COMPENSATION COMMITTEE CHARTER
The primary function of the Compensation Committee is to assist the Board of Directors, and in certain
circumstances the independent directors, in matters relating to compensation as may be delegated to it by
the Board, or by the independent directors, as applicable.
The Compensation Committee has a role in helping the Board of Directors, and in certain circumstances
the independent directors, ensure a clear relationship between total compensation, organization
performance and returns to shareholders. This is based on the Board's belief that total compensation
programs, properly aligned with economic value creation and the values and goals of the Company, are
essential tools in the delivery of sustainable value to shareholders.
A. Composition - The Compensation Committee shall be comprised of not less than three (3)
members of the Board of Directors. At least the Chairman of the Compensation Committee must
qualify as an independent director. It is the goal of the Board of Directors that as quickly as is
practical each member of the Compensation Committee qualify as an independent director. As
used in this Charter, independent director is one who meets the independence requirements of the
NASDAQ, the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated by the Securities Exchange Commission ("SEC").
B. Appointment - The members of the Compensation Committee shall be nominated by the Nominating
and Governance Committee and appointed annually to one-year terms by the Board of Directors. The
Nominating and Governance Committee shall recommend, and the Board shall designate, one
independent member of the Compensation Committee as Chair.
III. MEETINGS AND PROCEDURES:
A. Schedule. The Compensation Committee shall hold regular meeting at least quarterly each fiscal
year. Special meetings of the Compensation Committee may be called by the Chairman of the
Compensation Committee or any independent director. Pre-meeting materials are expected to be
distributed to Compensation Committee members in sufficient time prior to meetings to permit
review by members before such meetings.
B. Reports. Following each of its meetings, the Compensation Committee shall deliver a report on
the meeting to the Board of Directors, including a description of all recommendations by the
C. Minutes. The Compensation Committee shall keep written minutes of its meetings, which minutes
shall be maintained with the books and records of the Company.
The Compensation Committee shall have the following duties and responsibilities:
A. Compensation Policy. To assist in defining a compensation policy that (1) supports the
Company's objectives; (2) attracts and retains key leaders, (3) links total compensation with
business objectives and performance of the Company, and (4) provides competitive total
compensation opportunities appropriate to the market and tied to shareholder value creation.
B. Administration. Oversee the administration of compensation programs approved by the Board of
Directors, the independent directors, and shareholders, and developing materials for the Board
and in particular the independent directors with respect to the compensation of the Company's
C. Officer Evaluation and Compensation. Recommend annually the process for the independent
directors' evaluation of the Company's officers, including the independent directors' determination
of the officer's compensation.
D. Consistency. Review linkage of the total compensation program with the Company's strategic and
financial goals and plans.
E. Goals. Review and assess performance target goals established before start of the plan year and
review when performance goals have been achieved at the end of the plan year.
F. Incentive Plans. Recommend plans to the Board of Directors or, if required by applicable rules
and regulations, the independent directors, that (1) are consistent with the total compensation
philosophy of the Company, and (2) monitor the appropriateness of payouts under alternative
business scenarios. Plans currently in place include:
•Employee Stock Purchase Plan
•Stock Option Plan
•Cash Bonus Conversion Plan
•Restricted Stock Plan
•Change in Control Arrangements
G. Retirement Plans. Review the retirement plans, including 401(k) retirement plan, of the Company
and review the fit with plan objectives and competitiveness of current benefit levels, propose
appropriate amendments, and review the results of the retirement plan investments for compliance
with enterprise investment policies, tax law, the Employee Retirement Income Security Act of 1974
(ERISA), and related legal requirements.
H. Director Compensation. To recommend to the Board of Directors, pay levels (both cash and
stock) for Board members, subject to approval by vote of the full Board, in recognition of the
conflict of directors setting their own remuneration.
I. Regulatory Filings. In coordination with the Board of Directors and the Audit Committee and the
independent directors, to review in advance the contents of SEC and other regulatory filings
relating to compensation matters.
J. Self-Evaluations. In coordination with the Board of Directors and independent directors, to
conduct an annual performance evaluation of the Compensation Committee.
K. Board Recommendations. To implement recommendations by the Board of Directors and
independent directors to the Compensation Committee.
L. Annual Report. To review an annual report on executive compensation in accordance with all
applicable rules and regulations, to be included in the Company's annual Proxy Statement to
M. Committee Charter. Review and recommend to the Board of Directors and independent directors
(each of whom must approve) updates to this Charter periodically or as conditions dictate (no less
often than annually).
V. COMMITTEE RESOURCES:
A. Advisors. The Compensation Committee may, with the consent of the independent directors,
retain outside consultants or advisors to assist in the Compensation Committee recommending
compensation policies or undertaking independent studies of corporate compensation and
benefits of generally comparable companies.
B. Input. The Committee may be assisted on compensation projects by various members of the
Company's staff and/or legal counsel.
C. Independent Directors. Notwithstanding anything to the contrary contained herein, the independent
directors shall be solely responsible for all, and do not delegate any, functions required of the
independent directors under applicable law, rule, or regulation, including the NASDAQ listing