The purpose of the Compensation and Nominating Committee (the
"Committee") of the Board of Directors (the "Board") of Magma Design Automation, Inc. (the "Company") is to discharge the Board’s responsibilities with respect to the following matters:
Members of the Committee will be appointed by, and shall serve at the discretion of, the Board. Unless a chair is elected by the Board, the members of the Committee may designate a chair by majority vote of the Committee membership.
The Committee will consist of three or more members of the Board, with the exact number being determined by the Board. Each of the members of the Committee will be:
The Committee shall meet at least once each quarter, and more frequently as determined to be appropriate by the Committee. The Committee shall meet separately with the Company’s independent auditors and members of the Company’s management at such times as the Committee deems appropriate.
Meetings may be held telephonically. In lieu of a meeting, the Committee may also act by unanimous written consent.
The Committee shall have the authority to obtain advice and assistance from internal or external legal or other advisers at the Company’s expense.
Responsibilities and Duties
The following shall be the principal recurring processes of the Committee in carrying out its oversight responsibilities. These processes are set forth as a guide with the understanding that the Committee may supplement them as appropriate and may establish policies and procedures from time to time that it deems necessary or advisable in fulfilling its responsibilities.
1. The Committee will have the authority to determine and approve the form and amount of compensation to be paid or awarded to all employees of the Company, including the Company’s executive officers, as defined for purposes of Section 16 of the Exchange Act and the rules promulgated thereunder ("Executive Officers"). The Committee may delegate authority to subcommittees of the Committee, or the Chief Executive Officer ("CEO/President"), with respect to compensation determinations for persons who are not Executive Officers.
2. The Committee will have the authority to determine the form and amount of cash and equity compensation to be paid or awarded to members of the Company ’s board of directors who are not employed by the Company, including compensation for service on the Board or on committees of the Board.
3. The Committee will annually review and approve the corporate goals and objectives relevant to the compensation of the CEO/President and the other Executive Officers, and evaluate the performance of the CEO/President and Executive Officers in light of these goals and objectives. Based on this evaluation, including an evaluation of the Company’s performance and stockholder returns, the Committee shall have the sole authority to determine all of the following matters with respect to the CEO/President and Executive Officers:
§ Offer letters, employment contracts and similar arrangements (including any amendments or extensions);
§ Severance contracts and arrangements;
§ Salary amounts;
§ Grants of cash-based bonuses and equity-based compensation;
§ Change in control arrangements; and
§ Other compensation matters as may be directed by the Board
The Committee shall take account of the recommendations of the Board with respect to each of the foregoing. The Committee shall take account of the recommendations of the Company’s CEO/President for other Executive Officers with respect to each of the foregoing items. Determination of compensation decisions related to the CEO/President shall be conducted outside of the presence of the CEO/President.
4. The Committee will annually review and make recommendations to the Board with respect to adoption and approval of, or amendments to, all cash-based and equity-based incentive compensation plans and arrangements, and the amounts and shares reserved thereunder after taking into consideration the Company’s strategies with respect to short and long-term cash and equity-based compensation.
5. The Committee will: (i) approve grants of stock, stock options or stock purchase rights to individuals eligible for such grants (including grants to Executive Officers in compliance with Rule 16b-3 promulgated under the Exchange Act) in such amounts or such terms as it may deem appropriate; (ii) interpret the Company’s equity-based compensation plans and agreements thereunder; and (iii) determine acceptable forms of consideration for stock acquired pursuant to the equity-based incentive compensation plans.
6. The Committee may delegate to the CEO/President authority to approve option grants to employees of the Company or of any subsidiary of the Company who are not directors of the Company or Executive Officers, provided that, that the price per share of all such option grants is no less than the fair market value of the Company’s common stock on the date of grant.
7. The Committee will meet with the CEO/President within 90 days after the commencement of each fiscal year to discuss the incentive compensation programs to be in effect for the Executive Officers for such fiscal year and the corporate goals and objectives relevant to those programs.
8. The Committee will periodically review the Company’s procedures with respect to employee loans, and will not approve any arrangement in which the Company, directly or indirectly, extends or maintains credit, arranges for the extension of credit or renews an extension of credit, in the form of a personal loan to or for any director of the Company or any Executive Officer (or equivalent thereof) of the Company. The Committee will assist the Board and management of the Company in complying with this prohibition.
9. The Committee will prepare an annual report on executive compensation for inclusion in the proxy statement for the Company’s annual meeting in accordance with the rules and regulations of the Securities and Exchange Commission.
10. The Committee will review this Charter periodically and recommend to the Board any changes it determines are appropriate.
11. The Committee will review its performance and submit a report on its performance to the Board annually.
12. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to any such advisors employed by the Committee pursuant to this Charter or the commission of any necessary studies or surveys concerning the levels of executive compensation payable in the industry in which the Company is engaged and in other related industries and to obtain recommendations from outside consultants concerning compatible pay programs, as appropriate.
13. The Committee will report to the Board regularly, maintain written minutes of its meetings and will file such minutes with the minutes of the meetings of the Board.
14. The Committee will perform any other activities required by applicable law, Nasdaq Rules rules or regulations, including the rules of the Securities and Exchange Commission and any exchange or market on which the Company’s capital stock is traded, and perform other activities that are consistent with this charter, the Company’s certificate of incorporation and bylaws, and applicable laws, rules or regulations as the Committee, any other committee of the Board or the Board deems necessary or appropriate.
1. The Committee will identify and recruit qualified candidates to serve as members of the Board.
2. The Committee will recommend to the Board for nomination all candidates to serve as members of the Board before they are the appointed by the Board or proposed by the Board for election by the stockholders, including approval of a slate of director nominees to be proposed by the Board for election at each annual meeting of stockholders and approval of all director nominees to be elected by the Board or stockholders to fill interim director vacancies.
3. The Committee will determine the desired qualifications, expertise and characteristics of Board members.
4. The Committee will make recommendations to the Board regarding the structure and operations, size and composition of the Board and Board committees and committee member qualifications, appointment and removal.