I. Compensation Committee Designation
There is a committee of the Board of Directors called the Compensation Committee (the "Compensation Committee").
II. Compensation Committee Purpose
The purpose of the Compensation Committee is to:
- Assist the Board of Directors in discharging the Board of Directors' responsibilities relating to compensation of the company's executives and other employees;
- Review and discuss with management the company's Compensation Discussion and Analysis required to be disclosed by federal securities law and, based on this review and discussion, recommend to the Board of Directors whether the Compensation Discussion and Analysis should be included in the company's annual report on Form 10-K, proxy statement on Schedule 14A or information statement on Schedule 14C; and
- Prepare the disclosure required by Item 407 (e)(5) of Regulation S-K promulgated by the Securities and Exchange Commission.
III. Compensation Committee Membership and Procedure
The Compensation Committee consists of at least three members, all of whom shall be independent as described below. The Board of Directors appoints the members of the Compensation Committee annually, considering the recommendation of the Nominating/Governance Committee, and further considering the views of the Chairman of the Board and the Chief Executive Officer, as appropriate. The members of the Compensation Committee serve until their successors are appointed and qualify. The Board of Directors has the power at any time to change the membership of the Compensation Committee and to fill vacancies in it, subject to such new member(s) satisfying the requirements described herein.
Each member of the Compensation Committee must be (i) independent for purposes of Section 10C of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder; and (ii) an independent director as determined under the applicable rules of the New York Stock Exchange (NYSE), including the additional independence requirements for members of compensation committees under NYSE Rule 303A.02(a)(ii). In accordance therewith, in determining the independence of directors for purposes of service on the Compensation Committee, the Nominating/Governance Committee and the Board of Directors shall consider all factors specifically relevant to determining whether a director has a relationship to the company which is material to that director's ability to be independent from management in connection with the duties of a compensation committee member including, but not limited to:
- Whether the director receives compensation from any person or entity that would impair his or her ability to make independent judgments about the company's executive compensation; and
- Whether any affiliate relationship a director has with the company, a subsidiary of the company or an affiliate of a subsidiary of the company places him or her under the direct or indirect control of the company or its senior management, or creates a direct relationship between the director and members of the company's senior management, in each case of a nature that would impair his or her ability to make independent judgments about the company's executive compensation.
If a Compensation Committee Chair is not designated by the Board of Directors or present, the members of the Compensation Committee may designate a Chair by majority vote of the Compensation Committee membership.
The Compensation Committee holds regular meetings each year as often as the committee deems appropriate. The Compensation Committee Chair approves an agenda in advance of each meeting.
Except as expressly provided in this Charter, the by-laws of the company or the Corporate Governance Principles of the company, Compensation Committee may fix its own rules of procedure.
IV. Compensation Committee Authority and Responsibilities
In performing its functions, the Compensation Committee undertakes those tasks and responsibilities that, in its judgement, would most effectively contribute to and implement the purposes of the Compensation Committee. The following functions are some of the common recurring activities of the Compensation Committee in carrying out its duties:
The Compensation Committee reviews the company's overall compensation philosophy to ensure that the philosophy appropriately links management's interests with those of stockholders, rewards executives for their contributions, and provides appropriate retention incentives.
The Compensation Committee reviews and approves corporate goals and objectives relevant to CEO compensation, evaluates the CEO's performance in light of those goals and objectives and, as a Committee (or, if so directed by the Board, together with the company's other independent directors) determines and approves the CEO's compensation level based on this evaluation.
In determining the long-term incentive component of CEO compensation, the Compensation Committee should, as it determines appropriate, consider the company's performance and relative stockholder return, the value of similar incentive awards to CEOs at comparable companies, and the awards given to the company's CEO in past years.
The Compensation Committee establishes the salary rates and compensation structure for other executive officers of the company and its affiliated companies, subject to the right of the Compensation Committee to delegate to the Chief Executive Officer the fixing of compensation below certain levels determined by the Compensation Committee, and may periodically examine the compensation structure of the company and its affiliated companies for other employees.
It is the responsibility of the Compensation Committee to review the qualifications of candidates for election as officers of the company and to recommend those candidates for election by the Board of Directors at least annually, subject to review and recommendation of the Chief Executive Officer by the Nominating and Governance Committee.
It is the responsibility of the Compensation Committee to review annually with the Board of Directors the availability of qualified replacements for key executive positions in the company and its subsidiaries and the nature and adequacy of the company's plans for developing and providing necessary replacements both on a current and on a long-term basis, so as to ensure continuity and orderly succession of capable and qualified management for the company subject to review succession with respect to the Chief Executive Officer by the Nominating and Governance Committee.
The Compensation Committee oversees the evaluation of the executive management of the company and makes recommendations to the Board of Directors as it determines appropriate, taking into account the desirable balance of experience, qualifications, expertise and diversity among members of the executive management team, subject to oversight of the evaluation of the Chief Executive Officer by the Nominating and Governance Committee.
The Compensation Committee has, to the extent permitted by law and the applicable rules of the NYSE, the authority to:
- Approve, administer, establish, terminate or amend and to otherwise act for and on behalf of the Board of Directors with respect to any employee benefit plan, agreement (including any employee agreement) or other arrangement of the company and its affiliated companies, including both welfare and pension plans (i) pursuant to which any director or executive officer of the Company is a party or participant (other than broad-based plans that are generally available to all salaried employees of the Company and do not discriminate in favor of directors or executive officers); (ii) which by its express terms requires approval of or action by the Board of Directors, including without limitation, any supplemental Benefit Plans, change of control plans, severance plans and/or (iii) any other similar plans that are of a significant magnitude such that the Compensation Committee deems that it is desirable and appropriate for its approval to establish, terminate or amend such plans from time to time;
- Administer, establish, terminate or amend and to otherwise act for and on behalf of the Board of Directors with respect to executive and director compensation, incentive compensation, deferred compensation and stock option and restricted stock plans and programs of the company and its affiliated companies (hereinafter referred to as the "Compensation Plans"), including other similar compensation plans the Compensation Committee deems desirable to establish, terminate or amend from time to time, such authority hereby granted to the Compensation Committee to include, without limitation, the power and authority to authorize the issuance of stock pursuant to such Compensation Plans, in such manner as the Compensation Committee will deem best for the interests of the company, in all cases in which specific directions have not been given by the Board; and
- Establish, approve and monitor compliance with insider-trading policies, stock ownership policies, clawback policies, anti-hedging policies, anti-pledging policies and other similar policies the Compensation Committee deems desirable to establish, terminate or amend from time to time, applicable to any director or executive officer of the Company.
The Compensation Committee ensures that qualified firms are advising the company on compensation matters, managing diversity and related matters. The Compensation Committee should meet privately in executive session as often as it deems necessary, but at least annually, with any compensation or similar advisers to the company to discuss any matters that the Compensation Committee or these advisers believe should be discussed. Matters to be discussed may include, without limitation, matters pertaining to the Chief Executive Officer's compensation.
The Compensation Committee reviews and approves the list of a peer group of companies to which the company compares itself for compensation purposes.
The Compensation Committee reviews the compensation policies and practices of the company for its employees to determine whether these policies or practices are reasonably likely to have a material adverse effect on the company.
The Compensation Committee reviews and recommends to the full Board of Directors any company proposal regarding the advisory vote on executive compensation and any company proposal regarding the frequency of the advisory vote on executive compensation.
It is the responsibility of the Compensation Committee to maintain minutes of its meetings and report, through its Chair, to the Board of Directors on significant results of each meeting.
(a) The Compensation Committee may, in its sole discretion, retain (or terminate) or obtain the advice of any compensation consultant, independent legal counsel or other adviser. The Compensation Committee shall be directly responsible for the appointment, compensation and oversight of the work of any adviser retained by the Compensation Committee.
(b) Except as noted in clause (c) below, the Compensation Committee may select a compensation consultant, independent legal compensation counsel or other compensation adviser (each, a "compensation adviser") only after taking into consideration all factors relevant to such compensation adviser's independence from management, including:
- The provision of other services to the company by the person that employs the compensation adviser;
- The amount of fees received from the company by the person that employs the compensation adviser, as a percentage of the total revenue of the person that employs the compensation adviser.
- The policies and procedures of the person that employs the compensation adviser that are designed to prevent conflicts of interest.
- Any business or personal relationship of the compensation adviser with a member of the committee.
- Any stock of the company owned by the compensation adviser; and
- Any business or personal relationship of the compensation adviser (or the person employing the compensation adviser) with an executive officer of the company.
(c) The assessment described in clause (b) above need not be considered with respect to (i) in-house legal counsel or (ii) any compensation adviser whose role is limited to either consulting on any broad-based plan that does not discriminate (in scope, terms or operation) in favor of executive officers or directors of the company and is available generally to all salaried employees; or providing information that either is not customized for a particular company or is customized based on parameters that are not developed by the compensation adviser, and about which such compensation adviser does not provide advice.
(d) Nothing herein requires the Compensation Committee to implement or act consistently with the advice or recommendations of any adviser or affects the ability or obligation of the Compensation Committee to exercise its own judgment in fulfillment of its duties. Nothing herein requires any compensation adviser to be independent, only that the Compensation Committee consider the independence factors described in clause (b) above before selecting or receiving advice from any compensation adviser. The Compensation Committee may select or receive advice from any compensation adviser it prefers including ones that are not independent, after considering the independence factors described in clause (b) above.
(e) The company shall provide appropriate funding, as determined by the Compensation Committee, for payment of reasonable compensation to any adviser retained by the Compensation Committee.
It is the responsibility of the Compensation Committee to review and reassess the adequacy of this Charter at least annually and to recommend any proposed changes to the Board of Directors for approval. It is the responsibility of the Compensation Committee to cause the Charter to be published in accordance with applicable NYSE regulations.
It is the responsibility of the Compensation Committee to annually review its own performance.
The Compensation Committee may form and delegate authority to subcommittees when appropriate and to the extent permitted by applicable law and the rules of the NYSE. Once a subcommittee of this Committee is so formed, the Compensation Committee may exercise any authority in its discretion that is granted to such subcommittee.
In performing its duties, the Compensation Committee is not providing any expert, professional or special assurances as to the matters addressed herein. Compensation Committee members are not deemed to have accepted a duty of care greater than the duty of other directors. Nothing contained in this Charter is intended to alter the operation of the "business judgment rule" as interpreted under Delaware law.