The primary function of the Compensation Committee is to assist the Board of Directors in fulfilling its oversight responsibilities related to the performance and compensation of executives and the structure and performance of significant, long-term employee defined benefit and defined contribution plans. Consistent with this function, the Committee should encourage continuous improvement of, and adherence to the Corporation's policies, procedures and practices at all levels. The Committee's primary duties and responsibilities are as follows:
· Develop and administer an executive compensation program which is competitive; which ensures that the interests of executives are aligned with the interests of shareholders; which ensures the company’s ability to attract and retain qualified executive talent; and, which strikes a proper balance between compensation and corporate growth. Subordinate tasks include:
- Engagement
of an executive compensation consultant and evaluation
of that consultant’s
work product and recommendations.
- Prepare a written report to
shareholders on executive compensation for the annual
proxy statement
- Review / modify peer group for
executive compensation purposes
- Establish the annual EPS target for executive compensation
purposes
- Review and recommend to the
Board executive base salary adjustments (if any)
- Review, validate and report to the Board on actual results
of officer annual cash program
- Review, validate and report on Restricted Stock Grants
(LTIP) issued to executives
- Review, validate and approve actual Restricted Stock Awards
(stock earned) (begins in 3/2003) (note: restricted period expires in March of
each year); peer Total Shareholder Return (TSR) data will be available to finalize
relative TSR performance; required that Committee approve under the Plan (Section
11(d)); a written report will be prepared and provided prior to meeting)
- Prepare,
maintain and recommend a CEO evaluation policy
and procedure and facilitate the effective completion
of that process
- Review, approval and recommendation
to full Board on renewals, new or modifications
to Officer Employment Agreements
- Approve
any waivers provided for under Restricted Stock,
Deferred Compensation, or SERP agreements
· Oversee the management of the assets of the Company’s pension plans, VEBAs and Rabbi Trust related to retirement benefits in a manner which preserves the inflation-adjusted value of the Plans; produces investment returns that achieve the Plans’ actuarially assumed rate of return; achieve the optimal return within specified risk tolerances; and, prudently invests assets in a high-quality, diversified manner. Subordinate tasks include:
- Review
of actuarial assumptions to be used in valuation
studies for pension plans, VEBAs, Rabbi Trust & SERP
- Review, approve and recommend
to the Board annual contributions to the pension
plans, VEBAs and Rabbi Trust (if any)
- Identify and recommend appointees
to the Trust Committee
- Establish
Investment Guidelines consistent with Plans’ purposes
and objectives; approve changes to those guidelines
- Review the performance of investment
managers/funds annually
- Approve any change of Investment
Manager(s) or Investment Management Consultant
- Review, endorse and recommend
proposed ERIPs (Early Retirement Incentive Programs)
- Review 401 (K) Plan participation and fund performance
- Review, endorse and recommend
substantive changes to any of the Plans (Pension,
VEBA, Rabbi Trust, 401(k), ESOP, SERP)
- Review, endorse
and recommend any proposed employee benefit plan
termination or, the creation of any new plan which
inures primarily to the benefit of executives
or, which creates a new financial obligation for
the Company.
- Review, endorse and recommend
any proposed waivers provided for under executive
plans (SERP; deferred compensation; etc.) or executive
agreements (i.e.. Employment contracts; severance/general
release agreements; restricted stock agreements;
etc.)
The Committee shall comprise three or more directors as determined by the Board, each of whom shall be independent directors as defined by the rules of the New York Stock Exchange, and free from any relationship that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the Committee. The members of the Committee shall be appointed by the Board at the annual organizational meeting of the Board and the Chair shall be appointed by the Executive Committee. Committee members and the Chair shall serve until their successors shall be duly appointed and qualified.
The Committee shall meet at least twice annually, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee should meet at least annually with the named investment management consultant and at least every three years with its executive compensation consultant.
The Committee shall review and update this Charter periodically, at least annually, as conditions dictate.
rev.
10.08
