COMPENSATION COMMITTEE MANDATE
The compensation committee (the “Compensation Committee”) of CRH Medical Corporation (the “Corporation”) is responsible for board compensation, the establishment of salaries plus fringe benefits of executive management and senior staff, employee-employer relations, reviewing and approving employment agreements with senior management and executive compensation disclosure.
Membership and Reporting
- The Compensation Committee will be comprised of at least two and not more than three members. Each member of the Compensation Committee shall be “independent” within the meaning of National Instrument 58-101 “Disclosure of Corporate Governance Practices” of the securities regulators in Canada and within the meaning of the rules of the NYSE American and applicable to compensation committee members, and, as such, shall be free from any relationship that may interfere with the exercise of his or her independent judgment as a member of the Compensation Committee. Members of the Compensation Committee shall also qualify as “non-employee directors” within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended.
- Appointments and replacements to the Compensation Committee will be made by the board of directors of the Corporation (the “Board”). The Board will provide for continuity of membership, while at the same time allowing fresh perspectives to be added. The Board must affirmatively determine that any appointees to the Compensation Committee are independent as described in Section 1 above, taking into account, among other factors, (1) the source of compensation of such director, including any consulting, advisory or other compensatory fees, paid by the Corporation and (2) whether such director is affiliated with the Corporation, its subsidiaries or their affiliates.
- The Compensation Committee may form and delegate authority to subcommittees if deemed appropriate by the Compensation Committee.
- The chairman of the Compensation Committee will be appointed by a vote of the Board as necessary.
- The Compensation Committee will report to the Board as it deems appropriate.
Terms of Reference
- The Compensation Committee will meet as required, generally at least annually.
- No business may be transacted by the Compensation Committee at a meeting unless a quorum is present. Two members of the Compensation Committee shall constitute a quorum.
- The Compensation Committee will review and make recommendations to the Board regarding the corporate goals and objectives, performance and compensation of the Chief Executive Officer (“CEO”) on an annual basis. Compensation includes salary, bonuses, equity compensation, benefits and perquisites.
- The Compensation Committee is responsible for reviewing and, as appropriate, approving the recommendations of the CEO regarding:
a) compensation of the senior officers of the Corporation that report to the CEO;
b) the compensation policy of the Corporation, including internal structure, annual review and relationship to market levels and changes;
c) significant changes in the Corporation’s benefit plan and human resources policies; and
d) issuance of equity compensation to employees, consultants and directors.
- No member of management, including the CEO, may be present during voting or deliberations relating to his/her compensation. At its discretion, the Compensation Committee shall determine from time to time which members of management may be present during voting or deliberations relating to the compensation of any other member of management (including the CEO).
- The Compensation Committee may, to the extent authorized by the Board, grant incentive equity compensation to employees, independent contractors, consultants and insiders, provided that the grant of such compensation is made in accordance with:
a) the policies established by the Board with respect to the vesting, pricing and exercise or term periods of such compensation; and
b) any equity compensation plans of the Corporation.
- The Compensation Committee will review and recommend changes to the compensation of the Board, as necessary, based on a consideration of factors and issues relevant to the Corporation, as applicable.
- The Compensation Committee will review and make recommendations to the Board regarding annual bonus policies for senior officers and the incentive-compensation and equity-based plans of the Corporation.
- The Compensation Committee will annually review the Corporation’s compensation policies and practices to consider whether they are aligned with the Corporation’s risk management principles and whether they might, or are reasonably likely to, encourage executives and other employees to take inappropriate or excessive risks. In so doing, the Compensation Committee will assess whether any of the Corporation’s compensation policies or practices would likely give rise to material risks to the Corporation, or otherwise affect the risks faced by the Corporation and management of those risks.
- The Compensation Committee will review the executive compensation disclosure before the Corporation publicly discloses this information, including the Compensation Discussion and Analysis Section of any information circular which contains executive compensation disclosure.
- The Compensation Committee will review and re-assess the adequacy of this mandate from time to time, as appropriate.
- The Compensation Committee has the authority, to the extent it deems necessary or appropriate, to retain independent legal or other advisors. The Corporation shall provide appropriate funding, as determined by the Compensation Committee, for payment of compensation to the advisors employed by the Compensation Committee. The Compensation Committee may select, or receive advice from, a compensation consultant, legal counsel or other advisor to the Compensation Committee only after taking into consideration all factors relevant to that person’s independence, including the following six factors (and any other factors specified from time to time in the listing standards of the NYSE American):
(1) The provision of other services to the Corporation by the person that employs the compensation consultant, legal counsel or other advisor;
(2) The amount of fees received from the Corporation by the person that employs the compensation consultant, legal counsel or other advisor, as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel or other advisor;
(3) The policies and procedures of the person that employs the compensation consultant, legal counsel or other advisor that are designed to prevent conflicts of interest;
(4) Any business or personal relationship of the compensation consultant, legal counsel or other advisor with a member of the Compensation Committee;
(5) Any shares of the Corporation owned by the compensation consultant, legal counsel or other advisor; and
(6) Any business or personal relationship of the compensation consultant, legal counsel, other advisor or the person employing the advisor with an executive officer of the Corporation.
The Compensation Committee shall conduct the independence assessment described above with respect to any compensation consultant, legal counsel or other adviser that provides advice to the Compensation Committee, other than: (i) in-house legal counsel; and (ii) any compensation consultant, legal counsel or other adviser whose role is limited to the following activities for which no disclosure would be required under Item 407(e)(3)(iii) of Regulation S-K: consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favour of executive officers or directors of the Corporation, and that is available generally to all salaried employees; or providing information that either is not customized for a particular company or that is customized based on parameters that are not developed by the compensation consultant, and about which the compensation consultant does not provide advice.
Nothing herein requires a compensation consultant, legal counsel or other compensation adviser to be independent, only that the Compensation Committee consider the enumerated independence factors before selecting or receiving advice from a compensation adviser. The Compensation Committee may select or receive advice from any compensation adviser it prefers, including ones that are not independent, after considering the six independence factors outlined above.
Nothing herein shall be construed: (i) to require the Compensation Committee to implement or act consistently with the advice or recommendations of the compensation consultant, independent legal counsel or other adviser to the Compensation Committee; or (ii) to affect the ability or obligation of the Compensation Committee to exercise its own judgment in fulfillment of its duties.
Approved by the Board on December 6, 2018.
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