Board of Directors
Management Development and Compensation
Effective 16 July 2015
1.1 The Management Development and Compensation Committee (the “Committee”) shall assist the Board of Directors (the “Board”) in its responsibilities for (i) selecting, evaluating and compensating the chief executive officer (“CEO”) and overseeing CEO succession planning; (ii) providing counsel and oversight on the selection, evaluation, development and compensation of Company executives who are treated as “executive officers” for purposes of federal securities laws (together, the “Executive Officers”); (iii) approving compensation for the Executive Officers; and (iv) providing oversight for policies regarding management compensation and benefit programs. The Committee shall also have the authority of the Board with respect to the design and administration of the Company’s incentive compensation and equity-based plans that are subject to Board and/or shareholder approval; and oversight of the design and administration of the Company’s and its controlled subsidiaries’ employee pension, savings and welfare benefit plans worldwide, except that only the Board shall have the authority to establish or terminate significant Company plans.
Committee Structure; Member Qualifications, Appointment
2.1 The Committee shall consist of not less than three (3) directors of the Company, each of whom the Board has determined to be “independent” within the meaning of the New York Stock Exchange listing standards and other applicable rules, including those pertaining specifically to Compensation Committee members. Each member of the Committee also shall satisfy all requirements necessary from time to time to be “disinterested directors” under Securities and Exchange Commission Rule 16b-3 and qualified “outside directors” under Section 162(m) of the Internal Revenue Code and related regulations, all as amended from time to time.
2.2 The members and the Chair of the Committee are appointed by the Board, upon the recommendation of the Corporate Governance and Nominating Committee (the “Governance Committee”) and serve at the pleasure of the Board.
Authority and Responsibilities
3.1 The Committee shall have the authority to take any and all actions that it deems necessary in furtherance of its purpose, including, but not limited to, the following:
3.1.1Management Development and Succession
To assist the Board in developing and evaluating potential candidates for Executive Officer positions, including the CEO, and to oversee the development of Executive Officer succession plans, the Committee shall periodically review and, when appropriate, make recommendations to the Board regarding:
(a)long-range plans for orderly succession of the CEO and other Executive Officers including contingency procedures for management succession in the event of the unexpected departures of Executive Officers or their inability to serve due to an emergency;(b)Company management resources, development and performance processes;(c)as applied to management development and performance, progress with diversity practices and programs;(d)organization changes affecting Executive Officer staffing; and(e)appointment or termination of each officer of the Company or a subsidiary of the Company who is, or will be, an Executive Officer.
3.1.2Executive Officer Compensation
The Committee shall:
(a)establish the Executive Officer compensation philosophy and strategy for the Company, consistent with Company objectives and shareholder interests;(b)review and approve the annual corporate goals and objectives relevant to compensation of the CEO; evaluate the performance of the CEO in light of the agreed upon goals and objectives; and establish the compensation of the CEO based on such evaluation, including the balance of the components of total compensation;(c)provide oversight of the CEO’s evaluation of the performance of the other Executive Officers;(d)review and approve compensation of the Executive Officers other than the CEO;(e)evaluate and approve severance arrangements and employment contracts for the CEO and other Executive Officers;(f)review the Company’s incentive compensation arrangements to determine whether they encourage excessive risk-taking, review the relationship between risk management policies and practices and compensation and evaluate compensation policies and practices that could mitigate any such risk;(g)establish and periodically review Company policies relating to Executive Officer perquisites and other non-cash benefits;(h)prepare a report on Executive Officer compensation for inclusion in the Company’s annual proxy statement for shareholders in accordance with applicable rules and regulations; and(i)establish and review compliance with guidelines covering ownership of Company stock by Executive Officers.
The Committee shall:
(a)approve, make recommendations to the Board regarding the design and administration of the Company’s cash- and equity-based incentive plans unless reserved by the Board or delegated to management through plan provisions or as is otherwise consistent with applicable law and establish criteria for and terms of grants of stock options and other stock rights to management and other employees;(b)periodically review the operation of, and make recommendations to the Board regarding, the Company’s overall compensation program for management and evaluate its effectiveness in promoting shareholder value and Company objectives;(c)receive periodic reports on the design and administration of the Company’s and its controlled subsidiaries’ employee pension, savings and welfare benefit plans and review and make recommendations to the Board on any changes thereto requiring Board approval;(d)monitor the Company’s policies, practices, performance and objectives regarding diversity and inclusion, as well as the Company’s management systems in support of the foregoing; and(e)perform any other activities consistent with this Charter, the Company’s Bylaws and governing law as the Committee or Board deem appropriate.
Committee Operations: Meetings, Agendas, Reporting,
4.1 The Committee may adopt procedural rules for its meetings and the conduct of its business, not inconsistent under this Charter, the Bylaws or applicable law. The Committee is governed by the same rules regarding meetings (including meetings by conference telephone or similar communications equipment), action without meetings, notice, waiver of notice and quorum and voting requirements as are applicable to the Board. Adequate provision will be made for notice to members of all meetings; one-third of the members, but not less than two, shall constitute a quorum; and all matters shall be determined by a majority vote of the members present. The Committee may delegate all or a portion of the authority granted to it by the Board to one or more of the Committee members, senior executives or subcommittees, subject to applicable plans, laws, regulations and listing standards.
4.2 The Committee proposes its regular meeting schedule for each year for approval by the Board, upon recommendation of the Governance Committee. The Chairman of the Board, the Corporate Secretary and the Committee Chair agree on the length of regular meetings and the need to schedule additional special meetings. The Committee will meet periodically in executive session without Company management present.
4.3 The annual Committee agenda and individual meeting agendas are developed by the Chairman of the Board and Corporate Secretary in consultation with the Committee Chair, with input from appropriate members of management and staff.
4.4 When present, the Chair will preside at Committee meetings. In his or her absence, the Committee members present may appoint a chair pro temp. The Committee Chair reports to the Board on Committee meetings and actions, and the Corporate Secretary or an Assistant Corporate Secretary keeps minutes of all Committee meetings, which are distributed to Committee members for review and approval.
4.5 The Committee shall evaluate its performance annually and discuss the outcome of the evaluation with the full Board.
5.1 The Committee will have the resources and authority necessary to discharge its duties and responsibilities, including access to relevant records of the Company and officers and employees of the Company. The Committee may, in its sole discretion, retain or obtain the advice of an executive compensation consultant, independent legal counsel or other adviser (each, an “Advisor”), and the Company will provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to an Advisor retained by the Committee. The Committee will be directly responsible for the appointment, compensation and oversight of the work of any Advisor retained by the Committee.
5.2 The Committee may select an Advisor only after taking into consideration all factors relevant to that person’s independence from management, including the following: (i) the provision of other services to the Company by the person that employs the Advisor; (ii) the amount of fees received from the Company by the person that employs the Advisor, as a percentage of the total revenue of the person that employs the Advisor; (iii) the policies and procedures of the person that employs the Advisor that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the Advisor with a member of the Committee; (v) any stock of the Company owned by the Advisor; and (vi) any business or personal relationship of the Advisor or the person employing the Advisor with an Executive Officer of the Company.
5.3 Any communications between the Committee and legal counsel in the course of obtaining legal advice will be considered privileged communications of the Company, and the Committee will take all necessary steps to preserve the privileged nature of those communications.