I. Purpose of the Committee
The purpose of the Audit Committee (the “Audit Committee”) shall be to assist the Board of Directors (the “Board”) of Fossil Group, Inc. (the “Company”) in fulfilling its oversight responsibilities related to:
- The accounting and financial reporting practices of the Company and its subsidiaries, including the integrity of the Company’s financial statements;
- The accounting and financial reporting practices of the Fossil Group, Inc. Savings and Retirement Plan, as amended (“401(k) Plan”), sponsored by the Company, including the integrity of the 401(k) Plan financial statements;
- The surveillance of administration, disclosure and financial controls;
- The Company’s compliance with legal and regulatory requirements;
- The Company’s monitoring and enforcement of its Code of Conduct and Ethics (the “Code of Conduct”);
- The qualifications and independence of any independent auditor of the Company; and
- The audit of the Company’s financial statements, including the performance of the Company’s internal audit function and the Company’s independent auditor(s).
The Audit Committee shall also prepare the report required by the rules of the Securities Exchange Commission (the “SEC”) to be included in the Company’s annual proxy statement. This charter for the Committee (“Charter”) is amended and restated as of January 1, 2021, and this Charter replaces and supersedes any and all charters or similar documents relating to the governance of the Committee, which are void and of no effect on and after January 1, 2021.
II. Composition of the Committee
The Board shall appoint an Audit Committee of at least three members, consisting entirely of independent directors of the Board (as determined by the Board), and shall either designate one member as chairperson or delegate the authority to designate a chairperson to the Audit Committee. Members of the Audit Committee shall be appointed by the Board upon the recommendation of a majority of the independent directors and may be removed by the Board in its discretion.
A. Independence The independence of Audit Committee members shall be determined pursuant to the rules and regulations set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and requirements of the Nasdaq Stock Market (“Nasdaq”). No member of the Audit Committee shall have participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time in the past three years. B. Financial Expertise All members of the Audit Committee must be able to read and understand financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) at the time of their appointment. In addition, the Audit Committee must have at least one committee member who meets the requirements of an “Audit Committee Financial Expert,” as such term is defined in Item 407(d)(5) of Regulation S-K of the Securities Act of 1933. In addition, if an Audit Committee member ceases to be independent for reasons outside the member’s reasonable control, his or her membership on the Audit Committee may continue until the earlier of the Company’s next annual stockholders’ meeting or one year from the occurrence of the event that caused the failure to qualify as independent. If the Company is not already relying on this provision, and falls out of compliance with the Nasdaq requirements regarding Audit Committee composition due to a single vacancy on the Audit Committee, then the Company will have until the earlier of the next annual stockholders’ meeting or one year from the occurrence of the event that caused the failure to comply with this requirement. The Audit Committee shall cause the Company to provide notice to Nasdaq immediately upon learning of the event or circumstance that caused the non-compliance, if it expects to rely on either of these provisions for a cure period.
III. Meetings of the Committee
The Audit Committee shall meet as often as it determines but no less than once per quarter, either in person or telephonically, and at such times and places as the Audit Committee shall determine. The Audit Committee should have unrestricted access to and meet regularly with each of management, the principal internal auditor of the Company and the principal outside auditing firm to discuss any matters that the Audit Committee or any of these groups believes should be discussed. In addition, the Audit Committee or its chairperson should meet with the independent auditors, management and the internal auditor quarterly to review the Company’s financial statements. A majority of the members of the Audit Committee present in person or by telephone shall constitute a quorum. The Audit Committee shall report regularly to the full Board with respect to its activities. The Committee shall maintain written minutes of its meetings, which will be filed with the meeting minutes of the Board.
IV. Relationship with Independent Auditors
The Audit Committee shall be directly responsible, in its capacity as a committee of the Board, for the appointment, compensation, retention and oversight of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company, whether such services are for the Company or otherwise related to the Plan. In this regard, the Audit Committee shall have the sole authority to (A) appoint and retain, (B) determine the funding for, and (C) when appropriate, terminate, the outside auditing firm, which shall report directly to the Audit Committee. The Audit Committee will be responsible for resolving any disputes between the outside auditing firms and the Company’s management.
V. Responsibilities and Duties of the Committee
To fulfill its responsibilities and duties, the Audit Committee shall: A. Financial Reporting Processes and Documents/Reports Review
- Evaluate annually the performance of the Audit Committee and review and reassess the adequacy of the Audit Committee Charter.
- Review and discuss with the independent auditor(s): (a) the scope of any audit, the results of any annual audit examination by the auditor and any accompanying management letters, and any difficulties the auditor encountered in the course of their audit work, including any restrictions on the scope of the outside auditing firm’s activities or on access to requested information, and any significant disagreements with management; (b) any reports of the outside auditing firms with respect to interim periods, as deemed appropriate by the Audit Committee; and (c) any other matters required to be discussed by the independent auditor with the Audit Committee under auditing standards adopted by the Public Company Accounting Oversight Board.
- Review and discuss with management and the independent auditor(s) the annual audited and quarterly unaudited financial statements of the Company, including, but not limited to, related to the Plan, and including (a) an analysis of the auditor’s judgment as to the quality of the Company’s accounting principles, setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements; (b) the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” or otherwise under any such audit, including the development, selection and reporting of accounting policies that may be regarded as critical; and (c) major issues regarding the Company’s accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles and financial statement presentations.
- Recommend to the Board whether the financial statements should be included in the Company’s Annual Report on Form 10-K.
- Evaluate whether management is setting the appropriate tone at the top by communicating the importance of strong control systems.
- In accordance with Section 404 of the Sarbanes-Oxley Act, review and discuss the adequacy of the Company’s internal controls, any significant deficiencies and material weaknesses if any in internal controls, and any significant changes in such controls with the Company’s independent auditors, internal auditors and management, and the adequacy of disclosures about changes in internal control over financial reporting.
- Review with the Company’s independent auditors, internal auditors and management the adequacy and effectiveness of the Company’s information management systems.
- Periodically review and discuss with the Company’s principal internal auditor the scope of the internal audit plan, results of the audits conducted by the Company’s internal auditors, inclusive of findings, recommendations, management’s response and any significant difficulties encountered during the course of the audit.
- Periodically review and discuss the adequacy and effectiveness of the Company’s disclosure controls and procedures and management reports thereon.
- Review disclosures made to the Audit Committee by the Company’s Chief Executive Officer and Chief Financial Officer during their certification process for the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, along with any disclosures regarding the Form 11-K, about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company’s internal controls. Review and discuss with management (including the senior internal audit employee) and the independent auditor the Company’s internal controls report and the independent auditor’s attestation of the report prior to the filing of the Company’s Form 10-K or Form 11-K.
- Review and timely discuss with management and the principal outside auditors any material financial or non-financial arrangements of the Company which do not appear on the financial statements of the Company.
- Discuss with management any matters that could have a material impact on the Company’s financial statements.
- Review annually reports of fees for audit, non-audit and legal fees for services rendered.
- Review and discuss with the independent auditors their report regarding (a) all critical accounting policies and practices to be used; (b) all alternative treatments of financial information within GAAP that have been discussed with management officials of the Company, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the principal independent auditors; and (c) other material written communications between the independent auditors and Company management, such as any management letter comments and schedule of unadjusted differences.
- Review with financial management and the principal outside auditing firm the Company’s Form 10-K, Form 10-Q and Form 11-K filings with the SEC (including any amendments thereto containing amended or restated financial statements) prior to their filing or prior to the release of earnings reports. Discuss with management the Company’s earnings press releases, including the use of “pro forma” or “adjusted” non-GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies. Such discussion may be done generally (consisting of discussing the types of information to be disclosed and the types of presentations to be made). The chairperson of the Audit Committee may represent the entire Audit Committee for purposes of this review.
- Discuss with management and the independent auditors the effect of regulatory and accounting initiatives on the Company’s financial statements.
- Ensure that a public announcement of the Company’s receipt of an audit opinion that contains a going concern qualification is made promptly.
- Review and discuss with management the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including any risk assessment or risk management policies, and cyber security risk oversight.
- Keep the independent auditor informed of the Committee’s understanding of the Company’s relationships and transactions with related parties that are significant to the Company; and review and discuss with the independent auditor the auditor’s evaluation of the Company’s identification of, accounting for, and disclosure of its relationships and transactions with related parties, including any significant matters arising from the audit regarding the Company’s relationships and transactions with related parties.
- Review and discuss with management its annual and interim evaluation of the Company’s ability to continue as a going concern.
- Take any other steps as the Audit Committee deems appropriate in connection with the Form 11-K, including, but not limited to, working with the Retirement Plan Committee and other committees as may be established by the Company.
B. Independent Auditors
- Approve in advance all auditing services and internal control-related services to be provided by the principal outside auditing firm, including any written engagement letter related thereto. By approving the audit engagement, the audit service contemplated in any written engagement letter shall be deemed to have been pre-approved.
- Establish policies and procedures for the engagement of the principal outside auditing firm to provide permissible non-audit services, which shall require pre-approval by the Audit Committee of all permissible non-audit services to be provided by the outside auditing firm (other than with respect to de minimis exceptions described in Section 10A(i)(1)(B) of the Exchange Act that are approved by the Audit Committee prior to the completion of the audit). Ensure that approval of non-audit services are disclosed to investors in periodic reports required by Section 13(a) of the Exchange Act.
- Delegate the authority to grant pre-approval of audit and non-audit services to one or more designated members of the Audit Committee who are independent directors. Any such delegation shall be presented to the full Audit Committee at its next scheduled meeting.
- At least annually, (a) consider the independence of the principal outside auditing firm, including whether the outside auditing firm’s performance of permissible non-audit services is compatible with the auditor’s independence; (b) obtain and review a written report by the outside auditing firm describing any relationships between the outside auditing firm and the Company or any other relationships that may adversely affect the independence of the auditor; (c) discuss with the outside auditing firm any disclosed relationship or services that may impact the objectivity and independence of the auditor; and (d) present to the Board the Audit Committee’s conclusions with respect to the independence of the outside auditing firm.
- Ensure rotation of the audit partners as required by law.
- Review the experience and qualifications of the senior members of the independent auditor team and the quality control procedures of the independent auditors.
- Establish policies for the hiring of employees and former employees of the outside auditing firm.
C. Outside Advisors
The Audit Committee shall have the authority to retain such outside counsel, accountants, experts and other advisors as it determines appropriate to assist the Audit Committee in the performance of its functions. The Audit Committee shall have sole authority to approve related fees and retention terms and shall receive funding for these appointments and ordinary administrative expenses from the Company.
D. Oversight of the Company’s Internal Audit Function
- Review the appointment and replacement of the senior internal auditing services employee.
- Review the significant reports to management prepared by the internal auditing services department and management’s responses.
- Discuss with the independent auditor, management and the senior internal auditing services employee the audit services department responsibilities, budget and staffing and any recommended changes in the planned scope of the internal audit.
- Review with the senior internal auditing services employee any difficulties encountered by the audit services function in the course of its audits, including any restrictions on the scope of its work or access to required information.
- Annually review and approve any recommended changes to the Global Audit Services Department Charter.
E. Ethical and Legal Compliance
- Establish, review and update periodically a code of conduct and ethics that applies to the Company’s directors, officers and employees and ensure that management has established a system to enforce the Code of Conduct.
- Approve, if the duty is not delegated to a comparable body of the Board, all material related party transactions, which refers to transactions required to be disclosed under Item 404 of Regulation S-K of the Exchange Act.
- Review with the Company’s counsel any legal, tax or regulatory matter that could have a material impact on the Company’s financial statements.
- Establish procedures for the receipt, retention, treatment and communication to the Audit Committee of complaints received by the Company regarding violations of the Code of Conduct (including suspected fraud), accounting, internal accounting controls or auditing matters of the Company.
- Establish procedures for the confidential, anonymous submission by employees of concerns, including concerns regarding questionable accounting or auditing matters.
- Obtain from the independent auditor assurance that Section 10A(b) of the Exchange Act has not been implicated.
- Perform any other activities consistent with this Charter, the Company’s bylaws and governing law, as the Audit Committee or the Board deems necessary or appropriate.
VI. Limitation of Audit Committee’s Role
While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with GAAP and applicable rules and regulations. These are the responsibilities of management and the independent auditor. Further, it is not the duty of the Audit Committee to conduct investigations or to ensure that the Company and its employees comply with laws and regulations and the Code of Conduct.
I. Purpose of the Committee
The Nominating and Corporate Governance Committee (the “Committee”) shall report to and assist the Board of Directors (the “Board”) of Fossil Group, Inc. (the “Company”). The purpose of the Committee shall be to:
- identify qualified individuals for membership on the Board;
- recommend to the Board the director nominees for the next annual meeting of stockholders;
- develop and review the Company’s Corporate Governance Guidelines (the “Guidelines”) on an annual basis and recommend to the Board any changes deemed necessary or desirable; and
- oversee the corporate governance affairs of the Board and the Company.
II. Composition of the Committee
The Committee shall be appointed by the Board and shall be comprised of at least two (2) members. Each Committee member must be “independent” in accordance with applicable law, including the rules and regulations of the Securities and Exchange Commission (the “SEC”) and the requirements of the listing standards of the Nasdaq Stock Market. The Board shall either designate one member of the Committee as chairperson (the “Chairperson”) or delegate the authority to designate a chairperson to the Committee. Members of the Committee shall be appointed by the Board upon the recommendation of a majority of the independent directors and may be removed by the Board in its discretion.
III. Meetings of the Committee
The Committee shall meet as often as it determines, but no less than four (4) times each year, either in person or telephonically, and at such times and places as the Committee shall determine. A majority of the members of the Committee present in person or by telephone shall constitute a quorum. The Chairperson of the Committee may call meetings of the Committee. The Chairperson, in consultation with the Committee members and members of management, will determine the frequency and length of Committee meetings and develop the Committee’s agenda. The Committee shall maintain written minutes of its meetings, which will be filed with the meeting minutes of the Board.
IV. Responsibilities and Duties of the Committee
- Criteria for Nomination to the Board: The Committee shall evaluate candidates for election to the Board consistent with criteria approved by the Board. The Committee shall review, from time to time, such criteria for nomination, including the appropriate skills and characteristics required of Board members and recommend any proposed changes to the Board for approval.
- Nomination of Directors: The Committee shall annually consider the size, composition and needs of the Board and recommend any changes to the size and composition to the Board. The Committee shall consider and recommend candidates for membership on the Board. The Committee shall recommend to the Board each year the director nominees for election at the next annual meeting of stockholders. Upon the recommendation of the Committee, the Board may appoint a director to the Board during the course of the year to fill vacancies on the Board and newly created directorships to serve until the next annual meeting of stockholders. The Committee shall assist in identifying, interviewing and recruiting candidates for the Board. Before recommending an incumbent, replacement or additional director, the Committee shall review his or her qualifications, including capability, availability to serve, conflicts of interest and other relevant factors. In determining whether to recommend a director for re-election, the Committee also shall consider the director’s past attendance at meetings, participation in and contributions to the activities of the Board, and the results of the most recent Board self-evaluation.
- Director Resignation: The Committee shall consider, in accordance with the Guidelines, any resignation tendered to the Board by a director and recommend to the Board whether to accept such resignation.
- Stockholder Recommendations: The Committee shall have the authority to establish policies and procedures for the evaluation of candidates for election to the Board put forth by the Company’s stockholders. The Committee shall review and evaluate all candidates submitted by the Company’s stockholders.
- Committees of the Board: The Committee shall review annually the purpose of the committees of the Board, recommend to the Board any changes deemed necessary or desirable to the purpose of the committees and whether any committees should be created or discontinued, and recommend to the Board the directors and chairperson to be appointed to each committee. Committee chairpersons should be rotated every four (4) years, unless the Board determines that it is in the best interest of the Company to maintain an individual director’s status as chairperson of a particular committee beyond such four (4) year period.
- Corporate Governance Guidelines: The Committee shall develop and recommend to the Board for approval a set of corporate governance guidelines for the Company. The Committee shall review the Guidelines on an annual basis and recommend to the Board any changes deemed necessary or desirable. The Committee shall also have oversight of the corporate governance affairs of the Company and shall review annually the corporate governance practices and policies of the Company.
- Evaluation Process: The Committee shall develop and recommend to the Board an annual performance self-evaluation process for the Board and its committees. The Committee shall oversee the process that the Board and its committees use to conduct annual performance evaluations. The Lead Independent Director and the Chairperson of the Compensation Committee shall conduct a review of the performance of the CEO at least annually and shall communicate the results of the Committee’s review to the CEO.
- Self-Evaluation: On an annual basis, the Committee shall conduct a self-evaluation of its performance in fulfilling its duties and responsibilities under this Charter.
- Conflicts of Interest: The Committee shall review any possible conflicts of interest of the Board members, as such conflicts arise.
- Reports to the Board: The Committee shall report regularly to the Board on its meetings and review with the Board significant issues and concerns that arise at meetings of the Committee.
- Director Orientation: The Committee shall review and recommend, as appropriate, director orientation and continuing orientation programs for members of the Board.
- Succession Planning: The Committee shall review at least annually the succession plans relating to the positions of Chairman and Chief Executive Officer (the “CEO”). The Lead Independent Director shall be responsible for soliciting from the Board recommendations for the Company’s CEO and Chairman positions and shall present to the Board the Committee’s recommendations for the CEO and Chairman positions.
- Charter Review: On an annual basis, the Committee shall review the adequacy of this Charter, and recommend to the Board any modifications or changes hereto for approval by the Board.
- Non-employee Director Compensation: The Committee shall have the responsibility for recommending to the Board compensation and benefits for non-employee directors. Non-employee director compensation will be set at a level that is consistent with market practice, taking into account the size and scope of the Company’s business and the responsibilities of its directors. The compensation and benefits for non-employee directors shall be reviewed by the Committee annually.
- Stock Ownership: The Committee shall oversee and at least annually review compliance with stock ownership guidelines for directors of the Company
- Shareholder engagement:Periodically review and assess the Company’s shareholder engagement process
- ESG: Review the Company’s activities and practices regarding environmental, social, and related governance matters that are significant to the Company and review the Company’s philanthropic activities
V. Additional Authority of the Committee
The Committee shall have the authority to delegate any of its responsibilities to subcommittees, consisting solely of independent directors of one or more members of the Committee, as the Committee may deem appropriate in its discretion. The Committee shall have authority to retain outside counsel, executive search firms and other advisors as the Committee may deem appropriate in the conduct of its duties and responsibilities under this Charter. The Committee shall have sole authority to approve related fees and retention terms and shall receive funding for these appointments and ordinary administrative expenses from the Company.
Purpose
The role of the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Fossil Group, Inc. (the “Company”) is to discharge the Board’s responsibilities relating to compensation of the Company’s executives, to produce an annual report on executive compensation for inclusion in the Company’s proxy statement, and to oversee and advise the Board on the adoption of policies that govern the Company’s compensation programs, including stock and benefit plans.
Committee Membership
The membership of the Committee consists of at least three directors, all of whom shall (a) meet the independence and other requirements under Rule 10C-1(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the rules of the NASDAQ and as may be established by the Board, (b) be a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, and (c) be an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code, as amended.
Members shall be appointed by the Board based on recommendations by the Company’s Nominating and Corporate Governance Committee. Members shall serve for such term or terms as the Board may determine. The Board may remove any member from the Committee at any time with or without cause.
Committee Responsibilities
The principal responsibilities and duties of the Committee are as follows:
- Annually review the competitiveness of the Company’s executive compensation programs to ensure (a) the attraction and retention of executives, (b) the motivation of executives to achieve the Company’s business objectives, and (c) the alignment of the interests of key leadership with the long-term interests of the Company’s stockholders.
- Annually review and approve corporate goals and objectives relevant to the compensation of the Company’s Chief Executive Officer (“CEO”), evaluate the CEO’s performance in light of those goals and objectives, and determine, or recommend to the Board for determination, the CEO’s compensation level based on this evaluation. In determining or recommending the annual and long-term incentive components of CEO compensation, the Committee shall consider, among other factors, the Company’s performance and relative stockholder return, the value of similar incentive awards to CEOs at comparable companies and the awards given to the CEO in past years. In evaluating and determining CEO compensation, the Committee shall consider the results of the most recent stockholder advisory vote on executive compensation (“Say on Pay
Vote”) required by Section 14A of the Exchange Act. The CEO may not be present during any voting or deliberations by the Committee on his or her compensation.
- Annually determine, or recommend to the Board for determination, the compensation of all other executive officers of the Company. Review and approve compensation arrangements for persons newly hired as executive officers of the Company and compensation changes for employees promoted into such roles. In evaluating and determining executive compensation, the Committee shall consider the results of the most recent Say on Pay Vote.
- Review and discuss with the Board and executive officers plans for executive officer development and corporate succession plans for the CEO and other executive officers.
- Approve all stock option grants and other equity-related awards to all persons who are members of the Board and/or an “officer” of the Company as defined in Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934, as amended.
- Discharge the responsibilities of the Board with respect to the Company’s non-equity based incentive compensation plans for executive officers and equity-based plans, oversee the activities of the individuals and committees responsible for shareholder approval and administering these plans, and discharge any responsibilities imposed on the Committee by any of these plans. In reviewing and making recommendations regarding incentive compensation plans and equity based plans, including whether to adopt, amend or terminate any such plans, the Committee shall consider the results of the most recent Say on Pay Vote.
- Approve issuances under, or any material amendment of, any stock option or other similar plan pursuant to which a person not previously an employee or director of the Company, as an inducement material to the individual’s entering into employment with the Company, will acquire stock or options.
- In consultation with management, oversee regulatory compliance with respect to compensation matters, including overseeing the Company’s policies on structuring compensation programs to preserve tax deductibility, and, as and when required, establishing performance goals and certifying that performance goals have been attained for purposes of Section 162(m) of the Internal Revenue Code.
- Review and approve any employment or post-employment agreements proposed to be made with any current or former executive officer of the Company.
- Discuss with management the Company’s Compensation Discussion and Analysis (“CD&A”) for the annual report on Form 10-K or proxy statement; based on the review and discussion, recommend to the Board that the CD&A be included in the Company’s annual report on Form 10-K or proxy statement; and produce an annual Compensation Committee Report on executive compensation for inclusion in the Company’s annual proxy statement in accordance with applicable SEC rules and regulations and relevant listing authority.
- Annually review and discuss with management and assess the relationship between the Company’s policies and practices for compensation, risk-taking incentives and risk management. Review and discuss any disclosure that may be required in the Company’s annual report on Form 10-K or proxy statement.
- Review and recommend to the Board for approval the frequency with which the Company will conduct Say on Pay Votes, taking into account the results of the most recent stockholder advisory vote on frequency of Say on Pay Votes required by Section 14A of the Exchange Act, and review and approve proposals regarding the Say on Pay Vote and the frequency of the Say on Pay Vote to be included in the Company’s proxy statement.
- Oversee and at least annually review compliance with stock ownership guidelines for executive officers of the Company.
- Review and approve any perquisites and benefit policies or programs available to the Company’s executive officers, except to the extent such benefit policies or programs apply to employees of the Company generally.
- Report to the Board on a regular basis, and not less than twice per year.
- Perform any other duties or responsibilities expressly delegated to the Committee by the Board from time to time relating to the Company’s compensation programs.
Committee Structure and Operations
The Board shall designate one member of the Committee as its chairperson. The chairperson shall, if present, preside at all meetings of the Committee. In the event of a tie vote on any issue, the chairperson’s vote shall decide the issue
The Committee is governed by the same rules regarding meetings (including meetings by conference telephone or similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board.
The Committee shall meet at least four times a year, and perhaps more frequently, at regularly scheduled times and places determined by the Committee or its chairperson, with further meetings to occur, or actions to be taken by unanimous written consent, when deemed necessary or desirable by the Committee or its chairperson. The Committee may invite members of management, compensation consultants or other advisors to attend meetings and provide pertinent information; provided, however, the Committee may meet in executive session at its discretion.
Delegation to Subcommittee
The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee consisting of one or more members or to one or more designated members of the Committee.
Performance Evaluation
The Committee shall prepare and review with the Board an annual performance evaluation of the Committee, which evaluation shall compare the performance of the Committee with the requirements of this charter. The annual performance evaluation shall also review and assess the adequacy of this charter and recommend to the Board any improvements to the Committee’s charter deemed necessary or desirable by the Committee. The performance evaluation by the Committee shall be conducted in such manner as the Committee deems appropriate. The report to the Board may take the form of an oral report by the chairperson of the Committee or any other member of the Committee designated by the Committee to make this report.
Committee Advisors and Funding
The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities. The Committee shall have the sole authority, at the Company’s expense, to retain, obtain the advice of and terminate any compensation consultant, legal counsel or other advisor to the Committee as it deems reasonably appropriate, without seeking approval of the Board or management. The Committee shall set the compensation and other retention terms, and oversee the work, of the compensation consultant, legal counsel or other advisor.
The Committee may select, or receive advice from, a compensation consultant, legal counsel or other advisor to the Committee only after taking into consideration the following factors, as well as any other factors required by applicable rules of the SEC or NASDAQ: (i) the provision of other services to the Company by the person that employs the compensation consultant, legal counsel or other adviser; (ii) the amount of fees received from the Company by the person that employs the compensation consultant, legal counsel or other adviser, as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel or other adviser; (iii) the policies and procedures of the person that employs the compensation consultant, legal counsel or other adviser that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the compensation consultant, legal counsel or other adviser with a member of the Committee; (v) any stock of the Company owned by the compensation consultant, legal counsel or other adviser; and (vi) any business or personal relationship of the compensation consultant, legal counsel, other adviser or the person employing the adviser with an executive officer of the Company. The Committee is not required to assess the independence of any compensation advisor that acts in a role limited to (i) consulting on any broad-based plan that does not discriminate in scope, terms or operation in favor of executive officers or directors and that is generally available to all salaried employees, and/or (ii) providing information that is not customized for a particular company or that is customized based on parameters that are not developed by the advisor, and about which the advisor does not provide advice.
Any communications between the Committee and legal counsel in the course of obtaining legal advice will be considered privileged communications of the Company, and the Committee will take all necessary steps to preserve the privileged nature of those communications.
