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Prescient Corporate Governance Guidelines
A. Board Composition
1. Selection of Chairman and CEO: The Board does not have a policy on whether the roles of Chief Executive Officer and Chairman should be separate and, if they are separate, whether the Chairman should be selected from the non-employee directors.
2. Size of the Board: The authorized range of the Board is seven members. The Board believes that this size is appropriate. However, the Board may seek to increase its current size to accommodate the availability of an outstanding candidate(s).
3. Independent Directors: The Board believes that a majority of the Board should be independent. However, the Board is willing to have non-independent persons, including members of management, as directors.
4. Definition of Independence: While the company is listed on the OTCBB, the Board believes that the definition of “independence” adopted by the NASDAQ Stock Market (NASDAQ Stock Market Rule 4200) is the appropriate standard by which to measure the independence of board members.
5. Board Membership Criteria: The Corporate Governance and Nominating Committee is responsible for evaluating and then reviewing with the Board from time to time the appropriate qualifications, expertise, and characteristics required of Board members. This assessment should include issues of diversity; age; and skills such as understanding of technology, finance, and sales and marketing – all in the context of an assessment of the perceived needs of the Board at a particular point in time. Board members are expected to carefully prepare for, attend, and participate in all Board and applicable committee meetings. Each Board member is expected to ensure that other existing and planned future commitments do not interfere with service as a Prescient director.
6. Selection of New Director Candidates: The Corporate Governance and Nominating Committee assists the Board by identifying, evaluating, and approving director nominees.
7. Director Orientation and Continuing Education: The Board believes that management should develop and maintain a comprehensive orientation process for new directors that includes background material, meetings with senior management and visits to Company facilities. The Board further believes that management should develop and maintain, through third-party service providers or otherwise, an ongoing continuing education program for incumbent directors that satisfies all applicable requirements.
8. Directors Who Change Their Job Responsibility: The Board does not believe that directors who retire or change jobs should necessarily leave the Board. There should, however, be an opportunity for the Board, through the Corporate Governance and Nominating Committee, to review the continued appropriateness of Board membership under these circumstances.
9. Term Limits: The Board does not believe it should limit the number of terms for which an individual may serve as a Director. Directors who have served on the Board for an extended period of time are able to provide valuable insight into the operations and future of the Company based on their experience and understanding of the Company's history, policies, and objectives.
10. Board Compensation Review: The Company’s Bylaws authorize the Board to fix the compensation of directors. As part of a director's total compensation and to create a direct linkage with corporate performance, the Board believes that a meaningful portion of a director's compensation should be linked to the performance of the Company.
B. Board Meetings
1. Scheduling and Selection of Agenda Items for Board Meetings: Board meetings are scheduled in advance, generally every month. Once a quarter, meetings are held at the Company's offices in either West Chester, Pennsylvania or Dallas, Texas, but occasionally a meeting is held elsewhere. The Company’s Bylaws permit board meetings to be held by conference call. The Chairman of the Board, together with the corporate secretary, sets the agenda for each Board meeting and distributes it in advance to the Board. Each Board member is free to suggest items for the agenda.
2. Board Material Distributed in Advance: Information that is important to the Board's understanding of the business should be distributed in writing to the Board a reasonable time before each Board meeting.
As a general rule, materials on specific subjects should be sent to the Board members in advance so that Board meeting time may be conserved and discussion time focused on questions that the Board has about the material. However, matters may be discussed at the meeting without written materials being distributed in advance or at the meeting.
3. Board Presentations and Access to Employees: The Board encourages management to schedule managers to present at Board meetings who: (a) can provide additional insight into the items being discussed because of personal involvement in these areas, or (b) have future potential that management believes should be given exposure to the Board. The Board has reasonable access to Prescient employees.
4. Executive Session and Presiding Director: The Board’s policy is to have regularly convened executive sessions of the non-management directors. The non-management Directors shall designate one independent Director to serve as Presiding Director to chair the Board's executive sessions. In addition, the Presiding Director shall advise the Chairman of the Board with respect to agendas and information needs relating to Board meetings and perform such other duties as the Board may from time to time delegate to assist the Board in the fulfillment of its responsibilities. The Presiding Director shall serve for such term as the Board shall determine.
C. Board Committees
1. Number of Committees: The Board currently has three committees: (i) Audit, (ii) Compensation, and (iii) Corporate Governance and Nominating. There may, from time to time, be occasions on which the Board may want to form a new committee or disband a current committee depending upon the circumstances. Each committee shall comply with the independence and other requirements established by applicable law, including SEC and any exchange listings.
The Audit Committee selects the Company's independent auditors; monitors the independence and effectiveness of the independent auditors; pre-approves audit and permitted non-audit services; and evaluates the Company's accounting principles, internal controls, disclosure controls and procedures, financial reporting, and procedures relating to internal auditing functions and controls. The Audit Committee also reviews and approves related-party transactions.
The Compensation Committee administers the Company's stock option and stock purchase plans, including the review and grant of stock options to all eligible employees under the Company's existing stock option plans, reviews and approves salaries and other matters relating to compensation of the executive officers of the Company, and provides input on executive and leadership development policies and management succession.
The Corporate Governance and Nominating Committee makes recommendations to the Board regarding the size, composition and governance of the Board and its committees, establishes procedures for the nomination process, evaluates and approves candidates for election to the Board, oversees the evaluation
of directors and management, and develops and maintains corporate gov
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