2004 Committee Charter : ESLPurpose and Authority
It is the policy of this Corporation to have a Compensation Committee (the "Committee") to
function on behalf of the Board of Directors in matters relating to compensation of Corporate
officers, and concerning other significant incentive, equity, and retirement programs provided
for employees of Esterline, its affiliates, or subsidiaries. The Committee shall have overall
responsibility for evaluating and proposing officer compensation plans, policies, and other
significant compensation or retirement programs of the Corporation.
As the Committee deems appropriate, it may retain independent compensation, legal,,
accounting, and other professional advisors to assist the Committee without seeking Board
approval with respect to the retention, termination, fees or other terms for any such advisors.
The Committee shall also have all authority necessary to fulfill the duties and responsibilities
assigned to it in this Charter or by the Board. When appropriate, it may form and delegate
authority to subcommittees, or may delegate authority to one or more designated members of
the Board or to Corporate officers.
1. The Committee shall consist of at least three (3) Directors who have been selected to
serve on the Committee, one (1) of whom shall be designated as Committee Chair. Each
member of the Committee shall: (a) meet the independence requirements established by
the Board and any other regulations applicable to the Committee from time to time;
(b) be a "non-employee director" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934; and, (c) be an "outside director" within the meaning of Section
162(m) of the Internal Revenue Code.
2. Members of the Committee shall be elected for one (1) year terms.
3. The members of the Committee shall be appointed by the Board on the recommendation
of the Nominating & Corporate Governance Committee. The Board may remove any
member of the Committee.
4. The Chief Executive Officer and Vice President Human Resources shall be non-voting
advisors to the Committee, and may be delegated such responsibilities as the Committee
Duties and Responsibilities
The Committee shall have the following duties and responsibilities, in addition to any duties and
responsibilities assigned to the Committee from time to time by the Board:
1. Meet at least twice a year, in addition to any special meetings that may be called. Such
meetings shall, where possible, be held in conjunction with scheduled meetings of the
Board. In the absence of a member designated by the Board to serve as Chair, the
members of the Committee may appoint from among their number a person to preside at
their meetings. When appropriate, the Committee may meet in separate executive
session with management, employees, internal audit, or the independent auditor to
discuss matters the Committee, or those persons, believe warrant Committee attention.
2. Develop, evaluate, and recommend to the Board for its approval:
a. Executive compensation philosophy, policies, programs, and practices.
b. Corporate goals and objectives relevant to the Chief Executive Officer's compensation.
c. An appraisal of the Chief Executive Officer's performance in light of Corporate goals
d. Total compensation opportunities for the Chief Executive Officer based on the
Committee's appraisal. In doing so, the Committee shall consider the Corporation's
performance and relative shareholder return, the value of incentive awards to chief
executive officers at comparable companies, and awards given to the Chief Executive
Officer in past years.
e. The forms and level of compensation appropriate for other Corporate officers with
base salaries in excess of $125,000.
f. The Annual Incentive Compensation Plan for officers, including the proposed level of
participation and the subsequent actual payout computation for each officer.
g. Submission to the Corporation's shareholders incentive compensation plans and
equity-based plans and amendments thereto.
h. Any special executive employment, compensation, or retirement arrangements.
i. All Internal Revenue Service tax-qualified and non-qualified retirement plans, and all
plan amendments that are non-administrative in nature; the designation of the
trustee and the execution of trust agreements for any such plan(s); the termination,
merger, or consolidation of any such plan(s); the extension of plan participation to
employees of affiliates or subsidiaries.
j. Compensation for Board members, and for those who serve as committee chairs or in
other roles determined by the Board
3. Administer and fulfill all obligations required by any Esterline incentive compensation plan,
or equity-based plan.
4. Fulfill fiduciary functions with respect to Corporate retirement plans; periodically review
plan administration, participation, and regulatory compliance for such plans.
5. Submit to the Board copies of the minutes of all Committee meetings and report to the
Board on any significant matters arising from the Committee's work, including awards for
top executives, and any special executive employment, compensation, or retirement
6. Prepare the report on executive compensation required by the rules of the Securities and
Exchange Commission to be included in the Corporation's annual proxy statement.
7. Obtain or perform an annual evaluation of Committee performance and make applicable
changes to Committee practices, or recommendations to the Board for improvement.
The Committee shall review and reassess this Charter at least annually and, if appropriate,
propose changes to the Board.