JOINT CHARTER OF THE COMPENSATION COMMITTEE AND OF THE PERFORMANCE COMPENSATION SUBCOMMITTEE OF THE BOARD OF DIRECTORS
The primary purpose of the Compensation Committee (the "Committee") is to discharge the responsibility of the Company's Board of Directors (the "Board") relating to compensation of the Company's directors and executive officers, including administering the Company's 1997 Equity Participation Plan, the Deferral Plan for Senior Executive Officers of the Company and such other salary, compensation or incentive plans as the Committee is designated by the Board to administer, and related matters. The purpose of the Performance Compensation Subcommittee (the "Subcommittee" and, together with the Committee, the "Committees") is limited to administering the Company's compensation plans that are intended to meet the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended ("Section 162(m)"), including, without limitation, the Company's 1993 Equity Participation Plan, as amended, the Company's 1998 Equity Participation Plan, the Company's 2002 Equity Participation Plan, the 1999 Executive Bonus Plan and such other salary, compensation or incentive plans as the Subcommittee is designated by the Board to administer, and related matters.
The Committees shall be appointed, and members thereof may be removed, by the Board. The Committee shall consist of three or more directors, as determined by the Board. The Subcommittee shall consist of two or more directors, as determined by the Board and consistent with Section 162(m). Each member of the Committees shall satisfy the independence requirements of the New York Stock Exchange and any other applicable legal or regulatory requirements. In addition, each member of the Subcommittee shall satisfy the requirements of an "outside director" for purposes of Section 162(m) and it is intended, but not required, that each member of the Subcommittee satisfy the requirements of a "non-employee director" for purposes of Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Board shall designate the Committee Chairman and the Subcommittee Chairman. Each of the Committees may form and delegate authority to subcommittees comprised of one or more members of such respective Committees. Each of the Committees may also delegate authority to its respective Chairman when it deems appropriate, subject to the terms hereof.
The Committees shall meet as circumstances require. A quorum at any Committee or Subcommittee meeting shall be at least a majority of the members. All determinations of the Committees shall be made by a majority of its members present at a meeting duly called and held, except as provided herein. Any decision or determination of the Committee or the Subcommittee reduced to writing and signed by all members of the Committee or the Subcommittee, as applicable, shall be fully effective as if it had been made at a meeting duly called and held. The Committees may request that any director, officer or other employee of the Company, or the Company's outside counsel, or any other person meet with any members of, or consultants to, the Committees. Minutes for all meetings of the Committees shall be prepared to document the Committees' discharge of their responsibilities. The minutes shall be circulated in draft form to all Committee members to ensure an accurate final record, shall be approved at a subsequent meeting of the Committees and shall be distributed periodically to the full Board.
To fulfill their responsibilities, the Committee and/or the Subcommittee, as appropriate, shall:
1. Review and approve the Company's goals and objectives relevant to compensation of the Chief Executive Officer ("CEO"), evaluate the performance of the CEO in light of those goals and objectives and, either as a committee or together with the other independent directors (as directed by the Board), determine and approve the compensation level of the CEO based on such evaluation. In determining the long-term incentive component of CEO compensation, the Committees shall consider, among such other factors as the Committees may deem relevant, the Company's performance and relative stockholder returns, the value of similar incentive awards to CEOs at comparable companies and the awards given to the CEO in past years. To avoid confusion, the Committee and/or the Subcommittee, as appropriate, may approve awards (without the prior approval or ratification of the Board) as may be required to comply with applicable tax laws (i.e., Section 162(m)).
2. Review, advise and make recommendations to the Board from time to time with respect to compensation of executive officers other than the CEO, including Section 16 officers (as defined in Rule 16a-1(f) of the Exchange Act). The Committees shall have the authority to review and approve compensation, benefits, incentive programs and perquisites of such executive officers to the extent such power is not specifically reserved for the Board.
3. Review, advise and make recommendations to the Board with respect to incentive programs, compensation plans and equity-based plans and administer such plans as the Board designates shall be administered by the Committee or the Subcommittee, including determining any awards to be granted to executive officers under any such plan.
4. Advise the Board from time to time with respect to director compensation and perquisites. Directors who are Company employees shall not be compensated for their services as directors. The Committees shall be sensitive to questions of independence that may be raised where directors' fees and perquisites exceed customary levels for comparable companies.
5. Prepare the report or reports on executive compensation required by the Securities and Exchange Commission ("SEC") to be included in the Company's annual proxy statement, annual report on Form 10-K and other filings with the SEC.
6. Review and reassess the adequacy of this Charter at least annually and recommend to the Board any changes deemed appropriate by the Committee or the Subcommittee.
7. Review its own performance annually.
8. Report as required to the Board.
9. Perform any other activities consistent with this Charter, the Company's by-laws and governing law, as the Committee, the Subcommittee or the Board deems appropriate.
In discharging their responsibilities, the Committees shall have full access to any relevant records of the Company and shall have the sole authority to retain and terminate outside compensation consultants to assist the Committees in the evaluation of director, CEO or senior executive compensation, including the sole authority to determine such consultants' fees and other retention terms. The Committees shall also have the authority to retain or terminate such other outside consultants (including outside compensation consultants and counsel) as deemed appropriate by the Committees, including the authority to determine such consultants' fees and other retention terms. The Company shall provide such funding as is determined by the Committees to be necessary for payment of compensation to any consultant retained to advise the Committees. The members of the Committees shall be reimbursed for ordinary administrative expenses necessary or appropriate in carrying out their duties.