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Governance - Compensation Committee Charter
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Purpose
The primary objectives of the Compensation Committee are to assist the Board by: (i) overseeing compensation of the Company’s executives; (ii) overseeing equity-based compensation plans (including, without limitation, stock option and restricted stock plans) in which officers or employees may participate; (iii) administering the Company’s compensation and benefits programs; and (iv) overseeing arrangements with executive officers relating to their employment relationships with the Company (including, without limitation, employment agreements, severance agreements, supplemental pension or savings arrangements, change in control agreements and restrictive covenants).
The Committee also is responsible for producing an annual report on executive compensation (CD&A) for inclusion in the Company’s proxy statement and assisting management in the preparation of certain information to be included in periodic reports filed with the SEC.
Organization
The Compensation Committee shall consist of at least two independent Board members appointed by the Board upon the recommendation of the Nominating/Corporate Governance Committee. A Chairman shall be designated by the Board. A Board member shall not be eligible to serve on the Compensation Committee unless he or she meets the “independence” requirements of the NASD Marketplace Rules, and, if deemed appropriate from time to time, satisfies the definition of “non-employee director” for the purposes of Rule 16b-3 promulgated by the SEC under the Securities Exchange Act of 1934, as amended, and “outside director” for purposes of Section 162(m) of the Internal Revenue Code.
The Committee may form and delegate authority to subcommittees when appropriate. The Committee shall have the right to consult with or obtain input from management but, except as expressly provided herein, shall not delegate any of its responsibilities to management.
Each Board member appointed to the Committee shall be subject to periodic reconfirmation and may be removed by the Board at any time.
Goals and Responsibilities
The functions of the Committee shall be as follows:
- The Committee shall have sole and exclusive authority to grant stock options and stock appreciation rights, and effect stock issuances under the 1995 Stock Option/Stock Issuance Plan (the “1995 Plan”) to the Company’s executive officers and employee Board members, subject to short-swing profit restrictions of the Federal securities laws;
- The Committee shall have separate but concurrent authority with the Chief Executive Officer to grant stock options and stock appreciation rights, and effect stock issuances under the 1995 Plan to all other individuals eligible to receive such grants or issuances;
- The Committee shall develop and recommend to the Board and to the Company’s stockholders for their approval (to the extent such approval is required by any applicable law, regulation or NASD Marketplace Rule) all new stock ownership, stock option and other equity-based compensation plans of the Company, material modifications to existing plans, and all related policies and programs;
- The Committee shall establish, by a majority of the Committee meeting without the Chief Executive Officer, the compensation payable to the Company’s Chief Executive Officer, including the adjustment of base salary each year, the implementation and administration of incentive compensation programs for the Chief Executive Officer and the authorization of all awards to such individual under these incentive programs;
- The Committee shall establish, by a majority of the Committee at a meeting where the Chief Executive Officer may be present but may not vote, based upon the recommendation of the Chief Executive Officer, the compensation payable to the Company’s executive officers other than the Chief Executive Officer, including the adjustment of base salary each year, the implementation and administration of incentive compensation programs for such executive officers and the authorization of all awards to such individuals under these incentive programs;
- The Committee shall have overall responsibility for the administration of all of the Company’s employee benefit plans, including the Employee Stock Purchase Plan, although day-to-day administration shall be performed by Company management;
- The Committee shall assist the Board in succession planning for executive officers;
- The Committee shall produce an annual report on executive compensation (CD&A) for inclusion In the Company’s proxy statement and shall assist management in preparing certain other information to be included in other SEC filings;
- The Committee shall annually review and reassess the adequacy of this Charter and recommend any proposed changes to the Board for its approval. This Charter is in all respects subject and subordinate to the Company’s Certificate of Incorporation, Bylaws and applicable law; and
- The Committee shall perform any other responsibilities from time to time assigned by Board resolution.
Structure and Meetings
The chairperson of the Compensation Committee will preside at each meeting and, in consultation with 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 chairperson of the Committee shall ensure that the agenda for each meeting is circulated to each Committee member in advance of the meeting.
A majority of the members of the Compensation Committee shall constitute a quorum to transact business. Members of the Compensation Committee may participate in a meeting of the Committee by means of telephone conference call or similar communications equipment by means of which all persons participating in the meeting can hear each other. Except in extraordinary circumstances as determined by the chairman of the Compensation Committee, notice shall be delivered to all Committee members at least 48 hours in advance of the scheduled meeting.
The affirmative vote of a majority of the members of the Compensation Committee present at the time of such vote will be required to approve any action of the Committee. Subject to the requirements of any applicable law, regulation or NASD Marketplace Rule, any action required or permitted to be taken at a meeting of the Compensation Committee may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the members of the Committee. Such written consent shall have the same force as a unanimous vote of the Compensation Committee.
The Committee shall meet with the Chief Executive Officer prior to the start of each fiscal year to discuss the incentive compensation programs to be in effect for such fiscal year and the performance targets triggering payout under those programs. At the end of each fiscal year, the Committee shall meet to review performance under those programs and award bonuses thereunder. At that time, the Committee shall also adjust base salary levels, subject to Board review. The Committee shall also meet as and when necessary to effect stock option grants and/or direct stock issuances under the 1995 Plan to executive officers of the Company. The Committee shall convene periodically as necessary to act upon any other matters within its jurisdiction under this charter.
Performance Evaluation
The Compensation Committee shall conduct an annual evaluation of its own performance.
Committee Resources
The Compensation Committee shall have the authority to obtain advice and seek assistance from internal or external legal, accounting or other advisors, to retain (at the expense of the Company) and terminate any compensation consultant used to assist the Company, the Board or the Committee in the evaluation of director, Chief Executive Officer or other executive officer compensation. The Compensation Committee shall have the sole authority to approve such advisors’ fees and of the retention terms.
Minutes
Minutes shall be kept of each meeting of the Committee and will be provided to each member of the Board. Any action of the Committee, other than equity incentive awards to executive officers under the 1995 Plan, shall be subject to revision, modification or rescission by the Board.
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