The Compensation Committee (the “Committee”) shall discharge the responsibilities of the Board of Directors of Hanger, Inc. (the “Company”) with respect to the Company’s compensation programs and compensation of the Company’s executives and directors. The Committee has overall responsibility for approving and evaluating the director and officer compensation plans, policies and programs of the Company.
The Committee shall consist of not less than three members of the Board of Directors, each of whom shall meet the independence requirements of the New York Stock Exchange LLC (the “NYSE”) that apply to any director serving on the compensation committee of the board of directors of an NYSE-listed company. Additionally, no director may serve on the Committee unless he or she (i) is a “Non-Employee Director” under the qualifications set forth in Rule 16b-3 of the Securities Exchange Act of 1934 and (ii) satisfies the requirements of an “outside director” for purposes of Section 162(m)(4)(C) of the Internal Revenue Code.
The members of the Committee shall be appointed by the Board of Directors annually, or as necessary to fill vacancies, on the recommendation of the Company’s Corporate Governance and Nominating Committee. Each member shall serve until his or her successor is duly elected and qualified or until such member’s earlier resignation or removal. Any member of the Committee may be removed, with or without cause, by a majority vote of the Board of Directors.
The Chairperson of the Committee shall be appointed by the Board of Directors after recommendation by the Corporate Governance and Nominating Committee in consultation with the Chairman of the Board of Directors. The Chairperson will chair all regular sessions of the Committee and, in consultation with the Chairman of the Board of Directors, set the agendas for Committee meetings.
In furtherance of its purpose, the Committee shall have the following responsibilities and duties:
1. The Committee shall review and approve the overall compensation philosophy of the Company.2. The Committee shall review and approve corporate goals and objectives relevant to Chief Executive Officer and other executive officer compensation.3. The Committee shall evaluate the performance of the Chief Executive Officer and other executive officers in light of those corporate goals and objectives set and, based on such evaluation, shall determine and approve (either as a committee or together with the other independent directors, as directed by the Board of Directors) the annual salary, bonus, stock options and other benefits, direct and indirect, of the Chief Executive Officer and shall review, determine and approve the annual salary, bonus, stock options and other benefits of the other executive officers.4. In determining the long-term component of compensation of the Chief Executive Officer and the other executive officers, the Committee will consider various evaluation criteria, including the Company’s performance and relative shareholder return, the value of similar incentive awards to chief executive officers and other executive officers at comparable companies, the awards given to the Company’s Chief Executive Officer and other executive officers in past years and other relevant business and industry factors and trends.5. In connection with executive compensation programs, the Committee shall: a. Review and recommend to the Board of Directors, or approve, new executive compensation programs; b. Review on a periodic basis the operations of the Company’s executive compensation programs to determine whether they are properly coordinated and achieving their intended purpose(s); and c. Establish and periodically review policies for the administration of executive compensation programs.6. The Committee shall periodically review and approve the perquisites offered to executive officers.7. The Committee shall review and recommend to the Board of Directors compensation of directors as well as review and make recommendations in connection with directors’ and officers’ indemnification and insurance matters.8. The Committee shall review and recommend to the Board of Directors, or approve, any contracts or other transactions with current or former directors and executive officers of the Company, including consulting arrangements, employment contracts, and severance or termination agreements.
9. The Committee shall review and make recommendations to the Board of Directors with respect to the Company’s cash-based incentive compensation plans in which executive officers participate and the Company’s equity-based plans. The Committee shall have and shall exercise all the authority of the Board of Directors with respect to the administration of such plans.10. The Committee shall make recommendations to the Board of Directors with respect to the establishment of new cash-based incentive compensation plans in which executive officers will participate and new equity-based plans.11. The Committee shall review and approve all equity compensation plans of the Company that are not otherwise subject to the approval of the Company’s shareholders.12. The Committee shall review and make recommendations to the Board of Directors, or approve, all awards pursuant to the Company’s equity-based plans. The Committee may delegate certain equity granting authority to the Chief Executive Officer on an annual basis within the parameters of the securities law, applicable stock exchange rules and the terms of any existing equity compensation plan.13. The Committee shall review and make recommendations to the Board of Directors regarding the approval of employee pension, profit sharing and benefit plans applicable to senior management personnel.
14. The Committee shall have the authority to engage an independent executive compensation consulting firm to assist the Committee in the performance of its responsibilities. Such assistance shall include the identification of executive compensation practices and data of other comparable corporations and the making of recommendations to the Committee relating to the form and terms of the Company’s executive incentive plans.15. The Committee shall prepare annually a report on executive compensation (the “Compensation Report”) for inclusion in the Company’s proxy statement, in accordance with applicable rules and regulations of the Securities and Exchange Commission.16. As part of its review and determinations concerning compensation of the executive officers and in connection with its preparation of the Compensation Report, the Committee shall take into account the advisory shareholder vote on executive compensation (the “say on pay” vote) for the most recent and upcoming annual meetings of the Company in accordance with applicable laws and regulations (including voting standards) and prior say on pay votes.17. The Committee shall determine and recommend to the Board of Directors a desired frequency for say on pay votes to be proposed to the Company’s shareholders at the annual meeting at least once every six years and in accordance with applicable laws, regulations and listing standards and prior shareholder votes.18. The Committee shall, with the assistance of management, periodically evaluate the Company’s compensation policies and practices to assess whether potential actions to be taken by the Company’s employees in response to such policies and practices are likely to have a material adverse effect on the Company.19. The Committee shall determine stock ownership guidelines for the executive officers and monitor compliance with such guidelines.20. The Committee shall report regularly to the Board of Directors (i) following meetings of the Committee, (ii) with respect to such other matters as are relevant to the Committee’s discharge of its responsibilities and (iii) with respect to such recommendations as the Committee may deem appropriate. The report to the Board of Directors may take the form of an oral report by the Committee’s Chairperson or any other member of the Committee designated by the Committee to make such report.21. The Committee shall maintain minutes or other records of meetings and activities of the Committee.
The Committee shall have the authority to delegate any of its responsibilities to a subcommittee of the Committee.
The Committee shall have the power and authority to conduct or authorize studies and investigations into any matter of interest or concern within the scope of its responsibilities that the Committee deems appropriate. In addition, the Committee shall have the sole authority to retain legal counsel, compensation consultants, accountants, or other advisors to assist in the conduct of any such study or investigation or to otherwise provide advice to the Committee, including the authority to approve fees payable to such experts and any other terms of retention without approval from the Board of Directors or the management of the Company. The Committee will select a consultant or other advisor only after taking into consideration all factors relevant to that person’s independence from the management of the Company, including the following: (a) the provision of other services to the Company by the person that employs the consultant or other adviser; (b) the amount of fees received from the Company by the person that employs the consultant or other adviser, as a percentage of the total revenue of the person that employs the consultant or other advisor; (c) the policies and procedures of the person that employs the consultant or other advisor that are designed to prevent conflicts of interest; (d) any business or personal relationship of the consultant or other advisor with a member of the Committee; (e) any stock of the Company owned by the consultant or other advisor; (f) any business or personal relationship of the consultant or other advisor, or the person employing the advisor, with an executive officer; and (g) any other factors bearing on the consultant’s or other advisor’s independence as determined by applicable rules; provided that nothing in the foregoing may be construed to require the Committee to implement or act consistently with the advice or recommendations of the consultant or other advisor or to affect the ability or obligation of the Committee to exercise its own judgment in fulfillment of its duties. The foregoing evaluation shall not apply to in-house legal counsel. The Company shall pay any fees or expenses, including the ordinary administrative expenses of the Committee, that are necessary and appropriate in carrying out the Committee’s duties and reasonable compensation for any consultant or other advisor retained by the Committee.
The Committee shall perform a review and evaluation, at least annually, of the performance of the Committee, including by reviewing the compliance of the Committee with this Charter. In addition, the Committee shall review and reassess, at least annually, the adequacy of this Charter and recommend to the Board of Directors any improvements to this Charter that the Committee considers necessary or appropriate. The Committee shall conduct such evaluations and reviews in such manner as it deems appropriate.As adopted by the Board of Directors on August 14, 2018