Management Development and Compensation
Effective 18 November 2004
The Management Development and Compensation Committee (the "Committee") shall assist the Board of Directors (the "Board") in fulfilling its oversight responsibilities on an ongoing basis for matters relating to selecting, evaluating, and compensating the chief executive officer ("CEO") and overseeing CEO succession planning; providing counsel and oversight on the selection, evaluation, development, and compensation of Company executives who are serving on the Corporate Executive Committee or who are treated as "executive officers" for purposes of executive compensation disclosure requirements applicable to the Company's proxy statements under the federal securities laws (together, the "Senior Officers"); and providing oversight for policies regarding management compensation and benefit programs. The Committee shall also have the authority of the Board with respect to oversight for the design and administration of the Company's and its controlled subsidiaries' employee pension, savings, and welfare benefit plans worldwide, except that only the Board shall have the authority to establish or terminate significant Company plans.
The Committee is also responsible for preparing and publishing a report on executive compensation for inclusion in the Company's proxy statement for the annual meeting of shareholders.
Committee Structure; Member Qualifications, Appointment, and Removal
The Committee shall consist of not less than three (3) directors of the Company, each of whom shall meet the independence requirements of the New York Stock Exchange and other applicable rules. Each member of the Committee also shall satisfy all requirements necessary from time to time to be "disinterested directors" under Securities and Exchange Commission ("SEC") Rule 16b-3 and qualified "outside directors" under Section 162(m) of the Internal Revenue Code and related regulations, all as amended from time to time.
The members and the Chairperson of the Committee are appointed by the Board, upon the recommendation of the Nominating and Corporate Governance Committee (the "Governance Committee"), and serve at the pleasure of the Board.
Authority and Responsibilities
Management Development and Succession
To assist the Board in developing and evaluating potential candidates for Senior Officer positions, including the CEO, and to oversee the development of Senior Officer succession plans, the Committee shall periodically review and, when appropriate, make recommendations to the Board regarding
Compensation and Benefits
The Committee shall:
Committee Operations: Meetings, Agendas, Reporting, Delegation, and Performance Evaluation
The Committee may determine the procedural rules for its meetings and the conduct of its business, except as otherwise required by law. Adequate provision is made for notice to members of all meetings; one-third of the members, but not less than two, constitute a quorum; and all matters are determined by a majority vote of the members present. The Committee may delegate all or a portion of the authority granted to it by the Board to one or more of the Committee members, senior executives, or committees, subject to applicable plans, laws, regulations, and listing standards.
The Committee proposes its regular meeting schedule for each year for approval by the Board, upon recommendation of the Governance Committee. The Chairman of the Board, the Corporate Secretary, and the Committee Chairperson agree on the length of regular meetings and the need to schedule additional special meetings.
The annual Committee agenda and individual meeting agendas are developed by the Chairman of the Board and Corporate Secretary in consultation with the Committee Chairperson, with input from appropriate members of management and staff.
The Committee Chairperson reports to the Board on Committee meetings and actions, and the Committee Secretary (who is the Director, Compensation and Benefits) keeps minutes of all Committee meetings, which are distributed to Committee members for review and approval. The Committee evaluates its performance annually and discusses the outcome of the evaluation with the full Board.
In order to carry out its responsibilities, the Committee shall have