Remuneration Committee

Membership
The members of the Committee shall be at least three non-executive directors. Members of the Committee will be independent of management and free of any business or other relationships (including, without limitation, cross directorships or day to day involvement in the management of the business) which could interfere with the exercise of their independent judgement.

The Chairman of the Committee shall be appointed by the Board.

The quorum of the Committee shall be two members.

Secretary
The secretary of the Company shall be the secretary of the Committee.

Attendance
The Group Chairman, Group CEO, Group Head of Human Resources and Group Head of Performance & Reward would normally be required to attend meetings of the Committee.

Frequency of Meetings
Meetings shall be held at such times as may be necessary, when called by the Chairman, although the Committee would normally meet not less than three times a year.

Operation
The primary function of the Committee is to ensure that executive directors, the Chairman and senior management are rewarded for their contribution to the Group's operating and financial performance at levels which take into account Group and personal performance as well as industry, market and country benchmarks.

Duties
The principal duties of the Committee are:

• to make recommendations to the Board as to the framework and broad policy for remuneration provided to the Chairman and executive directors and its cost;
• to design and oversee all elements of executive directors' remuneration, including base salary, bonus, long-term incentive plans, compensation in the event of early termination and pensions;
• to make recommendations to the Board in relation to non-executive directors' fees;
• to procure such information as it may consider necessary to compare remuneration provided to QinetiQ's executive directors against the remuneration provided by comparable companies to executive directors;
• to monitor and be sensitive to pay and employment conditions elsewhere in the Group;
• to ensure that QinetiQ complies with any legal requirements governing disclosure of remuneration and pensions, including the Directors' Remuneration Report Regulations 2002 and the Combined Code;
• to review the remuneration packages and terms and conditions of employment of the Group's senior management; and
• to approve the scheme rules, launch of any QinetiQ executive share-based incentive scheme and oversee the administration and operation of any such scheme.