(As
approved by the Board of Directors on
December 13, 2007) Purpose
The Human Resources Committee is appointed by the
Board of Directors (the “Board”) to discharge the Board’s
responsibilities relating to compensation of the Chief Executive
Officer and all of the executive officers of Hercules Incorporated
(the “Corporation”). The Human Resources Committee has overall
responsibility for approving and evaluating or, to the extent the
Human Resources Committee may deem appropriate, recommending for
approval by the independent members of the Board, of all
compensation plans, policies, and programs of the Corporation as
they affect the Chief Executive Officer and executive officers as
well as all other programs for all employees.
Committee Membership The
members of the Human Resources Committee shall be appointed annually
by the Board on the recommendation of the Corporate Governance,
Nominating and Ethics Committee (“Governance Committee”), and may be
removed or replaced by the Board in its discretion. Vacancies shall
be filled by the Board. A Human Resources Committee member may
resign by giving written notice to the Board and may resign Human
Resources Committee membership without resigning from the Board. At
the time of each annual election of the Human Resources Committee
members, the Board, on the recommendation of the Governance
Committee, appoints the Chair of the Human Resources Committee.
The Human Resources Committee shall consist of
no fewer than three (3) members of the Board, each of whom shall be
an independent director under the New York Stock Exchange listing
standards, any other applicable laws, rules and regulations
governing independence, as determined to be applicable by the Board,
and the Corporation’s independence standards, as such requirements
may be in effect and amended from time to time. At least two members
of the Human Resources 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.
Committee Authority and Responsibilities
The Human Resources Committee shall have the
following authority and responsibilities:
- Subject to Board approval, to establish
compensation policy consistent with corporate goals and
objectives and shareholder interests.
- To review and approve or, to the extent
the Human Resources Committee may deem appropriate, recommend
for approval by the independent members of the Board, at least
once a year corporate goals and objectives relevant to the Chief
Executive Officer’s (“CEO”) compensation and evaluate at least
once a year the Chief Executive Officer’s performance in light
of established goals and objectives. Based upon these
evaluations the Human Resources Committee shall approve or, to
the extent the Human Resources Committee may deem appropriate,
recommend for approval by the independent members of the Board,
the Chief Executive Officer’s annual compensation, including
salary, bonus, incentive and equity compensation. In determining
the incentive components of CEO compensation, the Human
Resources Committee may consider a number of factors, including,
but not limited to, the Corporation’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.
- To review and approve or, to the extent
the Human Resources Committee may deem appropriate, recommend
for Board approval, at least annually, changes in the annual
base salaries and annual incentive opportunities of the
executive officers. In addition, periodically and as and when
appropriate, the Human Resources Committee shall review and
approve or, to the extent the Human Resources Committee may deem
appropriate, recommend for approval by the independent members
of the Board, the following as they affect the Chief Executive
Officer and the executive officers: (a) all other incentive
awards and opportunities, including both cash-based and
equity-based awards and opportunities; (b) any employment
agreements and severance arrangements; and (c) any
change-in-control agreements and change-in-control provisions
affecting any elements of compensation and benefits. In
addition, the Human Resources Committee shall receive periodic
reports on the Corporation’s compensation programs as they
affect all employees. Finally, the Human Resources Committee
shall review and approve or, to the extent the Human Resources
Committee may deem appropriate, recommend for approval by the
independent members of the Board, any special or supplemental
compensation and benefits for the Chief Executive Officer and
the executive officers and individuals who formerly served as
the Chief Executive Officer and/or as executive officers,
including supplemental retirement benefits and the perquisites
provided to them during and after employment.
- Notwithstanding the foregoing, if any
grant or award to the Chief Executive Officer or any other
executive is intended to qualify for the performance-based
compensation exemption from the limitations on deductibility of
executive compensation imposed by Section 162(m) of the Internal
Revenue Code of 1986, as amended, or any successor thereto, the
Human Resources Committee, rather than the independent members
of the Board, shall approve such award, but it may refer such
award to the independent members of the Board for ratification.
- To evaluate the methods for establishing
the amounts, types and competitiveness of Director compensation
benefits, including under any incentive compensation plans and
equity-based compensation plans.
- In conjunction with the Governance
Committee, to assist the Board in developing and evaluating
potential candidates for the Chief Executive Officer position,
and in oversight of executive succession plans.
- To assure systems are in place for
development of management competencies that are linked to those
competencies identified to be critical to attaining the business
and strategic plans of the Corporation.
- To monitor the Corporation’s compliance
with relevant laws applicable to compensation plans, policies
and programs, including without limitation, those relating to (i)
401(k) and similar savings and benefit items and (ii) loans to
directors or officers under Section 402 of the Sarbanes-Oxley
Act or otherwise.
- To oversee the Corporation’s compliance
with the requirement under the New York Stock Exchange rules
that shareholders approve equity compensation plans, with
limited exceptions.
- To prepare the annual report required by
the rules of the Securities and Exchange Commission (the “SEC”)
to be included in the Corporation’s proxy statement and annual
report on Form 10-K in compliance with the rules and regulations
promulgated by the SEC.
- To review and discuss the Compensation
Discussion and Analysis (the “CD&A”) required to be included in
the Corporation's proxy statement and annual report on Form 10-K
by the rules and regulations of 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.
The Human Resources Committee shall meet as
frequently as it deems necessary or desirable to discharge its
responsibilities and at least three (3) times each year, in
accordance with a schedule approved by the Chair of the Human
Resources Committee and the Chair of the Board.
The Chair of the Human Resources Committee
shall preside at each meeting of the Human Resources Committee. In
the event the Chair is not present at a meeting, the Human Resources
Committee members present at that meeting shall designate one of its
members as the acting chair of such meeting.
The Chair of the Human Resources Committee (or
acting chair) may direct appropriate members of management and staff
to prepare draft agendas and related background information for each
Human Resources Committee meeting. The draft agenda shall be
reviewed and approved by the Chair (or acting chair) in advance of
distribution to the other Human Resources Committee members. Any
background materials, together with the agenda, should be
distributed to the Human Resources Committee members in advance of
the meeting.
Written minutes of each meeting of the Human
Resources Committee shall be duly filed in the Corporation’s
records. The Human Resources Committee shall regularly report to the
Board on its activities.
The Human Resources Committee shall have the
authority to form and delegate any of its responsibilities to
subcommittees as the Human Resources Committee may deem appropriate,
in its sole discretion.
On behalf of the Board, the Corporate
Governance, Nominating and Ethics Committee conducts an annual
evaluation of the respective performance of the Board and Board
Committees. As a prelude to such evaluation, the Human Resources
Committee may conduct a self-review of its performance.
The Human Resources Committee shall have the
sole authority to retain and terminate any compensation consultant
to be used to assist it in the discharge of its duties and shall
have sole authority to approve the consultant’s fees and the other
terms and conditions of the consultant’s retention. The Human
Resources Committee shall have the authority to obtain advice and
assistance, as needed, from internal or external legal, accounting,
and other advisors as it may deem appropriate, in its sole
discretion. The Human Resources Committee shall have sole authority
to approve such advisors’ fees and other retention terms.
The Human Resources Committee shall annually
assess the adequacy of this Charter and recommend any proposed
changes to the Board for approval. |
