I. The Committee's Purpose. The Committee is appointed by the Board for the primary purposes of:
2003 Committee Charter : CLST
A. identifying individuals qualified to become members of the Board;
B. recommending to the Board when new members should be added to the Board;
C. recommending to the Board individuals to fill vacant Board positions;
D. recommending to the Board the director nominees for the next annual meeting of shareholders; and
E. evaluation of the Board, its committees and its members.
II. Membership on the Committee. The Committee shall consist of at least three directors. Each member of the Committee shall satisfy the independence requirements set forth in the corporate governance and other listing standards of the Nasdaq Stock Market as in effect from time to time (the "Nasdaq Standards"). However, if the Nominating Committee is comprised of at least three members, one director who is not an Independent Director (as defined in the Second Amended and Restated Statement of Corporate Governance Principles (the "Corporate Governance Principles")) and who is not a current officer or employee or a Family Member of an officer or employee may be appointed to the Nominating Committee if the Board, under exceptional and limited circumstances, determines that such individual's membership on the Committee is required by the best interests of the Company and its shareholders. Such appointee may not serve longer than two years.
III. The Committee's Duties and Responsibilities. The Committee has the following duties and responsibilities:
A. Board Vacancies. When a vacancy occurs on the Board by reason of disqualification, resignation, retirement, death or an increase in the size of the Board, to present the Committee's recommendation of a replacement member to the Board.
B. Director Criteria. To consider, at a minimum, the following factors in recommending to the Board potential new Board members, or the continued service of existing members:
1. the characteristics described in the Corporate Governance Principles (i.e., demonstrated character, judgment, relevant business, functional and industry experience, and degree of acumen);
2. whether the member/potential member assists in achieving a Board that represents an appropriate mix of background and specialized experience;
3. the member's/potential member's independence, as defined in the Corporate Governance Principles and pursuant to Nasdaq Standards;
4. whether the member/potential member would be considered a "financial expert" or "financially literate" as described in Nasdaq Standards, legislation or Audit Committee guidelines;
5. the extent of the member's/potential member's business experience, technical expertise, or specialized skills or experience;
6. whether the member/potential member, by virtue of particular experience relevant to the Company's current or future business, will add specific value as a Board member; and
7. any factors related to the ability and willingness of a new member to serve, or an existing member to continue his/her service.
C. Board Committees. At the first meeting of the Board following the annual meeting of stockholders, to propose to the Board appropriate members for all Board Committees. Each Committee member shall serve until the date of the next Annual Board Meeting, unless he or she resigns, is removed or replaced, or otherwise ceases to be a director or a member of the Committee prior to such date, in which event the Board shall appoint another director of the Company to fill the resulting vacancy for his or her unexpired term. Furthermore, if for any reason the Board does not elect the members to the Committee at an Annual Board Meeting, the directors who then comprise the Committee will continue to serve as members of the Committee until the Board takes action to elect new members of the Committee. The Board may remove or replace a member of the Committee at any time.
D. Board Size. To make recommendations to the Board about exercising the Board's authority to determine the number of its members.
E. Oversight of the Evaluation of the Board and Committees. To be responsible for overseeing the evaluation of the Board and its committees in the following respects:
1. By annually reviewing the performance of the Board and each committee as a whole, and reporting the results of its review to the Board; and
2. By annually reviewing the performance of Board members who are expected to stand for election at the next annual meeting.
F. Director Removal. To recommend to the Board the removal of a Director where appropriate.
G. Director Independence. To recommend to the Board standards for Director independence.
H. Other Activities. To perform any other activities as the Committee deems appropriate, or as are requested by the Board, consistent with this Charter, the Company's bylaws and applicable law.
I. This Charter. To maintain and update, as appropriate, this Charter, which will be filed with the Company's annual proxy statement as appropriate, but at least once every three fiscal years.
J. Stockholder Nominations. To review and consider director nominations made by stockholders of the Company.
IV. Operation of the Committee
A. Meetings. The Committee shall meet as often as is appropriate, but not less than two times annually.
B. Chairperson. The Board shall elect one of the members of the Committee to act as chairperson of the Committee (the "Chairperson"). Such member shall act as Chairperson until the next Annual Board Meeting unless he or she resigns, is removed or replaced, or otherwise ceases to be a director or a member of the Committee prior to such date, in which event the Board shall appoint another member of the Committee to serve as Chairperson for his or her unexpired term. The Chairperson shall preside over all meetings of the Committee. In addition, the Chairperson shall periodically report the Committee's findings and conclusions to the Board. The Board may remove or replace the Chairperson at any time.
V. Authority to Retain Experts. The Committee has the authority to select, direct and, if appropriate, terminate any search firm used to identify candidates for Board membership (or to establish other procedures to develop potential candidates for consideration) as well as any such other experts as it deems necessary in the performance of its duties.
VI. Annual Performance Evaluation of the Committee. At least annually, the Committee will evaluate how well it has fulfilled its purpose during the previous year, and will report its findings to the full Board.