Compensation Committee Charter
Compensation Committee Charter
The Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Egalet Corporation (the “Company”) is established pursuant to the Bylaws of the Company.
The purpose of the Committee is to discharge the Board’s responsibilities relating to (i) compensation of the Company’s executive officers and employees, and (ii) the administration of the Company’s equity compensation, retirement, incentive compensation and benefit plans generally.
- Appointment and Chairperson. The Board will appoint Committee members. The Board will also appoint a chairperson for the Committee.
- Term. Each of the directors serving on the Committee shall serve for such term or terms as the Board may determine or until his or her successor has been duly elected and qualified or his or her death, resignation or removal, if earlier.
- Composition and Qualifications. The Committee will consist of the number of members required by the listing standards of the Company’s principal stock exchange (subject to any applicable exceptions permitted under such listing standards), each of whom shall be independent as defined by such listing standards and any other applicable laws, rules and regulations governing independence. All members of the Committee must also qualify as “non-employee directors” for the purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and as “outside directors” for the purposes of Section 162(m) of the Internal Revenue Code, as amended.
IV. Duties and Responsibilities
The Committee shall have the following specific duties and responsibilities:
- Appointment of Officers. The Committee will review and recommend the senior employees proposed for election as corporate officers.
- Compensation of the Chief Executive Officer. To the extent it deems necessary or appropriate, the Committee will annually review and approve the compensation of the Company’s chief executive officer, including the goals and objectives relevant to such chief executive officer’s compensation that the Committee, in its discretion, determines are appropriate, evaluate his or her performance in light of those goals and objectives, and set his or her compensation based on this evaluation. In determining the compensation of the chief executive officer, the Committee shall not permit the chief executive officer to be present at or participate in its deliberations.
- Compensation of Executive Officers Other Than the Chief Executive Officer. To the extent it deems necessary or appropriate, the Committee will annually review and approve the compensation of the Company’s executive officers other than the chief executive officer, including such goals and objectives relevant to the executive officers’ compensation that the Committee, in its discretion, determines are appropriate, evaluate their performance in light of those goals and objectives, and set their compensation based on this evaluation. The Committee shall be entitled to consider the recommendations of the chief executive officer in connection with the compensation of other executive officers and, in the Committee’s discretion, the chief executive officer may participate in the Committee’s deliberations with respect thereto.
- Compensation of Other Employees. To the extent it deems necessary or appropriate, the Committee will review and approve the compensation of other employees of the Company that the Committee may specify from time to time, and delegate authority to specified executive officer(s) to review and approve the compensation of other non-executive officer employees. To the extent it deems appropriate, the Committee will also annually review with the chief executive officer and any other officer or member of management, as appropriate, the material criteria used by the chief executive officer and management in evaluating employee performance throughout the Company and in establishing competitive compensation, retention, incentive, severance and benefit policies and programs.
- Compensation of Directors. The Committee will periodically review compensation for service on the Board and Board committees and recommend any compensation changes to the Board.
- Stock and Incentive Plan Administration. The Committee will oversee the administration of, and periodically review and make changes to, the Company’s incentive compensation plans, equity-based compensation plans, and any material employee benefit, bonus, retirement, severance and other compensation plans. The Committee will approve equity compensation awards pursuant to the Company’s equity-based compensation plans. The Committee may delegate authority to specified executive officer(s) to review and approve equity awards to certain non-officer employees as the Committee may specify from time to time in accordance with the plan under which such awards are made.
- Compensation Discussion and Analysis. The Committee shall prepare any analysis or report on executive compensation required to be included in the Company’s proxy statement or Annual Report on Form 10-K pursuant to applicable Securities and Exchange Commission rules and regulations, and recommend the inclusion of such analysis or report in the Company’s proxy statement or Annual Report on Form 10-K.
- Compensation Committee Report. The Committee will prepare any disclosure required by Item 407(e) of Regulation S-K under the Securities Act of 1933, as amended, regarding the inclusion of the Compensation Discussion and Analysis in the Company’s proxy statement or Annual Report on Form 10-K.
- Risk and Compensation. The Committee is responsible for overseeing the management of risks relating to the Company’s executive compensation and overall compensation and benefit strategies, plans, arrangements, practices and policies. The Committee will periodically review the Company’s compensation policies and practices, as appropriate, to determine whether such policies and practices create risk-taking incentives that are reasonably likely to have a material impact on the Company.
- Stockholder Advisory Votes on Executive Compensation. If applicable, the Committee will review and make recommendations to the Board concerning the frequency of holding stockholder advisory votes on approval of executive compensation.
- Review of Charter. The Committee will review and assess the adequacy of this Charter annually and recommend any changes to the Board. The Board must approve any amendments to this Charter.
- Self-Evaluation. The Committee will annually conduct an evaluation of its performance of its duties under this Charter.
- Additional Functions and Administration. The Committee shall perform such duties and responsibilities as may be assigned to the Committee under the terms of any compensation plan of the Company. In addition to the specific powers set forth in this charter, the Committee shall have such powers as may be necessary or appropriate for it to efficiently carry out its duties hereunder.
- Delegation. The Committee shall have the authority to delegate any of its responsibilities to one or more subcommittees as the Committee deems appropriate.
V. Authority to Retain Outside Advisors
- The Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other advisor.
- The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any compensation consultant, legal counsel and other advisor retained by the Committee.
- The Company must provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to a compensation consultant, legal counsel or any other advisor retained by the Committee.
- The Committee may select, or receive advice from, a compensation consultant, legal counsel or other advisor to the Committee, other than in-house legal counsel, only after taking into consideration the following factors:
- the provision of other services to the Company by the person that employs the compensation consultant, legal counsel or other advisor;
- the amount of fees received from the Company by the person that employs the compensation consultant, legal counsel or other advisor, as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel or other advisor;
- the policies and procedures of the person that employs the compensation consultant, legal counsel or other advisor that are designed to prevent conflicts of interest;
- any business or personal relationship of the compensation consultant, legal counsel or other advisor with a member of the Committee;
- any stock of the Company owned by the compensation consultant, legal counsel or other advisor; and
- any business or personal relationship of the compensation consultant, legal counsel, other advisor or the person employing the advisor with an executive officer of the Company.
- The Committee shall evaluate whether any compensation consultant retained or to be retained by it has any conflict of interest in accordance with Item 407(e)(3)(iv) of Regulation S-K under the Act.
- 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 necessary steps to preserve the privileged nature of those communications.
VI. Meetings and Other Matters
- Frequency of Meetings. The Committee shall meet at least twice each year, and more frequently as it determines necessary, and at such times and places as it deems appropriate.
- Quorum Requirement. A majority of the Committee members shall constitute a quorum.
- Reports to the Board. The Committee shall make regular reports to the Board about its activities and recommendations. This will generally take place at the first Board meeting following a Committee meeting.
- Minutes. Minutes of each meeting will be kept and filed in the Minute Books of the Company.
- The Committee shall have full access to all books and records of the Company in carrying out its duties under this Charter.
Amended and Restated, June 8, 2017.