EXHIBIT 3.4
CHARTER FOR THE COMPENSATION COMMITTEE
OF AMERICAN HOMESTAR CORPORATION
SEPTEMBER 18, 2001
I. DESCRIPTION AND PURPOSE
The Compensation Committee (the "Committee") is a standing committee of the
Board of Directors (the "Board") of American Homestar Corporation (the
"Company") whose primary function is to oversee the compensation policies for
the Company, including its salary, bonus and other incentive compensation, stock
option, and employee benefit programs, to monitor the performance and
compensation of the Executive Officers of the Company, and to establish
performance goals and determine the compensation due under the Management
Incentive Program described in the Plan of Reorganization dated August 14, 2001.
II. COMPOSITION OF THE COMMITTEE
The Committee shall consist of two or more members, comprised solely of
Independent Directors, as that term is defined below.
III. DEFINITIONS
A. EXECUTIVE OFFICER
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As used in this Charter, "Executive Officer" means:
1. the President, Chief Executive Officer, Chief Financial Officer or any
individuals acting in similar capacities; and
2. any Vice President or Manager in charge of a principal business unit,
division or function (such as marketing, administration or finance),
any other officer who performs a policy making function or any other
person who performs similar policy making functions.
B. INDEPENDENT DIRECTOR
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As used in this Charter, "Independent Director" means a person other than an
officer or employee of the Company or its subsidiaries or any other individual
having a relationship that, in the opinion of the Board, would interfere with
the exercise of independent judgment in carrying out the responsibilities of a
director. The following persons shall not be considered independent:
1. a director who is employed by the Company or any of its affiliates for
the current year or any of the past three years;
2. a director who accepted any compensation from the Company for services
rendered to the Company or any of its affiliates in excess of $60,000
during the previous fiscal year, other than compensation for service
on the Board, benefits under a tax-qualified retirement plan, or
non-discretionary compensation;
3. a director who is a member of the immediate family of an individual
who is, or has been in any of the past three years, employed by the
Company or any of its affiliates as an Executive Officer. Immediate
family includes a person's spouse, parents, siblings, mother-in-law,
father-in-law, brother-in-law, sister-in-law, son-in-law,
daughter-in-law, and anyone who resides in the director's home;
4. a director who is a partner in, or a controlling shareholder or an
Executive Officer of, any for-profit business organization to which
the Company made, or from which the Company received, payments (other
than those arising solely from investments in the Company's
securities) that exceed five percent (5%) of the Company's
consolidated gross revenues for that year, or $200,000, whichever is
more, in any of the past three years;
5. a director who is employed as an executive of another entity where any
of the Company's Executive Officers serve on that entity's
compensation committee.
IV. MEETINGS
The Committee shall meet as frequently as circumstances require, but in any
event on a quarterly basis. The Committee may ask members of management or
others to attend meetings and may provide pertinent information to them as the
Committee deems necessary. However, members of management shall not be present
during the Committee's discussions and decisions on Executive Officer
compensation.
V. RESPONSIBILITIES AND DUTIES
The Committee's primary responsibilities and duties are as follows:
1. review and recommend to the Board compensation and employee benefit
policy for the Company;
2. review and recommend to the Board the annual salary, bonus, stock
options and other benefits, direct and indirect, to be paid to the
Executive Officers of the Company;
3. review and recommend to the Board the terms and conditions of written
employment agreements, if any, for Executive Officers of the Company;
4. review new executive compensation programs; review on a periodic basis
the operation of the Company's executive compensation programs to
determine whether they are properly coordinated and achieving their
intended purposes;
establish and periodically review policies for the administration of
executive compensation programs; and take steps to modify any
executive compensation program that yields payments and benefits that
are not reasonably related to executive and corporate performance of
peer businesses;
5. establish and periodically review policies in the area of Executive
Officer perquisites;
6. review and monitor the Company's Stock Option Plans and any other
employee pension, profit sharing and benefit plans, taking into
account the importance of retaining and incentivizing the employee
assets of the Company as well as the overall cost to the Company of
such programs;
7. if Executive Officer compensation is performance-based, (i) determine
the performance goals, (ii) advise the Board that the material terms
under which the compensation is to be paid, including the performance
goals, must be disclosed to the Company's shareholders and approved by
a majority of the vote in a separate shareholder vote before the
payment of the compensation, and (c) before any payment of the
compensation, certify to the Board that the performance goals and
other material terms were in fact satisfied.
8. review and recommend to the Board the amount of reasonable
compensation and payment of expenses to be paid to members of the
Board for serving as a Director of the Company;
9. supervise succession planning for the Executive Officers defined in
Section III(A)(1) above;
10. identify, recruit and nominate additional director candidates for
Board service at such time as they may be needed;
11. review and recommend to the Board director and officer insurance
coverage;
12. review and approve the Compensation Committee Report to be included in
the Company's proxy statement for its annual shareholders meeting; and
13. review, approve and administer any other matters or plans specifically
delegated to the Committee by the Board.
VI. CONSULTANTS
The Committee has the authority to retain, from time to time and at the
Company's expense, a professional compensation consulting firm to review such
matters regarding compensation and employee benefit structure as the Committee
may deem necessary and appropriate. Such consulting activities may include but
are not limited to a review of the Company's Executive Officer compensation
program including a review of those "performance based" compensation
programs in light of Section 162(m) of the Internal Revenue Code.
VII. COMPENSATION COMMITTEE REPORT
The Committee shall prepare a Compensation Committee Report (the "Report") to be
included in the Company's proxy statement for its annual shareholders meeting.
The Report shall contain the disclosure required by Schedule 14A under the
Securities Exchange Act of 1934, as amended, and such other disclosure as may be
required by law. At a minimum, the Report shall contain the following:
1. Disclosure of the Committee's compensation policies applicable to the
Executive Officers, including the specific relationship of corporate
performance to executive compensation, with respect to compensation
reported for the last completed fiscal year.
2. Discussion of the Committee's bases for the Company's compensation
reported for the last completed fiscal year, including the factors and
criteria upon which the Chief Executive Officer's compensation was
based. The Committee shall include a specific discussion of the
relationship of the Company's performance to the Chief Executive
Officer's compensation for the last completed fiscal year, describing
each measure of the Company's performance, whether qualitative or
quantitative, on which the Chief Executive Officer's compensation was
based.
The required disclosure shall be made over the name of each member of the
Committee. If the Board modified or rejected in any material way any action or
recommendation by the Committee with respect to such decisions in the last
completed fiscal year, the disclosure must so indicate and explain the reasons
for the Board's actions, and be made over the names of all members of the Board.