EXHIBIT 99.1
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NORTH ATLANTIC HOLDING COMPANY, INC.
AND
NORTH ATLANTIC TRADING COMPANY, INC.
COMPENSATION COMMITTEE CHARTER
This Compensation Committee Charter was adopted by the Board of Directors (the
"Board") of North Atlantic Holding Company, Inc. ("NAHC") and North Atlantic
Trading Company, Inc. ("NATC" and collectively, the "Company") on April 2, 2007.
This Charter is intended as a component of the flexible governance framework
within which the Board, assisted by its committees, directs the affairs of the
Company. While it should be interpreted in the context of all applicable laws
and regulations, as well as in the context of the Company's Certificate of
Incorporation and By-Laws, it is not intended to establish by its own force any
legally binding obligations.
I. PURPOSES
The primary function of the Compensation Committee (the "Committee") is to
exercise the responsibilities and duties set forth below, including, but not
limited to, (i) discharging the Board's responsibilities relating to the
compensation of the Board of Directors and the Company's chief executive officer
(the "CEO") pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC"); (ii) reviewing and approving administration of the Company's
incentive compensation and stock plans; (iii) producing an annual report on
executive compensation for inclusion in the Company's public filings under
applicable rules and regulations; (iv) determining, in consultation with
management, the compensation of the CEO and the Board with respect to individual
salary, bonus, equity arrangements and perquisites; (v) reviewing and approving
compensation levels for the Company's other executive officers (as identified in
its Annual Report on Form 10-K) (the "Executive Officers"); and (vi) determining
any new equity-based plans and any material amendments thereto (including
increases in the number of shares of common stock of the Company that are
available for grant as options or otherwise thereunder).
In discharging its role, the Committee is empowered to inquire into any matter
that it considers appropriate to carry out its responsibilities, with access to
all books, records, facilities and personnel of the Company. The Committee has
the power to retain outside counsel, compensation consultants or other advisors
to assist it in carrying out its activities. The Company shall provide adequate
resources to support the Committee's activities, including compensation of the
Committee's counsel, consultants and other advisors. The Committee shall have
the sole authority to retain, compensate, direct, oversee and terminate counsel,
compensation consultants, and other advisors hired to assist the Committee, who
shall be accountable ultimately to the Committee.
II. COMMITTEE MEMBERSHIP
The Committee shall consist of two or more non-employee members of the Board.
Members of the Committee shall be appointed by the Board. Members shall continue
to be members until their successors are elected and qualified or until their
earlier resignation or removal. Any member may be removed by the Board, with or
without cause, at any time. The Chairman of the Committee shall be elected by
majority vote of the Committee and appointed from among the Committee members
by, and serve at the pleasure of, the Committee to convene and chair meetings of
the Committee, set agendas for meetings, and determine the Committee's
information needs. In the absence of the Chairman at a duly convened meeting,
the Committee shall select a temporary substitute from among its members.
III. COMMITTEE MEETINGS
The Committee shall meet on a regularly-scheduled basis at least once per year,
or more frequently as circumstances dictate. The Committee shall establish its
own schedule and rules of procedure. Meetings may be called by the Chair of the
Committee or at the request of any member of the Committee or of the Board.
Meetings of the Committee may be held telephonically. A majority of the members
of the Committee shall constitute a quorum sufficient for the taking of any
action by the Committee. The Committee may invite members of the Board, senior
executives or others to attend Committee meetings and, at the request of the
Committee, provide pertinent information on the issues being considered.
Minutes of Committee meetings shall be kept and recorded with the books and
records of the Company.
IV. KEY RESPONSIBILITIES AND DELEGATION
The following responsibilities are set forth as a guide for fulfilling the
Committee's purpose, with the understanding that the Committee's activities may
diverge as appropriate given the circumstances. The Committee is authorized to
carry out these activities and other actions reasonably related to the
Committee's purposes or assigned by the Board from time to time.
To fulfill its purposes, the Committee shall:
1. establish and review the Company's overall compensation philosophy
and policy and make recommendations to the Board, as appropriate;
2. review the Company's goals and objectives relevant to CEO
compensation, including annual and long-term performance goals and objectives;
3. evaluate at least annually the performance of the CEO against the
Company's goals and objectives, including the annual performance objectives for
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the CEO and, based on this evaluation, determine and approve the compensation
level (including any discretionary incentive awards) for the CEO, reviewing as
appropriate, any agreement or understanding relating to the CEO's employment,
incentive compensation, or other benefits based on this evaluation;
4. review at least annually, and recommend to the Board, the
compensation of the Executive Officers.
5. retain a compensation consultant at its discretion, when and if
appropriate, from time to time, to advise the Committee on director and
executive compensation practices and policies or any other matters within this
Charter;
6. design and approve, in consultation with management, incentive
plans, including any equity-based compensation, to allow the Company to attract
and retain talented personnel and align the pay of such personnel with the
long-term interests of shareholders, submit each equity-based compensation plan
and each material modification thereof to the Board for its approval and take
actions that may be necessary or advisable to implement, administer and monitor
compliance of the Company's incentive plans, all in accordance with the rules
and guidelines outlined in such plans;
7. review and approve all grants of awards, including the award of
shares or share options pursuant to the Company's incentive and equity-based
compensation plans;
8. review the form and amount of director compensation, individually
and in the aggregate, at least annually, make recommendations to the Board and
take primary responsibility for ensuring that any payments to directors, whether
or not in their capacity as directors, are fully and properly disclosed;
9. review and reassess the adequacy of this Charter annually, and
recommend to the Board amendments as the Committee deems appropriate;
10. with the participation of management, prepare the report of the
Committee required to be included in the Company's Annual Report on Form 10-K in
accordance with applicable rules and regulations of the SEC and other applicable
regulatory bodies;
11. exercise such additional powers as may be reasonably necessary or
desirable, in the Committee's discretion, to fulfill its responsibilities and
duties under this Charter; and
12. maintain minutes or other records of Committee meetings and
activities.
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