The Remuneration and Corporate Governance Committee (the "Committee") is appointed by the Board of Directors (the "Board") of Petroleum Geo-Services ASA ("PGS" or the "Company") and shall act as preparatory body in connection with the Board's role with respect to (1) the Total Compensation (defined as compensation, benefits and perquisites) of the Company's CEO, (2) the Company's corporate governance policies and procedures and (3) succession planning for the role of CEO, which in each case are matters for which the Board maintains responsibility and decision making. In addition the Committee shall act, be responsible for and make decisions with respect to the Total Compensation of the Company's Executive Officers (includes those named as such in the Company's annual report except for the CEO).
The Committee shall consist of at least two members to be elected by the Board at its first meeting following the annual shareholders' meeting, each of whom shall serve at the discretion of the Board. A Committee Chairperson will be designated by the Board.
If the Chairperson of the Board is not an elected member of the Committee, the Chairperson shall be notified about and asked to provide input to the Committee prior to any meeting where the Committee reviews corporate and individual goals and objectives relevant to CEO Total Compensation, and evaluates the CEO's performance relative to those goals and objectives, and makes a proposal for the CEO's Total Compensation level based on this evaluation.
The Board intends that a majority of members of the Committee be "independent directors" in accordance with Norwegian law and applicable provisions of the Norwegian Code of Practice for Corporate Governance (the "Code"). New Committee Members will receive appropriate training and orientation.
The following shall be the principal duties and responsibilities for which the Committee supports the Board in the administration and exercise of the Board's responsibility for supervisory oversight:
- The Committee will make recommendations for Board approval of all aspects of Total Compensation for the CEO of the Company, including, but not limited to:
- Any review of or amendment of the current Total Compensation or the structure for such for the CEO of the Company;
- A review of corporate and individual goals and objectives relevant to CEO Total Compensation, an evaluation of the CEO's performance relative to those goals and objectives, and a proposal for the CEO's Total Compensation level based on this evaluation; In making a proposal for the long-term incentive component of CEO Total Compensation, the Committee will consider the Company's performance, relative shareholder return, the value of long-term incentive compensation given to CEO's at comparable companies, and the awards given to the CEO in past years.
- The Committee will make recommendations to the Board with respect to incentive compensation and equity-based incentive plans that require shareholder approval, and will act as a preparatory body for the Board in the management of the Company's shareholder-approved award and options plan(s).
- The Committee will assist the Board in preparing the statement pursuant to section 6-16a of the Norwegian Public Limited Companies Act.
- The Committee will assist the Board with succession planning for the position of CEO.
- The Committee will review and assess on a regular basis the Company's Corporate Governance policies and procedures, including policies embodied in the Company's Code of Conduct, Rules of Procedure for the Board and applicable Corporate Governance Guidelines (such as the Code), as maintained on the Company's website, and will recommend any proposed changes to the Board for approval. When reviewing and making recommendations with respect to the Company's Corporate Governance policies and procedures, the Committee shall take into consideration changes in Norwegian corporate law, applicable stock exchange listing standards, the Code and such other changes in Norwegian best practices.
- The Committee will assist the Board with the Board's annual evaluation of the Board, its committees and the Company's management.
- Other duties and responsibilities as may be assigned to the Committee, from time to time, by Board.
- The Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval. The Committee shall conduct an annual performance evaluation of its activities.
The following shall be the principal duties and responsibilities for which the Committee shall act, be responsible for and make decisions with respect to:
- The Committee will review and decide on all aspects of the Total Compensation of Executive Officers of the Company, however excluding the following which shall remain the responsibility of the CEO:
- to establish and review individual goals and objectives relevant to the Executive Officers' variable compensation, an evaluation of the Executive Officers' performance relative to those goals and objectives, and determine the level of variable compensation based on this evaluation within frames of the system for variable compensation adopted by the Committee; and
- to determine the annual salary increase of each Executive Officer within the total frame set for the Executive Officers by the Committee.
The Committee shall meet as often as it deems appropriate and necessary. The Committee will meet when called by the committee chairperson or by two members or when requested by the chairperson of the Board or the CEO. The committee chairperson and one member shall constitute a quorum.
Reports to the Board
The Committee shall prepare minutes and shall report to the Board on a regular basis. The report to the Board shall contain recommendations for Board action and decision when appropriate.
The chairperson of the Committee shall ensure that the Board after every Committee meeting receives a report on the work of the Committee and that all matters before the Committee requiring the decision of the Board is placed on the agenda of the Board and that adequate documentation in support of the decision is provided to the Board.