PURPOSE

The primary function of the Compensation Committee (the “Committee”) is to assist the Board of Directors (the “Board”) of the Titan Corporation (“Corporation”) in fulfilling its oversight responsibilities relating to:

  1. establishing and periodically reviewing the overall executive compensation philosophies and practices of the Corporation; compensation measurement practices and procedures; base salary and incentive cash compensation programs; and stock option and overall equity based compensation programs; executive compensation as a whole; and pension/benefit plans; and
  2. key senior management and succession planning, including evaluation of the Chief Executive Officer, recruiting, hiring, and retention of key senior executives.
  3. retirement plans of the Corporation, including annual evaluation of such plans to ensure compliance with all applicable laws, rules and regulations.

II. COMPOSITION

The Committee shall be comprised of three or more directors as determined by the Board, each of whom in the judgment of the Board, has experience that would be valuable in providing broad direction to the Board on all matters related to compensation and who qualify as “independent” under the listing standards of the New York Stock Exchange (“NYSE”). At least two of the members of the Committee shall satisfy the “non-employee director” standard within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended from time to time. The members of the Committee shall be elected by the Board at the annual organizational meeting of the Board and shall serve until their successors shall be duly elected and qualified or until their earlier resignation or removal by the Board. The members of the Committee shall be “outside directors” within the meaning of Section 162 (m) of the Internal Revenue Code of 1986 as amended from time to time and income tax regulations promulgated thereunder as in effect from time to time. Unless a Chair is elected by the full Board, the members of the Committee may designate a Chair by majority vote of the full Committee membership.

The Committee may form subcommittees for any purpose that the Committee deems appropriate and may delegate to such subcommittees such power and authority as the Committee deems appropriate, to the extent permitted by applicable law, regulation or listing standard.

III. MEETINGS

The Committee shall meet at least twice annually, including an annual review of the cash and equity compensation of senior management. The Committee shall meet at such additional times as determined necessary or advisable by a majority of the Committee.

Following each of its meetings, the Committee shall deliver a report on the meeting to the Board, including a description of all actions taken by the Committee at the meeting.

IV. RESPONSIBILITIES AND DUTIES

The Committee shall have the following responsibilities and duties:

  1. Consider and make recommendations to the Board regarding salaries, annual incentives and bonuses of all officers.
  2. Consider and make recommendations to the Board regarding salary, annual incentives and bonuses, perquisites, benefits, and other compensation matters for the Chief Executive Officer.
  3. Make grants of stock options to eligible persons under the Stock Option and Incentive Plan (the “Plan”), and to administer the Plan with respect to such option grants and to have all the attendant powers and duties of administering such grants until otherwise provided by resolution of the Board.
  4. Review with the Chief Executive Officer and with the Board matters relating to senior management development and hiring and succession planning for the Chief Executive Officer and President Positions, and such other positions as the Board directs.
  5. Conduct annual performance review of the Chief Executive Officer and review with the Board recommendations of the Committee.
  6. Consider and make recommendations to the Board on appropriate compensation for independent Board members.
  7. Consider and make recommendations to the Board regarding executive and managerial level compensation, incentive and benefit programs and changes thereto.
  8. Evaluate the retirement and benefit plans of the Corporation to ensure that all such plans are competitive with peer companies, including making all recommendations deemed necessary or advisable by the Committee to the Board regarding changes to those plans.
  9. Maintain sole authority to retain and terminate any compensation consultant to assist in the evaluation of director, Chief Executive Officer or senior executive compensation, including sole authority to approve the consultant’s reasonable fees and other retention terms, all at the Company’s expense.
  10. Prepare a report to be filed with the Corporation’s proxy statement which shall disclose the compensation policies applicable to the executive officers.
  11. Monitor and ensure that independent directors continue to meet the applicable independence requirements of the Securities and Exchange Commission (“SEC), the Code and the NYSE.
  12. To do every other act incidental to, arising out of or in connection with, or otherwise related to, the authority granted to the Committee hereby or the carrying out of the Committee’s duties and responsibilities hereunder.

V. EVALUATION OF THE COMMITTEE

The Committee shall, on an annual basis, evaluate its performance under this Charter. In conducting this review, the Committee shall evaluate whether this Charter appropriately addresses the matters that are or should be within its scope. The Committee shall address all matters that the Committee considers relevant to its performance, including at least the following: the adequacy, appropriateness and quality of the information and recommendation presented by the Committee to the Board, the manner in which they were discussed or debated, and whether the number and length of meetings of the Committee were adequate for the Committee to complete its work in a thorough and thoughtful manner. The Committee shall deliver to the Board a report setting forth the results of its evaluation, including any recommended amendments to this Charter and any recommended changes to the Corporation’s or the Board’s policies; such changes shall include any modifications necessary to satisfy any applicable requirements of the NYSE, the SEC and any other legal or regulatory requirements.

Adopted By the Compensation, Stock Option and Pension Committee
of The Board of Directorsof
The Titan Corporation
August 22, 2002

Revised July 19, 2004

Ratified by the Board of Directors on July 21, 2004