I. Purpose
The purpose of the Human Resources and Compensation Committee (the "Committee") is to assist the Board of Directors (the “Board”) by:
A. Discharging the Board's responsibilities relating to the human resources strategies and practices of Perot Systems Corporation (the "Company") and the compensation of, and benefits available to, the Company's associates;
B. Assisting in determining fair compensation for Perot Systems’ executives based upon their performance and contribution to Perot Systems; and
C. Producing an annual report on executive compensation for inclusion in Perot Systems’ proxy statement, in accordance with applicable rules and regulations.
II. Structure and Operations
A. Size. The Committee shall comprise the number of directors determined by the Board and consistent with Perot Systems’ bylaws.
B. Appointment and Removal of Members. The Board shall appoint the members of the Committee from qualified members of the Board. Each member of the Committee shall serve until such member's successor is duly elected and qualified or until such member's earlier resignation or removal. Any or all members of the Committee may be removed, with or without cause, by a majority vote of the Board.
C. Qualifications. Each member of the Committee will be “independent” in accordance with, and the membership will possess any additional qualifications required by, Perot Systems’ Corporate Governance Principles, the New York Stock Exchange, the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations of the Securities and Exchange Commission (the “Commission”).
D. Chair. Unless a Chair is elected by the full Board, the members of the Committee shall designate a Chair by majority vote of the full Committee membership. The Chair will chair all regular sessions of the Committee and set the agendas for Committee meetings. If a Chair is not designated or is not present at any meeting, the members of the Committee may designate a chairman for such meeting by majority vote of the Committee.
E. Delegation. The Committee shall be entitled to delegate certain of its responsibilities, where appropriate, to the Chair or one or more other members of the Committee, subject to policies and/or procedures adopted by the Committee, which shall be consistent with applicable legal and regulatory requirements.
F. Funding. Perot Systems shall provide for appropriate funding, as determined by the Committee, for payment of (a) consultants or experts employed by the Committee and (b) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
III. Meetings
A. Frequency; Notice; Quorum. The Committee shall meet at least two times annually, or more frequently as circumstances dictate. The Chair or any member of the Committee may call meetings of the Committee upon at least 48 hours’ notice, which may be delivered by mail, courier service, fax, email, or telephone, as long as the means of delivery utilized would normally result in all members having at least 48 hours’ notice of the meeting. Meetings of the Committee may be held telephonically. A majority of the members of the Committee will constitute a quorum.
B. Attendance of Non-Members. The Committee may invite to its meetings any director, any manager of Perot Systems and any other persons it deems appropriate in order to carry out its responsibilities. The Committee may also exclude from its meetings any persons it deems appropriate in order to carry out its responsibilities.
IV. Responsibilities and Duties
The following functions shall be within the power of the Committee in carrying out its purposes outlined in Section I of this Charter. These functions should serve as a guide with the understanding that the Committee may carry out additional functions and adopt additional or different policies and procedures as may be appropriate in light of changing business, legislative, regulatory, legal or other conditions. The Committee shall also have such further powers as may be delegated to it by the Board from time to time related to the purposes of the Committee outlined in Section I of this Charter.
The Committee, in discharging its oversight role, is empowered to study or investigate any matter of interest or concern that the Committee deems appropriate and shall have independent authority to retain outside counsel or other experts for this purpose.
A. Compensation of Executive Officers and Related Corporate Goals and Objectives
1. With input from management and any compensation consultant retained by the Committee,
a) Approve corporate goals and objectives with respect to compensation for the Company’s executive officers;
b) Annually evaluate the performance of the Company’s executive officers in light of these goals and objectives; and
c) Based upon this evaluation, determine the annual compensation of the Company’s executive officers, including salary, bonus and incentive and equity compensation.
2. Set limitations, restrictions and conditions on any incentive and equity compensation for the Company�s executive officers and approve any modification or cancellation of any existing awards that have been made to the Company�s executive officers.
B. Corporate Goals and Objectives Relevant to Other Key Employee�s Compensation
To the extent the Committee deems necessary or appropriate and as may be requested by management, review and consult with management regarding the compensation and performance of other key employees.
C. Review Perot Systems� Incentive Compensation and Other Stock-based Plans
1. Review, adopt, amend or take any other action related to the Company’s incentive compensation plans and stock-based plans, including, but not limited to (a) approving option and restricted stock guidelines and approving the overall size of each program, (b) approving option and restricted stock awards, (c) interpreting the plans, (d) determining rules and regulations relating to the plans, (e) modifying or canceling existing awards, (f) designating employees eligible to participate in the long-term incentive plans, (g) review and approve the Company’s plans, programs, and practices regarding the timing of option grants with respect to the release of material non-public information, (h) appointing and reviewing the performance of one or more administrators for the plans, and (i) imposing limitations, restrictions and conditions upon awards; provided that the Board shall retain the authority to place overall limits on the number of shares that may be issued under any stock-related plan and to place limits on the number of shares that may be issued pursuant to such plans during any period.
2.To the extent the Committee deems necessary or appropriate and subject to such limitations and requirements as the Committee may impose, delegate to the CEO authority to approve and determine the terms of awards under the Company’s 2001 Long Term Incentive Plan.
3. Monitor awards made under Perot Systems’ long-term incentive plans for compliance with any restrictions placed thereon by any laws, rules, regulations, the plans, the Committee or the Board.
D. Review and Approve Corporate Goals and Objectives Relevant to Director Compensation
Review compensation recommendations for Perot Systems� outside directors made by the Chairman, the CEO, the Committee�s compensation consultant, and directors and make recommendations to the Board with respect thereto.
E. Other Matters
Review and provide advice to the Company regarding:
- The development of human resources strategies.
- The Company’s succession planning and talent development processes.
- The Company’s progress in promoting diversity.
- The Company's benefit programs, including health and welfare programs.
- Leadership and associate development.
F. Exchange Act Matters.
- Review each year with management, the Company�s Compensation Discussion and Analysis (the �CD&A�) and, based on such review, make a recommendation to the Company�s Board of Directors regarding whether such CD&A should be included in the Company�s proxy statement or annual report.
- Annually issue a report on executive compensation in accordance with applicable rules and regulations of the Commission for inclusion in Perot Systems� proxy statement.
G. Reports and Records.
- Report regularly to the Board (a) following meetings of the Committee, (b) with respect to such other matters as are relevant to the Committee's discharge of its responsibilities, and (c) with respect to such recommendations as the Committee may deem appropriate. The report to the Board may take the form of an oral report by the Chair or any other member of the Committee designated by the Committee to make such report.
- Maintain minutes or other records of meetings and activities of the Committee.
V. Annual Performance Evaluation
The Committee shall perform a review and evaluation, at least annually, of the performance of the Committee, including reviewing the compliance of the Committee with this Charter. In conducting its evaluation, the Committee may address all matters that it considers relevant to its performance. In addition, the Committee shall review and reassess, at least annually, the adequacy of this Charter and recommend to the Board any improvements to this Charter that the Committee considers necessary or desirable.
VI. General
A. Reliance. Nothing in this Charter will, or will be deemed to, decrease or modify in any manner adverse to any member of the Committee, such member’s right to rely on statements and certifications made by Perot Systems’ officers, employees, agents, counsel, experts or auditors.
B. Right to Indemnification. Nothing in this Charter will, or will be deemed to, adversely affect in any manner the rights of members of the Committee to indemnification and advancement of expenses under the Certificate of Incorporation or Bylaws of Perot Systems or under any contract, agreement, arrangement or understanding benefiting such member.
C. No Creation of Duties, Liabilities or Obligations. Notwithstanding any other provision of this Charter, no provision of this Charter will, except to the extent required by applicable law, rule or regulation, be construed to create any duty, liability or obligation on the part of the Committee or any of its members.