Purpose: The purpose of the Management Development and Compensation Committee (the "Committee") is to oversee the process of selecting and planning the succession of the Chief Executive Officer ("CEO") and other senior executive officers, determine the compensation of the CEO and other senior executive officers, and review and approve the compensation policies of the Company.
Responsibilities: The responsibilities and activities of the Committee include but are not limited to:
- Recommending to the Board candidates for the Chief Executive Officer of the Company.
- Recommending to the Board candidates for the executive officers who report directly to the Chief Executive Officer.
- Developing corporate goals and objectives relevant to CEO compensation, evaluating the CEO’s performance against those goals and objectives, and determining and approving the CEO’s compensation based on this evaluation. In determining the long-term incentive component of the CEO’s compensation, the Committee will 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 will solicit the opinions of independent non-Committee Board members before taking final action.
- Reviewing and approving corporate goals and objectives for compensation payable to executive officers who directly report to the CEO, evaluating their performance, and determining and approving their compensation against such goals, objectives, and performance. In determining the long-term incentive component of compensation, the Committee will consider the Company’s performance and relative shareholder return, the value of similar incentive awards at comparable companies, and the awards given to the senior executive officers in past years. The Committee will solicit the opinions of independent non-Committee Board members before taking final action.
- Reviewing and approving the overall compensation policy for all officers, including the use of employment agreements, retirement and severance plans and arrangements, deferred compensation arrangements, and other executive benefits and perquisites.
- Making recommendations to the Board with respect to the structure of overall incentive-compensation and equity-based plans applicable to executive officers or other employees and administering such plans, including determining the aggregate number of shares or stock units to be awarded annually and grant terms.
- Reviewing annually the succession plan of the Chief Executive Officer and other senior executive officers as part of a talent review in which all Board members participate and periodically reviewing the succession plan as personnel changes occur.
- Encouraging the diversity of candidates for executive positions.
- Reviewing and discussing with management the Company’s disclosures and analysis about senior executive officer compensation, and recommending whether the Company’s Compensation Discussion and Analysis should be included in applicable SEC filings, and preparing the report of the Management Development and Compensation Committee required by the rules of the Securities and Exchange Commission to be included in the Company’s annual proxy statement and incorporated by reference into the Company’s annual report on Form 10-K.
- Overseeing management’s response to any shareholder proposal regarding an issue for which the Committee has responsibility.
- Evaluating the Committee’s performance annually and making revisions and updates to this Charter periodically as appropriate.
- Updating the Board with respect to Committee meetings and actions taken.
- Delegating any of the above responsibilities to a sub-committee of directors as necessary and as permitted under Pennsylvania law.
Composition: The Committee is comprised of at least three directors, all of whom must be independent. For purposes hereof, an "independent" director is a director who meets the New York Stock Exchange independence requirements and the Company’s Director Independence Standards. Additionally, members of the Committee must qualify as "non-employee directors" for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and as "outside directors" for purposes of Section 162(m) of the Internal Revenue Code.
Meetings: The Committee will meet as often as it deems necessary or appropriate but in no event less than four times per year, either in person or by teleconference. A majority of the members of the Committee must be present at a meeting to constitute a quorum. The Committee will keep minutes of its meetings and maintain those minutes with the books and records of the Company.
Appointment and Removal of Committee Members: Members will be appointed to the Committee by the Board of Directors, upon recommendation of the Corporate Governance Committee. Committee assignments will be based on the Board member’s business and professional experience, qualifications and public service. The need for continuity, subject matter expertise, tenure and the desires of the individual Board members will also be considered. Committee members will serve until their resignation, retirement, removal by the Board or until a successor is appointed. A Committee member may be removed by majority vote of the independent directors of the full Board.
Outside Advisors: The Committee will have the authority, and shall have appropriate funding from the Company, to retain such outside consultants, experts and other advisors as it determines appropriate to assist it in the performance of its functions, including sole authority to retain and terminate any compensation consultant used to assist the Committee in the evaluation of CEO or senior executive officer compensation, and to approve the consultant's fees and other retention terms.
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