Exhibit 99.13
HEADWATERS INCORPORATED
COMPENSATION COMMITTEE CHARTER
March 9, 2005
This Charter governs the operation of the Compensation Committee of the
Board of Directors of Headwaters Incorporated (the "Corporation").
Composition
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The Compensation Committee shall be comprised of two (2) or more
individuals selected by the Board of Directors from among its own members. The
members of the Compensation Committee shall be elected each year by the Board of
Directors, shall be comprised of "independent" directors as defined by the
listing standards of the New York Stock Exchange ("NYSE"), and shall serve until
such time as they resign or their successors are duly elected and qualified by
the Board of Directors. Unless a chairperson for the Compensation Committee is
designated by election of the Board of Directors, the members of the
Compensation Committee may elect, by their own majority vote, a chairperson.
Statement of Policy
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The Compensation Committee shall provide assistance to the Board of
Directors in overseeing compensation policies and practices of the Corporation.
Compensation shall be understood to include all cash, benefits, and equity paid,
in whatever form, to an employee, officer, or director of the Corporation.
The criteria used by the Committee to evaluate compensation policies
and practices shall include but not be limited to (1) value added during a
compensation period, (2) level of responsibility, (3) appropriate incentives,
(4) industry comparables, (5) principles of fairness and balance, and (6)
general principles of sound business practice.
Annual Performance Evaluation
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The Compensation Committee shall perform an annual self-evaluation of the
performance of the Compensation Committee.
Responsibilities and Processes
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The following shall be the principal recurring responsibilities and
processes of the Compensation Committee. The responsibilities and processes are
set forth as a guide with the understanding that the Compensation Committee may
alter or supplement them as appropriate.
1. Review and approve the compensation levels and policies for the
members of the Board of Directors of the Corporation.
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2. Review and approve the corporate goals and objectives with respect
to compensation for the chief executive officer ("CEO"). Evaluate the chief
executive officer's performance in light of corporate goals and objectives and,
based upon these evaluations, determine and approve the CEO's compensation,
including salary, bonus, incentive, and equity compensation. In determining the
long-term incentive component of the CEO's compensation, the Compensation
Committee should consider the Corporation's performance and relative stockholder
return, the value of similar incentive awards to CEOs at comparable companies,
and the awards given to the Corporation's CEO in past years.
3. Make recommendations to the Board of Directors with respect to
non-CEO executive officer compensation, and incentive-compensation and
equity-based plans that are subject to Board of Director approval, including
salary, bonus, incentive, and equity compensation.
4. Produce a Compensation Committee report on executive officer
compensation as required by the Securities Exchange Commission (the "SEC") to be
included in the Corporation's annual proxy statement or annual report on Form
10-K filed with the SEC.
5. Review and approve the compensation guidelines or practices for the
Company's employees and the criteria by which bonuses to the Company's employees
are determined.
6. Administer the Corporation's stock incentive plans, authorize grants
under such plans, and recommend changes in such plans to the Board of Directors,
as needed. Changes may include recommendations to amend such plans or change the
number of shares reserved for issuance thereunder.
7. The Compensation Committee shall perform such other activities and
functions related to the compensation policies and practices of the Corporation
as may be assigned from time to time by the Board of Directors.
8. In performing any of its duties and responsibilities, the Committee
may retain compensation consultants, experts, or advisors, as needed, and may
consult with the Corporation's internal or outside legal counsel. Further, the
Committee may and shall have the authority to retain independent legal counsel
and to approve such counsel's fees and other terms of retention.
9. Compensation Committee members shall be chosen based on their
competence and ability to add substance to the deliberations of the Compensation
Committee.
10. The Compensation Committee may delegate its duties and
responsibilities to a subcommittee consisting of one or more members of the
Compensation Committee, or to senior officers of the Corporation. Any delegation
may be made only to the extent permitted by the NYSE rules, Securities and
Exchange Commission rules and applicable law. The Compensation Committee may
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not, however, delegate any of its duties and responsibilities with regard to (i)
compensation arrangements, including salary and short term and long term
incentive awards, with respect to the CEO and any Section 16 Officer, or (ii)
the Corporation's annual proxy statement.
Reports and Meetings
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1. The Compensation Committee shall prepare or cause the preparation of
a report as required by the Securities and Exchange Commission to be included in
the Corporation's annual proxy statement or annual report.
2. The Committee shall maintain minutes of its meetings and regularly
report its activities to the Board of Directors of Directors.
3. The Committee shall submit any recommendations for changes to the
Compensation Committee Charter to the full Board of Directors for approval.
Reliance on Information Provided
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In adopting this Compensation Committee Charter, the Board of Directors
acknowledges that the Compensation Committee members may not be legal experts
and are not providing any expert or special assurance as to the Corporation's
legal compliance. Each member of the Compensation Committee shall be entitled to
rely on the accuracy and completeness of the compensation information and other
information provided by persons and organizations within and outside the
Corporation, absent actual knowledge to the contrary.
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