Amended as of June 13, 2013
- Membership of the Committee
- Committee's Purpose
- Meetings of the Committee
- Committee's Authority and Responsabilities
- Role of CEO
- Annual Performance Evaluation
The Compensation Committee ("Committee") is a committee of the Board of Directors (the "Board") of National Fuel Gas Company (the "Company"). Any company or entity in which the Company directly or indirectly has an ownership interest of fifty percent (50%) or more is referred to herein as a "Subsidiary", collectively as "Subsidiaries."
II. Membership of the Committee
The Committee shall consist of no fewer than three members of the Board. Each member of the Committee shall (i) meet the independence requirements of the New York Stock Exchange, as they may be amended from time to time, and any other applicable laws, rules and regulations governing independence; (ii) qualify as a "non-employee director," as defined in Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended; (iii) qualify as an "outside director" as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder; (iv) meet the requirements of the Company's Corporate Governance Guidelines; and (v) meet any additional requirements the Board deems appropriate . All members of the Committee will be appointed by the Board and shall serve at the discretion of the Board. Any vacancy on the Committee shall be filled by majority vote of the Board. No member of the Committee shall be removed except by majority vote of the Board. The chairperson of the Committee shall be designated by the Board, provided that if the Board does not so designate a chairperson, the members of the Committee, by a majority vote, may designate a chairperson.
III. Committee's Purpose
The Committee's purposes are:
- to exercise delegated authority of the Board regarding compensation of Executive Officers (as defined below) of the Company and its Subsidiaries;
- to make recommendations to the Board regarding compensation of directors of the Company;
- to exercise authority granted by various employee benefit plans approved by the Board and/or the Company's shareholders;
- to review and discuss with management the Company's compensation discussion and analysis ("CD&A") to be included in the Company's annual proxy statement or annual report on Form 10-K filed with the Securities and Exchange Commission ("SEC");
- to prepare the disclosure required by Item 407(e)(5) of the SEC's Regulation S-K, which sets forth information to be included under the caption "Compensation Committee Report" in the Company's annual proxy statement or annual report on Form 10-K; and
- to make recommendations to the Board on compensation-related matters.
IV. Meetings of the Committee
The Committee shall meet as often as it determines necessary to carry out its duties and responsibilities, but no less than twice annually. 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 chairperson of the Committee shall preside at all meetings of the Committee. He shall determine the agenda for all Committee meetings with the assistance of the Committee members. Each Committee member shall be entitled to suggest the inclusion of items on the agenda, with the final determination of the agenda to be made by the chairperson of the Committee. The chairperson of the Committee shall also determine the timing and length of the meetings, and the time devoted to each topic on the agenda. All procedural matters with respect to the conduct of Committee meetings shall be determined by the chairperson of the Committee, including whether any individuals other than Committee members shall be invited to attend and/or participate in all or any portion of any meetings, and the conditions of such individuals’ attendance and/or participation.
A majority of the members of the Committee present in person or by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other shall constitute a quorum.
The Committee may act by unanimous written consent as described in the Company's By-Laws.
The Committee shall maintain minutes of its meetings and records relating to those meetings and shall report regularly to the Board on its activities, as appropriate.
V. Committee's Authority and Responsibilities
To carry out its purpose, the Committee shall also have the following responsibilities.
- Compliance with Laws. Perform activities required of Compensation Committees by applicable law, rules or regulations including the rules of the SEC and the New York Stock Exchange.
- Shareholder Delegated Authority. Exercise authority delegated by the Company's shareholders with respect to compensation plans. These include, but may not be limited to:
- the National Fuel Gas Company 1997 Award and Option Plan, as amended, including At Risk Awards;
- the National Fuel Gas Company 2007 Annual At Risk Compensation Incentive Plan, including At Risk Awards;
- the National Fuel Gas Company 2010 Equity Compensation Plan;
- the National Fuel Gas Company 2012 Annual At Risk Compensation Incentive Plan, including At Risk Awards; and
- the National Fuel Gas Company 2012 Performance Incentive Program.
- CEO Compensation. At least 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 determine and approve the CEO's compensation level based upon this evaluation. In determining the long-term incentive component of CEO compensation, the Committee should consider all relevant factors, including the Company's performance and relative shareholder return, the value of similar incentive awards to chief executive officers at comparable companies and the awards given to the Company's CEO in past years.
- Non-CEO Compensation. After consultation with the CEO:
- Approve base salaries for individuals who have been designated by the Board as "officers" or "executive officers" for purposes of federal securities laws, including Section 16(b) of the Securities Exchange Act of 1934, as amended (collectively "Executive Officers"); and
- Approve cash bonuses to Executive Officers.
- Director Compensation. Regularly evaluate the level of compensation for Board and Committee service by non-employee directors and make recommendations regarding same to the Board.
- Other Compensation and Benefits
- Review the form of life insurance agreements made available to officers from time to time and, with the advice and counsel of the CEO, modify and supplement such agreements if it should deem such action appropriate; and
- Review the perquisites or other personal benefits made available to officers from time to time and modify and supplement such perquisites or other personal benefits if it should deem such action appropriate.
- Exercise the authority delegated by the Board under the National Fuel Gas Company Performance Incentive Program and the National Fuel Gas Company Executive Annual Cash Incentive Program.
- Recommendations. Make recommendations to the Board with respect to other compensation, including, but not limited to, incentive compensation plans and equity plans.
- Compensation Committee Report. Prepare the disclosure required by Item 407(e)(5) of the SEC's Regulation S-K.
- Severance and Termination Benefits. To review and recommend to the Board any severance or termination arrangements to be made with any Executive Officer of the Company.
- CD&A. To review and discuss with management the Company's CD&A, and based on that review and discussion, to recommend to the Board that the CD&A be included in the Company's annual proxy statement or annual report on Form 10-K.
- Process and Procedures Review. To review the description of the Committee's processes and procedures for the consideration and determination of executive compensation to be included in the Company's annual proxy statement.
- Evaluation of Management. Oversee the evaluation of management.
- Regular Board Reports. Make regular reports to the Board, including reports on the matters discussed at any Committee meeting that has occurred, and any Committee action taken, since the previous Board meeting.
- Compensation Program Review. Review from time to time with management and any consultants or advisors the adequacy and effectiveness of the compensation programs of the Company, and elicit any recommendations for the improvement of such programs or particular areas where new or different programs are desirable, and recommend that the Board amend, these programs if the Committee deems appropriate.
- Administrative Rules Review. Review from time to time and, as appropriate, amend the Committee's Administrative Rules regarding awards under various compensation plans administered by the Committee; ensure compliance with those Rules and review the Company management's response to any material violation of those Rules.
- Other Matters. Investigate any other matter brought to its attention within the scope of its duties. In addition, the Committee shall consider such other matters in relation to the compensation of the officers and employees of the Company and its Subsidiaries as the Committee may, in its discretion, determine to be advisable.
- Compensation Consultant. Exercise sole authority to retain and terminate any compensation consultant used to assist in the evaluation of director, CEO or officer compensation, including sole authority to approve the Consultant's fees and other retention terms, such fees to be borne by the Company.
- Authority to Retain Advisors. As deemed necessary or appropriate by the Committee in its sole discretion, retain or obtain the advice of compensation consultants, independent legal counsel or other advisors. The Committee shall be directly responsible for the appointment, compensation, oversight, evaluation and termination of the work of any compensation consultant, independent legal counsel or other advisor retained by the Committee. The Company must provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to a compensation consultant, independent legal counsel or any other advisor retained by the Committee. The Committee will inform the Board at least quarterly of any and all work done by such advisors.
provided, however, that the Committee is not required to conduct the independence assessment with respect to (i) in-house legal counsel; and (ii) any compensation consultant, legal counsel or other advisor whose role is limited to (a) consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers or directors of the Company, and that is available generally to all salaried employees, or (b) providing information that either is not customized for a particular company or that is customized based on parameters that are not developed by the compensation consultant, and about which the compensation consultant does not provide advice.
The Committee may select a compensation consultant, legal counsel or other advisor to the Committee only after taking into consideration all factors relevant to that person's independence from management, including the following:
- the provision of other services to the Company by the person that employs the compensation consultant, legal counsel or other advisor;
- the amount of fees received from the Company by the person that employs the compensation consultant, legal counsel or other advisor, as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel or other advisor;
- the policies and procedures of the person that employs the compensation consultant, legal counsel or other advisor that are designed to prevent conflicts of interest;
- any business or personal relationship of the compensation consultant, legal counsel or other advisor with a member of the compensation committee;
- any stock of the Company owned by the compensation consultant, legal counsel or other advisor; and
- any business or personal relationship of the compensation consultant, legal counsel, other advisor or the person employing the advisor with an executive officer of the Company;
Nothing herein requires a compensation consultant, legal counsel or other advisor to be independent. The Committee may select or receive advice from any advisor, including advisors that are not independent, after considering the independence factors outlined herein.
- Delegation to Subcommittees. The Committee may form subcommittees and may delegate to such subcommittees such power and authority of the Committee as the Committee deems appropriate; provided, however, that no subcommittee shall consist of fewer than two members; and provided further that the Committee shall not delegate to a subcommittee any power or authority required by any law, regulation or listing standard to be exercised by the Committee as a whole.
- Charter Review. On an annual basis, review the adequacy of this Compensation Committee Charter ("Charter") and recommend to the Board any modifications to this Charter, which the Committee deems appropriate, for approval by the Board.
VI. Role of CEO
The CEO may make, and the Committee may consider, recommendations to the Committee regarding the Company's compensation and employee benefit plans and practices, including its executive compensation plans, its incentive-compensation and equity-based plans with respect to Executive Officers other than the CEO.
VII. Annual Performance Evaluation
The Committee shall conduct and present to the Board an annual performance evaluation of the Committee.
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While the members of the Committee have the duties and responsibilities set forth in this Charter, nothing contained in this Charter is intended to create, or should be construed as creating, any responsibility or liability of members of the Committee.