The Compensation Committee (the “Committee“) of the Board of Directors (the “Board“) of Turtle Beach Corporation (the “Company“) will be responsible for overseeing and, as appropriate, determining and implementing the compensation plans, policies and programs for the Company’s executive officers (as defined under the Securities Exchange Act of 1934, as amended) and other direct reports of the Company’s chief executive officer (“Executive Officers“), directors and employees. In addition, the Committee shall provide assistance and recommendations to the Board with respect to the compensation policies and practices of the Company, and assist with the administration of the Company’s compensation plans. The Committee will have the authority necessary to carry out its duties and responsibilities as set forth in this charter (this “Charter“) and to take any action reasonably related thereto, subject to any restrictions in the Company’s articles of incorporation (the “Articles of Incorporation“) or bylaws (the “Bylaws“) (each, as in effect), the applicable rules of any exchange on which stock of the Company is traded and applicable law.
In particular, the Committee will:
- On an annual basis, with input from the Chief Executive Officer, (i) review and approve the corporate goals and objectives with respect to compensation for the Company’s chief executive officer (the “Chief Executive Officer“), (ii) evaluate the Chief Executive Officer’s performance in light of the established goals and objectives, and (iii) set the Chief Executive Officer’s compensation, including salary, bonus, incentive and equity compensation. The Chief Executive Officer will not be present during the voting and deliberations on his or her compensation;
- On an annual basis, (i) review and approve the evaluation process and compensation structure for the Company’s Executive Officers, (ii) review each Executive Officer’s performance evaluations and recommendations concerning his or her compensation, including salary, bonus, incentive and equity compensation, and (iii) approve each Executive Officer’s compensation;
- Review and approve any employment, retention, change in control, severance, termination or other compensatory agreement or arrangement to be made with the Chief Executive Officer or any other Executive Officer;
- Review and revise, as appropriate, the Company’s policies relating to the compensation of, and other matters relating to, its non-Executive Officer employees;
- As appropriate, provide the Board with recommendations as to the compensation for directors as determined through an analysis of comparable companies and other methods as the Committee deems appropriate;
- As appropriate, approve grants of stock options and other equity incentives to employees (under the Company’s equity incentive plans or otherwise), make recommendations to the Board with respect to incentive compensation plans and equity-based plans, including with respect to an equity grant policy, and administer any incentive plans and bonus plans that have been assumed as a result of any acquisition or merger transactions;
- Monitor compliance by officers and directors with Company stock ownership guidelines, if any;
- Prepare, or cause to be prepared, and approve the disclosures required by the rules and regulations of the Securities and Exchange Commission (the “SEC“) to be included in the Company’s proxy statement, including, as appropriate, the compensation committee report required by Item 407(e)(5) of Regulation S-K;
- Prepare, or cause to be prepared, and approve the compensation disclosures required by the rules and regulations of the SEC to be included in the Company’s periodic reports under the caption “Compensation Disclosure & Analysis,” and recommend to the Board its inclusion in such reports;
- Maintain the minutes of, and report the results and recommendations of, each Committee meeting to the Board;
- As appropriate, review this Charter, and report the results and recommendations of these endeavors to the Board for approval; and
- Perform such other specific functions as the Board may from time to time direct.
Committee Composition and Meetings
The Committee shall be comprised of no fewer than two members, which members shall be appointed by the Board and may be removed by the Board in its sole discretion, with or without cause. The Committee’s members shall meet the requirements of applicable law, the rules set forth in the Bylaws and, if applicable, the rules promulgated by the SEC, NASDAQ or any other stock exchange or trading market on which the Company’s securities may be listed or approved for quotation. The Committee’s chairperson shall be designated by the Board or, if the Board does not do so, the Committee members shall elect a chairperson by vote of a majority of the full Committee. The Committee shall meet at the call of the chairperson, but in no event less frequently than two times per year. A majority of the Committee shall constitute a quorum for the transaction of business and shall be empowered to act on behalf of the Committee.
Subject to the requirements of the Articles of Incorporation, Bylaws and any applicable law, regulation or rule, (i) any action required or permitted to be taken at a meeting of the Committee may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed or agreed to via electronic mail by all members of the Committee and (ii) the members of the Committee may participate in a meeting of the Committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such a meeting. Except in extraordinary circumstances as determined by the Committee chairperson, notice of a meeting shall be delivered to all Committee members at least forty-eight (48) hours in advance of a meeting. Notice of a meeting may be given by electronic mail.
The Committee may invite to any of its meetings other members of the Board, members of Company management and such other persons as it deems appropriate in order to carry out its responsibilities.
To the extent required by applicable NASDAQ rules, in determining the eligibility of directors to serve on of the Committee, a variety of factors shall be taken into account, including: (i) the sources of compensation of the prospective member, including any consulting, advisory or other compensatory fees paid by the Company or any subsidiary or affiliate thereof to such person and (ii) whether the prospective member is affiliated with the Company, a subsidiary of the Company or an affiliate of the Company to determine whether such affiliation would impair the prospective member’s judgment as a member of the Committee.
Resources and Authority of the Committee
In carrying out its responsibilities, the Committee believes its policies and procedures should remain flexible in order to be able to best react to changing conditions. The Committee is authorized and empowered to adopt its own rules of conduct and procedure not inconsistent with this Charter, the Bylaws and applicable law, including any applicable rules promulgated by the SEC or NASDAQ. The Committee shall have direct access to, and complete and open communication with, senior management. Except as otherwise prohibited by law, any rules promulgated by the SEC or NASDAQ, the Articles of Incorporation or Bylaws, the Committee may delegate its responsibilities to subcommittees or individual members of the Committee.
The Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other advisor (each, an “Advisor“) in the performance of its duties, including to periodically review its compensation policies against comparable company benchmarks. The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any Advisor. The Company shall provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to any Advisor retained by the Committee. The Committee may select, or receive advice from, an Advisor, other than in-house legal counsel, after consideration of the Advisor’s independence.
However, nothing in this Charter requires an Advisor to be independent, only that the Committee must consider this aspect before selecting, or receiving advice from, an Advisor. The Committee may select, or receive advice from, any Advisor the Committee prefers, including ones that are not independent.
Nothing in this Charter shall be construed: (i) to require the Committee to implement or act consistently with the advice or recommendations of any Advisor to the Committee; or (ii) to affect the ability or obligation of the Committee to exercise its own judgment in fulfillment of the duties of the Committee.
The Committee may designate any member of the Committee to execute documents on its behalf as the Committee deems necessary or appropriate to carry out its responsibilities hereunder.
This Charter was adopted by the Board on March 5, 2014, was last amended on March 1, 2018 and will be effective as of March 1, 2018.