centex Compensation%20Committee


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centex Compensation%20Committee

  1. 1. CENTEX CORPORATION Compensation and Management Development Committee Charter GENERAL The Centex Board of Directors created the Compensation and Management Development Committee to assist the Board in matters relating to: • The compensation of the CEO and other officers; • The administration of specific compensation plans, including equity plans, short- and long-term incentive compensation plans, profit sharing plans, supplemental executive retirement plans and other plans; • The assessment of succession planning and leadership development; and • The approval, review and oversight of other benefit plans. The Committee has the authority of the Board, except as may be prohibited by law, in all matters encompassed by this Charter. The Committee also has all authority required by the Securities and Exchange Commission and the New York Stock Exchange. MEMBERSHIP • The Committee shall consist of at least three people, all of whom are members of the Board and who have been determined by the Board to satisfy the independence requirements set forth in the NYSE listing standards. • Each member shall also be: o A “non-employee director” as defined by Rule 16b-3 under the Securities Exchange Act of 1934; and o An “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986. • The Board will designate members either at the annual Board meeting or at such other meeting or time as the Board shall determine. The Corporate Governance and Nominating Committee will recommend the members to the Board. • Each member will serve until the next time Committee members are designated, unless the member resigns, or is removed or replaced. • The Board may remove or replace any member at any time. • If for any reason the Board does not designate new members of the Committee at the annual Board meeting or at such other meeting or time as the Board shall determine, the current members will continue to serve until the Board names new members. • Replacing a member is optional, unless there are fewer than three members remaining on the Committee; then the member must be replaced. • To replace a member, the Board will designate another director to fill the unexpired term, based on the recommendation of the Corporate Governance and Nominating Committee. • Any member of the Board who meets the qualifications for Committee membership may be named to the Committee.
  2. 2. INTERNAL GOVERNANCE AND PROCEDURES Criteria for the Chairperson and Committee Rules • The Board will designate one member to act as the Chairperson until the next time Committee members are designated. • The Board can remove or replace the Chairperson at any time. • If the Chairperson resigns or is removed, the Board will name an existing member of the Committee to serve as Chairperson for the unexpired term. • The Chairperson presides over all Committee meetings and reports the Committee’s findings and conclusions to the Board. • The Chairperson shall have authority to execute and deliver all documents requiring signature by the Committee in relation to the Committee’s powers, duties and obligations as set out in this Charter or as decided by the Committee. • The Committee may establish rules for business that include meetings, notices, quorum, voting, agenda preparation, and distribution of materials, as long as they don’t conflict with the By-Laws or other provisions of the Charter. • If no rules have been set by the Committee, then: o A majority of the Committee constitutes a quorum; o If the Committee has an even number of members, one-half the members will constitute a quorum; and o As long as the Committee meeting has a quorum, the majority opinion can approve Committee action. • The Committee shall review its procedures periodically and make changes as necessary. Guidelines for Committee Meetings • The Committee will meet at least two times a year, and more often as needed. • The meetings can be held by phone; any member can call in if needed. • Special guests may be invited to meetings as needed. • The Committee can meet as often as necessary with the Company’s management, compensation consultants or independent auditors and in separate executive sessions if any Committee member feels privacy is needed. • Written minutes of the meeting and records of action must be kept. Guidelines for Subcommittees • The Committee can delegate specified duties and responsibilities to a subcommittee. • The subcommittee can consist of one or more members (unless a specified number is required), who have been designated by a majority of the Committee. • Any decision by the subcommittee must be reported back to the full Committee at the next scheduled meeting. • The subcommittee must follow any rules or procedures determined by the Committee. DUTIES AND RESPONSIBILITIES Listed below are the general duties and responsibilities of the Committee, which will be reviewed periodically. 2
  3. 3. The Committee will follow all NYSE listing standards, the securities laws, applicable provisions of the Internal Revenue Code and any other applicable law. The Committee will provide the Board any help needed relative to the general oversight of the Company’s compensation, equity and benefit plans. Unless required by the NYSE listing standards, applicable law, or the terms of any plan or agreement, it is in the Committee’s discretion whether to submit any of its decisions to the Board for approval or ratification. The Committee will seek final Board approval of the compensation of the CEO. In order to fulfill their responsibilities, the Committee will at minimum: a. Review the overall compensation philosophy of the Company; b. Review and approve the corporate goals and objectives relevant to compensation, taking into account whether: • Senior management compensation is reasonably related to corporate performance; and • Senior management compensation programs are properly coordinated and achieving their intended purpose; c. Evaluate the CEO’s performance relative to corporate goals and objectives, and determine his/her compensation including: • Annual base salary; • Annual incentive compensation, including performance goals under stockholder-approved plans; • Long-term incentives o In determining the long-term incentive component of the CEO’s compensation, the Committee should consider the Company’s relative performance and shareholder return, the Company’s performance goals, the value of similar incentive awards at comparable companies, past awards to the CEO and other factors the Committee deems relevant; • Mix of cash and equity; • Terms of employment, severance, retirement, changes in control and other agreements; • Special or supplemental benefits, including perquisites; and • Any other compensation or benefits provided; d. Annually review (with the CEO) and approve compensation for all other executive officers of the Company who are subject to the provisions of Section 16 of the Securities Exchange Act; e. Annually review (with the CEO) and approve compensation terms for other senior officers and key employees of the Company and its principal subsidiaries as necessary, including the Scope Group.1 f. Administer the Company’s equity and other compensation plans (except with respect to actions and decisions relating to non-employee directors), including: • establishing, amending or recommending action to the Board; • taking action on grants and awards under such plans; and • acting as the “stock option” or similar committee in regard to such plans; 1 Note: The Committee currently considers the following positions to encompass the “Scope Group”: The CEO, CFO, and other senior executives of the Company; senior management of Centex Homes (e.g., CEO, COO, President (or one or more other similar national or regional officers), and EVPs); the CEOs of the Company’s other principal business units; and any other “executive officers” of the Company. 3
  4. 4. g. Periodically review the effectiveness of other benefit plans; determine whether to amend or replace them and recommend action to the Board. Current plans include: • Profit sharing and retirement/401(k); • Supplemental executive retirement; • Salary continuation; • Severance; and • Health and life insurance; h. Review and discuss with management the Compensation Discussion and Analysis required by the SEC to be included in the Company’s annual proxy statement, and based on such review and discussion, determine whether to recommend to the Board that the CD&A be included in the Company’s annual proxy statement for the annual meeting of shareholders; i. Issue a report on executive compensation in the form required by the SEC to be included in the Company’s annual proxy statement; j. Regularly review the Company’s leadership development programs and initiatives and discuss leadership development with the CEO; k. Periodically review and report to the Board on senior management succession planning, including emergency procedures for the unexpected replacement of the CEO; l. Give periodic reports to the Board and make recommendations to the Board on matters requiring Board approval; and m. Perform other functions consistent with the purposes of the Committee. The Committee shall not act as a fiduciary relative to any benefit plan or program of the Company under ERISA, except where the Committee notes it in writing or where it is required by law. ENGAGEMENT OF ADVISERS AND FUNDING • The Committee has the sole authority to engage, retain and terminate any consultant, and approve the consultant’s fees and other terms of the engagement. • The Committee has the authority to get advice and help from independent counsel and others as necessary, and approve the cost. • The Company will pay for the cost of consultants and counsel, as well as ordinary administrative expenses necessary for the Committee to carry out their duties. ANNUAL REVIEW OF CHARTER AND EVALUATION OF THE COMMITTEE • The Committee will review and reassess the adequacy of this charter and recommend changes to the Board as needed, at least annually. • The Committee will review its own performance annually. • The Board will conduct an evaluation of the Committee’s performance annually, and afterward the Board, or a representative, will review it with Committee members. As amended through October 8, 2008 44314v15 4