The purpose of the Compensation Committee (the "Committee") of the Board of Directors (the "Board") of Sonoma Pharmaceuticals, Inc. (the "Company") is to assist the Board in meeting its responsibilities with regard to oversight and determination of executive compensation and to review and make recommendations to the Board with respect to major compensation plans, policies and programs of the Company.
Membership and Procedures
Membership and Appointment. The Committee shall consist of not fewer than two members of the Board, with the exact number being determined by the Board. Members of the Committee shall be appointed from time to time by the Board.
Independence. Each member shall meet the independence and outside director requirements of applicable tax and securities laws and regulations and the applicable rules of The Nasdaq Stock Market, provided that the exemptions from independence requirements set forth in such rules and regulations shall also be applicable to members of the Committee.
Authority to Retain Advisors. In the course of its duties, the Committee shall have the sole authority, at the Company's expense, to retain and terminate compensation consultants and other advisors as the Committee may deem appropriate, including the sole authority to approve any such advisor's fees and other retention terms.
Evaluation. The Committee shall review and reassess the adequacy of this Charter on an annual basis and make any changes it deems necessary or appropriate.
Deliberations. The Chief Executive Officer (“CEO”) and other management shall be present at Committee meetings when the Committee deems it necessary and appropriate, provided that, under no circumstances, shall the CEO be present during voting or deliberations concerning his or her own compensation.
Duties and Responsibilities
The following shall be the common recurring duties of the Committee in carrying out its functions. The duties and responsibilities are set forth below as a guide to the Committee with the understanding that the Committee may alter or supplement them as appropriate under the circumstances to the extent permitted by applicable law, regulation or listing standard.
The Committee shall:
Review and approve corporate goals and objectives relevant to the compensation of the Company's CEO and other executive officers.
Evaluate the performance of the Company's CEO and other executive officers in light of such goals and objectives at least annually.
Based on the evaluation of 1 and 2. above, establish and approve the compensation levels for the CEO and other executive officers of the Company, including, as applicable, (a) base salary, (b) bonus, (c) long-term incentive and equity compensation, and (d) any other compensation, perquisites, and special or supplemental benefits.
In consultation with the CEO, review and make recommendations to the Board regarding guidelines for the review of the performance and the establishment of compensation policies for all other employees of the Company and for the delegation to executive officers of the Company the determination of compensation for all employees of the Company who are not executive officers.
Establish and modify the terms and conditions of employment of the CEO and the other executive officers of the Company, by contract or otherwise.
Determine the provisions of any contracts for the CEO and the other executive officers of the Company that will govern the situation in which severance payments will be due upon change in control situations.
Make recommendations to the entire Board regarding the fees and other compensation to be paid to members of the Board for their service as directors and as members of committees of the Board.
Administer the stock and other equity-based compensation plans of the Company (other than with respect to stock option grants to members of the Board, which shall be considered by the entire Board) in accordance with the terms of such plans.
Oversee the administration of the Company's other employee benefit plans.
Maintain sole discretionary authority to interpret provisions of the Company's executive compensation plans.
Establish all rules necessary or appropriate for implementing and conducting the Company's executive compensation plans.
Determine, as applicable in connection with the Company's stock plans, such matters as eligibility for participation; persons to receive awards; the amount, form and other terms and conditions of awards; the form of agreements pertaining to such awards; the manner and form of deferral elections; or, when appropriate, the authorization of the Company's purchase of its stock for allocation to the accounts of persons to whom awards have been made under such plans. The Committee may delegate to the CEO the authority to carry out all of the powers of the Committee to grant options and issue awards under the Company's stock plans to employees or consultants of the Company or any subsidiary thereof who are not members of the Board, the CEO or executive officers of the Company; provided, that no such grant or award shall exceed the maximum number of shares that may be awarded to individuals and/or in the aggregate in any fiscal quarter or year as the Committee shall direct from time to time, and all grants or awards shall be at an exercise or grant price per share at least equal to fair market value on the date of such grant or award.
Review the Company's incentive compensation and other equity-based plans and practices and recommend changes in such plans and practices to the Board.
Approve equity compensation plans and the grant of equity awards not subject to shareholder or stockholder approval under applicable listing standards.
If the Company is a reporting company under Section 13 or Section 15(d) of the Securities Exchange Act of 1934, prepare the Compensation Committee report on executive compensation as required by rules of the U.S. Securities and Exchange Commission (the "SEC") for inclusion in the Company's annual proxy statement or annual report on Form 10-K filed with the SEC.
Make regular reports on the activities of the Committee to the Board.
Evaluate the Committee’s performance on an annual basis.
Review the applicable tax and securities laws and regulations and the applicable rules of The Nasdaq Stock Market regarding Independence and make a determination as to the continued Independence of the Committees members on an annual basis.
Oversee and review shareholder approval of compensation plans.
Perform such other activities and functions related to executive compensation as may be assigned from time to time by the Board.
Nothing in the foregoing shall preclude the entire Board from acting as an entire Board with respect to the enumerated duties and responsibilities above.