COMPENSATION AND GOVERNANCE COMMITTEE CHARTER Tropicana Las Vegas

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COMPENSATION AND GOVERNANCE COMMITTEE CHARTER Tropicana Las Vegas Powered By Docstoc
					               COMPENSATION AND GOVERNANCE COMMITTEE CHARTER
                       Tropicana Las Vegas Hotel and Casino, Inc.

      This Compensation and Governance Committee Charter (this “Charter”) was adopted by
the Board of Directors (the “Board”) of Tropicana Las Vegas Hotel and Casino, Inc. (the
“Company”) on July 14, 2009.

I.      Purpose

       The purpose of the Compensation and Governance Committee (the “Committee”) of the
Board is to:

        1. assist the Board in discharging the Board’s responsibilities regarding:

                 (a)   the identification of qualified candidates to become Board members;

                 (b)   the selection of nominees for election as directors at each annual meeting
                       of stockholders (or special meeting of stockholders at which directors are
                       to be elected);

                 (c)   the selection of candidates to fill any vacancies on the Board;

                 (d)   the development and recommendation to the Board of a set of corporate
                       governance guidelines and principles applicable to the Company (the
                       “Corporate Governance Guidelines”) if required by the listing standards of
                       any national securities exchange on which the Company’s securities are
                       traded, unless the Committee, in its discretion, decides to recommend such
                       Corporate Governance Guidelines at an earlier date; and

                 (e)   oversight of the evaluation of the Board and management;

        2. except as otherwise determined by the Board, discharge the Board’s responsibilities
           relating to compensation of the Company’s executives and directors, including by
           designing (in consultation with management or the Board), recommending to the
           Board for approval and evaluating the compensation plans, policies and programs of
           the Company, which the Committee shall ensure will be designed to encourage high
           performance, promote accountability and assure that employee interests are aligned
           with the interests of the Company’s stockholders; and

        3. review and approve an annual report on executive compensation prepared by
           management for inclusion in the Company’s annual proxy statement or Annual
           Report on Form 10-K, as applicable, following such time as the Company becomes
           subject to Section 12(g) or Section 15(d) of the Securities Exchange Act of 1934, as
           amended (the “Exchange Act”).

        Except as otherwise determined by the Board or delegated by the Committee, the
Committee will act on behalf of the Board with respect to the matters set fort h herein. In
addition to the powers and responsibilities expressly delegated to the Committee in this Charter,


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the Committee may exercise any other powers and carry out any other responsibilities delegated
to it by the Board from time to time consistent with the Company’s bylaws and applicable law.
The powers and responsibilities delegated by the Board to the Committee in this Charter or
otherwise shall be exercised and carried out by the Committee as it deems appropriate without
requirement of Board approval, and any decision made by the Committee (including any
decision to exercise or refrain from exercising any of the powers delegated to the Committee
hereunder) shall be at the Committee’s sole discretion. While acting within the scope of the
powers and responsibilities delegated to it, the Committee shall have and may exercise all the
powers and authority of the Board. To the fullest extent permitted by law, the Committee shall
have the power to determine which matters are within the scope of the powers and
responsibilities delegated to it.

II.     Membe rship

        The Committee shall be composed of three directors as determined by the Board in
accordance with all applicable legal requirements, contractual or otherwise, of the Company,
each of whom shall have experience, in the business judgment of the Board, that would be
helpful in addressing the matters delegated to the Committee. To the extent the Board
determines it is necessary or appropriate to comply with applicable law, applicable rules or
regulations or the listing standards of any national securities exchange on which the Company’s
securities are traded, or otherwise determines it to be in the Company’s interests, one or more
members of the Committee, as determined by the Board, shall (1) satisfy the independence
requirements of any national securities exchange on which the Company’s securities are traded,
(2) be a “non-employee director” within the meaning of Rule 16b-3 of the Exchange Act, and/or
(3) be an “outside director” under the regulations promulgated under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code”).

        The members of the Committee, including the Chair of the Committee (the “Chair”),
shall be appointed by the Board in accordance with all applicable legal requirements, contractual
or otherwise, of the Company. Committee members may be removed from the Committee at any
time, with or without cause, by the Board, subject to all applicable legal requirements,
contractual or otherwise, of the Company. Any action duly taken by the Committee shall be
valid and effective, whether or not the members of the Committee at the time of such action are
later determined not to have satisfied the requirements for membership provided herein.

III.    Meetings and Procedures

        The Chair (or in his or her absence, a member designated by the Chair) shall preside at
each meeting of the Committee and set the agendas for Committee meetings. The Committee
shall have the authority to establish its own rules and procedures for notice and conduct of its
meetings so long as they are not inconsistent with any provisions of the Company’s bylaws that
are applicable to the Committee.

       The Committee shall meet on a regularly scheduled basis at least two times per year and
more frequently as the Committee deems necessary or desirable.




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        The Committee may, at its discretion, include in its meetings members of the Company’s
management, or any other person whose presence the Committee believes to be desirable and
appropriate. Notwithstanding the foregoing, the chief executive officer of the Company (the
“CEO”) may not be present during voting or deliberations concerning his or her compensation
and the Committee may exclude from its meetings any person it deems appropriate, including
but not limited to, any non- management director who is not a member of the Committee.

        The Committee may retain any independent counsel, experts or advisors that the
Committee believes to be desirable and appropriate and may use the services of the Company’s
regular legal counsel or other advisors to the Company. In addition, the Committee shall have
the sole authority, as it deems appropriate, to retain and/or terminate, as needed, any independent
counsel, consultants and other outside experts or advisors regarding benefits and co mpensation,
and any search firm to be used to identify director candidates, including sole authority to approve
of the fees and retention terms of such counsel, consults, experts, advisors and search firms. The
Company shall provide for appropriate funding, as determined by the Committee, for payment of
compensation to any such persons employed by the Committee and for ordinary administrative
expenses of the Committee that are necessary or appropria te in carrying out its duties.

       The Chair shall report to the Board regarding the activities of the Committee at
appropriate times and as otherwise requested by the Chairperson of the Board.

IV.     Duties and Responsibilities

        Duties and Responsibilities Regarding Nominating and Governance

        1. (a) At an appropriate time prior to each meeting of stockholders at which directors
are to be elected or reelected, the Committee shall recommend to the Board for nomination by
the Board such candidates as the Committee, in the exercise of its judgment, has found to be well
qualified and willing and available to serve.

            (b) At an appropriate time after a vacancy arises on the Board or a director advises
the Board of his or her intention to resign, the Committee shall recommend to the Board for
appointment by the Board to fill such vacancy, such prospective member of the Board as the
Committee, in the exercise of its judgment, has found to be well qualified and willing and
available to serve.

            (c) For purposes of (a) and (b) above, the Committee may consider the following
criteria, among others the Committee shall deem appropriate, in recommending candidates for
election to the Board:

                (i)   personal and professional integrity, ethics and values;

               (ii)   experience in corporate management, such as serving as an officer or
                      former officer of a publicly held company, and a general understanding of
                      marketing, finance and other elements relevant to the success of a publicly
                      held company in today’s business environment;



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               (iii)   experience in the Company’s industry and with relevant social policy
                       concerns;

               (iv)    experience as a board member of another publicly held company;

                (v)    academic expertise in an area of the Company’s operations; and

               (vi)    practical and mature business judgment, including ability to make
                       independent analytical inquiries.

           (d) The foregoing notwithstanding, if the Company is legally required by contract or
otherwise to permit a third party to propose or designate one or more of the directors to be
elected or appointed or to be nominated for election or appointment (for example, pursuant to
rights contained in a Certificate of Designation of a class of preferred stock or a stockholders’
agreement), then the nomination or appointment of such directors shall be governed by such
requirements.

        2.    The Committee shall periodically review the performance of each current director
and shall consider the results of any such evaluation when determining whether or not to
recommend the nomination of such director for an additional term.                   The foregoing
notwithstanding, if the Company is legally required by contract or otherwise to permit a third
party to propose or designate one or more of the directors to be elected or appointed or to be
nominated for election or appointment (for example, pursuant to rights contained in a Certificate
of Designation of a class of preferred stock or a stockholders’ agreement), then the nomination or
appointment of such directors shall be governed by such requirements.

        3.      The Committee shall oversee the Board in any Board review of its performance
(including its composition and organization) and the performance of management, and will make
appropriate recommendations to improve performance.

       4.      The Committee shall, at least annually, assess the Company’s corporate
governance practices, including requiring the completion of an annual questionnaire by the
Board members on corporate governance and the effectiveness of the Board, and shall monitor
the overall effectiveness of the Company’s system of corporate governance on a continuing
basis.

        5.     The Committee may make recommendations to the Board regarding governance
matters, including, but not limited to, the Company’s certificate of incorporation, bylaws, this
Charter, and the charters of the Company’s other committee or committees.

        6.      The Committee shall, at least annually, assess the performance of the Committee
as a whole and of its members individually, considering improvements and taking decisive
corrective action.

      7.     If required by the listing standards of any national securities exchange on which
the Company’s securities are traded, the Committee shall develop and recommend to the Board
the Corporate Governance Guidelines, unless the Committee, in its discretion, decides to
recommend such Corporate Governance Guidelines at an earlier date.

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        8.     In appropriate circumstances, the Committee, in its discretion, shall consider and
may recommend the removal of a director for cause, in accordance with the applicable
provisions of the Company’s certificate of incorporation, bylaws and, if adopted, the Company’s
Corporate Governance Guidelines. The foregoing notwithstanding, if the Company is legally
required by contract or otherwise to permit a third party to direct or approve the removal of one
or more of the directors (for example, pursuant to rights contained in a Certificate of Designation
of a class of preferred stock or a stockholders’ agreement), then the removal of such directors
shall be governed by such requirements.

        9.     The Committee shall consider, develop and recommend to the Board such policies
and procedures with respect to the nomination of directors or other corporate governance matters
considered to be desirable and appropriate in the discretion of the Committee or, when the
Company becomes subject to Section 12(g) or Section 15(d) of the Exchange Act, as may be
required or required to be disclosed pursuant to any rules promulgated by the Securities and
Exchange Commission.

        10.  The Committee shall review periodically with the Chairperson of the Board the
succession plans relating to positions held by elected corporate officers and make
recommendations to the Board with respect to the selection of individuals to occupy those
positions.

        11.     When the Company becomes subject to Section 12(g) or Section 15(d) of the
Exchange Act, the Committee shall establish and review on a periodic basis, for recommendation
to the Board, a process for securities holders to send communications to the Board.

        12.     The Committee may establish and review on a periodic basis, for recommendation
to the Board, a policy concerning Board member attendance at meetings of stockholders.

      13.    The Committee shall review the corporate governance disclosures that may be
made by the Company.

     14.       The Committee shall review the financial qualifications of the Audit Committee
members.

        15.    The Committee shall oversee the Company’s orientation program for new
directors which may include such items as a review of the charters of the committees of the
Board, the Company’s Code of Business Conduct and Ethics, past Board and directors’ materials
and other private and public documents concerning the Company, exposure to the officers of the
Company, visits to certain of the Company’s operating companies and a review of the expected
time commitment and participation by directors.

        Duties and Responsibilities Regarding Compensation and Benefits

     1.        The Committee shall periodically review the compensation philosophy of the
Company.

        2.      The Committee shall periodically review and approve corporate goals and
objectives relating to the compensation of the CEO, evaluate the performance of the CEO in light

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of those goals and objectives and approve the compensation of the CEO (or recommend the
approval of such compensation to the Board, as determined by the Board) based on such
evaluation, subject to any applicable employment agreement. In evaluating any long-term
incentive component of the CEO’s compensation, the Committee shall consider the Company’s
performance and relative stockholder return, the value of similar incentive awards to chief
executive officers at comparable companies, and the awards given to the Company’s CEO in
past years.

        3.     The Committee shall periodically review and approve all compensation for the
non-CEO officers of the Company (as such term is defined in Rule 16a-1 promulgated under the
Exchange Act) (or recommend the approval of such compensation to the Board, as determined
by the Board), and such other employees as the Committee may determine from time to time.

        4.      The Committee shall review and approve all officers’ employment agreements
and severance arrangements (or recommend the approval of such agreements and arrangeme nts
to the Board, as determined by the Board).

      5.      The Committee shall periodically review and make recommendations to the
Board with respect to the compensation of its non- management directors.

        6.    The Committee shall manage and periodically review all annual bonus, long-term
incentive compensation, stock option, employee pension and welfare benefit plans, including
401(k) plans, pension plans, employee stock purchase plans, long-term incentive plans,
management incentive plans and others, and with respect to each plan shall, unless otherwise
determined by the Board consistent with the terms of such plan, have responsibility for:

               (i)   general administration;

            (ii)   setting performance targets under all annual bonus and long-term incentive
compensation plans as appropriate and committing to writing any and all performance targets for
all executive officers who may be “covered employees” under Section 162(m) of the Code
within the first 90 days of the performance period to which such target relates or, if shorter,
within the period provided by Section 162(m) of the Code in order for such target to be “pre-
established” within the meaning of Section 162(m) (to the extent that compensation payable
under such plans to such covered employees is intended to be “qualified performa nce based
compensation” within the meaning of Section 162(m) of the Code and the regulations and other
guidance promulgated thereunder);

          (iii)  certifying that any and all performance targets used for any performance-
based equity compensation plans have been met before payment of any executive bonus or
compensation or exercise of any executive award granted under any such plan(s);

          (iv)    approving all amendments to, and terminations of, all compensation plans and
any awards under such plans (subject to any other necessary approvals);

           (v)   granting any awards under any performance-based annual bonus, long-term
incentive compensation and equity compensation plans to executive officers or current
employees with the potential to become the CEO or an executive officer, including s tock options

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and other equity rights (e.g., restricted stock, stock purchase rights) (to the extent that
compensation payable pursuant to any such awards is intended to be “qualified performance
based compensation” within the meaning of Section 162(m) of the Code and the regulations and
other guidance promulgated thereunder);

         (vi)    approving which executive officers are entitled to awards under the
Company’s stock option plan(s); and

               (vii)   repurchasing securities from terminated employees.

All periodic plan reviews should include reviewing the plan’s administrative costs, reviewing
current plan features relative to any proposed new features, and assessing the performance of the
plan’s internal and external administrators if any duties have been delegated.

      7.      To the extent required by applicable law or otherwise determined by the Board,
the Committee shall establish and periodically review policies concerning perquisite benefits.

       8.      The Committee shall review, establish and approve all bonus, equity incentive
awards or other compensation to the extent any such bonus, awards or other compensation is
intended to be qualified performance based compensation under Section 162(m) of the Code.

        9.     To the extent that the Company is a “publicly held corporation” within the
meaning of Section 162(m) of the Code, the Committee shall periodically review the need for a
Company policy regarding compensation paid to the Company’s executive officers in excess of
limits deductible under Section 162(m) of the Code.

       10.    To the extent required by applicable law or otherwise determined by the Board,
the Committee shall determine the Company’s policy with respect to change of control or
“parachute” payments.

      11.     The Committee shall manage and review executive officer and director
indemnification and insurance matters.

       12.     Neither the Company, nor any of its subsidiaries, will make any personal loans to,
or guarantee the personal obligations of, any director, officer or employee of the Company unless
such loan or guarantee has been specifically approved in advance by the Committee (and the
Committee shall have no obligation to approve any such loan or guarantee).

       13.    Following such time as the Company becomes subject to Section 12(g) or Section
15(d) of the Exchange Act, the Committee shall review and approve the Compensation
Committee report prepared by management to be included as part of the Company’s annual
proxy statement or Annual Report on Form 10-K, as applicable.

        14.    Following such time as the Company becomes subject to Section 12(g) or Section
15(d) of the Exchange Act, the Committee shall review and discuss with management of the
Company the Compensation Discussion and Analysis (“CD&A”), and based on such
discussions, determine whether to recommend to the Board that the CD&A be included in the
Company’s annual proxy statement or Form 10-K, as applicable.

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        General Duties and Responsibilities

        1.     The Committee shall periodically report to the Board on its findings and actions.

       2.      The Committee shall periodically evaluate its own performance, including its
compliance with this Charter, and provide any written material with respect to such evaluation to
the Board, including any recommendations for changes in procedures or policies governing the
Committee. The Committee shall conduct such evaluation and review in such manner as it deems
appropriate.

      3.    The Committee shall periodically review and reassess this Charter and submit any
recommended changes to the Board for its consideration.

V.      Delegation of Duties

        In fulfilling its responsibilities, the Committee shall be entitled to delegate any or all of
its responsibilities to a subcommittee of the Committee, to the extent consistent with the
Company’s certificate of incorporation, bylaws, Corporate Governance Guidelines (if adopted),
applicable law and rules of markets in which the Company’s securities trade, except that it shall
not delegate its responsibilities set forth in paragraphs 2 through 6 under the heading “Duties and
Responsibilities Regarding Compensation and Benefits” of Section IV above or for any matters
that involve executive compensation or any matters where it has determined such compensation
is intended to comply with Section 162(m) of the Code by virtue of being approved by a
committee of “outside directors” or is intended to be exempt from Section 16(b) under the
Exchange Act pursuant to Rule 16b-3 by virtue of being approved by a committee of “non-
employee directors.”




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