BUILDING MATERIALS HOLDING CORPORATION

COMPENSATION COMMITTEE CHARTER

Approved and Adopted

November 26, 2002

 

 

 

1. Authority and Mission.

 

The Compensation Committee ("Committee") is a standing committee of the Board of Directors which acts on behalf of the Board of Directors in setting the general compensation policies of Building Materials Holding Corporation (the "Company"), determining the specific compensation levels for the Chairman, President and Chief Executive Officer and other executive officers of the Company and the compensation of members of the Board of Directors of the Company. The Compensation Committee also is responsible for administering the Company's stock option plans, supplemental employee retirement plan and such other compensation and retirement plans as the Company may establish from time to time.

 

2. Composition.

 

The Committee shall consist of at least three directors appointed by the Board of Directors, who shall be (i) independent of management and free from any relationship that, in the opinion of the Board, would interfere with exercise of independent judgment as a Compensation Committee member, and (ii) independent under the rules of Nasdaq for Nasdaq National Market companies. The Board of Directors shall designate one of the Compensation Committee members to be Chairperson.

 

3. Duties and Responsibilities.

 

The duties and responsibilities of the Compensation Committee shall be as follows:

(i) Establish the executive compensation and benefits philosophy and strategy for the Company, in consultation with the Nominating and Corporate Governance Committee and the Chairman, President and Chief Executive Officer ("Chairman").

(ii) Review and approve compensation programs covering the Company's senior management.

(iii) Review the recommendations of the Chairman with respect to the individual compensation for each member of senior management, and approve such individual compensation.

(iv) Determine performance measures and, if applicable, goals for measuring corporate performance, in consultation with the Chairman.

(v) Evaluate the performance of the Chairman and executive officers of the Company in consultation with the Nominating and Corporate Governance Committee, approve compensation performance standards for such individuals, as well as compensation awards (salary, bonus, stock options and other stock awards, etc.), contracts and supplemental compensation or benefits arrangements. 

(vi) Review and recommend the compensation program for outside directors in consultation with the Nominating and Corporate Governance Committee, including the amount and type of any form of compensation to be paid to any director for such service, including, without limitation, compensation in equity and equity-related incentives.

(vii) Approve and/or revise all major compensation or benefit programs involving stock or commitments beyond one year (e.g., pension, profit-sharing, etc.).

(viii) Approve all stock option and other stock incentive awards. 

(ix) Establish policies of the Company regarding structuring compensation programs to preserve tax deductibility and approve insider stock transactions as needed for exemptions from Section 16 of the Securities Exchange Act of 1934.

(x) Prepare or approve the Compensation Committee report to the stockholders in any proxy statement.

(xi) Report Compensation Committee actions to the Board of Directors.

(xii) Oversee the Company's policies relating to development and retention of able management, including personnel practices, equal employment opportunity practices, education and training programs.

(xiii) Review annually the adequacy of the Committee's Charter and assess the Committee's processes and effectiveness.

(xiv) Establish and review annually the Board compensation in consultation with the Nominating and Corporate Governance Committee and the Chief Executive Officer.

 

 

3. Meetings.

 

The Committee shall meet at least annually or from time to time as required. The Committee may meet either in person or telephonically and at such times and places as the Committee determines. The Committee shall report the results of each of its meeting to the Board. The Committee shall have the right to retain and meet privately with independent advisors and benefit specialists as needed. The majority of the members of the Committee shall constitute a quorum.