Annual California Written Declaration of Compliance
Audit Committee Charter
California Comprehensive Compliance Program Policy
Code of Business Conduct and Ethics
Compliance Committee Charter
Corporate Governance Guidelines
Employee Development and Retention Committee Charter
Nominating and Governance Committee Charter
Stock Option and Compensation Committee Charter
CHARTER OF THE STOCK OPTION AND COMPENSATION COMMITTEE
of the Board of Directors of Medicis Pharmaceutical Corporation
This Compensation Committee Charter (the “Charter”) was originally adopted by the Board of Directors (the “Board”) of Medicis Pharmaceutical Corporation (the “Company”) effective as of February 2, 2006, and subsequently modified effective as of August 27, 2007, May 12, 2008 and February 2, 2010.
I. Purpose and Authority
The purpose of the Stock Option and Compensation Committee (the “Committee”) of the Board is:
(1) to discharge the Board’s responsibilities relating to compensation of the Company’s executive officers and certain other officers, including designing, evaluating, approving and implementing the compensation plans, policies and programs of the Company;
(2) to administer the Company’s equity plans, incentive programs and other compensation plans and programs; and
(3) to prepare and approve or cause to be prepared and approved the Compensation Committee report and the Compensation Discussion and Analysis section for inclusion in the Company’s annual proxy statement or annual report on Form 10-K in accordance with applicable rules and regulations.
The Committee’s objective shall be to ensure that the Company’s compensation programs are designed to encourage high performance, promote accountability and assure that employee interests are aligned with the interests of the Company’s stockholders.
In addition to the powers and responsibilities expressly delegated to the Committee in this Charter, the Committee may exercise any other powers and carry out any other responsibilities delegated to it by the Board from time to time consistent with the Company’s bylaws. The powers and responsibilities delegated by the Board to the Committee in this Charter or otherwise shall be exercised and carried out by the Committee as it deems appropriate without requirement of Board approval, and any decision made by the Committee (including any decision to exercise or refrain from exercising any of the powers delegated to the Committee hereunder) shall be at the Committee’s sole discretion. While acting within the scope of the powers and responsibilities delegated to it, the Committee shall have and may exercise all the powers and authority of the Board. To the fullest extent permitted by law, the Committee shall have the power to determine which matters are within the scope of the powers and responsibilities delegated to it.
II. Membership
The Committee will consist of two or more members, with the exact number being determined by the Board. Each of the members of the Committee shall be (i) an “independent director” as defined under the rules of the New York Stock Exchange, as they may be amended from time to time (the “Rules”), except as may otherwise be permitted by such Rules, (ii) a “non-employee director,” as defined in Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (iii) an “outside director” under the regulations promulgated under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). All members of the Committee will be appointed by the Board on the recommendation of the Nominating and Governance Committee, and shall serve at the discretion of the Board. The Board will select members of the Committee who will be approved by a majority vote of the Board. Committee members will serve during their respective term as a director, subject to earlier removal by a majority vote of the Board. Unless a chair is elected by the full Board, the members of the Committee may designate a Chair by majority vote of the Committee membership.
III. Meetings and Procedures
The Chair (or in his or her absence, a member designated by the Chair) shall preside at each meeting of the Committee and set the agendas for Committee meetings. The Committee shall have the authority to establish its own rules and procedures for notice and conduct of its meetings so long as they are not inconsistent with any provisions of the Company’s bylaws that are applicable to the Committee.
The Committee shall meet on a regularly scheduled basis at least two times per year and more frequently as the Committee deems necessary or desirable.
All non-management directors who are not members of the Committee may attend and observe meetings of the Committee, but shall not participate in any discussion or deliberation unless invited to do so by the Committee, and in any event shall not be entitled to vote. The Committee may, at its discretion, include in its meetings members of the Company’s management, representatives of the independent auditor, the internal auditor, any other financial personnel employed or retained by the Company or any other persons whose presence the Committee believes to be necessary or appropriate. Notwithstanding the foregoing, the Committee may also exclude from its meetings any persons it deems appropriate, including but not limited to, any non-management director who is not a member of the Committee.
The Committee shall have the sole authority, as it deems appropriate, to retain and/or replace, as needed, any independent counsel, compensation and benefits consultants and other outside experts or advisors as the Committee believes to be necessary or appropriate. The Committee may also utilize the services of the Company’s regular legal counsel or other advisors to the Company. The Company shall provide for appropriate funding, as determined by the Committee in its sole discretion, for payment of compensation to any such persons retained by the Committee.
The Chair shall report to the Board following meetings of the Committee and as otherwise requested by the Chairman of the Board.
The Committee will maintain written minutes of its meetings, and will file such minutes with the books and records of the Company.
IV. Duties and Responsibilities
1) The Committee shall, at least annually, review the compensation philosophy of the Company.
2) The Committee will have the sole authority to determine and approve the form and amount of all compensation to be paid or awarded to (i) the Chief Executive Officer (“CEO”), (ii) any “officer” as defined in Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 16a-1 thereunder, and any officer within the meaning of Rule 3b-7 of the Exchange Act (collectively, the “Executives”), and (iii) any employee with a base salary equal to or greater than $250,000.
The Committee shall at least annually review base compensation (other than equity compensation) set by the Chief Executive Officer, Chief Operating Officer or Chief Financial Officer, for all other employees of the Company or its subsidiaries with a base salary less than $250,000 (collectively “Other Employees”), other than compensation paid or awarded to those employees set forth under (i), (ii) and (iii) directly above, and shall review periodic reports from management of the Company concerning the compensation philosophy and amounts paid to such Other Employees.
3) The Committee will annually review and approve the corporate goals and objectives relevant to each Executive’s compensation and shall evaluate each Executive’s performance in light of these goals and objectives. Based on this evaluation, the Committee will review and approve the following: (i) annual base salary paid to each Executive, (ii) the grant of all cash-based bonuses or incentive payments and all equity-based compensation to each Executive, (iii) the entering into or amendment or extension of any employment contract or similar arrangement with any Executive, (iv) any Executive severance or change in control arrangement, (v) any supplemental or retirement benefits payable to each Executive, and (vi) any other Executive compensation matters as from time to time directed by the Board. In determining the long-term incentive component of an Executive’s compensation, the Committee will consider, among other things, the Company’s performance and relative shareholder return, the value of similar incentive awards to executive officers at companies that the Committee determines comparable based on factors it selects and the incentive awards given to the Company’s Executives in prior years. The CEO may not be present during the voting for or deliberations about the CEO’s compensation but may be present for the voting or deliberations regarding the compensation of the other Executives.
4) The Committee shall manage and periodically review all incentive compensation, equity-based, deferred compensation and employee pension and welfare benefit plans (including 401(k) plans, employee stock purchase plans, restricted stock plans, long-term incentive plans, short term incentive plans, management incentive plans and others), and with respect to each such plan shall have responsibility for:
(a) general administration of all such plans;
(b) setting performance targets under all incentive compensation plans as appropriate and committing to writing any and all performance targets for all executive officers who may be “covered employees” under Section 162(m) of the Code within the first 90 days of the performance period to which such target relates or, if shorter, within the period provided by Section 162(m) of the Code in order for such target to be “pre-established” within the meaning of Section 162(m);
(c) certifying that any and all performance targets used for any performance- based compensation plans have been met before payment of any executive bonus or compensation or exercise of any award granted under any such plan(s);
(d) approving the design and implementation of, all amendments to, and terminations of, all such plans and any awards under such plans;
(e) granting equity and cash based awards under such plans;
(f) repurchasing securities from employees under such plans;
(g) interpreting the plans and award agreements thereunder; and
(h) determining acceptable forms of consideration for stock acquired pursuant to such plans.
All periodic plan reviews should include reviewing the plan’s administrative costs, reviewing current plan features relative to any proposed new features, and assessing the performance of the plan’s internal and external administrators if any duties have been delegated.
5) The Committee will periodically review the Company’s policies and procedures with respect to employee loans, and will not approve any arrangement in which the Company, directly or indirectly, extends or maintains credit, arranges for the extension of credit or renews an extension of credit, in the form of a personal loan to or for any Director or Executive (or equivalent thereof) of the Company. The Committee will assist the Board and management of the Company in complying with this prohibition.
6) The Committee shall establish and periodically review policies and programs concerning perquisite benefits and non-cash or other benefits.
7) The Committee shall review and approve all employment agreements, severance arrangements and change of control agreements for the Executives and any employee with a base salary equal to or greater than $250,000.
8) The Committee shall periodically review the Company’s policy regarding compensation paid to the Company’s executives in excess of limits deductible under Section 162(m) of the Code.
9) The Committee shall manage and review executive officer and director indemnification and insurance matters.
10) The Committee will exercise the powers of the Board and perform such duties and responsibilities as may be assigned to a committee, an administrator or the Board under the terms of any incentive-compensation, equity-based, deferred compensation, or other plan intended to be a component in the Company’s Executive compensation program.
11) The Committee shall prepare and approve, or cause to be prepared and approved, the Compensation Committee report and the Compensation Discussion and Analysis section to be included as part of the Company’s annual proxy statement or annual report on Form 10-K.
12) The Committee will periodically review and make recommendations to the Board regarding the fees and benefits payable to non-employee directors of the Company.
13) The Committee will make regular reports to the Board.
14) The Committee will periodically review and recommend policies to the Board regarding minimum retention and ownership levels of Company common stock by Executives and Board members.
15) The Committee will review this Charter at least annually and recommend to the Board any changes it determines are appropriate.
16) The Committee will at least annually review its own performance, including its compliance with this Charter, and submit a report with respect to such evaluation to the Board. The Committee shall conduct such evaluation and review in such manner as it deems appropriate.
17) The Committee will perform any other activities required by applicable law, rules or regulations, including the rules of the Securities and Exchange Commission and any exchange or market on which the Company’s capital stock is traded, and perform other activities that are consistent with this charter, the Company’s certificate of incorporation and bylaws, and governing laws, as the Committee or the Board deems necessary or appropriate.
V. Delegation of Duties
In fulfilling its responsibilities, the Committee shall be entitled to delegate any or all of its responsibilities to a subcommittee of the Board, except that it shall not delegate its responsibilities for any matters that involve Executive or director compensation or any matters where it has determined such compensation is intended to comply with Section 162(m) of the Code by virtue of being approved by a committee of “outside directors” or is intended to be exempt from Section 16(b) under the 1934 Act pursuant to Rule 16b-3 by virtue of being approved by a committee of “non-employee directors.” In addition, such delegation shall be consistent with all requirements of applicable law.
The Committee shall be entitled to delegate its responsibilities with respect to the administration of the incentive compensation, equity compensation, deferred compensation, and employee pension and welfare benefit plans to the Company’s officers and employees, as consistent with applicable law, who may also utilize the services of third-party administrators, record keepers, consultants, and other service providers.
VI. Miscellaneous
Nothing contained in this Charter is intended to expand applicable standards of liability under statutory or regulatory requirements for the directors of the Company or members of the Committee. The purposes and responsibilities outlined in this Charter are meant to serve as guidelines rather than as inflexible rules and the Committee is encouraged to adopt such additional procedures and standards as it deems necessary or advisable from time to time to fulfill its responsibilities or comply with applicable laws, rules or regulations. In addition, the Committee may amend any procedures or standards set forth in this Charter as it deems necessary from time to time to comply with applicable laws, rules or regulations. This Charter, and any amendments thereto, shall be displayed on the Company’s website.