Compensation Committee Charter
The Compensation Committee (the “Committee”) shall:
Discharge the responsibilities of the Board of Directors to the stockholders and the investment community with respect to the corporation’s and its subsidiaries compensation programs and compensation of the corporation’s and its subsidiaries’ executives and Board of Directors;
Administer the corporation’s and its subsidiaries’ long-term incentive and other equity-based compensation plans as required by such plans; and
Produce an annual report on executive compensation for inclusion in the corporation’s annual proxy statement, in accordance with applicable rules and regulations of the New York Stock Exchange (the “NYSE”), Securities and Exchange Commission (the “SEC”) and other regulatory bodies.
STRUCTURE AND OPERATIONS
Composition and Qualifications
The Committee shall be comprised of three or more members of the Board of Directors. At such time that the corporation no longer relies on the “controlled company” exception to the NYSE corporate governance standards, and after any allowable phase-in period, each of the members of the Committee shall be determined by the Board of Directors to be “independent” under the rules of the NYSE. Additionally, no director may serve unless he or she (i) is a “Non-employee Director” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and (ii) satisfies the requirements of an “outside director” for purposes of Section 162(m) of the Internal Revenue Code.
Appointment and Removal
The members of the Committee shall be appointed by the Board of Directors upon the recommendation of the Nominating and Corporate Governance Committee and shall serve until such member’s successor is duly elected and qualified or until such member’s earlier resignation, retirement, removal from office or death. The members of the Committee may be removed, with or without cause, by a majority vote of the Board of Directors.
Unless a Chairman is elected by the full Board of Directors, the members of the Committee shall designate a Chairman by majority vote of the full Committee membership. The Chairman will chair all meetings of the Committee and set the agendas for Committee meetings.
Delegation to Subcommittees
In fulfilling its responsibilities, the Committee shall be entitled to delegate any or all of its responsibilities to a subcommittee of the Committee.
The Committee shall meet as often as its members deem necessary to fulfill the Committee’s responsibilities. The Chairman of the Board or any member of the Committee may call meetings of the Committee in each case on at least twenty-four hours’ notice to each Committee member.
As part of its review and establishment of the performance criteria and compensation of designated key executives, the Committee should meet separately at least on an annual basis with the Chief Executive Officer (“CEO”), the corporation’s principal human resources executive, and any other corporate officers, as it deems appropriate. However, when necessary, the Committee may meet in executive session without such officers present, and in all cases such officers shall not be present at meetings at which their performance and compensation are being discussed and determined.
All meetings of the Committee may be held by telephone or similar communications equipment by means of which all persons participating in the proceedings can hear each other, and such participation shall constitute presence in person at such proceedings. A majority of the Committee members shall constitute a quorum for the transaction of the Committee’s business. The Committee shall act upon the vote of a majority of its members at a duly called meeting at which a quorum is present. Any action of the Committee may be taken by a written instrument signed by all of the members of the Committee. Meetings of the Committee may be held at such place or places as the Committee shall determine or as may be specified or fixed in the respective notice or waiver of notice for a meeting.
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, member of 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.
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 or substitute 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 of Directors 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 and terminate outside counsel or other experts for this purpose, including the authority to approve the fees payable to such counsel or experts and any other terms of retention. The corporation shall provide for appropriate funding for such counsel or experts retained by the Committee. Each member of the Committee, in the performance of such member’s duties, will be entitled to rely in good faith upon the information, opinions, reports or statements presented to the Committee by any of the corporation’s officers or employees or by any other person as to matters such member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the corporation.
Setting Compensation for Executive Officers and Directors
Review the overall compensation philosophy of the corporation and its subsidiaries, plans and programs.
Review and approve corporate goals and objectives relevant to CEO and other executive officers compensation, including annual performance objectives.
Evaluate the performance of the CEO and other executive officers in light of the corporate goals and objectives and, based on such evaluation, determine and approve the annual salary, bonus, equity based and other compensation and benefits, direct and indirect, of the CEO and other executive officers. In determining the long-term incentive component of the corporation’s executive officers’ compensation, the Committee will consider the corporation’s performance and relative stockholder return, the value of similar incentive awards to comparable executive officers at comparable companies, the awards given to the corporation’s executive officers in past years and such other factors as the Committee deems relevant. The Committee is not precluded from approving awards (with or without ratification of the Board) as may be required to comply with applicable tax laws (e.g., I.R.C. Section 162(m)).
Review and consult with the CEO on the selection of executive officers and review and approve employment contracts and other similar arrangements with executive officers.
In connection with executive compensation programs:
(i) Review and recommend to the full Board of Directors, or approve, new executive compensation programs;
(ii) Review on a periodic basis the operations of the corporation’s executive compensation programs to determine whether they are properly coordinated and achieving their intended purpose(s);
(iii) Periodically review policies for the administration of executive compensation programs;
(iv) Take steps to modify any executive compensation program that yields payments and benefits that are not reasonably related to executive and corporate performance.
Establish and periodically review policies in the area of senior management perquisites.
Consider policies and procedures pertaining to expense accounts of senior executives.
Review and recommend to the full Board of Directors director compensation and benefits, if any, as well as directors’ and officers’ indemnification and insurance matters.
Review and make recommendations to the full Board of Directors, or approve, any contracts or other transactions with current or former executive officers of the corporation, including consulting arrangements, employment contracts, severance or termination arrangements and loans to employees made or guaranteed by the corporation.
Monitoring and Administering Incentive and Other Plans
Review and make recommendations to the Board of Directors with respect to the corporation’s stock and long-term incentive compensation plans.
Approve the appointment and removal of trustees and investment managers for pension fund assets.
Interpret and administer the corporation’s stock and long-term incentive compensation plans (except as otherwise provided in such plans), and oversee the activities of other individuals responsible for taking any action with respect to those plans.
Review and approve all stock and long-term incentive compensation plans of the corporation that are not otherwise subject to the approval of the corporation’s stockholders.
Review and make recommendations to the full Board of Directors, or approve, all awards of shares or share options pursuant to the corporation’s equity-based plans.
Monitor compliance by executives with the rules and guidelines of the corporation’s equity-based plans.
Review and monitor employee pension, profit sharing and benefit plans.
Select, retain and/or replace, as needed, compensation and benefits consultants and other outside consultants to provide independent advice to the Committee. In that connection, in the event the Committee retains a compensation consultant, the Committee shall have the sole authority to approve such consultant’s fees and other retention terms.
Prepare an annual report on executive compensation for inclusion in the corporation’s proxy statement, annual report or Form 10-K, in accordance with applicable rules and regulations of the NYSE, SEC and other applicable regulatory bodies, and direct compliance with any other applicable compensation reporting requirements of the NYSE, SEC or other applicable regulatory bodies.
Report regularly to the Board of Directors (i) following meetings of the Committee, (ii) with respect to such other matters as are relevant to the Committee’s discharge of its responsibilities and (iii) with respect to such recommendations as the Committee may deem appropriate. The report to the Board of Directors may take the form of an oral report by the Chairman or any other member of the Committee designated by the Committee to make such report.
Maintain minutes or other records of meetings and activities of the Committee.
ANNUAL PERFORMANCE EVALUATION
The Committee shall perform a review and evaluation, at least annually, of the performance of the Committee and its members, including by reviewing the compliance of the Committee with this Charter. In addition, the Committee shall review and reassess, at least annually, the powers of the Committee and the adequacy of this Charter and recommend to the Board of Directors any improvements to this Charter that the Committee considers necessary or valuable. The Committee shall conduct such evaluations and reviews in such manner as it deems appropriate.
Management of the corporation and its subsidiaries are responsible for the dayto- day operation of their respective businesses. As a result, the corporation’s officers and employees and other persons who may be engaged by the Committee may have more time, knowledge and detailed information about the corporation than do the Committee members. The Committee will review information, opinions, reports or statements presented to the Committee by the corporation’s officers or employees or other persons as to matters the Committee members reasonably believe are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the corporation. While the Committee has the responsibilities and powers set forth in this Charter, each member of the Committee, in the performance of his or her duties, will be entitled to rely in good faith upon reports presented to the Committee by these experts. Accordingly, the Committee’s role does not provide any special assurances with regard to matters that are outside the Committee’s area of expertise or that are the traditional responsibility of management.