- Purpose. The
Compensation Committee (the “Committee”) of the Board of Directors
(the “Board”) of 3Com Corporation (the “Company”) has been
established for the purpose of reviewing and approving, on behalf of the
Board, all compensation to be provided to the directors and Section 16
officers (within the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended) of the Company, and
supervising the administration of the Company's cash incentive
compensation plans (i.e., 3Bonus) and equity-related compensation awards
to all employees.
- Structure and
2.1 Number. The Committee shall be composed of at least two members
selected by the Nominating and Governance Committee.
2.2 Independence.Each member of the
Committee shall be: (i) an "Independent
Director" as defined by the rules and regulations of the Nasdaq Stock Market, (ii) a "Non-Employee
Director" as defined by Rule 16b 3 promulgated under the Securities
Exchange Act of 1934, as amended, and (iii) an "Outside
Director" as defined by Section 162(m) of the Internal Revenue Code
of 1986, as amended.
2.3 Chair. The Nominating and Governance Committee shall elect a
Chair of the Committee. The Chair shall, if present, preside at all
meetings of the Committee and exercise and perform such other powers and
duties as may be assigned to him or her by the Nominating and Governance
Committee or the Committee.
2.4 Compensation. The compensation of Committee members shall be as
determined by the Board.
- Authority. To
allow the Committee to achieve its purpose and satisfy its
responsibilities, the Committee shall have the authority described in this
3.1 Subcommittees. The Committee may establish subcommittees of one
or more members, and delegate its authority and responsibilities to such
subcommittees, as it deems appropriate.
3.2 Consultants and Advisors. The Committee may engage compensation
consultants and other advisors, from time to time, to advise the Committee
on executive compensation practices and policies or any other matters
within the scope of this Charter.
3.3 Other Actions. The Committee may take such other actions as the
Committee deems necessary or appropriate to satisfy its responsibilities
set forth in this Charter or as otherwise delegated by the Board.
- Meetings. The
Committee shall meet as often as it deems necessary to carry out its
responsibilities. The Committee may invite members of management,
compensation consultants or other advisors to attend meetings and provide
pertinent information; provided, however, the Committee may meet in
executive session at its discretion.
The Committee shall be responsible for reviewing and approving, on behalf
of the Board, all compensation to be provided to the directors and Section
16 officers of the Company, and approving the cash incentive and
equity-related compensation programs for employees. Toward that end, the
Committee shall have the responsibilities set forth in this
5.1 Equity Compensation Plans. The Committee shall be responsible
for approving the Company's employee stock plan, employee stock purchase
plan, and other equity-related plans. The Committee shall also be
responsible for making recommendations to the Board regarding the
reservation of shares available for issuance under such plans. On a
periodic basis, the Committee shall be responsible for approving the pool
for equity-related programs and the employee grant guidelines.
5.2 Compensation Arrangements. The Committee shall be responsible
for determining, or recommending to the Board for its determination, the
annual compensation arrangements (including, without limitation, salaries,
bonuses, equity grants and benefits) for the Company's Section 16
officers. Notwithstanding the Committee's authority to invite members of
Company management to attend Committee meetings, the Chief Executive
Officer may not be present during the Committee's or Board's delibberations concerning his or her compensation
5.3 Performance of Chief Executive Officer. The Committee shall be
responsible for evaluating and making recommendations to the Board
regarding the performance of the Company's Chief Executive Officer, as
well as matters related to succession planning for Section 16 officers.
5.4 Annual Incentive Plan. The Committee shall be responsible for
approving the Company's cash incentive plan, and determining whether or
not the Company's plan performance metrics have been achieved.
5.5 Equity Awards to Directors and Section 16 Officers. The
Committee shall be responsible for approving stock option grants and other
equity-related awards to all persons who are members of the Board or
Section 16 officers.
5.6 Report of the Compensation Committee. The Committee shall be
responsible for preparing a report, to be included in the Company's proxy
statement relating to its annual meeting of stockholders.
5.7 Compensation and Benefits. The Committee shall be responsible
for annually reviewing the Company's compensation and benefit programs to
ensure that employees of the Company are rewarded appropriately for their
contributions to the Company's growth and profitability.
5.8 Annual Performance Evaluation. The Committee shall complete an
annual performance evaluation of itself and its members consistent with
practices established by the Nominating and Governance Committee (or any
5.9 Additional Responsibilities. The Committee shall have such
other responsibilities as may be delegated from time to time by the Board
- Reporting. The
Committee's reporting responsibilities will include reports to the Board
about Committee activities, issues and related recommendations, the
preparation of written minutes of Committee meetings and preparation of
the report to be included in the Company's annual proxy statement
describing the Committee and its activities, as required by the rules of
the Securities and Exchange Commission.
- Committee Charter.
The Committee shall also perform other activities related to this Charter
as requested by the Board, including: (i) a
review and assessment of the adequacy of this Charter annually and request
for Board approval of any proposed changes; and (ii) ensure that this
Charter is published or otherwise made publicly available as required by
rules and regulations established by the Securities and Exchange
Commission and the Nasdaq Stock Market.
Adopted: June, 2005