Exhibit 99.1
Dated October 16, 2007
CORPORATE GOVERNANCE GUIDELINES
Director Qualifications
The Board of Directors (the "Board") of Mace Security International,
Inc. (the "Company") will have at least 66.67% of directors who, in the business
judgment of the Board, meet the criteria for independence required by Section
3.14 of the Company's ByLaws. Section 3.14 of the Company's ByLaws incorporate
and add to the criteria for independence required for continued listing on the
Nasdaq Global Market. .
The existing Board and its Nominating Committee is responsible for
reviewing on an annual basis, the requisite skills and characteristics which new
Board members should possess as well as the composition of the Board as a whole.
This review will include assessment of the absence or presence of material
relationships with the Company or others which might impact independence and
objectivity, as well as consideration of diversity, age, skills, experience,
time available and the number of other boards the member sits on in the context
of the needs of the Board and the Company, and such other criteria determined to
be relevant at the time. Nominees for election as directors are recommended by
the Nominating Committee for approval by the Board. The criteria for nominees to
the Board are established by the Nominating Committee.. The invitation to join
the Board should be extended by the Chairman of the Board on behalf of the
Board.
The Board recently established the size of the Board to be six members.
It is the sense of the Board that a size of five to seven is the correct size.
No director may be nominated to a new term if he or she would be age 70 or older
at the time of the election. The Board does not believe it should establish term
limits. Although term limits help ensure that there are fresh ideas and
viewpoints available to the Board, they hold the disadvantage of losing the
contribution of directors who have been able to develop, over a period of time,
increasing insight into the Company and its operations. As an alternative to
term limits, each director's continuation on the Board is reviewed at the time
of each nomination. The Board also does not believe it should grant tenure to
directors, and no director shall have tenure rights.
Director Responsibilities
The basic responsibility of the directors is to exercise their business
judgment to act in what they reasonably believe to be in the best interests of
the Company and all of its shareholders. In discharging that obligation,
directors should be entitled to rely on the honesty and integrity of the
Company's senior executives and its outside advisors and auditors. The Board
shall authorize and approve the purchase of directors' and officers' liability
insurance in such amounts and upon such terms as the Board deems appropriate.
Directors are expected to attend Board meetings and meetings of
committees on which they serve, and to spend the time needed and meet as
frequently as necessary to properly discharge their responsibilities. The Board
expects that information and data distributed in writing to members before
meetings should be reviewed in advance of the meeting.
The Board does not require the separation of the offices of Chairman
and the Chief Executive Officer. The Chairman will establish the agenda for each
Board meeting. At the beginning of the year the Chairman will establish a
preliminary list of agenda subjects to be discussed during the year (to the
degree this can be foreseen). Each Board member is free to suggest the inclusion
of items on the agenda. Each Board member is free to introduce at any Board
meeting subjects that are not on the agenda for that meeting. The Board will
review the Company's long-term strategic plans during at least one Board meeting
each year.
The independent directors will meet in executive session as often as
they consider necessary. The "lead" director who presides at these meetings may
be chosen by a majority of the independent directors.
The Board will meet at least once each year, in addition to regular
board meetings, with the Company's executive management team to review the
Company's business plans, discuss corporate strategy and evaluate the Company's
strengths, weaknesses, opportunities and threats, as well as to review the
Company's progress against the Company's vision, mission, values and critical
success factors. The Board will also extensively study the company's strategic
alternatives at least once a year.
The Board believes that the management speaks and acts for the Company.
Individual Board members do not, absent the written approval of the Board or of
the Chief Executive Officer.
Board Committees
The Board will have at all times an Audit Committee, a Compensation
Committee, a Nominating Committee and an Ethics and Corporate Governance
Committee. All of the members of these committees will be independent directors
to the extent required under the listing standards of the Nasdaq Global Market
and meet all other applicable legal requirements. The independent directors by
majority vote, with management directors abstaining, will make all Board
Committee assignments. The Board does not believe that rotation of members among
committees should be mandated as a policy.
The Audit committee, the Compensation Committee, the Nominating
Committee and the Ethics and Corporate Governance Committee will each have its
own charter. The charters will set forth the purposes, goals and
responsibilities of the committees as well as qualifications for committee
membership, procedures for committee member appointment and removal, committee
structure and operations and committee reporting to the Board.
The Chairman of each committee, in consultation with the committee
members, will determine the frequency and length of the committee meetings
consistent with any requirements set forth in the committee's charter. The
Chairman of each committee, in consultation with the appropriate members of the
committee and management, will develop the committee's agenda.
The Board may, from time to time, establish or maintain additional
committees as necessary or appropriate.
Director Access to Officers and Employees
Directors have full and free access to officers and employees of the
Company. Any meetings or contacts that a director wishes to initiate may be
arranged through the Chief Executive Officer or the Secretary. The directors
will use their judgment to ensure that any such contact is not disruptive to the
business operations of the Company and will, to the extent not inappropriate;
copy the Chief Executive Officer on any written communications between a
director and an officer or employee of the Company.
Director Compensation
The form, amount and terms of directors and committee members'
compensation will be determined by the Compensation Committee (and approved by
the Board) in accordance with the policies and principles set forth in these
Guidelines and the listing standards of the Nasdaq Global Market and all other
applicable legal requirements, and the Compensation Committee will conduct an
annual review of director compensation. In making its determination, the
Compensation Committee considers (i) the impact on directors' independence of
the amount, form and terms of director compensation, and (ii) whether there is
any indirect compensation payable to or benefit conferred or payable to the
director.
Director Orientation and Continuing Education
All new directors must participate in the Company's Orientation
Program, which should be conducted as soon as practicable after the meeting at
which new directors are elected. This orientation will include presentations by
senior management to familiarize new directors with the Company's strategic
plans, its significant financial, accounting and risk management issues, its
compliance programs, its Code of Conduct and Ethics, its principal officers, and
its internal and independent auditors. In addition, the Orientation Program will
include visits to Company headquarters. All other directors are also invited to
attend the Orientation Program.
It is highly recommended that all directors attend continuing education
programs sponsored by nationally recognized educational organizations not
affiliated with the Company.
ii
CEO Evaluation and Management Succession
The Compensation Committee will conduct an annual review of the Chief
Executive Officers's performance, as set forth in its charter. The Board of
Directors will review the Compensation Committee's report in order to ensure
that the Chief Executive Officer is providing the best leadership for the
Company in the long and short term.
The Board should annually consider planning. The Board should annually
evaluate potential successors to the Chief Executive Officer. The Chief
Executive Officer should at all times make available his or her recommendations
and evaluations of potential successors, along with a review of any development
plans recommended for such individuals.
Annual Performance Evaluation
The Board of Directors will conduct an annual self-evaluation to
determine whether it and its committees are functioning effectively. The Ethics
and Corporate Governance Committee will receive comments from all directors and
report annually to the Board with an assessment of the Board's performance. This
will be discussed with the full Board following the end of each fiscal year. The
assessment will focus on the Board's contribution to the Company and
specifically focus on areas in which the Board or management believes that the
Board could improve.
Stock Ownership Requirement
The Company's non-employee directors, the Company's Chief Executive
Officer and the Company's executive management shall beneficially own shares of
common stock having a value as shall be determined by the Board from time to
time.
Disclosure of these Guidelines
It shall be the responsibility of the Corporate Secretary of the
Company to assure that the current version of these Guidelines be posted on the
Company's website www.mace.com. Effective for annual reports filed on or after
December 31, 2003, the Company's shareholders shall be apprised of the
availability of these Guidelines on the Company's website.
Codes of Ethics
The Company will at all times maintain a Code of Conduct and Ethics for
its directors, officers and employees.
Secretary
Minutes of each Board meeting and Committee meeting will be compiled by
the Company's Corporate Secretary who shall act as Secretary to the Board and
each Committee, who is also a member of the Company's internal legal staff, or
in the absence of the Corporate Secretary, by an Assistant Corporate Secretary
of the Company or any other person designated by the Board and a Committee, as
the case may be.
iii