Committee Charters

Committees of the Board of Directors

 

 

AUDIT COMMITTEE CHARTER

 

This Audit Committee Charter (“Charter”) has been adopted by the Board of Directors (the “Board”) of Thermodynetics, Inc. (the “Company”).  The Audit Committee of the Board (the “Committee”) shall review and reassess this charter annually and recommend any proposed changes to the Board for approval. 

 

Role and Independence: Organization

 

The Committee assists the Board in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing, internal control and financial reporting practices of the Company.  It may also have such other duties as may from time to time be assigned to it by the Board.  The membership of the Committee shall consist of at least three (3) directors, who are each free of any relationship that in the opinion of the Board may interfere with such member’s individual exercise of independent judgment.  Each Committee member shall, to the extent possible, also meet the independence and financial literacy requirements for serving on audit committees and at least one member shall have accounting or related financial management expertise all as set forth in the applicable rules of the NASDAQ.  The Committee shall maintain free and open communication with the independent auditors, the internal auditors when applicable and Company management.  In discharging its oversight role the Committee is empowered to investigate any matter relating to the Company’s accounting, auditing, internal control or financial reporting practices brought to its attention with full access to all Company books, records, facilities and personnel.  The Committee may retain outside counsel, auditors or other advisors. 

 

One member of the Committee shall be appointed as chairperson (the “Audit-Chair”).  The Audit-Chair shall be responsible for leadership of the Committee, including scheduling and presiding over meetings, preparing agendas and making, regular reports to the Board.  The Audit-Chair will also maintain regular liaison with the CEO, CFO, the lead independent audit partner and the director of internal audit, when appropriate. 

 

The Committee shall meet at least four (4) times a year or more frequently as the Committee considers necessary.  At least once each year the Committee shall have separate private meetings with the independent auditors, management and the internal auditors. 

 

The Committee’s job is one of oversight.  Management is responsible for the preparation of the Company’s financial statements and the independent auditors are responsible for auditing those financial statements.  The Committee and the Board recognize that management (including the internal audit staff, when applicable) and the independent auditors have more resources and time, and more detailed knowledge and information regarding the Company accounting, auditing, internal control and financial reporting practices than the Committee does; accordingly the Committee’s oversight role does not provide any expert or special assurance as to the financial statements and other financial information provided by the Company to its shareholders and others. 

 

Responsibilities

 

The following responsibilities shall be the general recurring activities of the Committee in carrying out its oversight role.  These responsibilities are set forth as a guide with the understanding that the Committee may diverge from this guide as appropriate given the circumstances.  The Committee shall be responsible for:

 

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Meeting at least four (4) times a year or more frequently as the Committee considers necessary.  At least once each year the Committee shall have separate private meetings with the independent auditors, management and the internal auditors.

 

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Recommending to the Board the independent auditors to be retained (or nominated for shareholder approval) to audit the financial statements of the Company, which auditors are ultimately accountable to the Board and the Committee, as representatives of the shareholders.

 

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Evaluating, together with the Board and management, the performance of the independent auditors and where appropriate replacing such auditors.

 

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Obtaining annually from the independent auditors a formal written statement describing all relationships between the auditors and the Company, consistent with Independence Standards Board Standard Number 1.  The Committee shall actively engage in a dialogue with the independent auditors with respect to any relationships that may impact the objectivity and independence of the auditors and shall take or recommend that the Board take appropriate actions to oversee and satisfy itself as to the auditors’ independence.

  

 

 

COMPENSATION COMMITTEE CHARTER

 

Purpose

 

The Compensation Committee (“Committee”) is appointed by the Board to discharge the Board’s responsibilities relating to the Company’s officers and employees.  The Committee has overall responsibility for recommending and evaluating the compensation plans, policies and programs of the Company. 

 

The Committee is also responsible for producing an annual report on executive compensation for inclusion in the Company’s proxy statement. 

 

Committee Membership

 

The Committee shall consist of no fewer than three (3) members.  The members of the Committee shall meet the independence requirements of Nasdaq and shall be outside, non-employee directors. 

 

The members of the Committee shall be appointed by the Board.  Committee members may be replaced by the Board. 

 

The Compensation Committee Chairman shall (a) chair all meetings of the Compensation Committee; (b) coordinate the evaluation of the performance of the CEO; (c) set the frequency and length of the meeting(s) and the agenda items to be addressed at each meeting; and (d) perform such other activities as from time to time are requested by the other directors or as circumstances indicate. 

 

Committee Authority and Responsibilities

 

The Compensation Committee shall have the power and authority of the Board to perform the following duties and to fulfill the following responsibilities:

 

1.  The Committee shall have the sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of director, CEO or senior executive compensation and shall have the sole authority to approve the consultant’s fees and other retention terms.  The Committee shall also have the authority to obtain advice and assistance from internal or external legal, accounting, senior management or other advisors. 

 

2.  The Committee shall review CEO compensation, evaluate the CEO’s performance, and approve the CEO’s compensation level based on this evaluation. 

 

3.  The Committee shall periodically review the compensation systems that are in place for employees of the Company in order to ensure there is internal and external equity in the compensation of all employees, including incentive-compensation plans and equity-based plans. 

 

4.  The Committee shall annually review and approve and recommend to the Board of Directors for its approval, for the CEO (a) the annual base salary level, (b) the annual incentive opportunity level, (c) the long-term incentive opportunity level, (d) employment agreements, severance arrangements, and change in control agreements/provisions, in each case as, when and if appropriate, and (e) any special or supplemental benefits. 

 

5.  The Committee may form and delegate authority to subcommittees when appropriate. 

 

6.  The Committee shall review and reassess the adequacy of this Charter periodically and recommend any proposed changes to the Corporate Governance & Nominating Committee for its approval. 

 

7.  The Committee shall annually review its own performance and present the evaluation findings to the Board. 

 

8.  The Committee shall fix and determine awards to employees of stock or stock options pursuant to the Company’s Equity Incentive Plan(s) now or from time to time in effect and exercise such power and authority as may be permitted or required by such plans. 

 

9.  The Committee is also responsible for producing an annual report on executive compensation for inclusion in the Company’s proxy statement in accordance with applicable rules and regulations. 

 

 

 

TDYT Committees SarOx Act 2004 (Committees of the Board of Directors 06-09-05)

 

 

 

 

NOMINATING/CORPORATE GOVERNANCE COMMITTEE CHARTER

 

I.  COMPOSITION AND QUALIFICATIONS

 

The Nominating/Corporate Governance Committee (the “Committee”) of the Board of Directors of the Company shall be comprised of three (3) or more members of the Board of Directors, each of whom is determined by the Board of Directors to be independent in accordance with the rules of Nasdaq. 

 

II.  APPOINTMENT AND REMOVAL

 

The members of the Committee shall be appointed by the Board of Directors and shall serve until such member’s successor is duly elected and qualified or until such member’s earlier resignation or removal.  The members of the Committee may be removed, with or without cause by a majority vote of the Board of Directors. 

 

III.  DUTIES AND RESPONSIBILITIES

 

The duties of the Nominating Committee of the Board of Directors are as follows, subject to any requirements of the Company’s Certificate of Incorporation or By-laws or any applicable agreements between the Company and its shareholders, are to:

 

1.  Make recommendations regarding the size and composition of the Board. 

 

2.  Establish and recommend to the Board criteria for the selection of new directors to serve on the Board.  Generally, to select people who are independent and diverse in a broad sense — people with a variety of backgrounds, experiences, cultures and skills who will bring individual talents or contribute to the needs of the Board and the Company.  Further, nomination candidates would be those able to work in a collaborative and collegial fashion with other directors and senior management, in a manner consistent with the current operating practices of the Board.

 

3.  Identify individuals, including those recommended by other parties, qualified to become Board members, consistent with criteria approved by the Board. 

 

4.  Select the director nominees for the next annual meeting of stockholders. 

 

5.  Determine the appropriate committee structure of the Board and, in fulfilling the Committee’s responsibilities, the Committee shall be entitled to delegate any or all of its responsibilities, as it deems appropriate. 

 

6.  Recommend Board committee assignments and any changes to such assignments. 

 

7.  Oversee the evaluation of the Board members. 

 

8.  Act as a forum to hear special concerns that might arise which require the attention of non-employee directors. 

 

9.  Make periodic recommendations for improving the Board’s effectiveness and discuss annually with the full Board its effectiveness. 

 

10.  Develop and recommend to the Board a set of corporate governance principles applicable to the Company. 

 

11.  Report regularly to the Board of Directors. 

 

12.  Have sole authority to retain and terminate any search firm to be used to identify director candidates, including sole authority to approve the search firm’s fees and other retention terms. 

 

 

 

TDYT Committees SarOx Act 2004 (Committees of the Board of Directors 10-27-04)