Compensation Committee Charter
The Compensation Committee (the "Committee") of the Board of Directors ("Board") of Minerva Neurosciences, Inc. (the "Company") is appointed by the Board to assist in fulfilling certain of the Board's oversight responsibilities. The Committee's purposes shall be:
- To establish a compensation philosophy designed to attract and retain the Company's executive officers and other employees in a competitive market and to maintain a link between executive compensation and Company and executive performance, and to set the individual compensation of each executive officer in accordance with the Committee's compensation philosophy;
- To administer the Company's equity compensation plans and other incentive compensation plans;
- To evaluate the performance of the Company's executive officers and adjust compensation arrangements as appropriate based upon Company and individual performance; and
- To review and monitor management development and succession plans and activities.
- The Committee shall be composed of at least two directors. All members of the Committee shall meet the independence requirements of Rule 10C-1(b)(1) under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and the listing rules of the NASDAQ OMX Group, Inc. ("NASDAQ") or any other exchange on which the Company's securities are listed or quoted, and must also qualify as "outside directors" for the purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder and as "non-employee" directors as defined in Rule 16b-3 under the Exchange Act.
- The members of the Committee shall be nominated by the Nominating and Corporate Governance Committee and appointed by the Board for one-year terms. The Nominating and Corporate Governance Committee shall recommend, and the Board shall designate, one member of the Committee to serve as Chairperson. The members of the Committee shall serve until their resignation, retirement, or removal by the Board or until their successors shall be appointed. A majority of the independent directors of the full Board [not including the director being so removed] then in office may remove any member from the Committee at any time with or without cause.
- The Committee shall meet as often as it may deem necessary and appropriate in its judgment to carry out its responsibilities, which meetings may be in person or by telephone conference or other communications equipment by means of which all persons participating in the meeting can hear each other.
- A majority of the members of the Committee shall constitute a quorum for purposes of holding a meeting and the Committee may act by a vote of a majority of members present at such meeting. In lieu of a meeting, the Committee may act by unanimous written consent in accordance with the Company's Amended and Restated Bylaws.
- The Chairperson of the Committee or a majority of the members of the Committee may call a special meeting of the Committee.
- The Committee may delegate authority to one or more members of the Committee where appropriate, but no such delegation shall be permitted if the authority is required by law, regulation, or listing standard to be exercised by the Committee as a whole.
- The Committee may request that any directors, officers, or employees of the Company, or other persons whose advice and counsel are sought by the Committee, attend any meeting to provide such information as the Committee requests. However, the Committee shall meet regularly without such individuals present, and in all cases the chief executive officer (the "CEO") and any other such officers shall not be present at meetings at which their compensation or performance is discussed or determined.
- The Committee shall fix its own rules of procedure, which shall be consistent with the bylaws of the Company and this Charter.
- The Committee shall keep written minutes of its meetings, which minutes shall be maintained with the books and records of the Company.
- The Committee shall have the authority, in its sole discretion, to select, retain and obtain the advice of compensation consultants, outside legal counsel or other advisers ("Compensation Advisers") as necessary, to assist with the execution of its duties and responsibilities. The Committee shall set the compensation and oversee the work of the Compensation Advisers. The Committee shall not be required to implement or act consistently with the advice or recommendations of its Compensation Advisers, and the authority granted herein shall not affect the ability or obligation of the Committee to exercise its own judgment in fulfillment of its duties under this Charter.
- The Company shall provide for appropriate funding, as determined by the Committee in its sole discretion, for payment of compensation to any Compensation Adviser selected by the Committee.
- Prior to retaining or seeking advice from any Compensation Adviser, and annually thereafter, the Committee shall assess the independence of any Compensation Adviser pursuant to applicable Exchange Act rules and NASDAQ listing requirements, including taking into consideration of the applicable factors affecting independence as specified in NASDAQ Rule 5605(d)(3). The Committee is not required to assess the independence of any compensation consultant or other advisor that acts in a role limited to consulting on any broad-based plan that does not discriminate in scope, terms or operation in favor of executive officers or directors and that is generally available to all salaried employees or providing information that is not customized for a particular company or that is customized based on parameters that are not developed by the consultant or advisor, and about which the consultant or advisor does not provide advice.
The Committee shall have the following duties and responsibilities:
Compensation Philosophy, Plans, and Programs
- Periodically review, consider, and approve a philosophy for compensation of the Company's executive officers and other employees in order to attract, retain, engage and reward employees in a competitive market and to maintain a link between executive compensation and Company and executive performance.
- Establish compensation plans and programs for executive officers and other employees, including incentive and equity-based plans and programs, and authorize appropriate employment contracts, special retirement benefits, and severance or change in control arrangements, and review and approve any material changes to such compensation plans and programs, including terminating such agreements, arrangements or plans as necessary or advisable.
- Periodically review the adequacy of such plans, programs and arrangements for the executive officers and other employees. In reviewing and approving incentive compensation plans and equity-based plans, including whether to adopt, amend or terminate any such plans, the Committee shall consider the results of the most recent stockholder advisory vote on executive compensation required by Section 14A of the Exchange Act (the "Say on Pay Vote").
- Administer or delegate to a subcommittee of the Committee the authority to administer, the Company's incentive and equity-based plans and programs, including the making of grants under such plans, and otherwise exercise the authority of the Board with respect to such plans.
- Periodically review compensation programs applicable to non-employee members of the Board, including all forms of cash compensation and equity compensation provided to non-employee members of the Board, and recommend any proposed changes to the Board for its approval.
Specific Compensation Amounts and Incentives
- Establish general compensation levels for executive officers, other than the CEO, including, but not limited to, annual base salaries, annual cash-based incentive opportunities and equity-based awards and opportunities. [In evaluating and determining executive compensation, the Committee shall consider the results of the most recent Say on Pay Vote.]
- Review and evaluate, at least annually (taking into account the views of the other members of the Board), the performance and leadership of the CEO and determine the CEO's total compensation package, including base salary, annual cash-based incentive opportunities and equity-based awards and opportunities, based upon such performance and consistent with the achievement of the established goals and the performance of the Company. In evaluating and determining CEO compensation, the Committee shall consider the results of the most recent Say on Pay Vote. The CEO shall not be present during voting or deliberations relating to CEO compensation and incentives.
- Review with the CEO his evaluation of the performance of the executive officers other than the CEO and approve each such executive officer's total compensation package, including base salary, annual cash-based incentive opportunities and equity-based awards and opportunities based upon such performance and consistent with the achievement of the established goals and the performance of the Company.
- To review, and make recommendations to the Board regarding, any employment agreements and any severance arrangements or plans, including any benefits to be provided in connection with a change in control, for the CEO and other executive officers, which includes the ability to adopt, amend and terminate such agreements, arrangements or plans.]
Management Development and Succession
- Review and monitor management development plans and activities.
- Review with the Board the Company's succession plan for the CEO and other executive officers, including plans for emergency succession in case of unexpected disability.
Risk Assessment of Compensation Programs
- Assess the Company's various compensation plans, programs and practices, including those in which non-executive officers participate, to determine whether there exists a reasonable likelihood that one or more of those plans, programs or practices would have a material adverse effect upon the Company or would otherwise encourage executive officers and other participating employees to engage in unnecessary or excessive risk taking.
Say on Pay
- Review and recommend 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 stockholder advisory vote on frequency of Say on Pay Votes required by Section 14A of the Exchange Act, and review and approve 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.]
- Review and discuss with management the Company's Compensation Discussion and Analysis ("CD&A"), and based on that review and discussion, recommend to the Board that the CD&A be included in the Company's annual proxy statement or annual report on Form 10-K.
- Prepare the Committee's report on executive compensation in accordance with all applicable rules and regulations of the SEC for inclusion in the Company's annual proxy statement or annual report on Form 10-K.
- Review and reassess on an annual basis the adequacy of this Charter and recommend any proposed changes to the Board for its approval.
- Perform any other activities consistent with this Charter, the Company's Certificate of Incorporation, the Company's Amended and Restated Bylaws, and governing law as the Committee or the Board deems necessary or appropriate.
- The Committee shall conduct an annual evaluation of the performance of its duties under this charter and shall present the results of the evaluation to the Board. The Committee shall conduct this evaluation in such manner as it deems appropriate.