Purpose The purpose of the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Dendrite International, Inc. (the “Company”) is to discharge the Board's responsibilities relating to compensation of the Company's executives and to produce an annual report on executive compensation for inclusion in the Company's proxy statement, in accordance with the rules and regulations of the Securities and Exchange Commission.
The Committee shall be responsible for:
• Establishing, in consultation with senior management, the Company's general compensation philosophy, and overseeing the development and implementation of compensation programs;
• Reviewing, in conjunction with senior management, the Company's organization structure, including analyzing available executive resources and preparing plans for executive development and succession;
• Reviewing and approving corporate goals and objectives relevant to the compensation of the Chief Executive Officer (“CEO”), evaluating the performance of the CEO in light of those goals and objectives, and setting the CEO's compensation level based on this evaluation. In determining the long-term incentive component of CEO compensation, the Committee shall consider, among other factors, the Company's performance and relative shareholder returns, the value of similar incentive awards to CEOs at comparable companies and the awards given to the CEO in past years;
• Reviewing and approving the compensation of all other “officers” of the Company as defined in Section 16 of the Securities Exchange Act of 1934 (“Section 16”) and Rule 16a-1 promulgated thereunder (the “Section 16 Officers”);
• Exercising independent oversight in matters relating to employee compensation, employee benefit plans and employee incentive programs, including stock incentive and stock purchase plans;
• Reviewing on an annual basis the Company's compensation and employee benefit policies and practices to help ensure that such policies and practices are consistently aligned to meet the stated company growth and other goals, and that to the degree relevant, these policies are generally competitive with those of other companies or institutions with whom the Company competes for employees; and approving or recommending for approval by the full Board plans to implement such policies and practices;
• Making recommendations to the Board with respect to the Company's incentive compensation plans and equity-based plans, including stock incentive and stock purchase plans, overseeing the activities of any individuals and committees responsible for administering these plans, and discharging any responsibilities imposed on the Committee by any of these plans;
• Recommending to the Board whether indemnification should be provided in a particular case;
• Overseeing, in consultation with the Company's management, regulatory compliance with respect to compensation matters, including overseeing the Company's policies on structuring compensation programs to preserve tax deductibility, and, as and when required, establishing performance goals and certifying that performance goals have been attained for purposes of Section 162(m) of the Internal Revenue Code;
• Overseeing, in conjunction with counsel, compliance with Section 16, as well as reporting obligations thereunder;
• Establishing and periodically reviewing policies in the area of management perquisites;
• Reviewing and approving any severance or similar termination payments proposed to be made to any current or former Section 16 Officer;
• Preparing and issuing the evaluations and reports required under “Reporting” below; and
• Performing any other duties or responsibilities expressly delegated to the Committee by the Board from time to time relating to the Company's compensation programs.
Members The Committee shall consist of at least two members selected by the Board of Directors, all of whom shall be independent directors, i.e. those directors who neither are officers or employees of the Company or its subsidiaries nor, in the opinion of the Board, have a material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company), nor have a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of the a director, and who are otherwise “independent” under the rules of the Nasdaq Stock Market, Inc. Members shall be appointed by the Board, and shall serve at the pleasure of the Board and for such term or terms as the Board may determine.
The Committee shall designate one member of the Committee as it chairperson. In the event of a tie vote on any issue, the chairperson's vote shall decide the issue. The Committee may invite, consistent with the maintenance of the confidentiality of compensation discussions, the Company's CEO, but if present during any deliberations of the Committee, the CEO may not vote. The CEO may not be present during any discussions and deliberations of the Committee regarding the compensation of the CEO. Meetings Meetings of the Committee shall be held on at least a quarterly basis consistent with the scheduling of the Company's regular quarterly Board meetings. Additional meetings may be scheduled at the Committee's discretion. Reporting The Committee shall prepare minutes for all meetings of the Committee, which minutes shall be filed with the Secretary of the Company. The minutes shall be circulated to the Board to keep the Board apprised of the Committee's activities and recommendations. The Committee shall prepare an annual formal report to the Board, summarizing the activities, conclusions and recommendations of the Committee during the previous year and the Committee's agenda for the coming year. The annual report shall describe the performance factors upon which the Committee relied in determining the compensation of the CEO and Section 16 Officers, as well as with respect to options granted pursuant to employee benefit or incentive plans. The report shall also include a discussion of the Committee's general policies with respect to executive compensation. A version of this report will be included in the Company's annual proxy statement distributed to stockholders. Other Issues
The Committee shall have the resources and authority to conduct or authorize investigations into any matter within the Committee's scope and authority.
The Committee shall have the resources and authority to discharge its duties and responsibilities, including the authority to select, retain, terminate, and approve the fees and other retention terms of special counsel or other experts or consultants, including independent compensation consultants, as it deems appropriate, without seeking approval of the Board or management.
Except as otherwise limited in this Restated Charter, the Committee may, in its sole discretion, rely upon Company personnel or Company-selected outside consultants in the performance of it functions.