1. Establishment of Compensation Committee: The board of directors (the "Board") of Veresen Inc. (the "Company"), hereby establishes a committee to be called the Compensation Committee.
2. Membership: The Compensation Committee shall be composed of three members or such other number as the Board may from time to time determine. One quarter of the members of the Compensation Committee shall be resident Canadians, all members shall be unrelated to the Company and all members of the Compensation Committee shall be independent within the meaning set forth under Multilateral Instrument 52 110 Audit Committees as amended from time to time ("MI 52 110"). Members may be appointed annually from among the members of the Board. The Chair of the Compensation Committee shall be appointed by the Board.
3. Mandate: The Compensation Committee shall, in addition to any other duties and responsibilities specifically assigned or delegated to it from time to time by the Board:
(a) assist the Board in respect of compensation matters and policies for the Company, review compensation strategies for the Company, and generally make recommendations to the Board in respect of compensation matters for the Company;
(b) in consultation with the President & Chief Executive Officer, assess the performance of all officers of the Company that report directly to the President & Chief Executive Officer in fulfilling their responsibilities and meeting corporate objectives;
(c) determine on behalf of the Board the compensation for all officers of the Company that report directly to the President & Chief Executive Officer, including base salaries, benefits, and the awards and allocations to such officers under the Company’s short-term and long-term incentive plans, if any, and under any stock option or other stock-based compensation plan implemented by the Company from time to time;
(d) without limitation to the general authority referred to above, the Compensation Committee shall have authority and responsibility for considering, assessing and/or making recommendations to the Board in respect of:
(i) compensation, benefit and perquisite policies and strategies for the Company, with particular emphasis on the officers and directors of the Company;
(ii) compensation of the President & Chief Executive Officer, including the awards and allocations to the President & Chief Executive Officer under the Company’s short-term and long-term incentive plans, if any, and under any stock option or other stock-based compensation plan implemented by the Company from time to time, taking into account the assessment of the performance of the President & Chief Executive Officer made by the Corporate Governance and Nominating Committee;
(iii) the terms and overall parameters of the Company’s short-term and long-term incentive plans, if any, and of any stock option or other stock-based compensation plan implemented by the Company from time to time;
(iv) the annual, or other periodic, determination of the parameters to be utilized for awards made to officers and directors of the Company, as applicable, under the Company’s short-term and long-term incentive plans, if any, and of any stock option or other stock-based compensation plan implemented by the Company from time to time, including in particular, target participation rates, performance factors, exercise prices, vesting terms and the term of any such awards;
(v) overall parameters of the Company's benefit plans and perquisites, if any, to ensure the appropriateness thereof;
(vi) any other compensation plans applicable to employees or officers of the Company;
(vii) consider whether any of the Company’s compensation programs increase or adversely impact the risks of the Company; and
(viii) as required, public or regulatory disclosure respecting compensation and the basis on which performance is measured; and
(e) undertake on behalf of the Board such other initiatives as may be necessary or desirable to assist the Board in discharging its responsibilities to ensure that the appropriate compensation policies and strategies and performance evaluations are in place and operating effectively.
4. Administrative Matters: The following general provisions shall have application to the Compensation Committee:
(a) A quorum of the Compensation Committee shall be the attendance of a majority of the members thereof present in person or by telephone. No business may be transacted by the Compensation Committee except at a meeting of its members at which a quorum of the Compensation Committee is present or by a resolution in writing signed by all the members of the Compensation Committee. Meetings of the Compensation Committee shall be held at least annually and more often as the Chair of the Compensation Committee may determine.
(b) Any member of the Compensation Committee may be removed or replaced at any time by the Board and shall cease to be a member of the Compensation Committee as soon as such member ceases to be a director. The Board, upon recommendation of the Corporate Governance and Nominating Committee, may fill vacancies on the Compensation Committee by appointment from among its members. If and whenever a vacancy shall exist on the Compensation Committee, the remaining members may exercise all its powers so long as a quorum remains. Subject to the foregoing, each member of the Compensation Committee shall hold such office until the close of the annual meeting of shareholders of the Company next following the date of appointment as a member of the Compensation Committee or until a successor is duly appointed. Any member of the Board who has served as a member of the Compensation Committee may be re-appointed as a member of the Compensation Committee following the expiration of his or her term.
(c) The Compensation Committee may invite such officers, directors and employees of the Company or its subsidiaries as it may see fit from time to time to attend at meetings of the Compensation Committee and assist thereat in the discussion and consideration of the matters being considered by the Compensation Committee.
(d) The time at which and place where the meetings of the Compensation Committee shall be held and the calling of meetings and the procedure in all respects at such meetings shall be determined by the Compensation Committee, having regard to the by-laws of the Company. A meeting of the Compensation Committee may be held at any time without notice if all of the members are present or, if any members are absent, those absent have waived notice or otherwise signified their consent in writing to the meeting being held in their absence.
(e) The Chair shall preside at all meetings of the Compensation Committee. The Chair of the Compensation Committee shall have a second and deciding vote in the event of a tie, provided that, in the event of a tie vote when only two members of the Compensation Committee are present at a particular meeting, the matter shall be resolved by a future vote of members of the Compensation Committee at which more than two members are present. In the absence of the Chair, the other members of the Compensation Committee shall appoint one of their members to act as Chair for the particular meeting.
(f) Minutes of the Compensation Committee will be recorded and maintained and the Chair of the Compensation Committee will report to the Board on the activities of the Compensation Committee and/or the minutes will be circulated to directors who are not members of the Compensation Committee or otherwise made available at a subsequent meeting of the Board.
(g) The Chair of each meeting of the Compensation Committee shall appoint a person to act as recording secretary to keep the minutes of the meeting. The recording secretary need not be a member of the Compensation Committee.
(h) The Compensation Committee shall have the authority to engage outside consultants and advisors as it determines necessary to carry out its duties. The Company shall provide appropriate funding to compensate any such consultant or advisor, as determined by the Compensation Committee in its capacity as a committee of the Board.
