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Remuneration Committee
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Members:
Mr. LIU Jian (Committee Chairman)
Mr. David AN
Mr. LI Wai Keung
Mr. CHAN Chun Wai, Tony
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HANS ENERGY COMPANY LIMITED
REMUNERATION COMMITTEE- TERMS OF REFERENCE |
| 1. |
GENERAL |
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| 1.1 |
Introduction |
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The Board hereby establishes a Remuneration Committee.
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| 1.2 |
Organization |
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These Terms of Reference govern the operations of the Remuneration Committee.
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| 1.3 |
Membership
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The Committee will consist of members of the Board appointed by the Board and will comprise at least three directors. The majority of members of the Committee must be independent directors. In addition, the Committee Chairman must be an independent director.
The Chairman should be appointed by the Board.
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| 1.4 |
Operations |
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The committees will meet as and when required during the year, but no less than once per year. Meetings may be called for as the Committee or its Chairman determine.
The quorum of every Committee meeting must not be less than two-third of the number of Committee members. The majority of the quorum must be independent directors.
The Company Secretary will be the Secretary of the Committee as well, who will keep minutes of all of its proceedings. The Committee will report its actions to the next meeting of the Board. Committee members will be provided with copies of the minutes at each meeting and any action taken requires unanimous consent; in absence of such unanimity, the disputed matter will be referred to the full Board for determination.
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| 2. |
PURPOSE |
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In fulfilling its obligations, the Remuneration Committee assists the Board in discharging its responsibilities relating to compensation policy of the Company's officers and the Compensation of the CEO and any Executive Directors. The Committee has overall responsibility for recommending to the Board broad remuneration policy, and evaluating actual performance in accordance with such policy.
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| 3. |
DUTIES AND RESPONSIBILITIES |
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The principal responsibilities of the Remuneration Committee in relation to remuneration are:
| 3.1 |
To review the competitiveness of the Company's executive compensation programs to ensure that:
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the Company is able to attract and retain suitable & qualified executives; |
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executives are motivated to achieve the Company's business objectives; and |
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the interests of key employees are aligned with the long-term interests of the shareholders; |
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| 3.2 |
To review trends in compensation, oversee the development of new compensation plans and, when necessary, approve the revision of existing plans;
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| 3.3 |
To assist the Chief Executive Officer in the review of the performance and remuneration of the executive management team. In making any assessments, the Committee will consider:
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the Company's performance and relative shareholder return; |
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the compensation of Chief Executive Officers at comparable companies; |
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the rewards given to the Chief Executive Officer in past years; and |
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other factors as the Committee considers relevant; |
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| 3.4 |
To review and recommend to the Board the compensation of all those corporate officers who are elected by the shareholders at appropriate time periods. The Committee will make recommendations to the Board as to incentive compensation plans and equity-based plans;
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| 3.5 |
To review and recommend to the Board policies relating to employment agreements, severance arrangements, retirement arrangements, and any special or supplemental benefits which may be adopted by the Company. For the want of doubt, compensation arrangements for employees of the Company who are not members of the Board or the CEO, are the responsibility of the CEO subject to the adherence to the broad policies adopted by the Committee and the Board;
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| 3.6 |
To review and make recommendations as to long-term incentive compensation plans – including the use of share options and other equity-based plans;
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| 3.7 |
To have the authority to retain and terminate any compensation consultant to be used to help evaluate the compensation of directors, the Chief Executive Officer and/or senior executives. The Committee will also have authority to obtain advice and assistance from internal or external legal, accounting or other advisers;
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| 3.8 |
To periodically review and reassess the adequacy of the Terms of Reference and the Company's remuneration policy and to recommend any proposed changes to the Board for approval; and
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| 3.9 |
To take up any other duties and responsibilities referred by the Board.
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| 4. |
COMMITTEE PERFORMANCE
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The Board will from time to time evaluate the performance of the Remuneration Committee to determine whether it is functioning effectively by reference to current best practice. |
Approved by the Board on 17 th June 2005
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