Compensation Committee of the Board of Directors
2003 Compensation Charter: NDSN
Stephen R. Hardis, Chairperson
I. Organization and Functioning
There shall be a committee of the Board of Directors to be known as the Compensation Committee (the "Committee"). The Committee shall be comprised of at least three Directors who shall be appointed by the Board of Directors after considering the recommendation of the Governance and Nominating Committee. The Committee shall only include directors who satisfy the independence standards of the National Association of Securities Dealers and are free of any relationship that, in the opinion of the Board, would interfere with their exercise of independent judgment as a Committee member.
The Committee shall meet at least twice each year and hold such other meetings from time to time as may be called by its Chairperson or any two members of the Committee. A majority of the members of the Committee shall constitute a quorum of the Committee. A majority of the members in attendance shall decide any question brought before any meeting of the Committee.
The Committee shall keep minutes of its proceedings that shall be signed by the person whom the Chairperson designates to act as secretary of the meeting. The minutes of a meeting shall be approved by the Committee at its next meeting, shall be available for review by the entire Board of Directors, and shall be filed as permanent records with the Secretary of the Company.
The Committee shall have the authority, to the extent it deems necessary or appropriate, to retain special legal, compensation or other consultants to advise the Committee. The Committee may request any officer or employee of the Company or the Company's outside counsel to attend a meeting of the Committee or to meet with any member of, or consultants to, the Committee.
The Chairperson shall at each meeting of the Board of Directors following a meeting of the Committee report to the Board of Directors on the matters considered at the last meeting of the Committee.
II. Statement of Purposes
The Committee shall:
1. Approve executive officer compensation and administer the incentive and equity participation plans that make up the variable compensation paid to executive officers:
2. Administer Company employee stock plans and certain other benefit plans; and
3. Produce the annual report on executive officer compensation for inclusion in the proxy statement of the Company.
III. Specific Duties and Responsibilities
The Committee shall have the following duties and responsibilities with respect to Chief Executive Officer (CEO) and executive officer compensation:
1. CEO Compensation and Goals. The Committee shall annually review and approve corporate goals and objectives relevant to CEO compensation, evaluate the CEO's performance in light of those goals and objectives, and set the CEO's compensation levels based on this evaluation. In determining the long-term incentive component of CEO compensation, the Committee will consider the Company's performance and relative shareholder return, the value of similar incentive awards to CEOs at comparable companies, and the awards given to the CEO in past years.
2. Approval of CEO and Executive Officer Compensation. The Committee shall annually review and approve for the CEO and the executive officers of the Company: (a) the annual base salary level, (b) the annual incentive opportunity level, (c) the long-term incentive opportunity level, (d) employment agreements, severance arrangements, and change in control agreements/provisions, in each case as, when and if appropriate, and (e) any special or supplemental benefits.
3. Stock Plan Administration. The Committee shall have full and final authority in connection with the administration of all plans of the Company under which common shares or other equity securities of the Company may be issued.
4. Delegation. The Compensation Committee may form and delegate authority to subcommittees when appropriate, provided any action taken by a subcommittee is subsequently reported to the Committee and ratified. The Committee may also delegate to the CEO the authority to grant options and make awards of shares under the Company's stock plans under conditions established by the Committee.
5. Engaging Consultants. The Committee shall have the sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of director, CEO or executive officer compensation and shall have sole authority to approve the consultant's fees and other retention terms. The Committee shall also have authority to obtain advice and assistance from internal or external legal, accounting or other advisors.
6. Self-Assessment. Pursuant to Section 10 of the Company's Governance Guidelines, the Committee shall conduct and review with the Board of Directors annually an assessment of the Committee's performance with respect to the requirements of this Charter. In conjunction therewith, the Committee shall review and assess the adequacy of this Charter and recommend any proposed changes to the Board of Directors for approval.