.

 

Statement of Purpose

The purpose of the Nominating Committee (the "Committee") is to assist the Board of Directors (the "Board") of TradeStation Group, Inc. (the "Company") with the Board's responsibilities regarding:

 

(i)

the identification of individuals qualified to become Board members;

 

(ii)

the selection of the director nominees for annual meetings of shareholders;

 

(iii)

the selection of director candidates to fill any vacancies on the Board; and

 

(iv)

other goals and responsibilities referred to herein.

In so doing, the Committee will endeavor to maintain free and open means of communication between the members of the Committee, other members of the Board and Board committees, and management of the Company.

II.

 

Committee Composition and Member Qualifications

The Committee will be organized as follows:

 

(i)

Committee members will be appointed and removed by action of the Board and shall serve at the discretion of the Board.

 

(ii)

The Committee will be composed of no fewer than two (2) directors.

 

(iii)

Each member of the Committee will satisfy the "independence" requirements of The Nasdaq Stock Market and any other applicable self-regulatory or regulatory requirements as may be prescribed.

 

(iv)

A majority of the members of the Committee shall constitute a quorum.

 

III.

 

Organization and Procedures

The Committee shall have the authority to establish its own rules and procedures for notice and conduct of its meetings as long as they are not inconsistent with any provisions of the Company's Bylaws. The Committee shall meet as frequently as the Board or the Committee deems desirable and shall produce minutes of all meetings.

The Committee may, at its discretion, include in its meetings other directors or members of the Company's management or any other personnel employed or retained by the Company or any other persons whose presence the Committee believes to be necessary or appropriate. The Committee may also exclude from its meetings any persons it deems appropriate to exclude.

The Committee may form and delegate authority to subcommittees when appropriate; provided that any such subcommittee must be comprised solely of a member or members of the Committee and must produce minutes of its meetings.

IV.

 

Goals and Responsibilities

The goals and responsibilities of the Committee are to:

 

(i)

assist in the recruiting of directors, including evaluation of executives recruited or promoted to positions eligible for Board membership;

 

(ii)

actively seek and recommend to the Board new directors for election by the shareholders or appointment by the Board to fill vacancies (as soon as is reasonably practicable after a vacancy arises or a director advises the Board of his or her intention to resign), in compliance with the selection criteria outlined below;

 

(iii)

consider any nominations of director candidates validly and properly made by shareholders of the Company;

 

(iv)

consider any nominations of director candidates made by an officer or director of the Company;

 

(v)

periodically review the qualifications and independence (if applicable) of the members of the Board and its various committees and, to the extent necessary, make recommendations the Committee may deem appropriate from time to time concerning changes in the composition of the Board and its committees;

 

(vi)

review proposed relationships of directors, for compensation or otherwise, with the Company or other entities that may diminish their effectiveness or be inconsistent with the criteria for Board selection provided herein;

 

(vii)

annually review the adequacy of this Charter and recommend any proposed changes to the Board for approval;

 

(viii)

recommend to the Board standards for determining director independence consistent with the rules and requirements of The Nasdaq Stock Market and other legal or regulatory corporate governance requirements, and review and assess these standards on an ongoing basis; and

 

(ix)

report to the Board on its findings and actions as and when appropriate.

 

V.

 

Board Member Selection Criteria

The Committee shall consider the following criteria, among others, in recommending candidates for election or appointment to the Board:

 

(i)

experience in corporate governance, such as past experience as an officer or director of one or more publicly-held companies or in a profession that services publicly-held companies;

 

(ii)

experience in and/or relationships within the Company's industry or industries with which the Company deals or proposes to deal;

 

(iii)

academic or professional expertise in an area important to the Company's operations, including expertise relevant to membership in specific Board committees, such as the Audit Committee or Compensation Committee;

 

(iv)

except in the case of any management members considered for Board membership, the absence of relationships with the Company that might reasonably compromise independence of judgment in discharging the responsibilities of Board membership;

 

(v)

a reputation for high moral and ethical standards, and business or professional standing that will add to the Board's stature; and

 

(vi)

business experience, skills and time availability (including the number of other boards he or she sits on in the context of the needs of the Board and the Company), and such other criteria as the Committee shall determine to be relevant at the time.

In recommending directors for election or appointment to the Board, it shall be a primary objective of the Committee to assure that the Board satisfies the independence requirements of The Nasdaq Stock Market and any other applicable self-regulatory or regulatory requirements.

VI.

 

Committee Resources

In performing their responsibilities, Committee members are entitled to rely in good faith on information, opinions, reports or statements prepared or presented by:

 

(i)

one or more officers or employees of the Company whom the Committee member reasonably believes to be reliable and competent in the matters presented;

 

(ii)

counsel, independent auditors or other persons as to matters which the Committee member reasonably believes to be within the professional or expert competence of such person; or

 

(iii)

another committee of the Board as to matters within its designated authority and which the Committee member reasonably believes to merit confidence.

The Committee shall have sole authority to retain and terminate any search firm to be used to identify director candidates, including sole authority to approve such search firms' fees and other retention terms, at the Company's expense.