COMPENSATION COMMITTEE CHARTER
The Compensation Committee (the "Committee") is appointed by the Board of Directors (the "Board") of 4Kids Entertainment, Inc. (the "Company") to discharge the Board's responsibilities relating to compensation of the Company's directors and executives and to produce an annual report on executive compensation for inclusion in the Company's proxy statement, in accordance with applicable rules and regulations. The Committee has overall responsibility for approving and evaluating the director and officer compensation plans, performance, policies and programs of the Company.
The Committee shall consist of no fewer than three members. All members of the Committee shall meet the independence requirements of the New York Stock Exchange, as such requirements are amended from time to time, and any other applicable regulatory requirements.
The members of the Committee shall be appointed by the Board on the recommendation of the Nominating and Corporate Governance Committee and shall serve until their successors shall be duly elected and qualified. Unless a Chairman is elected by the full Board, the members of the Committee may designate a Chairman by majority vote of the full Committee membership. Committee members may be replaced by the Board at any time, with or without cause.
The Committee shall hold regularly scheduled meetings and such special meetings as circumstances dictate. To the extent the Committee believes it to be appropriate or advisable, it shall meet in executive session, without management present. A majority of the members of the Committee shall constitute a quorum for the transaction of any business at any meeting, and the act of a majority of those present at any meeting at which a quorum is present shall be the act of the Committee. Action may be taken by the Committee without a meeting if all of the members of the Committee indicate their approval thereof in writing. The Committee shall report regularly to the Board.
Committee Authority and 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, Chief Executive Officer ("CEO") or senior executive compensation and shall have sole authority to approve the consultant's fees and other retention terms. The Committee shall also have authority to hire and obtain advice and assistance, to the extent it deems reasonably necessary or appropriate, from external legal, accounting or other advisors.
2. The Committee shall review and approve corporate goals and objectives related to CEO compensation, evaluate the CEO's performance in light of those goals and objectives, and recommend to the Board the CEO's compensation levels based on this evaluation, subject to the terms of any existing employment agreement. In determining any long-term incentive component of CEO compensation, the Committee will consider the Company's performance and relative shareholder return, the value of similar incentive awards to CEOs at comparable companies, and the awards given to the CEO in past years.
3. The Committee shall review and make recommendations to the Board regarding the compensation plans for the Company's executive officers, including incentive compensation plans and equity-based plans, based upon the corporate goals and objectives relevant to such compensation plans and its evaluation of the executive officers' performance in light of those goals and objectives, subject to the terms of existing employment agreements.
4. The Committee shall review and approve employment agreements for all executive officers of the Company.
5. The Committee shall periodically review and recommend to the Board, corporate goals and objectives for the Company's compensation policies for its executive officers and other employees, including the Company's incentive compensation plans and equity-based plans.
6. The Committee shall act as administrator of the Company's incentive compensation and equity-based plans and shall have the authority to make grants and awards under such plans to the extent such authority is delegated to the Committee by the Board.
7. The Committee shall annually review and make recommendations to the Board regarding Director compensation in accordance with the Company's Corporate Governance Guidelines.
8. The Committee shall annually produce a report on executive compensation for inclusion in the Company's proxy statement, in accordance with applicable rules and regulations.
9. The Committee may form and delegate authority to subcommittees when appropriate.
The Committee shall produce and provide to the Board an annual performance evaluation of the Committee, which evaluation shall compare the performance of the Committee with the requirements of this charter. The performance evaluation shall also recommend to the Board any improvements to the Committee's charter deemed necessary or desirable by the Committee. The performance evaluation by the Committee shall be conducted in such a manner as the Committee deems appropriate. The report to the Board may take the form of an oral report by any member of the Committee designated by the Committee to make this report.