Pursuant to Section 13.1-689 of the Virginia Stock Corporation Actand Article III, Section 4 of the Bylaws of New Market Corporation, incorporated under the laws of the Commonwealth of Virginia (the “Company”), the following shall constitute the Compensation Committee Charter (the “Charter”) of the Board of Directors of the Company (the “Board”):
Composition of the Compensation Committee
There shall be constituted a standing committee of the Board to be known as the Compensation Committee (the “Committee”). The Committee shall consist of not fewer than three directors. On recommendation of the Nominating and Corporate Governance Committee, the Board shall appoint the members of the Committee. The members of the Committee shall be appointed by the Board at the Board’s annual meeting and may be removed by the Board at any time. The members of the Committee shall satisfy the independence requirements of the New York Stock Exchange (the “Exchange”) as then in effect. The members of the Committee shall serve for one year or until their successors are duly elected and qualified.
The duties and responsibilities of the Committee members shall be in addition to those duties otherwise required for members of the Board. Unless a Chairman of the Committee (the “Chairman”) is elected by the full Board, the members of the Committee shall designate a Chairman by majority vote of the full Committee membership.
Statement of Purpose
The Committee’s primary purpose and responsibility is to develop and oversee the implementation of the Company’s philosophy with respect to the compensation of directors and officers, to produce the required report on executive compensation for inclusion in the Company’s annual proxy statement, and to oversee and advise the Board on the adoption of policies that govern the Company’s compensation programs, including stock and benefit plans. The Committee shall have the overall responsibility for designing, approving and evaluating the Charter plans, policies and programs. The Committee reports to the Board on all matters within the Committee’s responsibilities.
The Committee shall have sole authority to retain and terminate one or more compensation consultants or other advisors to assist the Committee with these duties. The Committee shall have sole authority to approve the fees and other retention terms of any such consultant or advisor. The Committee may form and delegate authority to subcommittees where appropriate.
The Committee shall have responsibility for developing and maintaining a compensation policy that creates a direct relationship between pay levels and corporation performance and returns to shareholders. The Committee shall monitor the results of such policy to assure that the compensation payable to the Company’s executive officers provides overall competitive pay levels, creates proper incentives to enhance shareholder value, rewards superior performance, and is justified by the returns available to shareholders.
The Committee shall have responsibility for recommending to the Board for approval, compensation and benefit plans, which may include amendments to existing plans, cash- and equity-based incentive compensation plans and non-qualified deferred compensation and retirement plans.
The Committee shall review and approve annually corporate goals and objectives relevant to Chief Executive Officer (“CEO”) compensation; evaluate the CEO’s performance in light of those goals and objectives; and together with the other independent directors determine and approve the CEO’s compensation level based on this evaluation; and, in determining the long-term incentive component of CEO compensation, consider the Company’s performance and relative shareholder return, the value of similar incentive awards to CEOs at comparable companies and the awards given to the CEO in past years.
The Committee shall review and approve annually with respect to the compensation of all directors and other officers and key executives, including: (a) the annual base salary level; (b) the annual incentive opportunity level; (c) the long-term incentive opportunity level; (d) employment agreements, severance arrangements, and change in control agreements/provisions, in each case as, when and if appropriate; and (e) any special or supplemental benefits.
In establishing the compensation to be paid or provided to officers and directors the Committee shall utilize where it deems appropriate comparative data regarding compensation practices. The Committee may utilize flexible compensation structures to attract, retain, and motivate and appropriately reward executive officers, consistent with the Company’s compensation philosophy.
With respect to the Company’s equity-based compensation plans, the Committee shall approve grants of stock options, restricted stock, performance shares, stock appreciation rights, and other equity-based incentives to the extent provided under the compensation plans for all directors and executive officers other than the CEO, in which case the Committee shall approve such grants together with the other independent directors.
The Committee shall from time to time review and make recommendations to the Board regarding the compensation of non-employee directors.
The Committee shall provide, over the names of the Committee members, the required Compensation Committee report for inclusion in the Company’s annual proxy statement in accordance with applicable rules and regulations.
The Committee shall have available to it such support personnel, including management staff, outside auditors, attorneys and consultants as it deems necessary to discharge its responsibilities.
The Committee shall consider the application of Section 162(m) of the Internal Revenue Code to the Company and its compensation practices and develop a policy for the Company with respect to Section 162(m).
The Chairman shall discuss the Committee’s performance with each member of the Committee, following which discussions the Chairman shall lead the Committee in an annual evaluation of its performance. The annual performance evaluation shall include a review and assessment of the Committee’s charter, and recommend any proposed changes to the Board for approval. The Committee shall conduct such evaluations and reviews in such manner as it deems appropriate.
The Committee shall perform such other duties and functions as may be requested by the Board.
The Committee shall meet as often as may be deemed necessary or appropriate in its judgment or that of the Board, but at least twice annually. The Chairman or a majority of members of the Committee may call meetings upon reasonable notice to all members of the Committee. The Committee shall keep minutes of its proceedings. At the next regular Board meeting following any Committee meeting, or sooner, as circumstances may dictate, the Chairman shall report to the Board on behalf of the Committee.
Nothing in this Charter is to be construed as precluding discussion of CEO compensation with the Board generally.
This Compensation Committee Charter was duly approved and adopted by the Board of the Company on the 27th day of May, 2004.
M. Rudolph West, Secretary