Charter of the Audit Committee

I. Purpose

The purpose of the Audit Committee of AGCO Corporation (the “Company”) shall be to assist the Board of Directors (the “Board”) in its oversight of:

  • The integrity of the Company’s financial statements;
  • The Company’s compliance with legal and regulatory requirements;
  • The independent auditor's qualifications and independence; and
  • The performance of the Company's internal audit function and independent auditor.

While the Audit Committee has the responsibilities set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that AGCO’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles or to assure AGCO’s compliance with laws and regulations. This is the responsibility of management.

II. Structure and Operations

Composition and Qualifications

The Audit Committee shall be comprised of at least three directors designated by the Board, each of whom shall meet the independence and qualification requirements of the New York Stock Exchange (the “NYSE”), Section 10A(m)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”), and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Audit Committee shall also disclose, in accordance with applicable regulatory requirements, whether any member of the Audit Committee is a "financial expert" as defined by the SEC. No member of the Audit Committee shall serve on more than three public company audit committees.

Appointment and Removal

The members of the Audit Committee shall be designated by the Board annually and each member shall serve until such member's successor is duly designated or until such member's earlier resignation or removal. Any member of the Audit Committee may be removed, with or without cause, by a majority vote of the Board.

Unless a Chairperson is designated by the full Board, the members of the Audit Committee shall designate a Chairperson by majority vote of the full Audit Committee membership. The Chairperson will chair all sessions of the Audit Committee and set the agenda for Audit Committee meetings.

Delegation to Subcommittees

In fulfilling its responsibilities, the Audit Committee may delegate responsibilities to a subcommittee consisting of one or more members of the Audit Committee.

III. Meetings

The Audit Committee shall ordinarily meet at least four times annually, or more frequently as circumstances dictate. Any member of the Audit Committee may call meetings of the Audit Committee. The Audit Committee will conduct executive sessions with Management (including CEO, CFO and General Counsel), the external auditors and the internal auditors at least annually. A majority of members of the Audit Committee shall constitute a quorum. The action of a majority of members at a meeting at which a quorum is present will be the action of the Audit Committee.

Any director of the Company who is not a member of the Audit Committee may attend meetings of the Audit Committee; provided, however, that any director who is not a member of the Audit Committee may not vote on any matter coming before the Audit Committee for a vote. The Audit Committee also may invite to its meetings any member of management of the Company and such other persons as it deems appropriate in order to carry out its responsibilities. The Audit Committee may meet in executive session, as the Audit Committee deems necessary or appropriate.

IV. Responsibilities and Duties

The following functions shall be common recurring activities of the Audit Committee in carrying out its purpose as set forth in Section I of this Charter. These functions should serve as a guide with the understanding that the Audit Committee may carry out additional functions and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, regulatory, legal or other conditions. The Audit Committee shall also carryout any other responsibilities and duties delegated to it by the Board from time to time related to the purpose of the Audit Committee outlined in Section I of this Charter.

The Audit Committee, in discharging its oversight role, is empowered to study or investigate any matter of interest or concern within the purpose of the Audit Committee that the Audit Committee deems appropriate or necessary. The Audit Committee shall have the authority to engage independent counsel and other advisers, as it determines necessary to carry out its duties, and the Company shall provide for appropriate funding, as determined by the Audit Committee for the payment of (a) compensation to the independent auditor(s) engaged for the purpose of preparing or issuing the audit report or performing other audit, review or attest services for the Company, (b) compensation to any independent advisors employed by the Audit Committee and (c) ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.

To fulfill its responsibilities and duties, the Audit Committee shall:

Financial Reporting

  1. Review and discuss with management and the independent auditor the annual and quarterly financial statements, including the Company's disclosure under "Management's Discussion and Analysis of Financial Condition and Results of Operations."
  2. Discuss the Company's earnings press releases and financial information and earnings guidance provided to analysts and rating agencies.
  3. Review with the independent auditor (i) all critical accounting policies and practices to be used; (ii) all alternative treatments of financial information under GAAP that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and (iii) other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences.
  4. Review with management and the independent auditor: (i) major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles, and major issues as to the adequacy of the Company’s internal controls and any special audit steps adopted in light of material deficiencies; (ii) analyses prepared by management and the independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements and alternative GAAP methods that could have been used; (iii) the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company; (iv) the type and presentation of information to be included in earnings press releases; and (v) any financial information and earnings guidance provided to analysts and rating agencies.
  5. Review disclosures made to the Committee by the Company’s Chief Executive Officer and Chief Financial Officer regarding: (i) any significant deficiencies in the design or operation of internal controls of the Company which could adversely affect the Company’s ability to record, process, summarize and report financial data; and (ii) any fraud, material or otherwise, that involves management or other employees who have a significant role in the control environment.
  6. Review with the independent auditor any problems or difficulties encountered during the course of the review or audit, including any restrictions on the scope or work or access to required information and management’s response.
  7. Review and discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees.

The Independent Auditor

  1. The Audit Committee shall have the sole responsibility for the appointment (subject, at the discretion of the Board, to shareholder ratification), compensation, retention and oversight of the work of the independent auditor. The Audit Committee shall review the performance of the independent auditor periodically and make determinations regarding the appointment or termination of the independent auditor. The independent auditor shall report directly to the Audit Committee.
  2. At least annually, obtain and review a report by the independent auditor describing: the independent auditing firm's internal quality-control procedures; any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and all relationships between the independent auditor and the Company.
  3. Oversee the independence of the auditor by:
    • Reviewing and discussing with the independent auditor on a periodic basis, any disclosed relationships or services that may impact the objectivity and independence of the auditor and pre-approving all audit and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor, subject to and in accordance with Section 10A(i)(1)(B) of the Exchange Act and the Audit Committee’s pre-approval policy, as it may be amended from time to time.
    • Developing clear hiring policies for employees or former employees of the independent auditor.

Ethical and Legal Compliance/General

  1. The Audit Committee shall be knowledgeable about the content and operation of the AGCO Ethics and Compliance Program. It shall monitor and oversee the Company’s legal compliance programs and code of business conduct and ethics and obtain regular updates from the Chief Ethics & Compliance Officer regarding any legal or regulatory matter that could have a significant impact on the financial statements. Specifically, the Audit Committee shall:
    • (a) Periodically review the Code of Conduct and its implementation;
    • (b) Periodically review with the Chief Ethics & Compliance Officer, or designated representative, the responsibilities, activities and effectiveness of the ethics and compliance function;
    • (c) Periodically review significant issues related to the Code of Conduct, including AGCO’s compliance with legal and regulatory requirements, and AGCO’s response to and resolution of such issues; and
  2. Establish procedures for the receipt, retention and treatment of complaints and concerns received by the Company regarding accounting, internal accounting controls, or auditing or related matters and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.

The Chief Ethics and Compliance Officer shall have direct access to the Audit Committee and the full Board of Directors and shall provide any information requested by the Audit Committee and/or the full Board of Directors.

Internal Audit

Internal Audit reports functionally to the Audit Committee and administratively to the Senior Vice President and Chief Financial Officer. To maintain oversight of the Internal Audit function, the Audit Committee shall:

  1. Review and approve the annual internal audit plan;
  2. Review progress with respect to the approved internal audit plan as well as any changes required in the scope of internal audit activities;
  3. Discuss any difficulties the internal audit team encountered in the course of their audits, including any restrictions on the scope of their work or access to required information;
  4. Review significant findings from internal audit activities and maintaining oversight of management responses and corrective actions.

Reports

  1. Prepare the report of the Audit Committee to be included in the Company's annual proxy statement.
  2. Report regularly to the Board (i) following meetings of the Audit Committee, (ii) with respect to such other matters as are relevant to the Audit Committee's discharge of its responsibilities, (iii) with respect to such recommendations as the Audit Committee may deem appropriate, and (iv) the Audit Committee's conclusions with respect to the independent auditor. The report to the Board may take the form of an oral report by the Chairperson or any other member of the Audit Committee designated by the Audit Committee to make such report.
  3. Maintain minutes and other records of meetings and activities of the Audit Committee, as appropriate under applicable law.

Other

The Audit Committee participates in other areas of review as designated by the Board, including, but not limited to, the following:

  1. At least annually (or more frequently as circumstances require), the Audit Committee shall review the expenses of the senior officers and executives of AGCO.
  2. At least annually (or more frequently as circumstances require), the Audit Committee shall receive a report regarding tax matters, including the status of income tax reserves and governmental tax audits.
  3. At least annually (or more frequently as circumstances require), the Audit Committee shall receive a report on AGCO’s use of derivative securities and hedging instruments.
  4. At least annually (or more frequently as circumstances require), the Audit Committee shall receive and discuss a report on the adequacy of AGCO’s computerized information system controls and related security.
  5. At least annually (or more frequently as circumstances require), the Audit Committee shall review policies with respect to risk assessment and risk management, including major financial risk exposures and the steps management has taken to monitor and control such exposures.
  6. Review and approve in advance any proposed “related party” transactions required to be disclosed pursuant to Item 404 of Regulation S-K.

V. Annual Performance Evaluation

The Audit Committee shall perform a review and evaluation, at least annually, of the performance of the Audit Committee. In addition, the Audit Committee shall review and reassess, at least annually, the adequacy of this Charter and recommend to the Governance Committee any improvements to this Charter that the Audit Committee considers necessary or appropriate. The Audit Committee shall conduct such evaluation and reviews in such manner as it deems appropriate.

 

Charter of the Compensation Committee

I. Purpose

The Compensation Committee of AGCO Corporation (the “Company”) shall carry out the Board of Directors’ (the “Board”) overall responsibility relating to executive compensation including:

  • Assisting the Board with respect to the Company's compensation programs and compensation of the Company's executives; and
  • Producing an annual report of the Compensation Committee on executive compensation for inclusion in the Company's annual proxy statement, in accordance with applicable rules and regulations.

II. Structure and Operations

Composition and Qualifications

All members of the Compensation Committee shall meet the independence (or similar) requirements of the New York Stock Exchange (the “NYSE”), Section 10A(m)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”), the rules and regulations of the Securities and Exchange Commission (including Rule 16b-3(d)(1)) (the “SEC”) and Section 162(m) of the Internal Revenue Code.

Appointment and Removal

The members of the Compensation Committee shall be designated by the Board annually and each member shall serve until such member's successor is duly designated or until such member's earlier resignation or removal. Any member of the Compensation Committee may be removed from the Committee, with or without cause, by a majority vote of the Board.

Unless a Chairperson is designated by the Board, the members of the Compensation Committee shall designate a Chairperson by majority vote of the full Compensation Committee membership. The Chairperson will chair all sessions of the Compensation Committee and set the agendas for Compensation Committee meetings.

Delegation to Subcommittees

In fulfilling its responsibilities, the Compensation Committee may delegate any or all of its responsibilities to a subcommittee of the Compensation Committee and, to the extent not expressly reserved to the Compensation Committee by the Board or by applicable law, rule or regulation, to any other committee consisting entirely of directors who meet the independence requirements of the NYSE, Section 10A(m)(3) of the Exchange Act and the rules and regulations of the SEC.

III. Meetings

The Compensation Committee shall ordinarily meet at least four times annually, or more frequently as circumstances dictate. Any member of the Compensation Committee may call meetings of the Compensation Committee. A majority of members of the Compensation Committee shall constitute a quorum. The action of a majority of members at a meeting at which a quorum is present will be the action of the Compensation Committee.

Any director of the Company who is not a member of the Compensation Committee may attend meetings of the Compensation Committee; provided, however, that any director who is not a member of the Compensation Committee may not vote on any matter coming before the Compensation Committee for a vote. The Compensation Committee also may invite to its meetings any member of management of the Company and such other persons as it deems appropriate in order to carry out its responsibilities. The Compensation Committee may meet in executive session, as the Compensation Committee deems necessary or appropriate.

IV. Responsibilities and Duties

The following functions shall be common recurring activities of the Compensation Committee in carrying out its purpose as set forth in Section I of this Charter. These functions should serve as a guide with the understanding that the Compensation Committee may carry out additional functions and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, regulatory, legal or other conditions. The Compensation Committee shall also carry out any other responsibilities and duties delegated to it by the Board from time to time related to the purpose of the Compensation Committee set forth in Section I of this Charter.

To fulfill its responsibilities and duties, the Compensation Committee shall:

Compensation for Executive Officers/Officer Selection/Conflicts

  1. Establish and review the overall executive compensation philosophy of the Company.
  2. Review and approve the Company goals and objectives relevant to the compensation of the Chief Executive Officer and other executive officers’ compensation, including annual performance objectives.
  3. Evaluate the performance of the Chief Executive Officer (“CEO”) and other executive officers in light of established goals and objectives and, based on such evaluation, determine and approve the compensation, including annual salary, bonus, stock options, other incentive awards and other benefits, direct and indirect, of the CEO and other executive officers.
  4. Review and recommend to the full Board, or approve as appropriate, new executive compensation plans, incentive-compensation plans and equity based plans and any amendments to or modifications of such plans.
  5. Establish and periodically review policies in the area of senior management perquisites.

Monitoring Incentive and Equity-Based Compensation Plans

  1. Perform duties delegated to the Compensation Committee by the Board under various executive compensation plans.
  2. Review and make recommendations to the full Board, or approve, as appropriate, all awards of stock, stock options and other incentive compensation awards to executive officers pursuant to the Company's executive plans.
  3. Monitor compliance by executives with the terms and conditions of the Company's executive compensation plans.
  4. Select, retain, terminate and/or replace, as needed, compensation and benefits consultants and other outside experts to provide independent advice to the Compensation Committee. In that connection, in the event the Compensation Committee retains a compensation consultant or other expert, or if the Company should retain a compensation consultant or other expert to assist in the evaluation of the CEO or senior executive compensation, the Compensation Committee shall have the sole authority to approve such consultant's or expert's fees and other retention terms.

Reports

  1. Prepare an annual report on executive compensation for inclusion in the Company's proxy statement, in accordance with applicable rules and regulations.
  2. Report regularly to the Board (i) following meetings of the Compensation Committee, (ii) with respect to such other matters as are relevant to the Compensation Committee's discharge of its responsibilities and (iii) with respect to such recommendations as the Compensation Committee may deem appropriate. The report to the Board may take the form of an oral report by the Chair or any other member of the Compensation Committee designated by the Compensation Committee to make such report.
  3. Maintain minutes and other records of meetings and activities of the Compensation Committee, as appropriate under applicable law.

V. Annual Performance Evaluation

The Compensation Committee shall perform a review and evaluation, at least annually, of the performance of the Compensation Committee. In addition, the Compensation Committee shall review and reassess, at least annually, the adequacy of this Charter and recommend to the Governance Committee any improvements to this Charter that the Compensation Committee considers necessary or appropriate. The Compensation Committee shall conduct such evaluation and reviews in such manner as it deems appropriate.

 

Charter of the Governance Committee

I. Purpose

The Governance Committee of AGCO Corporation (the “Company”) shall provide assistance to the Board of Directors (the “Board”) in fulfilling its responsibilities to the shareholders by:

  • Identifying individuals qualified to become directors, consistent with criteria approved by Board, and recommending to the Board for selection the candidates for all directorships to be filled by the Board or by the shareholders;
  • Developing and recommending to the Board a set of corporate governance principles applicable to the Company; and
  • Overseeing the evaluation of the Board and the Chairman’s relationship with the Board.

II. Structure and Operations

Composition and Qualifications

All members of the Governance Committee shall meet the independence requirements of the New York Stock Exchange (the “NYSE”), Section 10A(m)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”).

Appointment and Removal

The members of the Governance Committee shall be designated by the Board annually and each member shall serve until such member's successor is duly designated or until such member's earlier resignation or removal. Any member of the Governance Committee may be removed from the Committee, with or without cause, by a majority vote of the Board.

Unless a Chairperson is designated by the Board, the members of the Governance Committee shall designate a Chairperson by majority vote of the full Governance Committee membership. The Chairperson will chair all sessions of the Governance Committee and set the agendas for Governance Committee meetings.

Delegation to Subcommittees

In fulfilling its responsibilities, the Governance Committee may delegate its responsibilities to a subcommittee of the Governance Committee and, to the extent not expressly reserved to the Governance Committee by the Board or by applicable law, rule or regulation, to any other committee consisting entirely of directors who meet the independence requirements of the NYSE, Section 10A(m)(3) of the Exchange Act and the rules and regulations of the SEC.

III. Meetings

The Governance Committee shall ordinarily meet at least four times annually, or more frequently as circumstances dictate. Any member of the Governance Committee may call meetings of the Governance Committee. A majority of members of the Governance Committee shall constitute a quorum. The action of a majority of members at a meeting at which a quorum is present will be the action of the Governance Committee.

Any director of the Company who is not a member of the Governance Committee may attend meetings of the Governance Committee; provided, however, that any director who is not a member of the Governance Committee may not vote on any matter coming before the Governance Committee for a vote. The Governance Committee also may invite to its meetings any member of management of the Company and such other persons as it deems appropriate in order to carry out its responsibilities. The Governance Committee may meet in executive session, as the Governance Committee deems necessary or appropriate.

IV. Responsibilities and Duties

The following functions shall be the common recurring activities of the Governance Committee in carrying out its purpose as set forth in Section I of this Charter. These functions should serve as a guide with the understanding that the Governance Committee may carry out additional functions and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, regulatory, legal or other conditions. The Governance Committee shall also carry out any other responsibilities and duties delegated to it by the Board from time to time related to the purpose of the Governance Committee outlined in Section I of this Charter.

To fulfill its responsibilities and duties, the Governance Committee shall:

Board Composition, Evaluation and Compensation

  1. Establish criteria for the selection of new directors to serve on the Board.
  2. Identify individuals believed to be qualified as candidates to serve on the Board and recommend that the Board select the candidates for all directorships to be filled by the Board or by the shareholders at an annual or special meeting. In addition, the Governance Committee shall review and make recommendations to the Board whether members of the Board should stand for re-election. The Governance Committee shall review a Director’s continuation on the Board on a regular basis, and as needed recommend to the Board whether, in light of all the circumstances, the Board should request that the Director resign; provided, that in making such recommendation the Governance Committee shall consider, among such other factors as it deems relevant, that such Director was elected by the shareholders of the Company.
  3. Select, retain, terminate and/or replace, as needed, recruiters to assist the Governance Committee in identifying director candidates. The Governance Committee shall have the sole authority to approve such recruiter’s fees and other retention terms.
  4. Conduct all necessary and appropriate inquiries into the backgrounds and qualifications of possible candidates as directors. In that connection, the Governance Committee shall have sole authority to retain and to terminate any firm used to assist in background investigations, including sole authority to approve the fees payable to such firm and any other terms of retention.
  5. Review and make recommendations, as the Governance Committee deems appropriate, regarding the qualifications for Board membership and the composition and size of the Board in order to ensure the Board has the requisite expertise and its membership consists of persons with sufficiently diverse and independent backgrounds.
  6. Develop and recommend to the Board for its approval procedures for an annual evaluation of the Board and the Chairman’s relationship with the Board. The Governance Committee shall oversee the annual evaluation of the Board and the Chairman’s relationship with the Board.
  7. Provide oversight of regulatory, compliance and governmental matters that may impact the Company, and at least annually review the Company’s government affairs strategies and priorities, the Company’s political expenditures, if any, and lobbying activities.

Committee Selection and Composition

  1. Recommend members of the Board to serve on the committees of the Board, giving consideration to rotation of committee membership and the criteria for service on each committee as set forth in the charter for such committee, as well as to any factors the Governance Committee deems relevant, and where appropriate, make recommendations regarding the removal of any member of any committee.

Corporate Governance

  1. Periodically review the Company bylaws, committee charters and composition of each committee of the Board and make recommendations to the Board for the adoption of revisions to the bylaws, committee charters, the creation of additional committees or the elimination of Board committees, and the appointment of committee chairpersons.
  2. Consider the adequacy of the governing documents of the Company and recommend to the Board, as conditions dictate, that the Board adopt amendments to the governing documents.
  3. Develop and recommend to the Board a set of corporate governance principles and guidelines and keep abreast of developments with respect to corporate governance to enable the Governance Committee to make recommendations to the Board in light of such developments as may be appropriate.
  4. Consider policies relating to meetings of the Board. This may include meeting schedules and locations, meeting agendas and procedures for delivery of materials in advance of meetings.
  5. Evaluate all shareholder proposals and recommend to the Board whether the Company should support or oppose the proposal. In evaluating shareholder proposals, the Committee should take into account the extent of the share holdings and the length of time those shares have been held, without precluding proposals made by smaller, individual shareholders. When appropriate, such consideration could include a meeting of the shareholder and representatives of the Committee.
  6. Review and evaluate the shareholder rights agreement at least every three years, or sooner if necessary. Following each such review, the Committee shall communicate its conclusions to the full Board, including any recommendation in light thereof as to whether the shareholder rights agreement should be modified or redeemed.

Reports

  1. Report regularly to the Board (i) following meetings of the Governance Committee, (ii) with respect to such other matters as are relevant to the Governance Committee's discharge of its responsibilities and (iii) with respect to such recommendations as the Governance Committee may deem appropriate. The report to the Board may take the form of an oral report by the Chair or any other member of the Governance Committee designated by the Governance Committee to make such report.
  2. Maintain minutes and other records of meetings and activities of the Governance Committee, as appropriate under applicable law.

V. Annual Performance Evaluation

The Governance Committee shall perform an evaluation, at least annually, of the performance of the Governance Committee. In addition, the Governance Committee shall review and reassess, at least annually, the adequacy of this Charter and recommend to the Board any improvements to this Charter that the Governance Committee considers necessary or appropriate. The Governance Committee shall conduct such evaluation and reviews in such manner as it deems appropriate.

 

Charter of the Succession Committee

I. Purpose

The Succession Planning Committee of AGCO Corporation (the “Company”) shall carry out the Board of Directors’ (the “Board”) overall responsibility relating to the succession process for the Chief Executive Officer and executive officers including:

  • Assisting the Board with respect to selecting, developing, evaluating and retaining the Chief Executive Officer, executive officers and key talent;
  • Managing the succession planning process in the event the current Chief Executive Officer cannot continue in the role;
  • Establishing with the Chief Executive Officer performance goals of the Chief Executive Officer, executive officers and key talent that include financial as well as leadership objectives; and
  • Establishing a meaningful performance evaluation process of the Chief Executive Officer, executive officers and key talent which includes, but is not limited to, a formal review of performance annually.

II. Structure and Operations

Composition and Qualifications

With the exception of the Chief Executive Officer, all members of the Succession Planning Committee shall meet the independence requirements of the New York Stock Exchange (the “NYSE”), Section 10A(m)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”), the rules and regulations of the Securities and Exchange Commission (the “SEC”).

Appointment and Removal

The members of the Succession Planning Committee shall be designated by the Board annually and each member shall serve until such member's successor is duly designated or until such member's earlier resignation or removal. Any member of the Succession Planning Committee may be removed from the Committee, with or without cause, by a majority vote of the Board.

Unless a Chairperson is designated by the Board, the members of the Succession Planning Committee shall designate a Chairperson by majority vote of the full Succession Planning Committee membership. The Chairperson will chair all sessions of the Succession Planning Committee and set the agendas for Succession Planning Committee meetings.

Delegation to Subcommittees

In fulfilling its responsibilities, the Succession Planning Committee may delegate any or all of its responsibilities to a subcommittee of the Succession Planning Committee and, to the extent not expressly reserved to the Succession Planning Committee by the Board or by applicable law, rule or regulation, to any other committee.

III. Meetings

The Succession Planning Committee shall ordinarily meet at least four times annually, or more frequently as circumstances dictate. Any member of the Succession Planning Committee may call meetings of the Succession Planning Committee. A majority of members of the Succession Planning Committee shall constitute a quorum. The action of a majority of members at a meeting at which a quorum is present will be the action of the Succession Planning Committee.

Any director of the Company who is not a member of the Succession Planning Committee may attend meetings of the Succession Planning Committee; provided, however, that any director who is not a member of the Succession Planning Committee may not vote on any matter coming before the Succession Planning Committee for a vote. The Succession Planning Committee also may invite to its meetings any member of management of the Company and such other persons as it deems appropriate in order to carry out its responsibilities. The Succession Planning Committee may meet in executive session, as the Succession Planning Committee deems necessary or appropriate.

IV. Responsibilities and Duties

The following functions shall be common recurring activities of the Succession Planning Committee in carrying out its purpose as set forth in Section I of this Charter. These functions should serve as a guide with the understanding that the Succession Planning Committee may carry out additional functions and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, regulatory, legal or other conditions. The Succession Planning Committee shall also carry out any other responsibilities and duties delegated to it by the Board from time to time related to the purpose of the Succession Planning Committee set forth in Section I of this Charter.

To fulfill its responsibilities and duties, the Succession Planning Committee shall:

Succession Planning for the Chief Executive, Executive Officers and Key Talent

  1. Establish and review the overall succession planning process and philosophy of the Company.
  2. Review and approve the Company goals and objectives relevant to the succession planning of the Chief Executive Officer, executive officers and key talent.
  3. Evaluate the performance of the Chief Executive Officer and executive officers in light of established goals and objectives and, based on such evaluation, oversee the development and retention of the same.
  4. Recommend strategies for the Company to attract talented people at various stages in their career inside the Company and outside the Company, such as college and graduate students on internships or executive officers in competitor companies.

Monitoring the Succession Planning Process

  1. Conduct, at least once per year, a review the Chief Executive Officer, executive officers and key talent and update succession plans as needed.
  2. Select, retain, terminate and/or replace, as needed, succession planning consultants and other outside experts to provide independent advice to the Succession Planning Committee. In that connection, in the event the Succession Planning Committee retains a succession planning consultant or other expert, or if the Company should retain a succession planning consultant or other expert to assist in the evaluation of the Chief Executive Officer or executive officer, the Succession Planning Committee shall have the sole authority to approve such consultant's or expert's fees and other retention terms.
  3. Have formal and informal contact with executive officers and key talent in order to develop an independent view of each person.
  4. Avail itself of other information, such as the results of employee surveys, to develop a view of the corporate culture and quality of leadership.

Reports

  1. Report regularly to the Board (i) following meetings of the Succession Planning Committee, (ii) with respect to such other matters as are relevant to the Succession Planning Committee's discharge of its responsibilities and (iii) with respect to such recommendations as the Succession Planning Committee may deem appropriate. The report to the Board may take the form of an oral report by the Chair or any other member of the Succession Planning Committee designated by the Succession Planning Committee to make such report.
  2. Maintain minutes and other records of meetings and activities of the Succession Planning Committee, as appropriate under applicable law.

V. Annual Performance Evaluation

The Succession Planning Committee shall perform a review and evaluation, at least annually, of the performance of the Succession Planning Committee. In addition, the Succession Planning Committee shall review and reassess, at least annually, the adequacy of this Charter and recommend to the Governance Committee any improvements to this Charter that the Succession Planning Committee considers necessary or appropriate. The Succession Planning Committee shall conduct such evaluation and reviews in such manner as it deems appropriate.

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