1. ROLE AND RESPONSIBILITY OF THE REMUNERATION COMMITTEE

The role of the board remuneration committee is to assist and advise the board of directors to fulfil its responsibilities to members of Pacific Energy Limited (PEL or Company) on matters relating to compensation, bonuses, incentives and remuneration issues of the chief executive officer (CEO) and PEL senior management. The board remuneration committee is not a policy making body but assists the board by implementing board policy.

2. OBJECTIVES OF THE COMMITTEE

To establish, review and monitor the entity’s remuneration framework for directors, including the process by which any pool of directors’ fees approved by security holders is allocated to directors.

  • To review and recommend remuneration of the CEO, within the terms of the employment contract, annually to the board.
  • To review the CEO’s recommendations regarding remuneration for senior management.
  • To ensure staff remuneration is aligned with market trends.
  • To monitor and review the CEO’s performance and key performance indicators for the determination of any annual bonus components.
  • To review and recommend any equity based remuneration plans, incentive plans or ex-gratia payments to PEL senior management or the CEO.
  • To ensure that PEL’s remuneration and incentive policies, practices and performance indicators are aligned to the board’s vision, values and overall business objectives and are appropriately designed to:
    • Motivate PEL staff and the CEO to pursue the long term growth and success of PEL, and
    • Demonstrate a clear relationship between the achievement of PEL’s objectives and the CEO’s and staff performance and remuneration.
  • In discharging their responsibilities, the committee members have a duty to act in the best interests of PEL as a whole, irrespective of personal, professional, commercial or other interests, loyalties or affiliations.

3. COMPOSITION AND TERM

  • The remuneration committee is a committee of the board.
  • The committee will include at least three members, a majority of whom are independent directors; .
  • The Board will nominate committee members.
  • The committee shall elect its chairman, who should be an independent director.
  • The board shall approve all appointments to the committee including any external member and the appointment of the chairman.
  • Appointment to the committee will be for two years or as determined by the Board.
  • The duties and responsibilities of a member of the committee will be in addition to those duties set out for a director of the board.