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The Board shall annually elect a Compensation and Leadership Development Committee composed of at least three Directors, all of whom shall meet the independence requirements of the New York Stock Exchange (the "NYSE"), as well as of any laws or regulations as may be applicable to the Company. One of the members of the Committee shall be appointed by the Board to serve as Chairman. Compensation and Leadership Development Committee members may be removed and replaced by the Board.
The Committee shall:
- Approve and, thereafter, report to the Board of Directors, all matters concerning the Corporation's total compensation philosophy, including periodic reviews to ensure that the Corporation's compensation philosophy supports its objectives and shareholders' interests.
- Provide that the Corporation's executive compensation programs are designed to enable it to recruit, retain and motivate a large group of talented and diverse executives.
- Administer and interpret the Key Executive Short-Term Incentive Compensation Plan, the employee Stock Incentive Plans, and any and all other compensation and benefit plans in which members of the senior management group participate, including special benefits and perquisites.
- Act in an advisory capacity to the Board of Directors and to the Chief Executive Officer on all matters relating to senior management, including but not limited to the review of plans and programs for the development of key executives and the identification and selection of candidates for senior officer positions.
The Committee shall:
- Establish an overall total compensation philosophy statement for the Corporation.
- Provide that the Corporation's executive compensation programs are appropriately competitive, support organization objectives and shareholder interests and create pay-for-performance linkage.
- Periodically assess the competitiveness of the Corporation's compensation levels with the external marketplace based on broad competitive compensation survey data and/or a peer group approved for this purpose. Review and approve the companies used for assessing competitiveness of the Company's executive pay practices and pay levels, and monitor the Corporation's earned executive compensation levels and performance relative to this group.
- Make recommendations to the Board concerning amendments to and approval of the Key Executive Short-Term Incentive Compensation Plan and the Stock Incentive Plan.
- Oversee the Corporation's policies on structuring compensation programs to preserve tax deductibility of awards (if applicable), grant awards and approve payments under the Key Executive Short-Term Incentive Compensation Plan, the Stock Incentive Plan, and any and all other compensation plans implemented for the CEO and other senior executives in grade levels 28 and above, and, as and when required, establish and certify the attainment of performance goals with respect to any performance-based awards that are intended to be deductible under Section 162(m) of the Internal Revenue Code (the "Code").
- Establish performance objectives in connection with the annual and long-term executive incentive plans to ensure consistency with the Corporation's financial and strategic plans and objectives and Section 162(m) of the Code, if applicable.
- Authorize, amend or modify the terms and provisions of any incentive, profit sharing, benefit, pension, option or similar plans affecting the Corporation and its employees.
- Annually, review and approve goals and objectives for the Chief Executive Officer, meet at least annually with the CEO to discuss the CEO's self-assessment in achieving individual and corporate goals and objectives, evaluate the Chief Executive Officer's performance in light of those goals and objectives and establish the Chief Executive Officer's total compensation based upon this evaluation. In determining the long-term incentive component of the Chief Executive Officer's compensation, the Committee shall consider the Corporation's performance and relative shareholder return, the value of similar incentive awards to chief executive officers at comparable companies and the awards given to the Corporation's Chief Executive Officer in past years. The CEO shall not attend that portion of any meeting where the CEO's performance or compensation is discussed, unless specifically invited by the Committee. The Committee will refer its determination and approval of the Chief Executive Officer's compensation to the independent Directors for ratification.
- Review and approve the Chief Executive Officer's recommendations for salary and incentive compensation of the direct reports to the CEO and other senior executives in grade levels 28 and above. No executive shall attend that portion of any meeting where such executive's performance or compensation is discussed, unless specifically invited by the Committee.
- Monitor the operation of and payments under Standard & Poor's short-term and long-term incentive plans applicable to professional and management-level employees.
- Review and approve special hiring, retention and termination arrangements, including in connection with a potential or actual change in control of the Corporation or a business unit, and/or deferred payment arrangements to be paid to officers and other members of senior management for whom the Committee regularly approves compensation decisions.
- Review and approve the Corporation's executive stock ownership guidelines and oversee stock ownership levels, trading policies and anti-hedging and pledging policies applicable to executives under its purview.
- Periodically evaluate the Corporation's compensation policies, programs and practices and those of its Segments in relation to risks inherent in the business, and take reasonable steps to ensure that the various components of the compensation programs do not encourage imprudent risk taking.
- Advise the Board on management proposals to shareholders on executive compensation matters and proposals received from shareholders on executive compensation matters under its purview.
- Oversee shareholder communications on executive compensation matters, including shareholder votes on executive compensation, and assess the results of the Corporation's most recent advisory vote on executive compensation.
- Oversee compliance with the requirements of laws and regulations applicable to the Committee and the executive compensation program applicable to officers and other members of senior management, including the Dodd-Frank Wall Street Reform and Consumer Protection Act.
- Produce an annual report for inclusion in the Corporation's proxy statement that affirms that the Committee has reviewed and discussed with management the Compensation Discussion and Analysis portion of the proxy statement, and oversee the portions of the proxy statement pertaining to executive compensation, including the various compensation and pension tables.
- Periodically review the succession and development plans for the executives and other key talent below the direct reports to the Chief Executive Officer.
- Annually review the corporation's talent, diversity and organizational plans.
- Regularly report to the Board of Directors on the Committee's activities and any and all compensation matters which should appropriately be brought to the Board's attention.
- Review and assess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
- Annually review its own performance and report to the Board on the performance and effectiveness of the Committee.
- Undertake such other responsibilities or tasks as the Board may delegate or assign to the Committee from time to time.
- The Committee shall hold no less than three regular meetings in each calendar year. In addition to the Committee members, also attending these meetings by invitation of the Committee may be the Chief Executive Officer or another member of management. However, the Chief Executive Officer will not be present when the Chief Executive Officer's personal performance and compensation are discussed.
The Committee shall have sole authority to appoint any external advisors, to assess periodically (but no less frequently than as required by the rules of the Securities and Exchange Commission and the listing requirements of the NYSE) their independence and any actual or potential conflicts of interest of such advisors in accordance with the rules of the Securities and Exchange Commission and the listing requirements of the NYSE, to evaluate the performance of any such advisors so appointed and to commission any special studies or analyses, as it deems necessary to fulfill its Charter responsibilities and functions, and to assist it in evaluating Chief Executive Officer or senior management compensation. The Committee shall have sole authority to approve the fees and other retention terms of any such advisors and the Corporation shall provide for appropriate funding for payment of any such fees accrued and approved by the Committee.
The Committee Secretary shall be a member of management recommended by the Chairman of the Board and approved by the Committee. The Secretary shall prepare the agenda, distribute materials, and prepare minutes of each Committee meeting, which minutes will be distributed to members of the Committee, and keep Committee records.
- The Committee shall define a senior management, officer or grade level at and above which all compensation decisions must be approved by the Committee. Below this level, the Committee shall approve the overall design of the total executive compensation program; however, the Committee shall delegate the discretion to approve individual compensation decisions to the Chief Executive Officer.
- The Committee may form and delegate authority to subcommittees when appropriate.
June 26, 2013
||William D. Green
||Sir Winfried Bischoff
||Edward B. Rust, Jr.
||Kurt L. Schmoke
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