MEMBERWORKS INCORPORATED

CORPORATE GOVERNANCE AND NOMINATING COMMITTEE CHARTER

 
I.    Purpose

The purpose of the Corporate Governance and Nominating Committee (the “Committee”) shall be to assist the board of directors in identifying individuals qualified to become members of the board; to recommend to the board nominees for director in connection with the Company’s proxy statement and annual meeting of stockholders; and to assist the board in developing and implementing the Company’s Corporate Governance Principles.

 
II.    Responsibilities and Duties

In furtherance of its purpose, the Committee shall have the following authority and responsibilities:

(i)

 

To lead the search for candidates qualified to become directors and to recommend such candidates to the board for election thereto considering input from the Chief Executive Officer and all directors;

 

(ii)

 

To establish criteria for persons to be nominated for election to the board and its committees, taking into account the composition of the board as a whole. At a minimum, the criteria should include a non-employee director candidate’s qualification as “independent,” under the various standards applicable to the Company, the board and each of its committees (as identified in the Company’s Corporate Governance Principles), as well as a director candidate’s depth of experience and availability, the balance of his or her business interest and experience and the need for any required expertise on the board or one of its committees. With respect to incumbent directors, the Committee will also consider the performance of such director. In addition, the Committee will determine whether qualifications for membership on each committee of the board are met;

 

(iii)

 

To consider suggestions by the President/Chairman of the board for directors to serve on board committees, including the chair of each committee, and to recommend to the board the members and chair of all standing committees;

 

(iv)

 

To review the Board’s Committee structure and to recommend to the board for its approval the duties that will be in the charter of any new standing committee of the board;

 

(v)

 

To annually develop and oversee an evaluation of the board and individual directors by collecting comments and evaluations from each director and any other constituents the Committee deems relevant to such assessment;

 

(vi)

 

To review senior management and director compliance with any board-approved stock ownership requirements;

 

(vii)

 

To assist the board in the development of director’s responsibilities, including basic duties and responsibilities with respect to attendance at board meetings and advance review of meeting materials;

 

(viii)

 

To establish and maintain a director orientation program for new directors;

 

(ix)

 

To develop, or make available, a continuing education program conducted either internally or externally for all directors;

 

(x)

 

To review any apparent or actual conflicts of interest involving any of the Company’s Executive Officers or directors, including but not limited to requests by directors or Executive Officers to serve on outside board of directors;

 

(xi)

 

To assist the board with oversight of the Company’s policies;

 

(xii)

 

To review the Company’s plans and programs with respect to risk management and related insurance coverage;

 

(xiii)

 

To review the independence of each non-employee director; and

 

(xiv)

 

To review the continued appropriateness of board membership when a director changes the employment and/or outside directorship position he or she held when elected to the board.

 

III.    Advisors

The Committee shall have the exclusive authority, at the Company’s expense, to retain (including authority to approve fees and other retention terms) any search firms to be used to identify director candidates, and such independent consulting, legal and other advisors as it shall deem appropriate to fulfill its responsibilities without management or board approval.

IV.    Meetings

The Committee shall meet at least three times annually, or more frequently if circumstances dictate. Any member of the Committee may call a meeting of the Committee upon due notice to each other member at least seventy-two hours prior to the meeting. Two members shall constitute a quorum. If a quorum is present, a majority of the members present shall decide any question brought before the Committee.

V.    Minutes

The Committee will keep minutes of each meeting. The minutes will be kept by the General Counsel or by a member of the Committee.

VI.    Committee Chair

The Committee chair will be a director appointed by the board. If the Committee chair is absent from a meeting, another member of the Committee will act as chair.

VII.    Term

Members will be appointed by the board for a one-year term or until a successor is appointed and qualified. The Board will fill vacancies on the Committee and may remove a Committee member from the Committee at any time without cause.

VIII.    Number of Members

The Committee shall consist of at least three members of the Board as the board shall from time to time determine.

IX.    Membership

All of the members of the Committee shall be independent as determined by the board applying the definition of (i) ”independent director“ as established by the Nasdaq Stock Market, Inc. (”NASDAQ“); (ii) ”non-employee directors“ within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934 and the rules promulgated thereunder as well as the Sarbanes-Oxley Act of 2002; and (iii) ”outside director“ under Section 162(m) of the Internal Revenue Code of 1986 and the rules promulgated thereunder, all as amended from time-to-time.

X.    Subcommittees

The Committee may delegate authority and responsibilities to subcommittees as it deems proper.

XI.    Non-member Attendance

The Chief Executive Officer, the Chief Financial Officer and the General Counsel of the Company will be invited to each meeting; however, the Committee will meet at least twice each year without management participation. Attendance may be by telephone as provided in the Company’s bylaws.

XII.    Amendment and Revision

Not less than annually, the Committee will review this charter and recommend to the board any changes it deems advisable. The board may, at any time (acting on its initiative, or on recommendation of the Committee), amend this charter.

XIII.  

 

Agenda

The agenda for each meeting will be set by the Committee chair after conferring with the other Committee members and with the appropriate members of management.

XIV.  

 

Board Reports

The Committee will inform the board from time-to-time of the actions it has taken in fulfillment of the Committee’s responsibilities under this charter.

XV.  

 

Performance Review

The Committee will annually review its performance, which will include eliciting input from management and the board on the performance of the Committee. The Committee will report the results of such self-assessment to the board.