HUMAN RESOURCES COMMITTEE OF
THE BOARD OF DIRECTORS OF
CSS INDUSTRIES, INC. (the “COMPANY”)
(As adopted December 16, 2003 and amended effective July 1, 2013, February 6, 2017
and March 27, 2018)
- Mission Statement
The Human Resources Committee (“Committee”) of the Board of Directors (“Board”) of the Company oversees the development and implementation of compensation and benefit policies, plans and programs designed to encourage enhancement of the Company’s profitability, and consequently stockholder value. The Committee evaluates the compensation of the senior management of the Company and its affiliates and seeks to assure that they are compensated in a manner designed to attract, retain and reward them consistent with the compensation strategy of the Company, internal equity considerations, competitive practice, and the requirements of the appropriate regulatory bodies and other duties relating to human resources matters as requested by the Chief Executive Officer of the Company or as otherwise deemed appropriate. The Committee also shall communicate to stockholders regarding the Company’s compensation policies and the reasoning behind such policies as required by the Securities and Exchange Commission and the New York Stock Exchange.
- Membership and Qualification
The Committee shall consist of at least three members of the Board who satisfy the independence requirement of the New York Stock Exchange (“Independent Directors”). In affirmatively determining the independence of any member of the Committee, the Board must consider all factors specifically relevant to determining whether the director has a relationship to the Company which is material to that director’s ability to be independent from Company management in connection with the duties of a member of the Committee, including, but not limited to:
(A) the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the Company to such director; and
(B) whether such director is affiliated with the Company, a subsidiary of the Company or an affiliate of a subsidiary of the Company.
The Committee members shall be elected annually by the Board for terms of one year, or until their successors shall be duly elected and qualified. A Committee Chair shall be designated by the Board.
In addition to satisfying the requirements necessary to be Independent Directors, each member of the Committee also shall satisfy all requirements necessary from time to time to be “disinterested directors” under SEC Rule 16b-3 and qualified “outside directors” under Section 162(m) of the Internal Revenue Code and related regulations, all as amended from time to time.
3. Meetings and Other Actions
(a) The Committee will meet at such times as may be necessary to carry out its responsibilities. Meetings may be called by the Chair of the Committee, the Chairman of the Board and/or the Chief Executive Officer of the Company. All meetings of and other actions by the Committee shall be held and taken pursuant to the Bylaws of the Company. Minutes will be kept of each meeting of the Committee. Reports of meetings of and actions taken at meetings or by consent by the Committee shall be made by or on behalf of the Committee Chair.
(b) The Committee shall conduct an annual self-evaluation in such manner as determined by the Board.
4. Goals, Responsibilities and Authority
In carrying out its mission, the Committee shall have the following responsibilities and authority (it being understood that the Committee may condition its approval of any compensation on Board ratification to the extent so required to comply with applicable tax law such as Section 162(m) of the Internal Revenue Service):
- Review from time to time, modify if necessary, and approve: (a) the Company’s corporate goals and objectives relevant to executive compensation, including, but not limited to, those relevant to the compensation of the Chief Executive Officer of the Company; and (b) the structure of the Company’s executive compensation to ensure that such structure is appropriate to achieve the Company’s objectives of rewarding each member of senior management and other management personnel of the Company and of its affiliates appropriately for their contributions to the Company’s growth and profitability and the Company’s other goals and linking the interests of the senior management of the Company and of its affiliates to the long-term interests of the Company’s stockholders through long and short term incentives and features that include downside risk as well as upside potential.
- Annually evaluate the compensation (and performance relative to compensation) of the Chief Executive Officer of the Company and determine the amounts and individual elements of total compensation for the Chief Executive Officer consistent with the Company’s corporate goals and objectives and communicate in the annual Committee Report to the stockholders of the Company the factors and criteria on which the Chief Executive Officer’s compensation for the then last fiscal year was based, including the relationship of the Company’s performance to the Chief Executive Officer’s compensation. In determining the long-term incentive component of the Chief Executive Officer’s compensation, the Committee should consider the Company’s performance and relative stockholder return, the value of similar incentive awards to Chief Executive Officers at comparable companies, and the awards given to the Company’s Chief Executive Officer in prior years.
- Annually evaluate (in conjunction with the Chief Executive Officer) and approve the compensation (and performance relative to compensation) of the other executive officers and members of the senior management of the Company and of its affiliates, approve the individual elements of total compensation for each such person and communicate in the annual Committee Report to stockholders contained in the Proxy Statement the specific relationship of the Company’s performance to executive compensation.
- Periodically evaluate compensation policies for officers and senior management other than the Chief Executive Officer and evaluate and make recommendations to the Board with respect to the terms and administration of the Company’s annual and long-term incentive compensation plans and equity-based plans to assure that they are structured and administered in a manner consistent with the Company’s goals and objectives as to participation in such plans, target annual incentive awards, corporate financial goals, actual awards paid to the Company’s executive officers and other members of the senior management of the Company and its affiliates and total funds reserved for payment under the compensation plans.
- Approve revisions to the Company’s executive salary range structure, annual salary increase guidelines, and discuss all such compensation arrangements with the Chief Executive Officer of the Company.
- Periodically evaluate the employee benefit programs of the Company and those of its affiliates and approve any significant changes therein and determine when it is necessary (based on advice of counsel) or otherwise desirable to submit any such changes to a vote of the full Board and/or the Company’s stockholders.
- Perform such other duties and responsibilities as may be assigned to the Committee, from time to time by the Board of the Company or as designated in any compensation or other benefit plan document.
- Assist the Board in overseeing the development of executive succession plans.
- Produce the aforementioned Committee Report on executive compensation as required by the Securities and Exchange Commission (“SEC”) to be included in the Company’s annual proxy statement or annual report on Form 10-K filed with the SEC.
- Review and discuss with the Company’s management the Compensation Discussion and Analysis (CD&A) to be included in the Company’s annual proxy statement, and determining whether to recommend to the Board that the CD&A be included in the proxy statement.
- Conduct an annual self-evaluation in such manner as determined by the Board.
- Evaluate whether any compensation consultants, independent legal counsel and other advisers (collectively, compensation advisers) retained or to be retained by the Committee has any conflict of interest in accordance with Item 407(e)(3)(iv) of Regulation S-K. In retaining compensation advisers, the Committee shall consider the compensation adviser’s independence from management by considering the factors specified in New York Stock Exchange Rule 303A.05(c).
5. Additional Resources
The Committee shall have the right to use reasonable amounts of time of the Company’s internal audit staff and independent auditors, internal legal counsel and other internal staff to assist and advise the Committee in connection with its responsibilities. Additionally, the Committee may, in its sole discretion, retain or obtain the advice of compensation advisers, including compensation consultants, independent legal counsel and other advisers. The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any compensation advisers retained by the Committee. The Company shall provide appropriate funding, as determined by the Committee, for payment of compensation to any compensation advisers retained by the Committee. The Committee shall keep the Company’s Chief Financial Officer advised as to the general range of anticipated expenses for such compensation advisers.