NASHUA CORPORATION

 

LEADERSHIP AND COMPENSATION COMMITTEE CHARTER

 

 

A.      Purpose

 

         The purpose of the Leadership and Compensation Committee of the Board of Directors (the “Board”) of Nashua Corporation (the “Company”) is to oversee the discharge of the responsibilities of the Board relating to compensation of the Company’s executive officers.  The Leadership and Compensation Committee is responsible for screening candidates for the chief executive officer position, developing performance evaluation criteria, reviewing the caliber of key management positions and deciding on top management compensation.  The Leadership and Compensation Committee is also responsible for producing an annual report on executive compensation for inclusion in the Company’s proxy statement, in accordance with applicable rules and regulations.

 

B.      Structure and Membership

 

         1.    Number.  The Leadership and Compensation Committee shall consist of at least two Directors.  Members of the Leadership and Compensation Committee shall be appointed by the Board, upon recommendation of the Governance and Nominating Committee.  The Board may remove members of the Leadership and Compensation Committee, with or without cause.

 

         2.    Independence.  Except as otherwise permitted by the applicable NASDAQ rules, each member of the Leadership and Compensation Committee shall be “independent” as defined by such rules.

 

         3.    Chair.  Unless the Board elects a Chair of the Leadership and Compensation Committee, the Leadership and Compensation Committee shall elect a Chair by majority vote.

 

         4.    Compensation.  The compensation of Leadership and Compensation Committee members shall be as determined by the Board.

 

C.      Authority and Responsibilities

 

         General

 

         The Leadership and Compensation Committee shall discharge its responsibilities, and shall assess the information provided by the Company’s management, in accordance with its business judgment.

 

 

 

         Compensation Matters

 

         1.    Executive Officer Compensation.  The Leadership and Compensation Committee, or a majority of the independent directors serving on the Board, shall review and approve, or recommend for approval by the Board, the compensation of the Company’s Chief Executive Officer (the “CEO”) and the Company’s other executive officers, including salary, bonus and incentive compensation levels; deferred compensation; executive perquisites; equity compensation (including awards to induce employment); severance arrangements; change-in-control benefits and other forms of executive officer compensation.  The Leadership and Compensation Committee or the independent directors, as the case may be, shall meet without the presence of executive officers when approving or deliberating on CEO compensation but may, in its or their discretion, invite the CEO to be present during the approval of, or deliberations with respect to, other executive officer compensation.  In determining the long-term incentive component of the CEO’s compensation, the Committee shall consider, among other factors, the Company’s performance and relative shareholder return, the value of similar incentive awards to chief executive officers at comparable companies, and the awards given to the CEO in past years.

 

         2.    Plan Recommendations and Approvals.  The Leadership and Compensation Committee shall periodically review and make recommendations to the Board with respect to incentive-compensation and equity-based plans that are subject to approval by the Board.  In addition, in the case of any tax-qualified, non-discriminatory employee benefit plans (and any parallel nonqualified plans) for which stockholder approval is not sought and pursuant to which options or stock may be acquired by officers, directors, employees or consultants of the Company, the Leadership and Compensation Committee, or a majority of the independent directors serving on the Board, shall approve such plans.

 

         3.    Administration of Plans.  The Leadership and Compensation Committee shall exercise all rights, authority and functions of the Board under all of the Company’s stock option, stock incentive, employee stock purchase and other equity-based plans, including without limitation, the authority to interpret the terms thereof, to grant options thereunder and to make stock awards thereunder; provided, however, that, except as otherwise expressly authorized to do so by this charter or a plan or resolution of the Board, the Leadership and Compensation Committee shall not be authorized to amend any such plan.  The Leadership and Compensation Committee, or a majority of the independent directors serving on the Board, shall approve any inducement awards granted in reliance on the exemption from shareholder approval contained in NASDAQ Rule 4350(i)(1)(A)(iv).

 

         4.    Director Compensation.  The Leadership and Compensation Committee shall periodically review and make recommendations to the Board with respect to director compensation, including director compensation guidelines.

 

         5.    Leadership and Compensation Committee Report on Executive Compensation.  The Leadership and Compensation Committee shall prepare for inclusion where necessary in a proxy or information statement of the Company relating to an annual meeting of security holders at which directors are to be elected (or special meeting or written consents in lieu of such meeting), the report described in Item 402(k) of Regulation

                 S-K.

 

         6.    Leadership and Compensation Committee Report on Repricing of Options/SARs.  If during the last fiscal year of the Company (while the Company was a reporting company pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the “Exchange Act”)) any adjustment or amendment was made to the exercise price of any stock option or stock appreciation right previously awarded to a “named executive officer” (as such term is defined from time to time in Item 402(a)(3) of Regulation S-K), the Leadership and Compensation Committee shall furnish the report required by Item 402(i) of Regulation S-K.

 

         7.    Additional Powers.  The Leadership and Compensation Committee shall have such other duties as may be delegated from time to time by the Board.

 

D.     Procedures and Administration

 

         1.    Meetings.  The Leadership and Compensation Committee shall meet as often as it deems necessary in order to perform its responsibilities; but not less than two times a year, at the time of regularly scheduled Board meetings, and at other times on call of its chairman.  The Leadership and Compensation Committee may also act by unanimous written consent in lieu of a meeting.  The Leadership and Compensation Committee shall keep such records of its meetings as it shall deem appropriate.

 

         2.    Subcommittees.  The Leadership and Compensation Committee may form and delegate authority to one or more subcommittees as it deems appropriate from time to time under the circumstances (including (a) a subcommittee consisting of a single member and (b) a subcommittee consisting of at least two members each of whom qualifies as a “non-employee director,” as such term is defined from time to time in Rule 16b-3 promulgated under the Exchange Act, and an “outside director,” as such term is defined from time to time in Section 162(m) of the Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder).

 

         3.    Reports to Board.  The Leadership and Compensation Committee shall report regularly to the Board.

 

         4.    Charter.  The Leadership and Compensation Committee shall periodically review and reassess the adequacy of this Charter and recommend any proposed changes to the Board for approval.

 

         5.    Consulting Arrangements.  The Leadership and Compensation Committee shall have the sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of executive officer compensation and shall have sole authority to approve the consultant’s fees and other retention terms.    The Leadership and Compensation Committee shall also have authority to commission compensation surveys or studies as the need arises.   The Leadership and Compensation Committee is empowered, without further action by the Board, to cause the Company to pay the compensation of such consultants as established by the Leadership and Compensation Committee.

 

         6.    Independent Advisors.  The Leadership and Compensation Committee shall have the authority, without further action by the Board, to engage and determine funding for such independent legal and other advisors as it deems necessary or appropriate to carry out its responsibilities.  Such independent advisors may be the regular advisors to the Company.  The Leadership and Compensation Committee is empowered, without further action by the Board, to cause the Company to pay the compensation of such advisors as established by the Leadership and Compensation Committee.

 

         7.    Investigations.  The Leadership and Compensation Committee shall have the authority to conduct or authorize investigations into any matters within the scope of its responsibilities as it shall deem appropriate, including the authority to request any officer, employee or advisor of the Company to meet with the Leadership and Compensation Committee or any advisors engaged by the Leadership and Compensation Committee.

 

         8.    Annual Self-Evaluation.  At least annually, the Leadership and Compensation Committee shall evaluate its own performance.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective 9/12/03

Amended 3/1/04

Amended 2/9/05

Amended 10/3/05