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TSR, INC. COMPENSATION COMMITTEE CHARTER
I. PURPOSE OF THE COMMITTEE
The Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of TSR, Inc. (the “Corporation”) shall oversee the Corporation’s compensation and employee benefit plans and practices, including its executive compensation plans and its incentive-compensation and equity-based plans; and produce a Committee report on executive compensation as required by the Securities and Exchange Commission (“SEC”) and, if applicable, to be included in the Corporation’s annual proxy statement or annual report on Form 10-K filed with the SEC.
II. COMPOSITION OF THE COMMITTEE
The Committee shall consist of two or more directors as determined from time to time by the Board. Each member of the Committee shall be qualified to serve on the Committee pursuant to the requirements of such national securities exchange or market constituting the principal venue for listing of the Corporation’s shares, if any, and any additional requirements that the Board deems appropriate. Members of the Committee shall also qualify as “non-employee directors” within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, and “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, and shall satisfy any other necessary standards of independence under the federal securities and tax laws.
The chairperson of the Committee shall be designated by the Board, provided that if the Board does not so designate a chairperson, the members of the Committee, by a majority vote, may designate a chairperson.
Any vacancy on the Committee shall be filled by majority vote of the Board. No member of the Committee shall be removed except by majority vote of the Board.
III. MEETINGS AND PROCEDURES OF THE COMMITTEE
The Committee shall meet as often as it determines necessary to carry out its duties and responsibilities, but no less frequently than one time annually. The Committee, in its discretion, may ask members of management or others to attend its meetings (or portions thereof) and to provide pertinent information as necessary.
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; provided, however, that no subcommittee shall consist of fewer than two members; and provided further that the Committee shall not delegate to a subcommittee any power or authority required by any law, regulation or listing standard to be exercised by the Committee as a whole.
A majority of the members of the Committee present in person or by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other shall constitute a quorum.
The Committee shall maintain minutes of its meetings and records relating to those meetings and shall report regularly to the Board on its activities, as appropriate.
IV. DUTIES AND RESPONSIBILITIES OF THE COMMITTEE
A. Executive Compensation
The Committee shall have the following duties and responsibilities with respect to the Corporation’s executive compensation plans:
(a) To review at least annually the goals and objectives of the Corporation’s executive compensation plans, and amend, or recommend that the Board amend, these goals and objectives if the Committee deems it appropriate;
(b) To review at least annually the Corporation’s executive compensation plans in light of the Corporation’s goals and objectives with respect to such plans, and, if the Committee deems it appropriate, adopt, or recommend to the Board the adoption of, new, or the amendment of existing, executive compensation plans;
(c) To evaluate annually the performance of the Chief Executive Officer in light of the goals and objectives of the Corporation’s executive compensation plans, and, either as a Committee or together with the other independent directors (as directed by the Board), determine and approve the Chief Executive Officer’s compensation level based on this evaluation. In determining the long-term incentive component of the Chief Executive Officer’s compensation, the Committee shall consider all relevant factors, including the Corporation’s performance and relative stockholder return, the value of similar awards to chief executive officers of comparable companies, and the awards given to the Chief Executive Officer of the Corporation in past years. The Committee may discuss the Chief Executive Officer’s compensation with the Board if it chooses to do so;
(d) To evaluate annually the performance of the other executive officers of the Corporation in light of the goals and objectives of the Corporation’s executive compensation plans, and make recommendations to the Board with respect to the compensation of such other executive officers. To the extent that long-term incentive compensation is a component of such executive officer’s compensation, the Committee shall consider all relevant factors in determining the appropriate level of such compensation, including the factors applicable with respect to the Chief Executive Officer;
(e) To review and approve any severance or termination arrangements to be made with any executive officer of the Corporation;
(f) To perform such duties and responsibilities as may be assigned to the Board or the Committee under the terms of any executive compensation plan;
(g) To review perquisites or other personal benefits to the Corporation’s executive officers and recommend any changes to the Board; and
(h) To produce a Committee report on executive compensation as required by the SEC to be included in the Corporation’s annual proxy statement or annual report on Form 10-K filed with the SEC.
B. General Compensation and Employee Benefit Plans
The Committee shall have the following duties and responsibilities with respect to the Corporation’s general compensation and employee benefit plans, including incentive-compensation and equity-based plans:
(a) To review at least annually the goals and objectives of the Corporation’s general compensation plans and other employee benefit plans, including incentive-compensation and equity-based plans, and amend, or recommend that the Board amend, these goals and objectives if the Committee deems it appropriate;
(b) To review at least annually the Corporation’s general compensation plans and other employee benefit plans, including, the Corporation’s 401(k) plan, incentive-compensation and equity-based plans, in light of the goals and objectives of these plans, and recommend that the Board amend these plans if the Committee deems it appropriate;
(c) To review all equity-compensation plans to be submitted for stockholder approval under the listing standards of such national securities exchange or market constituting the principal venue for listing of the Corporation’s shares, if any, and to review and, in the Committee’s sole discretion, approve all equity-compensation plans that are exempt from such stockholder approval requirement; and
(d) To perform such duties and responsibilities as may be assigned to the Board or the Committee under the terms of any compensation or other employee benefit plan, including any incentive-compensation or equity-based plan.
V. EVALUATION OF THE COMMITTEE
The Committee shall, on an annual basis, evaluate its performance. In conducting this review, the Committee shall evaluate whether this Charter appropriately addresses the matters that are or should be within its scope and shall recommend such changes as it deems necessary or appropriate. 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 recommendations 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, which may be oral, 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 or procedures.
VI. INVESTIGATIONS AND STUDIES; OUTSIDE ADVISERS
The Committee may conduct or authorize investigations into or studies of matters within the Committee’s scope of responsibilities, and may retain, at the Corporation’s expense, such independent counsel or other consultants or advisers as it deems necessary.
VII. CLAWBACK POLICY
The Committee shall oversee and enforce the implementation of the following mandatory recoupment or “clawback” policy:
If and whenever there is an accounting restatement due to material non-compliance with any financial reporting requirements under the Securities Laws of the United States, the Corporation shall seek repayment from any current or former executive officer, as defined in Rule 3b-7 under the Securities Exchange Act of 1934, of any incentive-based compensation (including, without limitation, incentive-based compensation paid in the form of cash, stock options or any other form of equity compensation) paid during the three-year period preceding the date on which the Corporation is required to prepare the accounting restatement to the extent that there was an overpayment based on the erroneous data. The clawback amount is the excess of the amount paid over the amount that would have been paid on the basis of the restated financial statements or underlying financial information used to calculate the incentive pay. Executive malfeasance or wrong doing need not be shown in order to trigger the foregoing recoupment requirement.
The Committee may also adopt rules and procedures with respect to the extension of the Corporation’s claw back policy to non-executive officers either pursuant to general requirements or application to specific employees or in specific instances. The Committee may also exempt executive officers from the above policy where such executive officer became an executive officer after the grant but before the restatement.
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While the members of the Committee have the duties and responsibilities set forth in this Charter, nothing contained in this Charter is intended to create, or should be construed as creating, any responsibility or liability of members of the Committee, except to the extent otherwise provided under applicable federal or state law.
ADOPTED BY THE BOARD OF DIRECTORS – OCTOBER 16, 2012; AMENDED SEPTEMBER 5, 2017