VERITAS Software Corporation
2003 Committee Charter : VRTS
CHARTER OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The purpose of the Compensation Committee (the "Committee") of the Board of Directors (the "Board") of VERITAS Software Corporation (the "Company") is to exercise delegated authority of the Board to make determinations with respect to the following compensation matters:
1. Executive Compensation. The Committee will review the incentive compensation programs of the Company for executive officers and will approve the annual salary, bonus, stock options and other benefits, direct and indirect, of executive officers and directors;
2. Stock Plan Administration. The Committee will supervise the Company's administration of its equity incentive plans, whether adopted prior to or after the date of adoption of this charter (the "Stock Plans"), including, among other things, interpreting, modifying and amending the Stock Plans and agreements thereunder; and
3. Stock Option Grants and Awards. Under its delegated authority to grant stock options to eligible participants under the Stock Plans, the Committee shall meet as and when necessary to affect stock option grants and other awards. The Committee may delegate to the Chief Executive Officer the authority to grant options to employees of the Company or of any subsidiary of the Company who are not directors or executive officers, provided that no option grant exceeds a certain limit (currently set by the Board at 50,000 shares).
All members of the Committee will be appointed upon the recommendation by the Corporate Governance and Nominating Committee by, and shall serve at the discretion of, the Board. The Board may elect a member of the Committee to serve as the chair of the Committee. If the Board does not elect a chair, the members of the Committee may designate a chair by majority vote of the Committee membership.
The Committee shall consist of three or more members of the Board, with the exact number being determined by the Board. Each member of the Committee shall be "independent" as defined by the rules of the Securities and Exchange Commission and any exchange or market upon which the Company's capital stock is traded (the "Rules"), except as otherwise permitted by such Rules. The Board may designate one or more independent directors as alternate members of the Committee who may replace any absent or disqualified member at any Committee meeting.
III. MEETINGS AND MINUTES
Meetings of the Committee shall be held at least four times per year in connection with the Company's regularly scheduled meetings of the Company's Board. Additional meetings of the Committee shall be held from time to time as determined by the needs of the Board or the Committee. In lieu of a meeting, the Committee may also act by unanimous written consent resolution. The Committee will maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board.
The Committee will meet with the Chief Executive Officer at the beginning of each fiscal year to discuss the incentive compensation programs to be in effect for such fiscal year and the corporate goals and objectives relevant to those programs.
IV. RESPONSIBILITIES AND DUTIES
The following shall be the principal recurring processes of the Committee in carrying out its oversight responsibilities. These processes are set forth as a guide with the understanding that the Committee may supplement them as appropriate and may establish policies and procedures from time to time that it deems necessary or advisable in fulfilling its responsibilities.
1 Review and approve at least annually the corporate goals and objectives relevant to the compensation of the Chief Executive Officer. Evaluate the performance of the Chief Executive Officer in light of these goals and objectives and set the compensation of the Chief Executive Officer based on this evaluation. In determining the long-term incentive component of the compensation of the Chief Executive Officer, the Committee shall consider the Company's performance and relative stockholder return, the value of similar incentive awards to Chief Executive Officers at comparable companies and the awards given to the Company's Chief Executive Officer in the past.
2. Review and make recommendations at least annually to the Board regarding the compensation policy, including annual salary, bonus, stock options and other benefits, direct or indirect (including all "plan" compensation, as such term is defined in Item 402(a)(7) of Regulation S-K promulgated by the Securities and Exchange Commission, and all non-"plan" compensation), for all other executive officers and directors of the Company, and such other officers of the Company as directed by the Board. The Committee may review the operation of the Company's executive compensation programs on a periodic basis and recommend modifications.
3. Review and make recommendations to the Board regarding the general compensation guidelines for the Company's employees.
4. Supervise the Company's administration of, and make recommendations to the Board regarding, the Stock Plans. Pursuant to authority delegated to the Committee by the Board, the Committee may: (i) grant stock options or stock purchase rights to individuals eligible for such grants (including grants to individuals subject to Section 16 of the Securities Exchange Act of 1934 (the "Exchange Act") in compliance with Rule 16b-3 promulgated thereunder, so long as the Committee is comprised entirely of "disinterested
3 persons", as such term is defined in Rule 16b-3(c)(2)(i) promulgated under the Exchange Act); (ii) interpret the Stock Plans and agreements thereunder; and (iii) determine acceptable forms of consideration for stock acquired pursuant to the Stock Plans. The Committee shall also make recommendations to the Board with respect to amendments to the Stock Plans and changes in the number of shares reserved for issuance thereunder. The Committee shall also review and make recommendations to the Board regarding new Stock Plans that are proposed for adoption.
5. Prohibit the Company from, directly or indirectly, extending or maintaining credit, arranging for the extension of credit or renewing an extension of credit, in the form of a personal loan to or for any director or executive officer (or equivalent thereof) of the Company.
6. At least annually, review the performance of the Committee through self-assessment and assessment by the Board.
7. Annually prepare a report on executive compensation to the Company's stockholders for inclusion in the proxy statement for the Company's annual meeting, as required by the rules and regulations of the Securities and Exchange Commission.
8. Review and reassess the adequacy of the Committee's charter at least annually and recommend changes to the Board for approval.
9. Perform any other activities required by applicable law, rules or regulations, including the rules of the Securities and Exchange Commission and any exchange or market on which the Company's capital stock is traded, and perform other activities that are consistent with this charter, the Company's Bylaws and governing laws, as the Committee or the Board deems necessary or appropriate.
The Committee shall have the right, as and when it shall determine to be necessary or appropriate to the functions of the Committee, at the expense of the Company and not at the expense of the members thereof, to retain compensation consultants, legal counsel (who may be, but need not be, the regular corporate counsel to the Company) and other advisors to assist it in connection with its functions.
The Company shall provide for appropriate funding, as determined by the Committee, in its capacity as a committee of the Board, for payment of compensation to any advisors employed by the Committee pursuant to this Charter.