Amended and Restated Charter for the Compensation Committee of the Board of Directors
I. STATEMENT OF POLICY
This Charter specifies the scope of the responsibilities of the Compensation Committee (the "Committee") of the Board of Directors (the "Board") of AXT, Inc. (the "Company") and the manner in which those responsibilities shall be performed, including its structure, processes and membership requirements. This Charter shall be posted on the Company’s website or included as an appendix to the proxy statement for the Company’s annual meeting of stockholders at least once every three years.
The primary purpose of the Committee is to discharge the Board's responsibilities relating to compensation and benefits of the Company's executive officers and directors. In carrying out these responsibilities, the Committee shall review all components of executive officer and director compensation for consistency with the Committee's compensation philosophy as in effect from time to time.
The Committee is also responsible for producing an annual report on executive compensation for inclusion in the Company's proxy statement, in accordance with applicable rules and regulations.
II. ORGANIZATION AND MEMBERSHIP REQUIREMENTS
The Committee shall be comprised of at least three directors, each of whom (i) shall satisfy the independence requirements of Nasdaq and (ii) shall not accept directly or indirectly any consulting, advisory or other compensatory fee from the Company or any subsidiary thereof, except in compliance with the applicable requirements of Nasdaq. A director shall not serve as a member of the Committee if the Chief Executive Officer or another executive officer of the Company serves on the compensation committee of another company that employs that director as an executive officer.
The members shall be appointed by the Board, on the recommendation of the Nominating and Corporate Governance Committee, and shall serve until their successors are duly elected and qualified or their earlier resignation or removal. In determining whether a director is eligible to serve on the Committee, the Board must consider whether the director is affiliated with the Company, a subsidiary of the Company or an affiliate of a subsidiary of the Company to determine whether such affiliation would impair the director’s judgment as a member of the Committee. Any member of the Committee may be replaced by the Board on the recommendation of the Nominating and Corporate Governance Committee. The Committee may from time to time delegate duties or responsibilities to subcommittees or to one member of the Committee. Unless a chairman is elected by the Board, the members of the Committee may designate a chairman by the majority vote of the full Committee membership.
A majority of the members shall represent a quorum of the Committee, and, if a quorum is present, any action approved by at least a majority of the members present shall represent the valid action of the Committee. Any actions taken by the Committee during any period in which one or more members fail for any reason to meet the membership requirements set forth above shall be nonetheless duly authorized actions of the Committee for all corporate purposes.
The Committee shall have the authority, in its sole discretion, to retain or obtain the advice of a compensation consultant, legal counsel, accountant or other adviser as appropriate, to perform its duties hereunder and to determine the terms, costs and fees for such engagements. The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any compensation consultant, legal counsel and other adviser retained by the Committee. The Committee may select, or receive advice from, a compensation consultant, legal counsel or other adviser to the Committee, other than in-house legal counsel, only after taking into consideration the following factors:
The Committee is not required to conduct an independence assessment for a compensation adviser that acts in a role limited to the following activities for which no disclosure is required under Item 407(e)(3)(iii) of Regulation S-K: (a) consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers or directors of the Company, and that is available generally to all salaried employees; and/or (b) providing information that either is not customized for a particular issuer or that is customized based on parameters that are not developed by the adviser, and about which the adviser does not provide advice.
Without limitation, the Committee shall have the sole authority to retain or terminate any consulting firm used to evaluate director, Chief Executive Officer or executive compensation, and to determine and approve the terms of engagement the fees and costs for such engagements. The Company must provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to a compensation consultant, legal counsel or any other adviser retained by the Committee.
The Committee shall meet as often as it deems appropriate, but not less frequently than once each year to review the compensation of the executive officers and other employees of the Company, and otherwise perform its duties under this charter.
The Committee shall maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board. The Committee will also record its summaries of recommendations to the Board in written form, which will be incorporated as part of the minutes of the Board meeting at which those recommendations are presented.
IV. COMMITTEE AUTHORITY AND RESPONSIBILITIES
To fulfill its responsibilities and duties, the Committee shall:
- Financial Expert
- Independent Director