Authentidate Holding Corp.
Charter of the Strategy and Risk Analysis Committee
of The Board of Directors
This Charter was adopted by the Board of Directors (the “Board”) of Authentidate Holding Corp. (the “Company”) on November 13, 2014.
The purpose of the Strategy and Risk Analysis Committee (the “Committee”) shall be to assist the Board and monitor the Company’s senior management in carrying out of the following responsibilities:
- The financial management of the Company and its subsidiaries;
- Identifying and assessing the risks facing the Company; and
- The Company’s strategic planning, including reviewing material strategic transactions and potential material investments by the Company in, or in the Company by, third parties.
II. Structure and Membership
- Number, Composition. The Committee shall consist of at least three members of the Board (each, a “member”). If deemed advisable by the Board, the Company’s Chief Executive Officer may be a member of the Committee. A majority of the Committee shall be “independent” according to the standards of The NASDAQ Stock Market and the Company (to the extent the Company maintains standards that are more stringent).
- Chair. The Chair of the Committee shall be designated by the Board upon recommendation of the Nominating and Corporate Governance Committee of the Board (the “Governance Committee”).
- Selection and Removal. The Governance Committee shall recommend nominees for appointment to the Committee annually and as vacancies or newly-created positions occur or are about to occur. Committee members shall be appointed by the Board annually and may be removed by the Board at any time, with or without cause.
III. Authority and Responsibilities
The Committee members shall discharge their responsibilities and shall assess the information provided by the Company’s management, in accordance with the same standards of duty and care as they do as members of the Board. In addition to any other responsibilities that may be assigned from time to time by the Board, the Committee is authorized to undertake, and has responsibility for, the following areas relating to the Company and its subsidiaries.
The following are the duties and responsibilities of the Committee:
- The Committee is responsible for reviewing with senior management the Company’s funding and liquidity requirements, its capital planning process, its capital adequacy and structure under various scenarios including a stressed scenario. Specific responsibilities of the Committee include: (i) ongoing review of the Company’s significant capital expenditures and (ii) and review of the Company’s capital structure and financing requirements.
- Review and recommend to the Board any changes regarding the capital structure of the Company, including the issuance of common and preferred equity securities, share repurchases, stock splits or stock dividends and the issuance or calling of debt instruments;
- Review and recommend to the Board the declaration of cash dividends on the common stock;
- Review, assess and recommend to the Board for approval as appropriate, individual capital expenditures or any business acquisitions and/or dispositions of assets;
- The Committee shall oversee senior management’s establishment of the Company’s overall strategic planning process and alignment of the Company’s risk profile with its strategic plan, goals and objectives, which shall be recommended to the Board for its review and approval;
- The Committee shall review any strategic transactions where the aggregate amount of consideration to be paid or received exceeds any levels specified by the Board and such transaction is likely to have a material impact on the financial condition of the Company and its subsidiaries, taken as a whole;
- Within guidelines established by the Board, review and recommend to the Board for approval significant proposed “off-balance sheet” transactions;
- Review the Company’s corporate insurance program at least annually;
- Review the Company’s annual budget and monitor performance against operational plans and report to the Board on these matters at least annually;
- Review and oversee the development, implementation and execution by management of the Company of a comprehensive risk management program containing policies and procedures for identifying, controlling, mitigating or eliminating operational, financial, strategic, compliance and other risks and guidelines regarding the Company’s tolerance for risk and review the organization and staffing of the Company’s risk management function; and
- In consultation with the Audit Committee of the Board, discuss at least annually the guidelines and policies governing the process by which senior management of the Company and relevant departments of the Company assess and manage the Company’s exposure to risk.
IV. Procedures and Administration
- Meetings. The Committee shall meet as often as it determines is appropriate to carry out its responsibilities under this Charter, provided that the Committee shall meet at least quarterly. Special meetings of the Committee may be held from time to time pursuant to the call of the Chair of the Committee. The Chair of the Committee, in consultation with the other Committee members, shall determine the frequency and length of the Committee meetings, shall set meeting agendas consistent with this Charter and shall, when present, preside at all meetings of the Committee. Meetings may be conducted by teleconference. In lieu of a meeting, the Committee may also act by unanimous written consent. The Committee shall designate a person (who need not be a member of the Committee) to keep minutes of its meetings. The minutes shall be retained by the Corporate Secretary of the Company.
- Quorum. A majority of the Committee members in office shall constitute a quorum at any meeting but a less number may adjourn any meeting, from time to time. If a quorum is present, the Committee may take action through the vote of a majority of the directors who are in attendance.
- Subcommittees. The Committee may, to the fullest extent permitted by applicable law or regulation, form and delegate its authority to subcommittees of the Committee when it deems appropriate and in the best interests of the Company.
- Reporting to the Board. The Committee shall report to the Board regularly, and not less than quarterly. Any reports shall include recommendations or issues that arise with respect to the Company’s financial affairs, risk management, capital adequacy, risk profile, compliance with legal/regulatory requirements, strategic plan, potential material strategic transactions, and any other matter that the Committee deems appropriate or is requested to be included by the Board.
- Charter. The Committee shall periodically review and assess the adequacy of this Charter and recommend any proposed changes to the Board for its approval.
- Resources. The Committee will have the resources and authority appropriate to discharge its responsibilities, including the authority to consult external advisors. The Committee shall have the sole authority to retain and to terminate such advisors, and to approve the advisors’ fees and other retention terms. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to any advisors employed by the Committee. Notwithstanding the foregoing, however, the authority delegated to this Committee shall not include the authority to retain investment banking firms or securities and business brokers, without the prior approval of the Board of Directors.
- Coordination. The Chair of the Committee shall coordinate with the Chairs of the other Committees of the Board with respect to the responsibilities assigned by the Board and by applicable regulatory requirements to each of the Committees in assisting the Board in its oversight of the Company’s risk management.
- Annual Self-Evaluation. At least annually, the Committee shall evaluate its own performance of the duties specified in this Charter and report to the Board on such evaluation.
V. Limitations Inherent in the Committee’s Role
It is not the duty of the Committee but rather the responsibility of the Chief Executive Officer of the Company and the Company’s senior management to identify and assess the Company’s exposure to risk. The Committee, however, shall meet with the Chief Executive Officer at least quarterly to review the Company’s risk management, compliance activities and potential risk exposures. While the Committee is responsible for overseeing the risk management function, it is not the sole body responsible for ensuring that the Company’s risk management function is carried out efficiently and effectively. For purposes of clarity, unless this Committee is subsequently expressly authorized by the Board to evaluate a specific strategic transaction, this Committee has not been established to act as a special independent committee for the purpose of evaluating any particular strategic alternative that the Company may consider.
Adopted: November 13, 2014