Compensation Committee
COMPENSATION COMMITTEE CHARTER
Purpose
The Compensation Committee is appointed by the Board to discharge the Board’s responsibilities relating to compensation of the Company’s Chief Executive Officer (the ‘CEO’), the Company’s other executive officers (collectively, and including the CEO, the ‘Executive Officers’) and the Presidents of each of the Company’s business segments (‘Segment Presidents’). The Committee has overall responsibility for approving and evaluating all compensation plans, policies and programs of the Company as they affect the Executive Officers and Segment Presidents.
Committee Membership
The Compensation Committee shall consist of no fewer than three members. The members of the Compensation Committee shall meet the independence requirements of the New York Stock Exchange. Members of the Compensation Committee shall also qualify as ‘outside’ directors within the meaning of Internal Revenue Code ‘162(m) and as ‘non-employee’directors within the meaning of Rule 16b-3 of the Securities and Exchange Act of 1934.
The members of the Compensation Committee shall be appointed by the Board on the recommendation of the Nominating and Corporate Governance Committee. Compensation Committee members may be replaced by the Board.
The chairperson of the Committee shall be designated by the Board, provided that if the Board does not designate a chairperson, the members of the Committee, by a majority vote, may designate a chairperson.
In addition to the powers and responsibilities expressly delegated to the Committee in this Charter, the Committee may exercise any other powers and carry out any other responsibilities delegated to it by the Board from time to time consistent with the Company’s Bylaws and applicable laws and regulations.
Meetings
The Compensation Committee shall meet as often as necessary to carry out its responsibilities. The Committee, in its discretion, may ask members of management or others to attend its meetings (or portions thereof) and to provide pertinent information as necessary. The Chairman shall preside at each meeting. In the event the Chairman is not present at a meeting, the Compensation Committee members present at that meeting shall designate one of its members as the acting chair of such meeting.
Committee Authority and Responsibilities
| 1. | The Compensation Committee shall annually review and approve corporate goals and objectives relevant to CEO compensation, evaluate the CEO’s performance in light of those goals and objectives and, subject to the terms of any employment agreement between the CEO and the Company, determine and approve the CEO’s compensation level based on this evaluation. In determining the incentive components of CEO compensation, the Compensation Committee may consider a number of factors, including, but not limited to, the Company’s performance and relative shareholder return, the value of similar incentive awards to CEOs at comparable companies, the awards given to the CEO in past years and the terms of any employment agreement. | ||
| 2. | Subject to the terms of any employment agreement with the Company, the Compensation Committee shall, at least annually, review and approve the annual base salaries and annual incentive opportunities of the Executive Officers as well as the Segment Presidents. | ||
| 3. | The Compensation Committee shall, periodically and as and when appropriate, review and approve the following as they affect the Executive Officers and the Segment Presidents: (a) all other incentive awards and opportunities, including both cash-based and equity-based awards and opportunities; (b) any employment agreements and severance arrangements; (c) any change-in-control agreements and change-in-control provisions affecting any elements of compensation and benefits; and (d) any special or supplemental compensation and benefits for the Executive Officers and Segment Presidents and persons who formerly served as Executive Officers and Segment Presidents, including supplemental retirement benefits and the perquisites provided to them during and after employment. | ||
| 4. | The Compensation Committee shall review and discuss the Compensation Discussion and Analysis (the ‘CD&A’) required to be included in the Company’s proxy statement and annual report on Form 10-K by the rules and regulations of the Securities and Exchange Commission (the ‘SEC’) with management and, based on such review and discussion, determine whether or not to recommend to the Board that the CD&A be so included. | ||
| 5. | The Compensation Committee shall produce the annual Compensation Committee Report for inclusion in the Company’s proxy statement in compliance with the rules and regulations promulgated by the SEC. | ||
| 6. | The Committee shall oversee the Company’s compliance with the requirement under NYSE rules that, with limited exceptions, shareholders approve equity compensation plans. | ||
| 7. | The Compensation Committee shall periodically review and make recommendations to the Board related to the compensation of directors. | ||
| 8. | The Compensation Committee shall review at least annually the Company’s general compensation plans and other employee benefit plans, including incentive-compensation and equity-based plans, in light of the goals and objectives of these plans, and recommend that the Board amend these plans, or adopt new plans, if the Compensation Committee deems appropriate. The Compensation Committee shall also administer, and determine awards under, such plans as may be required by the terms of the plans. The Compensation Committee shall review, approve and adopt amendments to the Griffon Corporation Retirement Plan and the Griffon Corporation Employee Stock Ownership Plan. | ||
| 9. | The Compensation Committee shall make regular reports to the Board. | ||
| 10. | The Compensation Committee shall annually review its own performance. The Committee shall address all matters that the Committee considers relevant to its performance, including at least the following: the adequacy, appropriateness and quality of the information and recommendations presented by the Committee to the Board, the manner in which they were discussed or debated, and whether the number and length of meetings were adequate for the Committee to complete its work in a thorough and thoughtful manner. | ||
| 11. | The Compensation Committee shall review and reassess the adequacy of this Charter periodically and recommend any proposed changes to the Board. | ||
| 12. | The Compensation Committee shall have the sole authority to retain and terminate any compensation consultant to be used to assist it in the evaluation of Executive Officer and Segment President compensation and shall have sole authority to approve the consultant’s fees and the other terms and conditions of the consultant’s retention. | ||
| 13. | The Compensation Committee may form and delegate authority to subcommittees of the Compensation Committee and, with regard to qualified retirement plans, to individual employees of the Company or to committees consisting of employees of the Company as it deems appropriate. | ||
- = Member
- = Chair
- = Financial Expert
- = Independent Director