The purpose of the Compensation Committee (the "Committee")
of the Board of Directors (the "Board") of Vector
Group Ltd. (the "Company") is to discharge the Board's
responsibilities relating to compensation of the Company's executives
and to produce an annual report on executive compensation for
inclusion in the Company's proxy statement, in accordance with
the rules and regulations of the Securities and Exchange Commission
(the "SEC").
The Committee shall consist solely of two or more members
of the Board, each of whom the Board has determined has no material
relationship with the Company and each of whom is otherwise
"independent" under the rules of the New York Stock
Exchange, Inc.
Members shall be appointed by the Board, and shall serve at
the pleasure of the Board and for such term or terms as the
Board may determine.
The Board shall designate one member of the Committee as its
Chair. The Committee shall meet in person or telephonically
at least twice a year at a time and place determined by the
Committee Chair, with further meetings to occur, or actions
to be taken by unanimous written consent, when deemed necessary
or desirable by the Committee or its Chair.
The Committee may invite such members of management to its
meetings as it may deem desirable or appropriate, consistent
with the maintenance of the confidentiality of compensation
discussions. The Company's Chief Executive Officer ("CEO")
should not attend any meeting where the CEO's performance or
compensation are discussed, unless specifically invited by the
Committee.
The Committee shall have direct responsibility to:
- In consultation with senior management, establish the Company's
general compensation philosophy, and oversee the development
and implementation of compensation programs.
- Review and approve corporate goals and objectives relevant
to the compensation of the CEO, evaluate the performance of
the CEO in light of those goals and objectives, and determine
and approve the CEO's compensation level based on this evaluation.
In determining the long-term incentive component of CEO compensation,
the Committee should consider, among other factors, the Company's
performance and relative shareholder return, the value of
similar incentive awards to CEOs at comparable companies,
the awards given to the CEO in past years and such other factors
as the Committee may deem relevant.
- Review and approve compensation programs applicable to the
executive officers of the Company, and oversee regulatory
compliance with respect to compensation matters.
- Administer the Company's 1998 and 1999 Long-Term Incentive
Plans and approve such awards thereunder as the Committee
deems appropriate.
- Approve any new equity compensation plan or any material
change to an existing plan where shareholder approval has
not been obtained, make recommendations to the Board with
respect to the Company's non-CEO compensation plans, incentive
compensation plans and equity-based plans, oversee the activities
of the individuals and committees responsible for administering
these plans, and discharge any responsibilities imposed on
the Committee by any of these plans.
- Review and approve any severance or similar termination
payments proposed to be made to any current or former executive
officer of the Company.
- Prepare and issue the evaluations and reports required under
"Committee Reports" below.
- Perform any other responsibilities expressly delegated to
the Committee by the Board from time to time relating to the
Company's compensation programs.
The Committee may, in its discretion, delegate all or a portion
of its responsibilities to a subcommittee of the Committee.
In particular, the Committee may delegate the approval of certain
transactions to a subcommittee consisting solely of members
of the Committee who are (i) "Non-Employee Directors"
for the purposes of Rule 16b-3 under the Securities Exchange
Act of 1934, as in effect from time to time, and (ii) "outside
directors" for the purposes of Section 162(m) of the Internal
Revenue Code, as in effect from time to time.
The Committee shall prepare the following reports and provide
them to the Board.
- An annual Report of the Compensation Committee on Executive
Compensation for inclusion in the Company's annual proxy statement
in accordance with applicable SEC rules and regulations.
- An annual performance evaluation of the Committee, which
evaluation shall compare the performance of the Committee
with the requirements of this charter. The performance evaluation
should also recommend to the Board any improvements to the
Committee's charter deemed necessary or desirable by the Committee.
The performance evaluation by the Committee shall be conducted
in such manner as the Committee deems appropriate. The report
to the Board may take the form of an oral report by the Chair
of the Committee or any other member of the Committee designated
by the Committee to make this report.
- A summary of the actions taken at each Committee meeting,
which shall be presented to the Board at the next Board meeting.
The Committee shall have the resources and authority appropriate
to discharge its responsibilities, including the authority to
select, retain, terminate, and approve the fees and other retention
terms of special counsel or other experts or consultants, as
it deems appropriate, without seeking approval of the Board
or management. With respect to compensation consultants used
to assist in the evaluation of CEO, executive officer or director
compensation, this authority shall be vested solely in the Committee.
