AMENDED AND RESTATED CHARTER FOR THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF COPART, INC.
(amended and restated June 2, 2014)
The purposes of the Compensation Committee (“Compensation Committee”) of the Board of Directors (the “Board”) of Copart, Inc., a Delaware corporation (the “Company”) established pursuant to this charter are to:
- assist the Board in providing oversight of the Company’s compensation policies, plans and benefits programs,
- review and approve, and, where appropriate, to make recommendations to the independent members of the Board regarding all forms of compensation to be provided to the employees and directors of, and consultants to the Company, including stock compensation and loans, and all bonus and stock compensation to all employees,
- assist the Board in discharging the Board’s responsibilities relating to oversight of the compensation of the Company’s Chief Executive Officer (“CEO”) and its executive officers (including officers reporting under Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), and
- administer the Company’s equity compensation plans for its executive officers and employees.
The Compensation Committee has the authority to undertake the specific duties and responsibilities listed below and will have the authority to undertake such other specific duties as the Board from time to time prescribes.
STATEMENT OF PHILOSOPHY:
The policy of the Compensation Committee is to maximize stockholder value over time. The primary goal of the Company’s Compensation Committee and its executive compensation program is therefore to closely align the interests of the officers with those of the Company’s stockholders. To achieve this goal the Compensation Committee attempts to (i) offer compensation opportunities that attract and retain executives whose abilities are critical to the long-term success of the Company; (ii) motivate individuals to perform at their highest level and reward outstanding achievement; (iii) maintain a significant portion of the executive’s total compensation at risk, tied to achievement of financial, organizational and management performance goals; and (iv) encourage executives to manage from the perspective of owners with an equity stake in the Company.
The Compensation Committee shall consist of a minimum of two (2) non-employee directors of the Company as is determined by the Board. The members of the Compensation Committee are appointed by and serve at the discretion of the Board. The Board may designate one member of the Compensation Committee as its chair.
Each member of the Compensation Committee must meet the following independence criteria:
- the independence requirements of The NASDAQ Stock Market, Inc. (“NASDAQ”) Marketplace Rules;
- the non-employee director definition of Rule 16b-3 promulgated by the Securities and Exchange Commission (“SEC”) under Section 16 of the Exchange Act;
- the outside director definition of Section 162(m) of the Internal Revenue Code of 1986, as amended; and
- the requirements set forth in Rule 10C-1 adopted by the SEC under the Exchange Act and implemented by NASDAQ.
The responsibilities of the Compensation Committee include:
- Determine, or make recommendations to the independent directors of the Board for determination of, decisions regarding the compensation of the CEO (for purposes of this Compensation Committee Charter, the compensation of the CEO and the other officers of the Company to be approved by the Compensation Committee hereunder shall include all “plan” compensation as such term is defined in Item 402(a)(7) of Regulation S-K promulgated under the Securities Act of 1933, as amended);
- Determine, or make recommendations to the independent directors of the Board for determination of, decisions regarding all forms of compensation to be provided to the other officers and executive officers of the Company;
- Review and make recommendations to the Board regarding general compensation goals and guidelines for the Company’s employees and the criteria by which bonuses to the Company’s employees are determined;
- Review and make recommendations to the Board regarding the compensation policy for the directors of and consultants to the Company;
- Act as the Administrator (as defined under each plan) and administer, within the authority delegated by the Board, the Company’s equity compensation plans adopted by the Board (the “Plans”). In its administration of the Plans, the Compensation Committee may, pursuant to authority delegated by the Board, (a) grant stock options or stock purchase rights to individuals eligible for such grants (including grants to individuals subject to Section 16 of the Exchange Act in compliance with Rule 16b-3 promulgated thereunder), (b) amend such stock options or stock purchase rights, and (c) take all other actions permitted under the Plans. The Compensation Committee shall also make recommendations to the Board with respect to amendments to the plans and changes in the number of shares reserved for issuance thereunder. If the Board has authorized any other committees of the Board of executive officers (in accordance with Section 157(c) of the Delaware General Corporation Law) to approve the grant of awards under the Company’s equity incentive plans, the Compensation Committee shall receive and review periodic reports of the activities of such committees;
- Review and discuss with management the Company’s disclosures contained under the caption “Compensation Discussion and Analysis” or CD&A, in its registration statement, annual report on Form 10-K, proxy statement or information statement filed with the SEC;
- Prepare a report to be included in the Company’s proxy statement in accordance with applicable SEC rules and regulations, including whether the Compensation Committee reviewed and discussed the CD&A with management and based on that review and those discussions, whether the Compensation Committee recommended to the Board that the CD&A be approved for inclusion in the Company’s annual report on Form 10-K, proxy statement or information statement;
- Review its own charter, structure, processes and membership requirements on at least an annual basis; and
- Authorize the repurchase of shares from terminated employees pursuant to applicable law.
The Compensation Committee will meet at such times that it deems appropriate to fulfill its responsibilities of the Compensation Committee under this charter. The Compensation Committee shall establish its own schedule, which it will provide to the Board in advance. The members of the Compensation Committee may invite the Chief Executive Officer, the executive officer responsible for the Company’s human resources activities or any other person to attend meetings as appropriate. Notwithstanding the foregoing, neither the CEO nor any other executive officer may be present during any deliberations or voting regarding his or her compensation, and in all events, compensation decisions relating to executive officers will be determined by the Compensation Committee or, after having received the recommendations of the Compensation Committee, by a majority of the independent directors meeting in executive session.
The Compensation Committee will maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board.
The Compensation Committee will provide written reports to the Board of the Company regarding recommendations of the Compensation Committee submitted to the Board for action and copies of the written minutes of its meetings.
DELEGATION OF AUTHORITY:
The Compensation Committee may form and delegate authority to subcommittees when appropriate.
The Compensation Committee may, in its sole discretion, retain, obtain and terminate, as appropriate, any compensation consultant, outside legal or other advisors to advise or assist the Compensation Committee in the performance of any of the responsibilities and duties set forth in this charter, taking into account the independence factors set forth in the applicable rules of the SEC and NASDAQ prior to selecting and receiving advice from such consultants and advisors. The Compensation Committee will be directly responsible for the appointment, compensation and oversight of any consultants and advisors retained by the Compensation Committee, including having sole authority to approve related fees and retention terms for such consultants and advisors. The Company will provide the Compensation Committee with appropriate funding, as such Compensation Committee determines, for the payment of compensation to any compensation consultant, outside legal or other advisors as the Compensation Committee deems appropriate, and administrative expenses of the Compensation Committee that are necessary or appropriate in carrying out its duties.