Nominating and Corporate Governance Committee Charter

 

Purpose and Authority

 

The purpose of the Nominating and Corporate Governance Committee (the "Committee") of HouseValues, Inc. is to (i) identify individuals qualified to become members of the Board, (ii) approve and recommend to the Board director candidates, (iii) develop, update as necessary and recommend to the Board corporate governance principles and policies applicable to the Company and (iv) monitor compliance with such principles and policies.

 

The Committee shall have the sole authority to retain and terminate any search firm that is used to identify director candidates, including the sole authority to approve fees and other retention terms. The Committee also shall have all authority necessary to fulfill the duties and responsibilities assigned to the Committee in this Charter or otherwise assigned to it by the Board.

 

As the Committee deems appropriate, it may retain independent counsel, accounting and other professionals to assist the Committee without seeking further Board approval with respect to the selection, fees or retention terms for any such advisers.

 

The Committee when appropriate may form and delegate authority to subcommittees and may delegate authority to one or more designated members of the Committee or Company officers.

 

Composition

 

Independence

The Committee shall be composed of at least three (3) directors, as determined by the Board, each of whom shall meet the independence standards required by the Board, the Nasdaq Stock Market, Inc. or other applicable trading exchange or quotation system, and any other laws and regulations applicable to the Committee.

 

Appointment and Removal of Members

The members of the Committee shall be appointed by the Board. The Board may remove any member from the Committee at any time with or without cause.

 

Vacancies

Vacancies on the Committee arising for any reason may be filled by the Board at any regular or special meeting.

 

Duties and Responsibilities

 

The Committee shall have the following duties and responsibilities, in addition to any duties and responsibilities assigned to the Committee from time to time by the Board or set forth in the Company's Bylaws.

 

Director Selection

Review qualifications of candidates for Board membership from whatever source received based on the Director Selection Guidelines outlined in Exhibit A to this Charter;

 

 

Approve and recommend to the Board the slate of Director candidates to be proposed for election by shareholders at the annual meeting;

 

 

Recommend to the Board candidates to fill Director vacancies which occur between annual meetings of shareholders;

 

 

Recommend to the Board criteria regarding personal qualifications for nomination as a Director, including experience, skills, affiliations and characteristics, as more fully outlined in the Director Selection Guidelines;

 

 

Periodically review, approve and recommend to the Board appropriate revisions to the Director Selection Guidelines.

 

 

Determine procedures for the review, approval and recommendation of director candidates, as appropriate.

 

 

Board and Board Performance

Recommend to the Board criteria regarding the composition of the Board, including total size and number of employee-Directors;

 

 

Recommend to the Board criteria relating to tenure of directors.

 

 

Establish, coordinate and review with the Board criteria and methods for evaluating Board effectiveness.

 

 

Board Committee Matters

Recommend to the Board, as appropriate, the number, type, functions, structure and independence of committees.

 

 

Annually recommend to the Board director membership on Board committees and advise the Board and/or committees with regard to the selection of the chairmen of committees. (The Committee should consider rotation of chairmen and committee members when making its recommendations.)

 

 

Determine criteria and procedures for the selection of committee members and chairmen, as appropriate.

 

 

Management Selection, Review and Development

Determine procedures for the selection of the Chief Executive Officer and other senior management.

 

 

Governance Policies

Develop, review and recommend to the Board, as appropriate, principles and policies relating to corporate governance, and monitor compliance with and the effectiveness of such principles and policies, as appropriate.

 

 

Committee Minutes and Reports to Board

Keep minutes of Committee meetings; and

 

 

Report to the Board on the proceedings of the Committee.

 

 

Meetings

 

The Committee may hold such meetings as are necessary or appropriate in order for the Committee to fulfill its responsibilities. Special meetings of the Committee may be called by the Chairman of the Committee or any two (2) Committee members. In the absence of a member designated by the Board to serve as Chairman of the Committee, the Committee members may appoint from among their number a person to preside at their meetings. At all meetings of the Committee, the presence of at least two (2) members shall be necessary to constitute a quorum. The affirmative vote of a majority of the members present shall be necessary and sufficient for the adoption of any resolution.

 

Evaluation

 

The Committee shall review and reassess this Charter at least annually and, if appropriate, shall propose changes to the Board.

 

The Committee shall obtain or perform an annual evaluation of the Committee's performance and make applicable recommendations.

 

EXHIBIT A

Director Selection Guidelines

 

The Charter of the Nominating and Corporate Governance Committee (the "Committee") of the Board requires the Committee to develop and periodically review and recommend to the Board appropriate revisions to these Director Selection Guidelines. The following guidelines have been adopted by the Board upon the recommendation of the Committee.

 

Director Qualifications

 

When considering potential director candidates for nomination or election, directors should consider the following qualifications, among others, of each director candidate:

 

High standard of personal and professional ethics, integrity and values;

 

 

Training, experience and ability at making and overseeing policy in business, government and/or education sectors;

 

 

Willingness and ability to devote the required time and effort to effectively fulfill the duties and responsibilities related to Board and committee membership;

 

 

Willingness not to engage in activities or interests that may create a conflict of interest with a director's responsibilities and duties to the Company and its constituents; and

 

 

Willingness to act in the best interests of the Company and its constituents, and objectively assess Board, committee and management performances.

 

 

Board Composition Selection Criteria

 

The Board believes that its effectiveness depends on the overall mix of the skills and characteristics of its directors. Accordingly, the following factors, among others, relating to overall Board composition should be considered when determining Board needs and evaluating director candidates to fill such needs:

 

Independence;

 

 

Diversity;

 

 

Professional experience;

 

 

Industry knowledge (e.g., relevant industry or trade association participation);

 

 

Skills and expertise (e.g., accounting or financial);

 

 

Leadership qualities;

 

 

Public company board and committee experience;

 

 

Non-business-related activities and experience (e.g., academic, civic, public interest);

 

 

Board continuity (including succession planning);

 

 

Board size;

 

 

Number and type of committees, and committee sizes; and

 

 

Legal and Nasdaq Stock Market, Inc., or other applicable trading exchange or quotation system, requirements and recommendations, and other corporate governance related guidance regarding board and committee composition.

 

 

Selection Procedures

 

Potential director candidates should be referred to the Chairman of the Committee for consideration by the Committee and possible recommendation to the Board. The Committee shall maintain a list of director candidates to consider and propose to the Board, as required. If necessary or desirable in the opinion of the Committee, the Committee will determine appropriate means for seeking additional director candidates, which may involve the engagement of any outside consultant to assist the Committee in the identification of director candidates.

 

The Committee will consider candidates recommended by shareholders. Shareholders wishing to suggest director candidates should submit their suggestions in writing to the Chairperson of the Committee, c/o the Corporate Secretary, providing the candidate's name, biographical data and other relevant information.

 

The Committee shall decide on the appropriate means for the review and approval of individual director candidates, including current directors, and the recommendation of director candidates to the Board. In the event of a vacancy on the Board, the Chairman of the Committee shall initiate the effort to identify appropriate director candidates.