TECHALT, INC., POLICY GOVERNING DIRECTOR NOMINATIONS
AND SECURITY HOLDER-BOARD COMMUNICATIONS
The Board of Directors (the "Board") of TechAlt, Inc. (the "Corporation") has
adopted this Policy Governing Director Nominations and Security Holder-Board
Communications in accordance with the proxy disclosure requirements set forth in
the rules adopted by the Securities and Exchange Commission ("SEC") and the
corporate governance rules adopted by the Nasdaq Stock Market, Inc. ("Nasdaq").
The Corporation recognizes that its security holders desire increased insight
into the Corporation's director nominations process and greater ease of
communication with the Board of Directors, and the Corporation endeavors to
apply this Policy Governing Director Nominations and Security Holder-Board
Communications to those ends.
A. IDENTIFYING AND EVALUATING DIRECTOR NOMINEES
1. RESPONSIBLE COMMITTEE. The Compensation and Nominating Committee (the
"Committee") is responsible for, among other things, identifying individuals
qualified to become members of the Board and its committees, and recommending
candidates for the Board's selection as director nominees for election at the
next annual or other properly convened meeting of security holders.
2. PROCESS FOR CONSIDERATION OF NOMINEES.
a. Identification of Candidates. The Committee shall identify candidates for
director nominees in consultation with the Chief Executive Officer and Chairman
of the Board, through the use of search firms or other advisers or through such
other methods as the Committee deems to be helpful to identify candidates,
including the processes identified herein. The Committee will also consider
director candidates recommended by security holders.
b. Evaluation Process. Once candidates have been identified, the Committee shall
confirm that the candidates meet all of the minimum qualifications for director
nominees set forth in Sections B.1 and B.2 below. The Committee may gather
information about the candidates through interviews, background checks, or any
other means that the Committee deems to be helpful in the evaluation process.
The Committee shall then meet as a group to discuss and evaluate the qualities
and skills of each candidate, both on an individual basis and taking into
account the overall composition and needs of the Board. There shall be no
difference in the manner by which the Committee evaluates director nominees,
whether nominated by the Board or by a nominating security holder.
c. Recommendation of Nominees to the Board. Based on the results of the
evaluation process, the Committee shall recommend candidates for the Board's
selection as director nominees for election to the Board.
d. Recommendation of Nominees to Board Committees. In consultation with the
Chairman of the Board and the Chief Executive Officer, the Committee shall also
recommend candidates for the Board's selection as nominees for appointment to
the committees of the Board.
3. PROCEDURES FOR RECOMMENDATION OF NOMINEES BY SECURITY HOLDERS.
The Committee will consider director candidates who are recommended by security
holders of the Corporation. Security holders, in submitting recommendations to
the Committee for director candidates, shall follow the following procedures:
a. The Committee must receive any such recommendation for nomination by a date
not later than the 80th calendar day before the date the Corporation's proxy
statement was released to security holders in connection with the previous
year's annual meeting.
b. Such recommendation for nomination shall be in writing and shall include the
following information:
i. Name of the security holder, whether an entity or an individual, making
the recommendation;
ii. A written statement disclosing such security holder's beneficial
ownership of the Corporation's securities;
iii. Name of the individual recommended for consideration as a director
nominee;
iv. A written statement from the security holder making the recommendation
stating why such recommended candidate would be able to fulfill the duties of a
director;
v. A written statement from the security holder making the recommendation
stating how the recommended candidate meets the independence requirements
established by the SEC and Nasdaq;
vi. A written statement disclosing the recommended candidate's beneficial
ownership of the Corporation's securities; and
vii. A written statement disclosing relationships between the recommended
candidate and the Corporation which may constitute a conflict of interest.
c. Nominations may be sent to the attention of the Committee via the method
listed below:
U.S. Mail or Expedited Delivery Service:
TechAlt, Inc.
3311 N. Kennicott Ave., Suite A
Arlington Heights, IL 60004
Attn: Compensation and Nominating Committee
c/o Secretary of TechAlt, Inc.
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d. Once the Committee receives the recommendation of a candidate, such
recommended director nominee shall be evaluated and if appropriate may be
recommended to the Board pursuant to Sections A.2.b and A.2.c above.
B. DIRECTOR QUALIFICATIONS AND SKILLS
The Corporation seeks directors who possess the qualifications and skills
described in this Section B. Moreover, the Corporation evaluates each individual
candidate in the context of the overall composition and needs of the Board, with
the objective of recommending a group that can best manage the business and
affairs of the Corporation and represent security holder interests using its
diversity of experience. The Committee will consider these and other
qualifications, skills and attributes when recommending candidates for the
Board's selection as nominees for the Board and as candidates for appointment to
the Board's committees.
1. BOARD QUALIFICATIONS.
a. Independence. A majority of the members of the Board shall meet the
independence requirements promulgated by the SEC, the National Association of
Securities Dealers, any exchange upon which securities of the Corporation are
traded or any governmental or regulatory body exercising authority over the
Corporation (each a "Regulatory Body" and collectively the "Regulatory Bodies"),
as in effect from time to time.
b. Minimum Qualifications. The Corporation requires its directors to possess
certain minimum qualifications, including the following:
i. Adequate Experience. A director must have substantial or significant
business or professional experience or an understanding of technology, finance,
marketing, financial reporting, international business or other disciplines
relevant to the business of the Corporation.
ii. No Conflicts of Interest. A director must be free from any
relationship that, in the opinion of the Board, would interfere with the
exercise of his or her independent judgment as a member of the Board or of a
Board committee.
c. Other Qualities and Skills. The Corporation also considers the following
qualities and skills, among others, in its selection of directors:
i. Economic, technical, scientific, academic, financial, accounting,
legal, marketing, or other expertise applicable to the business of the
Corporation;
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ii. Leadership or substantial achievement in their particular fields;
iii. Demonstrated ability to exercise sound business judgment;
iv. Integrity and high moral and ethical character;
v. Potential to contribute to the diversity of viewpoints, backgrounds, or
experiences of the Board as a whole;
vi. Capacity and desire to represent the balanced, best interests of the
Corporation as a whole and not primarily a special interest group or
constituency;
vii. Ability to work well with others;
viii. High degree of interest in the business of the Corporation;
ix. Dedication to the success of the Corporation;
x. Commitment to responsibilities of a director; and
xi. International business or professional experience.
2. COMMITTEE QUALIFICATIONS.
a. Audit and Finance Committee. All members of the Audit and Finance Committee
shall meet the independence and Audit and Finance Committee requirements
promulgated by the Regulatory Bodies, as in effect from time to time. All
members shall be financially literate and at least one member of the Audit and
Finance Committee shall qualify as being financially sophisticated as set forth
in such committee's charter.
b. Compensation and Nominating Committee. All members of the Compensation and
Nominating Committee shall meet the independence and nominating and corporate
governance committee requirements promulgated by the Regulatory Bodies, as in
effect from time to time.
c. Other Committees. Members of other committees shall meet such requirements as
set forth by the Regulatory Bodies and the Board as the Board deems necessary.
3. LIMITS ON OTHER BOARD MEMBERSHIPS AND COMMITMENTS. The Corporation expects
that a director's existing and future commitments will not materially interfere
with such director's obligations to the Corporation.
The Corporation recognizes that directors should limit the number of boards on
which they serve so that they can give proper attention to each board
responsibility. However, the philosophy of the Corporation is not to set an
invariant limit on the number of boards on which a director may serve. In the
event a director wishes to join the board of another company, it is expected
that the director will advise the Committee of his or her intention and the
Committee will update the Board.
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4. INCUMBENTS. For candidates who are incumbent directors, the Corporation
considers the following factors, among others, when considering such individuals
as director nominees: such director's past attendance at meetings and
participation in and contributions to the activities of the Board. If such
incumbent director has had a significant change in status, such as an employment
change, the Corporation shall also take this event into consideration.
5. AMENDMENTS. The Committee shall review and assess the adequacy of this Policy
Governing Director Nominations and Security Holder-Board Communications
periodically, as well as in response to rules promulgated by the Regulatory
Bodies. The Corporation will disclose any material changes to these policies as
required by the Regulatory Bodies in the Corporation's SEC filings.
C. SECURITY HOLDER-BOARD COMMUNICATIONS
The Board provides to every security holder the ability to communicate with the
Board, as a whole, and with individual directors on the Board through an
established process for security holder communication (as that term is defined
by the rules of the SEC) ("Security Holder Communication") as follows:
1. For Security Holder Communication directed to the Board as a whole, security
holders may send such communication to the attention of the Chairman of the
Board via the method listed below:
U.S. Mail or Expedited Delivery Service:
TechAlt, Inc.
3311 N. Kennicott Ave., Suite A
Arlington Heights, IL 60004
Attn: Chairman of the Board of Directors
2. For security holder communication directed to an individual director in his
or her capacity as a member of the Board, security holders may send such
communication to the attention of the individual director via the method listed
below:
U.S. Mail or Expedited Delivery Service:
TechAlt, Inc.
3311 N. Kennicott Ave., Suite A
Arlington Heights, IL 60004
Attn: [Name of Individual Director]
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The Corporation will forward by U.S. mail any such Security Holder Communication
to each director, and the Chairman of the Board in his or her capacity as a
representative of the Board, to whom such Security Holder Communication is
addressed to the address specified by each such director and the Chairman of the
Board.
Communications from an officer or director of the Corporation and proposals
submitted by security holders to be included in the Corporation's definitive
proxy statement, pursuant to Rule 14a-8 of the Exchange Act of 1934 (and related
communications) will not be viewed as a Security Holder Communication.
Communications from an employee or agent of the Corporation will be viewed as
Security Holder Communication only if such communications are made solely in
such employee's or agent's capacity as a security holder.
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