Pacific Basin Shipping Limited — Remuneration Information 2020

Mar 2, 2020

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REMUNERATION COMMITTEE

TERMS OF REFERENCE

Approved and adopted on 27 February 2020

1. Authority

The Board of Directors (the “Board”) of Pacific Basin Shipping Limited (the “Company”) hereby delegates to the Remuneration Committee (the “RemCom”) such powers and authorities as it shall reasonably require to perform its duties and without prejudice to the following:

The RemCom is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee of the Company in order to perform its duties:

• 1.1 In connection with its duties, the RemCom should consult the Chairman and/or Chief Executive Officer about their remuneration proposals for other executive Directors. The RemCom should have access to independent professional advice if necessary.

• 1.2 The RemCom may delegate its authority on the performance of specific work to subcommittees or the Chairman of the RemCom when it deems appropriate and in the best interests of the Company.

2. Reporting Procedures

• 2.1 The RemCom shall report to the Board concerning its activities, either verbally or in writing, at regular meetings of the Board or more frequently if required.

• 2.2 The meetings and proceedings of the RemCom will be governed by the provisions of the Company’s bye-laws for regulating the meetings and proceedings of directors (as amended from time to time).

3. Roles and responsibilities

The RemCom should perform the following duties:

• 3.1 make recommendations to the Board on the Company's policy and structure for all directors’ and senior management remuneration and desirability of performance-based remuneration and on the establishment of a formal and transparent procedure for developing remuneration policy;

• 3.2 determine, through authority delegated from the Board, the remuneration packages of: (i) Executive directors;

• (ii) Senior management; and

• (iii) Employees earning the equivalent of US$25,000 per month or above.

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In reviewing the proposals from management, the RemCom should consider the Board’s corporate goals and objectives, salaries paid by comparable companies, time commitment and responsibilities of the directors and senior management and employment conditions elsewhere in the group;

Senior management are personnel who have global or group responsibility and include executive directors and may from time to time also include other personnel as determined by the Chief Executive Officer.

Remuneration includes:

• (i) benefits in kind; (ii) pension rights; and (iii) compensation payments.

• 3.3

• make recommendations to the Board on the remuneration of non-executive Directors;

• 3.4 review and make recommendations to the Board on terms of appointment for directors when considered necessary;

• 3.5 make recommendations to the Board relating to directors and senior management to ensure fair (and not excessive) compensation payments and reasonable and appropriate arrangements consistent with contractual terms, in the case of:

• (i) any loss or termination of office or appointment; and

• (ii) dismissal or removal for misconduct.

• 3.6 administer and oversee the Company’s 2013 Share Award Scheme and other equity or cash based schemes of the Company in place from time to time and explicitly review and approve the granting of new share awards to any staff members in the group;

• 3.7 produce and approve disclosure statements of the Company’s policy and remuneration for directors and senior management; and

• 3.8 ensure that no director or any of his associates is involved in deciding his own remuneration and that, as regards the remuneration of a non-executive director who is a member of the RemCom, his remuneration should be determined by the other members of the RemCom.

Notes:

(i) "Senior management" should refer to the same category of persons as is referred to in the Company's annual report and is required to be disclosed under paragraph 12 of Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited.

(ii) The RemCom shall advise shareholders on how to vote with respect to any service contracts of directors that require shareholders' approval under Rule 13.68 of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited.

4. Organisation

Membership

• 4.1 The Board will nominate the RemCom members and its chairman.

• 4.2 The RemCom will comprise at least 3 members and the majority of the members shall be independent non-executive directors of the Company.

• 4.3 The chairman of the RemCom shall be an independent non-executive director.

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• 4.4 A quorum of any RemCom meeting will be 2 members.

• 4.5 The secretary of the RemCom will be the company secretary or such other person nominated by the Board.

Meetings

• 4.6 The RemCom may invite the Chief Executive Officer, any director, any member of senior management or any other individuals to attend meetings of the RemCom as it considers necessary.

• 4.7 Meeting shall be held not less than once a year.

• 4.8 Agendas and accompanying papers regarding RemCom meetings should be sent in full to all directors in a timely manner (at least three days) in advance of each meeting.

• 4.9 Draft meeting minutes should be circulated to all directors for their comments and records within a reasonable time after the meeting is held.