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Governance, Compliance and Nominating Committee

Purposes

The primary purposes of the Governance, Compliance and, Nominating Committee (the “Committee”) are to ensure that (1) the Board of Directors (the “Board”) of Roust Corporation (the “Company”) consists primarily of qualified directors, (2) the Company and its Board follow the best possible corporate governance practices and (3) the Company and its Board maintain appropriate procedures to ensure compliance with the Company’s Certificate of Incorporation, By-Laws, significant covenants in its debt obligations, applicable law and generally accepted standards of corporate best practice. Its responsibilities in that regard include:

  • Identifying individuals qualified to become members of the Board and to recommend to the Board candidates for election or re-election as directors;
  • Monitoring and recommending corporate governance and other board practices;
  • Overseeing performance reviews of the Board, its committees and the individual members of the Board; and
  • Overseeing and reviewing the Company’s compliance procedures and corporate practices, in particular to respect the rights of minority stockholders, if any, pursuant to the Company’s Certificate of Incorporation and in order to ensure the Company’s compliance with the significant covenants in its debt obligations, as well as applicable law.

In discharging this oversight role, the Committee is empowered to investigate any matter brought to its attention with full access to all Company books, records, facilities, personnel, legal counsel and independent auditors, along with the power to retain, at the Company’s expense, search firms, outside counsel or other experts for this purpose. The Committee shall have sole authority to approve any search firm’s fees and other retention terms as long as the fees are in line with standard norms.

The Committee shall review the adequacy of this charter on an annual basis and recommend any appropriate changes to the Board for consideration.

Membership

Appointment and Removal. The Committee shall be appointed by the Board and shall serve on the Board for such term as the Board may decide or, with respect to individual Committee members, until such Committee member is no longer a Board member or is removed by the Board in accordance with the Company’s Bylaws. The Board shall designate the chairperson of the Committee.

Number and Meetings. The Committee shall be comprised of not less than one member of the Board. The Committee shall meet as often as necessary to fulfill its responsibilities. The Committee may appoint subcommittees and may delegate its responsibilities to a subcommittee to the extent it deems appropriate.

Nominating Responsibilities

The following functions shall be the common, recurring activities of the Committee in carrying out its duties.

  1. The Committee shall lead the Company’s search for individuals qualified to become members of the Board.
  2. The Committee shall evaluate and recommend to the Board for nomination candidates for election or re-election as directors, however other Company directors and equity holders may continue to also nominate candidates for election as directors in accordance with the Company’s articles of incorporation and by-laws.
  3. The Committee shall evaluate and recommend to the Board for nomination candidates for the chairs of the Compensation Committee and Audit Committee.
  4. In the event of a vacancy on the Board, or if the Committee becomes aware of a pending vacancy and the Board determines that such vacancy shall be filled by the Board, the Committee shall recommend to the Board a qualified individual for appointment to the Board.
  5. The Committee shall establish and oversee appropriate director orientation and continuing education programs. In assessing the qualification of a candidate, the Committee generally shall observe the following guidelines:
    • directors shall not be a director, consultant or employee of or to any competitor of the Company;
    • in considering candidates, the Committee shall consider their other obligations and time commitments and their ability to attend meetings in person; and
    • to avoid potential conflicts of interest, interlocking directorships will not be allowed. Interlocking directorships shall be deemed to occur if a senior executive officer of the Company serves on the board of or as a trustee of a company or institution that employs one or more directors (i.e., reciprocal directorships).

Corporate Governance Responsibilities

  1. The Committee shall, from time to time, as the Committee deems appropriate, make recommendations to the Board regarding an appropriate Board organization and structure.
  2. The Committee shall, from time to time, as the Committee deems appropriate, evaluate the size, composition, membership qualifications, scope of authority, responsibilities, reporting obligations and charters of each committee of the Board.
  3. The Committee shall periodically review and assess the adequacy of the Company’s corporate governance principles as contained in this Charter. Should the Committee deem it appropriate, it may develop and recommend to the Board for adoption additional corporate governance principles.
  4. The Committee shall be responsible for the Company’s succession plan, and will maintain criteria for the selection, evaluation and retention of the CEO, and will have oversight in the selection and performance of the other executive officers.
  5. The Committee shall periodically review the Company’s Certificate of Incorporation and Bylaws in light of existing corporate governance trends, and shall recommend any proposed changes for adoption by the Board or submission by the Board to the Company’s stockholders.
  6. The Committee may make recommendations on the structure and logistics of board meetings and may recommend matters for consideration by the Board.
  7. The Committee shall consider, adopt and oversee all processes for evaluating the performance of the Board, each committee and individual directors.
  8. The Committee shall annually review and assess its own performance.
  9. The Committee shall be responsible for ensuring that the members of the Board have ready access to Senior Management, whenever such access is requested.

Compliance Responsibilities

  1. The Committee shall, from time to time, as the Committee deems appropriate and for so long as the Company shall have any Minority Stockholders (as defined in the Company’s Certificate of Incorporation), review the Company’s procedures with respect to and ensure the Company’s compliance with its obligations to its Minority Stockholders, including ensuring appropriate approval of the transactions specified in Section 6.5 of the Company’s Certificate of Incorporation.
  2. The Committee shall, from time to time, as the Committee deems appropriate and for so long as the Company’s Senior Secured Notes due 2018 and Convertible Junior Secured Notes due 2018 remain outstanding, review the Company’s procedures with respect to and ensure the Company’s compliance with its principle obligations under the indentures related thereto, including with respect to the Company’s on-going reporting obligations as well as any affiliate transactions to be considered by the terms thereof. In order to facilitate this function, the CEO and CFO shall be required to report any affiliate transactions or series of transactions with a value greater than $2.5 million to the Committee for consideration and prior approval at least 72 hours prior to entry in to such transactions.
  3. The Committee shall, from time to time, as the Committee deems appropriate, review the Company’s procedures with respect to and ensure the Company’s compliance with applicable laws, rules and regulations, with particular attention to relevant national and international sanctions and anti-money laundering regimes.

General

  1. The Committee shall review and discuss such other matters that relate to the accounting, auditing and financial reporting practices and procedures of the Company as the Committee may, in its own discretion, deem desirable in connection with the review functions described above.
  2. The Committee shall perform any other duties or responsibilities delegated to the Committee by the Board from time to time.
  3. The Committee shall report regularly to the Board.
  4. The Committee shall conduct and review with the Board annually an evaluation of the Committee’s performance with respect to the requirements of this charter.
  5. The Committee shall periodically review and assess the adequacy of the Company’s corporate governance principles as contained in this Charter. Should the Committee deem it appropriate, it may develop and recommend to the Board for adoption additional corporate governance principles.

The Charter

  • This Charter was approved by the Board of Directors by unanimous written consent on July 23, 2014.
  • The Committee shall review the adequacy of this charter on an annual basis and recommend any appropriate changes to the Board for consideration.