Compensation Committee Charter

Organization

There shall be a committee of the Board of Directors (the "Board") to be known as the compensation committee (the "Committee"). The Committee shall be composed of at least three directors, each of who shall satisfy the independence requirements of the Nasdaq Stock Market and who shall be appointed by the Board on the recommendation of the Nominating and Corporate Governance Committee. In addition, each member of the Committee shall qualify as an "outside director" within the meaning of Section 162(m) of the Internal Revenue Code and shall be a "non-employee director" within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934.

In order to fulfill its role, the Committee shall be organized and governed in the following manner:

Committee members will be appointed and removed by the Board on the recommendation of the Nominating and Corporate Governance Committee;

 

A majority of the members of the Committee shall constitute a quorum for meeting purposes;

 

Action may be taken by the Committee upon the affirmative vote of a majority of the quorum;

 

Any member of the Committee may call a meeting of the Committee upon due notice to each other member at least forty-eight hours prior to the meeting (provided that participation in any meeting shall be deemed to constitute waiver of any deficiency in such notice); and

 

Action may be taken by the Committee without a meeting if all of the members of the Committee indicate their approval thereof in writing.

Statement of Purpose

The Committee shall discharge the Board's responsibilities relating to (1) the total remuneration of the Company's senior executives, and (2) the Company's benefit and equity plans.

Duties and Responsibilities

The responsibilities of the Committee include the following:

Review and approve the CEO's and other senior executives' compensation;

 

Evaluate competitive compensation levels for the CEO and other senior executives;

 

Make recommendations to the Board regarding compensation, if any, of members of the Board and Board committees;

 

Review and approve the financial performance targets, if any, to be used in determining divisional and corporate performance for bonus payment purposes;

 

Review and approve the adoption of new senior executive incentive compensation plans and equity-based plans, and administer the Company's existing incentive compensation plans and equity-based plans, including reviewing and approving stock option grants;

 

Review and approve the adoption of new health and welfare programs, retirement or supplemental retirement programs, and administer the Company's existing health and welfare programs, retirement or supplemental retirement program;

 

Review and approve the Company's policies concerning perquisites provided to the Company's executives, including benefits provided upon retirement or other termination of employment;

 

Review and assess the adequacy of this charter and submit any changes to the Board for approval;

 

Prepare an annual report on executive compensation for inclusion in the Company's annual proxy statement; and

 

Review such other matters as the Board or the Committee shall deem appropriate.

In carrying out these responsibilities, the Committee recognizes its obligation to balance (1) the Company's interest in conserving cash and minimizing shareholder dilution, and (2) the Company's interest in using compensation to attract, retain and motivate Company management and employees. In reconciling these competing concerns, the Committee should act in the long-term best interests of the Company and its shareholders.

Powers of the Compensation Committee

In order to fulfill its role, the Committee shall have the following powers:

to delegate to subcommittees of the Committee or to the Company's management any of the responsibilities of the full Committee;

 

to delegate to an individual employee of the Company the responsibility of the Committee to approve stock option grants; provided that such grants are made pursuant to a matrix or other set of guidelines previously approved by the Committee; and provided, further that such authority shall not extend to grants made to members of the Board or to "officers" of the Company within the meaning of the corporate governance rules of the Nasdaq Stock Market; and

 

to retain, compensate with Company funds, and terminate outside consultants to assist in the assessment of the compensation of the Board of Directors, the CEO or other senior management.

Adopted March 26, 2003