Charter of the Corporate Governance, Nominating and Compensation Committee of the Board of Directors
1. Mission Statement
The Corporate Governance, Nominating and Compensation Committee (the “Committee”) is appointed by the Board of Directors (“Board”) to discharge the Board’s responsibilities relating to the compensation of the Company’s executive officers, including the CEO, and reviewing and approving all employee compensation and benefit programs as they affect the executive officers. The Committee is also responsible for recommending corporate governance policies and practices to the Board, identifying and reviewing the qualifications and experience of proposed candidates for election to the Board, leading the Board in an annual review of its performance, and recommending to the Board director nominees for each committee.
The Committee shall consist of no fewer than three members. The Committee shall be comprised solely of “independent” directors, as determined in accordance with the independence standards adopted by the New York Stock Exchange and the Securities and Exchange Commission. At least two members of the Committee shall also qualify as “outside” directors within the meaning of Internal Revenue Code Section 162(m) and as “non-employee” directors within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended. Notwithstanding the foregoing, the “outside” director requirements of Internal Revenue Code Section 162(m) will apply only so long as there exists compensation intended to meet the “performance-based” exception under Section 162(m) with respect to which Committee action may be required. Members of the Committee and the Chair of the Committee shall be appointed annually, and may be removed, by the Board.
3. Duties and Responsibilities
The Committee shall have the following duties, responsibilities and authority:
a. Compensation Responsibilities
(i) At least annually, review and approve the annual base salaries and annual incentive opportunities for executive officers, as defined by Rule 3b-7 under the Securities Exchange Act of 1934.
(ii) Annually review and approve corporate goals and objectives relevant to the compensation of the CEO, evaluate the CEO’s performance in light of such goals and objectives, and determine and approve the CEO’s compensation based on this evaluation. In determining the incentive components of CEO compensation, the Committee may consider a number of factors, including without limitation the Company’s performance and relative shareholder return, the value of similar incentive awards to CEOs at comparable companies and the awards given to the CEO in the past year.
(iii) Periodically review and approve the following as they affect the executive officers: (a) all other incentive awards and opportunities, including both cash-based and equity-based awards and opportunities; (b) any employment agreements and severance arrangements; (c) any change-in-control agreements and change-in-control provisions affecting any element of compensation and benefits; and (d) any special or supplemental compensation and benefits for current or former executive officers, including supplemental retirement benefits and the perquisites provided to them during and after employment.
(iv) Review, approve and administer all equity compensation plans and amendments thereto, including IRS qualified and non-qualified plans.
(v) Review and recommend for Board action the Company’s contributions to employee benefit plans.
(vi) Oversee the administration of the Company’s other employee benefit plans.
(vii) Serve as the policy-making body for issues that arise under any of the Company’s employee benefit, equity compensation or other employee plans.
(viii) Review and discuss with management the Compensation Discussion and Analysis (“CD&A”) section required to be included in the Company’s proxy statement and annual report on Form 10-K by the rules and regulations of the SEC, and, based on such review and discussion, determine whether or not to recommend to the Board that the CD&A be so included.
(ix) Produce the annual Compensation Committee Report on executive compensation for inclusion in the Company’s proxy statement, in accordance with SEC rules.
(x) Review management’s evaluation of the relationship between the Company’s compensation policies and practices and risks arising for the Company and, to the extent necessary, take steps to provide that such policies and practices do not encourage unnecessary or excessive risk-taking.
(xi) Oversee the Company’s compliance with SEC rules and regulations regarding shareholder approval of certain executive compensation matters, including advisory votes on executive compensation and the frequency of such votes, and the requirement under NYSE rules that shareholders approve equity compensation plans.
(xii) Undertake any and all actions necessary to comply with federal legislation or regulations relating to compensation, incentive programs or their relationship with risk management.
(xiii) In its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel, or other adviser.
(xiv) Be directly responsible for the appointment, termination, compensation and oversight of the work of any compensation consultant, independent legal counsel or any other adviser retained by the Committee.
(xv) In selecting a compensation consultant, legal counsel (other than in-house legal counsel) or other adviser, the Committee shall take into consideration all factors relevant to that person’s independence from management, including the following:
- the provision of other services to the Company by the person that employs the compensation consultant, legal counsel or other adviser;
- the amount of fees received from the Company by the person that employs the compensation consultant, legal counsel or other adviser, as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel or other adviser;
- the policies and procedures of the person that employs the compensation consultant, legal counsel or other adviser that are designed to prevent conflicts of interest;
- any business or personal relationship of the compensation consultant, legal counsel or other adviser with a member of the Committee;
- any Company stock owned by the compensation consultant, legal counsel or other adviser; and
- any business or personal relationship of the compensation consultant, legal counsel, other adviser or the person employing the adviser with an executive officer of the Company.
b. Nominating and Corporate Governance Responsibilities
(i) Recommend to the Board the criteria to be used by the Committee to identify individuals qualified to become directors, including such specific minimum qualifications, if any, that the Committee believes are necessary for one or more of the Company’s directors to possess.
(ii) Identify potential nominees to the Board of Directors, including candidates recommended by management, consistent with criteria approved by the Board, review their qualifications and experience, and recommend nominees to the Board for consideration and presentation to the shareholders for election.
(iii) Review succession planning for the CEO and other senior management positions.
(iv) Develop and recommend to the Board a set of corporate governance policies, monitor compliance with those policies, and periodically review and reassess the adequacy of such policies and recommend any proposed changes to the Board for approval.
(v) Lead the Board in an annual review of the performance of the Board and each of the Board Committees.
(vi) Periodically review the Company’s ethics policy and make recommendations for changes to the Board when necessary.
(vii) Periodically review and make recommendations to the Board with respect to director compensation. Director compensation should be based on reasonable compensation to members of the Board for time spent in preparing for and attending meetings of the Board and Board Committees, as well as the time required for them to effectively perform their responsibilities and duties. In reviewing director compensation, the Committee will consider the impact of compensation levels and any contributions to charitable organizations with which any Director may be affiliated on Director independence.
(viii) Exercise sole authority to retain and terminate any search firm to be used to identify director candidates, including sole authority to approve the fees and other terms of such firm’s engagement.
(ix) Review and approve the Policies and Procedures with Respect to Related Person Transactions, and review, approve, disapprove or ratify these transactions.
(i) Report regularly to the Board of Directors with respect to the Committee’s activities.
(ii) Form and delegate authority to subcommittees, as the Committee deems appropriate.
(iii) Report to the Company’s shareholders in the annual proxy statement.
(iv) Annually review and reassess the adequacy of this Committee’s Charter, and recommend any proposed changes to the Board for approval.
(v) Retain outside advisers when it considers such services to be necessary.
4. Meetings and Operations
The Committee shall meet as frequently as its responsibilities require. Generally, the Committee shall meet quarterly, prior to each meeting of the Board of Directors, and hold an additional meeting to review proposed incentive compensation awards for executive officers. The Committee Chair, or, in his or her absence, another designated member of the Committee, shall preside at each meeting. The Committee may meet in person or by telephone.
At all Committee meetings, a majority of the members of the Committee shall constitute a quorum for the transaction of business. The action of a majority of those members present at a meeting at which a quorum is present (but in no event less than two members), shall be the action of the Committee. The Committee shall keep a record of its actions and proceedings.
The Company shall provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to a compensation consultant, independent legal counsel or any other adviser retained by the Committee.
As amended and restated by the Board of Directors on March 1, 2019