AMERICAN PUBLIC EDUCATION, INC.
COMPENSATION COMMITTEE CHARTER
The purpose of the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of American Public Education, Inc. (the “Company”) is to (i) establish the compensation and benefits of the Company’s Chief Executive Officer and other executive officers; (ii) monitor compensation arrangements applicable to the Company’s Chief Executive Officer and other executive officers in light of their performance, effectiveness and other relevant considerations, all in accordance with applicable laws, rules and regulations; (iii) administer the Company’s equity incentive plans; and (iv) exercise such other authority and responsibility as may be assigned to it from time to time by the Board.
Number and Qualifications. The membership of the Committee shall consist of at least three directors. Each Director who serves on the Committee must be affirmatively determined by the Board to meet the independence requirements established by applicable laws, regulations and listing requirements, including the requirements established by The NASDAQ Stock Market and the Securities and Exchange Commission, and any other independence requirements that may be established by the Board. In addition, the Committee members shall also satisfy the relevant requirements established pursuant to regulations under Section 16(b) of the Securities and Exchange Act of 1934 and Section 162(m) of the Internal Revenue Code of 1986.
Appointment. The Board shall elect a chairperson (the “Chairperson”) and other members of the Committee on an annual basis, generally at the first meeting of the Board following the Company’s annual stockholders meeting.
Rotation and Removal. The Committee chairmanship shall be rotated from time-to-time. In order to assure familiarity with the issues facing the Committee, the Chairperson should generally have served at least one year on the Committee prior to becoming Chairperson.
The Board may remove a member of the Committee, or replace the Chairperson, provided that the Board must, at all times, assure that the Committee will have a Chairperson and sufficient members to satisfy the requirements set forth above relating to the number and qualifications of Committee members.
Meeting Schedule. The Committee shall meet at least annually, and at the direction of the Chairperson or at the request of any other Committee member. The Committee may meet in person or by telephone conference call, and may act by unanimous written consent.
Agenda and Materials. The Chairperson shall approve the agenda for the Committee’s meetings, and any member may suggest items for the Committee’s consideration. Briefing materials shall be provided to the Committee as far in advance of a meeting as practicable.
Attendance at Meetings. At the discretion of the Chairperson, the Committee may invite any officer or employee of the Company, outside advisors or consultants, or any Directors who are not Committee members to attend a meeting of the Committee; provided that (i) the Committee Chairperson may ask non-Committee members to leave the meeting at any time and (ii) non-member Directors may not vote on any actions considered by the Committee.
Voting. A majority of the Committee members shall constitute a quorum. Each Committee member shall have one vote and actions at meetings may be approved by a majority of the members present.
Reporting to the Board. At the Board meeting following each Committee meeting, the Chairperson (or the Chairperson’s designee) shall report to the full Board on the Committee’s actions and recommendations.
Responsibilities and Duties
General Policy and Annual Review. The Committee shall be responsible for setting the Company’s general policy regarding executive compensation and for reviewing, no less than annually, corporate goals and objectives relevant to compensation of the Chief Executive Officer and other executive officers (for these purposes, “executive officers” shall include the Company’s “officers” within the meaning of Rule 16a-1(f) under the Exchange Act).
Responsibility for Determining Executive Compensation. The Committee shall be responsible for determining the compensation (including salary, bonus, equity-based grants and any other long-term cash compensation) for the Corporation’s Chief Executive Officer and for other executive officers as are subject to the Committee’s direct purview.
Process for Determining Compensation. In determining compensation for the Chief Executive Officer and other executive officers, the Committee shall consider such factors as it deems relevant, including annual reviews of the Chief Executive Officer’s and other executive officers’ performance, in light of Company objectives, Company stockholders’ interest, and applicable laws, rules and regulations. The Committee may also consult with other Directors as its sees fit.
Compensation Disclosure. The Committee shall exercise oversight of the Corporation’s disclosures regarding executive compensation, including approving the report of the Committee to be included in the Corporation’s annual proxy statement. The Committee shall review and discuss with management the Compensation Discussion and Analysis disclosure for the Corporation’s annual proxy statement and, based on its review and discussions, may recommend to the Board of Directors that the Compensation Discussion and Analysis disclosure be included in the proxy statement for the annual meeting of stockholders and in the Corporation’s annual report on Form 10-K (generally through incorporation by reference to the proxy statement).
Employment Agreements. The Committee shall review and approve any employment-related agreements, any proposed severance arrangements or change in control and similar agreements/provisions, and any amendments, supplements or waivers to the foregoing agreements, with the Chief Executive Officer and other executive officers, if applicable. In connection with reviewing proposed employment agreements for such executives, the Committee shall receive information regarding, among other things, the terms of the agreement, competitive practices and the potential financial implications of the employment agreement.
Benefits. The Committee shall review at least annually the benefits provided to the Company’s Chief Executive Officer and other executive officers.
Review and Recommendation. The Committee is responsible for reviewing the compensation for non-employee Directors, making recommendations on non-employee Director compensation policies to the Board for its approval and authorizing actions consistent with the implementation of those policies.
Other Compensation and Benefit Matters
General Oversight. The Committee shall have oversight of the Company’s overall compensation structure, practices and benefit plans. The Committee shall also, as appropriate, review and recommend compensation and benefit plans and amendment to existing plans for Board approval.
Risk Assessment. In establishing executive compensation and director compensation and in its role in implementing incentive compensation plans, the Committee shall consider whether compensation practices properly take into account an appropriate risk-reward relationship or encourage unnecessary and excessive risks that threaten the value of the Company.
Incentive Compensation Plans. The Committee shall be responsible for the implementation and administration of the Company’s incentive compensation plans and equity-based plans in which directors, the Chief Executive Officer, other executive officers and other employees of the Company and its subsidiaries may be participants, including, but not limited to (a) approving option grants and restricted stock or other equity-linked awards, (b) interpreting the plans, (c) determining rules and regulations relating to the plans, (d) modifying or canceling existing grants or awards and (e) imposing limitations, restrictions and conditions upon any grant or award as the Compensation Committee deems necessary or advisable.
Committee Resources. To assist the Committee in fulfilling its responsibilities, (i) each Committee member shall have full access to any member of management and (ii) the Committee may retain independent consultants, counsel and other advisors. The Committee will have sole authority and responsibility for hiring, approving the fees and retention terms for, and terminating the services of, such advisors. The Company will bear the expense of such advisors.
Performance Evaluation. The Committee shall conduct an evaluation of the Committee’s performance at least annually. The evaluation shall address subjects including the Committee’s composition, responsibilities, structure and processes and effectiveness. As part of this evaluation, the Committee shall also review this Charter. The Committee shall, as appropriate, make recommendations to management, the Nominating and Corporate Governance Committee, or the full Board as a result of its performance evaluation and review of this Charter.
Other Matters. The Committee shall have such other authority and responsibilities as may be assigned to it from time to time by the Board. The scope of authority delegated herein to the Compensation Committee shall include the power to engage in other activities that are within the general scope of the Compensation Committee’s responsibilities.
Adopted by the Board effective December 11, 2009.