ERHC Compensation Committee Charter
The purpose of the Compensation Committee of the Board of Directors (the “Compensation Committee”) of ERHC Energy Inc. (“Company”) is to assist the Board to discharge the Board’s responsibilities relating to the compensation of the Company’s non-executive directors and executive officers, publishing in the annual proxy statement a report on executive compensation, and compliance with the compensation reporting requirements of the Securities and Exchange Commission (“SEC”), and any other applicable rules and regulations. The primary responsibility of the Compensation Committee is to develop and recommend to the Board the compensation policies that are appropriate for the Company taking into consideration the circumstances of the Company, its business strategy, and its overall objective to enhance shareholder value. The Committee shall have duties as described in this Charter and additional duties as may be assigned by the Board.
All members of the Compensation Committee shall satisfy the independence requirements of the NASDAQ Stock Market and the Sarbanes Oxley Act that would apply if the Company were listed on such Exchange. In addition, of the Compensation Committee shall meet the requirements of the definitions of (i) "non-employee director” as contained in Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and (ii) “outside director” as contained in Section 162(m) of the Internal Revenue Code of 1986, as amended:
SEC Rule 16b-3 defines a “non-employee director” as a person who: is not currently an officer of the company (or a parent or subsidiary of the company); does not receive significant direct or indirect compensation from the company for any services performed other than services as a director; and has no interest in any significant transactions or business relationships with the company.
IRC Section 162(m) defines a director as an “outside director” if the director is not a current or former employee of the corporation and if the director does not receive significant direct or indirect compensation in any capacity other than as director.
The Compensation Committee shall consist of at least two members. The actual number of members shall be decided by resolution of the Board. The members of the Committee shall be appointed by the Board for a one-year term. The Board shall designate one member of the Compensation Committee as the Committee Chairman. The Board may remove or replace the Committee Chairman or any member of the Compensation Committee at any time with or without cause.
III. Meetings and Procedures
The Compensation Committee shall meet prior to meetings of the Board of Directors and may hold additional meetings as it deems appropriate to fulfill its responsibilities
The Committee Chairman shall have overall responsibility for developing meeting agendas, scheduling meetings and functioning of the Compensation Committee.
Attendance at the meetings may be in person, by telephone or other means of communication. Two members of the Compensation Committee shall constitute a quorum. Any action required to be taken at a meeting of the Compensation Committee will be deemed the action of the Compensation Committee if before the action is taken it is approved by (i) the unanimous vote of the members at a meeting in which a quorum is present or (ii) in lieu of a meeting, by unanimous written consent of all the members of the Compensation Committee.
The Secretary of the Company shall be the Secretary of the Compensation Committee and be responsible for circulating meeting agendas and materials to the members, and for recording accurate minutes of all meetings and distributing them to the Board members. The Secretary shall circulate the agenda and materials to be discussed at a meeting at least two days before the meeting.
The President of the Company shall act as management liaison to the Compensation Committee and shall work with the Compensation Committee Chairman to appoint advisors and arrange meetings with the Company’s external legal and accounting advisors. The Compensation Committee will make final decisions on the appointment of advisors specializing in executive and director compensation.
IV. Responsibilities of Compensation Committee
The Compensation Committee shall review this Charter at least once a year to assess its adequacy to meet the Company’s overall goals and objectives and to ensure compliance with the rules and regulations of the SEC and other applicable laws and regulations, and submit any proposed amendments to the Board for approval.
2. Compensation Philosophy
Periodically review the Company’s compensation philosophy and programs taking into consideration the Company’s business strategy and objectives, and recommend to the Board amendments to the Company’s compensation philosophy and programs.
3. Annual Report on Executive Compensation
Review and approve the report on executive compensation in accordance with applicable rules and regulations of the SEC for inclusion in the Company’s proxy statement for its annual meeting of stockholders or on annual report on Form 10-K.
4. Compensation of Directors and Committee Members
Annually review and recommend to the Board compensation for non-employee directors, committees of the Board, and Chairman of the Board, including awards under compensation plans and equity-based plans.
5. Incentive-Compensation Plans and Equity- Based Plans
Review and recommend to the Board grant of stock options and restricted stock awards of the Company''s stock.
6. Compensation of the Chief Executive Officer
Review and recommend to the Board the compensation of the CEO taking into consideration the CEO’s performance in context of the goals and objectives previously set for the CEO by the Board and market data compiled by professional advisors.
7. Compensation of the Officers of the Company
Review and approve the recommendations of the CEO with regard to the compensation of all officers of the Company other than the CEO.
In carrying out its responsibilities, the Compensation Committee may establish and delegate authority to one or more subcommittees consisting of one or more of its members. The Compensation Committee shall be entitled to rely upon advice and information that it receives from management. The Compensation Committee shall have the right to obtain advice and assistance from professional advisors specializing in executive and director compensation matters. The Compensation Committee shall have sole authority to approve any such advisor’s fees. The Compensation Committee shall also be entitled to obtain advice from the Company’s external legal and accounting advisors, and auditors.
The Committee will conduct an annual performance evaluation of its performance and at each Board meeting will report to the Board on its activities and recommendations.
Adoption by the Board of ERHC
The forgoing Compensation Committee Charter was adopted by the Board of Directors of ERHC Energy Inc on the 12th day of August 2007day of June 2005.