2003 Committee Charter : CF

Charter of the Compensation Committee
of the Board of Directors of
Charter One Financial, Inc.
I. Statement of Policy
The Compensation Committee (the "Committee") of the Board of Directors (the "Board") of Charter One Financial, Inc. (the "Company") shall (i) discharge the Board's responsibilities relating to the compensation of the Company's executive officers and other key management officers and (ii) produce an annual report on executive compensation for inclusion in the Company's proxy statement, in accordance with all applicable rules and regulations.
II. Committee Composition and Meetings
The Committee composition shall be in accordance with the New York Stock Exchange listing standards. The Committee shall be comprised of three or more directors (including a chairperson) as appointed by the Board, each of whom shall be an independent director as defined by the New York Stock Exchange listing standards and each of whom shall be free from any relationship that would interfere with the exercise of his or her independent judgment. The Board shall also consider whether it is advisable for members of the Committee to also qualify as "non-employee directors" within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, "outside directors" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, or any other standards of applicable law.
The members of the Committee shall be selected annually by the Board, considering the recommendation of the Corporate Governance/Nominating Committee of the Board. The Board shall have the power at any time to change the membership of the Committee and to fill vacancies, subject to the qualification requirements of this charter. The Committee shall meet at least two times annually or more frequently as circumstances require.
III. Committee Duties, Responsibilities and Process
A majority of the members of the Committee present in person or by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other shall constitute a quorum. The Committee may form subcommittees for any purpose that the Committee deems appropriate and may delegate to such subcommittees such power and authority as the Committee deems appropriate; provided, however, that no subcommittee shall consist of fewer than two members; and provided further that the Committee shall not delegate to a subcommittee any power or authority required by any law, regulation or listing standard to be exercised by the Committee as a whole.
The Committee may request that any directors, officers or employees of the Company, or other persons whose advice and counsel are sought by the Committee, attend any meeting of the Committee to provide such pertinent information as the Committee requests.
The Committee shall meet in executive session outside the presence of the Company's executive officers when appropriate.
Following each of its meetings, the Committee shall deliver a report on the meeting to the Board, including a description of all matters considered and all actions taken by the
Committee at the meeting. The Committee shall keep written minutes of its meetings, which minutes shall be maintained with the books and records of the Company.
The Committee shall have the following responsibilities:
(1) The Committee shall review from time to time the goals and objectives of the Company's compensation plans, and, if the Committee deems it appropriate, amend or recommend that the Board amend these goals and objectives.
(2) The Committee shall review from time to time the Company's compensation plans in light of the Company's goals and objectives with respect to such plans, and, if the Committee deems it appropriate, adopt or recommend to the Board the adoption of new executive compensation plans or amendments to existing plans.
(3) The Committee shall evaluate annually the performance of the Company's Chief Executive Officer in light of the goals and objectives of the Company's executive compensation plans and the CEO's performance goals, and set his or her compensation level based on this evaluation.
(4) The Committee shall oversee the evaluation of management of the Company, including the other executive officers of the Company, and establish the compensation for the Company's executive officers and approve the compensation for other key members of management.
(5) The Committee shall recommend to the Board the appropriate level of compensation for Board and Committee service by non-employee members of the Board.
(6) The Committee shall perform such duties and responsibilities as may be assigned to the Committee under the terms of any executive or employee compensation plan.
(7) The Committee shall oversee the preparation of, and review, approve and issue, an annual report to shareholders on executive compensation for inclusion in the Company's proxy statement, in accordance with all applicable rules and regulations.
(8) The Committee shall review with the Chief Executive Officer, at least annually, the Chief Executive Officer's succession plan. The Committee shall review, monitor and report to the Board, at least annually, on management development efforts to assure development of a pool of candidates for adequate and orderly management succession.
IV. Evaluation of the Committee
The Committee shall, on an annual basis, evaluate its performance under this Charter.
V. Investigations and Studies; Outside Advisers
The Committee may conduct or authorize studies of or investigations into matters within the Committee's scope of responsibilities, and may retain, at the Company's expense, such counsel or other advisers as it deems necessary (which may, if the Committee deems it appropriate, be the Company's regular counsel or advisers). The Committee shall have the sole authority to retain or terminate a compensation consultant to assist the Committee in carrying out its responsibilities, including sole authority to approve the consultant's fees and other retention terms, which fees shall be borne by the Company.