2003 Compensation Charter: PCLE
The purpose of the Compensation Committee established pursuant to this charter is to review and approve, and, where appropriate, to make recommendations to the Board of Directors (the "Board") regarding all forms of compensation to be provided to the employees and directors of, and consultants to, Pinnacle Systems, Inc., a California corporation, and its subsidiaries (the "Company"), including all bonus and stock compensation to all employees.
The Compensation Committee has the authority to undertake the specific duties and responsibilities listed below and will have the authority to undertake such other specific duties as the Board from time to time prescribes.
STATEMENT OF PHILOSOPHY:
The policy of the Compensation Committee is to maximize stockholder value over time. The primary goal of the Company's Compensation Committee and its executive compensation program is therefore to closely align the interests of the directors and officers with those of the Company's shareholders. To achieve this goal the Compensation Committee attempts to (i) offer compensation opportunities that attract and retain executives whose abilities are critical to the long-term success of the Company; (ii) motivate individuals to perform at their highest level and reward outstanding achievement; (iii) maintain a significant portion of the executives' total compensation at risk by linking it to the achievement of financial, organizational and management performance goals; and (iv) encourage executives to manage from the perspective of shareholders.
Each member of the Compensation Committee will be (i) an independent director as defined by the rules of The Nasdaq Stock Market, (ii) an "Outside Director" as such term is defined with respect to Section 162(m) of the Internal Revenue Code of 1986, as amended (the "IRC"), and (iii) a "non-employee" director as defined under Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
The responsibilities of the Compensation Committee include:
1. Review and make recommendations to the Board regarding the compensation of the Chief Executive Officer of the Company (the "CEO"). For purposes of this Compensation Committee Charter, the compensation of the CEO and the other officers of the Company to be approved by the Compensation Committee hereunder shall include all "plan" compensation as such term is defined in Item 402(a)(7) of Regulation S-K promulgated under the Securities Act of 1933, as amended). To the extent necessary to maintain the deductibility of compensation paid to the CEO, including pursuant to Section 162(m) of the IRC, the Compensation Committee shall review and approve decisions regarding the compensation of the CEO.
2. Review and approve decisions regarding all forms of compensation to be provided to the officers of the Company on an annual basis. Review and evaluate the performance of the officers of the Company, including the CEO;
3. Review and approve general compensation goals and guidelines for the Company's employees and the criteria by which bonuses to the Company's employees are determined;
4. Review and approve the compensation policy for the directors of and consultants to the Company;
5. Act as the Administrator (as defined under each plan) and administer, within the authority delegated by the Board, the Company's equity compensation plans adopted by the Board (the "Plans"). In its administration of the Plans, the Compensation Committee may, pursuant to authority delegated by the Board, (a) grant stock options or stock purchase rights to individuals eligible for such grants (including grants to individuals subject to Section 16 of the Exchange Act in compliance with Rule 16b-3 promulgated thereunder), (b) amend such stock options or stock purchase rights, and (c) take all other actions permitted under the Plans. The Compensation Committee shall also make recommendations to the Board with respect to amendments to the Plans and changes in the number of shares reserved for issuance thereunder;
6. Prepare a report (to be included in the Company's proxy statement) which describes: (a) the criteria on which compensation paid to the CEO for the last completed fiscal year is based; (b) the relationship of such compensation to the Company's performance; (c) the Compensation Committee's executive compensation policies applicable to officers; and (d) the Company's policies with respect to the $1 million deduction limit for certain executive compensation imposed by Section 162(m) of the IRC;
7. Review the Compensation Committee Charter, structure, processes and membership requirements from time to time;
8. As appropriate, obtain advice and assistance from outside legal, accounting or other advisors, including, without limitation, any compensation consultant to be engaged by the Company or the Compensation Committee to evaluate CEO, executive officer, employee or director compensation;
9. Authorize the repurchase of shares from terminated employees pursuant to applicable law; and
10. Annually review and evaluate its own performance.
The Compensation Committee will meet at such times as it deems appropriate to fulfill its responsibilities under this Charter. The Compensation Committee shall establish its own schedule, which it will provide to the Board in advance. The members of the Compensation Committee may invite the Chief Executive Officer, the Vice President of Human Resources or any other person to attend meetings as appropriate.
The Compensation Committee will maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board.
The Compensation Committee will provide written or oral reports to the Board of the Company regarding (i) actions taken by the Compensation Committee and (ii) any recommendations of the Compensation Committee submitted to the full Board for action. In addition, the Board shall be provided with copies of the written minutes of the meetings of the Compensation Committee.
DELEGATION OF AUTHORITY:
The Compensation Committee may form and delegate authority to subcommittees or management when appropriate.