Corporate Governance
Compensation Committee Charter
Mission
The Compensation Committee (the “Committee”) is responsible for determining the compensation for the Office of the Chairman and Chief Executive Officer as well as the Chief Operating Officer and Chief Financial Officer and approving the compensation structure for senior management, including members of the business planning groups, the most senior managers of corporate staff and other highly paid professionals, in accordance with guidelines established by the Committee from time to time. The Committee will produce an annual report on executive compensation for inclusion in the Company’s proxy statement. Further, the Committee approves broad-based and special compensation plans across the Company.
Additionally, the Committee will regularly review the Company’s management resources, succession planning and development activities, as well as the performance of senior management. The Committee is charged with monitoring the Company’s performance toward meeting its goals on employee diversity.
Membership
The Committee shall consist of at least three members of the Board of Directors, each of whom shall (a) meet the independence requirements of the American Stock Exchange corporate governance rules and all other applicable laws, rules and regulations governing director independence, as determined by the Board; (b) qualify as “non-employee directors” as defined under Section 16 of the Securities Exchange Act (see Exhibit II); and (c) qualify as “outside directors” under Section 162(m) of the Internal Revenue Code (see Exhibit I). Members of the Committee and the Committee Chair shall be appointed by and may be removed by the Board of Directors. At the request of the committee members, one representative from the Company’s management may attend these meetings.
Duties and Responsibilities
The Committee shall have the following duties and responsibilities:
Annually review and approve corporate goals and objectives relevant to the Company’s Chairman and Chief Executive Officer (“CEO”) , Chief Operating Officer (“COO”) and Chief Financial Officer (“CFO”) compensation, evaluate the Chairman’s and CEO’s the COO’s and the CFO’s performance in light of these goals and objectives, and provide a report thereon to the Board.
Annually review and determine base salary, incentive compensation and long-term compensation for the Chairman and CEO the COO and the CFO, and report the
Committee’s determination to the Board. In determining long-term incentive compensation of the Chairman and CEO, the COO, and the CFO, the Committee shall
consider, among other factors, the Company’s performance, relative stockholder return, the value of similar incentive awards to individuals at these positions at comparable companies and the awards given to the Chairman and CEO, the COO and the CFO in past years.Annually review and approve base salary, incentive compensation and long-term incentive compensation for senior management.
In consultation with and based upon the advice of outside counsel, monitor the disclosure and prepare an annual report on executive compensation for inclusion in the Company’s proxy statement.
Review executive officer compensation for compliance with Section 16 of the Securities Exchange Act and Section 162(m) of the Internal Revenue Code, as each may be amended from time to time, and any other applicable laws, rules and regulations.
In consultation with the CEO, the COO and the CFO, review the talent development process within the Company to ensure it is effectively managed. Senior management will provide a report to the Committee regarding its talent and performance review process forthe Committee members and other high potential individuals as requested. The purpose of the performance and talent review is to ensure that there is a sufficient pool of qualified internal candidates to fill senior and leadership positions and to identify opportunities, performance gaps and next steps as part of the Company’s executive succession planning and development process, all of which shall be reviewed with the Committee.
In consultation with the Board, the CEO , the COO and the CFO, the Committee shall, as part of its executive succession planning process, evaluate and nominate potential successors to the CEO, the COO and the CFO. The Committee will also provide an annual report to the Board on CEO, COO and CFO succession.
Annually review employee compensation strategies, benefits and equity programs.
Annually review the share usage, dilution and proxy disclosures.
Review and approve employment agreements, severance arrangements and change in control agreements and provisions when, and if, appropriate, as well as any special supplemental benefits.
Annually review the Company’s progress in meeting diversity goals with respect to the employee population.
Conduct an annual review of the Committee’s performance, periodically assess the adequacy of its charter and recommend changes to the Board as needed.
Regularly report to the Board on the Committee’s activities.
Obtain advice and assistance, as needed, from internal or external legal counsel, accounting firms, search firms, compensation specialists or other advisors, with the sole authority to retain, terminate and negotiate the terms and conditions of the assignment.
Perform any other duties or responsibilities expressly delegated to the Committee by the
Board from time to time.
Exhibit I – Section 162(m) of the Internal Revenue Code.
(m) Certain excessive employee remuneration
(1) In general
In the case of any publicly held corporation, no deduction shall be allowed under this chapter for applicable employee remuneration with respect to any covered employee to the extent that the amount of such remuneration for the taxable year with respect to such employee exceeds $1,000,000.
(2) Publicly held corporation
For purposes of this subsection, the term "publicly held corporation" means any corporation issuing any class of common equity securities required to be registered under section 12 of the Securities Exchange Act of 1934.
(3) Covered employee
For purposes of this subsection, the term "covered employee" means any employee of the taxpayer if -
(A) as of the close of the taxable year, such employee is the chief executive officer of the taxpayer or is an individual acting in such a capacity, or
(B) the total compensation of such employee for the taxable year is required to be reported to shareholders under the Securities Exchange Act of 1934 by reason of such employee being among the 4 highest compensated officers for the taxable year (other than the chief executive officer).
(4) Applicable employee remuneration
For purposes of this subsection -
(A) In general
Except as otherwise provided in this paragraph, the term "applicable employee remuneration" means, with respect to any covered employee for any taxable year, the aggregate amount allowable as a deduction under this chapter for such taxable year (determined without regard to this subsection) for remuneration for services performed by such employee (whether or not during the taxable year).
(B) Exception for remuneration payable on commission basis
The term "applicable employee remuneration" shall not include any remuneration payable on a commission basis solely on account of income generated directly by the individual performance of the individual to whom such remuneration is payable.
(C) Other performance-based compensation
The term "applicable employee remuneration" shall not include any remuneration payable solely on account of the attainment of one or more performance goals, butonly if -
(i) the performance goals are determined by a compensation committee of the board of directors of the taxpayer which is comprised solely of 2 or more outside directors,
(ii) the material terms under which the remuneration is to be paid, including the performance goals, are disclosed to shareholders and approved by a majority of the vote in a separate shareholder vote before the payment of such remuneration, and
(iii) before any payment of such remuneration, the compensation committee referred to in clause (i) certifies that the performance goals and any other material terms were in fact satisfied.
(D) Exception for existing binding contracts
The term "applicable employee remuneration" shall not include any remuneration and which was not modified thereafter in any material respect before such remuneration is paid.
(E) Remuneration
For purposes of this paragraph, the term "remuneration" includes any remuneration (including benefits) in any medium other than cash, but shall not include -
(i) any payment referred to in so much of section 3121(a)(5) as precedes subparagraph (E) thereof, and
(ii) any benefit provided to or on behalf of an employee if at the time such benefit is provided it is reasonable to believe that the employee will be able to exclude such benefit from gross income under this chapter. For purposes of clause (i), section 3121(a)(5) shall be applied without regard to section 3121(v)(1).
(F) Coordination with disallowed golden parachute payments
The dollar limitation contained in paragraph (1) shall be reduced (but not below zero) by the amount (if any) which would have been included in the applicable employee
remuneration of the covered employee for the taxable year but for being disallowed under section 280G.
Exhibit II – “Non-employee” Directors as defined by Section 16 of the Securities
Exchange Act
A Non-Employee Director shall mean a director who:
A. Is not currently an officer (as defined in Rule 16a-1(f)) of the issuer or a parent or subsidiary of the issuer, or otherwise currently employed by the issuer or a parent or subsidiary of the issuer;
B. Does not receive compensation, either directly or indirectly, from the issuer or a parent or subsidiary of the issuer, for services rendered as a consultant or in any capacity other than as a director, except for an amount that does not exceed the dollar S-K ($120,000) and
C. Does not possess an interest in any other transaction for which disclosure would be required pursuant to Item 404(a) of Regulation S-K.
D. Is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K.
