by Esprit Holdings Limited and was initially posted at http://www.esprit.com/index.php?command=ItemDownload&class=Esprit_Model_IR_DocAttachment&identity=50 6&WYSESSID=2mmodnniufdekad6digg1a6e17 . It was distributed, unedited and unaltered, by noodls on 2012-03-30 12:24:13 PM. The issuer is solely responsible for the accuracy of the information contained therein.