FMC TECHNOLOGIES, INC. CHARTER OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

Transcription

1 FMC TECHNOLOGIES, INC. CHARTER OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS Purpose of the Compensation Committee The Compensation Committee (the Committee ) is appointed by the Board of Directors (the Board ) of FMC Technologies, Inc. (the Company ). The purposes of the Committee shall be to: (A) Review, evaluate and approve the agreements, plans, policies and programs of the Company to compensate the Company s Chief Executive Officer ( CEO ), other executive officers and directors; (B) Review and discuss with the Company s management the Compensation Discussion and Analysis ( CD&A ) to be included in the Company s proxy statement for its annual meeting of stockholders ( Proxy Statement ) and determine whether to recommend to the Board that the CD&A be included in the Proxy Statement in accordance with applicable rules and regulations; (C) Produce the Compensation Committee Report as required by Item 407(e)(5) of Regulation S-K for inclusion in the Company s Proxy Statement in accordance with applicable rules and regulations; (D) Otherwise discharge the Board s responsibilities related to compensation of the Company s executive officers and directors; and (E) Perform such other functions as the Board may assign to the Committee from time to time. The Committee s goal is to ensure that the Company s compensation programs are designed to provide a competitive level of compensation to attract and retain talented executive officers and directors, reward and encourage maximum corporate and individual performance, promote accountability and ensure that executive officer and director interests are aligned with the interests of the Company s stockholders. Composition and Qualifications The Committee shall be composed of a minimum of three members of the Board, and each member shall, in the judgment of the Board, meet the independence requirements of the laws, rules and regulations applicable to the Company, including the requirements of the New York Stock Exchange or other applicable 1

2 securities exchange. The members of the Committee and its Chairman shall be selected annually by the Board upon the recommendation of the Company s Nominating and Governance Committee and shall serve at the pleasure of the Board. Any vacancy on the Committee shall be filled by, and any member of the Committee may be removed by, an affirmative vote of a majority of the Board. If a Chairman is not designated by the Board or present at a meeting, the Committee may designate a Chairman by majority vote of the Committee members then in office. In addition to meeting the independence requirements of the laws, rules and regulations applicable to the Company, each Committee member must be (a) an outside director for purposes of Section 162(m) of the Internal Revenue Code, (b) a non-employee director for purposes of Rule 16b-3 of the Exchange Act, and (c) not party to any interlocking arrangement that would require disclosure in the Company s annual proxy statement. Notwithstanding the foregoing membership requirements, no action of the Committee will be invalid by reason of any such requirement not being met at the time such action is taken. Authority and Responsibilities The Committee is delegated all authority of the Board as may be required or advisable to fulfill the purposes of the Committee. Without limiting the generality of the preceding statements, the Committee has the authority, and is entrusted with the responsibility, to take the following actions: A. Authority 1. Conduct or authorize investigations into any matter within the scope of the responsibilities delegated to the Committee as it deems appropriate, with full access to all books, record, facilities and personnel of the Company, including the authority to request any officer, employee or adviser of the Company to meet with the Committee or any advisers engaged by the Committee; 2. In its sole discretion, retain and determine funding for legal counsel, compensation consultants, as well as other experts and advisers (collectively, "Compensation Advisers"), including the authority to retain, approve the fees payable to, amend the engagement with, and terminate any Compensation Adviser, as it deems necessary or appropriate to fulfill its responsibilities. The selection of such Compensation Advisers should take place after considering all factors relevant to that person s independence from 2

3 management, including (i) the provision of other services (such as any non-executive compensation consulting services) to the Company by the person that employs the Compensation Adviser; (ii) the amount of fees received from the Company by the person that employs the Compensation Adviser, as a percentage of the total revenue of the person that employs the Compensation Adviser; (iii) the policies and procedures of the person that employs the the Compensation Adviser that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the Compensation Adviser with a member of the Committee; (v) any stock of the Company owned by the Compensation Adviser; and (vi) any business or personal relationship of the Compensation Adviser with an executive officer of the Company. The Company must provide for appropriate funding, as determined by the Committee, for payment of (a) compensation to any Compensation Adviser engaged by the Committee and (b) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties. 3. Delegate to its Chairman, any one of its members or any sub-committee it may form, the responsibility and authority for any particular matter, as it deems appropriate from time to time under the circumstances. Each sub-committee will keep minutes and regularly report to the Committee. B. Responsibilities Executive Compensation 1. Exercise oversight of all matters of executive compensation policy. 2. Review, modify (if necessary) and approve the Company's peer companies, if any, and data sources for purposes of evaluating the Company's compensation competitiveness and establishing the appropriate competitive positioning of the levels and mix of compensation elements. 3. Review, modify (if necessary) and approve the Company s executive compensation program in light of the Company s goals and objectives relative to executive compensation. 4. Review and approve the corporate goals and objectives relevant to the compensation for the CEO, evaluate the 3

4 CEO s performance in light of those goals and objectives, and determine and approve the CEO s total compensation level, including base salary, target bonus percentages, annual bonus payments, salary range and long-term equity incentive awards, based on this evaluation. The Committee should consider the Company s performance and related stockholder return, the value of similar awards to chief executive officers at comparable companies and the awards given to the Company s chief executive officers in past years along with any other considerations of applicable rules and regulations of the U.S. Securities and Exchange Commission ( SEC ). The Committee shall review its evaluation of the performance of the CEO and the CEO s total compensation decisions with the Board in executive session. 5. In consultation with the Company s CEO, evaluate and set the compensation of the Company s other executive officers, including base salaries, target bonus percentages and actual bonus payments and long-term equity incentive awards. 6. Approve all change in control agreements, officer contracts, agreements and severance arrangements and the terms of any supplemental retirement plans and annually review officer perquisites. 7. Approve revisions in the U.S. national exempt salary structure and annual U.S. merit fund budgets. 8. Review, as needed with a Compensation Adviser, executive compensation matters and significant issues that relate to executive compensation. 9. Review and discuss with management the Company s CD&A to be included in the Company s Proxy Statement and determine whether to recommend to the Board that the CD&A be included in the Company s Proxy Statement in accordance with applicable rules and regulations. 10. Prepare the Compensation Committee Report as required by Item 407(e)(5) of Regulation S-K for inclusion in the Company s Proxy Statement. 11. Review and recommend to the Board how frequently the Company should permit stockholders to have an advisory vote on executive compensation ( say-on-pay ). This review 4

5 should take into account the historical results of stockholder advisory votes on the frequency of say-on-pay resolutions at the Company. 12. Following each stockholder meeting at which say-on-pay resolutions are proposed for a stockholder advisory vote, the Committee will review the results of the advisory vote, and consider whether to make any adjustments to the Company s executive compensation policies and practices. 13. Review the Company s proposals to stockholders on executive compensation matters, including advisory votes on executive compensation and the frequency of such votes, prepared by the Company s executive management and, if appropriate, recommend to the Board that the proposals be included in the Company s Proxy Statement as required by the SEC. 14. Prepare and recommend to the Board for adoption a clawback policy that complies with applicable rules and regulations, including the rules and regulations of the SEC, and the listing standards of the NYSE. Succession Planning 1. Periodically review management s succession plans for the CEO and other executive officers and recommend the succession plans to the full Board for approval. 2. Review management s recommendations for executive officers of the Company, and recommend executive officer candidates to the Board for their approval. Incentive and Equity Compensation 1. Approve the terms and conditions of, and total awards to be made from, the Company s Amended and Restated Incentive Compensation and Stock Plan and any successor plan thereto (the Plan ), and make any other determinations necessary or advisable in the administration of the Plan, including (i) the review and approval of dilution levels and run rates, (ii) the review and approval of any forfeitures of awards to officers of the Company who are subject to Section 16 of the Exchange Act, pursuant to the terms of the clawback provisions of Section 16 of the Plan, and (iii) the approval of annual equity grants to all executive officers. 5

6 2. Review, approve, adopt and amend, as necessary, any incentive compensation or other equity-based compensation plans of the Company, to the extent authorized by the Board, and to make recommendations to the Board with respect to such plans. 3. Establish, and recommend to the Board for approval, policies with respect to insider trading, hedging and pledging of Company stock and periodically review compliance with such policies. 4. Ensure that stockholders are given the opportunity to vote on equity compensation plans, as may be required by law, the Company s Restated Certificate of Incorporation or Amended and Restated By-Laws (as amended from time to time) and the listing standards of the NYSE. 5. Review and approve management s summary of the Company s performance compared to bonus plan terms, total bonus amounts to be paid and specific bonuses for all executive officers. Committee and Sub-Committee Performance Evaluations 1. Evaluate the Committee s performance and the adequacy of its charter on an annual basis and recommend any proposed changes to the Board for approval. 2. Annually review the Sub-Committee Report of the Employee Benefits Committee, Plan Investment Committee and any other sub-committee formed by the Committee. Director Compensation 1. Recommend to the full Board changes to compensation for the independent members of the Board, including retainer amounts, meeting and chairman fees and non-retainer equity forms and amounts. Any recommended changes shall be supported by survey data from comparable companies provided by an independent compensation consultant. Other Powers and Responsibilities 6

7 1. Review the Company s overall compensation philosophy to ensure that the policy appropriately links management interests with those of stockholders, rewards executives for their contributions and provides appropriate retention incentives. 2. Review and approve all new employee and retiree benefit programs, and major changes in existing employee and retiree benefit programs. 3. Review and approve organization changes and restructuring that have a significant impact on the Company or its business. 4. Review and assess the adequacy of policies and procedures with respect to major risk assessment and risk management in those specific areas as delegated to the Committee by the Board in fulfilling its oversight responsibilities relating to the Company s risk management. The Committee will meet with management to understand the steps taken to identify, assess, monitor and control such exposures and will report its observations to the Board. Procedures The Committee shall meet at least four times per year as scheduled by the Committee Chairman to carry out the Committee s responsibilities under this Charter. Members of management, including audit and legal, and representatives from outside consultants will attend meetings at the request of the Committee Chairman. The Committee Chairman will, in consultation with the other members of the Committee and appropriate officers of the Company, establish the agenda for each Committee meeting. The Committee will maintain minutes of its meetings, and the Chairman of the Committee will report regularly to the Board about the Committee s deliberations, conclusions and recommendations. A majority of the Committee members shall constitute a quorum for the transaction of business. The action of a majority of those present at a meeting at which a quorum is present shall be the act of the Committee. The Committee may take action by unanimous written consent or by conference communication by which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person. The Committee will be assisted by the Vice President, Administration, who will serve as Executive Secretary to the Committee. Amended October 2,