Compensation and Corporate Governance
Committees of the Board
BADGER METER, INC.
COMPENSATION AND CORPORATE GOVERNANCE COMMITTEE CHARTER
(Effective June 16, 2008)
Overall Responsibility and Purpose
The Compensation and Corporate Governance Committee (the “Committee”) of the Board of Directors (the “Board”) of Badger Meter, Inc. (the “Company”) oversees all programs related to officer and director compensation; management development and succession; director and officer performance and nominations, including identifying and recommending to the Board qualified potential director nominees for election at each of the Company’s Annual Meetings of Shareholders; and corporate governance matters, including developing and recommending to the Board the Company’s governance principles.
Committee Member Qualifications
The Committee will consist of not less than three members of the Board, including the Committee Chair, all of whom shall meet the independence requirements of the New York Stock Exchange (“NYSE”). All Committee members and the Committee Chair will be appointed by the Board. In the event that the Committee Chair is unable to serve as chair for a specific meeting, he or she shall designate one of the Committee members to preside.
Meetings
The Committee will meet at least annually and at such other times as shall be determined by the Committee Chair. A simple majority of the Committee shall constitute a quorum for the transaction of business. The Committee will conduct an evaluation of its performance at least annually and will oversee the evaluation of the Board and the Company’s management.
Duties and Responsibilities
The duties and responsibilities of the Committee shall be:
Relating to Directors:
1. To identify and recommend candidates to be nominated by the Board for election as directors of the Company, consistent with criteria approved by the Board, at the next succeeding Annual Meeting of Shareholders.
2. To recommend candidates to fill any unexpired term of the Board which may occur, and to consider nominees recommended by shareholders.
3. At least annually, to evaluate board performance, and to recommend the removal of any director in accordance with the provisions of the by-laws of the Company.
4. At least annually, to review and recommend to the Board fees and compensation of non-employee directors for service on the Board or its committees or to the Company in any capacity (including consulting contracts).
Relating to the CEO:
1. To recommend to the Board the election or termination of the Chief Executive Officer.
2. At least annually, to review and approve appropriate corporate goals and objectives relevant to the Chief Executive Officer’s compensation and to evaluate the performance of the Chief Executive Officer in light of such goals and objectives.
3. At least annually, to review and approve an appropriate succession plan for the Chief Executive Officer.
4. At least annually, to review and approve all forms of compensation and fringe benefits for the Chief Executive Officer based on the evaluation of the Chief Executive Officer’s performance. (In determining the long-term incentive component of CEO compensation, the Committee will consider the Company’s performance and relative shareholder return, the value of similar incentive awards to CEOs at comparable companies, and the awards given to the Company’s CEO in past years.)
Relating to the Elected Officers:
1. At least annually, to review the Company’s overall organization chart and the development strategy for corporate officers and successors.
2. To recommend candidates to be nominated by the Board for election as corporate officers, or to be terminated from their positions as corporate officers.
3. At least annually, to review the evaluation of the performance of the corporate officers.
4. At least annually, to review and approve management's program for the development and succession of management, including identifying and developing those individuals who have the character, intelligence, motivation, education, stamina, and personality to be top caliber executives.
5. At least annually, to review and approve all forms of compensation and fringe benefits for all elected corporate officers.
6. At least annually, to review recommendations and to grant shares of any equity compensation plans in accordance with the terms of such plans.
7. At least annually, to review and approve the corporate incentive plans and incentives to be paid under those plans.
Relating to Corporate Governance:
1. At least annually, to review the Principles of Corporate Governance and related procedures and practices to ensure that they comply with NYSE standards, and take such actions as the Committee deems necessary or appropriate. Such governance principles shall address at least the following subjects: director qualification standards; director responsibilities; director access to management and, as necessary and appropriate, independent advisors; director compensation; director orientation and continuing education; management succession; and annual performance evaluation of the Board.
2. To review and make recommendations to the Board regarding shareholders’ proposals that relate to corporate governance.
3. At least annually, to review the Code of Conduct to ensure that it complies with NYSE standards and Securities and Exchange Commission (“SEC”) rules and take such actions as the Committee deems necessary or appropriate. Such Code of Conduct shall address at least the following subjects: conflicts of interest; corporate opportunities; confidentiality; fair dealing; protection and proper use of company assets; compliance with laws, rules and regulations (including insider trading laws); encouraging the reporting of any illegal or unethical behavior; and such issues related to the Company’s senior financial officers as required by SEC rules.
Relating to Compensation of the CEO and Other Elected Officers:
To produce a report on CEO and corporate officer compensation as required by the SEC to be included in the Company’s annual proxy statement or annual report on Form 10-K filed with the SEC.
DELEGATION
From time to time as the Committee determines it to be necessary or appropriate, the Committee may select and retain independent counsel or their advisors, including a search firm to help identify new potential director nominees, to assist in the evaluation of director, CEO or other executive compensation or to provide any other relevant independent advice to the Committee. The Committee shall have the sole authority to retain (on terms established solely by the Committee), terminate and approve the fees of any such counsel and advisors. The Committee may meet with any such counsel or advisors without management present. The Company will bear the cost of such counsel and advisors.
REPORTING
The Committee will have the minutes of its meetings prepared and submitted to the Board following each Committee meeting. The minutes will contain recommendations for appropriate Board actions if required.