STEWART & STEVENSON SERVICES, INC.
COMPENSATION & MANAGEMENT DEVELOPMENT
COMMITTEE OF THE BOARD OF DIRECTORS
A. The Compensation & Management
Development Committee is created pursuant to Section 4.13 of the Company’s
Bylaws by resolution of the Board of Directors.
B. No Committee member may be a
present or former officer of the Company or any of its subsidiaries and no
executive officer of the Company may sit upon any compensation committee
(or board of directors or other body performing the functions of a
compensation committee) of any entity, one of whose executive officers is a
member of the Board of Directors of the Company. Committee members
shall otherwise meet all independence requirements of law, including
federal tax law for purposes of Section 162(m) of the Internal Revenue Code
of 1984, and stock exchange rules.
C. Committee members are elected at
the Annual Meeting of Directors, to serve until the next Annual
Meeting. All vacancies are filled by the Board of Directors.
II. DUTIES AND RESPONSIBILITIES
A. The Committee shall establish and
monitor the basic philosophy and policies governing the compensation of the
Company’s directors, executive officers and senior managers. Directors
who are company employees shall not be compensated for their services as
directors. The Committee will recommend the total compensation for
each executive officer of the Company, subject to approval by those members
of the Board of Directors who are not and have never been an officer of the
Company or any of its subsidiaries and who are otherwise independent
directors in accordance with law and stock exchange rules (“independent
B. The Committee will review and
approve significant changes to the Company’s executive benefit plans and
establish and monitor management succession plans.
C. Specific duties and responsibilities
of the Committee include, but are not limited to, the following:
1. Appraise the
performance of the Chief Executive Officer and recommend the total
compensation for the Chief Executive Officer including base salary, annual
bonus and stock-based compensation awards, subject to approval by those
members of the Board of Directors who are independent directors.
2. Appraise the
performance of all other executive officers of the Company and recommend
the total compensation for each executive officer including base salary,
annual bonus and stock-based compensation awards, subject to approval by
those members of the Board of Directors who are independent directors.
3. Recommend to
the Board of Directors proposed changes in directors’ compensation for
service on the Board of Directors and Committee membership.
4. Administer the
stock-based compensation plans which have been (or may be) adopted by the
5. Review and
approve significant issues pertaining to changes in executive benefit
succession plans for the Chief Executive Officer and other key executives.
7. Retain and, on
behalf of the Company, compensate consultants, advisors and other third
parties to assist and advise the Committee in the performance of its duties
consider, and recommend for adoption to the Board any compensation plans
the Committee believes appropriate to support the Company’s objective of
maximizing long-term shareholder value.
prepare and submit to the shareholders of the Company all required reports
related to the compensation of the Company’s executives.
10. At least
annually, perform an evaluation of its performance to determine whether it
is functioning effectively and require its members to certify that they are
A. The Committee shall meet in March
of each year to:
Committee Report for Proxy.
3. Grant stock
B. The Committee shall meet at such
other times as deemed necessary by the Chairman of the Committee or any
number of members constituting a majority of the Committee.