The Compensation Committee (the “Committee”) of Direct Insite Corp. (the “Company”) is appointed by the Board of Directors of the Company (the “Board”) to assist the Board in fulfilling its responsibilities relating to the compensation of the Company’s directors and executive officers. The Committee’s primary responsibilities and duties are to:
- Approve and evaluate the executive officer compensation plans, policies and programs of the Company.
- Review the compensation paid to non-employee members of the Board.
- Provide guidance and evaluation of overall employee compensation schemes, particularly those regarding incentive compensation, such as equity and option grants.
The Committee shall have the ability to retain, at the Company’s expense, and determine the compensation of, special legal, accounting, or other consultants or experts, including compensation consultants, it deems necessary in the performance of its duties.
II. Composition and Meetings
The Committee shall be comprised of such number of directors as determined by the Board, but no less than three directors, each of whom shall be an independent director as such is defined by the independence rules of the NASDAQ Stock Market, and any rule or regulation prescribed by the Securities and Exchange Commission (“SEC”), free from any relationship that would interfere with the exercise of his or her independent judgment.
Committee members shall be appointed by and serve at the discretion of the Board. If a Committee Chair is not designated by the Board, the members of the Committee shall designate a Chair by majority vote of its membership.
The Committee shall meet at least two times annually, or more frequently as circumstances dictate. A majority of the members of the Committee shall constitute a quorum. If a quorum is present, a majority of the members present shall decide any matter brought before the Committee. The Committee Chair or any other member of the Committee may call a meeting of the Committee upon due notice to each other member at least 72 hours prior to the meeting, which notice period may be waived in writing by any member of the Committee. To the extent possible, the Committee Chair shall prepare and/or approve an agenda in advance of each meeting. The Committee may form and delegate any of its authority to subcommittees or to one or more designated members of the Committee.
III. Responsibilities and Duties
The Committee shall have the following specific responsibilities and duties:
1. Compensation Policies and Practices, Generally.
(a) Reviewing and approving the Company’s overall compensation philosophy and overseeing the administration of related compensation and benefits programs, policies and practices.
(b) Reviewing and approving the Company’s peer companies and other data sources for purposes of evaluating the competitiveness of the Company’s compensation programs, policies and practices.
2. Compensation of Executive Officers and Non-Employee Directors.
(a) Reviewing, not less than annually, and making recommendations to the full Board with respect to, the following for the Chief Executive Officer (the “CEO”) and other executive officers of the Company, subject to existing employment agreements:
(i) annual base salary;
(ii) annual incentive bonus, including the specific goals and amounts;
(iii) equity compensation;
(iv) employment agreements, severance arrangements, and change in control agreements/provisions; and
(v) any other benefits, compensation or related arrangements.
(b) Verifying and authorizing those incentive compensation items listed in Section 2(a) of this Charter which require calculation and are dependent on audited financial statements prior to payment of amounts due.
(c) Periodically reviewing the compensation paid to non-employee directors (including compensation for Chairman of the Board and committee chairs).
3. Performance Goals.
(a) Establishing annual and long-term performance goals and objectives for the CEO and reviewing the performance goals and objectives set by the CEO with respect to the Company’s other executive officers.
(b) Reviewing, not less than annually, the performance of the CEO and each other executive officer in light of established goals and objectives.
(c) Reviewing, not less than annually, the performance of each strategically valued employee in light of established goals and objectives.
4. Equity Incentive Plans.
(a) Making recommendations to the Board with respect to the adoption, and as appropriate, modification of the Company’s incentive compensation plans.
(b) Recommending to the full Board grants, as appropriate, of options and other equity incentive awards under the Company’s equity incentive plans.
5. SEC Reporting.
(a) Overseeing the Company’s submissions to shareholders, if any, with respect to executive compensation matters, as and when such submissions are required by the SEC or applicable listing exchange standards.
(b) Reviewing and recommending 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 shareholder advisory vote on frequency of Say on Pay Votes required by Section 14A of the Securities Exchange Act of 1934, as amended, and reviewing and approving the 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.
6. Outside Advisors.
(a) Evaluating whether any compensation consultant retained or to be retained by the Committee has any conflict of interest in accordance with Item 407(e)(3)(iv) of Regulation S-K.
(a) Performing any other activities consistent with this Charter, the Company’s by-laws, and governing law, as the Committee or the Board deems necessary or appropriate.
(b) Maintaining minutes of meetings and periodically reporting to the Board on significant results of the foregoing activities.
(c) Reviewing and reassessing the adequacy of its formal written charter on an annual basis.