Nominating and Governance Committee Charter (Adopted by the Board August 26, 2009)
CRS ELECTRONICS Inc.
GOVERNANCE COMMITTEE CHARTER
The Governance Committee (the "Committee") shall be appointed by the Board of Directors (the "Board") of CRS Electronics Inc. (the "Company" or “CRS”) on the recommendation of the Chairperson of the Board (if the Chairperson is an independent director), the Lead Independent Director (if appointed) and the Chairpersons of the Board of Directors and the Secretary of the Corporation. The primary function of 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 all authority necessary to fulfill the duties and responsibilities assigned to the Committee in this Charter or otherwise assigned to it by the Board.
Composition and Delegation
The Committee shall be comprised of at least three members. At least one member of the Committee shall be a member of the Board and meet the independence standards required by the Board and applicable laws, regulations and listing requirements. The members of the Committee shall be appointed annually by the Board, on the recommendation of the Chairperson of the Board, the Lead Independent Director (if appointed) and the Secretary of the Corporation, at its annual meeting or as necessary to fill vacancies in the interim. The Board shall designate one of the Committee members as Chairperson. The Board may remove any member from the Committee at any time with or without cause. The Committee when appropriate may form and delegate authority to subcommittees and may delegate authority to one or more designated members of the Committee, the Board or Company officers.
The Committee shall have sole authority to retain and terminate any search firm that is used to identify director candidates and the sole authority to approve fees and other retention terms. As the Committee deems appropriate, it may also retain independent counsel, accounting and other consultants to assist the Committee without seeking further Board approval with respect to the selection, fees or retention terms for any such advisers.
Duties and Responsibilities
The Committee shall:
1. Review, approve and recommend for Board consideration director candidates based on the Director Selection Guidelines outlined in Exhibit A to this Charter, and advise the Board with regard to nomination or election of director candidates.
2. Periodically review, approve and recommend to the Board appropriate revisions to the Director Selection Guidelines outlined in Exhibit A to this Charter.
3. Determine procedures for the review, approval and recommendation of director candidates, as appropriate.
Board and Board Performance
4. Periodically review and recommend to the Board the appropriate size of the Board.
5. Periodically review appropriateness of any restrictions on Board service, such as term limits and retirement policy.
6. Establish performance criteria/expectations for directors in areas of attendance, preparedness, candor and participation.
7. Establish, coordinate and review with Chairperson of Board criteria and method for evaluating the effectiveness of the Board.
8. Develop and recommend to the Board procedures for selection of the Chairperson of the Board.
9. Develop and recommend to the Board procedures for Board review of the Chairperson of the Board, and for communicating such review to, the Chairperson of the Board.
Board Relationship to Senior Management
10. Monitor process and scope of director access to Company management and employees and communications between directors and Company management and employees.
11. Develop, in consultation with the Chairperson of the Board and the CEO, an annual meeting calendar for Board.
12. Ensure that executive sessions take place regularly in conjunction with scheduled Board meetings.
13. Develop process for preparing agendas for, organizing and running Board meetings in coordination with the Chairperson and CEO.
14. Determine the subject matter, detail and appropriate timing for distribution of Board materials to allow directors adequate time to review materials and prepare for meetings.
Board Committee Matters
15. Recommend to Board, as appropriate, number, type, functions, structure and independence of committees.
16. Annually recommend to Board director membership on Board committees and advise Board and/or committees with regard to selection of Chairpersons of committees (provided that membership on the Governance Committee shall be recommended to the Board by the Chairperson of the Board (if the Chairperson is an independent director) the Lead Independent Director (if appointed) and the Chairpersons of the Audit, Governance and Compensation Committees).
17. Establish and coordinate with applicable committee Chairperson criteria and method for evaluating the effectiveness of the committees.
Management Selection and Development
18. Determine procedures for selection of the CEO and, in consultation with the CEO, other senior management.
19. Develop guidelines for and monitor compliance with long-range succession planning.
20. Develop and maintain in consultation with the Board and the CEO a short-term succession plan for unexpected situations affecting the CEO and senior management.
21. Monitor procedures relating to executive development.
Director Orientation and Continuing Education
22. Periodically review and recommend revisions, as appropriate, to the Company's director orientation program.
23. Monitor, plan and support budgeted continuing education activities of the directors.
24. Develop and periodically review and recommend to the Board in consultation with the Audit Committee appropriate revisions to a code of conduct applicable to the Company's directors, officers and employees pursuant to and at a minimum to the extent required by regulations applicable to the Company from time to time.
25. Develop and periodically review and recommend to the Board in consultation with the Audit Committee appropriate revisions to a code of ethics applicable to the Company's senior financial officers pursuant to and at a minimum to the extent required by regulations applicable to the Company from time to time.
26. Monitor compliance with and the effectiveness of the aforementioned codes.
27. Consult with and support the Audit Committee with respect to the establishment of (a) procedures for receipt, retention and treatment of complaints regarding the Company's accounting, internal controls and auditing matters; and (b) procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
28. Develop, review and recommend to the Board, as appropriate, other principles and policies relating to corporate governance; and monitor compliance with and the effectiveness of such principles and policies, as appropriate.
Meetings and Budget
In accordance with the applicable provisions of the Company's Bylaws, as amended from time to time, the Committee shall meet at such times and places as the members deem advisable, and shall make such recommendations to the Board as the Committee considers appropriate. When appropriate, the Committee may meet in separate executive session with other independent directors, management, employees, general counsel, internal audit, the independent auditor or other consultants or advisors it may retain to discuss matters that the Committee or the other groups believe warrant Committee attention. The Committee will meet periodically in executive sessions of only the Committee members and, if invited by the Committee in its sole discretion, other independent members of the Board.
For corporate budgeting purposes, the Chairperson of the Committee will each year submit to the CEO an annual budget for the Committee's activities and will review status against the budget on a periodic basis.
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 the minutes to 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.
The Committee shall review and reassess this Charter at least annually and, if appropriate, propose changes to the Board.
The Committee shall obtain or perform an annual evaluation of the Committee's performance and make applicable recommendations.
CRS Electronics Inc
Director Selection Guidelines
The Charter of the 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.
When considering potential director candidates for nomination or election, directors should consider the following qualifications, among others, of each director candidate:
1. High standard of personal and professional ethics, integrity and values;
2. Training, experience and ability at making and overseeing policy in business, government and/or education sectors;
3. Willingness and ability to keep an open mind when considering matters affecting interests of the Company and its constituents;
4. Willingness and ability to devote the required time and effort to effectively fulfill the duties and responsibilities related to Board and committee membership;
5. Willingness and ability to serve on the Board for multiple terms, if nominated and elected, to enable development of a deeper understanding of the Company's business affairs;
6. 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
7. 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:
1. Independence ;
2. Diversity (e.g., age, geography, professional, other);
3. Professional experience;
4. Industry knowledge (e.g., relevant industry or trade association participation);
5. Skills and expertise (e.g., accounting or financial);
6. Leadership qualities;
7. Public company board and committee experience;
8. Non-business-related activities and experience (e.g., academic, civic, public interest);
9. Board continuity (including succession planning);
10. Board size;
11. Number and type of committees, and committee sizes; and
12. Legal and other applicable requirements and recommendations, and other corporate governance-related guidance regarding board and committee composition.
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, including 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 Chairperson of the Committee shall initiate the effort to identify appropriate director candidates.