Authentidate Holding Corp.
Charter of the Management Resources and Compensation Committee
The purpose of the Management Resources and Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Authentidate Holding Corp., Inc. (the “Company”) is to discharge the Board’s responsibilities relating to executive compensation and to (a) review the performance and development of Company management in achieving corporate goals and objectives; (b) to assure that senior executives of the Company are compensated effectively in a manner consistent with the strategy of the Company, competitive practice, and the requirements of the appropriate regulatory bodies; and (c) review and make recommendations to the Board regarding employee benefit policies and programs, incentive compensation plans, equity-based plans and succession planning for the Company’s executive team. Toward these ends, the Committee will oversee, review and administer all compensation, equity and employee benefit plans and programs.
II. COMMITTEE MEMBERSHIP
The Committee will consist of not less than two directors, each of whom will be an “independent director” as required by the rules of The NASDAQ Stock Market, Inc. (“NASDAQ”), a “non-employee director” within the meaning of Rule 16b-3 issued by the Securities and Exchange Commission (“SEC”), and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code, as amended. Each Committee member will be subject to annual reconfirmation and may be removed by the Board of Directors (the “Board”) at any time.
III. COMMITTEE STRUCTURE AND OPERATIONS
The Board shall designate one member of the Committee as its chairperson. The Committee shall meet in person or via teleconference at least three times per year at a time and place determined by the Committee 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 request any officer or employee of the Company or the Company’s outside counsel to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The Committee shall meet without the presence of the Company’s chief executive officer (“CEO”) when approving or deliberating on the CEO’s compensation but may, in its or their discretion, invite the CEO to be present during the approval of, or deliberations with respect to, compensation for the Other Executive Officers. The Committee shall hold executive sessions without management present.
Meetings of the Committee shall be called by the Chairman thereof upon not less than 24 hours notice. Notice shall be sufficient if delivered verbally or by fax communication or by ordinary mail and shall be held at such place as the Chairman may designate in the notice. A quorum of the Committee shall consist of a majority of the members of the Committee then constituting the Committee. The Committee shall act and adopt and/or authorize all action by either (i) a majority vote of its members present at a meeting where a quorum is present (unless a greater vote is required by law, rule, regulation, listing standard or the Company’s Certificate of Incorporation or Bylaws) or (ii) upon the unanimous written consent of all of the members of the Committee then constituting the Committee. Minutes of each meeting will be duly filed in the Company records. The compensation of the Committee’s members shall be as determined by the Board of Directors of the Company. The Committee may delegate specific tasks to its Chairperson or a sub-committee consisting of at least two Committee members, provided that no such delegation shall be permitted if the authority is required by law, rule, regulation, listing standard or the Company’s Certificate of Incorporation or Bylaws to be exercised by the Committee as a whole.
IV. COMMITTEE DUTIES AND RESPONSIBILITIES
The following are the duties and responsibilities of the Committee:
1. Review and, as appropriate, discuss with Management and the Board the objectives, philosophy/strategy, structure, cost and administration of the Company’s executive compensation and employee benefit policies and programs. In making such review, the Committee shall consider peer group compensation comparisons.
2. No less than annually, review and approve, with respect to the CEO and the other officers designated as Section 16 officers for purposes of the Securities Exchange Act of 1934 (“Other Executive Officers”), (a) all elements of compensation, (b) incentive compensation targets, (c) any employment agreements, severance agreements and change in control agreements or provisions, in each case as, when and if appropriate, and (d) any special or supplemental benefits, including special perquisites, special cash payments and other special compensation and benefit arrangements for the Company’s Executive Officers. In making such review with respect to the CEO, the Committee shall consider and approve corporate goals and objectives relevant to the compensation of the CEO and evaluate the performance of the CEO in light of accomplishment of the prior year’s goals and objectives. The Committee, in connection with its responsibilities contemplated by this paragraph, shall have the further authority to negotiate and enter into employment agreements, severance agreements, change in control agreements, deferred compensation agreements or similar arrangements with the CEO or Other Executive Officers of the Company, and any amendments to such agreements and to determine compensation including bonuses and compensation arising out of such agreements and otherwise.
3. Review and recommend compensation for non-employee members of the Board, including but not limited to the following elements: retainer, meeting fees, committee fees, committee chair fees, equity or stock compensation, benefits and perquisites.
4. Make recommendations to the Board with respect to the Company’s incentive compensation plans and equity-based plans, including stock option and restricted stock plans, employee stock purchase plans and other major long-term incentive plans, applicable to directors, executives and/or non-executive employees of the Company.
5. Make and approve stock option grants and other discretionary equity awards under the Company’s stock option or other equity incentive plans to all persons who are Board members or Executive Officers. Grant stock options and other equity-based discretionary awards under the Company’s stock option or other equity incentive plans to all other eligible individuals in the Company’s service. Subject to Delaware General Corporate Law, the Committee may delegate to one or more corporate officers designated by the Committee the authority to make grants to eligible individuals (other than any such corporate officer) who are not Executive Officers, provided that the Committee shall have fixed the price (or a formula for determining the price) and the vesting schedule for such grants, approved the form of documentation evidencing such grants, and determined the appropriate number of shares or the basis for determining such number of shares by position, compensation level or category of personnel. Any corporate officer(s) to whom such authority is delegated shall regularly report to the Committee the grants so made. Any such delegation may be revoked at any time by the Committee.
6. Amend the provisions of the Company’s stock option or other equity incentive plans, to the extent authorized by the Board, and make recommendations to the Board with respect to incentive compensation and equity-based plans. Approve the foregoing for submission to the shareholders.
7. Recommend to the Board for its approval a succession plan for the CEO developed by Management and approved by the Committee, addressing the policies and principles for selecting a successor to the CEO, both in an emergency situation and in the ordinary course of business.
8. Review programs created and maintained by Management for the development and succession of Other Executive Officers and any other individuals identified by Management or the Committee.
9. Review the establishment, amendment and termination of employee benefits plans, recognizing that certain authority to amend the plans may be delegated to Members of Management in the plans. Review employee benefit plan operations and administration, recognizing that certain authority related to the operation and administration of the plans may have been delegated to members of Management.
10. Review compensation practices for incentives that may promote inappropriate risk taking, and any mitigating factors that the Company has or should consider implementing, such as policies requiring clawbacks or imposing holding periods and no less frequently than annually, provide oversight and assistance, for and among management and the Board, with respect to the analysis as to whether the Company’s compensation policies and practices create risks, including risks that are reasonably likely to have a material adverse effect on the Company.
11. The Committee shall review and recommend for approval by the Board how frequently the Company should permit stockholders to have an advisory vote on executive compensation (a say on pay) taking into account the results of stockholder votes on the frequency of say on pay resolutions at the Company. The Committee also shall review the results of say on pay resolutions, including in relation to golden parachutes, if any, and consider whether to make any adjustments to the Company’s executive compensation policies and practices.
12. To the extent required by the applicable law or regulation, including the rules and standards of the NASDAQ Stock Market (or any other exchange or market on which the Company’s securities may be listed for trading), the Committee shall conduct the independence analysis and to consider the factors described in Rule 10C-1 promulgated under the Exchange Act, before retaining compensation consultants, legal, accounting or other experts.
13. Any other duties or responsibilities that is either (i) expressly delegated to the Committee by the Board from time to time relating to the Committee’s purpose or (ii) that is otherwise required by applicable law, rules or regulations (including the rules of any exchange or market on which the Company’s securities are traded) which is consistent with this Charter, the Company’s Bylaws and governing law that the Committee or the Board deems necessary or appropriate.
14. At least annually, review the adequacy of this Charter and recommend any proposed changes to the Board for its approval.
15. Notwithstanding the foregoing, any action of the Committee, other than the grant of stock options or other equity-based discretionary awards under the Company’s stock option or other equity incentive plans, may be subject to Board review and may be revised, modified or rescinded by the Board.
V. COMMITTEE REPORTS
The Committee shall produce the following reports and provide them to the Board:
1. Assist in the preparation of any required “Compensation Discussion and Analysis” and the related “Compensation Committee Report” for inclusion in the Company’s annual proxy statement and Form 10-K, subject to and in accordance with the rules of the Securities and Exchange Commission. The Committee shall review and discuss any required Compensation Discussion and Analysis with management each year prior to preparing any required Compensation Committee Report, shall approve any required Compensation Discussion and Analysis and shall determine whether or not to recommend to the Board that any required Compensation Discussion and Analysis be included in the Company’s proxy statement and/or 10-K.
2. An annual evaluation of the Committee to determine whether to recommend to the Board any amendments to the Charter or the composition of the Committee.
3. A summary of the matters discussed, material reviewed and actions taken at each Committee meeting, which shall be presented to the Board at its next meeting. The Committee shall have responsibility for the review and approval of all reports and summaries of compensation policies and decisions as may be appropriate for operational purposes or as may be required under applicable law.
VI. RESOURCES AND AUTHORITY OF THE COMMITTEE
The Committee shall have the sole authority, at the Company’s expense, to retain and terminate any compensation consultant to be used to assist in the evaluation of director, CEO or Other Executive Officer compensation or employee benefit plans, and shall have sole authority to approve the consultant’s fees and other retention terms. The Committee shall also have the authority, at the Company’s expense, to obtain advice and assistance from internal or external legal, accounting or other experts, advisers and consultants to assist in carrying out its duties and responsibilities, and shall have the sole authority to retain and terminate, and to approve the fees and other retention terms for any external experts, advisers or consultants. To the extent the Committee engages any consultants or legal, accounting or other experts, the Committee shall be directly responsible for the oversight of such advisor’s work. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to the compensation consultants and to any advisors employed by the Committee. The Committee shall further have full access to the Company’s executives and personnel as necessary to carry out its responsibilities.
Amended: June 25, 2013