Compensation and Nominating Committee
The Corporate Governance and Nominating Committee of the Board of Directors of Clean Diesel, Inc. (the "Committee") is responsible for matters relating to the organization and membership of the Board, and for other issues relating to the COMPANY"S corporate governance. The Committee shall 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 and Chairman of the Committee shall be appointed annually by the Board of Directors and as vacancies or new positions occur. The Committee shall comprise of at least two directors, each of whom has been affirmatively determined by the Board to be independent of the Company. A director shall not be considered independent if he or she (i) 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 organizations with which the director is affiliated) that may interfere with the exercise of his or her independence from management and the Company or (ii) does not meet any other independence requirement under applicable laws, rules or stock exchange listing standards. Members of the Committee may be removed or replaced by the Board of Directors in its discretion.
The Committee shall meet with such frequency and at such intervals as it deems necessary to fulfill its responsibilities and duties, but in any case, at least two times each year and shall keep minutes of each meeting that will be distributed to the Board of Directors and each Committee member following each meeting. The following is a list of operating principles and are set forth as a guide, with the understanding that the Committee may supplement or modify them as appropriate:
- Meetings of the Committee may be called as needed buy the Chairman of the Committee, the Chairman of the Board or the Chief Executive Officer of the Company.
- The Chairman of the Committee will preside, when present, at all meetings of the Committee. The Committee may meet by telephone or videoconference and may take action by written consent.
- The Committee shall have the sole right to retain search firms and consultants to assist in the identification and evaluation of director candidates. THE COMMITTEE SHALL HAVE the sole authority to approve search firm fees and other retention terms AND SHALL HAVE THE SOLE AUTHORITY TO TERMINATE SEARCH FIRMS AND CONSULTANTS AS IT SHALL DETERMINE.
- the authority to obtain advice and assistance from any officer or employee of the Corporation or from any outside legal expert or other advisor.
- The Committee may request that members of management or outside consultants and advisors of the Committee be present to assist the Committee in performing its duties.
- The Committee may form, and where legally permissible, may delegate authority to subcommittees OF THE COMMITTEE, each of which shall be composed of two or more members, when the Committee deems it appropriate or desirable.
This document is subject to change by the Board without notice as circumstances and conditions change. The Committee, in carrying out its responsibilities, SHALL remain flexible in order to best ADAPT to changing conditions and circumstances. The following shall 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 shall 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 shall recommend to the Board the nominees for shareholder approval at each annual meeting. As part of this process, the Committee shall consult with Board members, management and others and shall give consideration to candidates recommended by shareholders. The Committee shall 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 shall consider the individual's past attendance at meetings and participation in and contributions to the activities of the Board and committees thereof. The Committee shall 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 shall adopt procedures to be followed by shareholders in submitting recommendations of director candidates for consideration by the Committee.
- The Committee shall periodically lead the Board in a self-evaluation to assess the current structure to determine whether it and the operations of its committees of the Board of Directors are functioning effectively and recommend changes to the Board.
- The Committee shall recommend to the Board of Directors, after consultation with the Chairman of the Board and Chief Executive Officer, the members and chairs of the other committees of the Board, who shall be appointed annually at the meeting of the Board following the annual meeting of shareholders, and shall 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 shall ensure that committee members meet the qualifications on independence and other criteria established by applicable laws, rules and stock exchange listing standards.
- The Committee shall develop and recommend to the Board corporate governance guidelines and shall review such guidelines at least annually and recommend changes as necessary.
- The Committee shall establish a process for shareholders to send communications directly to the members of the Board of Directors.
- The Committee shall develop and recommend to the Board procedures for the evaluation and selfevaluation of the Board and its committees and shall oversee the evaluation process.
- The Committee shall perform an evaluation of its performance at least annually to determine whether it is functioning effectively.
- The Committee shall take such actions or provide advice as the full Board may from time to time delegate to the Committee
This Charter was approved by the Board of Directors on _______________.
- Financial Expert
- Independent Director