TRANSACTION SYSTEMS ARCHITECTS, INC. NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER Purpose The purpose of the Nominating and Corporate Governance Committee (the "Committee") shall be to assist the Board of Directors (the "Board") of Transaction Systems Architects, Inc. (the "Company") in fulfilling its responsibilities to assure that the Company is governed in a manner consistent with the interests of the Company's stockholders. Without limiting the foregoing, the Committee shall advise the Board with respect to:
2003 Governance Charter: TSAI
The Committee may request any officer or employee of the Company, the Company's outside counsel or the Committee's counsel or other advisors to attend a meeting of the Committee or to meet with any members of, or advisors or consultants to, the Committee. Reports of meeting of and actions taken at a meeting or by consent by the Committee since the most recent Board meeting shall be made by the Committee Chairman or his or her delegate to the Board at its next regularly scheduled Board meeting or action and shall be accompanied by any recommendation from the Committee to the Board. In addition, the Committee Chairman or his or her delegate shall be available to answer any questions the other directors may have regarding the matters considered and actions taken by the Committee. Committee Authority and Responsibility The Committee shall have the following responsibilities and authority: Board of Directors 1. Periodically evaluate the desirability of and recommend to the Board any changes in the size and composition of the Board. 2. Select and evaluate directors in accordance with the criteria set forth below or determined as provided below. (a) Independent Directors. Director selection should include at least enough independent directors ("Independent Directors"), as determined by the rules and regulations of Nasdaq and other applicable laws, rules and regulations, to satisfy the independent director requirements of Nasdaq and other applicable laws, rules and regulations. Such Independent Directors should have appropriate skills, experiences and other characteristics to provide qualified persons to fill all Board committee positions required to be filled by Independent Directors. (b) Other Director Positions. Subject to the right of the Committee and the Board to decide otherwise when deemed appropriate, the Company's Chief Executive Officer (the "CEO") generally should be a director. Additionally, depending on the circumstances, certain other members of management, as well as certain individuals having relationships with the Company that prevent them from being Independent Directors, may be appropriate members of the Board. (c) General Criteria. Each director should: (i) Be an individual of the highest character and integrity and have an inquiring mind, vision, a willingness to ask hard questions and the ability to work well with others; (ii) Be free of any conflict of interest that would violate any applicable laws, rules or regulations or interfere with the proper performance of the responsibilities of a director;
(iii) Be willing and able to devote sufficient time to the affairs of the Company and be diligent in fulfilling the responsibilities of a director and Board committee member (including developing and maintaining sufficient knowledge of the Company and its industry; reviewing and analyzing reports and other information important to Board and committee responsibilities; preparing for, attending and participating in Board and committee meetings; and satisfying appropriate orientation and continuing education guidelines); and (iv) Have the capacity and desire to represent the balanced, best interests of the stockholders as a whole and not primarily a special interest group or constituency. (d) Specific Criteria. In addition to the foregoing general criteria, the Committee shall develop, reevaluate at least annually and modify as appropriate a set of specific criteria outlining the skills, experiences (whether in business or in other areas such as public service, academia or scientific communities), particular areas of expertise, specific backgrounds and other characteristic that should be represented on the Board to enhance the effectiveness of the Board and Board committees. (i) These specific criteria should take into account any particular needs of the Company based on its business, size, ownership, growth objectives, community, customers and other characteristics and will need to be adjusted and refocused as these Company characteristics change and evolve. (ii) The Committee should prepare at least annually a list of any specific criteria so identified that are not adequately represented on the Board. When practical, the Committee should indicate the most significant deficiencies that should be given the highest priority in recruiting new director candidates possessing the outstanding criteria. 3. Evaluate each new director candidate and each incumbent director prior to recommending that the Board nominate or re-nominate such individual for election or reelection (or that the Board elect such individual on an interim basis) as a director based on the extent to which such individual meets the general criteria above and will contribute significantly to satisfying the overall mix of specific criteria identified above and remedying any deficiencies therein. Each annual decision to re-nominate incumbent directors should be based on a careful consideration of each such individual's contributions, including the value of his or her experience as a director of the Company, the availability of new director candidates who may offer unique contributions and the Company's changing needs. 4. Diligently seek to identify potential director candidates who will strengthen the Board and remedy any perceived deficiencies in the specific criteria identified above. This should include establishing procedures for soliciting and reviewing potential nominees from directors and stockholders and for advising those who suggest nominees of the outcome of such review.
5. Submit to the Board the candidates for director to be recommended by the Board for election at each annual meeting of stockholders and to be added to the Board at any other times due to Board expansions, director resignations or retirements or otherwise. 6. Monitor the performance of directors based on the general and specific criteria applicable to each such director. If any serious problems are identified, work with such director to resolve such problems or, if necessary, seek such director's resignation or recommend to the Board such person's removal. 7. Develop and periodically evaluate initial orientation guidelines and continuing education guidelines for each member of the Board and each Board committee member regarding his or her responsibilities as a director generally and as a member of any applicable Board committee, and monitor and evaluate annually (and at any additional time a new member joins the Board or any Board committee) each director's cooperation in fulfilling such guidelines. Such guidelines shall take into account all relevant factors, including, without limitation, the nature of each individual's responsibilities and related background and any particular complexities relating to the Company's business, financial statements or other characteristics. These guidelines may impose higher requirements for directors who are members of certain Board committees than for those who are not and may, in appropriate circumstances, impose higher or lower requirements for a particular director based on his or her background and/or occupation. Director Compensation 8. Periodically evaluate the compensation of directors, including for service on Board committees and taking into account the compensation of directors at other comparable companies. Make recommendations to the Board regarding any adjustments in director compensation that the Committee considers appropriate. 9. Approve annual retainer and meeting fees for the Board and Board committees and fix the terms and awards of any stock compensation for members of the Board (as directed under applicable plans of the Company). Board Committees 10. Evaluate at least annually the performance, authority, operations, charter and composition of each standing or ad hoc Board committee (including any authority of a committee to delegate to a subcommittee) and the performance of each committee member, and recommend any changes considered appropriate in the authority, operations, charter, number or membership of each committee. If any serious problems are identified with a committee member, the Committee shall work with such person to resolve such problems or, if necessary, seek such person's resignation or recommend to the Board such person's removal from the applicable committee(s). 11. Annually submit to the Board (and at any additional times that any committee members are to be selected) candidates for membership on each Board committee and for the chairman of each committee. The Committee shall coordinate closely with the full Board as to the selection of an Independent Director who will qualify to serve on the Company's Audit Committee as a designated "audit committee financial expert."
Evaluation of and Successor Planning for the CEO and Other Executive Officers 12. Assist the Board in evaluating the performance of and other factors relating to the retention of the Chief Executive Officer. 13. Assist the Board in overseeing the evaluation of the performance of the other executive officers. It is recognized that, subject to oversight by the Board and this Committee and subject to the authority and responsibilities of the Compensation Committee, the CEO will have primary responsibility for evaluating the performance of other executive officers. 14. Develop and periodically review and revise, as appropriate, a management succession plan and related procedures. Consider and recommend to the Board candidates for successor to the CEO and, with appropriate consideration of the CEO's recommendations, candidates for successors to other executive officers, in each case when vacancies shall occur in those offices. Corporate Governance 15. Develop and recommend to the Board a Corporate Governance Policy and any changes therein, setting forth the corporate governance principles applicable to the Company. 16. Monitor and make recommendations to the Board on other matters of Board policies and practices relating to corporate governance. 17. Review and make recommendations to the Board regarding stockholder proposals that relate to corporate governance. Stockholder Issues 18. Monitor and make recommendations to the Board on the Company's policies and positions regarding significant stockholder relations issues. 19 Review proposals submitted by stockholders for inclusion at the next Company stockholders' meeting and make recommendations to the Board on an appropriate response to such proposals. Other 20. Prior to publication, review and approve the "election of directors" section of the Company's proxy statement. 21. Have sole authority to retain (including approval of the fees and terms of engagement), oversee and terminate independent legal, accounting or other advisors, including, without limitation, consultants to assist in recruiting Board candidates. The Company shall provide for appropriate funding for payment of compensation to any advisors or consultants employed by the Committee.
22. Delegate authority to the Chair and one or members, as the Committee deems necessary, provided that the decisions of such members shall be presented to the full Committee at its next scheduled meeting. 23. Perform such other duties and responsibilities as may be assigned to the Committee by the Board or the Chairman of the Board. 24. Annually review the Committee's own performance.