Compensation Committee Charter
The Board of Directors (the “Board”) of Heartland Express, Inc. (the “Company”) has adopted this Compensation Committee Charter. This Compensation Committee Charter describes the duties and responsibilities of the Compensation Committee of the Board (the “Compensation Committee”) and grants the Compensation Committee the authority necessary to perform its oversight responsibility.
The purposes of the Compensation Committee are to review and make recommendations to the Board with respect to the compensation of the Company’s Chief Executive Officer (“CEO”) and each of the other executive officers as required by applicable law or listing standards (“executive officers”) and the executive compensation policies of the Company. The Compensation Committee is responsible for carrying out the duties set forth below.
The Compensation Committee shall consist of not less than three members who shall be appointed by the Board. Each member shall be (a) an independent director as defined under the listing standards of The NASDAQ Stock Market, Inc.; (b) be a “non-employee director” as defined in Section 16 of the Securities Exchange Act of 1934; (c) be an “outside director” under Section 162(m) of the Internal Revenue Code; and (d) be free of any relationship or affiliation with the Company, a subsidiary of the Company, or an affiliate of a subsidiary of the Company that, in the Board’ discretion, would interfere with a member’s independent judgment. In affirmatively determining the independence of any director who will serve on the Compensation Committee, the Board must consider all factors specifically relevant to determining whether a director has a relationship to the Company that is material to that director’s ability to be independent from management in connection with the duties of a Compensation Committee member, including, but not limited to: (i) the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the Company to such director, and (ii) whether such director is affiliated with the Company, a subsidiary of the Company or an affiliate of a subsidiary of the Company.
Responsibilities and Authority
The Compensation Committee shall be responsible for the following:
1. Reviewing and making recommendations to the Board with respect to the Company’s general executive compensation policies;
2. At its discretion, reviewing and making recommendations to the Board and management regarding the Company’s compensation policies with respect to non-executive employees;
3. Reviewing and recommending to the Board annually the compensation of the CEO and each of the other executive officers, including salary, bonus, and incentive compensation;
4. Reviewing annually corporate and individual goals and objectives with respect to compensation for the CEO and each of the other executive officers and evaluating the performance of the CEO and each of the other executive officers against those goals and objectives; and
5. Reviewing annually the Company’s incentive compensation plans and recommending to the Board appropriate changes in such plans.
If applicable laws require that any of the foregoing or any other matter be determined solely by the Compensation Committee, the Compensation Committee shall not recommend such matter to the Board, but rather shall make the determination.
During any meetings where the compensation of the CEO or the other executive officers is addressed, the CEO and each of the other executive officers may not be present for such deliberations and voting on CEO and each of the other executive officers’ compensation; provided, the CEO may be present for and participate in deliberations and voting on compensation for other executive officers.
The Compensation Committee shall issue an annual report on executive compensation as required by U.S. Securities and Exchange Commission rules to be included in the Company’s proxy statement and annual report on Form 10-K stating that the Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis (“CD&A”) with management and based on that review and discussion, recommended to the Board that the CD&A be included in the Company’s proxy statement and annual report on Form 10-K.
The Compensation Committee may conduct or authorize investigations into or studies of matters within the scope of the Compensation Committee’s authority and responsibilities as it deems necessary. The Compensation Committee shall have sole discretion to appoint, retain, and oversee compensation consultants, legal counsel, or other similar advisors as part of performing the Compensation Committee’s responsibilities upon consideration of the following factors relevant to that person’s independence:
1. The provision of other services to the Company by the person that employs the compensation consultant, legal counsel, or other advisor;
2. The provision of other services to the Company by the person that employs the compensation consultant, legal counsel, or other advisor;
3. The policies and procedures of the person who employs the compensation consultant, legal counsel, or other advisor that are designed to prevent conflicts of interest;
4. Any business or personal relationship of the compensation consultant, legal counsel, or other advisor with a member of the Compensation Committee;
5. Any stock of the Company owned by the compensation consultant, legal counsel, or other advisor; and
6. Any business or personal relationship of the compensation consultant, legal counsel, other advisor or the person employing the advisor with an executive officer of the Company.
The Compensation Committee shall have the sole authority to approve related fees and retention terms, and the Company must provide for appropriate funding, as determined by the Compensation Committee, for the payment of reasonable compensation to compensation consultants, legal counsel, or other advisors. The cost of any such investigations or studies, and the compensation of all such compensation consultants, legal counsel, or other advisors, shall be at the Company’s expense.
When appropriate, the Compensation Committee may designate one or more of its members to perform certain of its duties on its behalf, subject to such reporting to or ratification by the Compensation Committee as the Compensation Committee shall direct.
The Compensation Committee shall annually review and reassess the Compensation Committee Charter.
The Compensation Committee shall meet at such times and places as the Compensation Committee shall determine necessary or appropriate, but not less frequently than annually. The Chairperson of the Compensation Committee shall report on the Compensation Committee activities to the full Board. Actions by the Compensation Committee may also be taken by unanimous written consent when deemed necessary or desirable by the Compensation Committee or its Chairperson.
The Compensation Committee shall keep written minutes of its meetings and maintain the minutes in the books and records of the Company.