2004 Committee Charter : BRE
The purpose of the Compensation/ Nominating/ Governance Committee (the "Committee") of the Board of Directors (the "Board") of BRE Properties, Inc. (the "Company") is to provide assistance to the directors in fulfilling their responsibilities by (1) reviewing management's recommendations, recommending to the Board for approval, and evaluating the compensation plans, policies and programs of the Company, especially those regarding executive compensation; (2) determining the compensation of the chief executive officer and making recommendations to the Board as to compensation of all other executive officers of the Company; (3) producing an annual report on executive compensation for inclusion in the Company's proxy materials in accordance with applicable rules and regulations; (4) the identification of individuals qualified to become Board members, to recommend to the Board the selection of director nominees for the next annual meeting of shareholders (or special meeting of shareholders at which directors are to be elected) or to recommend to the Board candidates to fill vacancies on the Board, and (5) to develop and make recommendations to the Board regarding the adoption or amendment of corporate governance guidelines and principles applicable to the Company (the "Corporate Governance Guidelines"). The Committee shall ensure that compensation programs are designed to encourage high performance, promote accountability and assure that employee interests are aligned with the interests of the Company's stockholders. In so doing, the Committee will endeavor to maintain free and open means of communication between the members of the Committee, other members of the Board, and management of the Company.
The Committee shall have the authority to undertake the specific duties and responsibilities described below and the authority to undertake such other duties as are assigned by law, the Company's charter, bylaws or Corporate Governance Guidelines, or by the Board.
The powers and responsibilities delegated by the Board to the Committee in this Charter or otherwise shall be exercised and carried out by the Committee as it deems appropriate without requirement of Board approval, and any decision made by the Committee (including any decision to exercise or refrain from exercising any of the powers delegated to the Committee hereunder) shall be at the Committee's sole discretion. While acting within the scope of the powers and responsibilities delegated to it, the Committee shall have and may exercise all the powers and authority of the Board. To the fullest extent permitted by law, the Committee shall have the power to determine which matters are within the scope of the powers and responsibilities delegated to it.
The Committee shall be comprised of at least three directors as determined by the Board, none of whom shall be an employee of the Company and each of whom shall (1) qualify as independent under the Corporate Governance Standards of the New York Stock Exchange, (2) be a "non-employee director" within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended, (3) be an "outside director" under the regulations promulgated under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), and (4) be otherwise free from any relationship that, in the business judgment of the Board, would interfere with his or her exercise of business judgment as a Committee member. Members of the Committee should, in its business judgment and that of the entire Board, have a combination of business and people management experience that would be valuable in providing broad direction to the Board on matters related to compensation for non-employee directors and for the chief executive officer of the Company and advising the Board on executive compensation matters and other matters delegated to the Committee. The members of the Committee shall be appointed by the Board. Unless a Chairperson of the Committee (the "Chairperson") is designated by the Board, the Committee may designate a Chairperson by a majority vote of the full Committee membership.
Such appointment shall be made no less frequently than every three (3) years. Committee members may be removed from the Committee, with or without cause, by the Board.
To fulfill its responsibilities, the Committee shall be responsible for:
(1) reviewing, approving and, if necessary, recommending to the Board revising the compensation philosophy of the Company;
(2) reviewing and approving corporate goals and objectives relating to the compensation of the chief executive officer, evaluating the performance of the chief executive officer in light of the goals and objectives and establishing the compensation of the chief executive officer based on such evaluation. The Committee shall have sole authority to determine the chief executive officer's compensation;
(3) reviewing and making recommendations to the Board regarding all compensation for all other officers of the company (as such term is defined in Rule 16a-1 promulgated under the 1934 Act) ("executive officers"), and directors of the Company or its subsidiaries;
(4) reviewing and making recommendations to the Board regarding all incentive compensation plans;
(5) managing all equity-based compensation plans;
(6) reviewing and overseeing management of the grant of perquisite benefits;
(7) reviewing and overseeing management of executive officer and director indemnification and insurance matters;
(8) managing and reviewing any employee loans;
(9) preparing and approving the Report of the Compensation Committee to be included as part of the Company's annual proxy statement (the "Proxy Statement Report");
(10) recruiting and setting standards for new directors, including retaining search firms and/or outside consultants if necessary and evaluating executives recruited or promoted to positions eligible for Board membership;
(11) recommending to the Board (as soon as is reasonably practicable after a vacancy arises or a director advises the Board of his or her intention to resign) new directors for election annually by the stockholders and otherwise by appointment by the Board to fill vacancies, in compliance with the selection criteria outlined below and who are willing and available to serve; provided, however, that if the Company is legally required by contract or otherwise to provide third parties with the ability to nominate directors (for example, preferred stock rights to elect directors upon a dividend default, shareholder agreements, and management agreements), then the selection and nomination of such directors need not be subject to this process;
(12) annually reviewing the performance of individual directors and the Board as a whole, and evaluating the nomination for re-election of current directors;
(13) nominating, for election by the Board, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer and other corporate officers;
(14) overseeing, by providing written criteria for, the Board's annual review of the performance of the Board (including its composition, size and organization), overseeing the Chief Executive Officer's annual review of management, and making appropriate recommendations for improving performance;
(15) annually reviewing Board compensation, recommending changes as appropriate to the Board for approval;
(16) reviewing the outside activities of corporate officers as they relate to service on boards of other companies and involvement and positions within industry associations, etc.;
(18) making recommendations to the Board regarding governance matters including, but not limited to, the Company's certificate of incorporation, bylaws, Corporate Governance Guidelines, this Charter and the Charters of the Company's other committees;
(19) developing and recommending to the Board a policy regarding the consideration of director candidates recommended by the Company's security holders and procedures for submission by security holders of director nominee recommendations;
(20) annually reviewing the performance of the Committee;
(21) periodically reporting to the Board on findings and actions;
(22) reviewing and approving all officers' employment agreements and severance agreements;
(23) determining the Company's policy with respect to the application of Section 162(m) of the Internal Revenue Code; and
(24) determining the Company's policy with respect to change of control or "parachute" payments.
In connection with paragraph (5) above, the Committee's responsibility for managing equity-based compensation plans includes responsibility for an annual review of the plan, the setting of performance targets when appropriate, granting awards under equity-based compensation plans, and approval of any and all changes, including termination of compensation plans when appropriate.
All annual plan reviews shall include reviewing the plan's administrative costs, reviewing current plan features relative to any proposed new features, assessing the performance of the plan's internal administrators and reviewing management's assessments of the performance of the plan's external administrators if any duties have been delegated, and formally adopting any plan changes by resolution of the Committee.
Delegation of Duties
In fulfilling its responsibilities, the Committee shall, subject to the following paragraphs, be entitled to delegate any or all of its responsibilities to a subcommittee of the Committee or, with respect to making stock-based awards under the 1999 BRE Stock Incentive Plan to employees who are not executive officers or Section 16 persons, to specified executive officers of the Company. All proposed delegations must be adopted by a resolution of the Committee and reviewed for compliance with the relevant plan and Maryland corporate law by the Company's tax and accounting departments and outside legal counsel before they are voted upon at meetings. The resolution shall specify which duties are being delegated, to whom the duties are delegated, and which oversight powers the Committee retains.
The Committee shall not delegate its responsibilities set forth in paragraphs (2) through (5) of the Specified Duties section above or for any matters that involve executive compensation or for any matters where it has determined such compensation is intended to comply with Section 162(m) of the Code ("Section162(m)") or is intended to be exempt from Section 16(b) under the 1934 Act pursuant to Rule 16b-3 by virtue of being approved by a committee of "outside directors."
The Committee shall, without delegation:
(1) determine all performance targets for all executive officers within the first 90 days of the performance period to which such target relates or, if shorter, within the period provided by Section 162(m) in order for such target to be "pre-established" within the meaning of Section 162(m);
(2) certify that any and all performance targets used for any performance based equity compensation plans have been met before payment of any executive bonus or compensation or exercise of any executive award granted under any such plan(s);
(3) approve all amendments to, and terminations of, all equity based compensation plans;
(4) grant any awards under any equity compensation plans to executive officers or vice presidents;
(5) approve which executive officers are entitled to awards under the Company's stock option plan(s);
(6) approve CEO and other executive officer compensation; and
(7) approve repurchases of securities from terminated employees.
In addition, the Committee shall ensure that the shareholders of the Company approve the performance goals used to set the performance targets in any performance based equity compensation plans to the extent required, and in the manner provided, by Section 162(m) and the treasury regulations promulgated thereunder (which generally requires such approval at least every five years or earlier if such criteria are otherwise amended).
Board Member Selection Criteria
A sufficient number of non-employee Board member candidates must meet the independence requirements of the New York Stock Exchange and those set forth in the Company's Corporate Governance Guidelines, such that a majority of the Board members meet the independence requirements.
In determining whether a prospective director nominee is qualified to serve on the Board, in the exercise of the Committee's reasonable judgment, the Committee shall also consider, but is not limited to, the following criteria in recommending candidates for election to the Board:
(1) general understanding of the Company's business;
(2) fundamental character qualities of intelligence, honesty, good judgment, high ethics and standards of integrity, fairness and responsibility;
(3) general understanding of marketing, finance and other elements relevant to the success of a publicly-traded company in today's business environment;
(4) experience as a board member of another publicly held company;
(5) ability to make independent analytical inquiries;
(6) educational and professional background;
(7) specific experience to fill needs or requests identified by the Board; and
(8) whether the candidate is willing and able to devote sufficient time to Board and Committee responsibilities and is willing to commit to purchase sufficient stock to meet the Stock Ownership guidelines.
Committee Selection Criteria
Each individual nominated to a Board committee will satisfy the following qualifications and be willing and available to serve:
(1) members of the chartered committees must meet the independence requirements of the New York Stock Exchange and those set forth in the Corporate Governance Guidelines;
(2) an employee director may serve as a member of the Executive Committee; provided, however, the Executive Committee must be composed of a majority of independent directors;
(3) members of the Audit Committee must, in the business judgment of the members of the Committee and the entire Board, be financially literate and at least one such member must have accounting or related financial management expertise;
(4) the Chairman of the Audit Committee will have accounting or related financial management expertise;
(5) members of the Committee must, in the business judgment of the Committee and the entire Board, have a combination of business and people management experience that would be valuable in providing broad direction to the Board on matters related to compensation for non-employee directors and for the Chief Executive Officer and the President, and advising the Board and the Chief Executive Officer on executive compensation matters; and
(6) members of the Committee must, in the business judgment of the Committee and the entire Board, have experience that would be valuable in providing broad direction to the Board on matters related to corporate governance.
Meetings and Procedures
The Committee shall meet on a regularly-scheduled basis as determined by the Committee and on such other occasions as circumstances may dictate or the members of the Committee may from time to time determine. Meetings of the Committee shall be held upon call by the Chairman of the Board or the Chairperson. A quorum of the Committee shall consist of a majority of the members of the Committee in office at the time of any meeting and the vote of a majority of the members of the Committee present at the time of a vote, if a quorum is present at that time, shall be the act of the Committee. The Chairperson or, in his or her absence, another member chosen by the attending members, shall preside at each meeting.
The Chairman of the Committee will preside at each meeting and, in consultation with the other members of the Committee, will set the frequency and length of each meeting and the agenda of items to be addressed at each meeting. The Chairman of the Committee shall ensure that the agenda for each meeting is circulated to each Committee member in advance of the meeting.
The Committee may form and delegate authority to subcommittees when appropriate; provided, that any such subcommittee must be comprised solely of members of the Committee and must publish its charter.
All non-management directors that are not members of the Committee may attend and observe meetings of the Committee, but shall not participate in any discussion or deliberation unless invited to do so by the Committee, and in any event shall not be entitled to vote. The Committee may, at its discretion, include in its meetings members of the Company's management, or any other person whose presence the Committee believes to be desirable and appropriate. Notwithstanding the foregoing, the Committee may exclude from its meetings any person it deems appropriate, including but not limited to any non-management director that is not a member of the Committee.
The Committee shall have the authority to establish its own rules and procedures consistent with the Company's bylaws for notice and conduct of its meetings, should the Committee, in its discretion, deem it desirable to do so.
The Committee shall have the authority to obtain advice and assistance from internal or external legal, accounting or other advisors. In discharging its responsibilities, the Committee shall have sole authority to, as it deems appropriate, select, retain and/or replace, as needed, compensation and benefits consultants and other outside consultants to provide independent advice to the Committee. The Committee shall also have the sole authority to retain and terminate search firms to be used to identify director candidates. In that connection, in the event the Committee retains a consultant or search firm, the Committee shall have the sole authority to approve the associated fees and other retention terms.
The Committee shall maintain written minutes or other records of its meetings and activities. Minutes of each meeting of the Committee shall be distributed to each member of the Committee and other members of the Board. The Secretary of the Company shall retain the original signed minutes for filing with the corporate records of the Company.
The Chairperson shall report to the Board following meetings of the Committee and as otherwise requested by the Chairman of the Board.
All adopted plans of compensation or changes to existing plans, whether for executives, directors or other personnel, shall be detailed and attached to the final, approved minutes of the appropriate meeting. This includes any grants of options or loans made outside of any official Company plan.
Evaluation of Performance of the Committee
1. The Committee shall evaluate its own performance on an annual basis, including its compliance with this charter and the Company's Corporate Governance Guidelines, and provide any written material with respect to such evaluation to the Board, including any recommendations for changes in procedures or policies governing the Committee. The Committee shall conduct such evaluation and review in such manner as it deems appropriate.
2. The Committee shall review and reassess the Committee's charter at least annually and submit any recommended changes to the Board for its consideration.
Disclosure of Charter
This Charter will be made available on the Company's website at www.breproperties.com and to any shareholder who otherwise requests a copy. The Company's Annual Report to Stockholders shall state the foregoing.