(as amended December 14th, 2017)
The purpose of the Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of Splunk Inc. (the “Company”) shall be to:
- provide oversight of the Company’s compensation policies, plans, benefits programs, and overall compensation philosophy;
- assist the Board in discharging its responsibilities relating to (i) oversight of the compensation of the Company’s Chief Executive Officer (the “CEO”) and other executive officers (including officers reporting under Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”)) and (ii) approving and evaluating the executive officer compensation plans, policies and programs of the Company; and
- assist the Board in administering the Company’s equity compensation plans for its employees.
The compensation programs for the Company’s executive officers shall be (i) designed to attract, motivate and retain talented executives responsible for the success of the Company, (ii) determined within a competitive framework and (iii) based on the achievement of the Company’s overall financial results, individual contributions and a compensation philosophy of “pay for performance.”
In furtherance of these purposes, the Compensation Committee will undertake those specific duties and responsibilities listed below and such other duties as the Board may from time to time prescribe.
The Compensation Committee members shall be appointed by, and shall serve at the discretion of, the Board. The Compensation Committee shall consist of no fewer than three members of the Board. The Board may designate one member of the Compensation Committee as its chair. The Compensation Committee may form and delegate authority to subcommittees when appropriate, except to the extent such delegation would violate an applicable tax, corporate or securities law, regulation or rule of any exchange upon which the Company’s securities are then listed. Members of the Compensation Committee must meet the following criteria (as well as any additional criteria required by applicable law or rules and regulations of the Securities and Exchange Commission (the “SEC”) or such other qualifications as are established by the Board from time to time):
- the independence requirements, including (i) the Compensation Committee requirements, of the listing standards of the Nasdaq Stock Market (the “Nasdaq Rules”) and (ii) Rule 10C-1(b)(1) under the Exchange Act;
- the non-employee director definition of Rule 16b-3 promulgated under Section 16 of the Exchange Act; and
- the outside director definition of Section 162(m) of the Internal Revenue Code of 1986, as amended, unless otherwise determined by the Board or the Nominating and Corporate Governance Committee of the Board.
The responsibilities and duties of the Compensation Committee shall include:
Executive and Other Compensation
- Annually reviewing and approving for the CEO and the executive officers of the Company: (i) the annual base salary, (ii) the annual incentive bonus, including the specific goals and amount, (iii) equity compensation, (iv) any employment agreement, severance arrangement and change in control agreement/provision, (v) any signing bonus or payment of relocation costs and (vi) any other significant benefits, compensation or arrangements not available to employees generally. One of the Compensation Committee’s objectives shall be to use compensation to align the interests of the executive officers with the long-term interests of the Company’s stockholders, thereby incentivizing management to increase stockholder value. In evaluating and determining CEO and executive officer compensation, the Compensation Committee shall consider the results of the most recent stockholder advisory say on pay vote on executive compensation (“Say on Pay Vote”) required by the rules and regulations promulgated under the Exchange Act;
- Reviewing and approving corporate goals and objectives relevant to the compensation of the CEO and the executive officers of the Company, evaluating performance at least annually in the light thereof, and considering factors related to the performance of the Company, including accomplishment of the Company’s long-term business and financial goals;
- Evaluating, on a periodic basis, the competitiveness of (i) the compensation of the CEO and the executive officers of the Company and (ii) the Company’s overall compensation plans;
- Acting as Administrator (as defined in the Company’s equity plans) of the Company’s equity compensation plans for its employees, including reviewing and recommending to the Board for approval any equity award granting policy and delegating administrative authority to management or a subcommittee, as the Compensation Committee deems appropriate;
- Providing oversight of the Company’s overall compensation plans and approving improvements or changes to such plans or the adoption of new plans when appropriate;
- Providing oversight of the Company’s 401(k) plan (the “401(k) Plan”), including adopting amendments to the 401(k) Plan, facilitating major 401(k) Plan changes, ensuring continued compliance with all applicable laws and regulations and, as needed, replacing the 401(k) Plan, as well as delegating any such 401(k) Plan related duties to a 401(k) committee established by, and whose members may be appointed and removed by, the Board or Compensation Committee;
- Reviewing and discussing with management the risks arising from the Company’s compensation policies and practices for all employees that are reasonably likely to have a material adverse effect on the Company;
- Evaluating director compensation, consulting with outside consultants and/or with the Human Resources department when appropriate, and making recommendations to the Board regarding director compensation;
- Reviewing and making recommendations to the Board with respect to the Directors’directors’ equity grants under the 2012 Equity Incentive Plan and any proposed amendments thereto, subject to obtaining stockholder approval of any amendments as required by applicable law or the Nasdaq Rules;
Related Duties and Authority
- Reviewing and assessing the adequacy of this Charter and its processes and recommending any proposed changes to said Charter and processes to the Board on an annual basis;
- Periodically reviewing the Stock Ownership Guidelines applicable to members of the Board and executive officers and recommending any proposed changes to the Board;
- Consulting with the Human Resources department and, in the Compensation Committee’s its sole discretion and at the expense of the Company, retaining, or obtaining the advice of, a compensation consultant, legal counsel or other advisor (each an “Advisor Firm”) to assist in the evaluation of executive officer compensation, director compensation and other compensation-related matters before the Compensation Committee;
- Appointing, setting the compensation and overseeing the work of any Advisor Firm retained by the Compensation Committee. The Compensation Committee shall receive from the Company appropriate funding, as determined by the Compensation Committee, for payment of reasonable compensation to Advisor Firms retained by the Compensation Committee, and any administrative expenses of the Compensation Committee that are necessary or appropriate in carrying out its activities. The Compensation Committee will also have the authority, in its sole discretion, to terminate any Advisor Firm. The Compensation Committee shall not be required to implement or act consistently with the advice or recommendations of any Advisor Firm, and the authority granted in this Charter shall not affect the ability or obligation of the Compensation Committee to exercise its own judgment in fulfillment of its duties under this Charter;
- In retaining or seeking advice from an Advisor Firm to the Compensation Committee, other than in-house legal counsel, the Compensation Committee must take into consideration independence factors set forth in the Nasdaq Rules and the applicable rules of the SEC, as in effect from time to time, including the following factors:
- the provision of other services to the Company by the Advisor Firm;
- the amount of fees received from the Company by the Advisor Firm, as a percentage of the total revenue of the Advisor Firm;
- the policies and procedures of the Advisor Firm that are designed to prevent conflicts of interest;
- any business or personal relationship of the Advisor Firm or its representative with a member of the Compensation Committee;
- any stock of the Company owned by the Advisor Firm or its representative; and
- any business or personal relationship of the Advisor Firm or its representative with an executive officer of the Company;
provided that the Compensation Committee is not required to conduct an independence assessment for an Advisor Firm that acts in a role limited to the following activities: (i) consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers or directors of the Company, and that is available generally to all salaried employees; and/or (ii) providing information that either is not customized for a particular issuer or that is customized based on parameters that are not developed by the Advisor Firm, and about which the Advisor Firm does not provide advice;
- Evaluating whether any Advisor Firm retained or to be retained by it has any conflict of interest;
- Reviewing and recommending to the Board for approval the frequency with which the Company will conduct Say-on-Pay Votes, taking into account the results of the most recent stockholder advisory vote on frequency of Say-on-Pay Votes, and reviewing and approving the proposals regarding the Say-on-Pay Vote and the frequency thereof to be included in the Company’s annual proxy statement; and
- Reviewing and discussing with management the Company’s Compensation Discussion and Analysis (“CD&A”) included in the Company’s annual proxy statement, recommending, when appropriate, that the CD&A be included in the Company’s annual proxy statement and producing a report on executive compensation for inclusion in the Company’s annual proxy statement that complies with the rules and regulations of the SEC and any other applicable rules and regulations.
The Compensation Committee shall meet as often as may be deemed necessary or appropriate, in its judgment, and at such times and places as the Compensation Committee determines. The Compensation Committee may establish its own meeting schedule, which it will provide to the Board. The Compensation Committee may invite to its meetings other Board members, Company management and such other persons as the Compensation Committee deems appropriate in order to carry out its responsibilities.
The Compensation Committee shall maintain written minutes of its meetings and actions by written consent, which minutes and actions will be filed with the minutes of the meetings of the Board.
The Compensation Committee shall make regular reports to the full Board on the actions and recommendations of the Compensation Committee. The CEO may not be present during voting or deliberations regarding CEO compensation.
Members of the Compensation Committee shall receive such fees, if any, for their service as Compensation Committee members as may be determined by the Board in its sole discretion.
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