Audit Committee Charter
The Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Ennis, Inc. (the “Company”) shall be charged with assisting the Board in (i) assessing whether the various compensation programs of the Company are designed to attract, motivate and retain the senior management necessary for the Company to deliver consistently superior results and are performance based, market driven and shareholder aligned, (ii) its oversight of specific incentive compensation plans adopted by the Company, with the approval of this Committee, including stock plans, supplemental executive retirement plans and short-term and long-term incentive compensation plans for members of senior management of the company, (iii) assessing the effectiveness of succession planning relative to senior management of the Company, (iv) its approval, review and oversight of benefit plans of the Company, and (v) its oversight of the performance and compensation of the Chief Executive Officer of the company (“CEO”) and the other members of the senior management team of the Company.
Furthermore, the Committee will direct the production of all reports that Securities and Exchange Commission rules require be included in the company’s annual proxy statement.
The Committee shall consist of at least three persons, all of whom are members of the Board. Each member of the Committee shall satisfy the independence requirements set forth in the corporate governance and other listing standards of the New York Stock Exchange (the “NYSE Standards”). In addition, each member of the Committee shall be a “non-employee director” as defined by Rule 16b-3(b) (3) under the Exchange Act.
Upon the recommendation of the Nominating and Corporate Governance Committee, the Board shall elect the members of the Committee at the Board Meeting (Annual Board Meeting) that is held immediately after the Annual Meeting of the stockholders, and each Committee member shall serve until the date of the next Annual Board Meeting unless he or she resigns, is removed or replaced or otherwise ceases to be a director or member of the Committee prior to such date, in which event the Board shall appoint another director to fill the resulting vacancy for his or her unexpired term. Further, if for any reason the Board does not elect the members to the Committee at an Annual Board Meeting, the directors who then comprise the committee will continue to serve as members of the Committee until the Board takes action to elect new members of the Committee. The Board may remove or replace a member of the Committee at any time.
Upon recommendation of the Nominating and Corporate Governance Committee, the Board shall elect one of the members of the Committee to act as chairperson of the Committee (the “Chairperson”). Such member shall act as Chairperson until the next Annual Board Meeting unless prior thereto he or she (x) resigns as Chairperson, (y) is removed or replaced by the Board or (z) ceases to be a director, in which event the Board shall appoint another member of the Committee to serve as Chairperson for the unexpired term. The Chairperson shall preside over all meetings of the committee. In addition, the Chairperson shall periodically report the Committee’s findings and conclusions to the Board.
The majority of the members of the Committee shall constitute a quorum.
The Committee shall meet as often as is appropriate but not less than two times annually. The Committee shall maintain minutes of its meetings and written records of its actions.
Duties & Responsibilities
To fulfill its purpose as described above, the Committee shall have the following duties and responsibilities:
The Committee will review and approve for the CEO, and for the other members of the senior management team of the Company, annual base salary levels, annual incentive opportunity levels and long-term incentive opportunity levels for each fiscal year. In this regard, the Committee will review and approve corporate goals and objectives related to compensation. In addition, the Committee will take into account whether the compensation is reasonably related to personal and corporate performance and whether the goals of each compensation program are compatible with external peer businesses.
The Committee will review senior management compensation programs on a periodic basis to determine whether they are properly coordinated and achieving their intended purposes. In addition, the Committee will consider from time to time whether to adopt compensation or benefit plans for senior management which address matters relating to severance or retirement provided that the benefits to be derived from those programs are appropriate, related to the overall benefit of the Company, and are reasonable in amount and duration.
The Committee will review on a periodic basis all benefit plans sponsored by the Company to determine whether they are properly coordinated and achieving their intended purposes. In addition, the Committee will consider, from time to time, amendments to existing benefit plans and proposals for new benefit plans, and if appropriate, recommend the same for approval to the Board.
The Nominating and Corporate Governance Committee, as well this Committee, will review and assess the adequacy of this charter annually and recommend any proposed changes to the Board for approval.
The Committee will make periodic reports to the Board on the work of the Committee.
The Committee will produce a compensation committee report on executive compensation as required by the SEC and NYSE to be included in the Company’s annual proxy statement or annual report on Form 10-K as filed with the SEC.
Annual Performance Evaluation of the Committee
The Nominating and Corporate Governance Committee will conduct an annual performance evaluation of the Committee and will conduct this evaluation in one or more separate sessions at which members of the Committee shall not be in attendance. After completing its annual performance evaluation of the Committee, the Chair of the Nominating and Corporate Governance Committee shall review such evaluation or a summary thereof with the members of the Committee.