Compensation Committee Charter
(Effective as of December 12, 2011, as amended December 18, 2013)
The purpose of the Compensation Committee of the Board of Directors (the “Board”) of Jive Software, Inc. (the “Company”) shall be to:
- Provide oversight of the Company’s compensation policies, plans and benefits programs, and overall compensation philosophy
- Discharge the Board’s responsibilities relating to (1) oversight of the compensation of the Company’s Chief Executive Officer (“CEO”) and its executive officers (including officers reporting under Section 16 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act”)) and (2) the evaluation and approval of the Company’s CEO and executive officer compensation plans, policies and programs.
- Administer the Company’s equity compensation plans for its executive officers and employees and the issuance of stock options and other equity-based or equity-linked awards not granted pursuant to a plan
The Compensation Committee shall seek to ensure that the Company structures its compensation plans, policies and programs as to attract and retain the best available personnel for positions of substantial responsibility with the Company, to provide incentives for such persons to perform to the best of their abilities for the Company and to promote the success of the Company’s business. The Compensation Committee is also responsible for producing an annual report on executive compensation for inclusion in the Company’s proxy statement. The Compensation Committee has the authority to undertake the specific duties and responsibilities as are enumerated in or consistent with this charter, and will have the authority to undertake such other specific duties as the Board from time to time prescribes.
1. Membership and Appointment.
The Compensation Committee shall consist of at least three (3) members of the Board. Members of the Compensation Committee shall be appointed by the Board upon the recommendation of the Nominating and Corporate Governance Committee and may be removed by the Board in its discretion.
Members of the Compensation Committee must meet the following criteria:
- The independence requirements of the listing standards of the NASDAQ Stock Market (as applicable).
- The non-employee director definition of Rule 16b-3 promulgated under Section 16 of the Exchange Act.
- The outside director definition of Section 162(m) of the Internal Revenue Code of 1986 (“IRC”), as amended.
- Such other qualifications as may be established by the Board from time to time.
The Board may designate a chairperson of the Compensation Committee. In the absence of that designation, the Compensation Committee may designate a chairperson by majority vote of the Compensation Committee members.
The following are the principal recurring responsibilities of the Compensation Committee. The Compensation Committee may perform such other functions as are consistent with its purpose and applicable law, rules and regulations and as the Board or the Compensation Committee deem appropriate. In carrying out its responsibilities, the Compensation Committee believes its policies and procedures should remain flexible, in order to best react to changing conditions and circumstances.
1. Set Compensation for Executive Officers
The Compensation Committee shall:
- Review and approve corporate goals and objectives relevant to the compensation of the CEO, evaluate his or her performance in light thereof, and consider factors related to the performance of the Company in approving the compensation level of the CEO. The CEO may not be present during deliberations or voting on such matters.
- Review annually and approve the CEO’s (1) annual base salary, (2) annual incentive bonus, including the specific goals and amount, (3) equity compensation, (4) any employment agreement, severance arrangement or change of control protections, (5) any signing bonus or payment of relocation costs and (6) any other benefits, compensation or similar arrangements (including, without limitation, perquisites and any other form of compensation). In determining the long-term incentive component of CEO compensation, the Compensation Committee will consider, among other things, 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 Company’s CEO in past years. The CEO may provide input on his compensation arrangements at the invitation of the Compensation Committee, but may not be present during final deliberations or voting on such matters.
- In consultation with the CEO, review annually and approve items (1) through (6) in the previous bullet for the other individuals who are deemed to be officers of the Company under Rule 16a-1(f) promulgated under the Exchange Act (the “executive officers”).
- Review and approve, seeking the input of the full Board when the Compensation Committee deems it appropriate, any compensatory contracts or similar transactions or arrangements with current or former executive officers of the Company, including consulting arrangements, employment contracts, severance or termination arrangements and loans to employees made or guaranteed by the Company.
2. Oversee Compensation Plans and Programs
The Compensation Committee shall:
- Establish and administer annual and long-term incentive compensation plans for executive officers and other senior executives, including:
- Establishing performance objectives and certifying performance achievement; and
- Reviewing and approving all equity-based compensation plans and grant awards of shares and stock options pursuant to such plans.
- Administer the Company’s equity incentive plans. In its administration of the plans, the Compensation Committee may (i) grant stock options, stock purchase rights or other equity- based or equity-linked awards to individuals eligible for such grants (including grants to individuals subject to Section 16 of the Exchange Act in compliance with Rule 16b-3 promulgated thereunder) and in accordance with procedures and guidelines as may be established by the Board and (ii) amend such stock options, stock purchase rights or equity- based or equity-linked awards. The Compensation Committee may also make amendments to the plans and changes in the number of shares reserved for issuance thereunder.
- Approve all option grants and performance awards to executive officers of the Company to ensure that such grants and awards comply with Section 162(m) of the IRC.
- Oversee the Company’s overall compensation philosophy, compensation plans and benefits programs, and make improvements or changes to such plans or programs or the adoption of new plans or programs when appropriate. One of the Compensation Committee’s objectives shall be to use compensation to align the interests of the executive officers with the long-term interests of the Company’s stockholders, thereby incentivizing management to increase stockholder value. This should consider the view of stockholders on executive compensation matters, including advisory votes to approve executive compensation, stockholder proposals and related matters.
- In connection with executive compensation programs:
- Establish and periodically review policies for the administration of executive compensation programs and review and approve new executive compensation programs; and
- Review on a periodic basis the operations of the Company’s executive compensation programs to determine whether they are properly coordinated and achieving their intended purpose(s) and take steps to modify any executive compensation program that yields payments and benefits that are not reasonably related to executive and corporate performance.
- Periodically review executive compensation programs and total compensation levels, including:
- Conducting comparative analyses of total compensation relative to market;
- Quantifying maximum payouts to executives under performance-based incentive plans and total payments under a variety of termination conditions, including upon a change of control; and
- The impact of tax and accounting rules changes.
- Establish and periodically review policies in the area of senior management perquisites.
- Authorize the repurchase of shares from terminated employees pursuant to applicable law.
- Periodically review and approve compensation and benefits, including equity awards, for non-employee directors.
3. Compliance and Governance Issues
The Compensation Committee shall:
- Review and discuss with management the Compensation Discussion and Analysis (“CD&A”) and related disclosures required by the rules of the Securities and Exchange Commission. The Committee will also review and recommend the final CD&A to the Board for inclusion in the Company’s annual report and proxy statement.
- Prepare the Compensation Committee Report required by the rules of the Securities and Exchange Commission to be furnished with the Company’s annual report and proxy statement.
MEETINGS AND PROCEDURES
- The Compensation Committee will set its own schedule of meetings and will meet at least two times per year, with the option of holding additional meetings at such times as it deems necessary or appropriate. The chairperson of the Compensation Committee shall preside at each meeting. If a chairperson is not designated or present, an acting chair may be designated by the Compensation Committee members present. The Compensation Committee will maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board.
- As part of its review and establishment of the performance criteria and compensation of designated key executives, the Compensation Committee should meet separately at least on an annual basis with the CEO, the Company’s principal human resources executive, and any other corporate officers as it deems appropriate. However, the Compensation Committee should meet regularly without such officers present, and in all cases such officers shall not be present during the portions of meetings when their performance and compensation are being deliberated and determined.
- The Compensation Committee may invite to its meetings any director, officer or employee of the Company and such other persons as it deems appropriate in order to carry out its responsibilities. The Compensation Committee may also exclude from its meetings any persons it deems appropriate in order to carry out its responsibilities, including non- management directors who are not members of the Compensation Committee.
2. Reporting to the Board of Directors
The Compensation Committee shall report regularly to the Board (i) following meetings of the Compensation Committee, (ii) with respect to such other matters as are relevant to the Compensation Committee’s discharge of its responsibilities and (iii) with respect to such recommendations as the Compensation Committee may deem appropriate. The report to the Board may take the form of an oral report by the chairperson or any other member of the Compensation Committee designated by the Compensation Committee to make such report.
3. Authority to Retain Advisors
The Compensation Committee shall have the authority to engage any compensation consultant, independent counsel or other advisors as it deems necessary or appropriate to carry out its duties. The Company will provide appropriate funding, as determined by the Compensation Committee, to pay any such compensation consultant or any other outside advisors hired by the Compensation Committee and any administrative expenses of the Compensation Committee that are necessary or appropriate in carrying out its activities.
Prior to engaging any advisors, the Committee must consider the independence factors specified by Nasdaq (the “Independence Factors”). Specifically, these Independence Factors are:
- The provision of other services to the Company by the entity employing the advisor (the “Advisor Entity”).
- The amount of fees received from the Company by the Advisor Entity as a percentage of the total revenue of the Advisor Entity.
- The policies and procedures of the Advisor Entity that are designed to prevent conflicts of interest.
- Any business or personal relationship of the advisor with a Committee member.
- Any stock of the Company owned by the advisor.
- Any business or personal relationship of the advisor or the Advisor Entity with an executive officer of the Company.
The Company shall be responsible for paying reasonable compensation, as determined by the Committee in its sole discretion, for such advisors. The Committee shall have the authority to approve such advisors’ compensation and other retention terms and to oversee their work. The Committee may also utilize the services of the Company’s regular outside legal counsel or other advisors to the Company, but only following consideration of the Independence Factors.
The Committee shall not be required to consider the Independence Factors prior to obtaining advice from in-house counsel. The Committee shall also not be required to consider the Independence Factors prior to obtaining an advisor’s counsel on (i) any broad-based plan that does not discriminate in scope, terms or operation, in favor of executive officers or directors of the Company and that is generally available to all salaried employees, or (ii) any information that is not customized for the Company or that is customized based upon parameters not developed by the advisor or the Company, and about which the advisor does not provide advice. The advisors exempted from Independence Factor consideration under this paragraph are referred to herein as the “Exempt Advisors.” Except with respect to Exempt Advisors, the Committee shall at least annually review the independence of advisors to the Committee, including compensation consultants and the Company’s regular outside counsel, in accordance with the Independence Factors.
The Compensation Committee may form subcommittees for any purpose that the Compensation Committee deems appropriate and may delegate to such subcommittees such power and authority as the Compensation Committee deems appropriate. Specifically, at its discretion, the Compensation Committee shall have the authority to designate a Committee for Equity Awards to Non-Officers with the authority to grant options or stock purchase rights to non-officer employees of the Company within guidelines established by the Compensation Committee from time to time. Such committee shall consist of a minimum of one (1) member of the Company’s Board, who may be the CEO. If designated, any subcommittee will establish its own schedule and maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board. The Compensation Committee shall not delegate to a subcommittee any power or authority required by law, regulation or listing standard to be exercised by the Compensation Committee as a whole.
5. Committee Charter Review
The Compensation Committee shall review and reassess the adequacy of this charter annually and shall submit any recommended changes to the charter to the Nominating and Corporate Governance Committee and the Board for approval.
6. Performance Review
The Compensation Committee shall review and assess the performances of the Compensation Committee on an annual basis.