CHARTER OF THE FINANCE AND RISK MANAGEMENT COMMITTEE OF THE BOARD OF DIRECTORS OF SPECTRA ENERGY CORP (April 2013)

Transcription

1 CHARTER OF THE FINANCE AND RISK MANAGEMENT COMMITTEE OF THE BOARD OF DIRECTORS OF SPECTRA ENERGY CORP (April 2013) I. General Focus The Finance and Risk Management Committee (the Committee ) shall: Review the Corporation s financial affairs; provided, however that the responsibility for managing and assessing risks with respect to financial reporting issues shall be the responsibility of the Audit Committee; Make recommendations to the Board of Directors (the Board ) regarding dividend, financing and financial policies; Review the financial exposure of the Corporation together with mitigating strategies; Review the financial impacts of major transactions such as mergers, acquisitions, reorganizations and divestitures and capital projects; Review systems, processes, organizational structure and people responsible for the finance and risk functions; Assist the Board in fulfilling its oversight responsibilities with respect to risk management; and Assist the Board in fulfilling its oversight responsibilities with respect to the Corporation s policies, standards, accountabilities and programs relative to health, safety and environmental matters. II. Structure and Operations The Committee shall be comprised of two or more members of the Board. The majority of the members of the Committee shall qualify as independent as defined under the listing standards of the New York Stock Exchange ( NYSE ). The members of the Committee shall be appointed by the Board and shall serve until such member s successor is duly elected and qualified or until such member s earlier resignation or removal. The members of the Committee may be removed, with or without cause, by majority vote of the Board. The full Board shall elect the Chair of the Committee. The Chair will chair all regular sessions of the Committee and approve the agendas for Committee meetings.

2 III. Meetings The Committee shall meet at the discretion of the Board or at the call of the Chair or any two members thereof. The Chair of the Committee or a majority of the members of the Committee may call a special meeting of the Committee. The Committee shall address risk management in all meetings and shall further dedicate at least one meeting per year primarily to environmental, health and safety matters. The Committee shall meet periodically, normally on at least an annual basis, with the Audit Committee of the Corporation to consider and discuss the Corporation s guidelines and policies with respect to risk management in accordance with NYSE requirements. All non-management directors that are not members of the Committee may attend meetings of the Committee but may not vote. Additionally, the Committee may invite to its meetings any director, management of the Corporation and such other persons as it deems appropriate in order to carry out its responsibilities. The Committee may also exclude from its meetings any persons it deems appropriate in order to carry out its responsibilities. A majority of the Committee members, but not less than two, will constitute a quorum. A majority of the Committee members present at any meeting at which a quorum is present may act on behalf of the Committee. The Committee may meet by telephone or videoconference and may take action by unanimous written consent with respect to matters that may be acted upon without a formal meeting. The Committee shall appoint a person who need not be a member thereof to act as secretary, and minutes of its proceedings shall be kept in minute books provided for that purpose. The agenda of each meeting will be prepared by the secretary and, whenever reasonably practicable, circulated to each member prior to each meeting. IV. Responsibilities and Duties The following functions shall be the common recurring activities of the Committee in carrying out its responsibilities outlined in Section I of this Charter. These functions should serve as a guide with the understanding that the Committee may carry out additional functions and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, regulatory, legal or other conditions. The Committee shall also carry out any other responsibilities and duties delegated to it by the Board from time to time related to the purposes of the Committee outlined in Section I of this Charter. The Committee, in discharging its oversight role, is empowered to study or investigate any matter of interest or concern that the Committee deems appropriate and shall have the sole authority to retain outside counsel or other experts for this purpose, including the authority to approve the fees payable to such counsels or experts and any other terms of retention. -2-

3 Financial Affairs 1. Periodically review the long-term and short-term financial objectives and policies of the Corporation, including dividend policy, and recommend such policies and objectives for action by the full Board where appropriate. 2. Review the financial condition and operating results of the Corporation. 3. Evaluate the financing requirements of the Corporation and management s proposed financing plans. Recommend to the full Board those authorizations, filings and applications necessary and appropriate to enable management to execute such plans. 4. Review any major budget variances as defined in the Approval of Business Transaction Policy for supplemental funding requests, consistent with the Corporation s internal controls. 5. Review the financial exposures undertaken by the Corporation together with any mitigating strategies, including insurance, and consider these in light of the approved Corporate Risk Management Polices and internal controls. Such exposures include physical and financial positions in commodities markets; derivatives strategies; capital commitments; sovereign and foreign exchange exposures; undertakings assumed in turnkey construction or engineering agreements, including liquidated damages; and exposure to interest rate fluctuations. The Committee will periodically review and discuss with the management, the Corporation's overall hedging strategy and the use of swaps and other derivative instruments by the Corporation or any of its subsidiaries for hedging risks pursuant to the Corporation's hedging polices. The Committee will have the authority to review and approve, at least annually, decisions by the Corporation (on its behalf or on behalf of any of its subsidiaries) to enter into swaps that may not be subject to clearing and exchange trading and execution requirements in reliance on the end-user exception under the Commodity Exchange Act, or other rules and regulations promulgated from time to time. 6. Review the risk exposures and impact to earnings for the Corporation s commodity portfolio. 7. Consider and recommend to the full Board common stock sales, repurchases or splits, as appropriate, and any payments of quarterly dividend on common and preferred stocks. 8. Review banking relationships and credit facilities. 9. Review periodically investment guidelines and performance, including investment aspects of pension trusts and other employee benefits programs. -3-

4 10. Review financial implications of any significant transactions requiring Board approval as related to mergers, acquisitions, reorganizations and divestitures. Capital Projects 11. Review financial implications of any significant capital project requiring Board approval and evaluate whether the economics on which the project is based, are consistent with the Corporation s standard methodology. In addition, perform post project reviews for significant projects or as requested by the Board. Risk Management 12. Annually review and assess the adequacy of the Corporation s risk management programs and recommend to the Board any changes to such programs, coordinating with the Audit Committee, as appropriate. 13. Meet periodically with management to discuss and provide oversight with respect to the processes, including guidelines and policies, established by the Corporation to assess, monitor, manage and mitigate the Corporation s significant risk exposures (whether financial, operational or otherwise). Environmental, Health and Safety 14. Review and provide oversight with respect to the Corporation s health, safety and environmental policies, standards, accountabilities and programs. 15. Review and provide oversight with respect to information and reports on various matters regarding health and safety-related issues, including the Corporation s health and safety goals, the Corporation s compliance with its health and safety policies, standards, accountabilities and programs as well as applicable laws and regulations, the occurrence of major operational events, including events such as explosions, fires, deaths and major injuries, and any material safety litigation and/or regulatory proceedings. 16. Review and provide oversight with respect to information and reports on various matters of the Corporation affecting the environment, including the Corporation s environmental goals and objectives, legislative and other developments related to environmental matters, the Corporation s performance relative to compliance with its environmental policies, standards, accountabilities and programs as well as applicable laws and regulations, internal environmental compliance matters, remediation projects, compliance with the Corporation s environmental incident reporting procedures, the occurrence of significant environmental incidents, and any material environmental legal proceedings, claims or other contingencies. 17. Review and provide oversight with respect to the Corporation s pipeline integrity program, including process safety. -4-

5 18. Review and provide oversight with respect to the Corporation s sustainability program and related reports. 19. Review and provide oversight with respect to the Corporation s state of readiness to respond to crisis situations. Reports 20. Report regularly to the full Board following meetings of the Committee and with respect to such other matters as are relevant to the Committee s discharge of its responsibilities. 21. Maintain minutes or other records of meetings and activities of the Committee. V. Annual Performance Evaluation The Committee shall perform a review and evaluation, at least annually, of the performance of the Committee and its members, including a review of the compliance of the Committee with this Charter and shall deliver to the Board a report which may be oral, setting forth the results of its evaluation. In addition, the Committee shall review and reassess, at least annually, the adequacy of this Charter and recommend to the Board any improvements to this Charter that the Committee considers necessary. The Committee shall conduct such evaluations and reviews in such manner as it deems appropriate. -5-