Revision Date: December 21, 2005

Purpose

The Compensation Committee ("Committee") of the Cadence Network, Inc. Board of Directors ("Board") assists the Board in fulfilling its oversight responsibilities by discharging the Board’s responsibilities relating to compensation and benefits. The Committee shall have and may exercise all the powers of the Board with respect to the specific authority delegated to the Committee in this Charter or hereafter specifically delegated to the Committee by the Board, except as may be prohibited by law.

Membership

The members of the Committee are appointed by the Board and shall consist of not less than two members of the Board. The Board may remove a member from the Committee at any time with or without cause. The Committee shall perform activities consistent with this Charter, the Corporation’s Charter, Bylaws and governing law, as the Committee deems necessary or appropriate. The President and CEO will be the management liaison to the Committee.

Responsibilities

Chief Executive Officer

• The Committee shall annually evaluate and review the performance of the CEO against specific corporate and personal goals and objectives, after gaining insight and input from the Board of Directors.
• The Committee shall annually review and approve the CEO annual base salary, annual incentive opportunity and long-term incentive opportunity, including any equity-based awards.
• If applicable, the Committee shall review and approve the CEO employment agreement, severance agreement, change in control agreement or provisions and any special or supplemental benefits, in each case as, when and if appropriate.
  

Other Officers and Key Employees

• The Committee shall annually evaluate and review the performance of executive officers and key employees through the input of the CEO.
• The Committee shall annually review and approve all other executive officer and key employee, annual base salaries, annual incentive opportunities and long-term incentive opportunities, including any equity-based awards.
• If applicable, the Committee shall review and approve any unique executive officer or key employee employment agreements, severance agreements, change in control agreements or provisions and any special or supplemental benefits.
• The Committee shall review the steps being taken to assure the succession of qualified officers.

Overall Company

• The Committee shall recommend to the Board a philosophy and strategy for compensation, which is consistent with and supportive of the Company's long-term plans and objectives.
• The Committee shall approve long term incentive plans such as stock options for the Company officers and key employees, and make awards under the terms of the option plans as approved by the Board.
  
• The Committee shall ensure that Company plans and actions relative to compensation for the Company officers and key employees are within all regulatory and legal requirements.

Independent Director

• The Committee shall propose to the Board, Director compensation and equity programs, which will subsequently require Board approval.
• Annually the Committee shall evaluate the competitiveness of directors’ compensation.

Other

• The Committee shall review, discuss, and assess its own performance annually.
• The Committee shall review, discuss, and assess this charter, including the Committee’s role and responsibilities as outlined in this Charter, and shall recommend any proposed changes to the Board.
• As necessary, the Committee will meet periodically with outside advisors to insure that it is carrying out its duties in light of industry practices and standards.
• The Committee shall perform such other functions and have such other powers as may be necessary or convenient in the efficient discharge of the foregoing.
• The Committee will perform other oversight functions as requested by the full Board.

Authority

The Committee shall have full access to all books, records, facilities and personnel of the Company as deemed necessary or appropriate by any member of the Committee to discharge his or her responsibilities hereunder. The Committee may request any officer or employee of the corporation or its outside counsel or consultants to attend a meeting of the Committee or to meet with any members of the Committee. The Committee shall have the sole authority to retain and terminate special legal, compensation or other consultants to advise the Committee and the authority to approve their fees and other terms related to their retention. To the extent not otherwise inconsistent with its obligations and responsibilities, the committee may form subcommittees and delegate authority hereunder as it deems appropriate.

The Committee will delegate to the CEO the authority to administer employee compensation, grant awards under a long term incentive plan, or add employees to an annual incentive compensation plan during the course of the year as warranted.

Meetings

Meetings will be held no less than two times per year. Meetings of the Committee may be held in person or telephone. Action may also be taken by the Committee without a meeting if all members thereof consent thereto in writing or by electronic transmission, and the writings or electronic transmission are filed with the minutes of the proceedings of the Committee.

The Committee shall keep separate minutes of their proceedings and actions. The Committee shall also report to the Board at the quarterly Board Meetings.