content_image/254640.jpg
Committee considers this plan will best support and facilitate the growth in shareholder value over the long term. 

From 2011 onwards, the Committee resolved to grant only Executive Directors with nil cost performance rights that will require achievement of EPS and relative TSR targets over the 2, 3 and 4 year periods. These grants are subject to shareholder approval. 

## NON-EXECUTIVE DIRECTORS’ FEES 

The current aggregate limit for non-Executive Directors’ fees is $A800,000 per annum. In FY2013 the base fee payable (including superannuation if applicable) to the Chairman of $A206,000 and to a non-Executive Director currently of $A103,000 per annum. Additionally $A10,000 per annum is paid for sub-committee attendances. These amounts were increased by 3% with effect from 1 August 2013. 

The Managing Director and Finance Director do not receive Directors’ fees. The amounts approved for Directors’ fees are expressed in AUD given the specific requirements for remuneration reporting applying to ASX listed companies, however all amounts reported in the tables within this report are specified in NZD, being the reporting currency of the Company. 

It remains the Board’s intention that Directors’ fees will be reviewed annually; with external independent remuneration consultants providing advice to ensure fees reflect market rates. There are no guaranteed annual increases in any Director’s fees. 

Non-Executive Directors do not participate in the Company short or long term incentive schemes. 

The following fees apply per annum, including sub-committee attendance fees: 

<img src='content_image/254640.jpg'>

## B DETAILS OF REMUNERATION 

The following Executives along with the Directors are identified as key management personnel with the authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, during the financial year: 

Peter Halkett - Chief Executive Officer 

Mark Todd - Chief Financial Officer 

Tamalin Morton - General Manager, Marketing 

Michelle Adams - General Manager, Product 

Caleb Nicolson - General Manager, Supply Chain 

Paul Stern - General Manager, Business Development and Sustainability 

Grant Taylor - Chief Information Officer 

Matthew Watts - General Manager, Retail Australia (from 1 March 2012) 

Brandon Beveridge - General Manager, Retail New Zealand (from 1 March 2012) 

All of the above persons were employed by the Group and were key management personnel for the full years ended 31 July 2013 and 2012, unless otherwise stated. Mark Todd, Michelle Adams, Caleb Nicolson, Grant Taylor and Brandon Beveridge are employees of Kathmandu Limited (New Zealand domiciled), and Peter Halkett, Tamalin Morton, Paul Stern and Matthew Watts, are employees of Kathmandu Pty Limited (Australian domiciled). 

Details of the remuneration of the Directors and total remuneration of other key management personnel of the Group, for the current and prior financial years are set out in note 9 of the financial statements. 

For the year ended 31 July 2013 the Group’s financial performance targets were not met and thus the annual short term cash and equity incentives were not paid. A smaller discretionary cash bonus was paid to key and senior management personnel in recognition of the EBITDA outcome for the year being very close to the financial performance target once the adverse impact of non-controllable exchange rate AUD to NZD translation was adjusted for. 

## COST OF CHIEF EXECUTIVE OFFICER’S CHANGE OF TAX RESIDENCY 

In the second half of FY2013 the Board reviewed the appropriate primary workplace of the Chief Executive Officer, and in conjunction with its taxation advisors also assessed his associated current and historical residency for taxation purposes. As Peter Halkett has been required to operate primarily out of our Melbourne office in the period following the Christchurch earthquake in February 2011, it has been determined that since May 2011 he has been primarily tax resident in Australia. The Board and Chief Executive Officer have negotiated a sharing of the expenses including personal income tax and other associated deductions for the period from May 2011 to July 2013 arising from this required change of taxation residency. This expense is reported in his remuneration in note 9c of the financial statements. The Board and the Chief Executive Officer have also entered into a new employment agreement recognising this new residency circumstance that is effective from FY2014 onwards. The Chief Executive Officer’s new remuneration under this agreement is detailed in the Notice of Annual General Meeting for 2013. 

## C SERVICE AGREEMENTS 

All Executives are on employment terms consistent with the remuneration framework outlined in this report. Each of the agreements has an open term, and the period of notice to be given by the employee is three months. The agreements provide for three months base salary inclusive of any applicable superannuation to be paid in the event of a redundancy. 

