Nominating and Corporate Governance Committee Charter
This Charter governs the operations of the Governance and Nominating Committee (the "Committee") of the Board of Directors of FortuNet, Inc., a Nevada corporation (the "Company"), The Committee will review and reassess the adequacy of this Charter at least annually and recommend any proposed changes to the Board of Directors for approval. This Charter may be amended only by the affirmative vote of the Board of Directors.
The Committee will be appointed annually by the Board of Directors upon the recommendation of the Nominating and Corporate Governance Committee and will at all times be comprised of at least two directors, each of whom has been affirmatively determined by the Board to be independent of the Company. A director will not be considered independent if he or she: (i) accepts, directly or indirectly, any consulting, advisory or other compensatory fee from the Company or any of its subsidiaries other than in his or her capacity as a member of the Committee, the Board of Directors or any other committee of the Board; (ii) has participated in the preparation of the financial statements of the Company or any of its subsidiaries at any time during the three years preceding his or her appointment to the Committee; (iii) is an affiliate of the Company or any of its subsidiaries; (iv) has a material relationship with the Company or any of its subsidiaries (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company or a subsidiary and determined not merely from the standpoint of the director but also from that of any person or organization with which the director is affiliated) that may interfere with the exercise of his or her independence from management and the Company; or (v) does not meet any other independence requirement under applicable laws, rules promulgated by the Securities and Exchange Commission ("SEC') or the Nasdaq National Market listing standards, each as in effect from time to time. Members of the Committee may be removed by the Board of Directors in its discretion.
The Committee will meet as often as it deems necessary to fulfill its responsibilities and will report to the Board of Directors following each meeting. The Committee may delegate any of its responsibilities to one or more subcommittees, each of which will be composed of two or more members, as it may deem appropriate.
The purpose of the Committee will be to identify qualified individuals to become members of the Board, to recommend to the Board nominees to be submitted to the shareholders for election as directors at each annual meeting and, from time to time, to develop and recommend to the Board corporate governance policies applicable to the Company.
Responsibilities and Processes
The Committee in carrying out its responsibilities believes its policies and procedures should remain flexible, in order to best react to changing conditions and circumstances. The following will be the principal duties and responsibilities of the Committee and are set forth as a guide, with the understanding that the Committee may supplement them as appropriate.
The Committee will conduct the search for and identify individuals qualified to become members of the Board of Directors to fill new positions and vacancies on the Board of Directors and will recommend to the Board the slate of director nominees for shareholder approval at each annual meeting. As part of this process, the Committee will consult with Board members, management and others and will give consideration to candidates recommended by shareholders. The Committee will consider the background and reputation of potential nominees in terms of character, personal and professional integrity, business and financial experience and acumen, how they would complement the other Board members in providing a diversity of expertise and experience, their availability to devote sufficient time to Board duties and any other criteria established by the Board. In considering whether to recommend a director for reelection, the Committee will consider the individual's past attendance at meetings and participation in and contributions to the activities of the Board and committees thereof. The Committee will specifically consider the effect of any change in a director's principal occupation or business association from that held when he or she became a member of the Board and the appropriateness of continued membership under the circumstances.
The Committee will adopt procedures to be followed by shareholders in submitting recommendations of director candidates for consideration by the Committee, which procedures will be consistent with the Company's Bylaws.
The Committee will have sole authority to retain, at the Company's expense, and terminate any search firm to be used to identify director candidates, and any legal and other advisor that it deems necessary for the fulfillment of its responsibilities, including the sole authority to approve fees and other retention terms.
The Committee will periodically assess the current structure and operations of the committees of the Board of Directors and recommend changes to the Board.
The Committee will recommend to the Board of Directors, after consultation with the Chairman of the Board and President, the members and chairs of the other committees of the Board, who will be appointed annually at the meeting of the Board following the annual meeting of shareholders, and will recommend directors to fill committee vacancies as they occur, taking into account the special skills required for service on particular committees, past performance on the Board and committees and such other factors as the Committee deems appropriate. The Committee will ensure that committee members meet the qualifications on independence and other criteria established by applicable laws, rules and Nasdaq National Market listing standards.
From time to time, as the Committee deems appropriate, the Committee will develop and recommend to the Board corporate governance policies and will review such policies at least annually and recommend changes as necessary.
The Committee will establish a process for shareholders to send communications directly to the members of the Board of Directors.
The Committee will develop and recommend to the Board procedures for the evaluation and self-evaluation of the Board and its committees and will oversee the evaluation process.
The Committee will perform an evaluation of its performance at least annually to determine whether it is functioning effectively.
This Charter was approved by the Board of Directors on _,2005.