## Remuneration 

Mr Fraser’s remuneration consists of the components set out below. 

## Total Fixed Remuneration 

Mr Fraser’s TFR, effective 1 September 2012, is $2,163,000 a year. 

During each year of the term of his appointment, the Board commissions an independent review of his TFR for the following year and decides whether to increase it, taking into account such matters as external market relativities. The details of the market remuneration information considered is described in Section 2 of this report. 

Under no circumstances can Mr Fraser’s TFR be reduced without his written consent. 

## Short-Term Incentive 

Mr Fraser is eligible to receive a maximum STI payment for the year ending 30 June 2013 of $2,163,000. 

Any STI will be determined in accordance with the STI Plan rules and is subject to the satisfactory completion by Mr Fraser of his performance objectives which relate to financial, customer, people management and strategic growth and innovation objectives. 

For year ending 30 June 2012, one half of any STI will be paid in cash in September 2012, with payment of the balance deferred for 12 months. 

Any deferred STI component is payable in the following circumstances: 

(a) death; 

(b) total and permanent disablement; 

(c) termination of his employment by AGL without cause (either with or without notice); 

(d) termination of his employment with AGL by Mr Fraser giving three months’ notice after the occurrence of a fundamental change (on the basis provided for in Mr Fraser’s employment contract); 

(e) redundancy; 

(f) retirement; or 

(g) cessation of his employment with AGL in such other circumstances as the Board in its absolute discretion may determine. 

Otherwise the deferred STI component is forfeited. 

## Long-Term Incentive 

AGL has obtained shareholder approval to issue the maximum number of Share Performance Rights available to Mr Fraser in respect of each of the financial years ending 30 June 2012, 30 June 2013 and 30 June 2014. 

The CEO’s LTI allocation was 100% of his TFR in accordance with contractual rights within the shareholder approved maximum allocation number of Share Performance Rights. 

The Share Performance Rights granted to Mr Fraser under the LTI Plan will vest, subject to meeting the associated performance hurdles, at no cost to Mr Fraser. 

## Restraint 

Mr Fraser must not, for a period of six months following termination of his appointment: 

> be engaged or concerned in any capacity whatsoever, in any business which is similar to, or competitive with, AGL’s business; 

> solicit or entice, or attempt to solicit or entice, any Director, employee or client of AGL to leave AGL; or 

> attempt to persuade any Director, employee or client of AGL with whom Mr Fraser had dealings with in the year preceding the termination of his appointment to discontinue their relationship with AGL or reduce the amount of business they do with AGL. 

## 8. Non-executive Directors 

Non-executive Directors do not receive performance-related payments. 

Non-executive Directors receive a base fee. In addition, in recognition of the higher workloads and extra responsibilities of participating in a Board Committee, if applicable they also receive a Committee fee. Chairing a Committee attracts a higher fee rate, but the Chairman of the Board receives no extra remuneration for participating in or chairing Committees. 

The maximum aggregate remuneration payable to non-executive Directors is $2.0 million a year or such other amount as approved at a general meeting of shareholders. 

Non-executive Directors’ fees are determined by the Board based on advice from independent remuneration advisers, which includes market comparison of remuneration paid to non-executive Directors in a comparator group of similar sized companies as well as the ASX100. 

Any changes to non-executive Directors’ fees take effect from 1 January in the following year. 

The market peer group used as a comparator group for the non- executive Directors is made up of companies who have a market capitalisation ranging from 20 companies below, to 20 companies above, the market capitalisation of AGL. 

