This charter (the Charter) sets forth the purpose, composition, responsibilities and authority of the Corporate Governance and Compensation Committee (the Committee) of the Board of Directors (the Board) of Baylin Technologies Inc. (the Company).
The purpose of the Committee is to assist the Board in fulfilling its oversight responsibilities with respect to:
• the establishment of key human resources and compensation policies, including all incentive and equity based compensation plans;
• the performance evaluation of the Chief Executive Officer and the Chief Financial Officer, and determination of the compensation for the Chief Executive Officer, the Chief Financial Officer and other senior management of the Company;
• succession planning, including the appointment, training and evaluation of senior management;
• overseeing the compensation of directors;
• developing corporate governance guidelines and principles for the Company;
• identifying individuals qualified to be nominated as members of the Board;
• the structure and composition of Board committees; and
• evaluating the performance and effectiveness of the Board and its members.
2) Composition and Membership
(a) The Board will appoint the members (Members) of the Committee. The Members will be appointed to hold office until the next annual general meeting of shareholders of the Company or until their successors are appointed. The Board may remove a Member at any time and may fill any vacancy occurring on the Committee. A Member may resign at any time and a Member will automatically cease to be a Member upon ceasing to be a director.
(b) The Committee will consist of at least three directors. A majority of the Members will meet the criteria for independence established by applicable laws and the rules of any stock exchanges upon which the Company’s securities are listed, including section 1.4 of National Instrument 52-110 — Audit Committees. In addition, each director will be free of any relationship which could, in the view of the Board, reasonably interfere with the exercise of a Member’s independent judgment.
(c) All Members will have a working familiarity with corporate governance, human resources and compensation matters.
(d) The Board will appoint one of the Members to act as the chairman of the Committee (the Chairman). The corporate secretary of the Company (the Secretary) will be the secretary of all meetings and will maintain minutes of all meetings and deliberations of the Committee. If the Secretary is not in attendance at any meeting, the Committee will appoint another person who may, but need not, be a Member to act as the secretary of that meeting.
(e) No more than one third of the Members of the Committee shall be a sitting Chief Executive Officer of another publicly traded company, at least one Member shall be experienced in executive compensation and the President and Chief Executive Officer of the Company shall be excluded from the Committee Member selection process.
(f) Two or more Members may not sit on two or more boards of the same publicly traded companies. Three or more Members may not sit on any other corporate boards together.
(a) Meetings of the Committee will be held at such times and places as the Chairman may determine, but in any event not less than two times per year. Members may attend all meetings either in person, videoconference or by telephone.
(b) The Chairman, if present, will act as the chairman of meetings of the Committee. If the Chairman is not present at a meeting of the Committee the Members in attendance may select one of their number to act as chairman of the meeting.
(c) A majority of Members will constitute a quorum for a meeting of the Committee. Each Member will have one vote and decisions of the Committee will be made by an affirmative vote of the majority. The Chairman will not have a deciding or casting vote in the case of an equality of votes. Powers of the Committee may also be exercised by written resolutions signed by all Members.
(d) The Committee may invite from time to time such persons as it sees fit to attend its meetings and to take part in the discussion and consideration of the affairs of the Committee.
The Committee should meet in camera without members of management in attendance for a portion of each meeting of the Committee.
(e) In advance of every regular meeting of the Committee, the Chairman, with the assistance of the Secretary, will prepare and distribute to the Members and others as deemed appropriate by the Chairman, an agenda of matters to be addressed at the meeting together with appropriate briefing materials. The Committee may require officers and employees of the Company to produce such information and reports as the Committee may deem appropriate in order for it to fulfill its duties.
4) Duties and Responsibilities
The duties and responsibilities of the Committee as they relate to the following matters, are as follows:
4.1 Performance Objectives
The Committee will annually review the performance goals and objectives relevant to the Chief Executive Officer, the Chief Financial Officer and the senior management compensation, evaluating the Chief Executive Officer’s, Chief Financial Officer’s and the senior management performance in light of those corporate goals and objectives and in the Committee’s discretion, recommend any changes to the Board for consideration.
4.2 Evaluation of Performance
The Committee will annually review and evaluate the performance of the Chief Executive Officer, the Chief Financial Officer and senior management in light of pre-established performance objectives and report its conclusions to the Board.
4.3 Executive Officer Compensation
The Committee will annually review the compensation for the Chief Executive Officer, the Chief Financial Officer and senior management and, in the Committee’s discretion, recommend any changes to the Board for consideration and review such executive compensation disclosure before the Company publicly discloses the information.
4.4 Executive Management Compensation
The Committee will annually review the Chief Executive Officer’s recommendations for the senior management compensation and, in the Committee’s discretion, recommend any changes to the Board for consideration and review such executive compensation disclosure before the Company publicly discloses the information.
4.5 Compensation Policies
The Committee will develop the Company’s compensation philosophy and ensure compensation policies for the directors, the Chief Executive Officer, the Chief Financial Officer and the senior management:
(i) properly reflect their respective duties and responsibilities;
(ii) are competitive in attracting, retaining and motivating people of the highest quality;
(iii) align the interests of the directors, the Chief Executive Officer, the Chief Financial Officer and the senior management with shareholders and the Company as a whole;
(iv) are based on established corporate and individual performance objectives; and
(v) are clearly distinguishable between each other, that is, the structure of non executive directors’ compensation should be distinguishable from that of executive directors and senior management.
4.6 Succession Planning
The Committee will annually review the Company’s succession plan for the Chief Executive Officer, the Chief Financial Officer and senior management, including appointment, training and evaluation.
4.7 Directors’ Compensation
The Committee will annually review directors’ compensation and, in the Committee’s discretion, recommend any changes to the Board for consideration.
4.8 Compensation Disclosure
The Committee will review all annual executive compensation disclosure before it is publicly released.
The Committee will direct and supervise the investigation into any matter brought to its attention within the scope of the Committee’s duties.
4.10 Corporate Governance Documents
The Committee will:
(a) annually review the Company’s Board Mandate, position descriptions for the Chair of the Board, chairs of the Company’s committees and Chief Executive Officer, Committee Charters and principal corporate policies (which review shall be conducted with the Audit Committee) and, in the Committee’s discretion, recommend any changes to the Board for consideration; and
(b) annually (i) review and assess the size, composition and operation of the Board to ensure effective decision making; (ii) review and assess the size, composition and chairs of all of the Committees of the Board; (iii) identify and review candidates for appointment or nomination to the Board based upon an assessment of the independence, skills, qualifications and experience of the candidate, and make recommendations to the Board for consideration.
4.11 Nomination of Directors
The Committee will:
(a) consider what competencies and skills the Board, as a whole, should possess;
(b) assess what competencies and skills each existing director possesses. The board should be considered as a group, with each individual making his or her own contribution. Attention should also be paid to the personality and other qualities of each director, as these may ultimately determine the boardroom dynamic;
(c) recommend to the Board the necessary and desirable competencies of directors;
(d) identify individuals qualified to become new Board members and recommending to the Board the new director nominees for the next annual meeting of shareholders; in doing so the Committee shall consider the competencies and skills necessary for the Board, the competencies and skills of existing directors and each new nominee as well as the time a new nominee can devote to the Board;
(e) annually conduct, review and report to the Board the results of an assessment of the Board’s performance and effectiveness;
(f) engage and compensate outside professionals where the Members believe it is necessary to carry out their duties and responsibilities;
(g) annually prepare and review a succession plan for the Chairman of the Board, the Chief Executive Officer or any person acting in such capacity, and the executive management of the Company;
(h) direct and supervise the investigation into any matter brought to its attention within the scope of its duties; and
(i) perform such other duties as may be assigned to it by the Board from time to time or as may be required by applicable regulatory authorities or legislation.
4.12 Other Duties
The Committee will perform such other duties as may be assigned to it by the Board from time to time or as may be required by applicable regulatory authorities or legislation.
The Chairman will report to the Board at each Board meeting on the Committee’s activities since the last Board meeting. The Committee will annually review and approve executive compensation disclosure to be included in the management proxy circular. The Secretary will circulate the minutes of each meeting of the Committee to the members of the Board.
6) Access to Information and Authority
The Committee will be granted unrestricted access to all information regarding the Company that is necessary or desirable to fulfill its duties and all directors, officers and employees will be directed to co operate as requested by Members.
The Committee has the authority to retain, at the Company’s expense, independent legal, financial, compensation consulting and other advisors, consultants and experts, to assist the Committee in fulfilling its duties and responsibilities, including sole authority to retain and to approve any such firm’s fees and other retention terms without prior approval of the Board.
7) Review of Charter
The Committee will annually review and assess the adequacy of this Charter and recommend any proposed changes to the Board for consideration.