National Fuel Gas
Board of Directors
Compensation Committee Charter
The Compensation Committee (“Committee”) is a committee of the Board of Directors (the “Board”) of National Fuel Gas Company (the “Company”). Any company or entity in which the Company directly or indirectly has an ownership interest of fifty percent (50%) or more is referred to herein as a “Subsidiary”, collectively as “Subsidiaries.”
The Committee shall comprise not less than three members of the Board. Each member of the Committee shall (i) meet the independence requirements of the New York Stock Exchange, as they may be amended from time to time, and any other applicable laws, rules and regulations governing independence; (ii) qualify as a “non-employee director,” as defined in Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended; (iii) qualify as an “outside director” as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder; and (iv) meet the requirements of the Company’s Corporate Governance Guidelines. All members of the Committee will be appointed by the Board and shall serve at the discretion of the Board.
The Committee’s purposes are:
(1) to exercise delegated authority of the Board regarding compensation of officers of the Company and its Subsidiaries,
(2) to exercise authority granted by various employee benefit plans approved by the Board and/or the Company’s shareholders,
(3) to prepare and sign the Compensation Committee Report included in the Company’s annual proxy statement; and
(4) to make recommendations to the Board on compensation-related matters.
To carry out its purpose, the Committee shall also have the following responsibilities.
A. Compliance with Laws. Perform activities required of Compensation Committees by applicable law, rules or regulations including the rules of the Securities and Exchange Commission and the New York Stock Exchange.
B. Shareholder Delegated Authority. Exercise authority delegated by the Company’s shareholders with respect to compensation plans. These include, but may not be limited to:
(1) the National Fuel Gas Company 1983 Incentive Stock Option Plan, as amended (the “1983 Plan”);
(2) the National Fuel Gas Company 1984 Stock Plan, as amended (the “1984 Plan”);
(3) the National Fuel Gas Company 1993 Award and Option Plan, as amended (the “1993 Plan”), including At Risk Awards;
(4) the National Fuel Gas Company 1997 Award and Option Plan, as amended (the “1997 Plan”), including At Risk Awards; and
(5) the National Fuel Gas Company Tophat Plan, as amended (the “Tophat Plan”).
C. CEO Compensation. Review and approve corporate goals and objectives relevant to CEO compensation, evaluate the CEO’s performance in light of those goals and objectives and determine and approve the CEO’s compensation level based upon this evaluation. In determining the long-term incentive component of CEO compensation, the Committee should consider 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 Company’s CEO in past years.
D. Non-CEO Compensation.
(1) approve base salaries for individuals who have been designated by the Board as “officers” or “executive officers” for purposes of federal securities laws, including Section 16(b) of the Securities Exchange Act of 1934, as amended (collectively “Executive Officers”); and
(2) approve cash bonuses to Executive Officers.
E. Other Compensation and Benefits
(1) review the form of life insurance agreements made available to officers from time to time and, with the advice and counsel of the CEO, modify and supplement such agreements if it should deem such action appropriate; and
(2) exercise the authority delegated by the Board under the National Fuel Gas Company Performance Incentive Program.
F. Recommendations. Make recommendations to the Board with respect to other compensation, including, but not limited to, incentive compensation plans and equity plans.
G. Compensation Committee Report. Prepare and sign the Compensation Committee Report on executive compensation as required by the Securities and Exchange Commission that appears in the Company’s annual proxy statement over the names of the Committee members.
H. Evaluation of Management. Oversee the evaluation of Management.
I. Regular Board Reports. Make regular reports to the Board, including reports on the matters discussed at any Committee meeting that has occurred, and any Committee action taken, since the previous Board meeting.
J. Compensation Program Review. Review with management and any consultants or advisors the adequacy and effectiveness of the compensation programs of the Company, and elicit any recommendations for the improvement of such programs or particular areas where new or different programs are desirable.
K. Administrative Rules Review. Review and, as appropriate, amend the Committee’s Administrative Rules regarding awards under various compensation plans administered by the Committee; ensure compliance with those Rules and review the Company management’s response to any material violation of those Rules.
L. Other Matters. Investigate any other matter brought to its attention within the scope of its duties. In addition, the Committee shall consider such other matters in relation to the compensation of the officers and employees of the Company and its Subsidiaries as the Committee may, in its discretion, determine to be advisable.
M. Compensation Consultant. Exercise sole authority to retain and terminate any compensation consultant used to assist in the evaluation of director, CEO or officer compensation, including sole authority to approve the Consultant’s fees and other retention terms.
N. Authority to Retain Advisors. As deemed necessary or appropriate by the Committee, hire, pay, evaluate and fire accountants, attorneys or other advisors, provided, however, that:
(1) the Committee will inform the Board at least quarterly of any and all work done by such advisors; and
(2) the Board retains the power to order the termination of any such advisor on a going-forward basis.
O. Delegation to Subcommittees. Delegate responsibilities to subcommittees as the Committee may deem appropriate.
P. Charter Review. On an annual basis, review the adequacy of this Compensation Committee Charter (“Charter”) and recommend to the Board any modifications to this Charter, which the Committee deems appropriate, for approval by the Board.
Q. Meetings. Meet at least two times per year and hold any additional meetings when deemed necessary or desirable by the Committee.
The Committee shall conduct and present to the Board an annual performance evaluation of the Committee.