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Purposes
This Charter governs the operations of the Compensation Committee of the
Board of Directors (the “Board”) of Republic Engineered Products
Inc. (the “Company”). The Compensation Committee (the “Committee”)
has been created by the Board to (a) determine, or recommend to the Board
for determination, the compensation of the Chief Executive Officer (the “CEO”)
of the Company; (b) determine, or recommend to the Board for determination,
the compensation of all other executive officers of the Company; (c) make
recommendations to the Board regarding director compensation; (d) discharge
the responsibilities of the Board relating to the Company’s compensation
programs and compensation of the Company’s executives; and (e) produce
an annual report on executive compensation for inclusion in the Company’s
annual proxy statement, all in accordance with applicable rules and regulations
of The Nasdaq National Market (“NASDAQ”), the Securities and
Exchange Commission (the “SEC”), and other regulatory bodies.
Composition of the Committee
Number. The Committee is appointed by
the Board and is comprised of at least three members of the Board.
Qualifications. Each member of the Committee
shall: (1) except as may be otherwise permitted by the rules of NASDAQ,
be an “independent director” as defined by such rules and determined
by the Board; (2) be a “non-employee director” within the meaning
of Rule 16b-3 of the Securities Exchange Act of 1934, as amended; and (3)
be an “outside director” under the regulations promulgated
under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).
Appointment. The Board will appoint the
members and the Chairman of the Committee based on nominations recommended
by the Company’s Nominating and Corporate Governance Committee to
the Board. Committee members serve based on the appointment of the
Board and for such term or terms as the Board may determine.
Operating Policies of the Committee
At each regular Board meeting held following a Committee meeting, or sooner,
as appropriate, the Committee shall report to the Board regarding the actions
taken by the Committee. In addition, minutes shall be kept of all
Committee meetings, and approved by subsequent action of the Committee. After
approval by the Committee, the Committee shall circulate the minutes of
the Committee meetings to the Board for review.
The Committee has the authority to retain independent, outside counsel
or other professional services as it deems necessary, without seeking Board
approval. The Committee shall have unrestricted access to members
of management and to all information relevant to its responsibilities. The
Company shall provide such funding as the Committee determines is necessary
for payment of compensation to any counsel or other advisors employed by
the Committee, or as otherwise necessary to support the Committee in satisfying
its responsibilities.
The Committee may form and delegate authority to one or more subcommittees
(including a subcommittee consisting of a single member), as it deems appropriate
from time to time under the circumstances. The Committee may delegate,
as the Committee deems advisable, certain responsibilities to an appropriate
management or administrative committee or to an executive officer or officers
of the Company.
Responsibilities of the Committee
The Committee shall carry out the duties and responsibilities set forth
below. These functions should serve as a guide with the understanding
that the Committee may determine to carry out additional functions and
adopt additional policies and procedures as may be appropriate in light
of changing business, legislative, regulatory, legal or other conditions. The
Committee shall also carry out any other responsibilities and duties delegated
to it by the Board of Directors from time to time related to the purposes
of the Committee as outlined in this Charter.
The
Committee’s responsibilities include:
- Compensation Philosophy. Establish and from time to time review
and as appropriate, revise the overall compensation philosophy of the
Company.
- Review
of Corporate Goals and Objectives. Review and approve the Company’s
corporate goals and objectives relevant to the compensation
of the CEO and the other executive officers, including annual performance
objectives.
- Evaluation
of Executives. Evaluate the performance of the CEO and the other
executive officers in light of those goals and objectives and, based on
such evaluation and subject to the provisions of executive officer employment
agreements, approve the CEO’s compensation, and approve, or recommend
to the Board the approval of, the annual salary, bonus, stock options and
other benefits, direct and indirect, of the other executive officers. The
CEO shall not be present during Committee voting or deliberations relating
to his or her compensation. The Committee shall consult with the
Nominating and Corporate Governance Committee with respect to that committee’s
annual evaluations of each of the Company’s executive officers. In
the case of financial executives, the Committee shall consult with the
Audit Committee of the Board, and the Committee’s evaluations shall
be otherwise consistent with the Company’s Corporate Governance
Guidelines.
- Consideration
of Company Performance. In approving or recommending the long-term
incentive component of compensation for the CEO and other executive officers,
the Committee should consider the Company’s performance and relative
stockholder return, the value of similar incentive awards
to CEOs and other executive officers at comparable companies, and the
awards given to the CEO and other executive officers in past years.
- Executive
Compensation Programs. In connection with executive compensation
programs, the Committee should do the following:
- Review and recommend to the Board, or approve, new executive compensation
programs;
- Review
on a periodic basis the operations of the Company’s executive
compensation programs to determine whether they are properly coordinated
and achieving their intended purposes;
- Establish
and periodically review policies for the administration
of executive compensation programs; and
- Take steps
to modify any executive compensation program that yields
payments and benefits that are not reasonably related to
executive and corporate performance.
- Executive
Officer Perquisites. Establish and periodically review policies
in the area of executive officer perquisites.
- Expense
Accounts. Consider policies and procedures pertaining to expense
accounts of executives officers.
- Compensation
and Indemnification of Directors. Review and make recommendations
to the Board regarding the compensation of the directors, as well as regarding
directors’ and officers’ indemnification and insurance matters,
in accordance with the policies and principles set forth in the Company’s
Corporate Governance Guidelines and this Charter.
- Incentive
and Equity Compensation Plans. Review and make recommendations to
the Board with respect to, or approve, subject to applicable stockholder
approval requirements, the Company’s incentive compensation plans
and equity plans, and review the activities of the individuals
responsible for administering those plans.
- Awards
of Shares or Options. Review and make recommendations to the Board,
or approve, all awards of shares or share options pursuant to the Company’s
equity-based plans.
- Executive
Compliance. Monitor compliance by executives with the rules and guidelines
of the Company’s equity-based plans.
- Employee
Benefits. Review and monitor employee pension, profit sharing
and other benefit plans.
- Hiring
Consultants. Have the sole authority to select, retain and/or replace,
as needed, any compensation or other outside consultant to be used to assist
in the evaluation of director, CEO or executive officer compensation. In
the event such a consultant is retained, the Committee shall have the sole
authority to approve such consultant’s fees and other retention
terms.
Meetings of the Committee
The Committee shall meet in person or telephonically at such times and
places as the Committee shall deem advisable to comply with its responsibilities
as set forth herein, on the call of the Chairman of the Committee, the
Chairman of the Board, the CEO or, in their absence, by any member of the
Committee. The presence of a majority of the members of the Committee
then in office shall constitute a quorum for the transaction of business
at a meeting of the Committee. The Committee may also take any action permitted
hereunder by unanimous written consent.
Annual Review of Charter
The Committee will conduct and review with the Board annually an evaluation
of this Charter and recommend any changes to the Board. The Committee
may conduct this evaluation in such manner as the Committee, in its business
judgment, deems appropriate.
Annual Performance Evaluation
The Committee shall conduct an annual self-evaluation, which will be incorporated
into the Nominating and Corporate Governance Committee’s annual report
to the Board on Board and committee performance.
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