NOMINATING AND CORPORATE
This Charter of the Nominating and Corporate Governance Committee of the Board of Directors of Advanced Neuromodulation Systems, Inc. (the “Company”) was adopted and approved by the Company’s Board of Directors on May 26, 2004.
The primary purpose and responsibilities of the Committee are to:
· identify individuals as candidates to become Board members consistent with criteria approved by the Board
· recommend that the Board select the director nominees to stand for election at the annual meeting of shareholders or, if applicable, at a special meeting, and recommend to the Board an individual to fill any vacancy either through appointment by the Board or by shareholder election (other than, in either case, vacancies for directors elected pursuant to nomination rights held by third parties)
· assist the Board in determining the composition of the Board and its committees
· assist the Board in establishing general criteria for director nominees
· establish policies and procedures for the submission of director candidates by shareholders
· periodically evaluate Board member performance
· review existing, develop new and recommend to the Board corporate governance principles and policies applicable to the Company.
II. MEMBERSHIP REQUIREMENTS
The Committee will be comprised of the number of directors determined by the
Board and consistent with the Company’s Bylaws, all of whom must qualify as
independent directors under the marketplace rules of Nasdaq or any other exchange or system on which the
Company’s securities are traded or listed.
The members of the Committee will be appointed by majority vote of the full Board at a duly convened meeting of the Board. The Committee may recommend, and the Board will designate, one member of the Committee to serve as the Chairman of the Committee (the “Chairman”). If a Chairman is not designated or is not present at any meeting, the members of the Committee may designate a chairman for such meeting by majority vote of the Committee. The members of the Committee will serve until their resignation, retirement or removal, or the due appointment and qualification of their successors. A member may resign Committee membership without resigning from the Board, but a member will cease automatically to be a member of the Committee upon either ceasing to be a member of the Board or ceasing to be "independent" as required above.
A member of the Committee may be removed only by majority vote of the independent directors then in office, provided that the failure of the Board to re-appoint a member during any reconstitution of the Committee will not constitute “removal” for this purpose. No reduction in the number of members constituting the full Committee will have the effect of shortening the term of any incumbent member.
The Committee’s rules of procedure will be consistent with the Bylaws of the
Company and this Charter. The Committee will meet at regularly scheduled
meetings at least two times annually, or more frequently as circumstances
dictate. In addition, the Chairman or a majority of the members of the
Committee may call a special meeting of the Committee. A majority of the
members of the Committee will constitute a quorum.
The Chairman will, in consultation with the other members of the Committee and appropriate officers of the Company, establish the agenda for each Committee meeting and will circulate the agenda to each Committee member in advance of the meeting. Any Committee member may submit items to be included on the agenda. Committee members may also raise at any meetings subjects that are not on the agenda.
The Committee may request any officer or other employee of the Company, or any representatives of any advisors, to attend all or part of a meeting or to meet with any members or representatives of the Committee.
The Committee may appoint subcommittees of its own denomination for any purpose that the Committee deems appropriate and may delegate to such subcommittees such power and authority as the Committee deems appropriate. Notwithstanding the foregoing, (a) no subcommittee will consist of fewer than two members, (b) the Committee will not delegate to a subcommittee any power or authority required by any law, regulation or listing standard to be exercised by the Committee as a whole, and (c) each subcommittee must have a published committee charter.
Following each of its meetings, the Committee will deliver a report on the meeting to the Board, including a description of all actions taken by the Committee at the meeting. The Committee will keep written minutes of its meetings and such minutes will be maintained with the books and records of the Company.
IV. AUTHORITY AND RESPONSIBILITIES
The basic responsibility of the members of the Committee is to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company and its shareholders. In discharging that obligation, members should be entitled to rely on the honesty and integrity of the Company’s executives and its outside advisors, to the fullest extent permitted by law. The Committee has the power to perform the following:
Develop and Implement Corporate Governance Policies
a. Review existing, develop new, and recommend policies to the Board to enhance the Board’s effectiveness, including corporate governance guidelines.
b. Review on an annual basis, or more frequently if it deems it appropriate, the corporate governance guidelines and policies of the Company to ensure that such guidelines and policies are appropriate for the Company and comply with the applicable laws, regulations, and listing standards, and to recommend any changes as necessary to the Board.
c. Review the Company’s existing code of corporate conduct and ethics for directors, officers, and employees. The Committee will oversee its implementation and enforcement, or designate those members of management responsible for implementation and enforcement with oversight from the Committee.
d. Consider any other corporate governance issues that arise from time to time, and develop appropriate recommendations for the Board.
Board Membership Needs and Recommend Board Nominees
a. Actively seek and select director nominees consistent with the criteria approved by the Board. The Committee will consider candidates recommended by shareholders of the Company if such recommendations are submitted in accordance with the policies and procedures established by the Committee for the submission of director candidates by shareholders.
b. Establish policies and procedures for the submission of director candidates by shareholders. Such shareholder recommendation policies and procedures will be published on the Company’s website, www.ans-medical.com, or otherwise made publicly available, and described in the Company’s filings with the Securities and Exchange Commission as required by applicable law, regulations and listing standards.
c. Develop the general criteria for director nominees for Board approval. Review such general criteria on a periodic basis and make recommendations to the Board of any changes the Committee members may deem appropriate. The Board approved criteria for director nominees will be published on the Company’s website, www.ans-medical.com, or otherwise made publicly available, and disclosed in the Company’s filings with the Securities and Exchange Commission as required by applicable law, regulations and listing standards.
d. Develop a process and establish procedures for the Committee to identify and evaluate director candidates. Review such process and procedures on a periodic basis and make any changes the Committee members may deem appropriate.
e. Recommend to the Board the number of and qualifications (including independence and financial literacy) for directors, the composition of the Board and a slate of nominees for election as directors at the Company’s annual meeting of shareholders (other than vacancies for directors elected pursuant to nomination rights held by third parties).
f. Recommend to the Board persons to be appointed as directors in the interval between annual meetings of the Company’s shareholders, including filling vacancies occurring for any reason (other than, in either case, vacancies for directors elected pursuant to nomination rights held by third parties).
g. Develop and recommend to the Board procedures for determining director independence consistent with the requirements under the marketplace rules of Nasdaq (or any other exchange or system on which the Company’s securities are traded or listed) and other applicable laws or regulations and review and assess these standards on a periodic basis.
h. Review the qualifications (including financial literacy) and independence of the members of the Board and its various committees on a periodic basis and make any recommendations the Committee members may deem appropriate from time to time concerning any recommended changes in the membership or composition of the Board and its committees.
i. Recommend to the Board such changes to the Board’s committee structure and committee functions, as the Committee deems advisable from time to time.
of the Board and Management
a. Sponsor and oversee performance evaluations for the Board as a whole, the directors and management.
b. Monitor director performance and provide assistance to directors regarding performance.
c. Participate with management in the review of director and officer insurance needs and the means of satisfying such insurance needs.
V. PERFORMANCE EVALUATION
The Committee will conduct a self-evaluation of its performance annually and
evaluate whether this Charter appropriately addresses the matters that are or
should be within its scope. In conducting its self-evaluation, the
Committee may address all matters that it considers relevant to its
performance, including the following:
a. The adequacy, appropriateness and quality of the information and recommendations presented to the Committee by management and by the Committee to the Board.
b. The manner in which they were discussed or debated.
c. Whether the number and length of meetings of the Committee were adequate for the Committee to complete its work in a thorough and thoughtful manner.
The Committee will deliver to the Board a written report setting forth the results of any self-evaluation, including any recommended amendments to this Charter and any recommended changes to the Company’s or the Board’s corporate governance guidelines.
VI. INVESTIGATIONS AND STUDIES; OUTSIDE ADVISORS
The Committee may conduct or authorize investigations into or studies of
matters within the scope of the Committee’s authority and responsibilities, and
may retain, at the Company’s expense, such outside advisors as it deems
necessary or appropriate.
The Committee has the sole authority to retain or terminate any consulting firm engaged to assist in identifying director candidates, and to retain outside counsel and any other advisors as the Committee may deem appropriate in its sole discretion. The Committee has the sole authority to approve related fees and retention terms.
VII. RELATED-PARTY TRANSACTIONS
All proposed related-party transactions must be presented to the Committee for its consideration. If required by law, Nasdaq rules or SEC regulations, such transactions must obtain Committee approval. The term “related-party transaction” will be consistent with the definition provided in SEC Regulation S-K, Item 404(a) or any successor statute.