The duties and functions of the Compensation Committee of the Board of Directors shall be as follows:

A. Composition of the Compensation Committee

    1. Members

      The Compensation Committee will be comprised of only independent members of the Board of Directors.
    2. Committee Size

      The Compensation Committee will have at least three members, one of whom will serve as the Committee's Chairperson, and may perform its functions through such subcommittees as may be deemed appropriate from time to time.
    3. Selection of Committee Members

      Members of the Compensation Committee and the Chairperson thereof shall be appointed by the Board of Directors.

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B. Operation of the Compensation Committee

    1. Core Responsibilities

      The following are the Core Responsibilities of the Compensation Committee:

 

a.        Establish the Company's basic Compensation Philosophy, which serves as the foundation for all policies and programs involving employee remuneration.

b.        Review and monitor the development and operation of compensation programs so as to ensure fidelity with the core principles of the Company's Compensation Philosophy as well as alignment with the Company's strategic objectives and shareholder interests.

c.        Establish and assure an internally consistent and externally competitive executive compensation program in order to attract and retain highly qualified executives and to provide incentives for attainment of the Company's strategic goals and objectives. Toward this end, review, approve and recommend to the Board executive compensation matters with respect to:

 

                                                                                  i.            Base salaries, incentive bonuses, long-term equity based rewards and other compensation programs;

                                                                                 ii.            any other executive officer compensation or perquisite plan or program which hereafter may be adopted;

                                                                                iii.            the form and content of employment contracts.

 

d.        In conjunction with the full Board of Directors the Committee will annually:

 

                                                                                  i.            Set performance objectives for the Chief Executive Officer.

                                                                                 ii.            Review the performance of the Chief Executive Officer.

 

e.        Review, modify and approve as appropriate management's recommendations concerning the granting of Stock Options under the Company's Stock Option Plan to employees at all levels.

f.         Review, modify and approve Director's compensation plans and programs.

 

2.        Committee Meetings

The Compensation Committee will meet two to three times per year or as often as necessary to carry out its responsibilities. Meetings may be called by the Chairperson of the Committee.

3.        Publication of Committee Meeting Minutes

The Committee Chairperson, working in conjunction with the Corporate Secretary and the Vice President, Human Resources, has responsibility for ensuring that accurate minutes of the Committee's meetings are maintained and distributed to the other members of the Board of Directors.

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Checkpoint Systems, Inc.
Compensation Committee Calendar





First meeting of year

Review competitive compensation analysis

Review CEO's recommendations for officers
- performance for past year
- salary for new year
- cash incentive payouts for past year

Review and approve **Plan for cash incentives for new year

Consider and approve CEO salary for new year and cash incentive for past year - input from Governance Committee

Stock incentive awards

Review and approve ** stock incentive awards and associated performance criteria, if any, for officers and for CEO for the new year - input from Governance Committee.


Second meeting of year

Review and approve ** proposed changes, if any, in stock incentive plan.

Review and approve Executive Compensation Statement for use in Proxy.


Last meeting of year

Review Director's compensation. Recommend changes, if any.

Review Checkpoint's overall benefit plans - recommend and approve ** any changes.







Note that ** compensation, incentive and compensation plan approval items are to be subsequently reviewed with the entire Board of Directors.