 |
SPAR GROUP, INC.
STATEMENT OF POLICY REGARDING
DIRECTOR QUALIFICATIONS AND NOMINATIONS
DATED AS OF MAY 18, 2004
The
Board of Directors (the “Board”) of SPAR Group, Inc.
(“SGRP”), upon the recommendation of its Governance Committee, has
adopted this SPAR Group, Inc., Statement of Policy Regarding Director Qualifications and
Nominations dated as of May 18, 2004 (as the same may be modified, amended, restated or
replaced from time to time in the manner provided herein, this “Policy”).
| 1. |
|
Introduction. The Board has adopted this Policy to identify personal and
group traits, skills and performance criteria that the Board believes are
essential to effective service as a member of the Board, and to establish an
effective process for the selection of nominees for the Board, all in order to
identify and select Board nominees who are in a position to exercise independent
judgment, provide effective oversight of management and serve the best interests
of stockholders. |
| 2. |
|
Nominee’s Personal Characteristics. The Board believes the following
personal characteristics are important for any nominee for director, and each
nominee for director should possess as many of them as practicable: |
| (a) |
|
the highest professional and personal ethics and integrity; |
| (b) |
|
sufficient time and attention to devote to Board duties and responsibilities and
shall be ready, willing and able to do so; |
| (c) |
|
strong relevant business and industry knowledge and contacts; |
| (d) |
|
business and financial sophistication, common sense and wisdom, and the ability
to make informed judgments on a wide range of issues; |
| (e) |
|
strong relevant skills and experience demonstrated through business,
professional, charitable or civic affairs, including (without limitation)
business, managerial and leadership skills; |
| (f) |
|
the ability and willingness to exercise independent judgment and express
independent opinions; and |
| (g) |
|
the apparent ability and willingness to meet or exceed the Board’s
performance expectations. |
The Governance Committee shall
consider each of these factors in evaluating potential nominees and recommending them to
the Board, which in the case of incumbents also shall include the degree to which they
have already evidenced such abilities and performance.
| 3. |
|
Performance Expectations. The Board expects each of its members to: |
| (a) |
|
prepare in advance for, regularly attend and actively participate in all
scheduled and special meetings of the Board and each Committee on which he
serves; |
| (b) |
|
offer insight, support and advice to management in his areas of expertise; |
| (c) |
|
ask appropriate questions and maintain focus on the Board’s agenda; |
| (d) |
|
understand the business, finances, plans and strategies of SGRP and its
subsidiaries (collectively, the “Company”); |
| (e) |
|
interact professionally and collegially with the other directors and the
officers of the Company; |
| (f) |
|
act in the best interests of the Company and SGRP’s stockholders and follow
the Company’s applicable ethics codes; |
| (g) |
|
pursue and attend continuing director education as appropriate. |
The Governance Committee shall
consider each of these factors in evaluating potential nominees and recommending them to
the Board, which in the case of incumbents also shall include the degree to which they
have already evidenced such performance.
4.
Evaluation of Overall Board Needs. The Board believes its effectiveness
will be enhanced by having a group of directors with a range of relevant
business and other experience, knowledge and judgment and a diversity of
perspectives and by individual directors that each have the personal
characteristics, commitment and experience to participate actively in the board
process. The Board also believes continuity in leadership and Board and
Committee tenure will maximize the Board’s ability to exercise meaningful
board oversight. In addition to considering the individual qualifications of a
potential nominee, the Governance Committee shall review and evaluate the then
current mix of contacts, disciplines, experience and other personal
characteristics of the directors on the Board and the perceived needs of the
Board, each Committee and the Company, and determine those personal
characteristics that may be desirable for any new nominee to possess.
Accordingly, in considering the potential nominee slate (including incumbent
directors) to recommend to the Board, the Governance Committee shall take into
account: (a) the benefits of incumbency, as noted above and below; (b) any
perceived needs of Board, any Committee or the Company at the time for business
contacts, skills or experience or other particular desirable personal
characteristics; (c) the collegiality of Board members; (d) the need for
independent directors or financial experts under this Policy or Applicable Law
for the Board or its Committees; (e) any other requirements of Applicable Law;
and (f) the desirability of ethnic, racial, gender and geographic diversity.
5.
Independent Directors. A majority of the directors of the Board, and all
of the members of its Audit Committee, Compensation Committee and Governance
Committee, shall satisfy the independence requirements applicable to Audit
Committee members as provided in the applicable rules of the Nasdaq Stock
Market, Inc.‘s National Market System, as the same may have been and
hereafter may be supplemented, modified, amended, restated or replaced from time
to time (“Nasdaq Rules”).
6.
Other Directorships. The Board believes that service by any outside
director on the boards of other public and private companies to be valuable
experience, a benefit to the Board and Company and not in conflict with his
duties to the Company so long as (a) he has sufficient time and attention to
deal with Board, Committee and Company matters and meets or exceeds the
performance expectations established by this Policy, (b) he remains independent
under Nasdaq Rules if and to the extent he was expected by the Board to be so,
(c) he complies with the Company’s codes of ethics, and (d) he uses
reasonable judgment as to the number of boards and audit committees on which he
serves.
7.
Incumbency. The Board believes qualified incumbent directors are
generally uniquely positioned to provide stockholders the benefit of continuity
of leadership and seasoned judgment gained through experience as a director of
SGRP. The value of these benefits may outweigh many other factors. Therefore, it
is expected that the Governance Committee will generally consider recommending
the re-nomination of incumbent directors, provided that they
continue to satisfy the applicable personal characteristic criteria and
performance expectations. However, the Governance Committee need not necessarily
recommend to the Board the nomination of eligible incumbent directors for
re-election.
8.
Consideration of New Candidates. New candidates for director may be
identified from time to time by directors, officers or other representatives of
SGRP. The Governance Committee may also receive recommendations from
stockholders received in accordance with Section 2.11 of the
By-Laws1. Regardless of the source of a recommended candidate for
director, the Governance Committee shall not propose or recommend any new
candidate for nomination unless the Governance Committee has evaluated the
individual’s qualifications on the basis of (i) sufficient background
information obtained directly from the candidate, (ii) references or background
checks obtained from third parties to the extent the Governance Committee deems
necessary or advisable; and (iii) interviews of the candidate by the Chairman
and by one or more members of the Governance Committee. However, the Board
recognizes that the Governance Committee may identify, or receive
recommendations respecting, more qualified candidates than would be feasible or
practical to consider, in which case the Governance Committee shall pursue those
it selects in its discretion and shall not be obligated to consider or pursue
more potential candidates than it deems reasonably necessary or appropriate in
order to select qualified nominees.
9.
Effective Date and Amendments. This Policy is effective as of May 18,
2004, and may be supplemented, modified, amended, restated or replaced from time
to time by action of the Board in its discretion, with or without the
recommendation of the Governance Committee.
10.
Certain Definitions. “By-Laws” shall mean the Amended
and Restated By-Laws of SGRP dated as of May 18, 2004, as the same may have been
and from time to time hereafter may be supplemented, amended or restated in the
manner provided therein. “Governance Committee Charter” shall
mean the Charter of the Governance Committee of the Board of Directors of SPAR
Group, Inc., Dated (as of) May 18, 2004, as the same may be supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein. Capitalized terms used and not otherwise defined herein shall have the
meanings respectively assigned to them in the By-Laws or the Governance
Committee Charter.
11.
Incorporation of Certain Provisions of By-Laws. This Policy shall be
governed and supplemented by and construed and interpreted in accordance with
Article X of the By-Laws (and the applicable definitions appearing elsewhere),
which are hereby incorporated into this Policy by reference as if fully set
forth herein and shall be construed as if this Policy were the
“By-Laws” referred to in those incorporated provisions. In the event
of any conflict between any specific provision of this Policy and the By-Laws or
the Governance Committee Charter, the specific provision of this Policy shall
control and be given effect.
_________________
| 1 |
|
Section 2.11. Stockholder Proposals and Nominations. If and for so long as any shares of
capital stock issued by the Corporation are listed for trading on any securities exchange
or registered under Section 12 of the Securities Exchange Act of 1934, as amended, the
following provisions shall apply: |
| (a) |
At an Annual Meeting, only such business shall be conducted, only such nominees
for director shall be considered, and only such proposals shall be acted upon,
as shall have been brought before the Annual Meeting: (i) by any stockholder of
the Corporation (acting in his or her capacity as stockholder) who complies with
the notice procedures set forth in this Section 2.11 of these By-Laws; or (ii)
by, or at the direction of, the Board. |
| (b) |
For any business, nominee or proposal to be properly brought before an Annual
Meeting by a stockholder (acting in his or her capacity as stockholder), such
stockholder must have given timely written notice thereof by Physical Delivery
to the Secretary of the Corporation. To be timely, a stockholder’s notice
must be delivered to, or received at, the principal executive offices of the
Corporation not less than 120 calendar days in advance of the date of the
Corporation’s proxy statement released to stockholders in connection with
the previous year’s annual meeting of stockholders except that if no annual
meeting was held in the previous year or the date of the annual meeting has been
changed by more than thirty (30) calendar days from the date contemplated at the
time of the previous year’s proxy statement, a proposal shall be received
by the Corporation a reasonable time before the solicitation is made. |
| (c) |
A stockholder’s notice to the Secretary shall set forth as to each matter
the stockholder proposes to bring before the Annual Meeting (i) a brief
description of the business, nominee or proposal desired to be brought before
the Annual Meeting and the reasons for considering the same at the Annual
Meeting, (ii) the name and address, as they appear on the Corporation’s
books, of the stockholder proposing such business and any other stockholders
known by such stockholder to be supporting such proposal, (iii) the class and
number of shares of the Corporation’s stock which are beneficially owned by
the stockholder on the date of such stockholder notice and by any other
stockholders known by such stockholder to be supporting such proposal on the
date of such stockholder notice, and (iv) any financial interest of such
stockholder (or any affiliate or family member of such stockholder), whether
current or at any time within the past three years, in such business, nominee or
proposal. In addition, if the notice is a nomination of a candidate for
director, the stockholder’s notice also must contain (A) the proposed
nominee’s name and qualifications, including five year employment history
with employer names and a description of the employer’s business, whether
such individual can read and understand basic financial statements, and board
memberships (if any), (B) the reason for such recommendation, (C) the number of
shares of stock of the Corporation that are beneficially owned by such nominee,
(D) a description of any business or other relationship, whether current or at
any time within the past three years, between such nominee (or any affiliate or
family member of such nominee) and either the Company, any of its directors or
officers, its auditor, or any of its customers or vendors, and (E) a description
of any financial or other relationship, whether current or at any time within
the past three years, between the stockholder (or any affiliate or family member
of such stockholder) and such nominee (or any affiliate or family member of such
nominee). |
| (d) |
If the Governance Committee determines in advance of the Annual Meeting, or if
it has not passed on the proposal, if the presiding officer of the Annual
Meeting determines at the Annual Meeting, that a stockholder proposal was not
made in accordance with the terms of this Section 2.11, such officer shall so
declare at the Annual Meeting and any such proposal shall not be acted upon at
the Annual Meeting. |
| (e) |
This Section 2.11 shall not prevent the consideration and approval or
disapproval at the Annual Meeting of reports of officers, Directors and
Committees of the Board or any other matter that comes before the meeting with
the consent of the Board, but, in connection with any such report on a
stockholder’s proposal, no business shall be acted upon at such Annual
Meeting unless stated, filed and received as herein provided. |
|
|
