X-Rite, Incorporated

More documents

Recommendations

Info

Nominating and Governance CommitteeThe Nominating and Governance Committee (the "N&GC") is currently comprised of three members, and allof the members are nonemployee directors of the Company. The primary functions of the N&GC include assisting theBoard of Directors and the independent directors in matters related to Board composition and size, Board policies(e.g., term limits, service requirements, and retirement), nominations, evaluation of the Board and Board andmanagement succession, director orientation and education, and other corporate governance matters, as areappropriately delegated to it by the Board.The N&GC has a role in identifying director candidates consistent with criteria established by the Board,including the slate of directors presented for election at this Annual Meeting of Shareholders. Historically, theCompany has not had a formal policy concerning stockholder recommendations to the N&GC (or its predecessors).To date, the Company has not received any recommendations from stockholders requesting that the N&GC (or anypredecessor) consider a candidate for inclusion among the Committee’s slate of nominees in the Company’s proxystatement. The absence of such a policy does not mean, however, that a recommendation would not have beenconsidered had one been received. The N&GC will consider this matter fully during the upcoming year with a view toadopting and publishing a policy on stockholder recommendations for director nominees prior to the 2005 AnnualMeeting of Stockholders.In evaluating director nominees, the N&GC considers the following factors:• the appropriate size of the Company’s Board of Directors;• the needs of the Company with respect to the particular talents and experience of its directors;• the knowledge, skills and experience of nominees, including experience in technology, business, finance,administration or public service, in light of prevailing business conditions and the knowledge, skills andexperience already possessed by other members of the Board;• familiarity with national and international business matters;• experience with accounting rules and practices;• appreciation of the relationship of the Company’s business to the changing needs of society; and• the desire to balance the considerable benefit of continuity with the periodic injection of the fresh perspectiveprovided by new members.The N&GC’s goal is to assemble a Board of Directors that brings to the Company a variety of perspectivesand skills derived from high quality business and professional experience. In doing so the N&GC also considerscandidates with appropriate non-business backgrounds.Other than the foregoing there are no stated minimum criteria for director nominees, although the N&GC mayalso consider such other factors as it may deem are in the best interests of the Company and its stockholders. TheN&GC does, however, believe it appropriate for at least one, and, preferably, several, members of the Board to meetthe criteria for an “audit committee financial expert” as defined by SEC rules, and that a majority of the members ofthe Board meet the definition of “independent director” under NASDAQ rules. The N&GC also believes it appropriatefor certain key members of the Company’s management to participate as members of the Board.The N&GC identifies nominees by first evaluating the current members of the Board of Directors willing tocontinue in service. Current members of the Board with skills and experience that are relevant to the Company’sbusiness and who are willing to continue in service are considered for re-nomination, balancing the value of continuityof service by existing members of the Board with that of obtaining a new perspective. If any member of the Boarddoes not wish to continue in service or if the N&GC or the Board decides not to re-nominate a member for re-election,the N&GC identifies the desired skills and experience of a new nominee in light of the criteria above. Currentmembers of the N&GC and Board of Directors are polled for suggestions as to individuals meeting the criteria of theN&GC. Research may also be performed to identify qualified individuals. To date, the Company has not engaged thirdparties to identify or evaluate or assist in identifying potential nominees, although the Company reserves the right inthe future to retain a third party search firm, if necessary.10
While the N&GC is not composed entirely of independent directors, it is the goal of the Board of Directors forthe N&GC to be comprised of all independent members as quickly as is practical. Until the N&GC is comprisedentirely of independent directors, the independent directors oversee the activities of the N&GC as required byapplicable laws, rules, regulations, and listing standards. The N&GC operates under a Nominating and GovernanceCommittee Charter which is available on the Company’s website under Investor Relations at www.xrite.com. During2003, the N&GC held four (4) meetings.Compensation Committee - Report on Executive CompensationThe Compensation Committee is currently comprised of three members, and all of the members arenonemployee directors of the Company. The primary function of the Compensation Committee is to assist the Boardof Directors and the independent directors on the Board in matters related to compensation as may be appropriatelydelegated to it by the Board. While the Compensation Committee is not currently comprised entirely of independentdirectors, it is the goal of the Board for the Compensation Committee to be comprised of all independent members asquickly as is practical. Until the Compensation Committee is comprised entirely of independent directors, theindependent directors oversee the activities of the Compensation Committee as required by applicable law, rule,regulation, or listing standard.Compensation Philosophy. The Company's compensation policies are designed to enhance the Company'sability to attract, motivate, and retain competent and dedicated management. In constructing and applying thesepolicies, a conscious effort is made to identify and evaluate programs for comparable employers, considering factorssuch as geography and industry influences, relative sizes, growth stages, and market capitalization. In fulfilling its roleto assist the Board of Directors and the independent directors, the Compensation Committee has, at times, enlistedthe assistance of a consulting firm to establish a peer group of corporations that can be used for compensationcomparison purposes.Components of Compensation. In general, compensation packages for executive officers are composed ofthree elements: base salary; annual bonus; and stock-based incentives. Base salary for an executive is determined bythe executive's responsibilities and the Company's need to be competitive in the market for executive services. Bonuscompensation is based on achievement of individual and corporate goals. Stock-based incentives are intended tostrengthen the alignment of the interest between the shareholders and senior management and to address long-termperformance. The Board of Directors believes the stock ownership of management is of critical importance to theongoing success of the Company. In the early part of 2003, the Compensation Committee reviewed the annual salaryplan with the Chief Executive Officer ("CEO") for all of the Company's executive officers, and provided input to theindependent directors and the entire Board of Directors to make such adjustments as the independent directors andBoard of Directors determined appropriate based upon salary survey data for comparable employers, economicconditions in general, and evaluations by the CEO. Annual salary for the CEO was reviewed by the independentdirectors and the entire Board of Directors and adjusted based on the same considerations for other executivesalaries, plus input from the N&GC and its evaluation of the CEO's performance. The Company established a bonusprogram for 2003 applicable to all executive officers of the Company. The program has two components. Onecomponent is based on individual performance as determined by the independent directors and the entire Board ofDirectors based on the input of the Compensation Committee, in conjunction with the CEO with respect to otherofficers. The second component is based on Company-wide economic performance defined to be roughly the returnon average assets. Bonuses, if any, are reported in the Summary of Compensation Table contained in this ProxyStatement.The Company, by its independent directors and the entire Board of Directors (with the input of theCompensation Committee), also awarded stock options to six (6) officers during 2003 under the Company's EmployeeStock Option Plan, including grants to the named executive officers detailed in the table captioned "Option Grants inLast Fiscal Year" contained herein. The options awarded to the executives other than the CEO were based onevaluations provided by the CEO, and input provided by the Compensation Committee and the N&GC to theindependent directors and the entire Board of Directors. Each executive's contribution to achieving agreed upon goals,his or her ability and willingness to influence success, and striving to achieve individual and corporate goals were keyfactors in the independent directors and Board of Directors determinations. The CEO was also awarded options basedprimarily on the concept that it is in the best interest of the shareholders to provide incentives for the CEO in the formof stock options, in an amount appropriate relative to the options granted to other executives considering their abilitiesto influence performance.11
Page 1 and 2: X-Rite, IncorporatedNOTICE OF ANNUA
Page 3: X-RITE, INCORPORATED3100 44 TH Stre
Page 6 and 7: Proposal to Amend and Restate Emplo
Page 8 and 9: If shares acquired by a participant
Page 12 and 13: Compliance. During 2003, the Compan
Page 14 and 15: Securities Ownership of ManagementT
Page 16 and 17: Executive CompensationThe following
Page 18 and 19: The following table provides inform
Page 20 and 21: Certain Relationships and Related T
Page 22 and 23: shall be granted option rights unde
Page 24 and 25: Appendix BX-RITE, INCORPORATEDAUDIT
Page 26: 3. Review and approve all related p

X-Rite, Incorporated

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?