Directors’ Report 2012 62 Remuneration Total Fixed Remuneration Short-Term Incentive Long-Term Incentive Restraint 8.  Non-executive Directors Mr Fraser’s remuneration consists of the components set  out below. 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. 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: Otherwise the deferred STI component is forfeited. 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. Mr Fraser must not, for a period of six months following  termination of his appointment: 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. (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. > 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.