Harvest Natural Resources, Inc.
HUMAN RESOURCES COMMITTEE CHARTER
The Human Resources (HR) Committee, on behalf of the Board of Directors, will; 1) oversee and administer the Company’s human resource policies, plans, and procedures, 2) review, approve, or recommend for Board approval, decisions relating to the fair and competitive compensation of executives, directors, and other key employees, and 3) oversee the preparation of the annual compensation discussion and analysis to be included in the Company’s proxy statement.
Composition
The HR Committee shall have at least three members. Committee members shall be appointed by the Board from among its independent members based on the recommendation of the Nominating and Corporate Governance Committee. Independence shall be determined in accordance with the Company’s Guidelines for Corporate Governance and the independence requirements of the New York Stock Exchange and the Securities Exchange Commission. Accordingly, all members shall meet the definition of “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended; the definition of “non-employee director” within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended; and may not be part of a compensation committee interlock within the meaning of SEC Regulations S-K. The Board shall appoint one member as Committee Chair on the recommendation of the Nominating and Corporate Governance Committee. A Committee member may be removed by the Board, based upon a recommendation of the Nominating and Corporate Governance Committee.
- The Director of Human Resources and Assistant Corporate Secretary shall act as Secretary of the Committee.
- A quorum shall be a majority of the members of the Committee.
Members should have sufficient knowledge of the Company’s human resources policies and procedures including, but not limited to, the compensation and benefit plans and any pension, savings or retirement plans to assist in providing advice and counsel on human resource issues.
Meetings
The HR Committee shall meet at least four times per year and/or as deemed appropriate by the Committee Chair.
- Effective agendas, with input from management, shall be circulated to Committee members and relevant management personnel along with background information on a timely basis prior to the Committee meetings.
- Minutes of each meeting shall be prepared by the Secretary of the Committee, reviewed by the Committee and made available to the Board.
- Any Director not a member of the Committee may attend a Committee meeting on a non-voting basis. The Chief Executive Officer may be present at all meetings of the Committee, excluding performance review of the Chief Executive Officer.
Human Resources and such other staff as appropriate to provide information to the Committee shall attend meetings upon the invitation of the Committee Chair.
Duties and Responsibilities
The duties and responsibilities of the Human Resources Committee shall include, without limitation:
- Establish an annual calendar of Committee activities including which activities will be addressed at which meetings.
- Review, annually, the Company’s human resource policies, procedures, programs compensation and benefits plans, recommending changes, as appropriate to the Board.
- Review and approve policies on compensation, benefits, including cash compensation and long term incentive plans, including stock ownership targets and plans.
- Annually conduct an external market assessment comparing the Company’s executive compensation levels and programs to its peer group and other applicable survey information. This review should include a review of general trends and emerging issues that should be considered in making decisions about executive compensation.
- Review and approve corporate goals and objectives relevant to Chief Executive Officer (CEO) compensation, evaluate the CEO performance against those goals and objectives, and determine the CEO compensation level based on this evaluation. In determining the long term incentive component of CEO compensation, the Committee will consider the Company’s performance and relative shareholder return, the value of the incentive awards to CEOs in comparable companies, and the awards given to the CEO in past years.
- Annually review elected officer’s compensation, stock ownership, benefits and perquisites to ensure the effectiveness of the compensation practices and adherence to approved plans and policies.
- Review and approve all cash compensation, stock option and restricted stock awards to officers of the Company or any general manager. Review and approve all stock options and restricted stock awards exceeding the authority of the CEO.
- Make recommendations to the Board for Director’s compensation, equity participation, benefits, and perquisites.
- Review and assess management’s plans and programs for attraction, retention, succession, and development of human resources to achieve Company objectives.
- Review and discuss with management the Compensation Discussion and Analysis (CD&A) to prepare for the Company’s proxy statement, and recommend to the Board that the CD&A be included in the proxy statement. Prepare and approve the Compensation Committee Report to be included in the Company’s proxy statement.
- Review and approve the hiring and termination of officers and general managers of the Company, including the terms of any employment contract. Review and approve the hiring of any employees outside of the scope of the authority granted the CEO and President or who are designated as key employees to receive enhanced separation benefits. Review and approve consulting arrangements outside the scope of authority granted the CEO and all consulting arrangements with a fee based upon success in obtaining or retaining business for the Company. Periodically review with management all consulting arrangements entered into by the Company and its subsidiaries.
- Receive any reports or complaints concerning actual or threatened retaliatory actions against employees for filing complaints or making reports concerning violations of the Company’s Code of Business Conduct and Ethics including, without limitation, complaints regarding questionable accounting or auditing matters.
- In advance of the annual Shareholders meeting, the Committee will review the Committee Charter and recommend appropriate changes and assess its performance to confirm it is meeting the responsibilities under this charter. The results of the review will be presented to the chair of the Nominating and Corporate Governance Committee.
Reporting/Authority
Following each meeting, the Committee Chair, on behalf of the Committee, will report to the board on key issues, recommending items for approval and/or remedial action when required.
- Copies of the minutes of all Committee meetings will be filed with the Board at the next Board meeting after a meeting is held (these may still be in draft form).
- Supporting schedules and information reviewed by the Committee shall be available for examination by any Director upon request to the Secretary of the Committee.
The Committee shall have the authority to investigate any human resource activity of the Company. All employees are to cooperate as requested by the Committee. The Committee has full access to all Company human resource information.
The Committee shall have the sole authority to retain and terminate a consulting firm to assist and advise on Committee matters, including evaluation of director, CEO, officer and employee compensation. The Committee shall have the sole authority to set the fees and other terms of the consulting retainer. The Committee shall also have the authority to retain other professional assistance, including independent counsel and actuaries. The Company will provide the Committee adequate funds to cover consulting fees and other costs incurred in carrying out its duties and responsibilities.
The Director of Human Resources will be the key contact for the Committee and will assign the staff resources appropriate to assist the Committee to carry out its responsibilities.
This Charter may be modified from time to time at the sole discretion of the Board of Directors.
Revised and Approved as Written on February 19, 2008