At Pinnacle Systems we are committed to the highest standards of business conduct in our relationships with each other and with our stakeholders. This requires that we conduct our business in accordance with all applicable laws and regulations and in accordance with the highest standards of business ethics and standards. Pinnacle officers, directors, employees, interns and contractors will not engage in any deceptive, misleading, illegal or unethical practice or any practice that may reflect unfavorably on Pinnacle or its products.

In order that Pinnacle is able to meet its commitment to these business principles and to comply with Sabanes-Oxley Act requirements, we have developed the Pinnacle Code of Business Conduct and Ethics (“Code”). The Code has been reviewed and approved by our Board of Directors and has Executive Management’s full approval and support. The purpose of the Code is to reinforce Pinnacle’s fundamental business values and to enhance our commitment to an ethical way of doing business. A copy of the Code is posted below.

Further, Pinnacle continually strives to establish and improve its corporate governance framework. Significant elements of this framework are as follows:

• Five of our nine Board members are non-management as well as considered independent according to the rules of the Nasdaq Stock Market;


• Every Board member is elected for a one-year term;


• All members of our Board Committees (Audit, Compensation, and Nominating and Governance Committees) are non-management and independent directors under the rules of the Nasdaq Stock Market;


• The charters of our Board committees clearly establish their respective roles and responsibilities and are published below;


• The independent members of our Board meet regularly without the presence of management;


• We have established a Lead Independent Director position on our Board;


• KPMG LLP, our independent auditors, report directly to the Audit Committee and meets regularly with our Audit Committee without management present.