Corporate Governance: Board Committee Charters: Nominating & Governance

Purpose and Authority:

The purpose of the Nominating and Governance Committee (the "Committee") 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, to the extent permitted by applicable laws, regulations and listing requirements, delegate authority to one or more designated members of the Committee or Company officers.

Composition:

Independence

The Committee shall be composed of two (2) or more 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 laws and regulations applicable to the Company.

Appointment and Removal of Members

The members of the Committee shall be appointed by the Board on the recommendation of the Chairperson of the Board following the Chairperson's consultation with the incumbent Chairperson of the Committee. The Board may remove any member from the Committee at any time with or without cause.

Vacancies

Vacancies on the Committee arising from any cause 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.

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 stockholders at the annual meeting.
  • Recommend to the Board candidates to fill director vacancies which occur between annual meetings of stockholders.
  • Recommend to the Board criteria regarding personal qualifications for director nominations, 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

  • Periodically review and recommend to the Board criteria regarding the composition of the Board, including total size and number of non-independent directors.
  • Recommend to the Board and periodically review appropriateness of criteria relating to tenure of directors.
  • Establish performance criteria/expectations for directors in areas of attendance, preparedness, candor and participation.
  • Develop, periodically review and recommend to the Board director stock ownership guidelines, and monitor compliance with such guidelines.
  • Establish, coordinate and review with the Chairperson of the Board criteria and methods for evaluating Board effectiveness.
  • Determine method of communications between (i) employees, stockholders and other interested parties, and (ii) independent directors or the presiding independent director.

Board Leadership

  • Develop and recommend to the Board procedures for selection of the Chairperson of the Board.
  • Develop and recommend to the Board procedures for Board review of, and for communicating such review to, the Chairperson of the Board.

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 chairpersons of committees. (The Committee should consider rotation of chairpersons and committee members when making its recommendations.)
  • Determine criteria and procedures for the selection of committee members and chairpersons, as appropriate.

Management Selection, Review and Development

  • Determine procedures for the selection of the Chief Executive Officer and other senior management.
  • Determine procedures for Board review of, and for communicating such review to, the Chief Executive Officer and other senior management.

Director Orientation and Continuing Education

  • Periodically review and revise, as appropriate, the Company's director orientation program.
  • Monitor, plan and support continuing education activities of directors.

Meeting Procedures

  • Ensure that executive sessions, including executive sessions of independent directors, take place regularly in conjunction with scheduled Board meetings.
  • Develop process for preparing agendas for, organizing and running Board meetings in coordination with the Chairperson and the Chief Executive Officer.

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.
  • Develop and periodically review and recommend to the Board in conjunction with the Audit Committee appropriate revisions to a code of conduct applicable to the Company's directors, officers and employees pursuant to and to the extent required by regulations applicable to the Company from time to time.
  • Develop and periodically review and recommend to the Board in conjunction with the Audit Committee appropriate revisions to a code of ethics applicable to the Company's senior financial officers pursuant to and to the extent required by regulations applicable to the Company from time to time.
  • Monitor compliance with and the effectiveness of the aforementioned codes.

Minutes and Reports to Board:

Minutes of each meeting shall be prepared by the Committee Chairperson or by his/her designee and sent to Committee members. Following an initial review by the Committee members, the Committee will provide minutes to the Board. The Secretary of the Company shall archive the approved minutes. The Committee will also report to the Board on any significant matters arising from the Committee's work.

Meetings:

The Committee shall meet at least two times per year and shall establish a new meeting calendar annually. The Committee may hold such other meetings as are necessary or appropriate in order for the Committee to fulfill its responsibilities. In the absence of a member designated by the Board to serve as Chairperson 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 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 keep an open mind when considering matters affecting interests of the Company and its constituents;
  • Willingness and ability to devote the required time and effort to fulfill effectively the duties and responsibilities related to Board and committee membership;
  • Willingness and ability to serve on the Board for multiple terms, if nominated and elected, which will enable the development of a deeper understanding of the Company's business affairs;
  • 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 (e.g., age, geography, professional, other);
  • Professional experience;
  • Industry knowledge (e.g., relevant industry or trade association participation);
  • Skills and expertise (e.g., accounting or financial);
  • Leadership qualities;
  • Decision-making abilities;
  • Public company board and committee experience;
  • Non-business-related activities and experience (e.g., academic, civic, public interest);
  • Personal integrity and reputation;
  • 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 Chairperson 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 stockholders. Stockholders wishing to suggest director candidates should submit their suggestions in writing to the Secretary of the Company, providing the candidate's name, biographical data and other relevant information, and should comply with all relevant procedures set forth in Section 2.2 of the Company's bylaws.

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 Chairperson of the Committee shall initiate the effort to identify appropriate director candidates.