FORMACIÓN HIPOCAMPAL 

Genesis Energy’s total remuneration policy for its executives provides the opportunity for them to be paid, where performance merits, in the median to upper quartile for equivalent market- matched roles. In determining an executive’s total remuneration, external benchmarking is undertaken to ensure comparability and competitiveness, along with consideration of the individual’s performance, skills, expertise and experiences. The Human Resources and Remuneration Committee reviews annual performance review programmes for the executives and uses external market information, from international external providers, when considering remuneration arrangements.

Executive total remuneration is currently made up of two components: fixed remuneration and short-term performance incentives.

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Fixed remuneration consists of base salary and benefits

(superannuation and insurances). Genesis Energy’s policy is to pay fixed remuneration for executives based on the market median. Short-term performance incentives

Short-term performance incentives are at-risk payments aligned to annual performance score-cards and individual measures for eligible executives. The score-cards define objectives and measures in the areas of financial performance and returns, customers, processes and operational excellence, and people and safety. All measures link directly to Genesis Energy’s business strategies. Each short-term performance incentive remuneration target is expressed as a percentage of base salary and is set and evaluated annually. Chief Executive employment agreement

Genesis Energy has entered into an employment agreement with Albert Brantley in relation to his employment with Genesis Energy as Chief Executive. The Chief Executive receives an annual fixed remuneration of $959,000. He is also entitled to receive up to 44% of his annual base salary in the form of a short-term incentive that is payable at the discretion of the board of Genesis Energy. The amount of the short-term incentive payment will be based on the achievement by the Chief Executive of certain Company and individual performance hurdles in the previous financial year. The Chief Executive is a member of KiwiSaver, so he receives matched employer contributions of 4%.

Once Genesis Energy is listed on the NZX Main Board, the Chief Executive will be entitled to participate in the Executive LTI Plan, a description of which is set out under the heading “Executive Long-term Incentive Plan” below. The total remuneration of the Chief Executive may be reviewed each financial year at the discretion of the board of Genesis Energy.

The Chief Executive is entitled on satisfaction of certain conditions, to a one-off retention and performance payment of $300,000 (gross) following this Offer.

Mr Brantley will be employed as Chief Executive until his employment is terminated in accordance with his employment agreement. Pursuant to the employment agreement, the Chief Executive and Genesis Energy have mutual rights of termination on the provision of six months’ written notice. Genesis Energy may also terminate the Chief Executive’s employment on the grounds of redundancy, serious misconduct and ill health. In addition, Genesis Energy may terminate the Chief Executive’s employment where the board considers it to be in the interests of Genesis Energy, in which case the Chief Executive would be entitled to a payment equivalent to six months’ fixed remuneration over and above any other payment due upon termination.

Mr Brantley has also agreed to non-solicitation and non-inducement commitments (applying to Genesis Energy’s customers, clients, contractors, staff and directors). These commitments apply for six months after the end of his employment as Chief Executive.

Executive Long-term Incentive Plan

A new long-term incentive plan is being implemented for the Executive Management team in conjunction with this Offer, to enhance the alignment between Shareholders and those executives most able to influence financial results after the Company has been listed on the NZX and ASX.

Under the new Executive LTI Plan, executives purchase Shares funded by an interest-free loan from the Company, with the Shares held on trust by the trustee of the Executive LTI Plan. The board has an absolute discretion to invite executives to participate in the Executive LTI Plan.

The Shares will be held on trust until the end of a three-year vesting period. In case of the first offer under the Executive LTI Plan, Shares will be held by the trustee until the conclusion of FY2017.

Any future offer of Shares under the Executive LTI Plan will be made at their market price at the time. The aggregate maximum dollar amount of Shares to be initially acquired for the purposes of the new plan is $850,000, for which the trustee of the Executive LTI Plan will receive a guaranteed allocation under the Retail Offer. Vesting of Shares with an executive at the conclusion of a three-year vesting period is dependent on continued employment through the three-year period, achievement of key targets within the PFI (for the first offer only), the Company’s absolute total shareholder return being positive and the Company’s total shareholder return, relative to a benchmark peer group, meeting certain criteria. If Shares vest, each executive is entitled to a cash amount which, after deduction of tax (but before other applicable salary deductions), is equal to the amount of their loan balance for Shares which have vested. That cash amount is applied towards repayment of their loan balance. Under the Executive LTI Plan, where total shareholder return measures are used, performance is measured against a benchmark peer group comprising all NZX50 members as at the start of the vesting period. If a member of that peer group ceases to have its securities quoted on the NZX Main Board, the entity is removed from the peer group. The Company’s board has the discretion to replace any such entity with another entity that the board considers appropriate.

Vesting of Shares is dependent on two factors (for the first offer, PFI targets must also be met): first, the Company must achieve a positive absolute total shareholder return over the measurement period; and, secondly, the Company’s performance relative to the performance of the benchmark peer group is measured, with a sliding scale to apply for the number of Shares to vest. If the Company’s total shareholder return performance over the measurement period exceeds the 50th _{percentile total shareholder} return of the benchmark peer group, 50% of an executive’s Shares will vest. All of an executive’s Shares will vest upon meeting the performance of the 75th _{percentile of the benchmark peer group,} with vesting on a straight-line basis between these two points. In the event that the total shareholder return performance in absolute terms is less than zero or, in relative terms, does not meet the peer group relative total shareholder return hurdle (being the 50th _{percentile total shareholder return of the benchmark group), or} if the participant ceases to be employed by the Company other than for a qualifying reason, the Shares will be forfeited to the trustee without compensation and the relevant executive will receive no benefits under the plan. Where the total shareholder return exceeds the 50th _{percentile of the benchmark peer group but is below the} 75th _{percentile, those Shares which have not vested will be forfeited}

to the trustee without compensation. Where any Shares are forfeited to the trustee without compensation, the obligations of the employee with respect to the interest-free loan provided for the acquisition of the forfeited Shares will be assumed by the trustee, in consideration for the transfer of the relevant Shares to the trustee. The trustee may then sell those Shares, hold them on trust for future allocations under the Executive LTI Plan, or transfer them to the Company pursuant to a put option granted by the Company. No Shares will vest if the Company’s total shareholder return over the measurement period is less than the 50th _{percentile total} shareholder return of the benchmark peer group.

As the ability of Genesis Energy to issue Shares in the future may be limited by the statutory requirement for the Crown to maintain a holding of at least 51% of the Shares, any future offer under this plan may need to be satisfied through on-market acquisitions of Shares by the trustee.

See Section 6.3.2 General and Specific Assumptions

(Assumption 19 Employee Benefits)for more information about the assumptions in respect of the Executive LTI Plan.